Enanta Pharmaceuticals Inc (ENTA) Q1 2021 Earnings Call Transcript

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Enanta Pharmaceuticals Inc (ENTA -4.89%)
Q1 2021 Earnings Call
Feb 8, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to Enanta Pharmaceuticals First Quarter 2021 Financial Results Conference Call. [Operator Instructions] There will be a question-and-answer session at the end of the prepared remarks. [Operator Instructions]

I would now like to turn the conference over to Jennifer Viera, Investor Relations. Please go ahead.

Jennifer Viera -- Investor Relations

Thank you, operator, and thank you to everyone for joining us this afternoon. The news release with our fiscal first quarter financial results was issued this afternoon and is available on our website.

On the call today is Dr. Jay Luly, President and Chief Executive Officer; Paul Mellett, our Chief Financial Officer; and other members of Enanta's senior management team.

Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-Q and other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call.

I'd now like to turn the call over to Dr. Jay Luly, President and CEO. Jay?

Jay R. Luly -- President, Chief Executive Officer and Director

Thank you, Jennifer, and good afternoon, everyone. Our fiscal first quarter was an exciting and productive time for Enanta, as we continue to advance our robust, wholly owned pipeline. We currently have six ongoing clinical trials: two in respiratory syncytial virus; two in hepatitis B; and two in non-alcoholic steatohepatitis, as well as three respiratory virus discovery initiatives, including our recently announced RSV L-inhibitor to complement our hMPV and COVID-19 programs. We also recently introduced a new selective oral HBV RNA destabilizer, it is advancing toward the clinic mid-year.

I'd like to take a moment and acknowledge the commitment and dedication of our employees, who continue to go above and beyond contributing to the significant pipeline progress we've made across our business. We continue to build out our team with talented individuals, and just this quarter made three significant new hires, who will contribute to the company's growth. We look forward to their contributions over the coming months as we approach several significant milestones.

In December, Dr. Tara Kieffer joined us from Vertex as Senior Vice President of New Product Strategy and Development. Tara brings over 20-years of scientific expertise in infectious diseases and product development.

In January, we announced Dr. John DeVincenzo, one of the most highly regarded investigators in respiratory syncytial virus will be joining the Enanta team. For the past 30-years, John has played a significant role in many of the major RSV clinical trials.

Most recently we were pleased to announce Brendan Luu, as our Senior Vice President of Business Development, a role to which he brings 20-plus years of diversified business development and sales and marketing experience in the pharmaceutical and technology industries, most recently at Merck KGaA.

Turning to our pipeline, I'm excited to review the progress of the past quarter in more detail and share our plans for multiple catalysts throughout 2021. I'll start with RSV, where we are advancing a robust clinical development program consisting of two ongoing studies and one plan study of EDP-938, the only RSV N-inhibitor in clinical development today. RSV is a severe respiratory infection associated with significant morbidity and mortality in infants, the elderly and immune compromised adults and a condition for which there is currently no safe and effective therapy. Globally, there are an estimated 33 million cases of RSV annually and children less than five years of age with about 3 million hospitalized and approximately 118,000 dying each year from complications associated with the infection.

The first of our ongoing studies is RSVP. The Phase 2b double-blind placebo controlled study of EDP-938 designed to enroll approximately 70 subjects were randomized to receive either EDP-938 or placebo for five days. Currently the RSV's season in the Northern Hemisphere has not begun, due to the continuing COVID-19 mitigation measures. We believe that when these measures up side, RSV will reemerge and recent modeling is even predicting large future outbreaks of respiratory viruses, especially influenza in RSV.

In fact, this has already occurred in New South Wales, Australia's most populated state for a recent government surveillance report showed a steep increase in RSV rates that experts believe was due to relax social distancing measures. Further the RSV rates were even higher than the usual average peak in the last five years, despite being delayed by several months. And this peak occurred in Australia's summer season when these cases are usually low.

Also the scarcity of RSV cases during the pandemic is breaking the chain of immunity in children and normally get repeated exposures of RSV and build resistance in the first few years of life. This is allowed for a larger vulnerable patient population, which experts believe may result in higher than average levels of RSV, when virus reemerges.

That said, we believe RSV will reemerge and our strategy is to be ready across the globe with clinical trial sites ready to go when the hot-spots emerge. For example, we are setting up trial operations for RSVP, not only in North America, but also in Europe, the Pan-Asia territory and the Southern Hemisphere aiming to more than double the number of sites globally. We'll provide updated guidance on RSVP timelines as RSV becomes prevalent again.

Turning to our other RSV clinical trials. In December, we initiated RSVTx, a global multi-center Phase 2b randomized, double-blind, placebo-controlled study, evaluating the efficacy and safety of EDP-938 in adult hematopoietic cell transplant recipients with acute RSV infection of the upper respiratory tract. The study is designed to enroll approximately 200 adult subjects with the primary objective of evaluating the effect of EDP-938 on development of lower respiratory tract complications in these transplant patients, who will receive EDP-938 or placebo for 21 days and then be followed for 28-days.

We are also currently planning to initiate our third RSV Phase 2 study, RSVPEDs later this quarter. This is a global multi-center Phase 2 double-blind, placebo-controlled, dose-ranging study of EDP-938 in children aged 28 days to 24 months. This designed to enroll approximately 90 hospitalized or non-hospitalized infants and children with RSV. The study will have two parts. In part one, the primary objective is to evaluate the safety and pharmacokinetics of EDP-938 in multiple ascending doses and four age cohorts, oldest to youngest, while the objective in part two is to access the antiviral effects of RS -- against RSV.

In each part subjects will be dosed for five days and then followed for 23 days. Beyond these three trials, we are excited about the expansion of our RSV program with the introduction of RSV L-Protein Inhibitor discovery initiative, that includes potent nanomolar leads against both RSV-A and RSV-B.

Similar to 938, we are focusing on replication inhibitors as this non-fusion approach directly targets viral replication as opposed to viral entry. RSV L-Inhibitors are not expected to have cross-resistance to other classes of inhibitors. And therefore can potentially be used alone or in combination with agents targeting different RSV mechanisms such as EDP-938, the possibly broaden the treatment window or the eligible patient population.

Our respiratory virology discovery efforts are also urgently focused on developing targeted anti-viral therapeutics for SARS-CoV-2. Recently, several new variants of the original virus have been identified, initially emerging in the UK, South Africa and Brazil, which may have some impact on the activity of current monoclonal antibodies and vaccines. These variants have mutations in the spike protein that potentially allow the virus to spread more readily, or evade the immune system.

Our antiviral discovery program targets conserved regions and enzymes essential for viral replication, so mutations in the spike protein are not expected to affect the activity of our inhibitors. We expect the emerging variants to retain full sensitivity to our inhibitors and are currently in the process of confirming that's pre-clinically.

Among our respiratory virology discovery programs, which include RSV L-protein, SARS-CoV-2 and human metapneumo virus. We have nanomolar inhibitors undergoing lead optimization in each and our plan is to nominate clinical candidates in two of these three programs in 2021.

Let's move on to our hepatitis B program, where we are evaluating EDP-514, our lead core inhibitor and chronic HBV patients treated with a nucleoside reverse transcriptase inhibitor referred to as NUC-suppressed patients, as well as in chronic HPV infected patients with high viral loads not currently on treatment, which we refer to as Viremic patients. Each trial is a randomized double-blind placebo controlled study designed to evaluate the safety, tolerability, pharmacokinetics antiviral activity of one of three orally administered multiple ascending doses of EDP-514, compared to placebo over a 28-day period and up to 24 randomized patients. We plan to have preliminary data from both trials next quarter.

Last month, we are excited to announce the expansion of our HBV program to include our newest clinical candidate EDP-721, a potent and selective oral HBV RNA destabilizer. It has the potential to reduce production of multiple HBV proteins, which we believe could be key component in achieving a functional cure for chronic HBV. We recognize this may take a multi-drug approach involving mechanisms to stop viral replication and inhibit surface antigen also referred to as s-antigen. NUC's are the current standard-of-care, then they are reasonably effective at suppressing HBV replication. EDP-514 our core inhibitor, in fact, several stages of HBV replication from uncoating and nuclear imported virus to capsid assembly and recycling.

And our new oral agent EDP-721 that can be stabilized HBV RNAs leads to a reduction in viral proteins, including s-antigen. Last month, we shared compelling data demonstrating a three log reduction in s-antigen levels with EDP-721 in a mouse model which demonstrated equal or superior efficacy to siRNA-based an antisense oligo-based agents tested in the same model. With EDP-721, now in our we see the opportunity for an all oral functional cure and we look forward to initiating a Phase 1 clinical study of this exciting new candidate by mid-year.

Moving on to our work and non-alcoholic steatohepatitis or NASH, our first FXR agonist EDP-305 is in an ongoing ARGON-2, Phase 2b randomized, double-blind, placebo-controlled 72-week study, in approximately 340 subjects with biopsy proven NASH with fibrosis. The primary endpoint of ARGON-2 is improvement of fibrosis without worsening of NASH and/or NASH resolution without worsening of fibrosis. While good target engagement and tolerability were observed with the 1 milligram dose in ARGON-1. With ARGON-2, we are exploring doses of 1.5 milligrams and 2.0 milligrams to determine what additional dose or doses may also favorably balanced target engagement with tolerability.

In mid-2021, we will have an internal interim analysis of 12-weeks of treatment and a subset of patients, at which point we expect to have more information to determine what dose or doses we moved forward for potential combinations through partnering.

We are also developing EDP-297, our oral follow on FXR agonist for NASH, with potentially best-in-class potency and tissue targeted effects. It's currently being studied in a Phase 1 randomized, double-blind, placebo-controlled first in human trial designed to assess the safety, tolerability and pharmacokinetics in approximately 74 healthy adult subjects. We look forward to reporting clinical data in mid-2021. So in mid-2021, we expect to have important insights for both EDP-305 and EDP-297. We will be positioned to prioritize these assets and define the optimal go-forward strategy.

I'd like to conclude my remarks by emphasizing a key few points. It's been especially active time for Enanta, as we continue to progress and expand our wholly owned pipeline. Over 2021, we look forward to several catalysts, including the initiation of a Phase 1 clinical study of EDP-721, our HBV RNA destabilizer by mid-2021, and preliminary data for both Phase 1 studies of EDP-514 and HBV patients in the second quarter of 2021. Further when looking toward our respiratory virology discovery efforts, we anticipate nominating two new clinical candidates this year among our HMPV, SARS-CoV-2 and RSV programs.

Finally in NASH, with the ARGON-2 trial of EDP-305 and the Phase 1 study of EDP-297, we look forward to having valuable insights mid-year to inform next steps.I'll stop here and turn the call over to Paul to discuss our financials for the quarter. Paul?

Paul J. Mellett -- Senior Vice President, Finance & Administration and Chief Financial Officer

Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30th fiscal year schedule. Today, we are reporting results for our first fiscal quarter ended December 31, 2020.

For the quarter, total revenue was $31.7 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $481 million. This compares to total revenue of $52.6 million for the same period in 2019. The decrease in royalty revenue quarter-over-quarter was driven by lower HCV product sales as treated patient volumes that remain below pre-COVID levels as reported by AbbVie.

Royalty revenue was calculated on 50% of MAVIRET sales at a blended royalty rate for the quarter of 13%, and on approximately 30% of VIEKIRA sales at a royalty rate of 10% after adjustments for certain contractual discounts, rebates and set-offs, which now are approximately 2.7% of AbbVie's total reported HCV product sales.

As a reminder, our royalties are calculated on a calendar year basis. Therefore royalties for our fiscal first quarter ending December 31 will be calculated at the highest royalty rate for the year. And royalties for our fiscal quarter ending March 31 will be calculated at 10%, our lowest royalty rate tier in our fiscal year. You can review our royalty tier schedule in our 2020 Form 10-K. Recently, AbbVie reported that their global HCV sales were $1.83 billion in 2020 and guided to $2 billion for global HCV sales in 2021.

Moving onto our expenses, the three months ended December 31, 2020, research and development expenses totaled $36.7 million, compared to $32.8 million for the same period in 2019. The increase was primarily due to the timing and activity of our clinical trials year-over-year. General and administrative expense for the quarter was $7.4 million, compared to $6.9 million for the same period in 2019. This increase was primarily due to increased headcount in compensation expense.

Enanta recorded an income tax benefit of $3.3 million for the three months ended December 31, 2020, compared to income tax expense of $1.5 million for the same period in 2019. This income tax benefit was due to the company's pre-tax loss for the period, which can be carried back under the CARES Act of 2020.

Net loss for the three months ended December 31, 2020 was $8.3 million or a loss of $0.41 per diluted common share, compared to net income of $13.4 million, or $0.65 per diluted common share, for the corresponding period in 2019.

Enanta ended the quarter with $404.7 million in cash and marketable securities. Enanta expects that its current cash, cash equivalents and marketable securities, as well as its continuing royalty revenue will be sufficient to meet the anticipated cash requirements of its existing businesses and development programs for the foreseeable future. Further financial details are available in our press release and will be available in our quarterly report on Form 10-Q, when filed.

I'd now like to turn the call back to the operator and open up the lines for questions. Operator?

Questions and Answers:

Operator

We will now open the call up for questions. [Operator Instructions] Your first question is from Roy Buchanan with JMP Securities.

Roy Buchanan -- JMP Securities -- Analyst

Hi, great. Nice quarter. Thanks for taking the question. So I guess, I want to start on EDP-721, it kind of struck with the terrible activity. I guess two weeks after the end of dosing is still far robust reductions in s-antigen. I guess, I'm curious, if you know of any other small molecules that have shown that kind of durable effect in the mouse model? And maybe if you could give any comments on what may be explained the durable effect? Is it something to do with drug half life for the mechanism? And then I wonder, if you could give us any details about how you guys are approaching the potential for off-target activity from this agent potentially on the host transcripts? Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Hi, Roy. This is Jay. So the durability question, I think, I need to -- help you understand -- that wasn't a single dose and then monitored two weeks later, it was dosed over two-week period as a small molecules that probably makes more sense to you in terms of the responses that we've seen with a small molecule. So it is daily dosing, it's daily dosing it was over a 14-day period, it was compared to other people's 14-day data regardless of how they dosed, so that's the first thing.

And you know comparing it to other agents, I think you may have seen the -- some of the data that we've shown and with regards to some of the siRNA's that are out there or anti-sense all goes. And 71 performed very, very well, stacked up, quite well, either being as efficacious by log drop as any of the agents and more efficacious than almost all of them.

So from that vantage point, we're very excited about the efficacy that we've seen so far and look forward to carrying it into the clinic. I mean, there has been a -- an extensive amount of pre-clinical work done virologically and mechanistically and looking at all sorts of things from a seasonal activity perspective. And we're quite pleased with the profile in terms of its specific targeting to HBV, RNAs versus others. And also with regards to its safety profile pre-clinically. So very, very nice virology and very good pre-clinical package. And we're just, sort of, wrapping up readiness to get ourselves into the clinic mid-year.

Roy Buchanan -- JMP Securities -- Analyst

Okay, great. I'll hop back into queue. Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Thank you.

Operator

Your next question is from Yasmeen Rahimi with Piper Sandler.

Rachel Vatnsdal -- Piper Sandler -- Analyst

Hi, team. This is Rachel on for Yasmeen. And thanks very much for taking my question. So we have one question and then a follow-up. First, can you provide us some color on the process and what you're looking for in the clinical candidate for your L-protein inhibitor? What's the significance of enhancing the L -- advancing the L-protein inhibitor and what advantages did they have over N-protein inhibitors? Thank you.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. So the process for identification is one that we're very familiar with across lots of different viruses. We zeroed in on the polymerase, what so called the L-protein and got a drug discovery program going in earnest action quite some time ago. And we've sort of waited until we came up with some very highly potent compounds that we thought were within striking distance of a candidate and then therefore announced the program this year in January at JP Morgan.

I'd say we're sort of finishing the sort of final lead optimization, looking at all the different characteristics that make a drug candidate more than just a potent molecule, so lot of DMPK work and other virologic work. But we're getting reasonably close and I think it is one of the ones that we can add to our list of ones that could hit this year.

With regards to advantage, not certain that there is an advantage of an L-inhibitor over N. I mean, we're very, very pleased with the profile of 938, and the mechanism of the N-protein targeting that we have with 938 has super high barrier to resistance and good activity across the different types of the virus, performed exceptionally well, clinically. And so this is more about us looking at different and potentially complementary mechanisms just to -- again to be defining hopefully the best-in-class across any different mechanism. So as the Enanta can continue to, sort of, build a leadership position and not only RSV, but human respiratory viral therapeutics more completely.

We also wonder and we've done pre-clinical studies looking at these different combinations of mechanisms and it's clear that our N-inhibitor plays well with other mechanisms and other mechanisms play well with N-inhibitors. So whereas we may never need to do a combination trial to demonstrate more than adequate efficacy, we may want to and as much as it could extend the treatment window perhaps. Again, we don't know that for certain, but these are the kinds of things that we'll be able to explore extending the treatment window for opportunity for to use therapeutics. And maybe even get us them to maybe even more challenging to treat patient populations. So patients who are further along will may be able to reel them back in, if we hit the virus with more than one mechanism. So these are the kinds of things that we're thinking about over time.

As we develop these and -- agents against several other viruses that we're targeting, yes, we're really pleased to have John DeVincenzo joining the team at Enanta. He's the world expert on lots of this stuff. And he'll be able to fit in with a very accomplished team of investigators that we already have. We'll really broaden and expand our thinking on how we go about this. So I think hopefully, that gets your question. Was that the follow-up too, or -- yes.

Rachel Vatnsdal -- Piper Sandler -- Analyst

Yes. No, I think that's incredibly helpful. So our follow-up is about the COVID-19 program. Can you comment on which targets you're evaluating that you believe will prevent infection by -- will be protective against by protein variant? Thank you.

Jay R. Luly -- President, Chief Executive Officer and Director

Sure. Thanks for the question. So we're -- as we said, pretty early going into this thing. We think about direct-acting antiviral as our sort of go to approach on a lot of these things, particularly with regards to human respiratory viruses. You can look at entry inhibitors, but we're just wondering if entry inhibitors or entry inhibitors alone will offer enough either horsepower or flexibility to have a longer treatment duration. So instead we're going after replication inhibitors. And I think we're, sort of, taking the same sort of approach not only to RSV, but we're carrying it into SARS-CoV2.

So with that in mind, we've stated publicly that among the things we're thinking about, our protease inhibitors and polymerase inhibitors. So that's a fair assumption of what we're targeting there. And we think they're good approaches vis-a-vis the variants, the spike protein variants that is starting to emerge in the community today.

Rachel Vatnsdal -- Piper Sandler -- Analyst

Great. That's really helpful. Thank you so much and congrats on the progress.

Jay R. Luly -- President, Chief Executive Officer and Director

Thank you.

Operator

Your next question is from Brian Skorney with Baird.

Brian Skorney -- Baird -- Analyst

Hey, good afternoon, guys. Thanks for taking the question. Jay, we talked before about sort of the almost acetic [Phonetic] nature of nucleoside chemistry. And I've kind of always thought that small molecule RNA destabilization seems like an almost equally, if not more complex chemistry. So I guess, can you help us think through the way in which you develop small molecule as opposed to targeted oligo that can result in specific destabilization of HBV RNA, without interrupting RNA that might be critical for normal cellular processes in a person?

Like do you actually know the end target or targets of this chemistry now or just primarily been an evolution of high throughput screening for chemicals that wind up stabilizing s-antigen in primary human hepatocytes? Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. We know -- thanks, Brian. So we know the targets and there's specific molecular targets that we're going after. They're ones -- they're specific enzymes that are focused on stabilizing HBV RNAs. And we've come up with very specific inhibitors of these enzymes that are not only good at inhibiting the enzymes, but inhibiting enzymes in the context of hepatitis B infection. So it was not through a high throughput screen.

Brian Skorney -- Baird -- Analyst

Great. Thanks, Jay. That's really helpful.

Jay R. Luly -- President, Chief Executive Officer and Director

You're welcome.

Operator

Your next question is from Brian Abrahams with RBC Capital Markets.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hey, guys. Thank you for taking my questions and congrats on all the progress. I guess one on NASH and just -- then just a quick follow-up. I'm curious if you could speak to your views following the FDA's recent workshop on NASH drug development in the context of the setbacks for the most advanced FXRs. Just wondering how that may shape your plans and what you might be looking for mid-year from the 305 and 297 studies.

And then just as a follow-up separately on the SARS-CoV-2 inhibitor. Just wondering if you could talk a little bit more about potential timelines there for both the preclinical variant data and clinical entry. And I guess, would it be fair to say that once that gets into the clinic, there could be a potential expedited regulatory path? Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. So starting with the SARS-CoV-2 first, the -- again we're working with very, very potent molecules right now that we're sort of the apple polishing into candidates. Unfortunately, with that process, you sort of can't legislate when you get to the finish line. It's iterative and sometimes it's two steps forward, one step back. But I feel confident enough that when you line up the three programs, the L-inhibitor for RSV; the human metapneumovirus and also the targets for SARS-CoV-2, they're all contenders for candidates this year and hopefully, we'll harvest two of them and -- top of my list would actually be SARS-CoV-2.

So depending upon we -- when we get that, we'll have to finish certain other IND-enabling studies before we can get it into the clinic. So the sooner that we can make that final candidate selection and nomination, probably be three quarters or so before you could go into the clinic. I think there's every sense that the new administration is looking at -- COVID has been more than just a vaccination sort of approach. I think therapeutics are getting highlighted extensively, and could there be some very constructive dialog with regulators.

I think the answer could be, yes, obviously you need to get there, and pull the agent forward and get it into the clinic. But I would be very hopeful that you would get a lot of receptivity and interaction with the FDA to help design studies that could -- good things to patients as soon as possible.

With regards to NASH, I think there's no impact, sort of, on our progress and how we're thinking around our current Phase 2b study or study design elements. The FDA highlighted the importance of histology readout as an endpoint until non-invasive biomarkers are further validated, I think that was one of the key points. And safety is also key in chronic treatment. So therefore, the need for long-term follow-up post conditional approval sort of thing. But at this point, we don't really feel that there is any modification to our current plan. Our plan is to get key information and data sets in mid-'21 and look at how all the data hang together, prioritize our NASH portfolio. And as we've said all along, ideally identify potential doses expeditiously around 305 that could be utilized in combinations likely through partnerships. So that's still a plan A and one that we're continuing to execute very well.

Brian Abrahams -- RBC Capital Markets -- Analyst

Got it. That's really helpful. Thanks for all the color, Jay.

Jay R. Luly -- President, Chief Executive Officer and Director

Welcome.

Operator

[Operator Instructions] Your next question is from Jay Olson with Oppenheimer.

Jay Olson -- Oppenheimer -- Analyst

Hey, thanks for taking the question. For your SARS-CoV-2 program, once you moved that small molecule direct-acting antiviral into the clinic. Do you plan to seek out a partner to expedite the clinical development and ultimately manufacturing and distribution and commercialization of that drug? Or is it something you envision doing independently? And then I guess more broadly on the business development front, now that you've increased your teams capabilities in business development and given your cash position? What do you plan or what do you envision this year in terms of your business development objectives? Thank you.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. So with regards to SARS-CoV-2, I think Enanta's pretty well situated as a small company. Again, this isn't our first respiratory virus. And one of the ways that we're thinking about this in a way to be really successful with SARS-CoV-2 therapeutic in the longer term is to have something that's very safe and very oral -- it's safe and oral such that you could almost think about it in the context of like an RSVP study, where we have otherwise healthy patient shows up to the doctor's office with respiratory symptoms. Hopefully, not terribly far advanced get tested and probably coming with a positive test result.

So maybe it's an symptomatic person, who just as part of some employee protocol or otherwise gets tested, test positive and then maybe asymptomatic. These are perfect candidates to receive direct-acting antiviral. Hopefully, jump on the virus quickly with several days of dosing and knock that viral load down, stop the shutting, stop the -- break the chain of transmissibility. Hopefully get the person recovering in at home quickly and being test negative very quickly and otherwise back to gainful employment or school or whatever the case may be. So we're no stranger to setting up that kind of a study, running that study in fact, a lot of the sites that we have around the globe could be candidates to run those kinds of studies.

So I think we'll have good insights in terms of how to jump in. Ultimately, if we have a very big product candidate, of course you have to work and think about can we maximize it completely ourselves or do we need to seek a partner? I think we've got a while to sort of sport that out. We'll be watching to see what gaps and vaccinations there are. And look at that longer-term as we would with any of our programs. But it's just -- it's very nice to tuck that in. And to a broader portfolio where we have multiple different RSV assets, human metapneumo another significant line and then SARS-CoV-2 dovetails perfectly in terms of building. You know, a very comprehensive human respiratory virus, therapeutics franchise, if you will. So first things first, we'll get the candidate and demonstrate what we need to demonstrate. But I think we've got a pretty clear set of thoughts and approach that we would take.

On the BD front, we did hire Brendan Luu, we've get -- asked on almost every one of these calls. What are you thinking about business development? How are you thinking about RSV or HBV or NASH? And we've always said that NASH falls into that category probably being bigger than we are ultimately on a global basis, particularly and as much as combinations are going to end up being very, very important.

So I think as we've guided along the way, ARGON-2, a big piece of that was understanding what 12-week data looks like in connection with ARGON-1 data to allow for potential combinations more quickly. And again, we're looking toward mid-year to get that understanding. Already we know from ARGON-1, that the 1 milligram dose looks pretty interesting; 2.5 milligrams gave us intercept like pruritus. With ARGON-2, we'll look at a couple of other doses to see if there's a dose above a milligram they gives a good balance there in terms of target engagement and tolerability. These are the things that will readily be able to, sort of, understand and move on. So I would say nothing has changed in that regard. NASH is an important one, probably nearer term and that we would aim to try to team up prior to any Phase 3 work and maybe sooner.

And then the other things are on, sort of, a spectrum, I think HBV, we've got a portfolio of assets that's starting to build. We had -- we started -- well, everyone sort of has a NUC as a background therapy out there. The patients are on as a standard-of-care and they're becoming cheap and ultimately generic here soon. So you have that as a great, sort of, base line therapy that you can start adding other agents on. So 514, obviously is our first combination study with the NUC, and we'll update on that next quarter. But we're hopeful that 721 could be a key piece in the missing link of create an all-oral triple coming up with something that does affect. As I mentioned and in addition to a couple of things that knock down DNA and RNA and do other things mechanistically adding 721 now could allow us to create an all oral triple.

Now how far we progress that remains to be seen, I think we want to try to put that forward as an all-oral triple combination. Maybe we seek other things that we might ultimately add to that, or -- so that would be among the possibilities. But if you run it further out, I think hep B, ultimately will be like hep C. Where -- if you really want to maximize that and you want to cure millions and millions of people on a global basis, especially where hep B is predominantly ex-US, when you look at it. I think we would definitely have a global partner. Now when -- at some point try to retain the possibility of co-commercialization. We have that option with AbbVie, even in the hep C days, we didn't exercise that at the time we needed to exercise it, because it didn't make sense for us as a company. But so we would think about that as the time came, where are we in terms of thinking about a commercial infrastructure on hep b. We got a while, you know, to sort that out. But in the meantime we're -- I think amassing a very nice set of assets, one that we can control and one that may lead to a functional cure that's all-oral.

And then, RSV is broader -- human respiratory virus. This is something that we're not looking to do a global partnership on any time soon. Maybe if ever, we'll have to see how that goes, that maybe the one that we can prosecute ourselves, especially on the RSV front where single agent 938, maybe all you need. And we have the opportunity to be the first or one of the early drugs to market in that indication, the first ever treatment, if you will. So I lay him down kind of in that order of priority and we'll just start to explore.

Jay Olson -- Oppenheimer -- Analyst

Thank you. It's super helpful. Appreciate the details.

Jay R. Luly -- President, Chief Executive Officer and Director

You're welcome.

Operator

Your next question is from Liisa Bayko with Evercore ISI.

Liisa Bayko -- Evercore ISI -- Analyst

Hi, thanks for taking my question. About your RNA destabilizer, can you talk about, sort of, the preclinical tox work up that you've done so far. I know it's a really interesting and exciting molecule. And I agree it can be a really important contributor to getting toward that goal of an all-oral functional cure for hep B. At the same time, we've seen another number of companies that have had some issues with their programs. So hopefully, you've threaded the needle there. So just curious about your pre-clinical tox. Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Sure. Yes, so thanks for the question, Liisa. I mean, others have tried to do this and haven't always been able to progress their programs. And so as we were working on this program actually for years, optimizing molecules coming up with ones that were exclusively potent had very, very nice drug-like properties. And importantly safely, I mean, we usually don't talk a lot about pre-clinical safety, because it's an enabler to get you to the real clinical data. But we've done a very extensive work up and have gone through 13-week tox and multiple species. So the molecule looks incredibly good by every measure that we've looked at it from a virologic perspective, from a DMPK and also from a safety perspective, it's a very, very nice molecule.

Liisa Bayko -- Evercore ISI -- Analyst

Can you talk about how -- your pre-clinical tox that are species and duration. How much coverage do you have now in terms of moving into financial development? Can you dose for a months, three months, what's your coverage at this point?

Jay R. Luly -- President, Chief Executive Officer and Director

No, we have 13 weeks. So we've got three months coverage with regards to that.

Liisa Bayko -- Evercore ISI -- Analyst

Okay, great.

Jay R. Luly -- President, Chief Executive Officer and Director

I mean, obviously we're going to go into a shorter term, Phase 1 will be a three month study in healthy volunteers, but we've got ample tox coverage.

Liisa Bayko -- Evercore ISI -- Analyst

Great. Okay, good. And do you mind saying what species you've done in?

Jay R. Luly -- President, Chief Executive Officer and Director

Again, typically these are details that we just don't get into. But there -- you have to line them up with your metabolites and you have to line them up with where you make sure you cover all your -- any metabolites have to be covered in your toxicology program as well. So those selections are made by a combination of the DMPK and the safety team at an answer, but it's the appropriate ones that were for this molecule to go safely into humans.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. And then you're a little big on expectations for RSVP. Are you still targeting kind of this year, or do you think that's something that you think it's more likely next year? I'm just trying to set expectations for myself?

Jay R. Luly -- President, Chief Executive Officer and Director

No, it's not that -- we're not expecting that this year. And as we pointed out, a few weeks ago at JPMorgan and people -- you know, you can go look at those news articles in the papers, all the time. There has been no influenza this year.

Liisa Bayko -- Evercore ISI -- Analyst

Yes, I know.

Jay R. Luly -- President, Chief Executive Officer and Director

And I mean, I guess normally, that's a good thing, unless you're trying to recruit for study like RSVP, but I don't want to wish RSV on anyone. But if anyone gets it, I'm happy to treat them. So they -- RSV is pretty much -- it's parallel in flu. If you look at the map on the CDC website for flu, it's basically all green. There's not even a light shade of green except for in four States, I think. So it's -- but it's basically flat lined cases. So it's -- that's not something, I mean, again pandemic notwithstanding, I think, we were on a good trajectory based on our readiness. But that parts -- not likely to happen or at least not likely to happen in a normal season.

I think one of the things that was really interesting was that, that report we saw a few weeks ago out of Australia, where they let their guard down for just a little bit, because it's summer down there. And all of a sudden they saw this massive spike in RSV infections. And it was a big spike, bigger than most spikes. And it happened in their summer time, which is out of phase. So it's sort of pie out of phase with the normal season. And so when you think about those kinds of considerations, I'm not sure there's a real clear rule book for what happens when COVID mitigation strategies start to subside.

And I think one thing that I can tell you that people are beginning to worry about is, could there be on the other side of the COVID pandemic. Could there be epidemic levels of influenza and RSV. So people are worrying about that particularly in children where you rely on the first year of birth to build up a little bit of immunity by more exposures once or more than one. And then your second year of life you build it up a little more. And the third year, you had a little more. Eventually, kids start to shake these RSV infections for a little while and then they're protected for a bit of time.

But now, you know last year and into this year, every kid that was less than one-year old probably didn't get an RSV infection. The kids who were between one and two years old didn't get them. And the kids who are two years to three years didn't get them. And so you're breaking this chain of immunity and ultimately, that can lead to some really unexpected, unprecedented level. So we'll have to see how that all shakes down, but it could be a very different season on the other side of some of this. So we'll just -- as we said on today's call, we're just -- we'll just update our guidance when we see the RSV prevalence kicking up again.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. But it won't be this year?

Jay R. Luly -- President, Chief Executive Officer and Director

It's unlikely to be this year.

Liisa Bayko -- Evercore ISI -- Analyst

All right. Okay. Thanks a lot.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. You're welcome.

Operator

Your next question is from Eric Joseph with JP Morgan.

Eric Joseph -- JP Morgan -- Analyst

Hi, good evening. Thanks for taking the question. Just a couple on NASH. You alluded a little bit to it earlier, but I'm just wondering if you could clarify which endpoints will be reporting at the 12-week interim analysis for ARGON-2. We've been looking at ALT and fat fraction as well as safety particularly pruritus?

And then as we think about the Phase 1 data for 297, we know that safety and healthy volunteers has been a little under informative in the past. Is there a particular data point or a couple of data points that you'd be nearly focused on that might better characterize or de-risk the safety profile in NASH subjects compared with the 305 experience? Thanks.

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. So I'll answer the first question, hopefully, very clearly because it's in our slide deck and we -- and it's on our call and we said it starting this year at the JP Morgan Conference. The ARGON-2 interim analysis is an internal read only. So it will not be reported out. It will not be reported out. So this is something that the -- there is -- it's only the DSMB and key people, who are not involved in the conduct of the study. We'll be able to take a peek at some of the information. And again in order to make dose selection determinations for potential combinations and comparing that to ARGON-1 data. It's really for that purpose. And if -- we'd have to power the study in a different way, if we were going to be reporting that data out, because we would be spending alpha and that's something we certainly don't want to do on the ARGON-2 study. So it will be informational. We'll get information as it relates to prioritization of assets and doses and really defining for us the go-forward strategy for NASH "at large at Enanta." So that's what it is.

But we will -- just so you know, we'll be looking at things like target engagement, things like C4 and FGF19, fat. These are the kinds of things that we looked at in ARGON-1, and we have a very clear data set at 1 milligram and 2.5 milligrams. All we're going to be doing is trying to understand on a subset of ARGON-2 patients, how those parameters look at two new doses, 1.5 milligrams and 2 milligrams. Pure and simple. The 297 trial, on the other hand, is a study healthies. And it's one of the things that we also know well, by having studied 305. So -- and you may recall, you know, we looked at SAD, single ascending dose and we looked at multiple ascending dose in healthies. And then we redid the MAD alongside in presumed NAFLD subjects, just so we could try to get a bead on what a bonafide NASH patient might look like to see, does the drug do anything different to that patient population or does that patient population do anything different to the drug.

And it turned out, it was, on the one hand, uninformative or it wasn't how should I say this? The presume NAFLDs behaved very similar to the healthy volunteers. And so -- but what we did learn was when you dosed to -- we are watching dose escalations. So as we went from, I remember all the doses, you go from 0.5 milligrams to 1 milligrams to 2.5 milligrams to 5 milligrams to 10 milligrams to 20 milligrams. As we doubled the dose escalating, we saw these target biomarker changes and so forth with or without pruritus, all the way up until we got to 20 milligrams in healthies, where we saw a lot of pruritus. Unexpectedly, but we saw it. And so we knew kind of how to handicap that. We could figure out the dose and the exposures that caused pruritus, and we could go backward downward from that find the doses that gave us target engagement.

And so I think one of the things here, when we overlay a new data set like on 297, which has some of their design elements on it than 305 did. But when we lay that data set over the 305 data set, yes, we'll have basically a good level of information to understand, did we do something different. Is this a product opportunity that has differentiation above and beyond the 305, or is it just like a super, super potent 305? We hope it will be a differentiated. We designed it to have certain elements that could lead to that. But the reality is you got to go in there and run that study. And when we get that data set, I think we'll be able to compare it to, to our 305 data set and really understand how it all hangs together. So I think we will recognize improvement if it's there.

Eric Joseph -- JP Morgan -- Analyst

Okay. Thanks for taking the question.

Jay R. Luly -- President, Chief Executive Officer and Director

You're welcome.

Operator

Our next question is from Zegbeh Jallah with ROTH Capital Partners.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Hi guys. Thanks for taking my question. It looks like we have multiple milestones in 2021. So I just wanted some additional clarity on the HBV data that's going to come on the second quarter of this year. What we've seen with assembly, just kind of wanted to know how you are setting expectations as we head into that?

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. So the dataset, so we're expecting two datasets. One will come from 514 that's added on top of a NUC. And the other one will be 514 in the backdrop of patients that haven't received any new therapy. So they are viremic, they've got higher viral loads. So one population will have very low viral loads. The other one will have higher viral loads. So -- and the study with regards to the nuc, it's going to be -- a lot of it's going to be about safety and tolerability and how the two molecules play well together over a 28-day period. You're not likely to get a lot of information about virology in that patient population over that time period, because they are already reasonably suppressed. It's only 28 days. So you wouldn't expect to see some of the viral antigens, if you were to ever move to be moving on that. So it's one kind of a study. It's a necessary study, because it is sort of the standard-of-care.

And then ultimately we're going to be looking at the viremic study data, which will be one in which we can get a little bit more information over that 28-day period. We should be able to see a good solid DNA drop in those subjects over a 28-day period, probably a multi-log drop would be encouraging, something, say, more than two logs or so. And you should also be able to see an effect on RNA as well. Probably RNA effects usually not as pronounced as DNA effects, but you should still be able to see something in that over a 28-day timeframe. So those are the kinds of data that we'll be reporting and they give us key information in terms of PK and PD safety and help us really understand dose ranging for future studies.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thanks. And just a follow-up on that one as well. When you do get the data, do you anticipate just going with the combo going forward or do you think you'll wait for the triple?

Jay R. Luly -- President, Chief Executive Officer and Director

We'll go forward. Yes, yes. We'll have -- the triple will catch up, shall we say.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Sounds good. And then the last one here is just about the recent hires. I am viewing it as very promising for the company. And so I was just wondering how these new hires, kind of, reflect your approach, or strategic approach toward the business and what can we kind of expect? I think we talked briefly about the business development efforts, but just more broadly?

Jay R. Luly -- President, Chief Executive Officer and Director

Yes. Well, as you know, Enanta, we've got a very experienced team that's very well rounded. You may remember, we used to have a person, and the company has tried before he started -- before he picked up initiation on us, but we had a person in that new product strategy and development role. Previously he retired. And so I embarked upon a search on that front. And actually the prior person had a sort of a BD role as well. So it was sort of a combined role. And now as the company has grown, we built out strategy in a more complete way and BD on a more complete stand-alone way as we envision just the pipeline maturity and complexity of what we're prosecuting.

So very good young talented hires from great companies. We've spoken about BD. Brendan spent a lot of years at Merck KGaA. He headed up the oncology business development for them, which is a big chunk of their business. And Tara Kieffer is Cardon Caring Hopkins trained PhD virologist, who spent a lot of years at Vertex in many different roles, not just on the virology side, although she was -- she and Nathalie, our CMO, were involved in ultimately the approval of telaprevir and Tara was presenting at FDA AdComs and then she went more into a role in the clinical area and then ultimately into business development. So she is a very experienced person as well who is highly technically trained. And so those are the kinds of people we love to have on the team.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Thanks, Jay. Sounds exciting. And thanks for that recall. I think it's really helpful in terms of kind of setting expectations for the upcoming quarter.

Jay R. Luly -- President, Chief Executive Officer and Director

Good, good. Thank you.

Operator

Your next question is from Akash Tewari from Wolfe Research.

Akash Tewari -- Wolfe Research -- Analyst

Hey, guys. Thanks so much for taking my question. So you're expanding the RSV trial sites for RSVP. How are you ensuring that patients are getting the drug within two days of symptoms? Like what are you putting into place to make sure as they're doubling the clinical trial sites, that is still going to be run properly? And as we think about Dr. DeVincenz and his recent hire, how do you think he is going to be contributing to running the trial design? Specifically as we think about Phase 2b to go into Phase 3, what's the kind of the path forward for that program? Could the Phase 2b potentially be pivotal?

And then finally, on your COVID program, you guys have really thoughtful about whatever you're putting into the clinic. You're alluding to a polymerase inhibitor then a protease inhibitor. I look at the Pfizer program and there's issues, I think, with that being an IV drug, I look at the Ridgeback-Merck program and I'm thinking there's probably issues with carcinogenicity or safety in general with that target. What are you optimizing right now when you're thinking about the target? And how do you think that your molecule could potentially be differentiated versus the other protease and RNA polymerase inhibitors that are in development for COVID? Thank you.

Jay R. Luly -- President, Chief Executive Officer and Director

Okay. So a bunch of questions, but I'll take them since we are getting, I think, on to the end of the call here, but the -- so with regards to RSVP, I mean, this is the way we always do the study, right? People show up and show up to one of our sites. And just as part of the -- as part of the investigator questionnaire, you find out when people were symptomatic. And so it's either they're within the 48-hour window or they're not. And so if they're outside of that window, they're just excluded from consideration. So the key inclusion criteria for our study, if they are in that window, they are tested on site. We've got RT-PCR machines in every site that will give quick answers and you find out basically while the subject's still in the office and they can be dosed straight away. So that part of it, I think were all set on and I don't expect there to be any abnormalities or perturbations from the existing protocols that we've had in place at other sites. So I think it should all be fine.

So John DeVincenzo or Dr. DeVincenzo, who will be joining us is expert in that. As I know you know, he is a KOL extraordinaire in the RSV space. He's been involved in many, if not all, of the key sort of RSV studies and key RSV therapeutic approaches over the years and he spent his whole career hoping that he could ultimately help deliver a therapeutic for the patients' disease. And so we're -- it's too early to say anything now about his impact on creative clinical trial design in the future, but what I would say is it's absolutely the reason why we have him on board. Again, our goal is to build the leading franchise in this space. We've got a very talented team of folks who have been in the industry for quite a while.

And I think now marrying that with sort of academic medicine and also sort of a translational thinker already, I mean, he had a clinical virology lab. In his lab, he saw patients, he's been working on trial designs, he'd been advisors to pretty much everybody. So I think we'll be thinking about it as hard as anybody can and hopefully trying to come up with the most expeditious pathway to commercialization as we possibly can.

Then with regards to COVID, you mentioned some of the pitfalls that have been with polymerase in the past and protease inhibitor. I think you were referring to Pfizer's. Is that what you...

Akash Tewari -- Wolfe Research -- Analyst

Yes.

Jay R. Luly -- President, Chief Executive Officer and Director

So their agent is not an entrusting one, but it's -- as you know, it's given IV. And we do not want to -- we don't want to go that route. I think by the time you're administrating one of these agents IVs, you've lost, or I shouldn't say that way. You've lost the opportunity to make it much more usable, and to our way of thinking, again, it's an oral agent. We take it and we get out and you don't have to have other more complicated routes of administration that brings you into proximity of other people and either in healthcare settings or other settings that you otherwise wouldn't need to be. So we're focused only on oral agents. We've got some very -- again, as I mentioned, some very fluid oral agents that are potent and have good oral PK. And so we're, again, just fine-tuning and optimizing.

With regards to polymerase inhibitors, NUCs have had issues over the past and some are fine and some are not fine. And so we'll be thinking broadly we are not wedded to -- anytime we go after a polymerase, we're certainly not wedded or necessarily even focused on NUC polymerases. And so we won't ignore them, but we need not look to NUCs only as a way to skin that cat. And so suffice it to say anything that we look at there will have an expensive toxicology workout just like any of our other programs. So I think all other approaches are generally fine on that front, especially if you aim them to be safe and oral.

Akash Tewari -- Wolfe Research -- Analyst

Thanks so much.

Jay R. Luly -- President, Chief Executive Officer and Director

You're welcome.

Operator

And there are no further questions in queue at this time. I'll turn the call back over to management for any closing remarks.

Jennifer Viera -- Investor Relations

Thank you everyone for joining us today. If you have any additional questions, feel free to contact us directly. And have a good evening.

Operator

[Operator Closing Remarks]

Duration: 75 minutes

Call participants:

Jennifer Viera -- Investor Relations

Jay R. Luly -- President, Chief Executive Officer and Director

Paul J. Mellett -- Senior Vice President, Finance & Administration and Chief Financial Officer

Roy Buchanan -- JMP Securities -- Analyst

Rachel Vatnsdal -- Piper Sandler -- Analyst

Brian Skorney -- Baird -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

Jay Olson -- Oppenheimer -- Analyst

Liisa Bayko -- Evercore ISI -- Analyst

Eric Joseph -- JP Morgan -- Analyst

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Akash Tewari -- Wolfe Research -- Analyst

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