Good afternoon and welcome to the Synthetic Biologics 2018 Year End 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. At this time, I would like to turn the call over to Vincent Perrone, Director of Corporate Communications at Synthetic Biologics. Vincent?

Thank you, Brandon, and good afternoon everyone. Welcome to Synthetic Biologics 2018 Year End Investor Conference Call. Today, I am joined by Chief Executive and Financial Officer, Steven Shallcross; Dr. Michael Kaleko, Senior Vice President, Research and Development; and Dr. Vince Wacher, Head of Product and Corporate Development. Synthetic Biologics issued a press release this afternoon which provided operational highlights and reported our financial results for the period ending December 31, 2018. The press release can be found on the Investor Relations section of our website. During our call today, we will provide an operational update on our GI and microbiome-focused clinical programs and summarize our financial results. 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 www.synthethicbiologics.com 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 terminologies 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 account of new information, future events or otherwise, except as required by law. With that, I would like to turn the call over to Steve. Steve?

Thanks, Vincent. Good afternoon, everyone, and thank you for joining our 2018 Year End Call. I'm happy to be with all of you this evening and I look forward to sharing important and exciting updates on our strategy and progress for advancing our late stage in emerging clinical programs during today's call. 2018 was no doubt a transformative and productive year for the company. We note several key advancements for our portfolio of clinical programs targeting critical unmet need in the prevention of life threatening gut microbiome infections in GI disorders. A particular note, we expanded our relationship with Cedar-Sinai Medical Center in the form of agreement to conduct a Phase 2b clinical study of SYN-010. We announced the completion of our End of Phase 2 meeting with the FDA and confirmed key elements of the Phase 3 clinical trial to support marketing approval for SYN-004 for the prevention of C. difficile infection. We began our evaluation of a potential secondary and more focused indication for SYN-004 in the prevention of acute graft versus host disease or AGVHD, an allogeneic hematopoietic cell transplant recipients and we made significant advancements for our SYN-020 intestinal alkaline phosphatase program which is currently in preclinical studies. These and other initiatives undertaken during 2018 has embedded us to realign our clinical programs to what we believe to be clear and achievable development path. And with the steps we have taken at the end of the fourth quarter to fortify our long term financial putting, we have created a strong foundation upon which to execute our strategy to advance and showcase the value of our late-stage clinical asset. With that backdrop, I'd like to share a more detailed update on our lead clinical programs. So let's begin with and update on SYN-010 first. Much has been…

Thanks, David, and good afternoon, everyone. As Steve noted above, our successful End of Phase 2 meeting with the FDA was really a very encouraging recognition of ribaximase as a potential new intervention to prevent antibiotic-mediated CDI. We spent considerable effort elaborating a registration pathway for ribaximase in this indication, during which we've encountered an imposing development challenge which is inherent to all preventive agents. Specifically, the overall incidents of the target disease, in this case CDI, is comparatively low, which means ribaximase will be administered to a broad range of patients who might never have contracted CDI at all. This mandates large clinical trials in order to ensure appropriate safety in a broad patient population, as well as established efficacy as a means of preventing the CDI. As noted above in the fourth quarter, we described an FDA-agreed Phase 3 program that would comprise one global event-driven trial within enrollment of around 4,000 patients. Clearly, a 4,000-patient study is an expense even very costly undertaking for a company of our size and resources. So in order to maintain our clinical momentum, we've explored alternative more narrow indications for ribaximase where our target to these incidents is high and the clinical development cost should be less on us. Ensuing this alternative strategy, we can leverage our existing ribaximase clinical data and our recent regulatory insight to advance ribaximase ourselves rather than depend on a potential pharma partnership. Our decal [ph] review of potential ribaximase opportunity is identify cancer patients who wanted to go allogeneic hematopoietic cell transplantation or commonly referred to as bone marrow transplantation as a population for whom ribaximase may provide a substantial therapeutic benefit. Allogeneic HCT, hematopoietic cell transplantation is a surgical process where patients with hematologic disorder such as acute lymphocytic leukemia have their disease cells…

Thanks, Vince. While we move forward with our later stage assets SYN-010 and ribaximase, we're also continuing to drive new value from our R&D engine. One of the most promising preclinical assets is SYN-020, an oral form of intestinal alkaline phosphatase or IAP. IAP is an endogenous enzyme expressed in the upper small intestine and plays an important role in maintaining GI homeostasis and promoting a healthy gut microbiome. IAP has several key functions, two of which are to detoxify GI inflammatory mediators and to diminish so-called leaky gut. Through these activities, oral delivery of IAP has the potential to treat both local and GI systemic disorders. Despite its broad therapeutic potential, the development of IAP as an oral drug has been hindered by manufacturing hurdles which has led to currently commercially-available IAP cost of around $10,000 per gram. We've overcome these hurdles and now have the ability to produce 3 grams per liter of IAP for roughly a few hundred dollars a gram. We believe this is a true game-changer. We currently are planning to pursue clinical trials for SYN-020 and have identified two noble indications with unmet medical needs, in which span a range of market sizes. Specifically, Enterocolitis associated with radiation therapy for cancer and Enterocolitis associated with checkpoint inhibitor therapy for cancer. We intend to move forward with an IND filing for one of these indications to be identified based on an ongoing preclinical research in the fourth quarter of 2019. Following the submission of an IND, we anticipate initiating a Phase 1 clinical trial for SYN-020 in the first quarter of 2020. We believe the clear and viable strategies we have detailed today will allow us to creatively and aggressively advance our development pipeline in ways that have the potential to drive significant value for…

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

Absolutely. At this time, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Katherine Xu with William Blair. Please go ahead.

Hi, good afternoon. I'm just wondering, Steven and Vince, for SYN-010. The IBS-C drug so far approved have not been performing very well in the commercial. I know you guys have been talking to partners for some time as well. What do you think this upcoming data -- what kind of difference do you think that homing [ph] data would make later this year in terms of differentiating the profile? And also is there a real sizable market?

Thanks for the question, Katherine. Since Vince has been working on our models in assessing the market here, I'll let him answer that for us.

Hi, Katherine. I guess there are two parts to that question. One of that got to do for us coming out of the study. Well, in our conversations when we look at people that are in the GI space interested in this space, there's recognition that the things on the marketplace now or more or less do the same thing. They all pour water into the intestinal tract and they all have largely the same concern which is variability and activity on wanted side effects, particularly unpredictable and explosive diarrhea. And they are all symptom-driven. You take them once every time you get constipated and there's not really [indiscernible] of being able to get people to any kind of normalized bowel function every consistent amount of time. SYN-010 has the opportunity to do that certainly based on the mechanism of action. We should be able to give this chronically into normalized the bowel function. So the mechanism of action, the opportunity to do something on the symptom's side is recognized. The particular advantages of the product that are also recognized at the absence of diarrhea and the potential to significantly reduce bloating which I remind everybody is a symptom that IBS patients report as the most bothersome in their quality of life. So within the product itself, if the data is meaningful and compelling, then we will be able to show differentiation to the current products. Part of the challenge in terms of getting a partnership previously is that the clinical development program that we agree with the FDA was quite substantial and that's because we didn't have a good dose response coming out of our Phase 2 result. By getting good read of the data from this study, we should be able to evaluate the dose response and pick…

Katherine, I might also add that when we announced that we are going back into the clinic with this asset, we had a lot of interest generated and we've had folks proactively -- potential partners -- reaching out to us to have discussions about what this clinical design was going to look like, how long it was going to take and when we expect to have the data. So we're very excited about the renewed enthusiasm around the compound. Clearly, folks in this space understand that there's no perfect solution out there and we have a real opportunity to offer something that's truly differentiated in the marketplace.

Our next question product comes from Jim Molloy with Alliance Global Partners. Please go ahead.

Thank you for taking my question. My question is on the SYN-004 for AGVHD and they're looking at some of the -- let me be sure I get that correct; looking at the [indiscernible] trial they have ongoing, is there additional information you guys have on where that stands and your thoughts on having another partner -- or not a partner, I guess competitor -- on the space targeting the same market, speeding through the validation, perhaps of the opportunity and your thoughts of comparing and contrasting SYN-004 versus Vedoluzimab? Thank you.

Go ahead, Vince.

I think it's great to see a clinical trial going forward like that because it gives us the guidelines on what sort of endpoints the FDA is looking for in the space that also validates that the space is valuable and compelling. We are very different because the Millennium program is an antibody and it's really having a direct effect on biological targets where our, is if prevented, it doesn't do anything to the biology, but prevents the damage in the first place. So while we are in the same space, we are mechanistically quite different and could even be complementary. The way that our product would be used in AGVHD is not to plant immunosuppressive agents or things that will treat AGVHD as it emerges. Our product is an add-on to make them all that more effective because there's one less battle to fight. If we can prevent the damage to the microbiome, if we can suppress the effects of that damage on immuno-dysfunction in the GI tract, then we make all of those things more effective in terms of preventing the AGVHD. And I know that people are using immunosuppressive agents now and still getting AGVHD and still having microbiome damaged. So again, this is a space that's unaddressed in the AGVHD prevention marketplace and where we add something, not necessarily remove the immunosuppressive agents overall.

Great. Thank you for that. And then quick follow up on your comments on the R&D number going up for next year. Is there any magnitude to that number? We read about your $2 million, almost $3 million a quarter towards middle of the year. Is that sort of the range you expect to see R&D going back to? An end guidance on G&A and sort of overall -- where your [indiscernible] your cash balance to take you to?

I'm glad you asked that question. When you think about our burning going forward, first and foremost, we guided that. We raised sufficient capital to fund these programs that we've described you today and allow us to operate without having to go back to the market, at least through the first quarter of 2020 and I believe possibly a little bit beyond that. We've already taken our fixed burned down significantly. As we announced in December, we resized the organization to accommodate our human resource needs in order to conduct the clinical activities that we laid out for you. If you recall, perhaps not even two or three quarters ago, our monthly fixed borrowing was sort of in that $800,000 to $900,000 a month range. Currently we've got our fix burned down to around $700,000 a month and we continue to work to get that down further. So we have a very, very focused effort to continue to reduce our overhead costs. Cost associated with our clinical programs -- these are numbers that we've talked about publicly particularly around the last financing -- we're probably going to commit somewhere around $700,000 this year to SYN-010; maybe about $200,000 or $300,000 for manufacturing in the rest for clinical work. Our SYN-020 program will commit about $7.5 million that pay for our manufacturing and some clinical activities and then we also stated we commit somewhere in the neighborhood of $5 million to our SYN-004 program for bone marrow transplant. So that's what you can expect and you can run the numbers. The timing of when the expenses will happen will obviously be correlated to when we start these activities. You saw a little bit of burn here in the fourth quarter and you'll see a little bit of a bump in the first quarter because we've had the front load. Some of our manufacturing costs for SYN-020, but that's exactly what you can spend. We're very confident that we put ourselves in a really solid financial position here without having to go back to the markets until we have clinical data.

Great. Thank you for that. My final question is just on the ideas program with Dr. Pimentel's lab. Do you still have confidence -- and I know you said in the press release -- second half of '19, when you do you have an idea of that third quarter, fourth quarter for that data?

We're very excited and happy about our progress to date. Right now, our guidance is the second half. What I'd like to do is probably get a few months or so under our belt and then we'll be able to probably tighten the time frame of when we'll have top-line data. I'm not going to put ourselves in the position where we start giving updates on enrollment. I think that's just unfair to Cedar's organization and to us and everybody starts sort of gaining the system. When we have a little bit more data, we'll tighten up the guidance and when we expect to have the top-line.

Great. Thank you for taking the questions.

This concludes our question-and-answer session. I would now like to turn the conference back over to Steve Shallcross for any closing remarks.

Thanks again and before we end the call, I just want to make a couple brief comments. First, we're incredibly excited and probably more excited than ever with our continued progress in our path forward. First and foremost, we're back in the clinic and we haven't been able to say that for a while and that created some great enthusiasm within our organization as well as with our existing and new investors that have become engaged with us and are now behind us as we pursue these clinical activities to finally develop some solid clinical results. We have incredible products that again we believe have the potential to significantly impact the quality of life for patients all over the world and we've talked to folks not only in North America, but in Europe and you've heard me talk before in China. Our products are needed. This has been reaffirmed in multiple discussions that we had for our team and key opinion leaders, clinicians, researchers and public health officials, again, all around the world. The strategy we've laid out, it's simple. It's designed to give us multiple ways to advance our products through the development cycle by number one, focusing on targeted indications that again addressed significant unmet needs allow us to rapidly advance our programs through the clinic at reasonable cost. I don't think we've paid enough attention to that in the past and I think we've got a solid strategy on how to do this and do this in a respectable way. This will allow us to capitalize on our investment, again with the goal of having products that have a viable commercial path forward. I've referred to this in the past as sort of our multiple shots on goal strategy. And then finally -- and we tried to talk about this on our call today -- we have the financial resources to execute on our plan. The cash on hand will fund our plan through again at least the first quarter of 2020 and we're continuing to work diligently to extend that runway beyond that time frame. This will allow us again to deliver several value-creating milestones, the most significant being the SYN-010 Phase 2b data for the 150 patient trial that would describe where the results would be available on the second half. And again, this date is going to be key to advancing our partnering discussion selecting a dose for the Phase 3 program for SYN-010 and more importantly, once we've identified that, we'll be able to lower the overall cost of that Phase 3 program. In closing, you have our commitment and the commitment of our team that we will do everything possible to get the job done. We remain focused on execution and delivering the return on investment that all of your shareholders expect from us. Thank you again for your support and we look forward to keeping you updated on our progress as we continue to move these products through the clinic.

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