Theriva Biologics, Inc. (TOVX) Q4 2020 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the Synthetic Biologics' 2020 Year End Investor Conference Call. All participants will be in a 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, Corporate Communication at Synthetic Biologics. Please go ahead.

Thanks, Gary and good afternoon, everyone. Welcome to Synthetic Biologics 2020 year end investor conference call. Today, I'm joined remotely by Steven Shallcross, Chief Executive and Financial Officer; 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 year ending December 31, 2020. The release can be found on the Investor Relations section of our website. During our call today, we'll provide an operational update on our GI and microbiome-focused clinical programs and summarize our financial results. We'll take questions after prepared remarks. In addition to the phone line, this call will be streamed live via webcast and will be archived on our website www.syntheticbiologics.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 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 statement 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'd like to turn the call over to Steve. Steve?

Thanks, Vincent. Good afternoon, everyone and thank you for joining our 2020 year end investor conference call. I hope everyone is staying safe and healthy, as we continue to navigate the global health crisis sparked by the COVID-19 pandemic. It was a busy year and the start of the New Year for the SYN team. I'm very excited to be with you this afternoon to share our operational highlights and financial results. I'd like to start our call by saying that, we're more encouraged than ever by the outlook for our business. We've made important progress this year by advancing and demonstrating the significant of our pipeline of GI and microbiome-focused clinical programs and as we look ahead in 2021 and 2022. There are more reasons than ever to be excited about our company's future prospects. Before I give you an update on our two lead clinical programs. I'd like to provide a brief recap of several operational milestones which have unquestionably allowed us to strengthen our balance sheet and position our company for what I believe will be significant long-term growth as well as the delivery of multiple short and long-term clinical milestones. Starting in January, favorable market conditions triggered the exercise or the cash exercise of approximately 65% of the warrants associate with our 2018 public financing and allowed us to efficiently utilize our aftermarket facility. In addition, the conversion of all of our outstanding shares of Series A and Series B convertible preferred stock into common stock have not only further helped streamline our capital structure and balance sheet. But allowed us to position the company to meet the conditions to fully regain NYSE listing compliance. As a result of these activities, we're pleased to announce that our current cash balance is approximately $72.6 million, the strongest cash position in the company's history. Our strength in financial position now provides us with a runway to continue our operations well into 2023. Importantly, we now have the financial foundation to fully fund our Phase 1b/2a clinical trial of SYN-004 and planned Phase 1 and Phase 2 clinical studies of SYN-020. In addition, we're now positioned to a evaluate and potentially acquire new technologies and or assets intended to enhance our development pipeline which we believe may benefit from our incredibly experienced team. As we anticipate clinical trials returning to normal, our recently strengthened financial position will allow us to conduct multiple clinical studies during the next several years advancing our portfolio of GI focused clinical programs through proof of concept. As we think about the remainder of 2021 and moving into 2022, we're excited about several potential catalyst and clinical milestones that can create additional significant value for our shareholders. Specifically, for SYN-004 our therapy and development to prevent acute graft-versus-host-disease or aGVHD. We're excited to announce that Washington University has begun screening patients for enrollment of the first cohort in the Phase 1b/2a clinical trial in allogeneic hematopoietic cell transplant or HCT recipients. We expect to dosing patients in this cohort before the end of the month and if enrollment proceeds as planned, we'll be positioned of announce up to three interim data readouts during the next 12 to 18 months with the first one anticipated before the end of the year, pandemic conditions permitting. For SYN-020, our intestinal alkaline phosphatase program, a Phase 1 Single Ascending Dose study or SAD study is expected to begin during the second quarter. A topline readout for this clinical trial is expected during the third quarter of 2021 and a second Phase 1 Multiple Ascending Dose study or MAD study of SYN-020 is expected to begin in Q3 with top line data expected in Q1 of next year. Both Phase 1 trials are designed to support the development of SYN-020 in multiple clinical indications. Following what we believe will be a successful Phase 1 program, we are preparing a Phase 2 clinical study celiac patients as well as clinical programs for other potential indications that could begin as soon as early 2022. We believe SYN-040 in development to prevent aGVHD and SYN-020 a recombinant Intestinal Alkaline Phosphatase program address very sizable and underserved markets and have the potential to be foundational long-term to value for our company and our shareholders. With that backdrop, I'd like to provide an update on our clinical development activities beginning with our SYN-040 or ribaxamase program. SYN-040 is our first in class therapeutic intervention design to protect the gut microbiome from antibiotic-mediated dysbiosis. We believe protection of the gut microbiome may play a pivotal role in improving health outcomes for patients administered long courses of intravenous beta-lactam antibiotics as part of their treatment plan for bone marrow and solid organ transplantations. Allogeneic HCT recipients routinely receive long courses of IV beta-lactam antibiotics to treat neutropenic fever which occurs in 80% to 90% of the patients. Microbiome damage from IV beta-lactam antibiotics is associated with aGVHD, VRE colonization, bacteremia and C. difficile infection. aGVHD occurs in 30% to 60% of allogeneic HCT recipients and is a leading cause of graft failure and mortality. Prevention of aGVHD is absolutely critical in this patient population since first line aGVHD steroid therapies fail in more than 50% of the patients resulting in two-year survival rates of around 20%. The use of SYN-040 in allogeneic HCT patients is well supported by our existing clinical data and SYN-040 is potential to preserve the intestinal microbiome an allogeneic HCT recipients could provide remarkable benefits to patients, providers and payors. Estimates of in-hospital cost for allogeneic HCT recipients in the US range from $180,000 to more than $300,000. All costs inpatient and outpatient costs are estimated to be greater than $600,000 per patient when measured up to 12 months after hospital admission. At least one US study found that allogeneic HCT recipients who develop aGVHD had three times higher in hospital mortality rate and almost two-fold increase in higher median hospital cost in patients who did not develop aGVHD. If SYN-040 could reduce aGVHD incidents by 30%, it may provide significant improvements in patient outcomes including prevention of an average of 11 deaths and a reduction of $4.3 million in hospital treatment cost per 1,000 patients. In 2018, there were approximately 29,000 allogeneic HCT procedures conducted in the US and Europe and an additional 13,000 procedures conducted in Japan and China. While these are comparatively small patient numbers, the substantial potential benefits [indiscernible] provide in this patient population could allow for premium pricing and significant market value. Conservatively, our modelling suggests a revenue opportunity in the US and European markets of more than $800 million in the first five years of sales when considering pricing of $1,000 a day for 14 days of treatment. If we were able to expand the opportunity for SYN-040 use in solid organ transplant recipients, the market opportunity could be four times larger. It is worth noting, that developing SYN-040 for use in the specific population may also provide an opportunity to seek orphan drug designation which may further facilitate Phase 3 clinical development. Last year, we outlined our plan to move this program forward in collaboration with our clinical development partner the Washington University School of Medicine in St. Louis in the form of a Phase 1b/2a clinical trial of SYN-040 and allogeneic HCT recipients. The goal of this study is to evaluate the safety, tolerability and pharmacokinetics to SYN-040 administered to as many as 36 adult allogeneic HCT recipients who received a beta-lactam antibiotics to treat fever. Participants will be enrolled in three sequential cohorts. It will be administered a different IV beta-lactam antibiotics, eight participants at each cohort will receive SYN-040 and four will receive placebo. Patients enrolled in the first antibiotic cohort will receive the antibiotic meropenem which is not degraded by SYN-040 in order to determine whether SYN-040 is systemically absorbed in this patient population. Pharmacokinetic data from our previously completed Phase 1 and Phase 2 clinical trials provided supporting evidence that SYN-040 should not affect the IV antibiotic in the bloodstream. If we see that SYN-040 is not systematically absorbed in this first cohort will consider applying for orphan drug designation and began to prepare for our Phase 3 program at the remainder of this clinical trial completes. At this time, Washington University is currently screening patients for enrollment in this first cohort and dosing of the first patient is expected to take place this month. If enrollment proceeds as planned, a topline data readout for the first cohort maybe available before the end of the year. Next, I'd like to turn the call over to my colleague, Dr. Michael Kaleko, who will provide an update on our SYN-020 intestinal alkaline phosphatase or IAP program which is currently being developed as a treatment for celiac disease as well as other potential GI and systemic inflammatory and age-related disorders. Mike?

Thanks Steve. I welcome this opportunity to discuss the SYN-020 program and to outline the anticipated clinical program in our selective indications. We're about to reach an important milestone with the first clinical trial scheduled to begin next month. SYN-020 is a high specific activity form of intestinal alkaline phosphatase which I'll refer to as IAP, produced recombinantly [ph] [indiscernible] cells and delivered orally. It's formulated to be protected in the stomach and released in the upper small intestine. SYN-020 is resistant to digestion and it is anticipated to remain in the GI tract and eventually emerge in the stool inactive form. IAP is an endogenous enzyme produced by the cells that line the small intestine and it has multiple functions. Three in particular, first it removes the phosphate from inflammatory mediators such as endotoxin to diminish local inflammation GI tract. Second, IAP acts directly on the cells that line the GI tract to improve barrier function and diminish so called leaky gut and third, IAP serves to maintain a healthy microbiome. The combination of these three functions suggests that in addition to its role in diminishing GI inflammation IAP may also diminish the low-grade systemic inflammation that has been associated with metabolic diseases and with ageing. The therapeutic potential of IAP supplementation has been verified in many animal studies. Oral administration of IAP to rodent has been efficacious in virtually every model of colitis as well as models of metabolic syndrome and liver disease. Interestingly, a recent publication from our collaboration Dr. Richard Holton at Massachusetts General Hospital, show that long-term supplementation of IAP in mice diminish the inflammatory and metabolic changes that occur with normal ageing and prolonged the mouse lifespan. Why then haven't other companies developed oral IAP products? The answer would seem to be, that it's remarkably difficult to manufacture. Most of the studies in the literature have been performed with IAP derived from calf intestines. Calf intestinal IAP cost up to $10,000 per gram which is prohibitive for an oral therapeutic. In published reports of various recombinant platforms have described very poor yield. Again, in sufficient for an oral therapeutic. At Synthetic Biologics, we've overcome this hurdle. Our unique advantage is that we've been able to generate a high yield production cell line that at commercial scale is anticipate to enable cost effective manufacturing. We've shown that are recombinant to IAP that is SYN-020 is biologically equivalent to calf derived IAP and it was well tolerated in mouse and dog toxicology studies that doses up to 50-fold above the anticipated clinical dose. Last June, we filed an IND application. We received a Study May Proceed approval from the FDA. For a first in-human Phase 1 Single Ascending Dose clinical study to evaluate SYN-020 safety, tolerability and bio distribution in healthy volunteers. We're really excited to say that this first clinical study is scheduled to begin next month. Four cohorts will be run sequentially and top line data are anticipated in the third quarter of this year. The Single Ascending Dose study will be followed by a Multiple Ascending Dose study again to assess safety, tolerability and bio distribution. But in this case, with twice daily dosing for 10 days. We're aiming to initiate the study in the third quarter of this year. The top line data anticipated by the first quarter of next year. Importantly, both of these Phase 1 studies are designed to provide support for subsequent clinical trials with multiple indications. We've previously discussed three potential indications for early SYN-020 evaluation. Radiation enteropathy, gluten enteropathy or celiac disease and non-alcoholic fatty liver disease. We've now prioritized these indications and devised a clinical development plans for the ensuing two to three years. Our initial indication for SYN-020 clinical development will be celiac disease. Autoimmune disease triggered and genetically predisposed individuals by ingestion of gluten proteins from wheat as well as other grains. Celiac disease prevalence is approximately 1% of the US population and includes children and adults. The clinical manifestations include both gastrointestinal and systemic symptoms. While the disease presentation in course vary from patient-to-patient, the underlying causes are the same. Specifically gluten derived peptide open the gut barrier, leak into the intestinal wall stimulate an inflammatory response and then with an autoimmune reaction to human proteins most notably through transglutaminase. The disease is unique among autoimmune disorders and that the trigger that is gluten is known is withdrawal can in most cases mitigate the symptoms. Celiac disease has a very significant unmet medical need. There are no pharmaceutical treatments. Patients are condemned to a lifelong highly restrictive gluten free diet. Even then some patients fail to respond to the diet. The disease can be very severe and in rare cases, can lead to early death from lymphoma. From a mechanistic perspective, we believe SYN-020 is well suited to improve clinical outcomes when combined with diet. First, by bolstering the gut barrier SYN-020 may block the initial step of gluten entry into the intestinal wall. Second, through with anti-inflammatory activities SYN-020 may serve to attenuate the immune response to the gluten peptides. And finally, patients with active celiac disease have been shown to have reduced levels of own their endogenous IAP. As [indiscernible] because the disease damages the intestinal villi that normally produce IAP. Thus SYN-020 in celiac patients would potentially supplement and correct their low endogenous IAP levels. The first proposed clinical evaluation is SYN-020 in celiac patients will be a six-week Phase 1b/2a gluten challenged study in patients who are well controlled on a gluten-free diet. It's anticipated that the Phase 1b/2a study will be followed by a 12-week Phase 2b study in patients who are poorly controlled on a gluten-free diet. Clinical endpoints for both studies will include patient reported outcomes, laboratory data and endoscopic biopsies. Assuming successful completion of the Phase 1 studies in healthy volunteer. The Phase 1b/2a study in celiac patient is tentatively scheduled to commence in the second half of next year. It's anticipated that these two studies will provide information with safety, potential efficacy and therapeutic dose that supports subsequent pivotal studies. I'm also very pleased to announce that we've engaged as a consultant Dr. Alessio Fasano, from Harvard University in Massachusetts General Hospital. Dr. Fasano is the Division Chief of Pediatric Gastroenterology and Nutrition and the Director of the Center for Celiac Research and Treatment. More to the point, Dr. Fasano is a world leading key opinion leader in the field of celiac disease who can guide us through the clinical analysis. Finally, I'd like to finish by reemphasizing that SYN-020 has the potential to treat both gastrointestinal and systemic diseases. Accordingly, we're currently drafting a clinical plan to evaluate SYN-020 for the treatment of non-alcoholic fatty liver disease. The utility in SYN-020 for this indications well supported by efficacy studies in multiple animal models of metabolic and liver disease. Briefly, we anticipate clinic entry as a Phase 1b placebo-controlled double blind study in patients with modest elevation of serum liver enzymes. The study will address safety and tolerability and follow the liver enzymes as well as relevant metabolic parameters. To assist with the clinical design, I'm very pleased to announce that we've engaged as a consultant Dr. Rohit Loomba, at UC San Diego. Dr. Loomba is the Director of the NAFLD, Non-Alcoholic Fatty Liver Disease Research Center and a world leading KOL in the field of non-alcoholic fatty liver disease. I'll provide more on this indication as the plan materializes. In short, we're excited to see the SYN-020 program advance into the clinic. Thanks for your attention and I will turn it back to Steve.

Thanks Mike. Our SYN-020 platform technology has a remarkable opportunity to help address a considerable unmet need for innovative new therapies targeting GI disorders stemming from immune and inflammatory responses including celiac disease. Currently, there are no FDA approved therapies to treat celiac disease and disease management predominantly relies on lifestyle modifications and adherence to a strict gluten free diet. Across the six major markets, the total prevalent cases of celiac disease are expected to increase from 5.8 million cases in 2013 to an expected 8.1 million cases in 2023 representing an annual growth of approximately 4%. During the same period prevalent cases in the US are expected to increase from 2.8 million in 2013 to an expected 4.3 million in 2023 representing a significant market opportunity. Non-alcoholic fatty liver disease is also an indication with high unmet need. It is estimated that the worldwide prevalence of non-alcoholic fatty liver disease is anywhere from 6% to 33%. In the US, non-alcoholic fatty liver is highly prevalent with an estimated prevalence of approximately 30% in the general population. Non-alcoholic fatty liver disease is also strongly associated with metabolic syndrome and like celiac disease no approved pharmaceutical therapies are available to treat this illness and disease management is dependent on lifestyle modification. I hope we've conveyed our excitement for this [indiscernible] program and its potential to become a platform therapeutic for our company. We believe SYN-020 will play a major role in delivering long-term value to our shareholders while targeting large underserved markets including celiac disease. With that backdrop, I'll review our financial results for the year ended December 31, 2020. Throughout 2020, we operated very efficiently. We remained focused on prudent cash management and continued to identify areas to further reduce non-essential operating expenses. We ended the year with approximately $6 million in cash and cash equivalents however due to favorable market conditions which triggered the cash exercise of approximately 65% of the warrants associated with our 2018 public financing and the efficient utilization of our at-the-market facility. Our current cash position is approximately $72.6 million. Now I'll turn to the yearend financial results. General and administrative expenses increased to $5 million for the year ended December 31, 2020 from $4.6 million for the year ended December 31, 2019. This increase of 8.7% is due to increased legal cost, related to business development, patent execution, employee contract matters, vacation expense, insurance cost and registration fees. The charge relating to stock-based compensation expense was $300,000 for the year ended December 31, 2020, compared to $300,000 for the year ended December 31, 2019. Research and development expenses decreased to $5.1 million for the year ended December 31, 2020, from $11.1 million for the year ended December 31, 2019. This decrease of 54.1% is primarily due to a reduction in preclinical and manufacturing activity of SYN-020 IAP and the result of the response to the global COVID-19 pandemic by our clinical development partners which led to the postponement of the Phase 1b/2a clinical trial of SYN-004 in allogeneic HCT recipients, the SYN-010 clinical trial and to a lesser extent the discontinuation of the Phase 2b investigator sponsored clinical trial of SYN-010. Research and development expenses also included a charge relating to non-cash stock-based compensation expense of $66,000 for the year ended December 31, 2020 compared to $75,000 for the year ended December 31, 2019. Total other income was $44,000 for the year ended December 31, 2020 compared to other income of $283,000 for the year ended December 31, 2019. Total other income for the year ended December 31, 2020 and 2019 is primarily comprised of interest income from investments. I hope we've conveyed in our remarks the embarking on a transformative and exciting direction that we're taking our company. We believe our newly found financial strength and long-term outlook will allow us to unlock and further showcase the value of our clinical assets and generated long-term and value for our shareholders. Looking ahead, the remainder of 2021 and into 2022 upcoming significant major announcements and potential [indiscernible] includes for SYN-040 our program in the development to prevent acute graft-versus-host-disease. We anticipate dosing the first patient in the Phase 1b/2a clinical trial this month and if enrollment proceeds as planned, top line data readout for this first cohort is expected before the end of the year. For SYN-020, our therapeutic intended to treat celiac disease a first Phase 1 Single Ascending Dose is expected to commence next month and topline data readout is expected during Q3 of this year. A second Phase 1 Multiple Ascending Dose study is expected to start in Q3 and a topline data readout from this clinical study is expected during the first quarter of 2022. Following the completion of our Phase 1 studies we're preparing for our Phase II proof of concept clinical studies in celiac patients by also planning for clinical studies to evaluate SYN-020 for use in other potential indications that could also begin as soon as early 2022. We look forward to continuing to update you on our progress in the weeks and months ahead. So I'll now turn the call back over to Vincent.

Gary, we'd like to open the phone line to questions. Can you please describe the procedure to ask questions for our listeners?

[Operator Instructions] our first question is from Jim Molloy with Alliance Global Partners. Please go ahead.

Thanks for taking my questions, assuming a lot going on as change from previous calls. As you've been cashing in and it looks like you've an exciting 2021 siding up here. I'd love to go through some of the NAFLD. I think at right at the end you were talking about the Phase for the NALFD and because we're wondering on the Phase 1 you're currently running for celiac [indiscernible] is going to separate Phase 1 for that and what's kind of timing on that?

Thanks for the questions, Jim. I'm going to let Mike take that question and walk you through the Phase 1 programs and as you'll see from his discussion. The data that we gather from Phase 1 study will allow us to advance the program in multiple indications for Phase 2. But I'll let Mike walk you through that again.

Okay, thanks. So the initial Phase 1 studies will be a Single Ascending Dose and a Multiple Ascending Dose study. Those should both, Single Ascending Dose study will be completed this year. The Multiple Ascending Dose study will start this year and will be completed early next year. Both of those are in normal healthy volunteers. They're designed to demonstrate safety tolerability and bio distribution. We would like to show the SYN-020 phase in the GI tract which it should and not moving to systemic circulation. Once those safety studies are completed then we go into a Phase 1b/2a study in celiac disease. That's the challenge study and that should start in the middle of next year and that will be followed by a Phase 2b study in celiac patients shortly thereafter. Now as a separate indication there's non-alcoholic fatty liver disease. Okay that will start as a Phase 1b study in patients with mild elevations of liver enzymes and we expect that during that study, where we hope to see the liver enzymes diminish and will also be following other metabolic parameters towards heart [ph] validations in those patients. Now those two patient studies celiac and non-alcoholic fatty liver disease are independent. They're both supported by the Phase 1 SAD and MAD studies in normal healthy volunteers. But the patient studies are independent. At the moment we plan to start the celiac study very shortly after the MAD study in normal healthy volunteers is finished and then somewhere along the way. We would move into non-alcoholic fatty liver disease and the timing for that is not yet determined. But it can potentially be run in parallel to celiac. It is not dependent upon celiac. Does that clarify things?

That does very much clarify things. Thank you very much. To get a lot of trials around it. So the starting - thank you for laying that out.

Yes, it's pretty cool.

What we anticipate for spend for 2021 with these various trials you guys burned through about $10.1 million, $10.2 million in 2020 down from obviously again as you - down from $15.6 million last 2019. Do we get back to 15 levels with the cash on hand and trials ramping up or we stay sort of somewhere between 10.15? Any guidance on that?

Yes, I would expect our fixed burn to stay in the $400,000 to $500,000 a month. That might start to increase a little bit more next year. The Phase 1 study that will be conducted starting this next month. The SAD study it's probably around $1 million study. The second one, the MAD study you could probably think about it in terms of $1.5 million. The ongoing trial is about to get underway Wash U. as we previously disclosed that's about $3.6 million trial, about $700,000 has already been spent on that. So that's under $3 million or so that would be spread over the next 12 to 18 months. The Phase 2 programs, we haven't finalized our cost on that yet. So when we have a little bit more clarity on that. We'll share that. Does that help you out?

Very helpful. Thank you and then just my last question, you have a couple other programs obviously didn't work out and as the nature of drug development. SYN-010 and sort of the thoughts on C. diff program, what should we anticipate you guys want to do with this compound? Is there something that - any interest from potential partners or these are just pretty much going to be shelved for the future?

So the SYN-010 program, we've discontinued our license with Cedar Sinai, it was a mutual termination. So we're not spending any more money on that program and we've moved on from it. I'd let Vince Wacher, talk about our long-term strategy as it relates to SYN-004 or ribaxamase. And where we're beginning and ultimately how we could get to a broader C. diff indication? Vince, you want to take that?

Thanks, Steve. The C. diff compounds and the bone marrow, the allo HCT compound are one and the same. Exactly the same product. We're pursuing the bone marrow indication because it enables us two events. The product more effectively and for in a smaller number patients in smaller clinical trials and ideally, with a greater number of endpoints that we can evaluate to help move that program forward. The mechanism is exactly the same for both indications the bone marrow transplant and the C. diff. and in fact, preventing C. diff is an anticipated outcome in bone marrow transplant patients in addition to reducing aGVHD. So this one of the ways to think about the overall development plan is that we start with the bone marrow transplant patients looking at aGVHD, looking VRE colonization, and also looking at C. difficile and other opportunistic infections that data can be leveraged to move into broader populations stated references to sort organ transplant population. We know that they have issues with opportunistic infections in those immunosuppressed patients so that's an indication where we expanded would be more focused on the opportunistic infections like C. diff. and then ultimately using the data to accumulate as we move through these increasing indications to get back to the broader use in C. diff which as we've explained before required a massive Phase 3 trial that was beyond us at the time and so we're pursuing this more focused approach to get the product forward and generate that data.

Thanks and thank you for taking the question.

Your next question is from Jason McCarthy with Maxim Group. Please go ahead.

This is Michael Okunewitch on for Jason. Thanks for taking my question and congratulations on the progress. It seems like things like are really moving forward now. I'd like to ask regarding the trial design for SYN-004, if you could give a bit more than that. Like the overall timeline for the study and which antibiotics from the three cohorts. And which of the cohorts is the one you're expecting to readout by year end?

Why don't you go ahead Vince and that take one as well?

No problem. So the three cohort study and each cohort uses a different antibiotic and the way that they're staged is to minimize risk to the patients based on the potential effects of SYN-004. So to quickly recap SYN-004 degraded penicillin and cephalosporins in antibiotics that penem antibiotics. So what we want to do is that start with a carbapenem antibiotics in our first cohort and measure the potential for absorption of SYN-040 and what would be considered the cohort of lowest risk, if there was any absorption because our product doesn't degree carbapenem's. even if it got it - now we don't believe, it will, even if antibody [ph] to affect the antibiotic because it's a carbapenem. If that cohort proves to give us the results that made if we have a successful completion of that cohort, that's the one that will initially readout and the data we will get from that will be safety and tolerability to add SYN-040 in the target population, will also get a read on whether or not SYN-040 is absorbed into the circulation of patients within impaired vary assumptions. Those are two key questions that the FDA had for the program in general. So with that data in hand, we will be able to proceed to the next cohort which will be to pursuing beta-lactam which is a cohort where the pursuant can be degraded by SYN-004 was present in the circulation but as beta-lactam stops it from doing that. So these patients have a mind, they have a body guide for their antibiotic that would, if our product absorbed would prevent it from degrading. So that's the next risk level. That's again a cohort that would readout subsequent to the first one and give us another set of PK data and other set of antibiotic data and safety data. And the final cohort is [indiscernible] born antibiotic and that antibiotic is exposed, it has no, it could be degraded by our product and it is also got nothing to protect it. So it is a product that, that's the final cohort that we would run because that's the one way, if that our drug got into circulation it would be highest risk degrading the antibiotic.

All right, thank you and then I'd actually touch on the M&A side of things. You mentioned that business development is a potential and it wouldn't be surprising given, you a fairly stable cash balance at this point. So what sort of compounds we could be looking for? It seems like you guys have expertise in GI microbiome health as well as GI delivery of drugs. So could you help narrow down which disease areas or which type of drugs you might target?

I think it's best that we kind of hold our cards a little tight at the moment. I could tell you this, we've been evaluating many opportunities and some are little bit further along than others in diligence. And I'll just say, when we're ready to talk about those details will get that out and disseminate it accordingly. But we just prefer to keep our cards close to this point.

All right. Then I have one more, I'd just like to touch real quick on some of the existing safety data out there for IAP. I mean obviously you don't have anything for SYN-020 quite yet, but IAP has been out there. Patients radiation enteropathy and severe celiac maybe willing to take on some safety risk for some adverse event. But disease like well controlled celiac and [indiscernible] which is largely asymptomatic maybe this will in take those risks. So how does the safety look like for IAP in general?

Mike, you want to take that?

The IAP as I said is an endogenous enzyme, it's in your intestines all the time, although we're using a bovine version of it because it's got a higher specific activity. The safety profile for IAP is very good. I admit, it would be even more if use of - I don't think that's necessary at this point. For our SYN-020 we saw virtually now adverse events in canine and mouse studies that were six-week long. They're at doses up to 54 the anticipated clinical dose. Now other companies have developed both bovine and human IAP products. Most notably though, who are intravenous use. In the safety studies again there was pretty much fairly remarkable profile, that really don't want to speak completely for other companies because I'm not privy to their data. But for the most part, the intravenous delivery human IAP in patients at doses that increase the outgoing [indiscernible] level, I believe about 500-fold, the background was well tolerated and there's been one oral study, with bovine IAP again very well tolerated that was an also colitis patients. I think that's probably that is, you can consider the safety profile that we anticipate to be quite good. We anticipate a very reasonable risk benefit ratio even for diseases that are not fatal. And I'd finally add that celiac disease yes there are patients who are healthily following on a gluten-free diet. But that's a really unpleasant diet. There are a large percentage of patients who are healthy following on a gluten-free diet and some may have refractory disease. So I don't think we'll have trouble finding or I don't - that you'll trouble finding a patient population to as a home to our SYN-020 and I think you know that among patients with non-alcoholic fatty liver disease maybe 20% of them will go on to get rash, which is associated with fibrosis, cirrhosis and occasionally cellular carcinoma. So again I don't think we'll find difficulty finding a patient population for SYN-020, does that answer your question?

Yes, great answer. Thank you very much.

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

Thanks Gary. Before we end the call, I'd just like to make a few final comments about our company. First, I'm incredibly proud of our talented team who have just worked countless hours to get us where we are at today. The effort takes into to advance our programs just could not have happened without their dedication and persistent drive to help a patient population that just continues to be underserved. Second, we're in the strongest financial position in the company's history and because of this we're now very, very well positioned to not only fund our clinical programs for the next two years. But to deliver on multiple clinical milestones over the next 12 to 24 months, so the value of these programs and that we've under development can be further supported and potentially the value, potentially fully realized by the markets. And we also have this great, great opportunity finally to go out and acquire or license new technologies to further expand our product portfolio and add additional shareholder value. So in closing, I'd like to thank our long-term shareholders for their ongoing support and also just welcome any new shareholders that have discovered us and are equally excited to be a part of our great company. I promise that 2021 will be an exciting year and we look forward to just keeping you informed and updated on our progress. Have a good weekend and we look forward to talking to you next time. Thank you.

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