Theriva Biologics, Inc. (TOVX) Q1 2017 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Synthetic Biologics 2017 First Quarter 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 that this event is being recorded. At this time, I would like to turn the call over to Mr. Vincent Perrone, Director of Corporate Communications at Synthetic Biologics. Mr. Perrone, please go ahead.

Thank you, Kate, and good afternoon everyone. Welcome to Synthetic Biologics 2017 first quarter investor conference call. Today, I'm joined by our CEO, Jeff Riley; our CFO, Steve Shallcross and our CMO, Dr. Joseph Sliman. Synthetic Biologics issued a press release this afternoon, which provided operational highlights and reported our financial results for the quarter ending March 31, 2017. The release can be found on the Investors section of our website. During our call today, Jeff will provide an operational update on our microbiome focused clinical programs, Steve will summarize our financial highlights and Joe will provide an update on results from several exploratory endpoints from our Phase 2b clinical trial for ribaxamase. We'll take questions after our prepared remarks. In addition to the phone lines, this call is being streamed live via webcast which will be archived on our website for 90 days. During this call, we'll review several slides which are viewable via the live webcast. These slides are also filed with the SEC earlier today and are accessible on the Investor Relations page of our website www.ir.syntheticbiologics.com. 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 in 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 and Synthetic Biologics undertakes no obligation to update any forward-looking statements contained on this conference call on the account of new information future events or otherwise except as required by law. With that said I'd like to turn the call over to Jeff. Jeff?

Thanks Vincent, good evening everyone and thanks for joining our 2017 first quarter investor call. It's an exciting time for Synthetic Biologics and it's been an active first quarter with two Phase 3 ready programs in the clinical development, the Synthetic Biologics team is more determined than ever to continue our work of advancing our cutting edge microbiome based therapies to the late stage development and towards commercialization. We started the year with the announcement of positive clinical data from our phase 2b proof of concept study for ribaxamase and quickly followed this up news that the FDA had approved a Phase 2b/3 adaptive design pivotal trial for SYN-010. But we didn't stop there, our goal remains delivering best in class and paradigm shift in drugs designed to improve the quality of life for millions of patients in greatly underserved markets while building long-term value for our shareholders. During today's call, we will provide a clinical update on ribaxamase, our oral enzyme designed to degrade certain IV beta-lactam antibiotics within the GI tract to protect and preserve the natural balance of the gut microbiome, from C. difficile infection, minimizing pathogenic colonization and reducing the emergence of antimicrobial resistance. In SYN-010, our compound design to reduce methane production in the gut to treat the underlying cause of the symptoms commonly associated with irritable bowel syndrome with constipation. Before we dive into our clinical update, I would like to turn the call over to Steve Shallcross, our Chief Financial Officer who will provide an update on our financial results for the year. Steve?

Thanks Jeff. During first quarter of 2017 we continued to efficiently utilize our cash, beginning to deploy our capital in support of our two lead clinical programs. we remain confident in our ability to continue to manage overhead while focusing the majority of our financial and human resources on the continued development of our two late stage phase 3 ready clinical assets. Synthetic Biologics 2017 first quarter financials were included in a press release which was distributed over the Newswire earlier this afternoon. The company's 10-K for the quarter ended March 31, 2017 will be filed with the SEC later this evening. General administrative expenses decreased this quarter from $2.1 million for the three months ended March 31, 2017 compared to $2.4 million for the same period in 2016. This decrease is primarily the result of lower employee salary expense and related benefit costs along with reduced travel and legal expenses. Included in these numbers were non-cash charges related to stock based compensation of $698,000 for the three months ended March 31, 2017 compared to $643,000 for the same period in 2016. Research and development expenses decreased to $6 million for the three months ended March 31, 2017 compared to $8.1 million for the same period in 2016. The decrease is primarily the result of lower program costs associated with the clinical development of ribaxamase as well as manufacturing and research activities within our other microbiome focused research and development activities. Research and development expenses include non-cash charge of $437,000 related to stock-based compensation for the three months ended March 31, 2017 compared to $409,000 for the same period in 2016. Other income was $5.1 million for the three months ended March 31, 2017 compared to other expense of $500,000 for the same period in 2016. Other income for the three months ended March 31, 2017 is due to a non-cash income of $5.1 million from the change in fair value of warrants that resulted from a decrease in our stock price from the prior quarter. Cash and cash equivalents as of March 31, 2017 was $13.5 million, a decrease of $5.6 million from December 31, 2017. We anticipate cash utilization remained steady for the second quarter of 2017 due to diminished costs associated with the completion of Phase 2 clinical trials for ribaxamase and SYN-010 and our ability to effectively manage our overhead expenses. Now I'll turn the call back over the Jeff.

[Technical Difficulty] important clinical milestones at the start of the first quarter, Synthetic Biologics is uniquely positioned amongst our biotech peers with two late stage unencumbered and potentially best in class phase 3 ready assets targeted at addressing largely unmet medical needs. At this time I'd like to begin with an update for SYN-010, our program designed to treat and target an underlying cause of irritable bowel syndrome with constipation. Currently marketed in development stage therapies for IBSC or [indiscernible] better drugs and function similar to laxatives. These therapies include temporary relief to a long term and often lifestyle altering problem and often have serious side effects most commonly diarrhea. In previously reported studies by Dr. Mark Pimentel's at Cedars-Sinai and Synthetic Biologics, methane production in the gut was shown to be the primary causative factor of the symptoms associate with IBS-C. It follows then that by reducing methane production in the gut we can treat the underlying cause of pain in constipation associated with IBS-C. Last year we announced positive results from Phase 2 clinical trials which demonstrated that patients in the SYN-010 treatment groups experience clinically significant improvements in bowel movements, abdominal pain and bloating as compared to the placebo group. These results provide us with strong scientific foundation and rationale to advance intend towards phase 3 development. During the first quarter of 2017 and following collaborative discussions with the FDA, we were pleased to announce the approval of Phase 2b/3 adaptive design pivotal trial intended to further evaluate efficacy and safety of SYN-010. With a clear path forward for SYN-010's clinical development we are one step closer to achieving our goal of providing millions of IBS-C patients with a novel potentially best in class therapy that directly targets a root cause Of IBS-C. our SYN-010 program is an important component of our micro biome focus clinical portfolio which we believe will contribute to the growth of our company and provide long term value to our shareholders. With the foundation of our Phase 2b/3 pivotal study in place we continue to work on solidifying its infrastructure with the focus on identifying, evaluating and delivering opportunities to move this program forward in a manner that it consistent with the best interests of our shareholders. We intend to initiate this trail only at a time when the requisite components of clinical and financial infrastructure are in place to ensure its full timely and successful completion. To that end, we continued to evaluate and engage and ongoing discussions with several potential US based pharmaceutical partners as well as interested parties in Europe, China and Japan. Switching gears now to SYN-004 or ribaxamase, our first in class oral enzyme designed to degrade certain IV beta-lactam antibiotics excreted into the GI tract. Ribaxamase is engineered to protect and preserve a naturally occurring gut microbiome to prevent the onset of primary CDI pathogenic colonization and the emergence of anti-microbial resistance. The presence of a healthy robust and well balanced gut microbiome can protect against the threat of infection by blocking colonization by opportunistic microbes. This is because the diversity of microbes present in a healthy young microbiome after the system of checks and balances allow an ecosystem of microorganisms to remain relatively steady. When species or microorganisms are eliminated or sharply reduced in the gut, a byproduct of antibiotic use. This system is disrupted and it may allow for overpopulation by opportunistic pathogenic bacteria such as C diff, [indiscernible]. Ribaxamase is designed as a first line of defense against this disruption. Ribaxamase is also specifically formulated to bypass systemic and avoids systemic absorption, which means it does not interfere with the ability of antibody to effectively fight against primary infections. Protecting patients may have got microbiome we demonstrated that ribaxamase can prevent the overgrowth pathogenic organisms responsible for the development of CDI and other pathogen organisms that may emerge as a result of antibiotic use. During the first quarter, we announced positive top line results from our global phase 2b randomized placebo controlled proof of concept clinical trial for ribaxamase which consisted of 412 patients. We were very excited to report that ribaxamase achieved its primary endpoint, significantly reducing incidents of CDI by 71.4% in patients as compared to placebo. Preliminary analysis of our phase 2b data also demonstrated a statistically significant reduction in new colonization by VRE for patients receiving ribaxamase as compared to placebo. During our last call we discussed the analysis of several exploratory end points designed to determine that ribaxamase's ability to protect the gut microbiome from antibiotic mediated dysbiosis. At this time, I'd like to turn the call over to Dr. Joe Sliman, our Chief Medical Officer who will provide an update on the results from several of these inputs. Joe?

Thanks Jeff. At this time I'd like to provide a brief update on several of our exploratory endpoints from our Phase 2b proof of concept clinical trial for ribaxamase. For those of you following along on the webcast please turn your attention now to our slide show if you're following along on the phone these slides were filed as an 8-K with the SEC earlier today and can be found in the Investor Relations section of our website at www.ir.syntheticbiologics.com. And now on to the show. So we'll obviously start here by saying that we will be making forward looking statements in this presentation as expected. So let me open up by talking about our study, our phase 2b proof of concept study of prevention of C. difficile infection. So let's just back up for one second and review what we're talking about here and what the objective of the study was. So antibiotics disrupt the balance of the normal commensal microbial species and the bacterial population in the gut. In doing so they allow for the over growth of opportunistic antibiotic resistant pathogens. The disruption of the natural balance of the microbiome is referred to scientifically as dysbiosis and it is multifactorial there is many different things that can affect it to diet and other environmental stimulants but the use of antibiotics has been demonstrated to have the most profound effect. Now antibiotic mediated changes to the natural balance of the gut microbiome it's reflected in a measurable way by the loss of microbial diversity and these reductions in the diversity or the density and broadness of the population of microbial species in the gut is associated with different disease states. The image to the microbiome due to antibiotics is not always completely reversed after the antibiotic is removed or the antibiotic course is completed. And in fact the greater the antibiotic damage that is done the less likely that the changes to the microbiome will ever recover back to a normal healthy state after that antibiotic is withdrawn. Moving onto Slide 5, so let's take a look at a schematic here of how our drug works. Normally for an infection you would go into the hospital and you would receive - you'd be diagnosed with say pneumonia and you would be indicated for a course of intravenous antibiotics for three days five days ten days two weeks whatever. You'd receive your antibiotics, those antibiotics would go directly into your bloodstream, they would circulate and after they do their job, they would be extracted from the bloodstream by the liver as liver does its job and prepared and excrete it through the bile into the gut and for a passage out of the body. That antibiotic it's important to remember is still active when its excreted into the bile and in the gut where it continues to do what it nature designed it to do or what people decided to do for some antibiotics, which is kill microbes in the environment in which it exists. And this is where SYN-004 because SYN-004 ribaxamase is specially formulated and designed to be taken orally co-administered with those IV antibiotics. It survives the stomach and emerges so to speak in the first part of the small intestine where it meets up with the excreted antibiotic that is being passed from the bile into the gut and it deactivates or inactivates that antibiotic before the antibiotic has a chance to do any type of damage or cause any type of change to kill the microbes in the gut. So moving on to next slide. This is a schematic of how we were able to measure the effect of the antibiotic on the gut microbiome and how we were able to measure the effect of that ribaxamase has at preventing and preserving the gut microbiome. So this is a schematic of our study, it was divided into two treatment periods. The first treatment period was the actual in hospital period of receiving an intravenous antibiotics and that lasted anywhere from five to 15 days or occasionally more. And that was completely determined at admission by the primary investigator at the site as indicated for that particular infection in that particular patient. The patient would be indicated for ceftriaxone and then be enrolled in the study divided or randomized I should say one to one to receive co-administration of either oral placebo or oral ribaxamase four times a day. Those patients were treated with both antibiotic and ribaxamase or placebo and at the end of the treatment period there would be a 72 hour window in which we would take a sample. Now we took a sample at screening, we took another sample at 72 hours following the completion of treatment. And then the patients were discharged for a four week follow up and we would take or actually it was six-week follow up total because there was a ability to look at patients for another two weeks, but we took a third sample at four weeks following the completion of treatment. So three samples per patient, screening, 72 hours after treatment completion, and four weeks after treatment completion and we were able to compare the results. So the next slide, Slide 8 and that is the topline results for our study and I want to reemphasize our primary end point which was the significant reduction of the incidence of C. difficile infection CDI in these patients as the primary endpoint. We achieved the primary. Our overall rate of CDI in our placebo group was 3.4% and this was actually pretty high compared to a comparable group of patients for the literature in these types of hospitals. And by that I mean this is not your general hospital across the country or across Europe and the rest of the world where some hospitals are better than others. These are only hospitals that can pass FDA audit and inspection for pivotal studies, okay, so that's important to keep in mind. So these are relatively clean hospitals. We had a placebo rate of 3.4% and we were able to reduce that rate in the ribaxamase group by about 70%. We used the regular clinical definition for CDI which was diarrhea, loose stools in the patient, six times within 24 hours and we took a stool sample from those patients and sent it to the central or excuse to the local lab at the hospital where they used a toxin test using their own procedures how they would normally diagnose patients in the hospital. We then took those specimens and we shipped them off to a central lab for confirmation and you can see that's on the left hand graph that's our middle column, middle pair of columns and you can see that we actually ended up finding one additional case of C. diff in the placebo group, but otherwise it was exactly the same to confirm what the local lab found. And then the third column there's no orange column there is the patients who were treated and so among patients who were not just identified by having C. diff but actually merited standard of care treatment for C. difficile infection we had basically no patients who met those qualifications or that criteria in the treatment group, but we had plenty of those in the placebo group. Moving over to the right hand graph, this is our main exploratory end point and this is a reduction in vancomycin-resistant enterococci in the gut microbiome at screening versus 72 hours and then at screening versus four weeks. And you can see that we reduced the new colonization with VRE in the treatment group by a significant margin with a very high level statistical significance. So next slide, is a - the first graphic that we'll use to describe how we measure and determine microbial diversity within the gut microbiome how we prevent its destruction and how ribaxamase improves its recovery. So on the left hand side the blue balls on the graph represent the range of diversity meaning number of species you'll see on the X axis present in samples in the gut microbiome in the placebo group. T0 meaning the screening sample and there's about 2,200 to 2,300 species present at screening. Following treatment with ceftriaxone and placebo all the way down the straight line to T1, the [indiscernible] T1 you'll see that there's about a 50% loss of microbial diversity in these patients within 72 hours of the sample being taken within 72 hours after the following treatment. Then after four weeks of recovery time meaning after the treatment is completed these patient had only recovered about half of their microbial diversity that's in the placebo group. On the ribaxamase group which is the right hand graph using the orange balls, you'll see that we had approximately the same screening diversity in the treatment patients, so 2,300ish species. You'll see that in patients who were treated or co-administered ribaxamase with their ceftriaxone, they only had a reduction down to about 2,100 species and then after four weeks of follow up they had basically completely recovered their normal diversity. So moving on to Slide 10, this is another representation of looking at diversity of the microbiome. And so this is a scatter plot of the diversity in patient samples. The orange oval represents the screening sample and you can see that the broadness of diversity within the microbiome is comparable between the placebo group on the left and the ribaxamase group on the right. After 72 hours following the completion of treatment, I'll probably let the slides catch up here for a minute. After 72 hours of following the completion of treatment you'll see that the diversity of the microbiome in the placebo patients was everywhere, it was all over the map and there was a significant change in the diversity and change in the composition of the microbiome. Whereas there was a very little change in ribaxamase group. And then when you take another sample at four weeks following the completion of treatment, you'll see on the left hand side there's been some recovery in the placebo group, but not a whole lot. But the ribaxamase group the blue ovals, the ribaxamase group has recovered just about to complete overlap with where they were at screening, again ribaxamase has not only reduced the amount of diversity loss, but it improved recovery time as well.

Joe, just as an aside, the slides are not going to same speed. Now, we're caught up. Sorry about that.

That's okay to get ahead of the slides here. I believe people have copies of these that were filed. We've moved on to slide, is it 14? Yeah. We're waiting for slide 14 to come up, which is our heat map and our heat map is, people may recall the heat map that we put out before from our animal model studies and there it goes. Now, it comes up. This is our actual human patients in our phase 2b study. So the top two rows represent the placebo patients and the bottom two rows represent the treatment patients, ribaxamase. At the top, you'll see the time zero, which is the screening sample and the time one, which is 32 hours following treatment and ribaxamase group is the same. And on the right hand side, you'll see those narrow strips and those are the resistant organisms. So keep that in mind as we do these slide builds here and we're waiting for the slide build. There it goes. So you'll see that in the placebo group, you have a significant loss of diversity in the gut microbiome from time point screening zero to 72 hours after completion of treatment, whereas in the ribaxamase group, you have essentially identical samples, at least according to the heat map. So your diversity is relatively the same. Whereas on the right hand side, you see a significant over growth of resistant organisms in the gut on the placebo group, but down on the ribaxamase group, you see that those in the boxes there, you see that there is relatively little change in the abundance of those resistant organisms. And so now, we're going to move on to slide 17, which is our conclusions for our phase 2b study and that is again just to reemphasize, as we wait for the slide to come up. I want to emphasize, we hit the primary endpoint, SYN-004, ribaxamase has achieved its primary end point, demonstrating a statistically significant relative risk reduction of greater than 70% with high level of statistical significance in the rate of C. diff infection in patients treated with ribaxamase compared with the placebo patients. We also saw a significant reduction in the new colonization with vancomycin-resistant organisms in patients receiving ribaxamase versus placebo as well. Secondarily, we significantly reduced the ceftriaxone mediated loss of microbial diversity. We reduced the ceftriaxone mediated eradication of normal species and reduced the overgrowth of pathogenic species and the ribaxamase patients had restoration of their microbial diversity shortly after ceftriaxone was removed compared to the patients in placebo group who only really got partway back to normal recovery - recovery of their normal microbiome after four weeks. And slide 18, this is our next steps. Just to let everybody know that we will be looking at additional exploratory endpoints to look at the ability of ribaxamase to prevent the proliferation of both antimicrobial resistance, both in colonization as well as in the proliferation of antimicrobial resistance genes in the gut microbiome in the presence of antibiotics. We have already met with the CDC once and presented the first part of our data and now we will plan on meeting with the CDC following completion of this analysis for - of antimicrobial resistance. Keep in mind that this is being done in partnership with the CDC using [indiscernible] from the CDC. So we will continue to share that data with them as it comes along. And of course from a regulatory perspective, we will plan to request an end of Phase 2 meeting at some point later this year to determine the regulatory pathway forward. And with that, we will eventually take questions, but for now I'm going to push it back to Jeff to complete the call.

Thanks, Joe. Just as a side note everybody, I mean the data that we have is we have so much data, it's unbelievable. I mean think about we have several hundred patients with roughly 2000 species per patient and we're basically crunching all of that data trying to really look at exactly what's happening, but what we've seen from the top is what Joe just pointed out which is we are seeing a profound impact on the reduction anti-microbial resistance, we're going to identify the specific resistant genes. That's what we're doing with the CDC and the deep sequencing. But in addition to that, we're going to continue to map out this day as we go forward. I'm sorry the slide show didn't go very well the way, it's set up is not very clean, but you can download this presentation again from our website and kind of walk through the PowerPoint builds and hopefully that'll help understand that datasets, because again, it's a very robust, easy to say, but very difficult to show graphically. With that, we are excited with the results, with ribaxamase's mechanism of action and provided a compelling demonstration of the potential of ribaxamase to help address serious health and economic impacts associated with CDI, antibiotic EDA to pathogen at colonization and of course AMR. Ribaxamase may position as the leader in clinical development for microbiome based interventions, specifically designed to prevent the incidence of primary and I am going to repeat that, primary CDI in AMR, resulting from antibiotic mediated dysbiosis of the gut microbiome. Looking ahead, we continue to analyze data from additional exploratory endpoints and to evaluate ribaxamase's ability to prevent the emerging spread and proliferation of specific antibiotic resistant genes amongst organisms in the gut microbiome. This includes analysis through funding, but more through synthetic by lawsuits from the Center of Disease Control to support the deep sequencing that we're doing with respect to the Phase 2b study we just completed. We met on the month in April to share preliminary data and following the full completion of that analysis in the coming months, we plan to meet with the CDC again to share our complete findings and to brainstorm as to what we're going to do at the end of Phase 2 meeting with the FDA later this year. We believe ribaxamase has the potential to act as a first line of defense against unintended and damaging effects of antibody therapies to the gut microbiome and represents the disruptive and simple approach to antibiotic resistance and antibiotic therapy that may directly lead to more efficient and effective use of antibiotics. I'd like to pause for a moment to announce that Synthetic Biologics is headed to Chicago this weekend to participate in Digestive Disease Week from May 6 through May 9. In addition, I'm very proud to announce that four abstracts, highlighting research from both the ribaxamase and SYN-10 programs were submitted and accepted for presentation. You can visit our website, at www.syntheticbiologics.com for the dates, times and locations for each of these events. Members of the team will also be available at booth 1508, again, 1508, located in the exhibitors' hall if you'd like to swing by. I know there are several retail folks that are going to come by. Please come and let us take care of you. We'll also have a video there. We can't say too much more than that, but there is an epic video that we think everybody's going to enjoy watching, which outlines what we're doing in the company and specifically with ribaxamase. And with that, I'm going to turn back - the call back over to Vincent.

Thanks, Jeff. Okay. We'd like to open the phone line to questions. Can you please describe the procedure to ask questions for our listeners?

[Operator Instructions] The first question comes from Katherine Xu of William Blair. Please go ahead.

Good afternoon. I think one of the pressing questions or issues right now is on the financing side. So can you Jeff and Steve comment on how you plan to go about raising financing for the company and both ways, stray from an equity perspective, not so off from a partnership perspective. And then on the partnership side, can you just give us some more color on what partners are looking for in the SYN-010 program.

This is Jeff. I don't want to rule out an equity raise. We never want to do that, but the reality is we have to get a deal done and that is our primary focus in the company is to complete a partnership with a mid to large size pharmaceutical company as soon as we possibly can. I can't really give you more details on that. We are in multiple discussions on SYN-010 with companies that you would know and maybe even a couple of European companies that you may not know and that does include a couple of Japanese companies as well. We hope to get that over the line in a relatively - as soon as we possibly can. There will be non-dilutive capital from such a deal and we'll obviously then move that Phase 2b/3 study forward as rapidly as we can at that point in time and then continue to create value there. We are talking with some larger investors as well. There's obviously a potential for them to take larger positions. As a company, we're keenly aware that the market has been frugal, there's very, few financings that have been done by folks out there. So we are being frugal with our money. We don't anticipate any large expensive items over the next year or so until such time as we do get a partnership for SYN-010. We are in discussions as well. We just started those, because we just announced the data pack at JP Morgan on ribaxamase and it's interesting to note that there is another drug out there that just recently got approved by Merck. It's called bezlotoxumab. It's an antibody, but it's used as a preventative approach to reduce C diff infection in recurrent C diff patients. So this is in the recurrent C diff, not the primary, but they literally are launching that product as we speak. Obviously, it's for a different group of folks, it's a different approach. It has minimal impact as far as we're aware on antibiotic resistance and all of that, but it does look like it does have an impact and they were able to get that approved I believe in February. So that drug is moving along. We're very excited for these guys as we think our approach is very complementary and they'll help us build that marketplace as well because they're going to spend obviously a significant amount of capital to build that. They have done the pharmacoeconomic models as well, which even at their higher price point for an antibody still makes a lot of sense. I know that I wanted to round a little, bit but the reality is Katherine, we're keenly aware of the financial. We think we're ideally situated to write out the storm if you will until such time as we do get a partnership. Steve, do you want to add anything?

And I guess the only point I'd make Katherine, follow-up on that is that as we talked on the last call, our monthly fixed burn is somewhere in the neighborhood about 1.2 million or so. And it should remain there pretty much until we get to that point in the future where we address your primary question.

And then with regard to meeting with the - preliminary meeting with CDC. What kind of feedback did you get from them? I mean can you sort of talk about in a qualitative kind of sense, were they enthusiastic about it, what aspect of the data were they excited about and what other endpoint or from an epidemiological and also from public health perspective that they would want to see more data for?

The CDC was very excited about our primary endpoint to be honest with you. They were very impressed with our rate in our placebo group, especially given the patients, not just the patient population, but as I mentioned, the hospital sites that we use being that you are very highly regarded, high end phase 3 type of sites typically don't have very high rates of C diff. And we were able to get a reasonable rate and we were able to show very clear statistical significance and a reduction in C diff infection. They're interested in our AMR data obviously because they're funding it. And that is their primary interest because they're interested in moving the program forward as I know we've mentioned before from a, I would say, a public policy type of viewpoint. We can get into the hospitals and make sure it's available to reduce the incidence rate across the board.

I mean I think I guess next steps are just more data to them and then you and the CDC and the FDA kind of city design the next step of the study?

Well, actually our KOLs feel like this was a very strongly performed designed and performed study. It actually is a superiority study and superior standard of care, which of course is nothing or placebo in this case representing nothing. And so I mean, we basically, we hit the endpoint, it's designed as a pivotal, we don't know that it counts as a pivotal yet because we haven't had that discussion. But if we were to design a pivotal study, which was internally long, this is what it looks like. There might be some tweaks to some of the exploratory end points, depending on label negotiations, but for the primary, it's CDI, incidence of CDI and prevention of the incidence of CDI I should say. So we will discuss the next steps about additional studies and maybe patient population broadening, that kind of thing, but I mean I think this is a pretty clear picture of what you see is what you get from a baseline standpoint. So yeah, we would probably provide more patients if that's what they need, but the study is going to look fairly much the same.

The other takeaway Katherine to your last question, since ribaxamase is clearly being viewed by CDC and other group - governmental groups as a public policy style drug to treat a condition that causes a significant amount of public health expenditure, there is money available also from the governmental side of the equation. We have not applied for yet, but we're preparing to do so. That does take significant - it takes a longer time period right and doing a regular financing, but it's non-dilutive. So again from a shareholder perspective, we're very focused on not doing another financing if we can avoid it, obviously because where we are today and getting that partnership as soon as we possibly can in addition to potentially some government support as well.

The next question comes from Keith Markey of Griffin Securities. Please go ahead.

Thank you for taking my question. Steve, earlier in the conversation, you mentioned that you thought that the cash utilization rate would remain fairly stable. Could you elaborate, are you talking on a third quarter - the next quarter or current quarter we're in or are we talking through the end of this year?

I would say through, definitely in the next quarter and subsequent quarters of fall. I assume in your models about 1.2 million or so in burn. The burn this last quarter might - it was a little heavier and that was due to the fact that we had some run out costs for the ribaxamase trial that we just finished, but I'd model out about 1.2 million or so a month.

Great. Thank you. And then turning to the question about the next trial structure. Is it your intention not to try to possibly go after protecting the microbiome as a primary endpoint and rather just focusing on the C diff indication because it would seem that you would require a lot fewer patience if you were going to use the protective approach rather than the C diff.

Keith, this is Joe. Hey. So the answer to your question is twofold. First of all, we have a primary endpoint of C diff infection, which the agency has already given us to go ahead to use. So that's what we - we hit the endpoint, so it makes sense to keep that as our primary. Now to your question about being able to run a smaller study theoretically with numbers and all that kind of stuff, that's all contingent on having conversations with the FDA. And there's no guidance on that at all. That's not to say that they're not open to that conversation. They have demonstrated a willingness to talk about that in the past, but I can't predict with any degree of certainty what we're going to get from this point on because now things start to get real right with respect to label negotiations and what constitutes a file and blah blah blah. So all those things - I can't say one way or the other, but I can tell you that if we continue on with the primary endpoint on CDI, that's an acceptable endpoint, because I told it is and we know we can hit the endpoint because we did it already. So you take that for what it's worth, but I can't speak to which way it's going to go. Maybe, they'll surprise us. Maybe, we'll have to take the straightforward approach first, it's up in the air so far.

Right. Thank you. And I guess that part of it will depend on your discussions with the FDA and with the CDC. And then perhaps determining your marketing strategy as well?

Well, that's definitely the case. You hit it all three correct. Yes.

And then if I can ask a question about the first slide in the appendix that you have, where SYN-004 protected microbial diversity. Could you elaborate a little bit about Alpha diversity and its importance?

So I can, I'm not sure that this is the right thing to do it, because I don't have my scientific smart people with me. Basically, it's different ways to measure it is really what we're talking about. We're talking about total speciation which, I mean I guess the best way to look at it is total speciation is the proper way to look at it, which is a measure of the composition, the overall composition within the microbiome. So number of taxa - groupings of types of bacteria so to speak or types of organisms. Beta diversity is a little different, beta diversity measures a little bit more, what's the right way to put it, types within, it's kind of types within, sub types within types. I can't really explain it any better than that. There's different bacteria that exist within different taxa right. They're all make up, type bacteria, but they're different subspecies or whatever.

Just to add to that, Keith. This is Jeff. There is multiple parameters on the diversity side. There's the channel, there is beta, there is alpha. The other matrices you want to look at is density as well, right. So if you have 50 trillion, 60 trillion bugs living in your gut, you're going to obviously wipe out diversity when you're giving somebody an antibiotic, but you're also going to wipe out just the sheer vast numbers of these guys and when you're wiping out those sheer vast numbers. That's what enables colonization to occur, right where there's basically unlimited food supply for some of the tougher organisms and they can feed like crazy and they grow, they split every 20 minutes, exponential at that particular point. So that measurement is a really tough measurement to make as well, because you're looking at it after the fact. But the reality is antibody's reduce the density of the bugs and it also reduces diversity, both are very critical to having a healthy gut as we all know.

And in fact, I would imagine that the composition of the bacteria to begin with in a sense almost in a way determines what the outcome is going to be, because there could be some bacteria in the gut of one person that would be more susceptible to an antibiotic than other bacteria and that could vary from one person to the other?

Correct. And one person - the pathogen for one person may not be a pathogen for somebody else, because all of our guts are different. So when you're measuring individual by individual, which is why those charts look like they do in that they're very difficult to get this because everybody's baseline with that diversity is very different, right, everybody's baseline. So you're really looking to changing that baseline of each individual than overlaying that on top of the overall dataset. And even with the diversity, that complexity, we were able to see a significant improvement in the patients that were on ribaxamase versus placebo. So exceptionally exciting. If you really love the subject, go look at the Merck Package Insert for their drug, bezlotoxumab. Look at their Package Insert and they'll walk you through kind of the studies that they did, which were somewhat similar, but with an antibody. And you'll see the difference between what we got and what they got and I think you'll be - I don't want to talk about it, but it's exceptional what our drug is doing in a very safe manner.

[Operator Instructions] There are no additional questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Jeff Riley for any closing remarks. Thanks, Kate. In closing, the start of this year was one of progress in clinical momentum for Synthetic Biologics. We believe strongly we have a very unique and diversified late stage microbiome focused clinical portfolio, unlike anybody else's out there. The leverage is existing and well defined guidance for a FDA, while applying cutting edge microbiome science will effectively deliver positive therapeutic outcomes. We're proud of the progress we've made at the start of the year. Obviously, the markets have been exceptionally difficult, but again, we have two fantastic drugs of the intrinsic value is yet to be unlocked. We're working on doing that obviously in a variety of ways and we look forward to getting to Chicago here in the next couple of days and presenting some of this other data that was in those slides at DDW. Our scientific crew is going to be presenting those in detail. Again please - if you happen to be at DDW, please come and see us. The video that we're going to show will be up on our website after DDW. It was done by DDW. So we can't show that right away, but after the show, we're allowed to put that up on our website and everybody can look at that as well. And with that, thank you for this evening and take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.