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…

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…

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…

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…

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.