Theriva Biologics, Inc. (TOVX) Q3 2016 Earnings Report, Transcript and Summary

Good morning, and welcome to the Synthetic Biologics Third Quarter 2016 Operational Highlights and Financial Results Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Vincent Perrone, Manager-Corporate Communications at Synthetic Biologics. Vincent?

Thank you, Angie, and good morning everyone. Welcome to Synthetic Biologics third quarter 2016 operational highlights and financial results Investor Conference Call. Today, I'm joined by our CEO, Jeff Riley; and our CFO, Steve Shallcross. Synthetic Biologics issued a press release this afternoon, which provided an operational highlights and reported financial results for the quarter ending September 30, 2016. This release can be found in the Investors section of our website. During our call today, Jeff will provide an update on our pipeline programs and Steve will summarize our financial highlights. We'll take questions after our prepared remarks. In addition to the phone lines, this call is being streamed live over the Internet today and the webcast replay will be archived on our website for 90 days. During this call, we will be making forward-looking statements regarding Synthetic Biologics' current expectations and projections about future events. Generally, the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions. These statements are based upon current beliefs, expectations and assumptions, and are subject to a number of risks and uncertainties, including those set forth at Synthetic Biologics filings with the SEC, many of which are difficult to predict. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call as Synthetic Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events or otherwise, except as required by law. With that, I'd like to turn the call over to Jeff.

Thank you Vincent, and good morning everybody. Thanks for joining our call this morning. During the third quarter of 2016, Synthetic Biologics achieved several important milestones, both inside and outside of the clinical. With the announcement of clinically significant results from Phase 2 clinical trials for both of our lead microbiome-focused programs. During the first half of the year we began our transition from an early stage clinical development company focused primarily under our discovery to clinical development -- late stage clinical development company focused on advancing our programs towards commercialization. Our clinical momentum during the third quarter continue to fuel this transition and I'd like to start our call this morning by providing a brief recap of our operational and clinical achievements since the beginning of the third quarter. SYN-004 or as it's called today ribaxamase, is our first-in-class oral enzyme designed to degrade certain IV beta-lactam antibiotics which are excreted into the gastrointestinal tract and to predict or preserve the naturally occurring ecosystem of micro-organisms in the gut microbiome, for the prevention of Clostridium difficile infection, antibiotic-associated diarrhea, and the emergence of antibiotic-resistant organisms. During the third quarter of 2015, we initiated our global phase 2b placebo controlled proof-of-concept clinical trial to assess whether ribaxamase may prevent CDI, CDAD and AAD in patients who are hospitalized with a lower respiratory tract infection and receiving IV ceftriaxone, an interim analysis was built into this study whereby an independent interim analysis committee would assess the rate of CDI and AAD in the patient population to determine whether our study was adequately powered. During the third quarter and following the completion of this interim analysis in which we remain blinded to all study data and no safety issues were reported, the IAC advised Synthetic Biologics' to continue the study as per the protocol without modification indicating that the study was adequately powered and should continue as planned. Following the completion of the interim analysis, enrollment of 413 patients had occurred in the Phase 2b trial exceeding the desired 372 patients outlined in the study protocol. These better than expected numbers allowed for the successful completion of the enrollment requirement for this clinical trial during the third quarter. All ongoing patients are expected to continue through the follow-up period in order to complete this study. Consistent with the results previously demonstrated by a Phase 2 study conducted in Europe by IPSAT, we believe ribaxamase has the ability to prevent the spread and occurrence of antibiotic resistance in organisms present in the gut and expose to certain residual IV antibiotics. During the third quarter we announced the award of a research contract from the Centers for Disease Control and Prevention as part of the CDC's antibiotic resistance solutions initiative. This government sponsored initiative is intended to assess how selective pressure from IV antibiotics may lead to the emergence of antibiotic resistance in the gut microbiome. Continued exposure, overuse and misuse of antibiotics may cause micro-organisms to develop resistance to anti-microbial agents. Research shows such resistant strains of micro-organisms maybe capable of transferring resistant genes between with other species increasing the threat of a superbug epidemic whereby commonly administered antibiotics maybe rendered ineffective. Funding from the CDC will support our research to evaluate ribaxamases ability to reduce selective pressure associated with antibiotic-mediated resistance in the gut microbiome's of patients enrolled in our Phase 2b clinical trial. By examining DNA obtained from patient samples, we will compare the incidence of antibiotic resistance in the gut microbiome before, during and after patients are treated with either ribaxamase or placebo to determine whether ribaxamase may prevent the onset of anti-microbial resistance. We anticipate announcing top line results from our Phase 2b proof-of-concept clinical trial during the first quarter of next year. I'm now going to switch to SYN-10, our IBS drug. It is -- again, SYN-10 is our proprietary modified release formulation of lovastatin lactone designed to target the methane-producing function of certain microorganisms in the gut with minimal disruption to the natural balance of the gut microbiome. In previously reported studies, methane was shown to be the foremost causative factor of the symptoms associated with IBSC. It follows then that by reducing methane production in the gut of IBS-C patients, SYN-10 has the potential to become a best-in-class in chronic treatment for the cause of the constipation, abdominal pain and bloating patients diagnosed with IBSC experience as a result of this disease. Unlike other marketed or development stage therapies which treat the symptoms associated with IBSC, our goals develop a solution to the underlying problem. During the third quarter we participated and entered Phase 2 meeting with the FDA representing a pivotal and critical clinical milestone for SYN-10 and Synthetic Biologics. During the collaborative discussion with the agency, data from two previously reported Phase 2 clinical trials of SYN-10 were reviewed. Following our discussion, the determination was made to advance SYN-10 into Phase 3 clinical trials. This critical milestone brings us closer towards our goal of making SYN-10 commercially available and providing long-term relief to the millions of people suffering from IBS-C. With guidance from the FDA we are developing a phase 2b three adaptive design for study for our first pivotal trial. On a particular note we intend to broaden the potential patent population beyond IBS-C patients with high breath methane in the study and evaluate SYN-10's efficacy for treating IBS-C patients who present at screen with low breath methane levels. Our clinical development team continues to collaborate with the FDA to determine the optimal clinical pathway to advance SYN-10 into pivotal trials. To-date, we have submitted a study protocol design and correspondence statistical analysis plan and are waiting the agency's feedback. Given the well documented and robust safety profile for lovastatin, we believe we can utilize a 505(b)(2) regulatory pathway as we progress through the clinic towards an NDA. We anticipate initiating this first pivotal clinical trial for SYN-10 during the first quarter of 2017 and look forward to sharing additional details of the study design following feedback from the FDA. Before turning it over to Steve for discussion of our financial results, I'd like to quickly address our capital position. During the third quarter, we continue to operate in an efficient manner and as of September 30, 2016 cash and cash equivalents were $4.5 million. Synthetic Biologics' clinical progress for ribaxamase and SYN-10 leaves us well positioned to advance both lead microbiome focus programs into Phase 3 development. To do so, we intend to strengthen our balance sheet and continue to evaluate capital raising strategies which would allow us to benefit from our recent clinical momentum. Such strategies may include assessing, accessing the equity capital markets or potentially leveraging relationships with our loyal investors or continuing to utilize a recently filed aftermarket offering as necessary. We continue to evaluate and engage in collaborative discussions with potential domestic and international partners for both of these programs. At this time, I'd like to turn the call to our Chief Financial Officer, Steve Shallcross. Steve?

Thanks, Jeff. During the third quarter we continue to operate in an efficient manner and spending approximately 80% of our capital for the continued clinical development of both our lead microbiome focused drug candidates and early stage pipeline programs. Our focus remains on advancing both, SYN-10 and ribaxamase into Phase 3 clinical development. Synthetic Biologics' third quarter financial results were included in the press release which is distributed over the news wire earlier this morning. The company's 10-Q for the quarter ended September 30, 2016 was also filed with the SEC earlier today; both can be found on the Investor Relation section on our website. At this time, I'd like to provide an overview of our financial results for the third quarter of 2016. For the third quarter of 2016, general and administrative expenses were $2.1 million compared to $1.6 million in the same quarter last year. This increase is primarily a result of increased stock-based compensation, investor relations expenses, and employee salary and benefit cost; offset by lower consulting and legal expenses. Non-cash charges related to stock based compensation were $524,000 in the third quarter of 2016 compared to $387,000 in the same period last year. Research and development expenses decreased to $7 million in the third quarter of 2016 compared to $10 million in the same period last year. This decrease is primarily the result of charges related to our exclusive channel collaboration agreement with Traxon that we entered into August 2015. In 2015, we issued a 937,500 shares of our common stock to Traxon as payment of the technology excess fee that resulted in a non-cash charge of $3 million for the three months ended September 30, 2015. Non-cash charges related to stock-based compensation were $422,000 for the quarter ended September 30, 2016 compared to $259,000 for the same period last year. Cash and cash equivalents as of September 30, 2016 were $4.5 million compared to $31.8 million for the same period in 2015. Our current cash position reflects the partial utilization of our prepaid expense balance for ongoing Phase 2b clinical program cost for ribaxamase, the completion of Phase 2 trials for SYN-10, and our ability to continue to manage our overhead expenses as we continue to grow. We anticipate cash utilization remain steady in the fourth quarter of 2016 as cash prepayments made during 2015 will continue to be used to offset a portion of the cost associated with the ongoing Phase 2b clinical trial for ribaxamase. We anticipate our 2017 quarterly cash burned will begin to increase as we move SYN-10 forward into our planned Phase 2b3 clinical trial next year. Now I'll turn the call back over to Vincent.

Thank you, Steve. Angie we'd like to open the phone line to questions, would you please describe the procedure to ask questions for our listeners?

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Adnan Butt from RBC Capital. Please go ahead.

Thanks, two questions; first on ribaxamase. Could you tell us if dosing is complete at this time and you're just following patients for rates for CDI, CDAD and AAD?

Yes, enrollment is complete and we are now following the six-week follow-up after the last patient was dosed.

Can you remind us what's the expected rate of CDI or CDAD?

We powered the study based upon a 5% CDAD infection rate and we got that rate from the CDC's databases, Antibiotic Associated Diarrhea is roughly 25%; so the trial was powered 5% for CDI and 25% for AAD.

Okay. And company remains blinded to the data even the rates of CDI and ADD so far?

We are blinded at this point, yes.

Thanks. And just one quick question on SYN-010 development, could you tell us what the differences between a 2b/3 and 3? What transitions the 2b and 2 registration study?

It's called an adaptive study design, and the FDA basically gave us guidance as to how to create this thing. Essentially we'll be looking to have an interim analysis once we have roughly 400 patients. This study will be between 800 and 900 patients total, where we -- again it's a three-month study; so it will be equivalent to [indiscernible] and the other drugs that are out there for IBS-C and the endpoints will be identical. The difference is that we will be looking at all comers, so if you have IBS-C so less than one -- two bowel movements a week, bloating pain -- I'm using the wrong criteria, you can be in the study. We will be looking at methane levels but we will not be powering it nor will we be looking at -- some of these patients have methane, some don't; and that's basically top function of the diagnostics test which is not very accurate. So we'll be looking at that but we will not be measuring it. As we get to that interim analysis there will be a committee that -- an independent committee that will look at the results of that. A) for power sufficiently for all comers study; we will continue and it will flip immediately, we will just keep enrolling and it will flip to a Phase 3 study. If we do not have significance in that group of folks, we will then do a subgroup analysis and look at the methane producers, and as we saw in our Phase 2, we will feel fairly confident that it's going to work in that group no matter what. And then we will switch obviously again to a phase 3 study but it will be methane only. So the FDA provided that guidance to us, we don't have final approval yet on the protocol; we expect that in a not too distant future here but that's essentially how we're going to look at it. So it's kind of a win-win for us. If we don't get sufficient powering for an all comers study, we switch to the methane positive folks. If we do have sufficient powering and the independent committee says keep on rolling, obviously the label will be much broader if we can have an all comers. Just as in a side deal, what we've discovered, I mean methane is a fairly new diagnostic. It's not been used historically very much, the GI docs are using that more and for other things as well outside of just irritable bowel syndrome. But the diagnostic test is really only accurate down to about five parts per million. We believe and our KOLs believe that the vast majority of patients, in fact people in general, likely have methane-producing organisms in their bodies. We just can't detect them. So we'll be looking at five parts per million as sort of our cut off in this particular study -- in this Phase 3 study -- and we'll see what happens going forward.

Just a follow-up; in terms of giving an update to the street, would you be able to report any data from the interim? Or it would just be a decision as to what the next stage is?

It will just be a decision that we're moving forward or not, as similar to what we just did with the Rayback [ph].

Sure. Thank you.

Thanks, Adnan.

Our next question comes from Katherine Xu from William Blair. Please go ahead.

Good morning. A couple of questions on ribaxamase, can you confirm that the incremental analysis was to form with a week [ph] 120 patients were enrolled and 10 cases of CDI occurred? And will you say the study is fully powered? Are you saying that it's fully powered for both, the CDI and AAD? And also, can you just comment whether at 120 patients -- whether anything else of the -- and according to what actually significant because I recall there was an option so you can stop study after the interim?

Well, we did stop the study after the interim, Katherine, but the difference is that we -- again, it was a blind study so we didn't get any information out of the independent analysis folks, other than its power sufficiently continue and we don't know if that's CDI or AAD. They looked at both of those two endpoints. The goal was for them to get going. Obviously the safety profile was bulletproof, so we feel very confident. But again, from the interim, it was either keep on rolling its power sufficiently, or if there were safety issues you would stop it -- which there were no safety issues at that stage of the game. We at that stage went from 370 patients, which is how it's originally powered, we went up to 413 and then we stopped. It was kind of a concurrent thing because of the rapid enrollment rate. We don't have any idea. At the end of the day we don't have any idea whether we hit the CDI endpoint, or whether we hit the AAD endpoint. We don't know yet until after we do the analysis.

And for the fourth study, the 413 patient study, this simplifies -- is this adequately powered for both CDI and AAD or just one with them?

We believe it's powered sufficiently. Again, 372 was the number that we were powering that based upon the CDC's feedback initially when we started the study, which was a 5% CDI rate in this population and roughly 20% to 25% AAD rate. Keep in mind that antibiotic-associated diarrhea really has never been an endpoint before and that was something the CDC and the FDA wanted us to include. Obviously it's an easier endpoint and a nice marker versus the CDI rates. But we're expecting anywhere between eight and 12 cases of C. diff. Infection would be our guess. We don't know based upon those statistical rates.

But the interim analysis, when the data monitoring committee said that the study is powered -- it looks like it's powered – they must have seen some cases or announcement of the CDI rate in the study. So I'm just wondering for -- when the sample size expanded from 300 to 413 -- is that DMC or you -- are you to some extent certain that the study is powered by CDI?

We believe that it's powered appropriately for CDI, but again the difference between the 372 and the 413, these patients were already in the queue. So when we had the interim analysis literally about three weeks later, we shut the study down or we froze the study. We felt we had enough patients, but again, these patients were already in the queue in a variety of hospitals. Why not keep on rolling? Again, it was designed as a Phase 2b/3 study. It's designed as a pivotal study, so we could have gone up higher if we wanted to, but really again the interim analysis said we were powered appropriately, end of story. That's where we're at today with that. Again, we hope to show the topline data early next year for both the C.diff infection as well as AAD. We will likely not show the antibiotic resistance, which is the exploratory endpoint until probably March-April-ish of next year, maybe a little bit later and that's because there's over 1,000 fecal samples that we need to sequence, that's what the CDC and the third party is going to work on together with us in order to make that happen and then we'll look. That's a vast amount of information that we'll have to correlate and really look at. But again, from the Phase 2 that was run by Ipsat back in 2009 -- and that's publicly available data -- they had a profound impact on protecting the microbiome, is how they had their endpoint where they looked at the genesis and looked at a reduction in a number of antibiotic resistance organisms before and after.

Okay. And then could you comment a little bit on your sense on the exposure of ribaxamase? Given the microbiome approaches and also the recent approval of the Merck [ph] antibody against this vaccine? And how you see ribaxamase position in the market?

We're in a bit of an odd situation. We are a microbiome company, we are leveraging our knowledge of the microbiome to make drugs. We have the idea IBS drug which pits in the [indiscernible] methane-producing organism, we have obviously ribaxamase, which protects the entire GI microbiome. We have another drug in house that's earlier that we'll be talking about later, probably middle of next year that also protects the GI tract as well and there's another naturally-occurring enzyme. These are very different approaches. Our approach is very, very different compared to some of the other companies out there that are using FMT Fickle transplantation or using bugs as drugs. We do not use bugs as drugs, so I think that's the big differentiator between us and a company like Asuris or Rebiotix, or a lot of these other companies that are doing great work trying to impact the microbiome in some way. We're being much more selective how we do that using molecules that are fairly well-known going forward. That's kind of our differentiating factor. From a market perspective, again, I think we've been fairly clear that we are collaborating with the CDC and other public policy groups including the White House. We've been there a couple of times. Ribaxamase to us is truly a public policy-style drug. What does that mean? It really means that this drug should be given concurrently with every dose of antibiotic out there, which means it should likely be in the formulary. Our first drug out is ribaxamase. We have programs that are very similar to ribaxamase that work on other types of antibiotics, so a very similar approach and then we have oral-oral programs that we work with Augmentin, things of that nature that are oral drugs, which is a gigantic market as well. But the bottom line is you really want to protect the gut microbiome and organisms from eventually gaining resistance. Along with just very strong steward of chip and cleaning of these various facilities -- the hospitals, the nursing homes and places of that nature which is important -- reducing the use of antibodies when and where necessary and our drug combined, those three things together should have a profound impact on antibiotic resistance and the rise of super bugs. We feel our drugs should be on the formulary, we will be moving toward that direction, we'll be looking at marketing, bringing on marketing folks here in the next six to 12 months after we get data and start building that team. But again, it's not going to be a traditional drug that you would sell through scripts, through pharmacies. This will be a drug used primarily in hospitals and IV-drug type places. I think the Merck drug is great, I think anything that helps reduce this nasty disease is fantastic. Obviously they're moving toward that goal as well, but again from a broader perspective, their program does not prevent antibiotic resistance. It does help us see the infections here and there in select patient populations and that's awesome. But I think in combination again with our drug, we could have a very effective pipeline to protect patients. Does that answer your question, Katherine?

Thank you.

Our next question comes from Ed White from FBR & Company. Please go ahead.

Hi, guys. Thanks for taking my question. Jeff, just on 010 Phase 2 study; you have said the interim analysis, you'll look at 400 patients with the total of 800-900 patients into three-month study. Is that three months of treatment, three months of follow-up? How are we looking at that? I'm just trying to get the time line together.

Its three months of treatment. Then it's absolutely identical if you read the protocol. Again, our protocol has not yet been approved by the FDA. I want to make that clear. They're supposed to get that back to us in the next few weeks, but it's exactly the same protocol as you would find and the exact same endpoints for Synergies drug, Plecanatide; for Ardelyx drug, Tenapanor; or the drug that's in the market today, linaclotide or LINZESS which is sold by Allergan. Exact same protocol; so it will be 12 weeks of treatment, we have three arms for this -- we have a low-dose, a high-dose and a placebo group and then we'll be looking at all three of those obviously. The study will be powered roughly 800-900 patients and we'll stop somewhere in the middle, the interim analysis will take place and they'll say, 'Keep on rolling' or stop. If they stay stop, it means that we did not have significance in the all-comers group, which means we'll take a step back. We'll look at the methane-producers and that reevaluate and then drive forward with the methane-only people. The FDA want us to have a label as broad as possible, which is why we're doing all comers.

Okay, great. And then on ribaxamase, you have said six weeks of follow-up. I think before you have said four weeks of follow-up. I'm just curious which it is?

I don't have my medical officer, but I'm fairly certain it's six weeks.

Okay. And then how should we be thinking of this study? Excuse me, just on that, out of the 413 patients that were enrolled, how many have completed the six weeks of follow-up?

I think we're getting close. I don't remember the exact date that we stopped mid-September. Try mid-November-ish will be more or less done, then there's all the paperwork that has to happen after that, lock in the database, et cetera. We are shooting again for Q1 of next year to announce the topline data for that. It may be early Q1, but at this stage until given the holidays, a lot of the data was generated in Central and Eastern Europe as well as here in the U.S. We have to compile all of that. Our best guess today is that we'll be able to have the data sometime early next year.

Okay, great. Thanks. And then I'm just wondering if you can give more detail on the CDC contract? You have said that it will support research during the Phase 2b proof-of-concept trial. You didn't give any of the financial terms, so I'm just wondering if you can discuss in your own words why we should place importance on this contract?

I think there are two things. The actual monitoring about, a little bit over $500,000 is really not the critical component there. Obviously that will help do the analysis. I think what's important is of the several groups that received capital, they were all academic centers with the exception of us. We were the only company -- private or public -- to get access to that little bucket of cash. It was not a huge bucket to begin with, but $500,000 was significant from that. I think the other takeaways if you look, we have a close relationship with the CDC. It is in their mandate to look at public issues of health and try and resolve those. Ribaxamase as a drug is probably definitely one of the safest drugs out there that does not have any systemic exposure, that doesn't have any off-target activity and that can fix three fairly horrible issues that humans have today. The regulatory endpoint is C. diff infection. That is something that we can measure and at this point is a regulatory FDA endpoint. Antibiotic resistance is not a regulatory endpoint. We may get lucky and make that into one once we have the data driven, but from a public health perspective, there are numerous diseases that come from giving kids antibiotics, not having the maximal number of species in your gut and your body for optimal health. That's obviously in the CDCs we'll house big-time. And if our drug can confirm what we saw in the prior Phase 2 over in Finland that we can reduce or have a significant impact on antibiotic resistant -- the rise of antibiotic resisting organisms, we have a hell of a winner here. This is a drug that should be under formulary of every hospital in the country and hopefully around the world that can help -- if your child has an ear infection -- I've got three kids and if they had a bad ear infection, we always give them a Z-Pak. Right? At the end of the day, you don't want to see the kids suffer and then you try and treat the disease. We didn't know 15 years ago what impact that would have downstream. We know today that there is a profound impact on the diversity of the microbiome by giving even one course of an antibiotic. And if we can stop that from happening, these kids 20-30 years from now should be significantly healthier than a lot of us are today. Again, I think the CDC plays an important role in that, I think they're by far the biggest player in the United States as far as public policy drugs and whoever ends up being in the White House I think will be an advocate of that as well whether it's Secretary Clinton or whether it's Donald Trump. Either one of those two characters, I think, will push this because again, it's a huge public health problem.

Right. No, I agree. Thanks, Jeff. And then maybe a question for you or for Steve. You have mentioned you have the $4.5 million in cash. How much runway does that give you into 2017?

Good morning, Ed. This is Steve. Over the last three quarters, we have been burning about five a quarter and I expect that to remain pretty close to that for the fourth quarter. Having said that, as Jeff have mentioned earlier, we have a tool in place that we've been utilizing our APM. We've taken down since we put that in place about $1.5 million. Our fixed in burn on a monthly basis is about $1 million. With that tool, we have the ability to continue to fund the company as we get closer to moving SYN-010 into the clinic. In addition as Jeff have mentioned, we're evaluating a number of possibilities. We have the option of tapping into some insiders that have been great supporters of the company, we're evaluating our options as it relates to the capital markets and we also have these ongoing discussions related to potential deals. One or all these possibilities will play out and we're still in the process evaluating them all.

Okay, great. Thank, Steve. Those are all the questions I have.

Thanks, Ed.

Our next question comes from Tim Chiang. Please go ahead.

Hey, Jeff. Just given the size of the IBS-C trial that you're going to run next year, I think you said 800-900 patients. Are you considering still doing this on your own? Or would you wait to find a partner before you embark on the study?

Great question, Tim. We're looking at both options, to be honest with it. To run the entire study is between $20 million and $25 million give or take. Again, there's an interim analysis which obviously if it goes well and we continue and power properly, that's another value inflection point from a deal-making perspective. We're going to continue moving down that road at this stage of the game. As Steve pointed out, we can survive using the APM if we need to, but we would have to raise additional capital from insiders or from a partnership or something of that nature in order to start the Phase 2b/3 study. So we're evaluating all of those things at this time. I can tell you on the partnering side, it takes six to 12 months to get a deal down. We have the Phase 2 data from SYN-010 in May of this year, so it's been roughly six months. We are in discussions with a variety of folks. Obviously we want the best deal and we've come long ways with that particular drug and it would be a shame to partner for a pittance, if you will, because of markets happen to be kind of crappy and we'd like to get a bucket of cash. That being said, there are partners that make absolute sense from a geography-base perspective that are in the GI realm that would probably make great partners and obviously would offset the cost of this particular study. We will not be occurring large numbers for ribaxamase for that Phase 3 study until the latter part of next year. That burn will stay fairly low as we continue to do the analysis, rule out variety of papers clinically and scientifically on the date of that has been generated by those 400 plus patients in that study. Again, the bogey for us is really SYN-010. You hit the nail on the head. We're saying we're going to start the study Q1 of next year. That assumes that we have the cash to do it. If we don't and if we don't have a partnership in place, we'll push it out and we'll just keep plugging along. There's obviously a variety of bogeys out there with the elections, with the holidays, with those things that have the market -- as everybody knows in a bit of a turmoil at the moment and fairly unpredictable -- so we may just wait until those things boil down into something a bit more predictable.

Okay, great. Thanks, Jeff.

Thanks, Tim.

[Operator Instructions] Our next question comes from Keith Markey from Griffin Securities. Please go ahead.

Good morning, guys. Just one quick question. I was wondering if you could give us a little bit of detail about the level of sequencing you're going to be doing on the bacteria and in a sense of what you'll have to look for in terms of the antibiotic resistance development?

We'll be doing a combination of different things, but primarily 16S, so we're doing a deep sequencing. We'll take a deeper dive on the subset of those samples. It says it's in two buckets. Right? So we took samples before the patient got the antibiotics and we took the sample both afterwards. In some cases if there was an occurrence of C. diff of whatever, we took additional samples as well. So there's roughly over 1,500 samples that we have from those 413 patients and then we'll be sequencing everything, we'll be looking at the patients that were on placebo-only and the antibiotic and the changes and you can go to our website if you want to see. There's a presentation out there that we tend to give publicly. It shows a heat map of what happens in a particular pig study and what you see is when somebody is on an antibiotic alone without our drug on board, you have a rise in some of the stronger bacterium that are more resistant to antibiotics and you see a decrease in some of the weaker bugs, and you can see that fairly consistently across the board in those patients. On the other side of the equation when ribaxamase is administered concurrently with the antibiotic, you don't see that happening. Just from a macro perspective, you can see what's happening live in that, but at a micro perspective when you look at it, you can actually measure the muted genesis on their variety of species as you go forward in the conference of specific genes that provide antibiotic resistance to these folks. We'll be looking at all of that. If you want a detailed analysis of how that's done, you can go and look at the study that was done -- the first Phase 2 -- that was done back again in Finland by the company called Ipsat. My hats off to those guys because in 2009, they were way ahead of the curve and fortunately probably too far ahead for the markets to catch up, but they did the same exact study back in 2009, and our study was frankly designed very similar to the way theirs was. There's very little difference between other than the antibiotic we used. The study is almost identical and they were able to see that. I believe the rates -- and I'm shooting off-the-cuff here -- were greater than 80% reduction in antibiotic resistance, give or take in these organisms. And that was a 120 patient Phase 2 study.

Fantastic. Thank you very much.

You're welcome.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Riley for any closing remarks.

Thanks, Angie. In closing, 2016 continues to be a year of clinical momentum for Synthetic Biologics and we remain well-positioned with advanced both microbiome-focused programs, SYN-010 which is designed to treat the underlying cause of IBS-C and ribaxamase is designed to prevent the onset of CDI, AAD and antibiotic resistance into Phase 3 next year. During the third quarter, we completed enrollment for our Phase 2b proof-of-concept clinical trial for ribaxamase and received financial support from CDC. We plan to announce top line results from the study again, early next year. With guidance received during the end of Phase 2 meeting with the FDA back in July, we continue to make great strides with advanced SYN-10 towards a pivotal trial which we anticipate beginning in the first quarter of 2017. Our goal remains to continue to build innovative and noble approaches to solving largely unmet and growing medical needs while creating value for shareholders. We remain encouraged and excited by the clinical progress we experienced during the third quarter of 2016 and look forward into what lies ahead in the coming months. Thanks again, I hope everybody had a great Halloween and have a wonderful day.

Ladies and gentlemen, the conference has now concluded. Thank you attending today's conference.