Evelo Biosciences Inc (EVLO) Q3 2021 Earnings Call Transcript

Evelo Biosciences Inc  (NASDAQ: EVLO) Q3 2021 earnings call dated Oct. 28, 2021

Corporate Participants:

Kendra Sweeney — Head of Investor Relations and Capital Markets

Simba Gill — Chief Executive Officer

Mark Bodmer — President of R&D, Chief Scientific Officer

Jonathan Zung — Chief Development Officer

Duncan McHale — Chief Medical Officer

Analysts:

Chris Howerton — Jefferies — Analyst

Matthew Luchini — BMO Capital Markets — Analyst

Kristen Kluska — Cantor Fitzgerald — Analyst

Gobind Singh — JMP Securities — Analyst

Keay Nakae — Chardan Capital Markets — Analyst

Joseph Thome — Cowen & Company — Analyst

Presentation:

Operator

Good morning, and welcome to Evelo Biosciences Conference Call discuss its Third Quarter 2021 Business Highlights. [Operator Instructions] Following the formal remarks, we will open the call up for your questions. [Operator Instructions]

At this time, I would like to turn the call over to Kendra Sweeney of Evelo. Please proceed.

Kendra Sweeney — Head of Investor Relations and Capital Markets

Thank you. This morning, we issued a press release that outlines the topics we plan to discuss today. This release is available at www.evelobio.com under the Investors tab.

Today on our call, Simba Gill, Chief Executive Officer; Mark Bodmer, President of R&D and Chief Scientific Officer; and Jonathan Zung, Chief Development Officer, will review our recent business highlights and third quarter 2021 financial results.

Before I begin, I would like to remind everyone that statements made during this conference call that do not relate to matters of historical fact, including statements about our objectives and anticipated clinical milestones, the impact of any of our product candidates, and the timing and results of any clinical studies should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

Actual results could differ materially from those indicated by the forward-looking statements due to their impact of many factors. Participants are directed to the risk factors set forth in Evelo’s quarterly report on Form 10-Q for the quarter ended September 30th, 2021, and the company’s other filings with the Securities and Exchange Commission. Any forward-looking statements made today speak only to Evelo’s operations as of today. Evelo disclaims any duty to provide updates to its forward-looking statements even if subsequent events cause the company’s views to change.

It is now my pleasure to pass the call over to Simba.

Simba Gill — Chief Executive Officer

Thank you, Kendra. Good morning, everyone and thank you for joining us to review our progress during the third quarter. A major news for the last quarter was, of course, the positive topline results of our Phase 2 trial of EDP1815 in patients with mild and moderate psoriasis. The Phase 2 clinical data prove beyond reasonable doubt that we can indeed harness SINTAX to create medicines.

I can’t emphasize enough the importance and value of these data. The trial addressed the central question we have been asking since we first started Evelo. Can parking SINTAX be the foundation for a new profile of medicine? The answer is yes. With EDP1815, we have now shown, in a well-controlled Phase 2 clinical trial, that we can harness SINTAX to make a clinical impact on patients with an oral product candidate with safety and tolerability data comparable to placebo. Together with affordable manufacturing, these data support the potential of SINTAX medicines to address an enormous unmet need in the global treatment of patients with mild and moderate inflammatory disease.

The data from the Phase 2 trial underscore two drivers of value. First is the potential of EDP1815 as an important new medicine in the treatment of psoriasis. Based on the data, we are advancing EDP1815 towards registration trials in mild and moderate psoriasis. The primary unmet need in psoriasis is for this segment of patients. There are over 55 million patients with psoriasis worldwide, and patients with mild and moderate disease represent over 90% of this patient population.

The second driver of value is that this is a proof-of-concept for the SINTAX platform in a Phase 2 clinical trial. The potential implications of this are immense. It reveals a previously unknown branch of biology, which touches on a broad mechanism for the resolution of inflammation, which impacts a considerable number of diseases, and for which we have shown a new type of medicine that works in humans. In dermatology alone, there are globally over 200 million people who suffer from mild and moderate diseases for which there are limited treatment options. In broader inflammatory diseases, including arthritis, asthma, and chronic obstructive pulmonary disease, there are about a billion people worldwide in need of better treatment.

I’d like to touch on one specific aspect of SINTAX based products as a new type of medicine. We are developing orally delivered microbial products that are non-live biotherapeutics. This is a completely different concept for live biotherapeutics and the microbiome. There is no colonization or modification of the microbiome. They have a direct pharmacological effect through interactions with host cells in the gut, which in turn modulates systemic inflammatory responses throughout the body via the small intestinal axis.

The clinical responses to EDP1815 opened the door both to EDP1815 as a potentially important medicine in dermatology and to the broader potential of the platform. Our aim has always been to develop an entirely new profile of medicine that will transform healthcare rather than another incremental improvement to what already exists. We did not invent the small intestinal axis. We discovered it by inventing SINTAX medicines, which harness this extraordinary natural system, which controls inflammation throughout the body.

What we have discovered is have harness nature to create something that has never existed before. We have discovered and pioneered new principles and new approaches for developing and manufacturing SINTAX medicines. A Phase 2 data, together with other clinical and preclinical data we have generated, gives us high confidence that we will realize our vision to transform global healthcare. Let me repeat the core point. We have demonstrated that we can harness SINTAX to drive clinical effects throughout the body with an orally delivered, gut-restricted agent.

SINTAX medicines are a substantial new platform in our industry with the potential to help 100s of millions of patients globally at all stages of disease. Most of these patients have so far not received the benefits of biotech innovation. Think of this in terms of combining the discovery of cytokine biology with the discovery of therapeutic antibodies, newly discovered biology underpinning many diseases together with the means to do something about it, and then delivering it to patients as a convenient oral pill.

With that, I will hand it over to Mark.

Mark Bodmer — President of R&D, Chief Scientific Officer

Thanks, Simba. We’re often asked the reasonable question, what are the risks of success of Evelo’s medicines? Of course, there’s one overarching risk, is SINTAX biology important and can SINTAX medicines work? Yes, it is important. And yes, EDP1815 was observed to have a clinical impact on patients with psoriasis. There are also the risks around manufacturing and regulatory path to the clinic, both potentially significant hurdles for new modality. These two have been overcome.

The Phase 2 results take us past these fundamental risks on to the practical challenges of making SINTAX medicines work, the largest numbers of people as effectively as possible. The breadth of opportunity that Simba talks about comes directly from the breadth of the mechanism of action, that is the coordinated resolution of multiple pathways involved in the inflammatory response. Now, that we have shown SINTAX functions in humans to modulate systemic immunity, it’s reasonable to expect that SINTAX medicines may be beneficial in almost any condition in which inflammation plays an adverse role, which is most diseases.

As an example, two weeks ago, the effect of EDP1867 in a mouse model of neuroinflammation were presented by the European multiple sclerosis conference. These were extraordinary data showing the gut immune system reaching into the central nervous system under the influence of one of our drug candidates. It is the same principle that allows the gut to reach into the skin. The currently disparate effects in skin and CNS are the result of the pleiotropic mechanism, which is the glue that holds together this whole concept, because small intestinal access can impact inflammation throughout the body.

I’m now going to turn to two related topics that are part of making EDP1815 and future SINTAX medicines work as effectively as possible. The first topic is to do with the responder rate to EDP1815 that we observed in the Phase 2 psoriasis trial. As you recall, approximately 30% of patients, who received EDP1815 in the trial achieved a PASI-50 response by the 16-week endpoint. However, this does not mean that EDP1815 does not have any effect in the other 70% of people. There was a continuous distribution of PASI responses, the 30% who were reported as PASI-50 responders is simply a cut of that overall distribution after 16-weeks of treatment.

The Phase 2 study showed the efficacy accrued as patients continue to take EDP1815. This suggests that treating for longer could result in higher response rates, a rising tide lift all boats, anything that increases overall response rates has the potential to benefit more patients. We’ve also done further sensitivity analysis since the Phase 2 data were released last month, and I’d like to highlight one of them. The proportion of patients, who achieved IGA 0O1, after stratifying the baseline body surface area, psoriasis was evaluated. IGA zero and one are respectively clear and nearly clear skin. These are the targets of treatment in patients with mild and moderate psoriasis. Mild disease is defined as body surface area less than or equal to 5%, moderate disease is greater than 5%.

The proportion of patients with moderate disease that is greater than 5%, who reached IGA zero or one, compared to placebo at a p-value of less than 0.05. Patients with mild disease also trended to efficacy with a p-value that was not significant. Across the entire study population, stratifying by BSA group at baseline, EDP1815 was also found to be significantly better than placebo in the number of PGA zero or one responders with a p-value less than 0.05.

This is an important result. It does not mean that EDP1815 doesn’t work in milder patients. It does mean that the effect is more readily detected in patients with more extensive disease, not surprising since there is a larger window for reading the effect of the treatment. The observed response rate in the Phase 2 study was already within a clinically and commercially attractive range for mild to moderate disease reinforced by placebo-like safety and tolerability. These further analyses are evidence for additional improvement of efficacy in future studies based on clinical data that we already have.

The second broad point about making SINTAX medicines work as effectively as possible is based on the observation in the Phase 2 psoriasis trial, but we saw continued improvements in some patients after the end of the treatment period. Generally, drug levels need to be maintained to suppress the target pathway. When dosing is stopped, there’s often a rebound in disease symptoms. The mechanism of action that allows us continued effect with EDP1815 ties into broad inflammation resolution that I was talking about a moment ago.

EDP1815 and several of our other product candidates induce a regulatory phenotype in circulating immune cells. We can show this experimentally in preclinical studies by isolating peripheral immune cells from animals that have been treated with drug. If we then transfer these isolated cells into animals that have not treated with drug that these non-drug treated animals have the same anti-inflammatory inflammation resolution as if they have been treated. The transferred cells mediate the inflammation resolving effect of the drug. This is called adoptive cell transfer that is a core proof of mechanism for the therapeutic cellular phenotype induced via SINTAX.

Consider what this means, the efficacy of a gut restricted drug is carried out by modified immune cells and appropriate are evidence that this in mice is the adoptive cell transfer. Our evidence for this in humans is the continuing effect after the drug is stopped, reduced regulatory cells continue to overcome the effect of the inflammatory cells resident in the skin leading to skin healing after administration of the drug is ended. The modified immune cells can last for weeks in circulation, perhaps longer, we don’t know the duration response yet.

So, consider again what this means. We’ve created a regulatory cell phenotype, which is induced in situ by product candidate, EDP1815, that has been preserved — observed to have placebo-like tolerability and safety, and that can be manufactured at scale. Compare this to the current interesting cellular therapies with ex-vivo conditioned regulatory T cells, which skipped that entire process step and gone straight to with such new generation, with an all product candidate which uses the body’s natural programming. This is one of the scientific results that profound the alters once frame of reference. With that restricted agent can create active regulation of systemic inflammation, which is not immunosuppression, it is restoration of the normal non-inflamed state.

I’d like to finish with some more forward-looking comments about our aspirations for the future of the SINTAX platform. EDP1815 is now nicely set up as a treatment for mild to moderate psoriasis, and that should also be true for other inflammatory diseases. We have reported repeatedly that in preclinical studies, our drug candidates are as effective as the best standard of care biologics and orals.

This suggests potential also in severe inflammatory disease. Our goal for future versions of SINTAX medicines is to reach biologic levels of efficacy in humans to take SINTAX medicines beyond mild and moderate and into severe disease. The preclinical data suggests this is biologically feasible. Getting effective target engagement in humans is harder than in mice, the physics of the delivery of SINTAX medicines for the target in a larger human gut provide some particular challenges. We think that extracellular vesicles, with a volume 1,000 that of a micro, have helped to address these challenges.

The small size advantage of EVs allows them to diffuse more readily in the gut milia and allows us to pack a higher concentration into each pill. The size of outages will be combined with formulations that assure that the drug is made as much as the small intestine as possible. It’s a reasonable prediction of these factors, size, packing, and formulation will combine to increase efficacy. It’s how we get the high levels of efficacy preclinically, and we are now learning how to do it in humans. Our vision for the future of SINTAX medicines is efficacy, which is competitive, the best standard of care for all stages of the disease with oral delivery, and the safety and tolerability seen with EDP1815. The scientific platform, which we have constructed methodically over the last five years, supports this possibility.

With that, I’ll hand over to Jonathan to update you on our clinical programs.

Jonathan Zung — Chief Development Officer

Thank you, Mark, and good morning, everyone. I will provide an update on our ongoing clinical trials, upcoming readouts, as well as planned studies. Part B of our Phase 2 trial in mild and moderate psoriasis is ongoing and assessing the durability of treatment response following completion of 16-weeks of dosing in 124 patients. These participants are being evaluated monthly, and we look forward to learning more about the lasting effects of EDP thousand 815. We expect to report top line results in the first quarter of 2022.

The results from part A and part B of the Phase 2 trial will allow us to refine our next phase clinical plans for EDP1815 in psoriasis, as well as seek feedback from health authorities. Our phase 1b trial of EDP1867 in a cohort of patients with moderate atopic dermatitis is ongoing. Trial participants are being dosed or stay with a 14-day follow-up period. We anticipate results from this trial in the first half of 2022 based on slower than projected recruitment. We previously reported that the US FDA had requested additional information in a clinical hold letter in the EDP1815 Phase 2 atopic dermatitis trial in patients with mild, moderate and severe disease. We have satisfactorily responded to the FDA request and the hold has been lifted. The IND is now open, and we anticipate dosing late in the fourth quarter.

This trial will be 16-weeks in duration with the primary endpoint of percent of patients, who achieve an eczema area and severity index EASI50 score at week 16. In addition, we’ll be collecting various physician and patient-reported outcomes. We anticipate reporting results from this trial in the fourth quarter of 2022. Patients on active and placebo from this trial will have the opportunity to join an open-label extension once they complete 16-weeks of dosing. All patients in the open-label extension will receive EDP1815 for up to 52-weeks.

We remain on track to bring our first extracellular vesicle or EV candidate, EDP2939, for inflammatory diseases into the clinic in 2022. We continue to recruit patients in the Phase 2/3 TACTIC-E trial for the prevention and treatment of life-threatening complications associated with COVID-19 in hospitalized patients in the UK, Brazil, Mexico and India. TACTIC-E is progressing well and is very close to the initial recruitment goal of 125 patients in each of the initial three arms of the trial, including EDP1815.

Hitting this recruitment target will trigger an interim safety and futility analysis by the independent data monitoring committee. Based on the progress and scale of TACTIC-E, we have decided to focus our efforts on this trial and to close our smaller US Phase 2 trial, evaluating the safety and efficacy of EDP1815 in the treatment of patients hospitalized with COVID-19 infection. It is now clear that smaller trial will not make a meaningful contribution to our understanding of EDP1815 in hospitalized COVID-19 patients.

I’ll hand it back to Simba for closing remarks.

Simba Gill — Chief Executive Officer

Thank you, Jonathan. This is a pivotal moment for Evelo. We now have proof-of-concept from a Phase 2 study for SINTAX. We are advancing EDP1815 in psoriasis toward later-stage development and potential commercialization. In parallel, we are advancing EDP1815 in a Phase 2 study in atopic dermatitis, and our second anti-inflammatory microbial product, EDP1867, is in the clinic.

Our EV development platform is making strong technical progress towards the clinic, and we have shown preclinically the potential of SINTAX medicines in neuroinflammation. All of this is only the beginning. We have a better and better understanding of how to capture the full breadth of our SINTAX platform, and you can expect much more from our platform as we continue to grow Evelo toward our vision.

Thank you for your attention, and we will now open for questions.

Questions and Answers:

Operator

[Operator Instructions] Now, our first question coming from the line of Chris Howerton with Jefferies. Your line is open.

Chris Howerton — Jefferies — Analyst

Hi. Good morning, everybody and thank you very much for taking the questions. For me, I think the first would be with respect to atopic dermatitis, I’d be curious to hear the company’s thoughts on both, kind of, the regulatory path of using EASI50 as a primary endpoint, if that would be possible? And then secondarily, what would be a clinically meaningful effect size on such an endpoint within, I guess, the mild to moderate patient population. So, that would be question one.

And then, question two is, with respect to cohort B of the psoriasis study, maybe if you could just compare and contrast that to a cohort A and how that’s going to inform the phase three design moving forward? Thank you.

Simba Gill — Chief Executive Officer

Chris, it’s Simba. Thanks for your question. Sorry. Can you just repeat the last question?

Chris Howerton — Jefferies — Analyst

Yes. The last question was a compare-and-contrast cohort A and cohort B for the psoriasis study? And what exactly in the cohort B results is going to help you kind of figure out the phase three design moving forward?

Simba Gill — Chief Executive Officer

Okay. All right. Thanks. So, let me take the middle one first, which was what would be a clinically meaningful effect on the EASI50 side. As you know, Chris, atopic dermatitis for mild and moderate patients does not have any approved oral treatments, and atopic dermatitis patients essentially with mild and moderate disease are limited to taking a range of topicals, including topical steroids, which have a number of limitations.

The reason I’m leading with that, Chris, is the bar is actually very low for a safe, well-tolerated oral drug. And as long as we continue to confirm safety and tolerability, if we see EASI50 responses or equivalent, and I’ll hand over to Duncan in a moment, who can answer your first question, in a reasonable percentage of patients, we have a very attractive drug. I would say, somewhat similar to psoriasis, if we have effects at EASI50 or greater in 25% to 30% of patients or more, then we have an attractive drug as a general guidance for you, Chris.

We expect we have a good probability of doing better than that. If you look at our phase 1b data in atopic dermatitis, we already had seven out of 16 patients who were plus or minus at that EASI50 level after only eight weeks of treatment. So, we’re feeling confident right now that we’ll get to that level or better, Chris, that I talked about. I’d also emphasize that in psoriasis, we did already see some patients that PASI75 or even greater PASI90, different diseases, different biology, but it’s certainly encouraging in terms of where we think we may end up.

So, that’s the first point, Chris. And then, I’ll let Duncan ask your question on EASI50 as a regulatory endpoint.

Duncan McHale — Chief Medical Officer

Yes, Chris. Good question. So, EV is a — it’s a well-established scale. It’s the scale that the authorities are very familiar with. In terms of the EASI50 benchmark itself, it is a clinically meaningful change that patients with moderate, in fact, severe disease, we’ll clearly notice and benefit from. So, we have no concerns about that as a scale from a regulated perspective. But remember, we’ll also — this is the Phase 2 study. We also will have SCORAD, we will have IGA BSA is sort of key second the endpoint.

So, what we will do is we will look at all of that data. We will understand which of those endpoints actually is the best endpoint to capture the benefit of EDP1815 in mild to moderate atopic dermatitis, and then we’ll go and have those discussions with the health authorities, but all of those are pretty well-established and particularly easy is a very well-validated endpoint that we don’t expect to have any concerns from the regulations of EASI.

Simba Gill — Chief Executive Officer

And then, Jonathan, do you want to do the part B versus part A.

Jonathan Zung — Chief Development Officer

Sure. Sure. So, Chris, for the Phase 2 psoriasis study, from the part A, we’ve clearly learned that dosing longer is going to be important to capture the full breadth of activity of 1815. When we think about the part B data, part B data will inform us around relapse, how long this benefit maintained. Obviously, that will be incorporated in our thinking, but certainly, as we think about the next study and the registration pathway, it will be longer dosing, right? We’ll be looking at an endpoint, as we’ve mentioned before, most likely at six months and then extending out for another six months, so we get a full-year of data. So, the real, I think, data that will support the thinking behind that is part A.

Simba Gill — Chief Executive Officer

Mark, did you want to…

Mark Bodmer — President of R&D, Chief Scientific Officer

Just one point for Chris. Just one point for clarity that cohort B is not a separate cohort. It’s the same patients from part A of the study carried over into part B. I just wanted to make sure you didn’t work on the impression that we had a separate cohort of patients that we were looking at for longer.

Chris Howerton — Jefferies — Analyst

Yes. No, that is helpful. I appreciate the clarification. And maybe I’ll hop back in the queue and give other people the chance. But i appreciate you taking my questions.

Simba Gill — Chief Executive Officer

Thanks, Chris.

Operator

Thank you. And our next question is coming from the line of Matthew Luchini with BMO Capital. Your line is open.

Matthew Luchini — BMO Capital Markets — Analyst

Hi. Good morning, guys. Thank you very much for taking the questions, and congrats on the continued progress. So, maybe first on the part B psoriasis. Given everything that you’ve just talked about and the importance of looking beyond 16-weeks, are you able to provide some preliminary perspective on the level of additional follow-up you expect to have beyond that 16-week data point when you really state it will everyone be at six months or will the median be somewhere below that? And if so, around where?

And then secondarily, I wanted to know if you’re able to provide any incremental color on the formulation work since the last update? And when you may be able to have something more concrete to say about your efforts here?

And then maybe lastly, if I could, on 1867, just understand more of the recruitment challenges that you’re seeing and maybe more broadly how the AD data will inform your development strategy, not only for this drug, but for EDP1815 as well. Thank you so much.

Simba Gill — Chief Executive Officer

So let me take a couple of those. I’ll let Jonathan take the detailed questions on part B. On formulation, we expect we’ll have next level of data and understanding of the next wave of activity in Q1 next year. So, I think we should be on track for that on that front. Matt, on recruitment on 1867, we’re trying to understand exactly why recruitment slower than we had expected. It may be because of COVID. That study is being recruited in the UK and you probably know, there’s been a rise of COVID patients. We don’t know that, Matt. It’s definitely posing for us, but we’re trying to understand that right now. And we don’t really have any additional information at this stage on that recruitment situation. And then, Jonathan, do you want to talk about the details on part B?

Jonathan Zung — Chief Development Officer

Yes. So, in part B, we have 124 subjects, who have rolled into that portion of the study. It goes out for an additional 20-weeks. We expect to have a fair number of those subjects who will be completing the 20 weeks. We’ve got about 70-plus% subjects who are now complete in that, and we’ll report the data in first quarter of next year, and we’ll have a large proportion of those subjects who will go out for the full 20-weeks.

Simba Gill — Chief Executive Officer

Great. And then, actually, Duncan, do you want to comment on 1867, atopic dermatitis?

Duncan McHale — Chief Medical Officer

Yes. A good question. So, just to be clear, we’re using atopic dermatitis here because actually, it’s a very useful and valuable kind of, if you like, an early indication that we’ve got good anti-inflammatory effect, we will obviously have the 1850 data as well. But the intent to is not, say the 1867 is another drug that was following exactly the same footsteps as 1815.

This is the phase 1b study. We want to demonstrate antiinflammatory effect. And then, actually, there’s obviously a whole range of indications that we talked about before that could range from classic immunoinflammatory diseases like inflammatory bowel disease, some of other diseases such as neuroinflammation. The key here is to just demonstrate the safety, tolerability, and the anti-inflammatory effect. And then, the future development plan will involve other indications.

Matthew Luchini — BMO Capital Markets — Analyst

Great. Thank you for taking the questions.

Simba Gill — Chief Executive Officer

Thank you, Matt.

Operator

Our next question is coming from the line of Kristen Kluska with Cantor Fitzgerald. Your line is open.

Kristen Kluska — Cantor Fitzgerald — Analyst

Hi. Good morning, everyone. Thanks for taking the questions. The first one I have is, I noticed that your most recent corporate deck expands and further emphasizes some of the comorbidities that are specifically associated with psoriasis and atopic dermatitis. So, as your recent data set was important for your broad understanding of the potential of SINTAX medicines. Curious as you are near starting the Phase 2 study in atopic dermatitis, if you will look to enroll some patients where perhaps some of these comorbidities are more apparent to even better understand some of the systemic impact.

Simba Gill — Chief Executive Officer

Yes. So, Kristen, thanks for picking up on that point. We won’t be specifically looking to recruit patients with comorbidities. Obviously, to the degree we pick it up anyway in the detailed analysis, we’ll obviously be looking for those things in that context. But beyond the Phase 2, I think the more fundamental point that you’re picking up on, Kristen, is there’s a huge breadth of opportunity with 1815 and with this impact platform to treat many different types of inflammation, a and b, both psoriasis, and atopic dermatitis are systemic diseases that, as your question suggests, impact, not just skin, but have comorbid conditions in multiple different dimensions. So, we won’t be looking specifically for that treatment in Phase 2, but the point is an important one in terms of the potential treatment as we go forward.

Kristen Kluska — Cantor Fitzgerald — Analyst

Okay, Thanks. And looking at the profile differences between EDP1815 and EDP1867, based off some of these trends you’ve observed post dosage in longer-term with EDP1815, wondering if based on the differences with — for PUVA, whether you might expect or look to see something similar with EDP1867. And then, as you think longer-term here, how do you think about expansion opportunities for EDP1867, excuse me, in light of these recent preclinical findings you had, as well as the greater focus on EV candidates given the recent patent could address both?

Simba Gill — Chief Executive Officer

Yes. So, I think three level questions. So, first of all, we need the human clinical data to see if we see similar or different responses with 1867 versus 1815. They’re different. And certainly, preclinically, they’re different. So, we’ll be able to answer that question with data and then not do to some future, Kristen. In terms of how we think about 1815, 1867 expansion and EV side of things, let me take that together. What we’ve talked about historically is that we see where we are now.

I talked about it earlier today, even as the equivalent of uncovering cytokine biology and discovery of antibodies happened to have worked with Alex Zaboronok decades ago, Kristen, who started DNX is the first cytokine biology company in the world, fairly remarkable uncovery of the central human biology. Mark and I — Mark Bodman and I worked, as you know, in the earlier stages of antibodies, when Mark headed up when it was first antibody engineering groups. And we’re very much in the early days of uncovering the potential of SINTAX platform and pushing things forward.

I’ll ask Mark to say a little bit more about this right now. But as we start to understand more and more how the biology works, what the potential of EVs is, as Mark said, we see EVs and the ultimate future of SINTAX platform as being an opportunity to have orally delivered agents that have antibody-like efficacy while being safe, well-tolerated and affordable. And all of the science right now points us in the direction of that being a very real possibility, and it’s not too far away. We’ll have our first EV data sometime in the not-too-distant future. As we said on the call, we are on track to go into the clinic with EVs next year in inflammation.

And we haven’t given forward guidance on when that data will read out, but it won’t be too far away. And so, that’s where we see this going pretty quickly, actually. Right now, we have, as you know, 1815 that’s looking like an attractive drug in psoriasis and quite probably in atopic dermatitis, but that’s really the first way when we look at EVs as rapid forwards that can have dramatically better potency. In terms of then of 1867 and 1815 or indeed any of our other microbes and microbe-like cellular vesicles versus 1815.

As you know, and again, as Mark talked about today, the neuroinflammatory side of 1867 is already looking very interesting. As Duncan said, we don’t see 1867 as an atopic dermatitis drug, necessarily. Atopic dermatitis is a quick way of getting clinical information in human patients. And then, we’ll figure out how we move it forward depending on that data, but we see potential for 1867, for example, in neuroinflammation, as well as in a number of other areas.

And then, Mark always like to remind everybody how lucky would we be to have 1815 and 1867 as great products. So, we look forward to that possibility obviously, Kristen, and it’s a great luxury if we do end up there. So, hopefully, that was helpful. I’ll have Mark say a little bit more about actually your EV side of things because, as I said, all the science right now is pointing us to that being an incredibly exciting possibility.

Mark Bodmer — President of R&D, Chief Scientific Officer

Yes. Thanks, Simba. Kristen, let me play into that with the first bit of your question about 1815 and 1867 and the duration of effect, a simple said we don’t know clinically, but preclinically, we do. So, EDP1867 induces this regulatory phenotype in treated animals that can be transferred to untreated animals in exactly the same way as EDP1815 does it.

But it does it with a different molecular background, which is fascinating. Artis driving a lot of our research and discovery because there is a — there’s some common parts of the pharmacological pathway here, which are induced by different molecular pathways in the primary action of the drug. This is not to say that we’ve identified specific targets, we can look at differences in by any toll-like receptors, we can look at differences’ induction of various transcripts in the gut by the different agents. We then take that to the EV part.

We’ve been doing a lot of work on the extracellular vesicle of the microbe that underlies EDP1867. And that also does these things. It doesn’t look molecularly exactly like the current micro, but pharmacologically, it does at a much lower level. So, if you think about this from a dose point of view, which was driving some of my comments about efficiency of movement of these things in the milia, take that target to the gut and also packing.

So, we give typically a dose of about 10.0 to 9.0 microbial cells per day in an animal model with the EV from EDP1867. We can take that down several orders of magnitude, 10 to the sixth, 10 of the seventh. And they’re smaller at the same time. So, the differential is about a million fold. I mean, this is quite an extraordinary effect. That’s why we’re so excited about the future of the EV platform because we’ve got a base of efficacy with the microbial preparations. And then, we have this additional way to go forward, which is why I talked about the potential to get into severe disease because I suspect this is all about dosimetry and where we are in the dose-response curve in relation to formulation, in relation to the concentration of drug that’s given to the target.

Then just very briefly, beyond that, actually, most of our discovery work is now focused on looking at extracellular vesicles from quite a wide taxonomic range of microbes, comparing their pharmacology, their underlying molecular mechanisms to get a spectrum, which is going to support the future of the pipeline. And by the way, critically importantly, it supports the breadth of patent claim that we get around this. And just to reemphasize that the patenting around the use of extracellular vesicles from mucosal and aerobic microbes as oral treatments is virgin territory. And so, we’re finding very broadly on that, nothing issued yet, of course. But the discovery work, which gives us the product candidates also gives us the breadth of support for those patent filings. So, I hope that helps to give a bit of context to the whole thing.

Kristen Kluska — Cantor Fitzgerald — Analyst

Yes. Thank you, Simba and Mark.

Simba Gill — Chief Executive Officer

Thanks, Kristen.

Operator

Our next question coming from the line of Gobind Singh with JMP. Your line is open.

Gobind Singh — JMP Securities — Analyst

Thanks for taking the question. So, just a few from me. I think, Mark, you had a — I wanted to bring the conversation back to those results that I think you had mentioned with the BSA greater than 5% and below 5%. And I’m just trying to figure out what the comparator is, if there is any.

And it just seems like the way Amgen has presented results from the advanced trial. It looks really different compared to how they’ve kind of done things with other trials. I don’t even think there’s a PASI50 or PASI75 or any kind of traditional pad ever presented from the advanced trials. So, can you maybe give us some context to how to kind of view those results? And then one follow-up after that.

Simba Gill — Chief Executive Officer

Duncan, go ahead.

Duncan McHale — Chief Medical Officer

Yes. Kevin, thanks for the question. So, I can’t really comment on why Amgen chose the particular endpoint that they chose. Obviously, they have their own data sets with unveiling and then went to advance.

In terms of the body sheet area threshold of 5% at the sort of — that’s one of the ways in which people can sort of classify psoriasis into mild and moderate disease of it. It’s not necessarily true from a patient perspective, but certainly from a physician perspective, we tend to sort of say if the body sphere is less than 5% is mild, if it’s greater than 5%, but it’s moderate. And I’m assuming that is the reason that they cut that data at 5%. And as you saw, we’ve done something similar and looked at that PGA01, so the ability to get to clear or nearly clear skin, both in the mild and the moderate disease.

We’ve also actually done it using PGA2 and PGA3, which is another way of categorizing mild to moderate disease. And in both of those settings, we have a statistically significant results in terms of EDP1815 versus placebo and which clear or nearly clear skin. So, from our perspective, it’s just another way of looking at the clinical benefit that we’re getting in the EDP1815 and seeing a sort of a clinically meaningful benefit to patients there because that’s usually — that’s the target for patients. They want to get to the clear skin or virtually clear skin because it’s quite hard to get a truly clear skin.

But we — the 5%, it does reflect some of what Amgen did, but I can’t tell you why they use PASI or did use PASI in that case, we used it because we used this early, and it’s a well-established, well-validated endpoint. We will look at, obviously, all the endpoints in 201, and we will decide which one we view as the best in terms of capturing EDP1815’s activity, and that’s what we’ll propose to the health authorities in terms of thinking about later phase development studies.

Mark Bodmer — President of R&D, Chief Scientific Officer

Can I just add one comment, Gobind, as actually, you understand very well. What was important in this was that an orthogonal analysis to the PASI50 showed robustness of the underlying data. So, unlike the comparison of the primary mean PASI with the PASI50, this is a different data set that was collected, looking at BSA and looking at IGA, but it reinforced the fact that there is an effect of EDP1815. This is separate from the question of the proportion of responders, but they thought that all analysis picked it up as well. So, it really, for us, in our evaluation of the study added a deal of robustness in our estimation of the effect of EDP1815.

Gobind Singh — JMP Securities — Analyst

That’s helpful. And I know there was a mention about the lower, I guess, less than 5% BSA population being statistically significant with the orthogonal analysis. If I’m — is that — I mean, I’m just roughly following it. It’s about, what, 10%, 20% of your population.

So, I’m assuming the numbers are probably pretty small there anyway. Can I confirm that with you guys? And then maybe the follow-up would be, I’m looking at those pictures that you guys presented earlier with like PASI and PGA and DLQI and PSI. And is the — like the clinical effect, clearly, we’re having a microbiome drug, it’s not shutting off the pathway or more normalizing the underlying disease process. So, one might imagine the time to kind of see the peak effect here might be different than a small molecule like a Tesla or JAK, is there any rationale or any precedent for how long this could take? Like, for example, would 20 weeks, for example, be enough time for us to be able to see this?

And then maybe is PGA the right way of looking at this, not PASI or maybe DLQI or I don’t know if you can comment because the DLQI responses at a prevented was pretty good. And I think in advance, they are focusing more on PGA and these other metrics, not as is.

Simba Gill — Chief Executive Officer

Let me say a few things, and then Duncan can expand, Gobind. So, first of all, you raised a really important point on small molecules versus our mechanism of action. And in Mark’s comments today, he talked about the fact that we’ve done very elegant adoptive cell transfer studies preclinically that show that our effects are driven from immune cell impact versus classic impact of antibodies or small molecules. So, we’re pushing the immune system back to a homeostatic regulatory status through cellular effects on the immune system.

That is completely distinct that you’re saying over to anything else that it’s got very positive potential implications because, obviously, having a healthy homeostatic immune system is a lot better than shutting down part of the immune system, which is essentially what antibodies and small molecules do. As it suggests, also likely means it will take a little bit longer for effects to kick in, but then effects, and that’s part of what we’re looking for in part B, may well be sustained for longer. So, all those things are very positive for us. We can’t quantitatively answer your question now as to its 20 weeks, the right time.

We’ve certainly already seen at 20 weeks, and we’ve reported out on this with the initial data release from the Phase 2 psoriasis study that we see continued depth of response post-dosing. So, that is already indicative of a likely cellular effect that persists and continues for presumably weeks after we’ve stopped dosing. But we don’t have it quantified yet. So, just a few initial comments there.

And then, Duncan, you can answer the other process.

Duncan McHale — Chief Medical Officer

Yes. Just a couple of points, Gobind, on that. Just to be clear, when we talked about that data being statistically significant, what we were looking at that is, when we looked at the PGA01 across both the groups, either split by BSA or actually split by that starting PGA a baseline of being two or three. This is still a — it’s a Phase 2 study.

It’s a reasonable side, but as you start to sort of look at the various subsets, they come down a bit. So, it’s not that we looked at each of those individual subsets, what we’ve done is we looked at the total population but divided into either being PGA2 or 3 at baseline or less than 5% or greater than 5% of baseline in the two analyses. And when you analyze all of the data with that as a stratification variable in either of those two cases, we see a statistically significant result. In terms of what will be the best endpoint as we go forward, we’ll keep continuing to look at the data.

The one thing I would today is that if we look at the faces where we get very nice, clear kind of kinetics of response to EDP1815, the psoriasis flat. And you can see them actually clearing sort of earlier on, and they tend to clear centrally, which means that BSA is one of the latest things to actually shift, and we’ll take that into account as we think about what the later — so what the endpoints are for the later trials. It’s a well-established way of actually throughout is back to clearing and actually Bennett, our chief investigator, what it is, as well as our in-house dermatologists, and it’s a fascinating way in which actually EDP1815 drives defect, so to say, it’s centrally clearing and the last thing to clear the agent is the fact.

Mark Bodmer — President of R&D, Chief Scientific Officer

Can I just add one comment, Gobind, related to what Simba said about the mechanism of action because you’re actually asking a question about the duration and the time scale of these cellular effects versus factor inhibition. So, if one imagines, for instance, an inflammatory response is driven by IL-17 or TNF, one puts a direct inhibitor and it takes that inflammatory drive out, and as long as the inhibitors are the Apamate drive is taken away. But it’s not generating a remapping of the immune system and its function. So, while the effect may be a bit quicker, the durability of the clack will be less.

So, one of the things to imagine here from an immunological point of view is that if you’ve got inflamed skin, whether it’s psoriasis or atopic dermatitis or the flake joint or a plant spinal cord, whatever it is, you’ve got a bunch of resident inflammatory cells in there, which need to be suppressed and displaced. Now, if you’ve got a direct inhibitor of that inflammatory effect so it will act on those inflammatory cells.

What we’re looking at here is a different process where there is a steady replacement over time of the inflammatory cells that are resident in the inflamed tissue with the anti-inflammatory regulatory cells that have been induced by the drug. And that’s why Simba talked about the reprogramming or the long-term effects. This has been the holy grail of anti-inflammatory therapy for years, and we haven’t known how to get at it.

So, you can imagine when we saw the adoptive cell transfer effect in mice, and then we saw the continuing accrual of effects in humans, this was a real eye-opener for us. That was why I made the comment in the scripted remarks about profoundly changing the way one thinks about an area of science. So, I think we can do something in this system, which we’ve known we wanted to do for decades, but haven’t figured out how to do it.

That is not just to suppress the inflammatory response but to reprogram the immune system so that it controls its own response. So, that is what the data are telling us are happening, very clearly, preclinically because we can show it by direct experimental methods, and it reads on what we’re seeing clinically, which is consistent with what we’re seeing pre-clinically.

Gobind Singh — JMP Securities — Analyst

Thank you.

Simba Gill — Chief Executive Officer

Thanks, Gobind. I appreciate the question.

Operator

And our next question is coming from the line of Keay Nakae from Chardan. Your line is open.

Keay Nakae — Chardan Capital Markets — Analyst

Yes, thank you. Maybe just a further drill down on the effort to improve the release kinetics. Obviously, I think the enteric coating chemistries are well understood. So, what’s really the gating item of that initiative?

Simba Gill — Chief Executive Officer

So we’re just generating supply key for the next wave formulations to test in the Syntegra V-model that we touched on briefly on the last earnings call. So, we’re just generated supply. And as I said, we should be ready to test different formulations in Q1 of next year.

Keay Nakae — Chardan Capital Markets — Analyst

Okay. Yes. All my other questions were answered. So, thank you.

Simba Gill — Chief Executive Officer

Thank you very much.

Operator

Thank you very much. Our next question coming from the line of Joseph Thome at Cowen. Your line is now open.

Joseph Thome — Cowen & Company — Analyst

Good morning and thank you for taking our questions. Maybe the first one, just a clarification on the Phase 2 atopic dermatitis data readout that we’re going to be able to see. I know with the Phase 2, we saw the base analysis for superiority, but then also maybe more like a traditional p-value comparison on the — those that reached a certain PASI cutoff. What should we expect in terms of the data readout for the atopic dermatitis? Will this be sort of a traditional disproportion of patients in the EV50 on drug versus placebo or is there a basin comparison that would be appropriate here as well? And then second, in terms of the novel formulation work, you can move that into the clinic in the Q1, the Phase 2 for atopic dermatitis is starting in Q4.

Is there any way to expand the Phase 2 if what you’re seeing with the novel formulations is interesting to add that cohort or will these novel formulations be used kind of ready for the pivotal study if that path is supported?

Simba Gill — Chief Executive Officer

Yes. I’m going to let Duncan answer both of those questions.

Duncan McHale — Chief Medical Officer

So for the first question, both can be straightforward because it is a proportion of analysis as the number of subjects to weak EASI50. Actually, the basing approaches are less well-established and validated for that, so we will use the more traditional frequentist approach from that side of things. In terms of the potential to add a new formulation partway to the Phase 2 study, I think that would be very difficult to sort of do that and be able to sort of have a robust interpretable analysis for that. So, we will run any potential new formulations in a separate study rather than try and complicate the current study. Yes, in parallel.

Joseph Thome — Cowen & Company — Analyst

Great. Thank you.

Simba Gill — Chief Executive Officer

So Joe, I hope that hasn’t stopped you from becoming an expert on basis statistical analysis, which I will — it is not only in the future, it’s the path. So, part of what we try to do at belo is educate people something it’s 300 years old, which is basically statistics. But anyway, that’s just my humorous comment for the day, Joe.

Joseph Thome — Cowen & Company — Analyst

Thank you very much.

Operator

I’m showing no further questions at this time. I would now like to turn the call back over to our speakers for any closing remarks.

Simba Gill — Chief Executive Officer

Thank you, everybody, for your attention. Thanks to our wonderful analysts for their attention and their excellent questions. As we said in the scripted marks, this is a pivotal moment for us. We are thrilled with the Phase 2 data in psoriasis, but that is absolutely just the beginning of what we see as an incredibly exciting future for the SINTAX platform.

I will remind everybody that we are true pioneers. Mark Bodmer talked about the extracellular vesicle intellectual property, but we were the first company to uncover the small intestinal access. We are the first company to think of using non-live microbes already delivered therapeutics. We are the first company to think about using orally delivered microbalance extracellular vesicles.

So, our goal has always been to be the pioneer and the leader forever in thinking about how to capture the value of the small intestinal access, which we now absolutely know plays a central role in human biology, still not widely appreciated by the scientific or clinical community. And we now know that we can harness the small intestinal axes for clinical effects with something that is very safe and well-tolerated. So, an extremely exciting moment for us. Thank you very much, everyone.

Operator

[Operator Closing Remarks]