Synlogic, Inc. (SYBX) Q1 2019 Earnings Call Transcript

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Synlogic, Inc. (NASDAQ: SYBX) Q1 2019 Earnings Call May 9, 2019, 2:00 p.m. ET

Contents:

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  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon. Welcome to Synlogic's first quarter 2019 conference call and webcast. At this time, all participants are in a listen-only mode. There will be a question and answer session at the end of this call. Please be advised that this call is being recorded.

I would now like to turn the call over to Dr. Elizabeth Wolffe, Head of Investor Relations and Corporate Communications. Please proceed.

Taylor Feehley -- Chardan -- Analyst

Thank you, Angela. Good afternoon and thanks for joining us on today's conference call. This afternoon, we issued a press release which outlines our first quarter 2019 financial results and several other topics that we plan to discuss today. The release is available on the investor section of our website at www.synlogictx.com.

Joining me on this call today are Aoife Brennan, President and Chief Executive Officer, Todd Shegog, Chief Financial Officer, Antoine Awad, Head of Technical Operations, and joining us for the first time in his new role as our Chief Scientific Officer, Dr. Scott Plevy.

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During the call, Aoife will provide a brief outline of our recent progress and introduce Scott. Todd will summarize our financial results for the quarter. Finally, Aoife will discuss the data that were recently presented at the ASGCT Annual Meeting and their implications for the development of our Synthetic Biotic platform before summarizing our upcoming milestones. Following our prepared remarks, we'll open up the call for questions.

As we begin, I'd like to remind everyone the comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date hereof and are subject to numerous factors, assumptions, risks, and uncertainties, which change over time.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including those described under the heading forward-looking statements in Synlogic's press release from earlier today or under the heading risk factors in Synlogic's most recent Form 10-K or in later filings with the SEC. Synlogic cautions you not to place undue reliance on any forward-looking statement.

Now, I'd like to turn the call over to Aoife.

Aoife Brennan -- President and Chief Executive Officer

Thanks, Liz. Good afternoon, everyone and thank you for joining us on our call to discuss our first quarter 2019 financial results, progress in 2019, and what is shaping up to be a busy time for Synlogic as the year progresses.

At Synlogic, we're designing for life. Using the tools and principles of synthetic biology to rationally engineer living medicines that have the potential to dramatically change the lives of patients. We recognize the significant unmet need in diseases with complex biology, which provides an opportunity for innovative therapeutic approaches, such as our Synthetic Biotic platform.

We are using our platform to develop a novel class of living medicines based on a strain of non-pathogenic bacteria and engineering them to perform therapeutic functions that may be missing or impaired in a patient. For new modalities, it's critical to understand where they may be most effective. As we started to develop the platform, we made the strategic decision to focus on programs that required bacteria to be active at different sites in the body. In that way, we would learn about the kinetics of our Synthetic Biotic medicines at different sites of action and use this information to choose additional programs to advance.

Our initial programs were therefore designed to be active in the small intestine, colon, and tumor. SYNB1020, a strain of E. coli has been engineered to consume ammonia within the colon, where approximately 50% of total body ammonia originates. In hyperammonemia, impaired liver function or a genetic mutation in one of the enzymes of the urea cycle means that patients cannot effectively metabolize ammonia. Blood ammonia levels elevate and this can have serious health consequences, potentially leading to coma and death.

Next, for SYNB1618, small intestinal activity is most important, about at the site where most phenylalanine is present within the GI tract. SYNB1618 is designed for the treatment of phenylketonuria or PKU. In PKU, defects in the phenylalanine hydrolase enzyme lead to elevated levels of phenylalanine or Phe in the blood, which can result in cognitive impairment, seizures, and other health issues.

SYNB1891 is designed to activate the immune system in tumors that are not responsive to checkpoint inhibitors. For this, Synthetic Biotic medicines were delivering bacteria into the tumor microenvironment directly. In addition to executing these programs, we've also been investing in additional programs that we will advance based on data and information gained from our initial clinical trials.

We also see potential for our Synthetic Biotic medicines in broad disease areas. In inflammatory bowel disease or IBD, there's an opportunity to explore the activity of our strains in the colon and this is a disease where there is a need for a combination approach, a key capability of our living medicines.

We are developing a Synthetic Biotic for IBD in collaborative with AbbVie. Ultimately, our goal is to develop therapeutic applications in which we design Synthetic Biotic medicines that are engineered to sense disease states and respond with the combination of therapeutic response to the disease symptoms.

We had a busy start to the year and have made progress on all of these fronts. Importantly, for the development of the organization, we expanded our scientific leadership of the company with the appointment of Dr. Patricia Hurter to our Board of Directors and Dr. Scott Plevy as our Chief Scientific Officer. Both have significant experience in drug development and will be very helpful to us as we move our programs forward.

I'd like to take this opportunity to introduce Scott, who joined us full-time this week. I think this is day four for him. As many of you know from the press release that we issued recently, Scott is a physician scientist, a gastroenterologist by training, who enjoyed a successful career in academia before moving to industry and most recently served as Vice President and Gastroenterology Disease Area Leader at Janssen Research and Development.

Let me hand over to Scott to say a few words about his background, why he joined us, and what he's excited about. Scott?

Scott Plevy -- Chief Scientific Officer

Thanks, Aoife. Good afternoon, everyone. It has been a whirlwind few days, but I'm delighted to have joined Synlogic and to finally be here at the company getting to know the team. I've been very impressed by everyone I have met at the company. Their accomplishments over the past four years speak for themselves.

People have asked me why I moved to Synlogic. In addition to the high quality of the science, what really captured my imagination was the transformational potential of the Synthetic Biotic platform and the approach the company is taking to really understand and develop the platform.

As a clinician scientist, I have always been driven by unmet needs for patients with debilitating diseases. There's a growing awareness in the biopharma industry that the ability to deliver combinations of therapies to the right location at the right time is the way of the future, particularly for the treatment of complex diseases.

As I learned more about Synlogic, I gravitated toward the Synthetic Biotic platform as an exciting potential therapeutic solution for a broad range of systemic metabolic and inflammatory diseases. My experience includes research in areas from disease specific targets to basic immunology and molecular biology. I have also carried our translational research to advance the understanding of novel immunologic interventions in inflammatory bowel disease or IBD, other inflammatory conditions, and microbiome-related diseases, and have served as the lead investigator on multiple early phase clinical trials.

At Janssen Pharmaceuticals, I was responsible for the end to end GI disease area strategy in the immunology therapeutic area, but also led the strategy across therapeutic areas including oncology, neuroscience, and metabolic diseases for understanding and inhibiting the IL-23 cytokine pathway.

With this experience, I believe that my skills are highly relevant to Synlogic and I look forward to leading the team to even greater accomplishments as we continue to build our platform and advance additional programs into development based on data from our initial pipeline programs. I also look forward to getting out to meet our analysts and investors once I've found my feet here at the company.

Now, let me hand it back to you, Aoife.

Aoife Brennan -- President and Chief Executive Officer

Great. Thanks, Scott. Don't worry. Linda is going to have you out on the road in no time.

As I mentioned, it's been a busy year so far. We've made visible progress in our already administered programs which are currently both being evaluated in patients and we're on track to present topline data mid-year, specifically in the third quarter of 2019. At the beginning of the year, Science Translational Medicine published the first in-human data from a Synthetic Biotic medicine and the supporting pre-clinical data from our SYNB1020 program to treat hyperammonemia.

As with all of our publications and presentations, the paper can be accessed from the publications and presentations section of our website. More recently at the annual meeting of the American Society of Gene and Cell Therapy, we were delighted to be able to share data from our process to develop a solid formulation of SYNB1618. I will discuss these data and our manufacturing updates later in this call, but sufficed to say we've demonstrated that we have a robust and reproducible process to manufacture solid material that will be used in our future clinical trials and provide the path to commercialization.

We remain on track to file and investigational new drug or IND application for our program in immuno-oncology SYNB1891 in the second half of 2019. I look forward to providing more detail around our clinical trial plans for that program on future calls.

Finally, in March, we announced that we advanced our collaboration with AbbVie to develop Synthetic Biotic medicine for IBD to the lead optimization stage and we received a $2.5 million milestone payment. So, lots of progress on all fronts.

Before I describe our ASGCT data in more detail, let me pass you over to Todd who will summarize our financial results for the quarter. Todd?

Todd Shegog -- Chief Financial Officer

Thanks, Aoife and good afternoon, everyone. Earlier today, we released our financial results for the first quarter ended March 31, 2019 and I'm happy to review the highlights of those results with you now.

For the first quarter of 2019, Synlogic reported a consolidated net loss of $12.9 million or $0.51 per share compared to a net loss of $11.1 million or $0.55 per share for the corresponding period in 2018. The increase in net loss is primarily due to increases in compensation-related expenses related to increased headcount as well as increases in research and development expenses to support Synlogic's advancing clinical programs.

The total operating expenses for the first quarter of 2019 were $14.0 million compared to $12.0 million for the same period in 2018. Research and development expenses were $10.4 million for the three months ended March 31st, 2019 compared to $8.4 million for the same period in 2018. The increase was primarily due to an increase in compensation-related expenses associated with increased headcount and increased expenses associated with manufacturing, free clinical, and clinical studies of Synlogic's Synthetic Biotic programs.

General and administrative expenses for the first quarter of 2019 were $3.7 million compared to $3.6 million for the corresponding period in 2018. Revenue was $0.3 million for the three months ended March 31, 2019 compared to $0.4 million for the same period in 2018. Revenue for both periods is associated with services performed under Synlogic's collaboration with AbbVie to develop Synthetic Biotic medicine for the treatment of IBD.

Turning to the balance sheet, Synlogic ended the quarter of 2019 with $109.8 million in cash, cash equivalents, and short-term investments. I'm pleased to say that Synlogic is in a solid financial position with cash that will take us through 2020 under the current plans and we look forward to executing on that plan to advance our pipeline of Synthetic Biotic medicines.

I'd like to thank you and I will now turn the call back over to Aoife.

Aoife Brennan -- President and Chief Executive Officer

Thanks, Todd. With a solid cash position to see us through 2020, 2019 will be a year of significant achievements for the company in terms of program progress and gaining an understanding of our platform. A central tenet of synthetic biology is the idea of design, build, test, rapid cycles of evaluation to maximize activity. This is a concept that we've embraced as a company and which has informed not just our strain engineering and development but our early clinical strategy.

As I've just described, we're evaluating our Synthetic Biotic medicines at three different sites of activity -- small intestine, colon, and tumor -- to determine where the best first applications of our platform lie. We decided to move into the clinic as quickly as possible with an early liquid formulation of our Synthetic Biotic medicine to determine if we had a feasible approach to address unmet needs in patients.

We wanted to quickly understand if one, our engineered bacteria were safe, two, if they could perform the functions we programmed into them in humans as well as they did in in vivo pre-clinical models, and three, has their activity in these models predicted activity in healthy volunteers and patients.

We answer the first of these questions in clinical trials of both SYNB1020 and SYNB1618 in healthy volunteers, demonstrating that both strains were safe, genetically stable and tiered from subjects upon sensation of dosing. By measuring the production of biomarkers, we were able to demonstrate that they were biologically absent in the GI tract in large and small intestine, respectively.

We will answer the last question in the third quarter of this year from our Phase 1b/2a clinical trial of SYNB1020 in patients with cirrhosis and elevated ammonia and from the expansion cohort of our SYNB1618 study in PKU patients.

The early frozen liquid formulation of our Synthetic Biotic medicines enabled us to rapidly gain an important understanding of the feasibility and therapeutic potential of our platform. However, our intention has always been to develop a solid formulation that could be readily taken by patients at home. Therefore, in tandem with our early clinical studies, we've been developing manufacturing and appropriate formulation processes and capabilities to deliver a solid formulation that could be stable at room temperature or as a refrigerated product.

This has been an exciting undertaking requiring the patient work as a team at Synlogic and I'm pleased to be able to discuss our progress today. In addition to investing in developing our fermentation, downstream processing, and lyophilization processes, we've taken a cost-effective route to expanding manufacturing capabilities to enable in-house GFP manufacturing of liquid and solid forms of our medicines.

This has been a game-changer for us as a company as we advance clinical development, as it maximizes our ability to move quickly into the next phase of clinical testing of our Synthetic Biotic medicines with a commercialization and patient-friendly formulation.

We announced this initiative less than six months ago and I'm pleased to report the first clinical trial material was manufactured in our new facility. This is a liquid formulation of 1891, our first immuno-oncology program for inter-tumor injection. In terms of oral delivery, we've completed buildout of the suite that will be used for GMP production of [inaudible] GMP material for our next SYNB1618 clinical trial within the month.

We were very pleased to be able to present data at the ASGCT meeting under characterization of SYNB1618, made using our improved fermentation and lyophilization process. The data highlights several important advances that we've made over the past year or so. The original poster is available in the presentations and publications section of our website. I will summarize the main takeaway on slides three through five.

First, we've improved the fermentation process to produce material that retains viability and activity when lyophilize. When we began our solid formulation work, we were warned by others that we might have to accept a significant loss of viability and thus for a living medicine the loss of activity. However -- and this has been a testament to the great work of the team here -- we've demonstrated that our lyophilization process reproducibly results in minimal loss of viability and activity.

I should note that we've determined that not all live cells give rise to colonies and that the important measure for our living medicines is the number of live cells rather than the total cell number of CFU. Even with an early development batch, when we compared a frozen liquid formulation to lyophilized material, we saw very similar activities of liquid and solid formulations when we compared its number of live cells from each preparation and their production of biomarkers of SYNB1618 activity.

This was demonstrated across in vitro assays, an animal model of disease, and in healthy mice and non-human primates. We have also measured several physical characteristics, such as free-protein and viscosity, in addition to cell viability and activity. The batches made using our new process are less viscos and most have lower free protein levels, suggesting there is less cell breakage. This is very encouraging and we look forward to evaluating the effects of these improvements in humans.

If you recall from our healthy volunteers, while the product was safe, we saw some tolerability issues at high doses of the liquid formulation, notably nausea and vomiting in the first few days of formulation. We do not know the exact mechanism. However, one possibility is that this is caused by cell fragments in the preparation.

When we compared the liquid presentations of both SYNB1020 and SYNB1618, it was notable that subjects reported tolerability issues at lower doses of SYNB1618 and we saw more cell breakage in this preparation than in the SYNB1020 liquid. Having said this, we don't have a pre-clinical model for tolerability and so, we will need to assess the impact of the improved fermentation process and solid formulation in healthy volunteers directly, which we will do in a bridging study.

We may also be able to evaluate the effectiveness of the dose ramp to improve tolerability. The tolerability issues were only observed in the first few days of administration. We may be able to acclimate subjects to the bacteria as a low starting dose and then increase the dose.

Our lyophilization process is robust and reusable. As we show in slide four, we demonstrated reproducible viability at in vivo levels of activity in healthy mice across three different batches made at the [inaudible] scale.

An important factor for us was also stability. While these studies are ongoing, our initial data suggest that the lyophilized material is stable at 2 to 8 degrees Centigrade for at least three months and for more than 30 days at room temperature as seen on slide five. This property is very important, not only as we consider the ability to execute larger trials of longer duration, but for patients having a medicine that's easy to store and transport on a day to day basis is critical.

Importantly, this also gives us a preparation of SYNB1618 that is suitable for commercialization and can be formulation in sachets or capsules depending on the patient's demographic.

Even with the current competitive landscape in PKU, we believe that there is a pressing need for a safe oral therapy that's suitable for all patients with PKU regardless of their type of mutation or their age. We are particularly looking at younger patients who have the fewest therapeutic options, which brings me to our ongoing study in SYNB1618 in patients with PKU and what we expect to report in the third quarter.

First, we will gain an understanding of the safety and tolerability of the liquid formulation in patients. We will also be focused on the levels of biomarkers at 1618 activity and how levels in patients compare to those in healthy volunteers. Our intention going forward is to use our material in future clinical studies and so, we will first evaluate tolerability in dosing in a bridging study of healthy volunteers.

I expect to provide more detail as to our plan when we release data from our ongoing study in the third quarter. In our ongoing SYNB1020 in patients with cirrhosis and elevated pneumonia, we're evaluating safety and tolerability in this population, measuring ammonia lowering, and evaluating several exploratory endpoints. We also expect to have data to share from this program in the third quarter this year.

As we've indicated before with ammonia-lowering data and other supported outcomes in these endpoints, we will make a decision on the development path for SYNB1020. We remain on track for filing our first IND for our IL program the second half of 2019. As I've mentioned earlier, we've already made the clinical trials for this program and I look forward to sharing more information around the specific clinical trial plans in the not too distant future. We're also working on a number of new pipeline programs and I look forward to providing more detail on those in the future also.

To sum up, with approximately $110 million at the end of the first quarter, we're in a solid cash position to take us through 2020 and enable us to execute our current plans beyond our upcoming clinical milestones. I look forward to updating you on our progress throughout the year. Thank you. Angela, I'll now open the call for questions.

Questions and Answers:

Operator

Ladies and gentlemen, if you have a question at this time, please press the * and the number 1 key on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the # key.

The first question comes from the line of Mark Breidenback with Oppenheimer. Please go ahead.

Mark Breidenback -- Oppenheimer & Co. -- Analyst

Thanks for taking the questions. Now that you've demonstrated that your lyophilized formulations can have similar viability and metabolic capacity as the liquid suspension version, I'm wondering if you could translate what a dose level would look like not in terms of number of live cells or colonies but in terms of grams of actual powder that would be required for patients to take each day. Thank you.

Aoife Brennan -- President and Chief Executive Officer

That's a great question. I think it depends on the dose. Because we're moving from the liquid to solid oral, our plan is we would do a bridging study in healthy volunteers with the solid oral, where we would measure not just safety and tolerability but also look at the PD biomarkers. With that data and understanding how healthy volunteers compared to PKU patients based on the current study, we would develop one or two doses to take forward into a Phase 2 trials.

I think it's only after we understand what the dose level is likely to be, if it's likely to be the optimal dose level that we could estimate what that would be in terms of grams or some of those other details. It's likely we'll still have a little bit of dose finding to do, but the great news is that now that we have the lyophilized product, we have lots of options.

Mark Breidenback -- Oppenheimer & Co. -- Analyst

A quick follow-up -- it sounds like there's two very important readouts coming up in the third quarter for the PKU program and for SYNB1020. It sounds like we'll be dealing with small numbers of symptomatic patients in both readouts. First of all, I'm wondering if this information, this topline data will be released via press release or if this will be in the context of medical conferences. Do you anticipate that will have enough information from these small numbers of patients to guage metabolic turnover in terms of the capacity of the cells in symptomatic patients? Thank you.

Aoife Brennan -- President and Chief Executive Officer

Great question. The first one is easy. I think we would issue a press release and a call once we have the data and are unblinded and have interpreted it. Then we would look at the next opportunity to present the full data set at an academic meeting. I think we always move aggressively to publish all the data we collect in the trials. This time will be no different from that. You can expect to see the press release first followed by full disclosure for both readouts.

I think the second one as far as the interpretation of small numbers, these are studies that were designed around biomarkers. Based on our healthy volunteer experience, certainly with the PKU, because we're using this stable isotope, we can get pretty good precision with the data. What we would be able to say is the bacteria is working or not and how the activity compares healthy volunteers to PKU patients.

The second component that we'll aim to provide is how those data are contextualized in terms of an ability to achieve our product profile. We'll be providing the numbers but our interpretation of those based on what we'd like to achieve in patients with PKU. That's what we're working toward here with the team, the data, the context, but also with the guidance of milestones and activities. That's what you can expect to get when you expose the data in the third quarter.

Operator

Our next question comes from the line of Joseph Schwartz with Leerink. Caller, please go ahead.

Joseph Schwartz -- SVB Leerink -- Analyst

Congratulations on all the progress. With the new solid formulation of SYNB1618, what kind of a dosing regimen would you anticipate? Would it differ in any way from the current frozen liquid and be something other than thrice a day?

Aoife Brennan -- President and Chief Executive Officer

That's a good question. The dosing for us is not so much dependent on the formulation or presentation. It really depends on the site of activity in the kinetics. The reason we took these three different sites of action programs forward is because the kinetics would be very different. In the small intestine, the bacteria are only there for four to six hours from the data that we got in the healthy volunteers. Regardless of solid or liquid, it's likely that product would need to be taken three times a day.

For colonic programs, there's potential that it needs to be taken less frequently given that we know our bacteria spend between 24 and 48 hours in the large intestine and so, there may be potential for once-daily dosing with colonic applications based on what we know now. Then finally, for the intertumoral programs, because they're injected intertumorally, there will be a different dosing regiment here, but that's a different context.

We think the kinetics will depend on the site of action and the mechanism we're engaging for all the programs but will not be influenced by the formulation work.

Joseph Schwartz -- SVB Leerink -- Analyst

That makes sense. Could you give us an update on your status to develop a solid oral formulation of 1020 and is that process quite similar or are there differences we should keep in mind?

Aoife Brennan -- President and Chief Executive Officer

We think we'll be able to apply the lessons we've learned from 1618 across all oral programs. It's likely there will be some tweaks to the process. We've seen a lot of benefits in what we've learned from one and being able to apply that learning to other programs. We haven't provided any guidance in terms of next steps or timelines. I think we would do that when we disclose the data. We anticipate there would be a lot of learnings from 1618 that can be applied to all the programs.

Operator

Our next question comes from the line of [inaudible] with Citi. Please go ahead.

Samantha -- Citigroup -- Analyst

This is Samantha on for [inaudible]. That name does get butchered here and there. Congrats on the progress of the solid formulation. Obviously, the stability you've achieved for 90 days for 2 to 8 degrees and 30 for room temperature is an achievement. I'm wondering if you have any room to optimize it further or do you think that durability is sufficient for patient expectations?

Aoife Brennan -- President and Chief Executive Officer

Our aim is to eventually have up to one to two years. How the stability studies work is we put a batch in stability and then pull samples at intervals over a period of time. We have only pulled samples up to the three-month time, but that study is ongoing and we'll continue to develop. It's just an issue of every day that goes by, we get additional information about stability.

What I will say is if you look at the graphic on the slide, the trends are very positive. Even up to 90 days, we're not seeing any drift off. So, we're very confident based on these early trends we're seeing up to 90 days it's looking good for longer periods of time, but you're correct. Our goal would be to have a year or two years of stability.

Samantha -- Citigroup -- Analyst

Just going back to 1618, is there a difference between PAL and LAD consumption for phenylalanine? Is one more important than the other outside of the location of where they are in the cell or do they contribute equally to phenylalanine consumption?

Aoife Brennan -- President and Chief Executive Officer

They both consume phenylalanine. The PAL enzyme produces TCA, which we can measure directly. The LAD enzyme produces phenylpyruvic, which is very difficult to measure for numerous reasons in humans. We believe those contribute to phenylalanine consumption in vivo. The real question is how much each contributes and how we can build a model to show here's where we're falling in terms of our therapeutic targets.

We've done a lot of work in terms of biomarkers for the large enzyme activity so we can make some estimate for how much phenylalanine has been consumed in vivo, but both do function independently and consume phenylalanine in different ways.

Operator

Your next question comes from the line of Ted Tenthoff of Piper Jaffray. Please go ahead.

Ted Tenthoff -- Piper Jaffray -- Analyst

Thank you very much. Scott, welcome. Great background. I think you're going to bring a lot of expertise to the team. I wanted to check on next steps, if I could. Assuming positive data in PKU, what could the next study look like? What do you think you need to demonstrate? Thank you.

Aoife Brennan -- President and Chief Executive Officer

That's great. To set expectations for our analyst community in terms of what to expect in the third quarter, we'll be presenting the data from the PKU cohort and we'll be presenting our plans for the program in terms of next steps and guidance in terms of how to interpret the biomarker data.

In terms of next steps, it would include doing a bridging study in healthy volunteers. We think we have improved tolerability based on the equality parameters. We'll be evaluating that in a short healthy volunteers study and if that all looks good, moving into a Phase 2 trial in patients with PKU. We'll be able to give a lot more detail in terms of specific study design and timing to set some expectations about that, but we'll be moving forward pretty quickly with the program.

Operator

Our next question comes from the line of Rahm [inaudible] with H.C. Wainwright. Please go ahead.

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Hi, this is Edward Marks on for Rahm. You just mentioned that bridging study for 1618. I'm just wondering if you can go into detail on if bridging studies would be necessary for 1020 and 1891.

Aoife Brennan -- President and Chief Executive Officer

I'll start backwards -- 1891 product is given by intertumoral [inaudible]. Because it's given intertumorally, it's possible if we get great data, that formulation and presentation can be taken all the way through registration because we anticipate that would be given in an inpatient setting in a cancer hospital kind of scenario where products that have sufficient efficacy and tolerability in the context of cancer, that's certain viable to take all the way through.

In terms of the oral programs, based on our experience to date, everything we do with one program allows us to be more efficient with subsequent programs. We would make a decision at the time and then disclose that. I would anticipate we learn a lot from the bridging study in the PKU program regarding how the pre-clinical data translates into the clinic. We're learning more and more that can be applied to subsequent program and have a good experience with regulators so far being able to cross-reference some of the experience we've had also.

Operator

Your next question comes from the line of Chris Howerton with Jefferies. Please go ahead.

Chris Howerton -- Jefferies -- Analyst

Thanks for taking the questions. I wanted to touch upon the idea of the quality of the measure of viable cell count versus CFU and why you believe that's a better measure of activity.

Aoife Brennan -- President and Chief Executive Officer

That's a great question. It's not just our hypothesis. We've actually demonstrated data to show that for this program and for our product, live cells predict in vivo activity in an animal model much more precisely than CFU. We believe the rigth strength and potency measure is live cells and that CFU are actually not a correct measure and that it's not so relevant to the activity.

I think it's one of the benefits of having our Synthetic Biotic platform, where we understand mechanism and can measure in vivo activity that we can really evaluate what are the critical quality attributes and support the critical quality attributes. It's a nice feature of our platform that we can do that. They do support live cells as being the right measure.

Chris Howerton -- Jefferies -- Analyst

Then for the potential work on 1020 for a solid formulation or lyophilized formulation, will those activities be gated by a release of clinical data or are those going on right now?

Aoife Brennan -- President and Chief Executive Officer

We have done some work preliminarily, less on clinical data and more on our capacity internally as we've been able to fit it in around activities of other programs. But as soon as we have clinical data, we'll have next steps and set expectations around timing. That would be the plan.

Chris Howerton -- Jefferies -- Analyst

Then I guess one last question with respect to kinetics and the different compartments you're exploring -- do you think there are any opportunities to alter those kinetics? So, for example, if you observe there was better activity within the small intestine, are there opportunities to increase the area under the curve, activity there?

Aoife Brennan -- President and Chief Executive Officer

Yes, we have done some preliminary brainstorming and thought process around that, particularly as it pertains to small intestinal transit time. We've thought about ways to engineer bacteria to hang around longer in the small intestine. Now that Scott is here as a gastroenterologist, he'll be digging into some of that work. We engineer these to be [inaudible]. So, we can think about other ways in the colonic compartment to stay around longer. It's most important for us to make sure we had good safety and genetic stability before contemplating what you might call next gen approaches. Nothing concrete to discuss, but an interesting thought experiment.

Chris Howerton -- Jefferies -- Analyst

When you think about the translation of the liquid formulation to the lyophilized formulation, are there additional [inaudible] that were added to the final drug product that would constitute any meaningful biological difference between the two?

Aoife Brennan -- President and Chief Executive Officer

No, we haven't -- a lot of our special sauce know how we're maintaining as trade secrets. We put in a lot of work to preserve so much viability. Through lyo, we're one of the first groups to invest in this area. We're kind of keeping that secret sauce secret. We've tested a lot of different [inaudible] and components, none of them that would have any impact on the safety or benefit risk profile of the product and we'll provide our data on an ongoing basis.

Chris Howerton -- Jefferies -- Analyst

Liz has her hand over your mouth, I can tell.

Aoife Brennan -- President and Chief Executive Officer

I can tell you but then I'd have to kill you.

Chris Howerton -- Jefferies -- Analyst

I appreciate you taking the questions.

Operator

Your next question is from Tom Schraeder with BTIG. Please go ahead.

Julian -- BTIG -- Analyst

This is Julian on for Tom, actually. I just had two quick questions. On the heels of ASGCT, I'm wondering if you could comment on how important it is to have a dosable regimen as opposed to a one and done gene therapy for a condition like PKU. What I'm trying to get at is how tight is the normal range? Is it difficult to stay within 120 to 360 micromolar? Do you see this as a possible driver of interest in alternatives to gene therapy for the condition?

Aoife Brennan -- President and Chief Executive Officer

For PKU, gene therapy is still in the very early stage. There will be data maybe next year for some of the programs. Our understanding of the gene therapy programs right now is they're targeting the adult segment and patients will be eligible who don't have preexisting antibodies to whatever capsid being used in those programs.

We're hopeful at some point there will be a gene therapy option for a subset of patients with PKU. We see an opportunity for chronic oral products, particularly in the pediatric segment. These kids struggle to maintain adequate protein intake and their C-levels in the normal range. There's a normal range where those of us not born with a [inaudible] mutation maintain blood C pretty tightly and then there's the recommendation range, which is a C-level of less than 360. We know that a minority of patients actually get within that target range. I think there's a need particularly in the pediatric segment and even in adults. In the context of gene therapy programs, we see an opportunity to do something meaningful. We're learning about PKU all the time and are moving the program forward aggressively.

Julian Harrison -- BTIG -- Analyst

Todd, sorry if I missed this, but are you still guiding a runway through 2020?

Todd Shegog -- Chief Financial Officer

Yes, through 2020.

Operator

Our final question comes from the line of Taylor Feehley with Chardan. Please go ahead.

Taylor Feehley -- Chardan -- Analyst

I just want to clarify one of your statements, particularly on 1020. You mentioned based on the results of the ammonia lowering in the third quarter you'll determine further development. Should we think about that more in terms of formulation in the bridging study or patient populations that are most amenable to the therapy? Anything else you can provide would be great.

Aoife Brennan -- President and Chief Executive Officer

As we said earlier, I think the path forward for the 1020 programs depends on the strength of the data but also some work we've been doing to understand the development path in UCD and the various segments within the liver disease population. We've been doing a lot of work to map out what the next studies can look like, what the development feasibility and unmet need is across the various applications for the 1020 program could play.

So, both in connection with the target patient population for future development as well as the guidance around when that next study would be likely to start. It really is a holistic development plan path forward we would be sharing with the data in hand.

Operator

And I'm showing no further questions at this time. I would now like to turn the call back to our host for closing remarks.

Aoife Brennan -- President and Chief Executive Officer

Thank you, Operator. We'd like to thank everyone for joining us on today's call and we look forward to updating you on progress across our developing pipeline in the coming months. We'll be available throughout the evening if anyone would like to reach back out for a follow-up call but thanks so much for your questions and engagements.

Operator

This concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.

Duration: 51 minutes

Call participants:

Elizabeth Wolffe -- Head of Investor Relations and Corporate Communications

Aoife Brennan -- President and Chief Executive Officer

Scott Plevy -- Chief Scientific Officer

Todd Shegog -- Chief Financial Officer

Mark Breidenback -- Oppenheimer & Co. -- Analyst

Joseph Schwartz -- SVB Leerink -- Analyst

Samantha -- Citigroup -- Analyst

Ted Tenthoff -- Piper Jaffray -- Analyst

Edward Marks -- H.C. Wainwright & Co. -- Analyst

Chris Howerton -- Jefferies -- Analyst

Julian Harrison -- BTIG -- Analyst

Taylor Feehley -- Chardan -- Analyst

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