Surrozen, Inc. (NASDAQ:SRZN) Q4 2022 Earnings Call Transcript

Surrozen, Inc. (NASDAQ:SRZN) Q4 2022 Earnings Call Transcript March 25, 2023

Operator: Good afternoon, and welcome to the Surrozen Corporate Update Conference Call. My name is Josh, and I will be your manager for this call. I will now turn the call over to Craig Parker, CEO of Surrozen to begin the call.

Craig Parker: Thanks, Josh, and thank all of you for joining us today for this important corporate update. As Josh said, I’m Craig Parker, CEO of Surrozen. And with me today is Chuck Williams, the Chief Financial Officer at Surrozen. We’ll be providing corporate and R&D pipeline updates today and will then address questions. Slide 2. I’ll be making forward-looking statements. Please consult our SEC filings, in particular, our 2022 annual report on Form 10-K for a full discussion of our risk factors. Slide 3. As some of you know, Surrozen is the preeminent innovator in using the Wnt pathway, the body’s own physiologic mechanism for tissue repair to selectively stimulate tissue regeneration in a broad range of diseases. We do this through our proprietary platform and technologies that combine an understanding of Wnt pathway biology in specific disease settings with advanced antibody engineering techniques and proprietary antibody technologies.

Our vision is to design and develop tissue selective antibodies that have the potential to regenerate tissue in many severe diseases. It’s this targeted approach to Wnt modulation and the extremely broad potential therapeutic applications that distinguish our approach and our technologies. The ultimate clinical promise of our approach is disease-modifying benefit. Wnt signaling plays an essential role in regulating many biological processes, including regenerative responses to tissue injury, and we see myriad opportunities to regenerate tissue for clinical benefit. We’ve invented several novel multivalent antibody-based approaches to selectively modulating Wnt signaling and have advanced to into the clinic. We believe that the Wnt pathway’s broad physiologic role portends a role for Wnt therapeutics in a wide range of severe and acute diseases.

Our approach overcomes a significant limitation to most regenerative medicine approaches that are limited by availability of donor tissue or long-term viability. We’re currently focused on 2 key clinical areas: severe alcoholic hepatitis with our candidate SZN-043 and inflammatory bowel disease with our candidate SZN-1326. Today, we’ll provide you with corporate and pipeline updates, including anticipated time lines for our lead clinical programs, our prioritization efforts for the research pipeline, updates on our partnered program with Boehringer Ingelheim, and our expectations around cash runway as we look toward key inflection points in our lead programs. We’ll also provide an overview of our initial evaluation of the transaminase elevations observed in the Phase Ia studies and our approach to advancing both lead programs.

In November, we disclosed several adverse events observed in clinical trials that had commenced in 2022. One of the studies, the Phase I single ascending dose study for SZN-1326 was voluntarily paused pending further evaluation of Grade 3 transaminase or liver enzyme elevations. We’re excited to be able to update you on progress for both SZN-043 and SZN-1326 Phase I clinical trials. Both are currently open to enrollment. For SZN-043, we’ve enrolled our first patient, and we’ll provide more information later in the call. Slide 4. If Wnt biology is so promising, why has it taken decades to drug this pathway. There are many technical impediments. Wnt proteins themselves are insoluble, promiscuous and not manufacturable. So a typical recombinant native protein strategy is just not possible.

Surrozen’s platform technologies and strategies have helped us overcome all of these limitations. Our candidate molecules are full linked biospecific antibodies that have desirable drug-like properties such as solubility, stability and manufacturability. They’re also highly targeted to tissue-specific receptors. Importantly, we’re mimicking a normal physiologic response, so our antibodies in a selective way are able to do what Wnt pathway proteins do in all of our bodies in many tissues, either to maintain the tissue or respond to injury. The novelty and breakthrough nature of our work is validated by our strong publication record and high-impact peer-reviewed journals, including science, nature, cell chemical biology, nature scientific reports and nature communications.

We have filed or licensed over 20 patent families related to our key discoveries involving the Wnt pathway and its modulation. We recently received notices of allowance from the United States Patent and Trademark Office for 2 patent families assigned to Surrozen related to the SZN-1326 program. We think the breadth of our scientific discoveries and related patent application and claims can establish a dominant position for us in the use of antibody therapeutics to modulate Wnt signaling. Slide 5. Our proprietary technologies have led to 2 different lead programs that entered the clinic in 2022, the licensing of the lead development candidate, SZN-413 for treatment of retinal diseases to Boehringer Ingelheim in the fourth quarter of 2022 and a focus on 2 discovery pipeline programs for cornea and lacrimal gland.

Our research programs focus on indications of high unmet need with no or few available treatments, including a group of ophthalmologic indications that we’ll tell you more about. We’re excited today to provide an update on advancing both of our clinical programs, SZN-043 and SZN-1326. Since our announcement in the fourth quarter of 2022 regarding transaminase elevations, we’ve completed numerous studies to understand the mechanism of transaminase elevation seen in this SZN-1326 programs and also at a lower grade in the SZN-043 program. We’ll provide you with an overview of our efforts to date and clinical program plans. For SZN-043, we’re really excited we’ve advanced to the second phase of the study in chronic liver disease patients following completion of dosing at 2 dose levels in healthy volunteers.

For SZN-1326, we will progress our Phase I single ascending dose study at lower doses, pursuing a dosing strategy frequently applied to first-in-class antibodies referred to as MABEL or minimal anticipated biological effect level. Additionally, we will look forward to the opportunity to advance another development candidate in 2023 in collaboration with our partner, Boehringer Ingelheim, with the potential to identify the final Frizzled4 targeted development candidate by year-end, a milestone that would trigger a payment to Surrozen. Finally, we anticipate that our prioritization and restructuring will result in a cash runway into the second half of 2024, allowing us to achieve multiple key milestones and catalysts. Slide 7. SZN-043 is our bispecific multivalent antibody that mimics the activity of R-spondin but importantly, is specifically targeted to hepatocytes via its ASGR1 binding.

SZN-043 specifically activates Wnt signaling in the liver, resulting in hepatocyte proliferation, liver regeneration, improvement in liver function and reduction in fibrosis. We think the biological rationale and preclinical data that support the concept of activating Wnt signaling for the treatment of liver disease — severe liver disease is compelling. We developed a data-driven clinical plan to align the molecule’s pharmacology with specific disease pathologies and advance into clinical trials in 2022. As mentioned, we observed some mild-to-moderate adverse events in the first 2 dose cohorts, which we’ll describe in more detail. Importantly, these observations did not impact our ability to advance into the next stage of the Phase I program in liver disease subjects.

We’ll describe our planned next steps and the significant opportunity in severe alcoholic hepatitis. Slide 8. It’s important to point out that our SWEETS antibody platform on which 043 is based allows for cell-specific targeting of the Wnt activating mechanism. SZN-043 utilizes a well-characterized hepatocyte-specific receptor, ASGR1 to target 043s activity to hepatocytes. Our SWEETS technology mimics the activity of a naturally occurring protein R-spondin. R-spondin’s contribution to regeneration is well described, and we focused that its activity on hepatocytes with our technology. We’ve confirmed the cell-specific Wnt pathway effects of the molecule and our animal toxicology studies showed no adverse effects up to 125 milligrams per kilogram dose level.

Let me explain why we think severe alcoholic hepatitis is the right indication for the molecule and for Surrozen. Alcoholic hepatitis is a severe clinical entity characterized by acute onset of jaundice and coagulopathy in patients with acute — with alcohol use disorder. The incidence of alcoholic hepatitis is increasing over recent years. Short-term mortality of severe AH remains very high. 20% of patients with AH die within 30 days of admission to the hospital, and 30% die within 90 days due to hepatocyte loss and lack of sufficient regeneration to overcome that loss. The medical management of alcoholic hepatitis has not evolved substantially in the last 2 decades with multiple potential therapeutic agents tested without success. There are no approved drugs indicated for severe alcoholic hepatitis.

Corticosteroids remain the only established treatment for AH but are contraindicated in more than half the patients. Liver transplants often are denied due to alcoholism. And even if available, transplants are limited by donor organ availability, cost and limitations on medical centers with transplant capabilities. Hospitalization rates are very high in severe alcoholic hepatitis and represent about 130,000 hospitalizations per year. People with severe AH are typically admitted to the ICU. So this is an identifiable population with an extremely high unmet need. We are also aware that alcohol consumption increased by over 30% during the pandemic and hospitalizations also increased during the pandemic for alcoholic hepatitis. We think that the critical medical need in this population, the dearth of novel approaches and alignment of our mechanism with the disease pathophysiology is reinforced by an award to Surrozen of a several million dollar NIH grant for this program.

Importantly, hepatocyte regeneration is known to correlate with improved survival. Furthermore, we can utilize surrogates for response and survival, such as the Lille and MELD scores to assess early signs of clinical benefit. Both of these tools are using clinical practice to assess response to treatment, prognosis and eligibility for transplant. They are objective and are calculated using common laboratory tests like bilirubin. The Lille score at 7 days is a well-characterized marker of disease severity — severity that is highly correlated with 90-day survival. We expect 90-day survival to be the approvable endpoint in a registration trial. Because of the disease severity and unmet medical need, we believe there’s an opportunity for favorable regulatory treatment such as breakthrough designation and a potentially rapid approval pathway as seen in other grievous diseases.

Slide 9. We’ve published data from multiple rodent liver injury models demonstrating that SZN-043 rapidly proliferates mature hepatocytes resulting in functional improvements and a reduction in fibrosis. These publications and abstracts can be found in the Investors section of our corporate website. The efficacy of SZN-043 spans injury models specific to our initial indication of alcoholic hepatitis to models of fibrosis that could ultimately provide translation to additional liver indications in the future. Slide 10. We’re excited to have completed 2 cohorts of patients in the Phase I single ascending dose study in healthy volunteers, and we’ve enrolled our first patient with chronic liver disease. Following the outcome of the mild-to-moderate TA elevations in the first cohort of healthy volunteers treated at 3 milligrams per kilogram, we enrolled a second cohort in 6 healthy volunteers at a lower dose of 1 milligram per kilogram.

We observed one case of mildly elevated Grade 1 transaminitis that also resolved spontaneously. Following completion of Cohort 2 in the Phase I SAD in healthy volunteers, we opened enrollment in the Phase I SAD in patients with chronic liver disease, and as I said, have enrolled our first patient. We expect to enroll 4 subjects per dose group with an option to expand the cohort. We’re proceeding with lower doses as our preclinical data indicates that damaged tissue may be more sensitive to the beneficial hepatocyte proliferation effects of SZN-043. Patients in Cohort 1 will be dosed at 0.5 milligrams per kilogram. Importantly, we anticipate having data from the Phase I single ascending dose in chronic liver disease patients by year-end 2023.

Assuming acceptable safety, we anticipate moving into a Phase Ib clinical study in severe alcoholic hepatitis patients in 2024, with proof-of-concept data expected to be available in the second half of 2024. In summary, we believe that SZN-043’s mechanism and preclinical data are ideally aligned with our initial target indication, and that SZN-043 has a well-defined clinical development and regulatory pathway. We look forward to advancing our understanding of the therapeutic potential of SZN-043 as we initiate treatment of subjects with chronic liver disease and ultimately, patients with severe alcoholic hepatitis. Slide 12. SZN-1326 is based on our SWAP technology, and we’re developing SZN-1326 from moderate to severe inflammatory bowel disease.

Based on a compelling effect in well-established rodent models of colitis, showing near complete healing of damaged intestinal epithelium, including reestablishment of the critical barrier function using 1 or — just 1 or 2 doses of SZN-1326, we designed a clinical development plan leveraging the extensive experience of other biologic agents in IBD. In contrast to other biologics, though, our biology and preclinical data suggests we have an opportunity to directly drive mucosal healing or histologic remission. In May 2022, we commenced dosing of SZN-1326 in a healthy volunteer Phase I single-ascending dose study. Several subjects in cohort 1 treated at 25 milligrams experienced asymptomatic liver transaminase elevations, including 2 subjects with Grade 3 ALT and AST elevations and 2 subjects with Grade 1 ALT elevations.

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There were no corresponding increases in total bilirubin nor any changes in other liver function markers and no other clinically significant laboratory abnormalities. The transaminase elevations resolved spontaneously in all subjects. No serious adverse events were observed during the study. Although the protocol did not require that we halt the study, we announced a voluntary pause to enrollment in the Phase I healthy volunteer portion of the study in November following this observation — following an observation of a grade 3 ALT elevation at a lower dose in order to give us an opportunity to analyze the clinical data. We have not observed transaminase elevations or any other adversities at doses up to 125 milligrams per kilogram in pilot or GLP toxicology studies.

So these adverse events were unexpected and as such, could not be characterized with nonclinical data available at the time of the observed events. We’ve invested significantly in efforts to understand the mechanism of the TA elevations. Importantly, a better understanding of the nonclinical data and clinical data, combined with a modified dosing strategy, allows us now to proceed to dose additional healthy volunteers in the Phase I SAD portion of the study, which we expect to do in the next few weeks. Our initial rationale for dose levels for SZN-1326 was based on doses tested in multiple models of colitis, and the absence of any observed toxicities preclinically. Such a dosing strategy is informed by the NOAEL or no observed adverse effect level as well as other indicators of activities such as a therapeutically active dose.

In light of the TA elevation observations, we’re now pursuing a dose level strategy with SZN-1326 that, as I said, is commonly employed with agonistic antibodies for first-in-human studies and that’s a MABEL or minimum anticipated biological effect level. Slide 13. So I probably don’t need to reinforce for all of you the remaining unmet need in this significant market. Initially, we’re developing SZN-1326 for ulcerative colitis. Ulcerative colitis is a chronic immune-mediated inflammatory disease of the large intestine that’s frequently associated with inflammation of the rectum, but also extends proximately to involve additional areas of the colon. Nearly 1 million individuals each in the U.S. and EU are affected. Peak incidence occurs between the ages of 15 and 45.

Some patients with UC have persistent disease activity despite medical therapy. And 20% will develop at least one episode of acute severe ulcerative colitis requiring hospitalization. Importantly, although there are medical therapies on the market in development, there remains a significant unmet need in UC for the following. Rapid induction, as current anti-inflammatory biologics can take months to induce clinical remission. Improved efficacy, especially histologic remission as anti-inflammatory biologics achieved clinical remission in less than 50% of patients at 52 weeks, and low rates of histologic remission as low as 20%. Histologic remission has been associated with a better clinical course. Additional mechanisms of action — as an additional unmet need as many patients fail first-line anti-inflammatory biologics and subsequently fail second and third-line therapies.

Slide 14. So what’s the rationale for a Wnt mimetic in inflammatory bowel disease. A major component of the pathophysiology of IBD is an impaired epithelial barrier or gut wall, allowing for exposure of gut microbes to the gut immune system, resulting in inflammation. This inflammation further destroys the epithelial barrier. SZN-1326 can directly address this epithelial barrier dysfunction. It binds to intestinal stem cells in the colon crypt replacing Wnt ligands that in normal circumstances are produced by the stromal cells, but that’s disrupted in IBD. This binding of 1326 leads to proliferation and differentiation of these cells as they move up and out of the colon crypt replacing the damaged epithelium and restoring the epithelial barrier.

We’ve shown preclinical that this results in reduced inflammation and reduced disease activity. Slide 15. In preclinical studies, we’ve demonstrated that 1326 restores Wnt signaling in the damaged intestine, repairs the damage colon epithelium, reduces inflammatory cytokines and reduces disease activity. We’ve also shown that this activity in preclinical models of colitis compares favorably to approved biologics and immunosuppressants. You can find abstracts related to some of this preclinical data on our website. Slide 16. Over the last several months, we’ve identified several potential hypotheses for the transaminase elevations we’ve seen in the clinic and have established a rigorous science-based investigation plan. Our in-house expertise and capabilities have proved invaluable in expeditiously analyzing the available data and conducting additional experiments designed to specifically address key questions.

Let me describe some of these activities, the data and our conclusions. We’ve established additional in vitro and in vivo systems, specifically employing human hepatocytes in order to most closely model human physiology. We’ve observed that our molecules do not have a direct toxic effect on human liver cells in multiple in vitro and in vivo experimental systems. We have not observed a direct effect on ALT or AST in vitro. And importantly, we have not seen any immune-mediated effects using multiple experimental settings, no cell death, no immune activation, no observed hepatocyte killing effect in any of our studies that we’ve undertaken over the last few months. Although 043 and 1326 employ different receptor systems for activity, the downstream Wnt pathway effects are shared.

We think the similarities and the patterns of transaminase elevations between the 2 molecules in light of their different pharmacokinetics is supportive of the hypothesis that activation of Wnt signaling and subsequent hepatocyte-driven liver regeneration is at least partially responsible for the transaminase effects. We’ll continue to investigate additional models for applicability to understanding the mechanism of these TA elevations. I’ll also remind you that this seems to be a liver-specific effect and many of our molecules would not be expected to affect liver cells based on either receptor targeting or route of administration. We’ll be commencing dosing of SZN-1326 in the next cohort of healthy volunteers at a dose of 0.04 milligrams or 40 micrograms.

Assuming acceptable safety in this and subsequent cohorts, we anticipate proceeding to doses up to at least 1 milligram. Following acceptable safety, we anticipate enrolling a proof-of-concept study in ulcerative colitis patients in 2024, with proof-of-concept data expected to be available in the second half of 2024. Slide 18. We have 3 research programs in late stages of lead optimization or candidate selection, 2 wholly owned by Surrozen and 1 partnered with Boehringer Ingelheim. As I mentioned, Wnt signaling plays a central role in tissue regeneration and Wnt responses cell types are found in tissues throughout the body. We believe this broad physiologic role portends a role for Wnt therapeutics in a wide range of severe and acute diseases.

The role of Frizzled4-mediated signaling and blood vessels in the retina has been validated through human genetics, rodent models and our own and collaborators data and publications. We’ve shown that a Frizzled4 targeted SWAP, SZN-413 could fill a unique mechanistic role in the treatment of retinopathies by simultaneously addressing vascular leakage and retinal nonperfusion. In 2 different models of retinal injury, we’ve shown that SZN-413 could reverse multiple manifestations of retinal injury, including vascular leakage and areas in the retina that were not adequately vascularized and areas with characteristic pathologic neovascular tufts. This and other data stimulated interest from multiple parties in an SZN-413 partnership and led us to sign a collaboration agreement with Boehringer Ingelheim in October 2022.

Slide 19. We also have a research program in regenerating cornea. Fuchs endothelial cell dystrophy is a disease characterized by corneal swelling and ultimately vision loss and discomfort caused by excessive loss of corneal endothelial cells. The cause of corneal endothelial cell loss is not well understood, but has a genetic component. Current therapies are limited to endothelial transplant or resection at late stages of the disease. There is a significant unmet need for therapies that mitigate disease progression and/or improve surgical efficacy. Our strategy for treating corneal disease is to specifically activate Wnt signaling in the tissue, regenerate corneal endothelial cells reduce corneal swelling and improve vision. We’ve established a corneal research effort, including in vitro and in vivo models that to date have demonstrated the following: specific Frizzled receptors are expressed in corneal endothelium of both normal and Fuchs’ human donors and can therefore be used in designing and targeting our SWAP molecules.

We can observe Wnt activation through specific SWAPs that enhance proliferation of primary human, corneal endothelial cells in vitro. And we’ve established a corneal cryo injury model to measure the therapeutic effect of activating Wnt signaling in the corneal endothelium. In vivo Surrozen Wnt activating molecules are efficacious in reducing corneal thickness and improving opacity. The next step for our program is to optimize a lead molecule and select a development candidate. Slide 20. Well, let me tell you about another ophthalmologic program that we’re excited about. We’re pursuing a potential treatment for severe dry eye with our SWAP technology. Severe dry eye is characterized by atrophy of the tear producing glands in the eye and insufficient regeneration.

The objective with the Wnt activating approach is to stimulate regeneration of the tear producing cells in the lacrimal gland and restore fluid secretion. We’ve established multiple lacrimal gland injury models in rodents, in which tear production is reduced. One using Intraleukin-1 alpha to promote inflammation-driven injury, the other, a lacrimal duct ligation model that results in necrosis to the gland. An important first mechanistic step in restoring tear production is to regenerate the tear-producing cells in the gland called the acinar cells. We’ve shown that a single injection of a SWAP molecule results in an increase in the weight of the lacrimal gland and a demonstrable proliferation of these acinar cells. So we’re having a clear effect at the cellular level of increasing the number of target cells in the gland.

In the IL-1a induced injury model, we’ve shown that SWAP molecules activate Wnt signaling in the tissue, which leads to an increase in tear secretion. The method for measuring tear secretion in this model is actually the same as that used in clinical trials of agents for dry eye, a phenol red thread. In this model, there’s a statistically significant increase in tear production with SWAP molecules at days 2, 3 and 4. Similarly, in a duct ligation model of lacrimal gland injury, we’ve shown that treatment with the SWAP molecule restores tear production through activation of Wnt signaling and proliferation of acinar cells. Next step for the program is to optimize and finalize a lead molecule for development. We expect at least one of these programs to move forward into development in 2023, potentially in collaboration with a corporate partner.

Both involve local administration of our antibodies to the affected tissue and therefore, would not be expected to have any potential liver exposure liabilities. Slide 21, and I’m going to turn the slide over to Chuck.

Charles Williams: Thanks, Craig. So as Craig outlined, we’ve made significant progress with our programs over the last few months. And I wanted to highlight a few, the things that we’ve accomplished from a corporate and capital structure perspective to establish an even stronger foundation for continued future success. So first, I wanted to highlight, we executed a partnership with Boehringer Ingelheim in the fourth quarter of 2022 to develop a Wnt agonist SZN-413 for the treatment of people with retinal diseases. We anticipate the potential to identify the lead Frizzled4 targeted Wnt agonist candidate by year-end 2023, would trigger a potential $10 million milestone payment. Secondly, we implemented a restructuring in Q1 of this year.

Our efforts were focused on maximizing shareholder value by: one, aligning resources and R&D investments for the 2 lead clinical development programs with a focus on obtaining proof-of-concept data; two, prioritizing investment in the most advanced discovery preclinical programs, lacrimal and cornea; and thirdly, reducing operating expenses with the goal of maintaining a strong balance sheet. Following the corporate prioritization and restructuring activities, we anticipate a reduction in operating expenses, excluding noncash and nonrecurring charges of approximately 15% in 2023 compared to 2022. Cash, cash equivalents and marketable securities were approximately $76 million as of the end of 2022, and we expect our cash runway to last into the second half of 2024.

Finally, I wanted to highlight in the fourth quarter of 2022, we entered into a securities purchase agreement with Continence. Given they decided that they were winding down their fund, they were an overhang on our stock, so we entered into an agreement to repurchase approximately 5.4 million shares of our common stock and approximately 1.3 million warrants for a purchase price of approximately $2.7 million. Following the repurchase, Continence no longer hold any shares of our common stock or warrants to purchase theirs in common stock. We’re excited with the multiple opportunities that lie ahead of Surrozen in 2023 and 2024. We’ve shared some of our key milestones and catalysts through 2024 on this slide. We shared our thoughts on cash runway into the second half of ’24 as we think about our key upcoming milestones and catalysts, and I’ll briefly highlight a few of these.

First, for SZN-043, as Craig mentioned, we’ve enrolled the first patient for chronic liver disease and expect to have data by the end of the year, and plan to initiate a Phase Ib clinical trial in 2024 with potential proof-of-concept data in the second half of 2024. As it relates to 1326, we’ve opened enrollment for the Phase I in healthy volunteers, and we expect to be able to have data by the end of the year, and we’ll initiate a Phase Ib trial in 2024 in UC patients and expect to have proof-of-concept data in the second half of ’24. As I’ve already mentioned, with SZN-413, which is partnered with Boehringer Ingelheim, we expect by the end of the year for them to nominate a candidate which will trigger a $10 million milestone payment, and as it relates to our research programs, we expect to nominate an additional program and/or partner that potential program.

So now I’d like to turn it back to the operator, and we’ll open up the call for questions.

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Q&A Session

Operator: . Our first question comes from Dae Gon Ha with Stifel.

Dae Gon Ha: Congrats on all the progress. Good to hear things are back in motion on your side of the table. Maybe I’ll just start with two before I hop back in the queue. Regarding the 043…

Craig Parker: I don’t hear anything.

Dae Gon Ha: Hello. Can you guys hear me? Hello. Can you guys hear me now?

Craig Parker: Yes.

Dae Gon Ha: Congrats on all the progress. I wanted to ask two questions. One was more of a clarification for the 043 plan. Is there a change in the study plans? Because I thought the Phase I next study was in early cirrhotic patients, but now it seems like chronic liver disease. So was there a change? Or what was the, I guess, the nuance that I’m missing? And based on the liver transaminase observations, can you speak to your confidence or strategy to mitigate similar observations in more hepatically-impaired patients? And then I’ve got a follow-up.

Craig Parker: Thanks for the questions, Dae Gon. So yes, you observed a nuance in what we think are the patients likely to be enrolled in the study. So the general objective of the study — well, the primary objective of the study is unchanged, which is safety. We think that — and cirrhotic patients are chronic liver disease patients. For many etiologies like patients with hep C, for example, cirrhosis is defined by in part a FibroScan score or transient elastography score of 7.5. We’re taking patients with lower FibroScan scores. So they will certainly have chronic liver disease. They will have fibrosis. But whether they have frank cirrhosis, I think we’ll just have to see. So that’s the nuance in the description of the target population that you picked up on is they may have FibroScan scores that are low enough that they would not be considered to be cirrhotics yet, but they would certainly have fibrosis and have hepatic impairment.

Dae Gon Ha: Got it. And what about the hepatically-impaired aspect? How might that be a potential complication for you guys? Or do you have strategies to mitigate that?

Craig Parker: No. We have not identified a specific mechanism where one could mitigate, for example, by co-administering something else. And so I think, as I mentioned, we’ve observed that damaged tissue tends to be more sensitive. And so I think this is really going to come down to the dose response in disease tissue versus healthy tissue. So not — there’s no specific mechanistic strategy at this point based on the data that we’ve generated. But again, it’s possible that at quite low doses, there’s a regenerative response that doesn’t bring with it some hepatocellular injury.

Dae Gon Ha: Okay. Regarding that MABEL aspect you were talking about, so if we think about your 1326 study, how many more dose cohorts are you going to be exploring? I think I heard you say starting with 0.04 but going up to 1 milligram dose. Have you clarified how many cohorts that would be? And kind of by extension, this notion of higher-than-expected exposure in humans versus animal studies. Is that also an effect for your 043 molecule as well?