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Enanta Pharmaceuticals Inc (ENTA) Q4 2020 Earnings Call Transcript

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Enanta Pharmaceuticals Inc (NASDAQ: ENTA)
Q4 2020 Earnings Call
Nov 23, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal Fourth Quarter and Year-End 2020 Financial Results 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 call over to Jennifer Viera, Senior Director, Investor Relations. Please go ahead.

Jennifer Viera -- Senior Director of Investor Relations and Corporate Communications

Thank you, operator and thanks to everyone for joining us this afternoon. The news release with our fiscal fourth quarter and 2020 year-end 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. Throughout 2020, we made meaningful advances across our pipeline. Today, I'm excited to review this progress and to share our plans for multiple catalysts in 2021. Looking ahead, we believe that we are in a unique position to leverage our years of drug discovery experience to deliver new medicines to patients. Not only do we have a robust and growing internal portfolio which I'll review momentarily, but our efforts are informed by our previous successes, including the discovery of two products, which are currently marketed by AbbVie as part of its leading treatment for chronic HCV infection.

In the beginning of the year, we announced our program for human metapneumovirus or hMPV, and in March, we began working to find the treatment for COVID-19. I'm proud and appreciative of my colleagues for their efforts and rapidly responding to the pandemic and for the nimble and creative thinking they applied to translate our extensive experience in virology, notably respiratory virology to fight this global challenge. Taking a step back by focusing on these two respiratory viruses, combined with our work in respiratory syncytial virus, we are establishing our position as one of only a few biotechnology companies explicitly developing a broad portfolio in the respiratory virus treatments.

We also advanced our hepatitis B compound EDP-514, a novel core inhibitor that displays potent anti-HBV activity in vitro at multiple steps on the HBV in life cycle. In February, we announced positive results from Part 1 of our Phase 1a/1b clinical study of EDP-514 in healthy subjects, which supported further evaluation of once daily dosing and Part 2 of the study in chronic HBV patients treated with marketed nucleoside reverse-transcriptase inhibitors, which we refer to as a NUC-suppressed patients as well as in chronic HBV infected patients with high viral loads, not currently on treatment, which we refer to as viremic patients.

Moving to our NASH program, the past quarter was also marked by the initiation of two clinical studies. ARGON-2, or Phase 2b study evaluating our first FXR agonist EDP-305 in subjects with liver biopsy proven NASH and a first-in-human study of EDP-297, a highly potent and targeted FXR agonist, but is their follow-on FXR candidate. As we move forward toward the remainder of 2020 and beginning of 2021, we look forward to initiating two new Phase 2 trials for our program in respiratory syncytial virus or RSV.

Now, let's look at our portfolio programs in a bit more detail. I'll begin with our virology focus programs, more specifically our respiratory virus programs, RSV, hMPV and SARS-CoV-2. I'll start with RSV where we are developing EDP-938, a potent non-fusion inhibitor of RSV-A and RSV-B. 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. In an average year in the US, RSV infections lead to around 2 million outpatient visits among children younger than five years old and hospitalizations of more than 57,000 children under age five and about 177,000 older adults. Our Phase 2b double-blind, placebo-controlled study of EDP-938 is designed to enroll approximately 70 subjects up to the age of 75 years randomized to receive either 800 milligrams of EDP-938 or placebo for five days.

Starting in the Southern Hemisphere, recruitment in this study has been affected by the ongoing COVID-19 pandemic and related shutdown and social distancing measures, which have reduced the incidence of flu and RSV. Thus, as we've previously said, we are hopeful that the 2021 Northern Hemisphere RSV season will allow us to finish enrollment in RSVP, but that will be dependent on RSV being as prevalent as in a normal season.

To that end, we are reactivating close to 15 of our existing RSVP clinical sites in North America. These sites are prepared with RT-PCR machines to diagnose patients' RSV and to rule out flu and COVID in the same day, which should make enrollment as efficiently as possible. In addition, we are working to set out about an equal number of sites in six different European countries by year-end and are also planning to add sites in select Asia Pacific territories in 2021. As we know, COVID-19 is unpredictable and the rate of enrollment in this trial will continue to depend on the prevalence of RSV infection and the precautions that people are taking for COVID-19 as the winter progresses in the Northern Hemisphere.

Considering that respiratory viruses often have hotspots, we are prepared with many geographically dispersed sites to identify and enroll as many patients as possible in those RSV season. Assuming we can complete enrollment in the second quarter of 2021, our goal remains to report data in the third quarter of 2021.

We also plan to initiate two additional Phase 2 studies with EDP-938, one on adult transplant patients by the end of 2020 and another in pediatric patients in the first quarter of 2021. The adult transplant study named RSVTx is a Phase 2b randomized double-blind, placebo-controlled study to evaluate the effect of EDP-938, an adult hematopoietic cell transplant recipient and acute RSV infection of the upper respiratory tract. The pediatric trial named RSVP will be a Phase 2 randomized double-blind placebo dose-ranging study to evaluate EDP-938 regimens in hospitalized or non-hospitalized infants and children aged 28 days to 24 months, who test positive for RSV based on an approved diagnostic assay. Our goal for both of these studies to enroll during 2021 and 2022 subject to potential impact of COVID-19 on the incidence of RSV infections and activities of trial sites.

Turning to our other two respiratory virus treatments in development, hMPV, a virus that causes respiratory infection with symptoms similar to RSV and SARS-CoV-2, we have discovered several potent molecules. For SARS-CoV-2, we are leveraging our expertise in direct-acting antiviral mechanisms to discover new compounds to treat COVID-19 using a combination of drug target screening and drug design. The advantage of this discovery approach is that you can make potent purpose-built inhibitors against multiple different targets. While we are encouraged that the vaccine could be available soon, we still see a need for an oral treatment for those in various patient population, who are nonetheless infected with COVID-19.

Regarding hMPV, since announcing our new drug discovery effort in January, we've been optimizing nanomolar inhibitor leads against this virus. We are hoping to finalize a clinical candidate selection for each program next year.

Let's move onto our hepatitis B program with EDP-514, our lead core inhibitor currently being tested in chronic HBV patients, who are NUC-suppressed and in viremic HBV patients. In February, we announced positive results from Part 1 of the Phase 1a/1b clinical study of EDP-514 in healthy subjects, which allowed us to initiate Part 2 in chronic NUC-suppressed HBV patients. These encouraging data, which highlighted positive safety and tolerability as well as pharmacokinetics suitable for once daily dosing were presented in a poster presentation in August at the Digital International Liver Congress sponsored by the European Association for the Study of Liver, or EASL.

Part 2 of the Phase 1a/2b study, which is now ongoing, is designed to evaluate the safety, tolerability, pharmacokinetics and anti-viral activity of orally administered multiple ascending doses of EDP-514 versus placebo and up to 24 randomized NUC-suppressed patients over a 28-day period. Barring any further significant COVID-19 disruptions, we plan to have preliminary data from Part 2 in the second quarter of 2021.

Also on our HBV program, in July, we initiated a Phase 1b clinical trial in viremic HBV patients. This randomized double-blind placebo-controlled Phase 1b study in viremic chronic HBV patients not currently on therapy has a similar designed to the one in NUC-suppressed HBV patients. We plan to enroll 24 subjects at our clinical trial sites in Hong Kong and Taiwan, which are both areas with large unmet need for HBV treatment. We expect preliminary data from this trial in the second quarter of 2021.

And finally, we continue our HBV efforts in search of a novel oral agent against a different HBV mechanism that could be combined with EDP-514 and a NUC to create an all oral triple regimen. Progress against that has been strong this year. We'll have further details around this new program and our oral HBV triple strategy early next year.

Shifting gears to our work in non-viral liver disease. We are currently focused on NASH, where we are conducting clinical trials on EDP-305, our first FXR agonist. Based on data from ARGON-1, which was highlighted in an oral presentation at EASL in August, we initiated recruitments in ARGON-2 in July. ARGON-2 is a 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 the fibrosis. We're using EDP-305 doses of 1.5 milligrams and 2.0 milligrams, which we believe will favorably balance strong efficacious target engagement with tolerability.

We are additionally developing EDP-297, our follow-on FXR candidates in NASH with potentially best-in-class potency and targeted effects. At EASL, we presented two posters which demonstrated the treatment with EDP-297 demonstrated significantly reduced fibrosis progression and improved liver function in a rat model of NASH. We are encouraged by EDP-297's pre-clinical profile, which shows high target tissue distribution in the liver and intestine versus plasma and skin.

In September, we announced the initiation of a Phase 1 randomized, double-blind, placebo-controlled first-in-human study designed to assess the safety, tolerability and pharmacokinetics, including the effect of food intake of orally administered EDP-297 and approximately 74 healthy adult subjects. This study includes two phases, a single ascending dose phase enrolling six cohorts, including a two-part food effect cohort, and a multiple ascending dose phase enrolling three cohorts. We look forward to reporting clinical data in the second quarter of 2021. By mid-year 2021, we expect to have important new insights for both EDP-305 and EDP-297, which will inform next steps across our NASH program.

We will now weather the tissue-targeting and potency design elements we introduced in EDP-297 will allow us to better leverage FXR agonists without encountering tolerability challenges. And at approximately the same time, we expect that ARGON-2 will provide us an interim analysis at 12 weeks of treatment on a subset of patients to enhance our ability to prioritize our FXR agonist compounds and seek opportunities more quickly for development of one or both of them in combinations with other mechanisms for NASH. We are encouraged by the efficacy demonstrated by FXR agonist for NASH with fibrosis, the disease with high unmet need and believe that this mechanism has promise as a potential therapeutic.

We've accomplished all of this, while we're still managing the impact of COVID-19 on our lives and business. I'm continually impressed by the team we have built and their ability to maneuver around the challenges with which we have then presented. I want to thank our very talented and committed employees who have worked tirelessly during the pandemic. Their dedication is evidenced by the progress we've been able to make this year.

I'd like to conclude my remarks by emphasizing a few key points. We made significant progress during our fiscal year, despite the multitude of challenges presented by the COVID pandemic, including the initiation of four new clinical trials, two for our HBV program and two for our NASH program concurrent with conducting our ongoing Phase 2b program for RSV.

Further, we are on schedule to initiate RSVTx in adult transplant patients later this quarter and RSV 2 [Phonetic] in pediatric patients in the first quarter of 2021. We were also successful in moving our HBV trial in viremic patients forward as well as on progressing our Phase 1b trial in HBV patients, who are NUC-suppressed with preliminary data expected for both these studies in the second quarter of 2021.

And finally, we look forward to advancing our candidates in NASH with the ARGON-2 trial, EDP-305 and the Phase 1 study of EDP-297. Looking toward 2021, we are poised for an exciting year with multiple data readouts anticipated across our pipeline.

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 and Administration and Chief Financial Officer

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

For the quarter, total revenue was $23.6 million and consisted entirely of royalty revenue earned on AbbVie's global HCV product sales of $414 million. This compares to total revenue of $51.3 million for the same period in 2019. The decrease in our royalty revenue was due to lower global HCV product sales as reported by AbbVie, as treated patient volumes have remained below pre-COVID levels. AbbVie now expect total HCV sales of approximately $1.9 billion for the calendar 2020, as treatments remain below pre-COVID levels.

Our royalty revenue was calculated on 50% of MAVIRET sales at a blend of our first and second royalty tiers of 10% and 12%, respectively and on approximately 30% of VIEKIRA sales at a royalty rate of 10% after adjustments for certain contractual discounts, rebates and set-offs, which are now just over 2% of AbbVie's total reported HCV sales.

Our royalties are calculated on a calendar year basis. Therefore, royalties in 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 2019 Form 10-K.

Moving on to our expenses. The three months ended September 30, 2020 research and development expenses totaled $36.7 million compared to $38.7 million for the same period in 2019. This decrease was primarily due to the timing of our clinical studies year-over-year and COVID-19-related delays and two clinical studies that are now on going. General and administrative expense for the quarter was $6.7 million compared to $6.2 million for the same period in 2019.

Enanta recorded income tax expense of $10.7 million for the three months ended September 30, 2020 compared to an income tax benefit of $0.5 million for the same period in 2019. The income tax expense in 2020 was driven by a non-cash valuation allowance recorded against our deferred tax assets of approximately $18 million, which was partially offset by $7.3 million of NOL carrybacks and R&D tax credits. For the 12 months ended September 30, 2020, Enanta's effective tax benefit was approximately 3% compared to an effective tax rate of approximately 2% for the 12 months ended September 30, 2019. I'd like to note that the drivers of the decrease in the effective tax rate are covered in the press release.

Net loss for the three months ended September 30, 2020 was $29.3 million, or a loss of $1.46 per diluted common share compared to net income of $9.2 million, or $0.44 per diluted common share for the corresponding period in 2019. The net loss for 2020 was due to the decrease in HCV royalties earned under our AbbVie agreement, which were adversely affected by the COVID-19 pandemic.

Enanta ended the quarter with approximately $419 million in cash and marketable securities, an increase of approximately $19 million from our 2019 fiscal year-end balance of $400 million. Notwithstanding our current level of operating losses, our existing cash balances together with our ongoing royalties are expected to be sufficient to fund our operations for the foreseeable future.

Regarding guidance for fiscal 2021, we expect our research and development expense to be between $145 million and $165 million, and our general and administrative expense to be between $27 million and $33 million. Further financial details are available in our press release and will be available in our annual report on Form 10-K when filed.

I'd now like to turn the call back to the operator, and he'll wind up the lines for questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] Your first question comes from the line of Roy Buchanan from JMP Securities. Please go ahead.

Roy Buchanan -- JMP Securities -- Analyst

Hi. Great. Thanks for taking the questions. Hello, I had a few on RSV program. So for RSVP, it sounds like there are more set versus the last quarter in terms of adding agent sites in 2021. Does the northern Asian season margin [Indecipherable] in North America? And can you provide any specifics on the potential agent site? Is China included?

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

Hi. This is Jay. So, in terms of Asia and different countries have slightly different season, summer actually almost year round. So the broader perspective on the market with the Northern Hemisphere, the U.S. and Canada and we look at Europe, we think if we can build on Asia that we'll be getting coverage that we've somewhere for [Phonetic] maybe nine or so months out of the year. So I think, specifically, we'll come back later with other Asian countries in particular that we're picking up, but that's -- the plan is to continue to add some of those in the 2021 time frame. Of course, in the meantime, we'll have lots of North American sites on board. You recall, we were poised with dozens of them previously, so we'll have approaching 50 North American sites, and hopefully at least that many more on the EU by the end of the year. So really trying to pull the stuff out for many, many sites.

Roy Buchanan -- JMP Securities -- Analyst

So any of the North American sites yet opened? Do you have any feedback from those sites?

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

It's just coming up, but what we can tell is that if you recall last year, the season came early. And so, this year versus last year, it's a little quiet so far this year and we just have to keep an eye on that. We started the screen. But in general, the rates set by CDC are pretty quiet right now. We'll just have to wait and see as the season progresses with the backdrop of COVID and social distancing and alike what the season will be like.

Roy Buchanan -- JMP Securities -- Analyst

Okay, great. And I had a couple on the new Phase 2 trials, if you don't mind. So for RSVPED, how many patients are you planning and the endpoint is progression to lower respiratory tract infection? And then for that trial, we have investigated for this. And I guess maybe kind of similar to the last question just how are they viewing the current situation and the feasibility starting the trial?

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

I'm sorry. Are you talking about the ped study?

Roy Buchanan -- JMP Securities -- Analyst

Yeah. Right RSVPEDs.

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

Yeah, so the -- on the ped's front, we're aiming to start in next quarter and we're aiming for about 90 patients total. And yeah, so I think those are the main points in terms of the ped study itself. Part 1 is going to be safety in PK, and then we'll have a Part 2 where we'll be looking at the actual virus. So change in RSV shedding with all other things that we look at. So ped to be given 938 or placebo for five days, and we'll be looking in that cohorts up to 24 months of age.

Roy Buchanan -- JMP Securities -- Analyst

Okay, great. And then one last one on the transplant trial, if you don't mind. So how many sites are you planning for that one? Are you also including Europe? And is there any information on the current RSV rates and the transplant setting either in the U.S. or elsewhere? Thanks.

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

I don't think the sites will come on line. We'll get numerous sites up, will be a global study that will have sites in all the obvious sort of territories. There -- we'll be looking at 938 versus placebo for 21 days, and we're doing it a little bit longer because the patients are obviously compromised. There aren't a lot of statistics on this specific patient population, so we just get start up in a lot of the centers during the normal season, and recruit as they come.

Operator

Your next question comes from the line of Brian Skorney from Baird. Please go ahead.

Jack Allen -- Robert W. Baird & Co. -- Analyst

Hi, thank you. This is Jack dialing in for Brian. Thanks for taking our questions. We have one quick one. We're wondering about if you have any updated thoughts with regard to the HBV opportunity for core inhibitors in light of the disappointing news from assembly and their core plus NUC regimen and the sustained viral response data we saw there? I know you're looking at the triple combination internally as well, but we're just wondering what your thoughts were and what does that means. Thank you.

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

Yeah. So it's an interesting data set. I have to hand it to them for doing that study, the study of, let's say, I was looking at the core inhibitor plus a NUC plus time. So the question is could a core plus a NUC plus time get you to a functional cure. And again, nobody knew the answer to that question. They looked at different time points over the course of the -- there is no investigations, three months and six months, a year or so forth. And well against the results that were produced in this initial study weren't particularly positive. There could be a lot of different reasons, I mean, it's either NUC plus a core plus more time, although they went for 12 months to 18 months. So, it's a good chunk of time. It's possible that the -- their first generation core inhibitor wasn't applying to NASH. I think that's the main reasons why they're working on other generations.

EDP-514, our core inhibitor is roughly 10 times more potent than the one that you referring to in that study. And then another possibility of course is that a core plus a NUC plus a third agent that actually be the one in strategy to get you there just applying enough pressure on the virus and from different angles and from different stages of mechanistic intervention. And so, all along we've been working on multiple different mechanisms. So, we'd have something in addition to a NUC plus a core inhibitor and we're making pretty good progress on that front. So I think earlier next year, we'll have more to sort of discussion around our progress on that front. And then also on our strategy is coming up with a potential triple.

I think for us, we're highly focused on all oral treatments. As you know some of the -- well, historically people have used their interferon as an injectable with or without a NUC, but it's sort of a poorly tolerated treatment that leads to very, very low cure rate. Other folks have been using some RNA approaches to add injectables to oral agents and that's an interesting approach that some others are taking. We're highly focused and committed to, if we can come up with an all oral regimen we think in the end having all oral therapies that potentially could be put together as a fixed-dose combination and could be disseminated to the millions of people -- hundreds of millions of people globally that suffer from this infection that would offer significant advantages overall. So, highly focused on all oral agents and hopefully with the addition of a NUC in all oral treatment.

Operator

Your next question comes from the line of Akash Tewari from Wolfe Research. Please go ahead.

Amy Li -- Wolfe Research -- Analyst

Hi, this is Amy Li on for Akash. Thanks so much for taking our questions. We just have several on RSV and then one on HBV. So on -- for your -- starting with your Phase 2b in stem cell transplant, do you have any data supporting the safety of longer-term dosing with EDP-938? And then, why did you set the symptom onset cut off to be three days instead of two days like you did for outpatient adults?

And then on the RSV outpatient trial, how many patients are currently enrolled in this trial and is there any way to modify it into a Phase 2/3 registrational trial? Additionally, how are you ensuring that patients will be dosed within the right time window?

And then one last one on HBV, one hypothesis why assembly's core inhibitor failed is that the drug doesn't completely stopped the formation of new cccDNA and we were just wondering what the in vivo or in vitro potency of EDP-514 is too specifically inhibit cccDNA formulations. Thank you.

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

Well, let's start with the first one. So three days versus two days in terms of the transplant, I think is -- it's in the range we're looking at 48 hours with the inclusion criteria for RSVP. There was nothing special about that and we believe that sooner is always likely to be better. Flu drugs are often within two days or three days. And so, 48, 72 hours and they are probably pretty reasonable time frames to be looking at. We certainly have all the talks as you asked to support this type of study progressing forward. So what were some of your other question, couldn't write them down fast enough. Did you go offline?

Amy Li -- Wolfe Research -- Analyst

Hello, can you hear me?

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

I can now.

Amy Li -- Wolfe Research -- Analyst

Okay. Great. I apologize for that. Yeah, so for the RSVP [Speech Overlap].

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

How about one at a time?

Amy Li -- Wolfe Research -- Analyst

For sure, yeah, so outpatient trial, how many patients are currently enrolled and is there a potential to modify into some sort of a Phase 2, 3 registrational trial?

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

Yeah, I think this is -- it's really a Phase 2 study that we're using to capture the initial data in that patient population. So our plan is for it to be a Phase 2. We don't really discuss the recruitment on ongoing trials other than the set targets for where we are -- where we expect to have data. So it's -- but then again, to be clear, RSVP is not a registrational study based on start to be supportive of the entire program overall to better assess the feasibility, the window, etc. And so, we again are able to get people to arrive with symptoms within the 48 hours time line. And so, again, I think we'll have -- the bigger wildcard is what were the season be and the presence of COVID and social distancing and potential lockdown. That's something that no one has any idea. We'll just have to go into and sort out.

Amy Li -- Wolfe Research -- Analyst

Great. Thank you. And then our last question on hepatitis B. Just wanted to know what the in vitro and in vivo potency of EDP-514 is specifically on inhibiting cccDNA formation?

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

In terms of cccDNA formation as I'd recall, it's in the nanomolar range. I want to say it was around 30 nanomolars. Again, this is something that you determine in vitro at the time of an infection. So 30 nanomolars fit in my mind.

Amy Li -- Wolfe Research -- Analyst

Great. Thank you so much.

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

You're welcome.

Operator

Your next question comes from the line of Yasmeen Rahimi from Piper Sandler. Please go ahead.

Yasmeen Rahimi -- Piper Sandler Companies -- Analyst

Hi, team. I have two questions. Maybe, the first question is what do we know about the viral kinetics? Obviously, RSV is different between hospitalized per a pediatric patient versus immunocompromised. And how do we really capture this efficacy in the next stage of development? So I think commenting on that would be helpful.

And then the second one question is recently at the EASL meeting, we saw data from another FXR agonist that had very encouraging biomarker data, but failed to achieve histological benefit. So how do we think about sort of the mix of correlation, especially as we think about data for the first generation and the second generation of FXR agonist? And thank you for taking our questions.

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

Sure. So starting with the second question first. I think tropifexor is the FXR you are referring to, correct. It was in a 48-week study and they don't see a lot of the market is moving on the right directions. They did see pruritus, but they didn't see -- I don't think they would step further on fibrosis improvement. And I think one of the key differences people generally view Intercept's results as being the sort of a benchmark ones to be looking at for the -- as leadership and the class. And I think one of the big differences, they didn't go 72 weeks. So, that's obviously what we've built into our ARGON-2 study. Again, many people have looked at shorter duration lines on various relative success in terms of trying to demonstrate an effect on fibrosis. So we just looked to Intercept's front study in a Phase 2/3 rework and designed ARGON-2 accordingly.

So I think the other thing is the Novartis study, I wasn't -- I don't believe it was hugely power in terms of numbers of subjects also. So I would question I guess about the powering in order to get a difference from the placebo and also the shorter duration of the study that they did. I think some of these fibrosis improvement endpoints are just necessarily going to be one in two [Phonetic] patient lines.

And peds usually prevent with the upper airway infection. They have high a viral load in the upper respiratory tract initially. The key whether it's immunocompromised or not is to make sure try to prevent -- try to catch the infection and it's in upper airway infection prevented from the virus from sort of going down the elevator shaft into the lower airways, which is where we become -- start to have as much of the inflammatory disease going on as you do viral disease. I think symptoms can be assessed them or specific outcome scale.

In transplant, you will be looking for patients that have initially upper airway disease and try to have that prevention of lower airway complications. It's a -- I'm not specifically able to point to very straighten out in a way, I'm not. I think on the differences in terms of how that viral course plays out of immunocompromised one, but I do believe longer treatment duration is wanted in our patient population.

Yasmeen Rahimi -- Piper Sandler Companies -- Analyst

Thank you so much, Jay, for answering my questions.

Operator

Your next question comes from the line of Zegbeh Jallah from ROTH Capital Partners. Please go ahead.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Hi. Thanks for taking my question. I have two quick ones for you. I think the first one is, I understand that you've been really busy with multiple studies, so I'm just curious about particularly in RSV study. Do you think that they could hamper the enrollment of the ongoing Phase 2b study? Also what are some of the risk that you think positively the studies since COVID mentioned increased costs associated with some studies the installed and delayed due to COVID?

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

So what was the first part of the question? We're competing for one another the studies.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Yeah, just competing for enrollment, or do you not expect that to be a problem?

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

Among our studies or between our studies and other studies?

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Between your studies.

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

Yeah, no, I think there -- the each requires significant internal resource, but they are very different and diverse patient population. So I don't expect any real challenges there. The question on COVID, there is -- there was a question, I mean, we do know -- our people have been -- as we were setting up for the Southern Hemisphere in the late spring, no one really knew what the 1Q time would look like in the Southern Hemisphere. And that turns out due to a lot of the mitigation strategies that places like New Zealand were right on top of -- they were able to stem the tide of COVID significantly.

But with that, due to travel bans and lockdowns and social distancing and closing and such, they did pretty much prevent many other respiratory virus things from similarly occurring. And to that end, you can look at through as one of the major centers for that RSV as well. So there was a very little with regards to the -- at some of the other respiratory infections due to COVID mitigation strategies and now we're rolling into what looks like a pretty nasty COVID situation emerging on in the Northern Hemisphere, particularly in the early U.S. and EU.

So we'll just have to see. The most we can do is have sites set up everywhere. Again, we'll have approximately 100 sites in the U.S., EU and ultimately in parts of Asia to try to capture a total of 70 patients and -- but it is going to be in some major COVID dependent I think. Hopefully, we won't have some of the specific trial impacts that we had in earlier COVID waves in North America, but no one can rule those sorts of things out and we'll just have to see what some of the social distancing and other sorts of things plays out in terms of rates of diagnosed RSV and flu and other kinds of things. So through the season, we're rolling into, but we'll just have to watch.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Makes sense. Thanks. And then, just a quick follow up here about the NASH data expected in mid-2021. How much data do you expect or would you actually like to have at the time of readout and then based on the enrollment that we're assuming now, how confident are you that you'll be able to achieve that?

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

Are you talking about 305 or?

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Yeah.

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

ARGON-2?

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

I suppose both of them, more 305 since you had some cohort.

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

Yeah, OK. So well, we're on track. I mean, today, guidance that we gave we have two bits in NASH. In fact, we have a lot of catalysts coming in sort of the first half of the year. We'll have two in HBV in the second quarter. We're also expecting to have data from our follow-on FXR 297 in the second quarter and in our Phase 2b study of EDP-305, so-called ARGON-2 study. We're hoping to have enough patients fit the target for the interim analysis threshold that we can then have that informed decision-making around the whole NASH program. So, we then will have all kinds of data to look at in that time frame.

Right now things are running along and going generally smoothly. So anything can happen in between now and the middle of next year with regards to COVID. But it will be something that we're not currently seeing that we're on track for those targets that we guided to tonight.

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Looking forward to the most update.

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

Yeah. Thank you.

Operator

Your next question comes from the line Eric Joseph from JPMorgan. Please go ahead.

Eric Joseph -- J.P. Morgan -- Analyst

Hi, good evening. Thanks for taking the questions. From our recent interactions with KOLs, there's a lot of interest in suing FXRs the combination regimen and you talked about exploring some non-FXR modalities in NASH. So what's your latest thinking on the -- will be an attractive mechanism to partner with either EDP-305 and EDP-297? And do you have a sense of whether development of the combo regimen to novel agents would be feasible as our initial registration strategy? Thanks.

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

Thanks, Eric. So I felt our combos are really interesting because there is some elements of FXR. I mean FXR is a little bit of a sort of a utility that are, I mean, it goes after some of the pro-fibrotic mechanisms. It's got some anti-inflammatory components. And it also affects metabolically. And so, these are some of the hallmarks of the disease. So as such, it could really tuck-in with many of the different mechanisms that are under study and there are a bunch of them out there.

So I think there is a reasonably solid rationale to tuck-in an FXR and with virtually any of the other classes. Ultimately, in terms of combination strategies, I think clearly some people are thinking of fixed dose combinations, and there are -- some people are thinking of maybe taking single agents forward, so that they can be mixed and matched. I think both of those are possibilities, but in the end, you're going to need likely to have a combination. So now, our plan is to generate interesting -- in the case of 305 existing Phase 2 data set that would enable us to even through having checked at the interim analysis at 12 weeks next year to then think about peeling off a dose that could then be used in combination with another agent from somewhere else. So that's the plan there.

I think as the field matures, this is very likely to end up in combinations that, if their oral could be potentially fixed dose combinations. I know that was one of the approaches that Gilead was clearly taking at the beginning when they were looking at their multiple single mechanisms and in combinations, it's almost reminiscing to the disease of Hep C. And so, that's following it down further on, but if combination studies sort of promise of one sort or other, I would imagine that people will go forward with combinations for approval.

Eric Joseph -- J.P. Morgan -- Analyst

Okay. Great. And just a follow-up on HBV, if I could. We're just picking up on your comments about the potential for an all oral triple regimen. I think what you can share on what the third leg of vet tool might look like, and I guess is there a party component to the HBV life cycle that could be adopted here and I guess that when you're able to say more about what the mechanism might be would be surprised, all I get any relative to some of the other points in the life cycle that are being pursued so far for either HBV or HCV? Thanks.

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

Yeah. Thanks for the question. We're not quite ready tonight to sort of that we expect that we will be by early next year. So on that front stay tuned, but we've been sort of grinding away for a long time in the background on other have ceased primarily. You've sort of hinted that over time, and I think we're getting to the point now where some of this is hopefully getting pretty close. So -- and in the end, our plan is to try to go for all oral, but stay tuned.

Eric Joseph -- J.P. Morgan -- Analyst

Thanks for taking the question.

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

Thank you.

Operator

Your next question comes from the line of Brian Abrahams from RBC Capital Markets. Please go ahead.

Brian Abrahams -- RBC Capital Markets -- Analyst

Hey, Jay. Hey, Paul. Hey team. Thanks for taking my questions. Just starting on NASH, I was wondering if you could speak broadly about your views on the evolving regulatory landscape there and how you might incorporate that into the development program. For instance, are there additional non-invasive tests you may explore to ensure easily translatable methods for identification of patients or a benefit risk if an FXR is optimal? Do you have any views on what the accelerated approval endpoints are and whether those might evolve? Thanks.

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

Yeah. Thanks for the question. As you know, everybody is focused on trying to get rid of biopsies, not only in an endpoint that is one of the important for approval, but also in terms of more robustly looking for a non-invasive test that could stratify patients in a better way and also perhaps to give you a more informed and reliable readout and histologic endpoint. So we'll be working on with the scientific community to explore this within our programs. We hope that the landscape will change before our registration study and it's a chance for the good. There is a chance for those that have may not, but nonetheless, the field is moving very solidly in that direction -- there is a lot of encouraging signs we've been coming out of AASLD on that front. It's probably not quite right there, but for now, we're still including histologic readouts obviously in our study, because that is the best at this time at least in terms of now targeting provable endpoints, but I suspect that landscape will change and it could change by the time one is ready for Phase 3.

Brian Abrahams -- RBC Capital Markets -- Analyst

Got it. And then on the earlier stage respiratory programs, human metapneumovirus and SARS-CoV-2, I was wondering if you could talk about the potential timelines for development there once you select lead candidates and what's the -- how does the recent success of vaccines for COVID-19 impact your prioritization of development among those early stage programs? Is there a rule you would still potentially see for a COVID-19 therapy for instance in stockpiling? Thanks.

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

Yeah. So absolutely. I think the last few weeks is including, I guess in part today, there has been a lot of news on the vaccine front and much of it's quite encouraging. I think there was sort of the things we know and the things we don't know. Well, number one, we don't know what the efficacy rates are going to be broadly across all sorts of different patient population, that's number one. Nor do we fully know yet, although there are some encouraging signs that your ability may be in a good direction, but you just really -- you need a lot more formation to understand how fully efficacious vaccines are and further how much they do or don't obviate the need for therapy. So I think there's questions about even long-term safety, there's questions about compliance in terms of getting vaccinated.

And so, for the foreseeable future, I think there are going to be people for one reason or another view turn up testing positive for COVID-19. And to that end, particularly in people who are asymptomatic or otherwise fairly early in the stage of their infections. This is where it makes fantastic sense to have a therapeutic. So we'll continue down this path with the full expectation that there will be the need in some form for therapeutics.

With regards to that and human metapneumovirus for which there is no current vaccines and with RSVs, but coming back to human metapneumo and our SARS-CoV-2 program, I'd say they are tracking pretty similarly right now even though we -- I mean, we announced our human metapneumo program and in January with some early leads and then we announced the start of this is beginning to work at SARS-CoV-2 in the March timeframe, but the scientists have made really good progress. I'd say we've got potent molecule -- very potent molecules from against both of those viruses. And we're now turning potent molecules -- selection of potent molecules onto the finalist candidate for clinical development. So we're targeting to have hopefully long-term each of those programs, the candidates for next year. And then, from the time -- I think you want to part of your question was in time of your candidate selection, how long until you get it in the clinic. There are -- you just got to finish a lot of buying enabling things, but typically nine, 10 months, something like that is often achievable at least in our hands by the criteria that we use to nominate our candidates.

So again, we're hopeful to further harvest the candidate for each of those viruses next year. It should really begin to round out as our goal is really building out sort of leading human respiratory virus portfolio with the flagship of RSV. In just weeks, we expected we'll have three different Phase 2s going on. Just FYI, we haven't -- staff working on RSV research, we're still exploring other mechanisms there to consider, again not because we don't have tremendous faith in 938, but we just want to continue to establish a leadership position there looking at any reasonable mechanism start comparing and even looking, we don't think we need combination for the reason. Maybe, there is a certain patient population that would profit from having a combination and if that's the case we would love to have that for an off-the-shelf facet that we have and have a 100% ownership. So that's going on in RSV.

Again hopefully soon, we'll be supplementing that with human metapneumo agent, human metapneumo second leading cause of pretty much everything RSV causes and then, COVID therapeutics too, we've got a watchful eye on how the things are going to play there. But again, I think there is no one who wouldn't want to have an effective COVID-19 SARS-CoV-2 agent available to them something that was safe and oral and that could be administered at early stages from the first sign of a positive test and without needing to head into an infusion center, neither who are monoclonal antibody or an agent that's injectable. So this remains a strong goal. And I think in the aggregate, it really builds out an interesting sort of portfolio of human respiratory viral app [Phonetic].

Brian Abrahams -- RBC Capital Markets -- Analyst

Great. Thanks so much.

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

You're welcome.

Operator

Your last question comes from the line of Jay Olson from Oppenheimer. Please go ahead.

Jay Olson -- Oppenheimer & Co. -- Analyst

Hey guys. Thanks for taking our questions. We have two of them. The first question is about GSK's RSV vaccine, which they announced today was moving into a Phase 3 study, is that vaccines eventually successful? Would it have any long-term impact on your view of the market opportunity for an RSV therapeutics? And then, we have another question about NASH.

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

Yeah. This is a maternal vaccine, is that right?

Jay Olson -- Oppenheimer & Co. -- Analyst

Yes, that's correct.

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

Yeah. I mean that approach has been tried before, and it's had promising results in Phase 2 only that to hold up in Phase 3 study. I think there is just a fair number of questions around that strategy not least of which is the degree of penetration and compliance in terms of doing mandatory -- or not mandatory, but doing broad vaccinations of pregnant women for something that may or not end up being a big issue. So I think there are other questions that are reimbursement questions, how these things getting paid, will people really reimburse for something that again is a -- well, it's just a question of the dollar value per benefit garnered there because some of these vaccines may not be that durable, and you're ultimately just maybe postponing the inevitable. I mean children reliably get RSV infection. And if they -- they usually rely on a few years of successful RSV infections to sort of build certain immunity, but if there is a break in that immunity, it's not sort of a durable one that we are going to be pronged to get new infections anyway. So I think there has been questions around the efficacy piece of that approach. And once again one in which I think you would want still have under any -- even under any vaccine scenario, a robust armamentarium of small molecule therapeutics. So there is -- I think there has been safety hurdles in that area.

Jay Olson -- Oppenheimer & Co. -- Analyst

Okay. Great. Thank you. And then a second question is about NASH, and we are wondering if the CRL that Intercept received and then the subsequent work they're doing to resubmit their NDA kind of have any impact on your own development plan for an FXR agonist in NASH and specifically, if you would consider targeting a narrower NASH patient population with advanced fibrosis?

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

I think we just need to fully understand the situation. I'm not sure anybody really knows all the details around that CRL. For us and for our immediate next steps, they're on a certain path that we've outlined and defined again today and they're not -- there is -- so there's literally no impact of that based on our current ongoing activities. I think we as a NASH company in part and all other NASH companies should be watching work that CRL meant just to fully understand it. But until we have a lot more granular detail around, I'm hesitant to sort of recommend course changes at this time.

Jay Olson -- Oppenheimer & Co. -- Analyst

Okay. Great. Thanks for taking the questions and have a Happy Thanksgiving.

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

You too. Thank you.

Operator

I will now turn the call back over to Jennifer Viera for closing remarks.

Jennifer Viera -- Senior Director of Investor Relations and Corporate Communications

Thank you everyone for joining us today. If you have any additional questions, please feel free to give us a call or send me an email. Thanks so much. Have a good night. Bye-bye.

Operator

[Operator Closing Remarks]

Duration: 70 minutes

Call participants:

Jennifer Viera -- Senior Director of Investor Relations and Corporate Communications

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

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

Roy Buchanan -- JMP Securities -- Analyst

Jack Allen -- Robert W. Baird & Co. -- Analyst

Amy Li -- Wolfe Research -- Analyst

Yasmeen Rahimi -- Piper Sandler Companies -- Analyst

Zegbeh Jallah -- ROTH Capital Partners -- Analyst

Eric Joseph -- J.P. Morgan -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

Jay Olson -- Oppenheimer & Co. -- Analyst

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