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Edited Transcript of AKAO earnings conference call or presentation 3-Aug-17 8:30pm GMT

SOUTH SAN FRANCISCO Aug 4, 2017 (Thomson StreetEvents) -- Edited Transcript of Achaogen Inc earnings conference call or presentation Thursday, August 3, 2017 at 8:30:00pm GMT

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* Kenneth J. Hillan

* Tobin C. Schilke

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H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research and Senior Healthcare Analyst

* Jeh-Fei Lin

Stifel, Nicolaus & Company, Incorporated, Research Division - Director

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Achaogen Second Quarter Financial Results Conference Call. As a reminder, today's conference is being recorded. And at this time, I'd like to turn the floor over to [David Errington], Vice President of Investor Relations and Corporate Communications. Please go ahead, sir.

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Unidentified Company Representative, [2]

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Good afternoon. Thank you for joining us today. First I'd like to say that I am extremely pleased to have joined the Achaogen team, and I look forward to interacting with new and existing investors. This is truly an exciting time for Achaogen.

Second, as a reminder, this conference is being recorded and will be available on our website, www.achaogen.com, until September 1, 2017.

Before Kenneth begins, just a reminder that this conference call will contain forward-looking statements. All statements other than historical facts contained in this presentation, including statements regarding our future results of operations and financial position; business strategy; prospective products; potential market size; commercial opportunity; available funding; clinical trial results; product approvals and regulatory pathways; research and development costs; timing strategies for completion and likelihood of success of our activities, including follow-up from our Phase III EPIC and CARE clinical trials evaluating plazomicin; our C-Scape program; and future results of current and anticipated products, are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or qualified or are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Our actual results and the events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements.

For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to our business in general, see our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on March 14, 2017, and our quarterly reports on Form 10-Q, including the one we expect to be filed on August 8, 2017. Except as required by law, we do not plan to publicly update or revise any forward-looking statement contained herein, whether as a result of new information, future events, changed circumstances or otherwise.

This conference call concerns treatments that are under clinical investigation, none of which have yet been approved for commercial use. Plazomicin is currently limited by federal law to investigational use. No representation is made as to its safety or effectiveness for the purpose for which it is being investigated.

I'll now turn the call over to Kenneth Hillan, Achaogen's CEO.

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Thanks, David. Thank you, everyone, for joining us today. On the call with me is Blake Wise, our President and Chief Operating Officer; and Toby Schilke, our Chief Financial Officer.

On the people side, I'd like to share how thrilled we are with the appointment of Karen Bernstein to our Board of Directors. As most everyone in our industry knows, Karen co-founded BioCentury and has 3 decades of experience writing and publishing on biotechnology developments, and we're honored to have her join our board.

Shifting now to business update. We remain on track to submit the plazomicin NDA to the FDA in 2017. Blake will provide more color on that progress in just a moment, and he'll also summarize some new market research findings from our plazomicin team.

Now I'll highlight several important accomplishments. In May, the FDA granted plazomicin breakthrough therapy designation for the treatment of bloodstream infections, or BSI, caused by Klebsiella pneumoniae and Enterobacteriaceae, 2 important pathogens that are commonly resistant to carbapenem antibiotics. This designation is based on plazomicin's potential to address a serious or life-threatening condition in patients with limited treatment options. Plazomicin is the first antibacterial to receive breakthrough therapy designation from the FDA.

In June, we had a significant presence at the annual ASM Microbe medical meeting. Oral presentations of the EPIC and CARE trial results were received with great interest by attendees at the conference. Regarding the challenge of treating bloodstream infections, further analysis of the CARE trial data highlighted plazomicin's higher microbiological response rate compared to colistin in patients with BSI, which supports the mortality benefit observed for plazomicin versus colistin.

With the EPIC trial, new analysis presented at ASM Microbe highlighted the favorable efficacy profile of plazomicin compared to meropenem in a subgroup of patients with bacteremia along with a statistically higher rate of microbiological eradication and a lower clinical relapse rate in plazomicin-treated patients at the late follow-up time point, which occurred roughly 4 weeks from the first dose of plazomicin.

We continue to be impressed with the compelling clinical profile of plazomicin, in particular the substantial mortality benefit and improved safety profile of plazomicin compared to colistin in the CARE study and the superior microbiological eradication compared to meropenem in the EPIC study, and we look forward to the NDA submission later this year.

With C-Scape, during the quarter we began dosing human subjects in a Phase I clinical pharmacology dosing and safety study. We anticipate updating you later in the year after we've analyzed all the data from this study. And if successful, we plan to initiate a pivotal Phase III trial in patients with complicated urinary tract infections in the first half of 2018.

Turning now to our LpxC inhibitor program. Last week, we announced that we were granted funding by CARB-X, an international antimicrobial consortium to accelerate global antibacterial innovation and research. CARB-X was launched last year to address the growing threat of drug-resistant infections by accelerating antibacterial product development. The CARB-X award consists of $3.2 million over 12 months and potentially up to an additional $8.2 million after that period upon achievement of certain milestones. Therefore, the total potential funding from CARB-X is $11.4 million.

We're excited about this additional validation of our LpxC inhibitor program and to be advancing this program along with the existing support from NIAID, the National Institute of Allergy and Infectious Diseases. LpxC inhibition could offer the first new antibacterial mechanism of action in decades and holds the potential to treat serious Gram-negative infections due to pseudomonas aeruginosa.

I'll now turn the call over to Blake.

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Thanks, Kenneth. I'm pleased to give an update on our progress with plazomicin. We are excited to be another quarter closer to submitting the NDA for plazomicin. We remain on track with our plan to file the NDA by the end of 2017 and, with priority review, the potential for plazomicin approval and launch in 2018. We've had a few key activities take place since our last call in May that I'd like to update you on.

First, on the regulatory front. We recently had a pre-NDA CMC meeting that was well attended by senior FDA leaders from the Office of Pharmaceutical Quality and the Division of Anti-Infective Products. The meeting provided clarity to our submission approach and we believe supports our plans for the CMC sections of the NDA, and thus we are continuing with our manufacturing plan to enable the submission of the NDA by the end of 2017 and the potential launch of plazomicin in 2018.

Second, on the manufacturing front. We've had ongoing interactions with our drug product manufacturer, Pfizer CentreOne, around their progress in addressing the warning letter received by their McPherson site in February of this year, based on an FDA inspection that occurred in the second quarter of 2016. As a reminder, this site performs the fill step for plazomicin. We remain in close contact with Pfizer CentreOne regarding their progress, and we continue to be encouraged with the effort and the level of commitment that we have seen in addressing the warning letter. Pfizer CentreOne continues to make progress on the commitments outlined in their responses to the FDA, including implementation of a quality improvement plan. And as such, we continue to support Pfizer's commitment to addressing the cited quality issues in a timely manner.

We continue to...


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