Verona Pharma plc (VRNA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to today's Verona Pharma KOL Prospective Conference Call. [Operator Instructions] I must advise you the conference is being recorded today, and that's Monday, the 1st of June 2020. I'd now like to hand the conference over to your first speaker today, David Zaccardelli. Please go ahead, sir.

Thank you, operator, and welcome to Verona Pharma's KOL Perspective Conference Call. The goal of the call is twofold: First, to provide you with an update on ensifentrine, the company's late-stage clinical development candidate that is planned to start Phase III clinical trials later in 2020 for the treatment of moderate to severe chronic obstructive pulmonary disease or COPD; and second, to provide insight from experienced pulmonologists on their perspective of how ensifentrine can be utilized in the treatment of COPD. We are delighted to have a panel of esteemed pulmonologists with us today who will share their expertise on treatment protocols and the challenges in treating this disease with high unmet medical need. Before we begin, I would like to remind you and direct you to our forward-looking statements on Slide 2 and our filings with the SEC. On Slide 3, we have an exciting agenda for you that includes Dr. Tara Rheault, Verona Pharma's VP of R&D and Global Project Management, who will be reviewing our Phase III clinical program for ensifentrine. Ensifentrine has been studied in trials involving over 1,300 subjects and demonstrated statistically significant improvements in lung function and symptoms as well as other quality of life metrics in moderate to severe COPD patients in multiple Phase II clinical trials. We believe that ensifentrine will become an important therapeutic for COPD patients, particularly for those who remain symptomatic despite maximum treatment with current therapies. In May, Verona Pharma received written comments from the U.S. Food and Drug Administration, supporting the company progressing its planned Phase III clinical program for nebulized ensifentrine in COPD. We obtained clarity on the study design, dose selection and study endpoint. We anticipate beginning the clinical trials later this year subject to securing additional funding. Tara will provide additional details about our Phase III program, which is called ENHANCE ensifentrine as novel inhaled nebulized COPD therapy program. Our panel of distinguished pulmonologists include: Dr. James Donohue from the University of North Carolina; Dr. Donald Mahler from the Geisel School of Medicine at Dartmouth; and Dr. Jill Ohar from Wake Forest School of Medicine. We look forward to their commentary about the significant burden of COPD, the limitations of current approved treatments and the urgent need for a novel therapeutic option to treat COPD symptoms. The panel discussion will be led by Dr. Kathy Rickard, Verona Pharma's Chief Medical Officer. We will then open up the discussion for questions for the panel. Now let's begin with a brief summary overview of ensifentrine, starting on Slide 4. As you'll see, I want to remind you of 3 important elements as a general summary. As I mentioned, ensifentrine is a late stage product, a first-in-class candidate for the treatment of COPD. It is an inhaled PDE3, 4 inhibitor, which, as such, provides bronchodilator and anti-inflammatory activity. With that, there is a large COPD opportunity in the U.S. -- and in the U.S., there has been close to $10 billion spent on the chronic maintenance of COPD therapies. There's over 1 million patients failing despite maximum therapy and interestingly there is a fairly limited number of physicians who prescribe approximately 70% of the U.S. nebulized prescriptions. I mentioned to you the unique profile of ensifentrine, which there has not been a new mechanism of action in COPD in over 40 years. It has been extensively studied, as I mentioned, in over 16 clinical trials, and it has a safety profile very similar to placebo. There is a well-validated pathway to approval. As I mentioned, we have received end of Phase II comments from the FDA, and we are aligned on our pathway forward in Phase III. We have an expert team that is assembled to develop and commercialize ensifentrine in various respiratory diseases, including COPD, and we will continue to progress and complete our funding process so that we can start the Phase III trials later this year. If we turn to phase -- excuse me, turn to Slide 5, here, it reminds us that COPD is a global epidemic. It is expected to be the third leading cause of death by 2030 with over 300 million -- 380 million patients worldwide. It's a progressive disease, in which patients remain symptomatic throughout their course, and there is no treatment -- no cure for COPD. If we take a look at Slide 6. In the U.S., there are 6 million patients with COPD under treatment. Of those 6 million, 3 million of them are actually being treated with maximum therapy, dual or triple therapy. And of those 3 million, 1.2 million remain symptomatic despite that therapy and need additional therapy, such as ensifentrine. You can see from a commercial perspective, patients currently -- I mean, we have -- patients are treated with nebulized COPD drugs and are reimbursed by about $12,000 per year. So you can see that the commercial opportunity in the U.S. is substantial. If you take a look at Slide 7, this reminds us of our program that we have for ensifentrine. As a nebulized product, we have programs in COPD, which is the focus of our development, but we've also studied ensifentrine in asthma and cystic fibrosis. In addition, we have advanced other dosage forms, such as DPI and MDI format, which allows us to expand treatment as we address those diseases later in development. It's noteworthy that ensifentrine has demonstrated effect on improving lung function in all of these dosage formats. On Slide 8, it will remind you that we have an excellent team assembled, and I'm very proud of the team that has been brought together in order to advance ensifentrine into Phase III trials and ultimate commercialization to help patients with COPD. We have deep experience in executing and developing products across a wide range of diseases. And in particular, the team has deep experience in developing drugs for respiratory diseases and, specifically, COPD. And as you can see, have been involved in a number of products directly related to the treatment of COPD. I want to note that we have a special deep experience in the clinical research team who will lead us in the further development of ensifentrine in Phase III. And I couldn't be more proud of the team that has been assembled, and is working to advance ensifentrine every day. And finally, for my summary on Slide 9, just to provide you a brief recap of our financial position, at the end of March, we had approximately $35 million. And we are backed by a number of very experienced investors, as noted on the right, and they continue to be very supportive of our progress forward, and we look forward to that support. With that, now I will turn the call over to Dr. Tara Rheault who will summarize the Phase II data for ensifentrine, which has demonstrated improvement in lung function and symptoms in moderate to severe COPD patients in several Phase II clinical trials. Tara will also review the Phase III program for nebulized ensifentrine. Tara?

Over the past few decades, COPD therapy has been dominated by 2 main classes of bronchodilators, beta agonist and muscarinic antagonist. Ensifentrine is the first novel dual inhibitor PDE3 and PDE4 that has been shown to impact not only 1, but 3 key mechanisms of COPD pathophysiology. Ensifentrine is a strong relaxant of airway muscle through its inhibition of PDE3, which is predominantly expressed in these cells. This leads to sustained bronchodilation, which is important for patients with obstructive lung disease. Ensifentrine has also shown anti-inflammatory effects in multiple inflammatory cell types known to be mediated by PDE4 and also PDE3 activity, which targets another characteristic of COPD, chronic inflammation following years of cigarette smoke injury. Finally, ensifentrine has shown stimulation of the cystic fibrosis transmembrane conductance regulator, also known as CFTR and a resulting increase in ciliary beat frequency in human bronchial epithelial cells, a mechanism that facilitates mucociliary clearance in patients. We're really excited to be here today with clarity from our recent FDA end of Phase II interaction and a clear path to our Phase III program in COPD. We learned in Phase II some really important features of this dual mechanism, not only did ensifentrine improve lung function and reduced residual volumes at a clinically meaningful level in patients with COPD but also substantially improved symptoms of COPD and quality of life even added on to other therapies. Our first Phase IIb study of ensifentrine as a monotherapy in patients with moderate to severe COPD showed a large and dose-dependent improvement in lung function up to the 3-milligram dose. This was paired with a clinically meaningful improvement in COPD symptoms from the validated ERS symptom scale in only 4 weeks of treatment. This progressive improvement in symptoms appeared independent of the rapid improvement in lung function, which occurs within minutes of dosing, indicating additional mechanisms are at play, such as anti-inflammatory effects, that may be contributing to these clinical effects. When patients received ensifentrine, they saw a very large increase in lung function compared to the patients who received placebo. And there was clear separation between the 3-milligram dose and the placebo group over the entire 12-hour dosing interval. Tiotropium is a long-acting muscarinic antagonist, one of the most widely used treatments and is a standard of care therapy in COPD. We studied ensifentrine in patients who were still symptomatic despite maintenance use of tiotropium in another Phase IIb study and showed a similar large and meaningful improvement in lung function up to the 3-milligram dose. In addition, in only 4 weeks of treatment, we showed a clinically meaningful improvement in quality of life as measured by the validated SGRQ-C scale, which incorporates not only symptom domains, but also activity and impacts of COPD on the patient's daily life. And this was really powerful data coming out of this 4 week study, as I'm not aware of any other drug that has shown this level of improvement in quality of life in COPD added on to another therapy in a 4-week study. In the COPD patients who were still symptomatic and with impaired lung function, despite maintenance treatment with once-daily tiotropium, ensifentrine again provided a clinically meaningful and statistically significant improvement in lung function over the 12-hour dosing interval with clear separation from tiotropium plus placebo at each time point assessed. These Phase IIb studies demonstrate the potential for ensifentrine both as a monotherapy and when added on to existing classes of therapies. Next, we evaluated the ensifentrine added on to dual muscarinic antagonist and beta agonist therapy, the once-daily maintenance therapy Stiolto Respimat. Right now, if a patient is still symptomatic on a muscarinic antagonist such as tiotropium, they will likely be escalated to a dual therapy containing both muscarinic antagonist and beta agonist. Beyond this, no other classes of approved therapies have shown additional meaningful improvements in lung function in patients still suffering with breathlessness or other symptoms of COPD who are otherwise on maximal dual or triple therapy. Ensifentrine did show a meaningful improvement in lung function when added on to Stiolto in a 3-day study. In this study, 29% of the patients were also on stable inhaled corticosteroids, essentially a triple therapy background. In this study, ensifentrine showed a statistically significant and clinically meaningful improvement in FEV1 averaged over the 24-hour Stiolto dosing interval. Importantly, over 40% of patients in this study achieved an improvement in lung function of greater than 100 milliliters when added on to this dual and triple therapy background, which is a remarkable improvement in a large proportion of patients who would otherwise be considered on maximal maintenance therapy. Ensifentrine showed a mean numerical improvement in peak FEV1 of almost 50 milliliters added on to Stiolto, which is a very high bar in a study where patients peak improvement on background Stiolto alone was over 400 milliliters, already approximately a 25% improvement in lung function in these patients with COPD. In addition to showing consistent efficacy as a monotherapy and added on to standard classes of therapies, inhaled ensifentrine has also been shown to be exceptionally well tolerated throughout our Phase II program involving over 1,300 patients, with a safety profile generally similar to placebo, including gastrointestinal and cardiovascular adverse event profiles. Given the strong safety profile to date and the demonstrated efficacy of monotherapy added on to single, dual, and triple therapies, we're very excited to be at the point of moving ensifentrine into Phase III development. So we took this data package to the FDA and received excellent feedback setting us up for a Phase III start later this year. Following this regulatory milestone, we now have a clear path to Phase III, which includes alignment on preclinical CMC and clinical pharmacology packages, clarity on our Phase III design, including dose endpoints of population, and alignment on the safety database and safety assessment. I'm very pleased to introduce to everyone today the nebulized ensifentrine Phase III ENHANCE program. This program consists of 2 pivotal studies, ENHANCE-1 and ENHANCE-2, both enrolling approximately 800 patients. ENHANCE-1 contains a subset of patients who will continue on ensifentrine for 48 weeks to provide long-term safety data and ENHANCE-2 will also evaluate population pharmacokinetic assessments, both of these fulfilling regulatory requirements for approval. These studies replicate efficacy and safety over 24 weeks, which is important to generate robust data on symptoms and quality of life improvement in our Phase III program, the most important impacts to patients with COPD. The design of each study is aligned with the FDA and includes a representative population of moderate to severe symptomatic COPD patients, including a proportion of patients on background LAMA or LABA maintenance therapy. The primary endpoint for the program is improvement in lung function over 12 hours with key secondary endpoints of symptoms and quality of life and other lung function parameters, such as trough and peak FEV1. In addition to these, we are evaluating the impact of ensifentrine on COPD exacerbations in each study and plan a pooled analysis across both studies to potentially inform labeling. Because ensifentrine has been well tolerated in prior studies, routine safety monitoring is planned for the program without the need for 24-hour Holter monitoring or a data safety monitoring board. This is probably the most important slide in the whole deck because it shows how we're going to get this across the finish line. Our primary endpoint, average FEV1 over 12 hours, we have a 90% power to show a treatment effect of 59 milliliters. If you remember the data I showed from our Phase IIb studies, we showed 119 millimeters on this endpoint as a monotherapy and 87 milliliters added on to tiotropium. So you can see that we're comfortably powered for our primary endpoint in our Phase III program. In addition, I showed in prior studies that we achieved the minimal clinically important difference in both ERS symptoms and SGRQ quality of life in only 4 weeks. So we're confident that we're also comfortably powered on both of these important endpoints in our Phase III program as well. Verona is about to start a Phase III program with an agent that has a novel dual mechanism of action that has shown consistent improvement in lung function, symptoms and quality of life in patients with COPD. We're confident in the safety profile demonstrated to date and in our ability to get this across the finish line from a statistical and regulatory perspective. We look forward to being able to provide ensifentrine as a novel treatment option that pulmonologists and other health care professionals can turn to, to treat COPD patients in their clinics suffering with chronic breathlessness. And with that, I'm going to turn it over to Dr. Kathy Rickard, our Chief Medical Officer at Verona, who will moderate a panel of leading pulmonologists to give you their views on COPD, their patients and ensifentrine. Kathy?

Thank you, Tara. It's my pleasure to introduce our panel of clinical experts, who will be sharing their perspective on treating patients with COPD and how the treatment landscape is evolving. We're very lucky to have 3 of the world's experts in the treatment of COPD here today. As you heard earlier, we have present here today, Dr. James Donohue, Emeritus Chair and Professor of Medicine, Division of Pulmonary and Critical Care Medicine at the University of North Carolina at Chapel Hill. Dr. Donohue is a well-renowned expert in the diagnosis and treatment of lung disease. He's an expert in clinical trials and has presented on many occasions to the FDA's Pulmonary and Allergy Advisory Committee. He was Chairman of the Foundation of the American Thoracic Society for 4 years. In 2018, he received The Breathing for Life award, the highest honor given to an ATS member for philanthropy. He has authored over 100 articles in the most important peer-reviewed journals in pulmonology. Welcome, Dr. Donohue.

Thank you, Kathy.

We are also joined by Dr. Donald Mahler, Emeritus Professor of Medicine, the Geisel School of Medicine at Dartmouth, Director of Respiratory Services at the Valley Regional Hospital in Claremont. Dr. Mahler is a prominent pulmonologist who codeveloped the baseline and transition dyspnea indexes. These questionnaires measure the impact of dyspnea related to activities of daily living and have been widely used in clinical studies involving patients with COPD. In addition to publishing over 200 papers in peer-reviewed journals, he has written an co-authored 4 books on dyspnea. Dr. Mahler, we are glad to have you here today.

It's a pleasure to participate.

We'd also like to welcome Dr. Jill Ohar, Professor of Internal Medicine, Pulmonary, Critical Care, Allergy and Immunological Diseases at the Wake Forest University School of Medicine. Dr. Ohar is a leading pulmonary disease specialist. Her clinical and research interests focus on inhalational disease such as COPD and asbestos-related diseases, and her work has been published in numerous peer-reviewed journals. She's a founding member of the North Carolina Chapel of the American Thoracic Society. Thank you, Dr. Ohar for joining us today, and we look forward to your perspective.

Thank you, Kathy, for including me.

We're now going to run through a series of questions to give their -- each ones their perspective on various aspects of the treatment of COPD. So the first question I'd like to ask Dr. Ohar to address is what is the impact of COPD on patients and caregivers?

I'm going to start with Slide 29 to give a little overview of the disease itself. I think many people think of COPD as a little shortness of breath, maybe a little cough, but they fail to understand that this is a chronic progressive disorder that's characterized by destruction of several of the components of the lung. So not only are the airways involved with mucus hypersecretion, but also, there's swelling or edema in the airways and also fibrosis or scarring around those airways, thereby narrowing airways. Furthermore, the "emphysematous portion" of COPD involves actually the loss initially of the elastic fibers that run through the airway walls that you see pointed out here thus making it difficult to exhale because excalation is dependent on the integrity of those elastic fibers. And eventually, because those fibers also provide tensile strength to the airway walls they rupture. And because they work like the tethers of a hammock to hold open those tiny distal airways, those airway slam shut during exhalation, trapping air behind them. As a result, patients who suffer from air trapping have marked exercise limitation. And this seems to be actually a very early part of the disease. So patients, as you'll see in subsequent slides, begin to take to the couch. In addition to the cough and sputum, they believe it's a snooper's cough and that you get up in the morning, everyone does and coughs up a little mucus. And so this becomes a gradual, progressive indolent process whereby patients just kind of live, habituate with their symptoms. And so most patients with COPD are not diagnosed until half of their lung function is already gone. Now Don, you had some insight on some symptoms. Did you want to continue there?

I wanted to comment on -- reemphasize what you said on the right-hand portion of the slide, number one, the airway is narrowed. And part of the narrowing is that green colored mucus, and that leads us to the next slide. If you keep that image in your brain, you can see why the 2 major symptoms are shortness of breath and cough. So that was my main emphasis.

So great, I wanted to actually elaborate on that as well. As you move down the slides, I know you've talked about Slide 30, the shortness of breath, which then leads to anxiety and depression. But also, as I mentioned, this idea of taking to the couch and how really indolent this is, it's a very covert process where patients initially go from carrying their clubs while golfing to carrying them in a stroller to over years go to the riding in a cart and then go from 18 holes to 9 holes, without anyone in their family or the patient themselves realizing this process has taken place and how that leads to deconditioning that worsens their overall state of well-being.

Yes. Certainly, most of our patients complain of shortness of breath. That's the #1 symptom and clearly, why it's included as a secondary outcome in the Phase III trials. The second most common symptom is cough, which can be dry or it can be productive. And certainly, we are always interested to ask about the color of the mucus or sputum with white or clear suggesting an inflammatory cause, yellow or green suggesting probably a bacterial infection. And you can see that list of symptoms that include at the bottom, fatigue, and that's a very nonspecific symptom, but that's clearly important for all of our patients as well. They're short of breath, they're coughing, and they may not sleep well and they're tired, and that leads to not only the anxiety and depression, but basically concerns about doing anything. They're concerned if they go to the store, go visit family that they may have a breathing attack. Jim, did you have any thoughts?

I wanted to just ask -- to mention one other thing. We often think about COPD as confined to the lung, and thus obviously, as you and Jill have showed, particularly from that cartoon, there's an awful lot going on in the lung. However, this is not a lone pulmonary phenomenon. This is a systemic disease, COPD, because of the inflammation, all the comorbidities that are also impacted by cigarette smoking, such as heart disease and other problems like osteoporosis, all these things have a tremendous impact, all these symptoms and the impact on well-being on other organs. For example, as you all know, when you talk about the patient becoming more of a couch potato, in fact, because of the weakness of the quadriceps muscles, from COPD, the patients have difficulty with walking, and that's for rehabilitation. Because of anti-inflammatory IL6 and other mediators, they're depressed. The bone marrow is depressed. So it's very, very important to look at COPD in the context of the impact on the total person. And as you see here, I think this is a terrific slide with the symptoms and the wellbeing because, see, in a downwards spiral is precisely what happens in the real world.

I think also -- It's important to also emphasize that the couching, the going to the couch actually that disability begets more disability. And I think that's a real, real critical point in this whole concept of this disorder that COPD, even the definition is it's a disorder characterized by the disproportionately high prevalence of common comorbidities that Jim's mentioned. And how those interplay in the disability and the deconditioning that continues to spiral downward and in a very progressive nature? Sorry, Kathy.

No, thank you. I was going to ask Dr. Mahler. We all know as pulmonologists the effects on FEV1. But honestly, our patients, as you said, are really bothered by the dyspnea and the shortness of breath. And you developed the BDI/TDI in order to measure that. Can you just discuss a little bit about the importance of being able to measure that in our patients and be able to tell the effect that different agents may be having on improving their shortness of breath.

Certainly, although shortness of breath is a subjective experience kind of like pain, there are multiple instruments that have been developed to quantify this experience. And I was fortunate to work with the late Dr. Alvin Feinstein, and we developed the baseline transition dyspnea index, which is a multidimensional questionnaire for patients that relate to different components, how dyspnea impacts function, how it impacts the ability to do tasks. And finally, how it affects effort where people may have to stop multiple times to accomplish a task and then it becomes too laborious. And I think that part of that experience and instrument is illustrated in Slide 31, this downward spiral that we've talked about already. And yes, shortness of breath leads to inactivity, but it's surprising that lots of patients are not even aware that they're less active, or if they are aware of this inactivity, they attribute it to, well, I'm getting old or I'm out of shape, I'm not as active as I was. And in practice, it's key to get this information out and separate out, is it the lung disease in which inhaled therapies are our primary cornerstone or is it this deconditioning process where, as Jim Donohue mentioned, pulmonary rehabilitation would be a key intervention. And again, for most of our patients, it's a combination of inhaled therapy and referral to pulmonary rehab if it’s available or an exercise program at home that are 2 of our major therapies.

I'd like to add at this point that also in the differential is concurrent heart disease, which is so common in COPD. So is it a differential diagnosis of this? Is it I'm getting old and out of shape? Is it my COPD? Is it deconditioning? Or is it concurrent heart disease? And there's actually mounting evidence that treating the COPD with both bronchodilators as well as anti-inflammatory agents may actually improve heart function because of its interaction -- dynamic interaction with hyperinflation or that air trapping that occurs once those airways are narrowed and closed. So I think it's really important to think all the way through this.

And I would add to that, Jill, anemia, which can affect the exercise and happens in at about 15% of our patients with COPD as well as the previous slide mentioned anxiety and depression. And certainly, those 2 symptoms can affect energy level, desire to do things and just life satisfaction. So totally agree, it's a broad picture we need to consider.

I'd like to move on to the next question. And Dr. Donohue, I'm going to ask you to address this first. What is the typical treatment pathway for COPD patients?

Thank you, Kathy. And I'd like to thank you for asking me to participate today. Slide 32 that we have up on the board is the so-called gold guidelines. These are recommendations by an expert panel based on the best possible evidence. It's very important, though, to contrast this kind of best practices with what really is taking place in the world, and because of a lot of confusion and concern about LABA safety and asthma, there was a lot of confusion by practitioners as to what's best for COPD. In fact, the market leader had been alongside the monotherapy LAMA tiotropium have been Advair or Symbicort in the field. And I'd like to just take you through how that's not the first choice. Although that's a very good choice, I'm not in any way disparaging those drugs. So this schema here in the boxes, A, B, C, D are the gold levels or the gold guidelines. And basically, on the left, you see the exacerbation history. So A, B, C, D, I was involved a little bit in the gold guidelines in the earlier days when we included lung function in the era of personalized medicine that was taken out, because we wanted to emphasize what the patient experiences as symptoms, primarily shortness of breath or these terrible events called exacerbations. So we have exacerbation 0 or 1 or infrequent. And then the important group, a person who has 2 or 1 leading to a hospital admission, and that would be -- put you in level C and D. If you have 0 to 1, you're in A and B. Next, we're going to go to symptoms, and why patients come to us, and I just -- I'm not retired, but semi-retired, 43 years in the practice of pulmonary critical care, people come to us because they're short winded, and they're looking for relief. And so we have 2 tests there. And these are not widely used in America, unfortunately. You see the mMRC and the CAT. And that's the COPD assessment test. And these are just quantitative tests that tells us about patient symptoms. And if you see an mMRC greater than 2, and we put this in all our clinical trials, particularly with combination therapies that means when you're walking on a leveled ground with your peers, you can't keep up. You have to stop. So that's kind of a good starting point. Now in this schema, A, B, C, D, the 2 things I'd like you to focus on with me are groups B and D. These are the groups that we see, A, are pretty mild, and maybe primary care sees more of these, certainly in the practice of pulmonary medicine, B is the most common 39. Now those are symptomatic people. Usually, they're coming in their 40s and 50s. And we have choices here. And the recommendations of the gold panel has been to start with the monotherapy bronchodilator. And by convention and availability, that's more often than not been a LAMA, long acting muscarinic and drugs like tiotropium, aclidinium, umeclidinium, glycopyrrolate are widely used with fairly good success. Now as we've heard over and over again, there's always residual symptoms left. You're always searching for more. Some of those residual symptoms are due to irreversible components that Jill and Don showed in that schema slide of the various mechanisms that rupture the attachments, for example, the emphysema, for the most part is irreversible. So B is very important. So the choices, monotherapy or LABA/LAMA. Now I happen to like that. But again, the gold guidelines calls for a LAMA usually or LABA first. And then if that's not successful, adding the go up, step up to a LABA/LAMA. Now D is a very important group, up at the top here. These are the folks who are really utilizing the resources and really have a poor quality of life, and it's very hard on their families. As you see, they could have a hospitalization, and that's a terrible event for the exacerbations for a COPD patient. Many have great fear of having to go to the hospital. This predates the COVID-19 era, but they're afraid they won't come home. And in fact, they're right, many patients wind up at scaled facilities. Now D is also symptomatic. So they're both -- the worst of both worlds. They have a lot of symptoms and they have the exacerbations. Now certain drugs like monotherapy with a LAMA like tiotropium does have an indication for exacerbations. But almost the great majority of patients indeed would be considered candidates for LABA/LAMA's or triples. A triple because the inhaled steroid in combination has been shown to be excellent for exacerbations. Now it has the potential for -- certain of the products have higher than normal signal for pneumonia. So it's always a safety issue -- Now I want to make 2 comments here. What are the concerns indeed, primarily that's -- the therapy is driven by exacerbations. They have to pick a drug that has an indication for exacerbation. The ICS LABA's, some monotherapies LAMA and, certainly, our triple therapies have that indication. Now there's another concept that's beginning to be recognized. And that's the eosinophil count in the blood. If you have a peripheral blood eosinophil count of 300 or more, that could be an indication that you're going to respond to inhaled corticosteroids and that the inhaled steroids are a very important part of the program. If it's 100 or below, you're less likely to respond. So the eosinophil count, although it does not have the power or the importance of exacerbations or dyspnea as shown here are -- is becoming an important component. Now if you're in D and you still have trouble and that really is a very high percentage of patients despite the excellence of either opened or closed triple therapies. Other agents that come into play here that are considered would be the PDE4 inhibitors, Daliresp, okay, which has an indication for a reduction in exacerbations in severe COPD with the bronchitic phenotype. It has a lot of side effects, which has somewhat limited its use. And perhaps by going to an inhaled route -- I know many pharmas are looking at that, that might be a way to get around it. The other is the drug azithromycin, the antibiotic used either daily or 3 times a week, has been shown by Dr. Albert in a 1-year study to reduce exacerbations. And then other drugs like oral steroids, rarely in the United States, theophylline would come in there. So that's the scheme. Unfortunately, it's a good scheme, but it's not widely used, but we're trying to make that a more useful kind of guide for the treatment of patients. And if you follow this guidance, your patients will do better than if you just give them off the table kind of -- off-the-shelf kind of therapy. The big problem is though almost everybody is getting ICS LABA's and many are not that do not need that. So I'll stop there, and I think Don...

Can I just make a brief comment in the slide?

Yes. Dr. Mahler, please go ahead.

Slide 32, yes, the B. If you look at, this is from the Spiromax data, which is a National Institute of Health sponsored study in the United States. If you look at group B, representing 39% of the total population, group D 35%. You add those together. So you've got 74% of the patients from a general COPD population in the United States are still symptomatic at the time they were referred as part of the entry into the trial. So this is a large number of people who are -- have unmet needs and potentially new therapies are going to be helpful for this large population.

This is Jill, and I wanted to pile on with this from a different perspective. And that is just that when you look at that refill persistence, that means do patients consistently refill their chronic drugs, and about 33% in some studies as low as 10% actually persistently refill their COPD maintenance medications. And many of the reasons, probably the primary reason that patients don't refill these meds is, they feel they don't get adequate control of their disease from them. So again, highlighting this unmet need that patients experience.

I'd like to make one further comment following up on Jill and Don's point here is the importance of a -- for this population of a device to deliver the drug, which can be effective in particularly these frail or fragile D's and usually the nebulizer would be more frequently used versus B, where mostly would be DPIs and MDIs, so that's just another consideration. None of the drugs, none of the -- putting the patient into a little box here, it helps. If the patient doesn't get the medicine deep into their lungs, again, thinking back to the cartoon, the model that Jill and Don were talking about with the pathology, it's complex. It involves small airways. There's mucus blocking the airway. So you really need a good device to deliver the drug and a device which would deliver the drug to the lower airways like the nebulization. So that's a key part of this that's not discussed.

I'd like to follow up with you all and Dr. Mahler, I'm going to ask you first. Can you further describe what is the unmet need in COPD based on all that's been discussed so far?

Well, I think we said it, and I'll try to maybe say it in a different way. Patients come to see me as a pulmonologist. There are 2 main reasons: One, they're short of breath and can't do the physical activities they want to do; and the second one is patients who have been admitted to the hospital for a flare-up or exacerbation and they're discharged. And it's very common that they may not have even been diagnosed with COPD prior to the hospitalization. So at least again in a specialty practice, these are the 2 types of patients I see, and they're short of breath. And they've had a flare-up leading to hospitalization, and that brings us to how can we help these people. And I don't know if you want to get to Slide 33, if we've covered that yet or not, but this shows that one group that are very symptomatic, 39% of the Spiromax, and most pulmonologists that I know, we use LAMA/LABA, the combination therapy there in the middle. And so many of our patients remain symptomatic. The question is, what's next? And Jim alluded to some of the options that we have. Slide 33 covers that group D on the right, 35% of the Spiromax population. And Jim mentioned the LABA ICS, the triple therapy. But we're learning ICS, inhaled corticosteroids, do not work in all of our patients with COPD, the eosinophil count seems to be a marker, and secondly, there's concern about pneumonia risk with certain inhaled corticosteroids. So that leads us again to some -- the desire to have a non-inhaled corticosteroid anti-inflammatory therapy that we think can attract the neutrophil, which is part of the inflammatory process. So to get back to that question, Kathy, the unmet needs are better symptom therapies and better therapies to reduce the risk of an exacerbation in our patients.

And Dr. Ohar, would you like to comment as far as your perspective on the unmet needs when you're seeing your patients?

Absolutely. I think Slide 35 shows that despite therapy -- and so Slide 35 is the BLAZE study, 247 patients who were randomized to either combination therapy with umeclidinium and vilanterol or tiotropium was another group and placebo, the third group. So LABA/LAMA, LAMA alone and placebo, and you can see from this slide that even the group that got the combination therapy, 64 of them -- 64% of them continued to have shortness of breath on therapy and even higher percentages with placebo or tiotropium alone. So patients are symptomatic. They continue to be symptomatic, and they expect nothing better. And I think that's the other thing. And the idea of a new drug that is going to be both a bronchodilator as well as an anti-inflammatory agent, I think, is extremely exciting and something that there's a true unmet need for.

Thank you, Dr. Ohar. I'd like to now get into a couple of specific questions that deal with ensifentrine. So ensifentrine is a first-in-class potential therapy with the dual mechanism of action, as you spoke about, anti-inflammatory and bronchodilator. How will this address the unmet need in COPD? And how do you anticipate using it in your clinic? So Dr. Ohar, I'm just going to go back to you first about this question.

Well, I have a pretty different take on this than I think both Don and Jim, in that because COPD is almost always diagnosed initially at late stage. That is when the FEV1, the lung function is in the 50s percent or lower. Already patients have had a large amount of symptoms, have a large burden of disease. And so I think that this drug could actually, in addition to being an add-on therapy, which I think both Don and Jim have set the stage for, I think this could be a first-line therapy in some limited patients. So clearly, after dual bronchodilatation adding it instead of an inhaled corticosteroid, especially in the groups of patients that are symptomatic but are not in and out of the hospital with recurrent exacerbations or who don't have the high eosinophil counts, which are the ones you think that, well, maybe they do best with the addition of an inhaled glucocorticoid to their dual bronchodilator. But I think that it could be used as a first-line therapy instead of a LABA or a LAMA as well, especially, as Jim has mentioned, in those frail patients who don't do well with the dry powders and/or who have trouble with the coordination required and the steps required for a meter dose inhaler.

Dr. Donohue, would you like to give your perspective?

There's a tremendous unmet need. Now some of it is, of course, this irreversible component of the disease that we've mentioned a little bit it and in your cartoon. Also, there is the interaction with the heart. There's a -- and we've talked about that a little bit. There's a tremendous interaction with hyperinflation and diastolic dysfunction and weakness of the left ventricular wall, which the Germans have been working on. So you have to take those out. There's also muscle deconditioning. We have to, again, make sure we don't overlook the rehabilitation, the need of a patient to move or they'll die, which is also essential. I'd like to think of it myself more as an add-on to LAMA monotherapy. Although what I like is to have access to the drug as a doctor, I've spent my whole life and all 3 of us, and you, too, Kathy, worked in clinics, we like to -- we recognize the individuality of all the patients that we see before us. Despite what the others may say, there is no short algorithm that covers every human being. They have different comorbidities, different other factors. So you really want to have some options to work with. And again, I have no objection to use it at first, certainly not, but I like the option of using it on top of, particularly a LAMA and to see how that goes. And I think that would be a terrific combination. You have the LAMA's effects on bronchodilation, and certainly, I know Don and I and Jill have worked with some of the pivotal studies with LAMA's. I have worked with all 5 on the market now in the clinical trials, IIbs and IIIs. Also, though, the LAMA's do have some effects on exacerbations. So that's very nice to have that. And we have to see with the -- whether this new product, this combination, PDE4 will have an effect on exacerbations, that will be down the road. But again, you have also options with the LAMA's that can be gotten in meter dose inhalers. You have it in with the new AstraZeneca's Co-Suspension, you're going to get them in MDIs and you're going to get it nebulizer. And so they are now on the market. Well, that's -- for further research, we have to see how you can combine agents like this in nebulizers. That work hasn't been done yet, that comes later. But this gives us a great variety, a broader variety of options to use for people who have shortness of breath. And I'm very excited to have it. As you guys have talked about, we have -- we just don't have enough options. And in our practices, that everybody is different. Not to oversimplify it, but everyone -- every man or woman who comes in to see you is a unique person with a unique set of properties and skills, and it's really a challenge to try to help them out.

Thank you, Dr. Donohue. And Dr. Mahler, lastly, I like to ask you about how you feel you will anticipate using it in your clinic?

Sure. As Slide 36, I find the most intriguing information, its dual mechanism of action, bronchodilation, anti-inflammatory effects in a single molecule. And I would envision initially assuming Phase III trial results show as expected and approval as add-on to LABA/LAMA in my practice. And I see a potential challenge of this medicine as challenging the use of a LABA ICS for many of our patients that are prescribed. As we said before, inhaled corticosteroids are widely used, but without good evidence in many cases and they do not work in all patients and to have an anti-inflammatory medicine combined with bronchodilation, I think, could challenge the LABA ICS use as we get more evidence of its efficacy. And clearly, a potentially greater safety profile than the ICS monotherapy or combination therapy with LABA.

Thank you, Dr. Mahler. We'll move to the next slide. You're all familiar with the Phase III design, and we can pull up Slide 38 just to remind everybody about the Phase III design. I want to ask each of you, how will the proposed Phase III program inform your use of ensifentrine once approved? And Dr. Ohar, perhaps we can start with you.

Sorry, I was on mute. I think that -- I lost the slide. For me, again, as I said, I initially -- I think it's important that we don't lose sight of the fact that it could be a first-line therapy. But clearly, when you're in the clinic and you've got that patient that is persistently short winded despite either a LABA, a LAMA or even combination therapy, I think that this study is going to help inform me with the highest dose of ensifentrine. Well, how many mLs can I expect of FEV1 on top of that? For me, even though the patient doesn't know how many mLs of FEV1 they get, but they do sense. Though if they sense that MCID, the minimally clinically important amount of change in FEV1, which is about 100 cc. And so -- and as I say, the preliminary data that you've shown thus far makes -- reassures us that, that's definitely going to be seen here in a large percentage, the majority of patients at this dose. So that's what I'm going to be looking for is that improvement in lung function. And I think Jim has stressed the concept of pulmonary rehab and so the idea of not only you've got that improved lung function now, now it's the time to get off the couch and go to pulmonary rehab to learn to use it. So I think those 2 things coupled together are going to be important.

And Dr. Mahler?

One of the nice things I like is there, the box on the left, one of the inclusion criterion is patients have to be symptomatic. The modified Medical Research Council scale 2 or higher, as Jim said before, basically, a grade 2 is I'm short of breath walking on the level or can't keep up with my peers. So it's enrolling a group of people who are symptomatic, which is real world experience, comparing therapy versus placebo and Jim emphasized lung function, which is clearly a requirement by the FDA. Again, I'd like to -- the secondary endpoints, the evaluating respiratory symptoms, E-RS, which is recognizes an exploratory outcome by the FDA in trials for COPD and the St. George's Respiratory Questionnaire measures quality of life. So if we find positive benefits for those 2, that would be unique outcome data for a novel therapy.

And Dr. Donohue, how would you like to add as far as once the Phase III program is completed, how will it help inform you?

Well, the first thing is that I think it's got an excellent design. It has a very good chance of getting the drug approved. Also because there's important populations in the background here, those who come in on monotherapy, LAMA or LABA or people who get -- who are being compared to placebo. So a lot of information is going to be gotten from this. It's a big study, 90% power to achieve its desired endpoints. As a doctor, though, this is what we do in pulmonary medicine. We would like to first -- and again, we've all -- the 3 of us have been involved in the pivotal studies. You too, Kathy, with us in almost every long-acting bronchodilator on the market. You want to have it. And first of all, you know it's safe from the data that you collected. And this study to me is data safety monitor many large studies now. The extension phase really will give us a lot of information about safety. And so far, it looks very good on the safety point of view. The other thing is nebulized, which I think will help a lot of our more severe patients actually be able to effectively use it. So I think this is an excellent study. It's really all I want. Maybe I'm weird, don't answer that. But that's really what I want at this point. I know you have to deal with insurance and others who like algorithms, but algorithms don't work very well here. You just like to have the options available to you. And as we've said over and over again, in 43 years into my practice, pulmonary medicine, patients, no matter what we do, still have symptoms. We're still looking for some additional relief. And so I think this will give us good information about the benefits of this agent. So I'm excited to have it.

Thank you. And 1 last question before we open up to the audience for questions. And Dr. Donohue, I'm going to ask you to address this one. What other therapies are in development, particularly as it relates to treating symptoms as we all recognize as a huge unmet need for our patients who continually have symptoms?

Well, that's exactly right. And there's a great look for novel or new therapies like this agent. So that's been very, very desirable. Going back to our scheme a little model there of the mucus and what have you, there are some trials with devices. We now know that you could put endobronchial valves in and reduce the hyperinflation. I'm working with actually cryotherapy, which will go in and you apply it to the airway through a bronchoscope, you can reduce the mucus. Also, when using that slide, a lot of the old -- a lot of drugs directed at the neutrophil, if you look at the slide Verona gave on the cell, Slide 36, for example, you see all those neutrophils and the effects of PDE4, many companies now have gone back and looked at agents that are effective orally or otherwise against the neutrophil, and you have to do that safely because the neutrophil is essential to our immune system. But if you can lower the numbers, perhaps, you can have an effect. Other symptoms, Don mentioned, cough and there's a new series of drugs that are effective on the nerve C fibers and directed at cough. So there's just a lot going on. Those drugs really are a long way out yet in those techniques. The only thing really, I think on the immediate horizon, and please correct me if I'm wrong, is this drug, which I think is really the farthest long in development. That's why I keep mentioning, I'm excited to have it. But there's still things going on that are very exciting. And of course, we'll ultimately have some novel mechanisms of actions to deal with the irreversible pathways through the regenerative medicine. That's what we're working with at the Alpha-1 Foundation against emphysema.

Thank you. And I'd like to thank the panel for these questions. So now we will open the call to Q&A from our participants. We're going to ask that you keep your topics to the pulmonologist area of expertise, like Tara and I will be happy to address questions about the clinical data and the Phase III design. For any questions that are company-specific or outside the panel's purview, our IR team will be available to respond after this call. With that, operator, we are ready to take the first question.

[Operator Instructions] And your first question comes from the line of Tom Shrader from BTIG.

Congratulations. I love all the data on the story. It's always interesting to hear why you guys would use the drug. I had 1 question on the Phase III, maybe from the company as well as the pulmonologist. The fact that the FDA agreed to a single dose and actually a dose at the high end, I think, certainly speaks to the safety. Can you talk about what piece of data was most supportive of both 1 dose as well as kind of a relatively high dose. I think it's the second highest dose you ever tried. Just your thoughts would be great?

And Tara, can you respond to that first, and then we'll open it up for the pulmonologist?

Sure. You're absolutely right. The safety -- we couldn't distinguish between doses from a safety perspective. And from an efficacy perspective, in both studies, we did see that clear separation from placebo or placebo plus tio over the entire 12-hour dosing interval consistently with the 3-milligram dose.

From our panel of experts, any comments that you'd like to make? And I think the question specifically about why did the FDA allow the higher -- one of the higher doses to go forward? And does that reflect on particularly safety perspective?

This is Jim. Yes, there's -- one of the most important things. I'm now -- I don't do research anymore. I do a lot of DSMBs for asthma clinical research network and NIH studies and industry. One of the things that was very reassuring here is, as Tara says, there's no dose escalation on side effects. Now just very, very quickly, I haven't done the original Atrovent, ipratropium, dose response curve with Dr. Petty, Dr. Gross, Dr. Friedman. The FDA at that time allowed the highest dose to be the dose given. That was -- we studied for 600, and they gave us 500. Subsequently, the rule has changed. You had to show the least effective or an ineffective dose. And then you got usually the dose above it, with some caveats. As long as the 95% confidence interval is met, you don't want to give an ineffective drug. So you began to see a somewhat lower dosing. And now the big controversy was with the drug indacaterol that led to that. So here, I think, just as was mentioned, the 3 was always effective as was the 6, but there was no real benefit of the 6 over the 3. So I thought this was -- I would have agreed had I been on that panel that, that would have been the dose that I would have selected.

Yes. This is Don. I totally agree. If you look at Slide 15, for those that have it available, you see the add-on to tiotropium on the left, 3 milligram is obviously superior to the lower doses. And it achieves the MCID and symptom relief shortness of breath. So maybe it's a slight change in the direction of the FDA. But clearly, this is the right dose based on Phase II data.

This is Jill. I think there's a couple of things. Not only is it the symptom relief, but the augmentation of the FEV1. And finally, I think it's a shout out from the FDA that just how safe they believe this drug is to allow one of the higher doses to be the single dose to be tested in Phase III.

And your next question comes from the line of Lucy Codrington from Jefferies.

I've got a couple. Firstly, and apologies if I missed this, but the -- will we be assessing the residual volume in the patients in the Phase III or in the subset of patients? Secondly, and again, I may have misheard, but I believe you said the MCID is generally viewed to be around 100 mL improvements in FEV1. So with the Phase III powered for slightly less than that, could we have an issue where the Phase III is positive but you don't actually achieve what many would view to be the MCID? And then finally, just in terms of -- it's been quite clear from this presentation that there's an important need for new anti-inflammatory agents. Therefore, how important are the exacerbation data when you're going to be using this drug in the real world setting? And with the acknowledgment that some of these may have to come in later trials such as -- that might not be achieved just in the 24-week extension?

So I'm going to just open up first and turn it over to others for comments. So we were not remeasuring the [ residual ] volume in this particular study. It's very difficult to do residual volume measurements in these large studies because it requires a lot more complicated technique. So we would anticipate if we do that, and we have seen significant changes in residual volumes in our other studies and also inspiratory capacity from that matter. Just to comment on the MCID for 100 mL, I think that is oftentimes the opinion that's recognized. It's not a validated MCID, and I'll ask other people to comment about that. And as far as the anti-inflammatory data, I think what's really, really promising for us is that the FDA clearly left it there open for us to be able to look at a label inclusion of our exacerbation data if they see data that is significant from that perspective. It's very rare when the FDA does that. They usually require 2 separate studies to look at exacerbations, but they clearly have told us that they will be looking at the data, and at that time, they'll consider from a label perspective. So Tara, first, let me ask you if you'd like to comment anything further on the MCID or the residual volume or the anti-inflammatory data before we move on to our experts?

Sure thing. On the magnitude of lung function improvement that we're expecting or looking for out of our Phase III program, remember, we're going to have a significant number of patients in the Phase III program, 50% on background LABA or LAMA monotherapy. And so other programs have done something similar, although it's even when -- with a lower cap on the number of patients that have been allowed in on background therapy, typically 30% to 40%. And in those instances, we've seen improvements in FEV1 down to between 30 and 60 milliliters for those drugs that are approved in on the market. And I'm thinking specifically [indiscernible] as 1 that really struggled, I think, to show a lung function improvement added on to other therapies. So there's certainly, I think, some room to show a treatment effect even if it's around 100 milliliters or slightly less than that, but it's meaningful for patients. And even so, I think it was Jill that mentioned that patients don't feel this milliliter improvement. They don't know if they're improved 60 milliliters or 80 or 180. They feel the symptom improvement and they feel the quality of life improvement. And that, I think, is some really, really strongly supportive data for our drug.

So perhaps really to start, Dr. Donohue, do you have any comments you'd like to make about those questions? So remember, primarily around the MCID and I guess the anti-inflammatory data.

Right. So Lucy had 3 questions. First of all, Lucy, on lung volumes, because of variability between the residual volume, the TLC and the ICE, the FDA does not consider a regulatory endpoint. They felt that lung -- and I'll tell you, I took with [ Joel Cooper ] and a couple of other people, the bronchos technology, which we try to power on a change in residual volume. This was a bronchoscopic procedure where you puncture holes in the airway to improve lung function. And the FDA said that the volumes have not been vetted across centers. Now the inspiratory capacity is widely used. It does respond quite quickly. It does have some loose correlates with dyspnea, but it's certainly not a regulatory endpoint, it's more exploratory or whatever. Secondly, Lucy, you asked about the 100 mLs. A number of years ago, the FDA and some academics convened a panel in Miami, I think, under Saint Louis University, Katherine, I can't remember her name. But anyway, this was published in a supplement to the journal of COPD, where Don Mahler, of course, came up with a change of 1 for the TDI/BDI, Paul Jones, minus 4. And I was asked to do the FEV1. And so I came up with the 100 milliliters. That's really the trough for a long-acting agent, and that could be an 11 hours and 55 minutes or 23 hours and 55 minutes. That correlated by -- with anchoring techniques. The statistical techniques that were used by Gordon Guyatt did not apply. That number became absurd if you did the standard deviation squared. So the 100 mL still works pretty well from mean value. Then 100 is always a drug against the placebo. When you come into the rule of combinations, the first drug combination approved in the United States was the drug -- is the drug Combivent or Duonebs, and there it was 70 mLs was the difference. And so the studies were all powered then on roughly 70 mLs. Now for a triple, the added value of lung function, if you look at the studies where the steroid and things like that were drawn, you can rarely get 40, 50 mLs by a third drug that has any bronchodilator. And then lastly, you asked about exacerbations. Right now, we get exacerbations in the safety column in a 48-week study that will be part of the FDA Phase III design. We'll have exacerbations, but that's different. That's the safety end point. The actual design of the study is quite complicated. It requires 2 1-year parallel studies in an enhanced population. So I think you'll get some information the company will on exacerbations, but they'll have to do additional work to get the claim. Thank you.

Dr. Mahler or Dr. Ohar, anything you'd like to add?

No, I think Jim nailed it there. I don't -- he got all 3 questions and completely agree.

And our next question comes from the line of Adam Walsh from Stifel.

I have several questions. The first, Dr. Donohue, I think you had mentioned that 1 place that this drug might fit well is patients who maybe started on a LAMA but have a contraindication to a LABA. Do you know what proportion of patients that would be?

No. There isn't many. Actually, I studied this in the paper for the drug Anoro with [ Don Sinn ] from Manchester, England. And we -- first of all, I'm very -- one of the reasons that you heard, Don mentioned it too, that pulmonologists like the LABA/LAMAs because there is a responder rate. So it's about 85% for both the LAMA and the LABA for in terms of clinical endpoints. But 15% don't respond. But if you combine the 2, you're going to get a response. So that needs to -- we need to do more work there. I keep asking if I can have the data back and reanalyze it, but that's kind of the ballpark, the responder to a LAMA. And again, I did the pivotal study that the FDA looked at. Don and I were there that day at FDA. We had about an 80% response to tiotropium. So that's usually -- and that's a 12% 200 mL increase, okay, Adam, on that. So I think that's -- it's pretty good. Now the question sometimes comes up if that -- if your patient that you're going to put the PDE3, 4 on top of is a nonresponder to tio, how does that work? Well, it's not very common. That's really all I can say. And the LABAs and LAMAs, I've done a number of meta-analysis comparing them. They're very comparable. The LAMAs are better on 2 endpoints, and it's only slightly. You only pick this up when you have a 16,000 patient database. The LAMAs are better on exacerbations and LABAs don't have an indication there. And the LAMAs have an improvement in mortality signal, everything else is a wash, quality of life, dyspnea, hyperinflation, they're all very close, rescue albuterol use. So there is -- and you hit on something that's very important though, there are nonresponders to LAMAs and LABAs. And that is -- that's why, as a doctor, I'd like to have the privilege of just really working with the drug and the patient to apply the right one that works. Thank you, Adam.

I'd like to comment on that as well, though. Even with the people who are on dual bronchodilators and who are responders. Remember, this isn't in all or none phenomena, where suddenly you're all better because you're a responder. So if you get a couple of hundred mLs, you're starting out with patients who have an FEV1 that's 50% of predicted or lower. And so they still have plenty more room for additional bronchodilatation. And so I think that's where the concept of this being a great add-on therapy because of the very high percentage, maybe as high as 30%, 40% of patients on these drugs remain symptomatic even on dual therapy.

Yes, this is Don. I guess I would address the question as contraindication to LABAs. I don't see that in my practice. In fact, if there was, then we would be concerned about using a short-acting beta agonist like albuterol as rescue medicine. And in very rare situations, albuterol is used as either monotherapy or in combination with ipratropium as part of our rescue recommendation. So I think that the question addresses a very small percentage of patients, if any.

That's helpful. And then in terms of utilization, as it pertains to the outcome of the Phase III study, what do you think the delta would be if the drug hit on the primary endpoint of FEV1, but didn't have any impact on the secondary such as symptoms versus hitting both the FEV1 and the symptoms? How much of a delta do you think utilization would capture there?

So any of our experts want to comment on that?

Yes. I guess, that's a tough question to answer. It's obviously speculative. Remember, the design that a percentage of patients are already going to be on a LABA or LAMA, which would affect the difference with add-on therapy. So yes, the targets have been adjusted based on that. But I think it's very hard to say. And then the analysis would include responders based on the minimal clinical important difference. Now that can get a little complicated. But sometimes that's another approach to look at outcomes when additional therapy is involved. So I guess my short answer would be, let's see what the evidence shows.

I agree with Don. This is really an important area. The FEV1 and as Paul Jones has said many times, the SGRQ are not necessarily -- they don't necessarily go the same way. For example, we had salmeterol, we had 2 doses, 50 and 100. 100 was better on lung function, but it decreased the quality of life. So chosen dose in the United States when Kathy Rickard and I were involved and all that stuff was 50. Indacaterol was the same thing. I published a meta-analysis on it in a couple of them, where we had 300, 600, 150 going down to the American dose. But anyway, 300 and 600 were much better on lung function. But the 150, which is the dose worldwide, but not U.S. and Canada, was best on the quality of life. So they measure different things. Now when you do a meta-analysis, and I had the privilege of having the 16,000 database of Novartis, when you put them in that, a huge database, they all trend in the same direction. And from that, we were able to give payers, based on the primary data, which is essentially lung function, we were able to give them some indication that it probably would change the exacerbations and other things. But that, again, that was based on just speculation. So in general, they measure different things, even RV and FEV1 measure different things, and they can -- the magnitude of the change can be quite different. That's why we do all these things, and -- because they -- sometimes, you can't just rely on one. Now what you had mentioned though, is very important because if you look at Daliresp, when it went through the FDA. At that hearing, the FDA wanted it to be evaluated as a bronchodilator. And again, there's not much PDE4 receptors on human airway smooth muscles. So it only increased lung function 50 mLs, but again, it had a nice exacerbation effect of about 17%, 18% reduction. So you can lose on secondaries. And again, two, you have to understand the -- let me just take you to St. George's. We couldn't -- we never hit minus 4 and I did the pivotals with Don Mahler with salmeterol, with tiotropium and what have you. The first monotherapy that came very close was indacaterol. And it was a minus 3.6. And they allowed the company to put that in their product information. Now combinations will always hit the minus 4, like Anoro, Stiolto and what have you. So it's uncommon to have symptoms and FEV1 go in other directions, but it can happen. It's not necessarily in a study that's possible to that effect. It doesn't necessarily, though, kill the agents and take away the efficacy. If it hits FEV1, it's probably still the best thing to hit.

And I just wanted to remind everybody about the data that Tara showed previously, that we are very confident in our symptom, on quality of life data. The changes we've seen have been unprecedented than previously in a short period of time and have been consistent across every study we've seen where we see these significant and clinical relevant changes in symptoms and in quality of life. So we are confident that we'll be able to continue to show these in the Phase III studies. Go on with your next question.

I hate to hog all the time here, but I do have 2 more quick ones. One for the clinicians on YUPELRI, a nebulized LAMA. Just can you give us some idea of whether or not that's a kind of -- are there any parallels with how you see nebulized ensifentrine uptake and the way that drug has been used? And then finally, 1 for the company. Any update on the timing of the Phase III enrollment and completion in the COVID environment? And any update to the total cost of the program?

I'll jump in to YUPELRI. And so YUPELRI is a great product. And so it provides a LAMA in a nebulized format, as Jim has alluded to. And Don did actually the seminal work on [indiscernible] in strength, patients' ability to inhale. And I have alluded to the fact that many older frail patients are just not able to use dry powders. They're not strong enough, and they're not coordinated enough to be able to use metered-dose inhalers, and it's really not just limited to those patients. If you look at studies involving health care workers, both physicians, nurses and respiratory therapists as well as patients, you'll find that 60% to 80% are unable to perform all the steps required in metered-dose inhalers, dry powders, et cetera. And so I think some of the key issues with the uptake of YUPELRI or related to third-party payers and contractual agreements, and so -- and those are always barriers, but I think this is a team that has been, as they say, around the block in terms of those kinds of issues. And so I would anticipate that this would have -- this will be a great product, and its niche would not only be in that frail group, but kind of across the board.

Yes. This is Don. In my practice now, if I am prescribing nebulized therapies, I would use a nebulized LABA. I would use a nebulized LAMA like YUPELRI. And then typically, I'll use nebulized budesonide because these patients are group D frequently, that is high risk for exacerbations. If ensifentrine is approved, I would envision replacing the nebulized budesonide or ICS with ensifentrine because of its dual mechanism of action and safety profile than inhaled corticosteroid. So that's 1 group of people that I would consider this therapy as triple therapy via nebulization replacing ICS.

This is Jim. The other thing to keep in mind is both YUPELRI and your drug is given by old jet nebulizer. That means that everybody can use it for all the products. Now you'll have to do the studies to make sure there's nothing -- no interaction, which could change the dose. You can't combine it with [ Emax long hailer ] because that has an eFlow device. And again, how this will work in the eFlow, they'll have to do that work and see. But it's a very attractive, I think, combination. If it doesn't have any interactions, which we need to know about with YUPELRI, that's one of the things I'm very excited about having. Having this plus YUPELRI really is very desirable, I think, and as well as for the reasons that Don and Jill mentioned.

I want to come back and also mention that even people who are on dry powder or metered-dose maintenance medication, about 80% of them have a nebulizer machine at home to use for rescue albuterol. So this would not -- the use of this drug would not necessarily require patients to invest in additional equipment, again, learn equipment that they're not used to, patients have this equipment at home.

So to address the other questions about the -- so the cost, we'll take off-line. Tara, would you like to update the timing and COVID situation?

Sure. I'll start with the COVID piece. So we, of course, have been monitoring this carefully and proactively planning around this. I think we have 1 of the most experienced operational teams that you could possibly have in the COPD space. And these guys have experience planning around the volcano interruptions and tsunamis, and COVID is another disaster that we're proactively addressing there. So we have designed the program prospectively to manage and mitigate potential impacts related to COVID and have built is in upfront. So I think we're confident even through a number of situations that we can manage these impacts and get through the program with these patients safely and with our data intact.

And as far as timing of the program?

Yes, we're looking at later this year, planning around the end of third quarter, beginning of fourth quarter.

Thank you, Tara. I think we're ready for the next question.

And I take our next question, and it's from the line of Liana Moussatos from Wedbush Securities.

What's the argument against frontline use since you get bronchodilator and anti-inflammatory and its space, and they're going to have either MDI or DPI and nebulize to deliver?

There is no argument against. I think that's what I presented early. So I think there is a certain number of people, it's going to be a first-line therapy.

Why not for everyone?

We -- this is Don. Right now, we consider standard of care to be either a LAMA or LABA/LAMA for both B and D. I would like to see head-to-head with ensifentrine against either a LAMA or LABA/LAMA to put it as a first-line therapy. In theory, you're absolutely right, but let's see the evidence to suggest that it should be first line.

And just remember, on our large Phase II study, where we used tiotropium background, so when you look at the placebo, tiotropium on, you can see the difference. Now certainly ensifentrine as regard with [indiscernible] in that study for that perspective. I think we're ready for the next study.

I agree...

Go ahead, Jill.

I think that there is preliminary data that it is effective against head-to-head against tiotropium and Slide 16 shows that. But I agree also with Don's point that for this therapy to make it into the guidelines, we're going to need more than 1 study. And I think that's really in a nutshell. But I think your question is right on target.

And our next question comes from the line of Ram Selvaraju and he's from HCW.

This is Blair Cohen on for Ram. Just a couple of quick ones for me. Where do you see a more important therapeutic impact from inhibition of PDE3 or from the inhibition of PDE4?

Tara, I don't know if you want to talk about this first, and then we'll open up to our experts.

Well, that's a really interesting question because what we found is that it's very difficult to separate out the 2 when you have a dual therapy. For instance, there are some effects, even bronchodilation duration of effect and anti-inflammatory effects that appear to be augmented with the inhibition of both rather than just one.

Any comments from our expert panel?

Well, the -- in the dual agent, the phosphodiesterase 3 is working as a bronchodilator, and that is an airway smooth muscle. The 4 effect is the anti-inflammatory is a little bit hard to measure. The FEV1 really is picking up a good part of it. It's both, but mostly the 3. Remember, the oral phosphodiesterase 4 inhibitor, roflumilast, Daliresp, but you're lucky to get 50 mLs. The performance here is way better than that. So I suspect the regulatory endpoint of lung function is driven mostly by the -- you would expect it to be more than 3 than the 4, but others, with symptoms perhaps and perhaps exacerbations later, probably the 4 is much more important. So they work together, as Tara mentioned.

Yes. This is Don. I think it's impossible unless you could separate these out. And 1 approach would be if you had a blocker to either the PDE3 or the PDE4 components. I'm not aware that this exists, but 1 might design a blocker if there was significant interest in identifying which component provided which particular benefit. But from a clinical perspective, it's attractive that it has dual mechanism of action, which is unique.

I guess the only comment I would add to that is the idea of it's putting patients characterized by their eosinophil counts that would be indirectly related to the PDE4 effect versus the PDE3 effect. And seeing patients with higher eosinophils have a greater or lesser response. But I think that studies to be done way down the pike.

Did you have another question?

Yes. And do you think this drug could potentially be deliverable using an existing device? And is there any meaningful advantage to using a soft mist inhaler for this drug?

So Tara, I don't know if you want to comment on our formulations.

So can you repeat the first part of that question again?

Sure. Do you see this drug being potentially deliverable using an existing device?

An existing nebulizer or handheld?

Like breath-hailer Respimat, LTAP.

Certainly. So we have completed Phase II studies, both with the dry powder formulation using a mono-dose dry powder inhaler, that is a standard kind of off-the-shelf inhaler to prove the concept that we could be delivered through this dry powder formulation and also through an inhaled suspension through a metered-dose inhaler. We have not looked specifically at a soft mist inhaler, but right now, we haven't seen any barriers towards any different type of inhaled technology to deliver ensifentrine.

Okay. Was that the end of -- did you have another question? Or does that complete your question?

That's it from me.

[Operator Instructions] And your next question comes from the line of Edward Thomason from Nplus 1 Singer.

Three questions, if I may. One for Kathy. Sorry, can I just check my line? Can everyone hear me okay?

Yes.

Yes, we can.

Fine. So 1 question, please, first, Kathy. Just do you mind talking or expanding on just the past evidence, the data on improvements on LABA as a monotherapy?

So are you specifically asking about the long-acting beta agonist, correct?

Yes, yes. And ensifentrine as an add-on to LABA, yes.

So in many of our studies, we didn't have a lot of patients on LABA alone. We don't particularly think that's problematic because all patients are allowed to use the short-acting beta agonist. And we wouldn't expect to see any particular difference between that and the long-acting beta agonist. We've had a small number of patients, and we don't see any significant problems with adding it on to the LABA. Tara, do you remember any particular data that we can -- that you'd like to discuss?

Sure. To get a little specific there, we did complete 1 study where we added ensifentrine on to either albuterol or ipratropium so checking, again, the add-on mechanism to the beta agonist. And what we found was that ensifentrine added on to albuterol increased the peak FEV1 over 0 to 4 hours by 116 milliliters versus albuterol alone. So we see a similar delta added on to beta agonist therapy that we do see added on to the muscarinic antagonist class. So we don't see that we're going to really see any difference between patients coming into our program on muscarinic antagonist or a beta agonist.

Kathy, this is Jim. Can I -- I'd like to comment on that. The -- or in the asthma national studies about asthma safety with LABAs, the tsunami in Japan destroyed the source of all the formoterol in the United States. So it became quite hard to get LABA monotherapies. We had salmeterol, but that's basically disappearing indacaterol. But of course, the dose in the United States is very different than the worldwide dose, which is quite effective, the 150. So there have been problems with LABAs. Most of the LABAs by themselves are nebulized like BROVANA or PERFOROMIST. But in the -- it's still a very good question because you look at the background of some of the formulations of dual therapies like aclidinium plus formoterol from Circassia, AstraZeneca, the Pearl Astrazeneca, Bevespi, formoterol is a great drug. So that's a good question. It's just the United States has real problems with formulations because of Novartis withdrawing formoterol monotherapy off the market. So that's part of the reason that everything is almost LAMA monotherapy.

Okay. And then 2 questions to the panel, please. So one, can I just get a bit of commentary on the recent most changes to the GOLD guidelines, where they're recommending a dual LAMA and a LABA to be used in the first line? And whether you see that being used on the real world setting? And then the second question, just talking about the inappropriate use of ICS and even when not -- it's not actually being used in patients that have eosinophilic or exacerbation symptoms, we're still seeing a high use of [ instant ] inhaled corticosteroids? So that's my 2 questions, please.

Kathy, I'll answer it. The LABA/LAMA, I think Don also and Jill said this, really should be the first-line therapy. And about 4 years ago, when the FLAME study was published in the New England Journal of Medicine, the editor had me write an editorial on this. I felt and still do very -- pretty strongly that I prefer a LABA/LAMA as first-line therapy, and Don Mahler mentioned that many pulmonologists do. And the reasons for it are twofold. One is that there's no escalation in safety in the rule of combinations. All those studies that we've done, we've never seen any marked increase or really additive effect and side effects. There is an almost additive or an additive kind of effect in efficacy on lung function and other significant endpoints. So again, there is no safety, and there's a marked increase in efficacy. I mean no matter what dual agent you look at, I think what do we have about 5 of them now, you've always get a marked increase in lung function of the 2 over 1. You also often will hit the secondary. So from the efficacy and safety point of view, I think that's -- it's almost a no-brainer. Then lastly, the cost wasn't very different, between the companies made them reasonably close in terms of cost. And so I think it's -- and again, there's that theoretic thing that I mentioned, but I can't prove it about the nonresponders that putting 2 and we'll make the patient respond at least somewhat, but that's not too important. It's the efficacy. The 2 always win over 1. And the safety is no escalation. So that's -- therefore, I prefer the 2. I think Don did too, and I think Jill does over 1. And if we do, do a 1, it's a monotherapy LAMA.

This is Jill. I want to put in a dissenting view. I agree with Jim in terms of the 2 versus 1. I think you mentioned do people follow guidelines was part of your question. And also, you ask about LABA ICS. And no, that most of COPD is actually treated by primary care doctors who believe that the GOLD guidelines are guidelines for purchasing gold bullion for their retirement, seriously. And so there's a real lack of uptake of the theory of the treatment of COPD and the reality of treatment of COPD. And to that end, the dovetails with the concept of use of ICS LABAs because many times doctors don't know the difference or can't tell in a patient, whether this patient has COPD or asthma. And with a LABA ICS, you nail both of them. The problem with that is, as Jim and Don and I think I have all pointed out during this conversation is that there's that issue of the pneumonia signal associated with the ICS. And so you have to weigh that versus any effectiveness of the ICS. So that's why the GOLD guidelines say, hold the ICS for patients who are going to benefit most. And there's a ton of studies that show that the people who benefit most tend to be the people who have frequent exacerbations or -- and/or elevated eosinophil counts.

There are currently no further questions from the phone lines.

Well, we appreciate all the pulmonologists' variable prospectives shared on today's call. It's clear that there remains a high unmet need for patients living with COPD and we believe that ensifentrine's unique dual mechanism action will support issues as a key treatment for COPD patients. Just to remind you of the data we talked about today, there's a large COPD opportunity and many patients still are symptomatic despite the current therapies available. Ensifentrine has a unique profile with the first novel class of bronchodilator in COPD in over 40 years. Our results from our 16 clinical trials, including 2 Phase IIb studies have demonstrated its unique effect on efficacy and safety. And remember that the safety profile is similar to placebo, involving over 1,300 subjects. We have a well-validated demonstrated path to U.S. FDA approval. And our team has developed and commercialized many leading respiratory products. We continue to be very encouraged by its benefits on lung function symptoms and quality of life as well as a favorable adverse event profile, and we look forward to commencing our Phase III clinical program later this year, subject to securing additional funding and keeping you updated on our progress. We thank everyone for joining us today. I'd like to specifically also thank our expert panelists for joining us today. And operator, that concludes today's call.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may now disconnect.