Eloxx Pharmaceuticals, Inc. (ELOX) CEO Greg Williams on Q4 2019 Results - Earnings Call Transcript

Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX) Q4 2019 Earnings Conference Call March 5, 2020 4:30 PM ET

Company Participants

Barbara Ryan - Investor Relations

Greg Williams - Chief Executive Officer

Tom Haverty - Chief Medical Officer

Matthew Goddeeris - Vice President of Research

Stephen MacDonald - Vice President of Finance and Accounting

Conference Call Participants

Joel Beatty - Citi

Lina Kaminski - Canaccord

Ted Tenthoff - Piper Sandler

Yun Zhong - Janney

Operator

Good afternoon, everyone and welcome to Eloxx Pharmaceuticals Fourth Quarter and Full Year 2019 Earnings Webcast and Conference call. Today’s call is being recorded.

At this time, I would like to turn the call over to Barbara Ryan, Eloxx's Investor Relations. Please begin.

Barbara Ryan

Thank you, Gigi. Welcome and thank you for joining us this afternoon for a review of Eloxx Pharmaceutical’s fourth quarter and full year 2019 financial results and business updates.

Joining me this afternoon are Dr. Greg Williams, Chief Executive Officer; Neil Belloff Chief Operating Officer and General Counsel; Tom – Dr. Tom Haverty, our Chief Medical Officer; Dr. Matthew Goddeeris, our VP of Research; and Stephen MacDonald our Vice President of Finance and Accounting.

Before we begin I'd like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed in the Risk Factors section in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission and our other reports filed with the SEC. Any forward-looking statements represent our views as of today March 5, 2020 only. A replay of this call will be available on the company's website www.eloxxpharma.com following the call.

It is now my pleasure to turn the call over to Dr. Greg Williams, Chief Executive Officer.

Greg Williams

Thank you, Barbara and welcome to Eloxx's fourth quarter and full year 2019 earnings webcast and conference call. 2020 will be a very important year for Eloxx, as we continue to advance our clinical and scientific programs for our ERSG library and report Phase II top line proof-of-concept data from our cystic fibrosis clinical trial program, which we believe will be a substantial value inflection point for the company.

Last week, we announced the leadership and organizational realignment to ensure that the company has a cash runway of two years with sufficient capital to run through the end of 2021. These actions strengthen our commitment to cystic fibrosis by ensuring that we have the right resources and the strategic flexibility to accomplish our key priority, which is to deliver top line Phase II proof-of-concept data for ELX-02 in cystic fibrosis in the first half of 2020.

We will also continue with enabling work in autosomal dominant polycystic kidney disease or ADPKD and inherited retinal disorders. We continue to be focused on delivering value to shareholders while fulfilling our mission to provide treatment options to patients with high unmet medical needs in the most safe and expeditious manner.

In a planned succession, I've been appointed Chief Executive Officer and I'm thrilled to have the opportunity to lead the company at this critical time, as we advance the Phase II development program for ELX-02 in cystic fibrosis. In parallel, we are continuing to develop other compounds from our ERSG library in kidney and inherited retinal diseases.

Be assured that we have a strong and experienced team with expertise in clinical drug development, basic research and regulatory affairs. I'm highly confident that we have the capabilities and the resources needed to deliver on our goals. I personally led the development of multiple drugs, the most recent of which is Tymlos, which is now the number one prescribed anabolic for postmenopausal osteoporosis. I'd like to express the company's and my personal gratitude to Bob Ward and the other departing employees, who have enabled the company to advance to this stage.

In cystic fibrosis we are committed to ensuring full enrollment of our Phase II CF clinical trials and reporting top line proof-of-concept data in the first half of this year. We are extremely pleased that we are conducting these trials at top CF clinical trial sites. In fact, the expressed level of interest and support for our cystic fibrosis program from top investigators, trial sites and patient efficacy groups has been tremendous.

In a recent discussion with members of our CFF program advisory group, we had the opportunity to share the positive results of the completed first cohort of our Phase II clinical trial for ELX-02 in nephropathic cystinosis. They view the safety and efficacy data as very exciting for cystinosis patients and we're pleased that we met the primary safety end points.

Together with the support of pharmacokinetics in this trial, these data further derisk Phase II CF program. We expect that there will be a steady cadence of additional data scientific presentations and publications as we move through this year. We will be presenting data from our inherited retinal disorders program at ARVO May 3rd through the 7th. We are pleased that our scientific presentation on our Phase 2 clinical trial for ELX-02 has been accepted for presentation at the European Cystic Fibrosis Conference in early June and will be part of a workshop titled: Beyond modulators: approaches involving gene editing and/or alternative channels. We also plan to present data for ELX-02 in cystic fibrosis at the North American Cystic Fibrosis Conference in late October.

Our CF Phase 2 program consists of two open-label trials: One for clinical investigators enrolling patients at sites in Europe and Israel. The second, Phase 2 trial focuses on sites in the United States. The expansion of our CF program to the U.S. has been made possible in part by funding provided by the Cystic Fibrosis Foundation and the endorsement of our protocol by the Therapeutic Development Network. In Europe, our protocol has been endorsed by the European Cystic Fibrosis Society Clinical Trial Network.

In nephropathic cystinosis, we reported positive Phase 2 top line data for ELX-02 from completed first cohort of study EL-003. This study met the primary safety endpoint and the reductions in white blood cell cysteine provide a clear indication of biologic activity in these patients at nominal doses greater than 0.5 milligrams per kilogram per day. The pharmacokinetics of ELX-02 administered were consistent with those expected based on the prior SAD, MAD and renal studies and the emerging profile supports continued development in this dose range.

In the study, the ELX-02 was generally well tolerated with no deaths, nephrotoxicity, ototoxicity or serious adverse events potentially related to ELX-02. Following completion of the first cohort, the independent Safety Review Committee met to review the pharmacokinetic and safety results and approved progressing to the second cohort that would enable enrolling patients ages 12 and older. We believe that the clarification of biologic activity provides human proof-of-concept for ELX-02 and derisks other clinical applications of our ERSG library.

However, due to study design limitations, patients across all dose groups had elevated and uncontrolled pretreatment white blood cell cysteine levels, which made it difficult to fully evaluate ELX-02 mediated white blood cell cysteine reductions. Therefore, we have discontinued the study and will not proceed with the second cohort as contemplated in the original protocol. We are continuing to review these data with a panel of scientific and clinical experts to determine appropriate modifications for possible new study design.

Last quarter, the Eloxx team presented new positive scientific data during the American Society of Nephrology Kidney Week from our completed renal impairment study, which supports the expansion of our research in kidney beyond nephropathic cystinosis into other areas such as ADPKD. The data also provides modeling necessary for dose adjustments based on renal function.

Our screening programs continue to evaluate opportunities to advance the ELX-02 for new indications or other novel molecules from our ERSG library. We continue to advance our work in ophthalmology and our team achieved an important proof-of-concept milestone demonstrating that our ERSG compounds can restore protein production in the eye when injected intravitreally in an animal model.

We will build on this milestone with our ongoing formulation efforts to sustain compound exposure across longer treatment periods. We are evaluating Usher syndrome and other disorders of the photoreceptors or RPE recently demonstrating read-through of the most common nonsense alleles for the CEP290, MYO7A and PDE6B genes.

We believe that the encouraging results from our ongoing cystinosis study support expanding our research into kidney into diseases such as ADPKD where there's a high prevalence of nonsense mutation patients. We are the most advanced company tackling the great challenge of developing new potential therapies for nonsense mutations. There's a high level of interest and enthusiasm in the scientific and clinical community for our programs as well as in the business community.

We remain actively engaged in pursuing strategic business relationships to expand our therapeutic footprint and accelerate our progress. We ended 2019 with $56.3 million in cash and cash equivalents. With the realignment of our resources, we've extended our cash runway to two years, which will take us through the end of 2021.

We are well funded to advance our clinical programs to deliver top line data for ELX-02 in cystic fibrosis and to advance the preclinical activities for ELX-02 and our library of molecules in additional indications.

I'd now like to introduce Dr. Tom Haverty, our Chief Medical Officer, who'll provide you with a further update on our Phase 2 programs and discuss the advances in our work in genetic kidney disease.

Tom Haverty

Thank you Greg. As you know, our CF Phase 2 program currently consists of two trials, one in Europe and Israel, and the second in the U.S. There's a high level of interest and support for these trials both in the U.S. and globally. Professor Eitan Kerem, MD Head of the Division of Pediatrics Children's Hospital Hadassah Medical Center in Israel is a global lead investigator. Our Phase 2 protocol have been given a high-priority ranking by the European Cystic Fibrosis Society Clinical Trial Network.

In the U.S. Dr. Ahmet Uluer, Director of the Adult Cystic Fibrosis Program at the Boston Children's Hospital Brighman Women's CF Center is the lead investigator. We are very pleased with the high quality of the clinical sites we are working with and appreciate the CFF providing financial support for a portion of this trial.

These are open-label studies and we expect to report top line Phase 2 proof-of-concept data in the first half of this year. We expect to present data for ELX-02 in cystic fibrosis later this year at the European Cystic Fibrosis Conference in June and the North American Cystic Fibrosis Conference in late October.

In nephropathic cystinosis as Greg described, the first cohort of our Phase 2 study met its primary safety endpoint and provided proof of biologic activity along with the anticipated pharmacokinetic results. These positive results along with the results of our renal impairment study provide a basis for expansion to studies of additional kidney diseases caused by nonsense mutations. One such genetic kidney disease is ADPKD, which is a relatively common inherited genetic kidney disease occurring in between one in 400 and one in 1,000 patients, affecting 300,000 to 600,000 individual patients in the U.S. alone and is the fourth leading cause of end-stage renal disease in the United States. Over 25% of the primary genetic changes that cause ADPKD are nonsense mutations where a premature stop code on in the gene leads to a truncated often unstable protein.

I would like now to turn the call over to Dr. Matt Goddeeris, who will provide updates on our ongoing work in ADPKD and additional development programs.

Matthew Goddeeris

Thank you Tom. Our preclinical efforts in renal and ocular continued to advance. Our team focuses on applying our understanding of read-through to the unique genetics of each disease and evaluating efficacy with a focus on protein function using assays versatile enough to enable our personalized medicine approach.

As described by the two HIT hypothesis, most individuals with ADPKD are born with a single defective copy of either PKD1 or the PKD2 gene. For the disease this is the primary genetic mutation or HIT.

In the kidney, a sporadic second HIT will trigger cyst formation throughout life leading to ADPKD and potentially end-stage renal disease. We are focused on those individuals whose primary HIT is a nonsense allele. Using a reporter assay, we have already observed dose-dependent read-through with our ERSGs across the most common PKD1 allele and have expanded our studies to include PKD2. We are now applying this information to our functional model efforts in order to confirm that the read-through we observe has the -- an impact on cyst formation and growth.

Our cystic fibrosis platform has highlighted utility of organoid technology to assess function in a translational model. Similarly for ADPKD, organoids derived from patient cells or induced pluripotent stem cells can be differentiated in a manner that recapitulates the cellular diversity of the kidney and generates the cyst characteristic of the disease state.

As part of this effort, we are excited to be working with Dr. Benjamin Freedman of the University of Washington, a pioneer in ADPKD organoid technology on this program. We intend to evaluate additional cellular and/or animal models of ADPKD and with positive results advance towards IND submission.

We are pleased to report on the advances of HIT-CF program in Europe. Last year, we joined the HIT-CF consortium to support the collection of cystic fibrosis patient-derived organoids and the initiative to conduct a prospective clinical trial to confirm the translational potential of the organoid model.

HIT-CF recently announced completion of the first phase of the effort, collection of organoids from patients at 47 of the biggest CF centers in 16 countries throughout Europe. This collection included organoids from over 100 individuals bearing rare nonsense mutations in the CFTR gene.

HIT-CF is now testing the organoids for ELX-02 responsiveness in the laboratory. The first data set evaluating ELX-02 in 31 patient-derived organoid samples demonstrate activity in a majority of the nonsense organoids. The intent of the program is to use these positive results to enroll those individuals with responsive organoids in a prospective clinical trial with ELX-02. We believe this program will continue to expand the application of organoid technology from drug discovery through drug approval.

Indeed at Eloxx, we continue to use the technology to identify the most responsive alleles for inclusion in future clinical trials recently identifying a nonsense allele in which ELX-02 increases CFTR function in organoids to levels over twofold greater than that observed for some of the most responsible alleles, such as G542X. We are committed to progress ELX-02 down the development path to provide potential treatment options to the CF population with unmet medical need.

Turning to inherited retinal disorders. As we previously reported, library compounds have demonstrated dose-dependent read through using our in-vitro assay platform, acceptable intravitreal tolerability, and achieved an important preclinical milestone, demonstrating restored protein production in an animal model via ERSG intravitreal injection.

We conducted studies in a mouse model with a naturally occurring nonsense mutation in the OCA2 gene which results in a form of albinism present in human Type 2 oculocutaneous albinism.

In this model, the R262X mutation results in a lack of OCA2 channel protein which is needed to establish the pH of the organelle that produces pigment, the melanosome. Some of these results will be presented at ARVO this May. When this tissue exposure data is coupled with our ongoing sustained-release formulation efforts and the read-through potential we observed against nonsense mutations in disease-causative genes such as USH2A, MYO7A, CEP290, and TDE6B, we are encouraged that the intravitreal ERSG approach could provide restoration of critical proteins to preserve or restore visual function across nonsense-related inherited retinal disorders.

I would now like to ask Steve McDonald, our VP of Finance and Accounting to provide a review of our full-year financial results for 2019.

Stephen MacDonald

Thanks Matt. As of December 31, 2019, the company reported total cash including cash equivalents and marketable securities of $56.3 million which we believe will fund the company's operations through topline data in cystic fibrosis and through the end of 2021.

For the quarter ended December 31, the company incurred a net loss of $11.6 million or $0.29 per share as compared to a net loss of $14 million or $0.40 per share for the same period in 2018.

As we have shared, one of our key accomplishments in the third quarter of last year was entering into our agreement with the Cystic Fibrosis Foundation who will provide up to $1.6 million in funding contributing towards our U.S. Phase II cystic fibrosis study.

In Q4, we received the first payment of $400,000. And in Q1 of 2020, we received the second $400,000. In the fourth quarter noncash stock compensation expense totaled $2.7 million with $2.2 million allocated to G&A and $0.5 million to R&D.

Fourth quarter 2019 R&D expense totaled $5.7 million compared to $6.5 million for the same period in 2018. The quarter-to-quarter R&D expense decrease was driven by the timing of significant activities in our Phase II clinical trials along with preclinical and CMC costs and lower non-cash stock compensation.

G&A expense for the fourth quarter of 2019 was $5.8 million, a decrease from $7.6 million for the same period in 2018.

Moving to the full year numbers, the company incurred a net loss of $50.9 million or $1.34 per share as compared to a net loss of $47.2 million or $1.45 per share for 2018. The $3.7 million increase in net loss was driven primarily by higher R&D expenses, while G&A expenses declined.

Non-cash stock compensation expense for the full year 2019 was $11.3 million with $8.9 million recorded to G&A and $2.5 million to R&D. Full year R&D expenses totaled $25.8 million compared to $20.5 million for 2018, an increase of $5.3 million. The year-over-year R&D increase was driven primarily by increases in salaries and other personnel costs and in expenses related to our Phase II clinical trials along with expanded preclinical operations.

Full year G&A expense totaled $24.7 million compared to $26.5 million for 2018 a decrease of $1.8 million. The decrease was primarily related to lower non-cash stock-based compensation and a decrease in infrastructure-related costs, partly offset by increases in salaries and other personnel-related costs.

Given the realignment announced last week, we would like to provide you with some guidance for our cash burn in 2020 and 2021 to assist you as you revise your models. We are taking a onetime charge in Q1 of 2020 estimated at $1.7 million, primarily for severance costs.

We expect that our quarterly cash burn will decline sequentially as we move through the year to reflect the company's reduced headcount elimination of non-priority program spending and targeted efficiencies.

Therefore, while the majority of cost savings will fall in G&A, there will be some reduction in our R&D spending. We expect that our cash burn rate will reach in the year, in the fourth quarter of 2020 and remain fairly stable throughout 2021. Also for your modeling purposes our total shares of common stock outstanding as of December 31, 2019 were 40031000.

This concludes the fourth quarter and full year financial comments and I'll turn the call back to Greg.

Greg Williams

Thank you, Steve. 2020 will be an important year for Eloxx as we expect to report top line data from our Phase II proof-of-concept clinical trials in cystic fibrosis in the first half of this year which we believe will be a major value inflection point for the company.

I'm extremely excited to be leading the company at this time and highly confident that we have the right team with the necessary experience, as well as the strategic flexibility to achieve our goals.

Beyond cystic fibrosis, we continue to advance our portfolio of novel ERSG molecules. We believe several of these compounds demonstrate encouraging levels of read-through activity and preliminary tolerability data, supporting their potential therapeutic development.

We expect to report scientific data on our inherited retinal disorders program at ARVO in early May and an abstract on ELX-02 have been accepted for an oral presentation at the European Cystic Fibrosis Conference in June.

We also expect to report data on ELX-02 at the North American Cystic Fibrosis Conference in late October. We thank you for joining us on our fourth quarter and full year 2019 earnings call and we look forward to continuing to update you on our progress.

Thank you very much. Operator you may now open up the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Joel Beatty from Citi. Your line is now open.

Joel Beatty

Hi, thanks for taking the questions. First one is could you compare and contrast the opportunity in cystic fibrosis versus cystinosis and help explain the confidence in moving ahead in cystic fibrosis, while it seems the cystinosis program was discontinued?

Greg Williams

Sure Joel. So thank you for the call. This is Greg. There's a much larger commercial opportunity for cystic fibrosis. I'm not going to give you the -- all the numbers, but up to about 10% of CF patients have disease due to nonsense mutations and we would potentially be in a great position to be able to help those patients.

In contrast there's a comparatively small number of patients with cystinosis due to nonsense mutations. That number is in the range of maybe 30 patients in North America, so it's a comparatively small group. It's much smaller than CF. Our interest in cystinosis is certainly in terms of trying to help those patients. And we also thought that by working in cystinosis, it would be a great path to get us to proof of concept. The issues with the cystinosis trial related to study design and in those patients as we discussed during the call, there was a significant reduction in the second treatment group in white blood cell cysteine. We did meet the primary safety endpoint. But because of the design of the trial, there was some drift in their baseline white blood cell cysteine results, where the numbers were really quite high and they were quite uneven prior to treatment and it made it difficult to fully interpret those results.

In contrast with cystic fibrosis, the baseline levels for sweat chloride are pretty consistent over time. In the absence of treatment, there's no variation up and down. We don't expect the same kind of issue with cystic fibrosis. The great news about the cystinosis trial is that we did see clear signs of biologic activity and this helps us to know that we are in the right range when we're evaluating a similar dose range and similar concentrations for cystic fibrosis.

Joel Beatty

Great. Thanks for the explanation. Maybe another question on the organoid data for cystic fibrosis. It sounds as if you've been testing a growing collection of organoids. Could you talk about how the data in organoids looks for the patients who carry the mutation that you're setting in your trial? If I remember right it is the G542X mutation and compare that with how the data looks and other organoids that are other nonsense mutations or just other mutations causing cystic fibrosis?

Matthew Goddeeris

This is Matt Goddeeris. Great question. So for G542X, which is the most common nonsense mutation in cystic fibrosis, the organoid response has been fairly high. So compared to organoid responses of approved drugs and known genotypes, we've got a response that we think is equivalent to that and should provide us with translational data to the study results. We're really encouraged by those results.

But the question about, what about other nonsense alleles and testing frozen organoids, we see a range of responses. So some organoids with a nonsense allele have less response than that of G542X and we've encountered a few alleles that are actually greater than that of G542X. What we do is take this data and helping us prioritize those alleles that we can go to after this initial study of G542X.

Joel Beatty

Great. And then one last question. Could you tell us about what the endpoints are that you'll be assessing in the Phase II trial with the data reading out in the first half of this year? And what you'd like to see to assess your decision to whether to move forward?

Greg Williams

Right. So for the cystic fibrosis trials the primary endpoint is safety. We will also be evaluating pharmacokinetics. And the primary pharmacodynamic marker that we'll be looking at is reduction in sweat chloride. We would – if we had a response of a reduction of maybe 10, it would be in the range of showing some biologic activity. If we showed a reduction in the range of 50 or 60, it would be a much more dramatic response. That would be something that would be more consistent with some of the Vertex compounds.

Somewhere in between would also be a favorable response relative to what those patients have available today. So those would be the key endpoints. We'd be looking for all different aspects of safety. We would be looking at pharmacokinetics. We'd be looking at sweat chloride as an indicator of pharmacodynamics. And it's well known that while white blood – excuse me, while sweat chloride doesn't correlate with patients on a one to one basis for FEV1 as a population it correlates very well and that would give us pretty good confidence of going forward into a Phase 3 trial.

Joel Beatty

Great. Thank you.

Greg Williams

Welcome.

Operator

Thank you. Our next question comes from the line of Michelle Gilson from Canaccord. Your line is now open.

Lina Kaminski

Hi. Thank you. This is Lina here for Michelle. So maybe you can just remind us about the trial design and since it's two trials, if there's any difference between the two trials. And how should the trial design kind of clearly demonstrate the effect for ELX-02? Thank you.

Greg Williams

Hi, Lina, good to talk with you again. So the Phase 2 trials in the U.S. as well as in Europe and Israel have four different treatment groups. The first treatment group starts at 0.3 milligrams per kilogram per day. The top dose -- the maximum dose would be three milligrams per kilogram per day. The first dose is for one week. The second dose is for one week. The third dose is for one week. And then the final top dose would be two weeks of exposure. The trials are identical in terms of dose, duration, endpoints and key evaluations.

There are some small differences relating to the different regions in which the trials are being conducted, but the trials were designed so that the data could be fully integrated. And ultimately, we'll end up with a complete data set that comprises both sets of patients both in Europe and Israel and in the U.S. Once again, as we discussed with Joel, the key endpoint -- the primary endpoint is safety, but we're also looking at pharmacokinetics and we're also looking at the reduction in sweat chloride as the key pharmacodynamic marker as an indicator of efficacy.

Lina Kaminski

Got it. Thank you. And congrats on the quarter.

Greg Williams

Thank you.

Operator

Thank you. Our next question comes from the line of Ted Tenthoff from Piper Sandler. Your line is now open.

Ted Tenthoff

Great. Thank you so much for the update. I'm really looking forward to data this year. Yes, I have one quick question. And if this was asked or touched on I apologize. But I was just thinking because of the potential of a read-through agent to get more CFTR to the self-service membrane even though traditionally these patients would not be amenable to a potentiator, is there a potential to use 02 in combination with potentiators? And is that something that can be explored via the organoids and then potentially through the HIT-CF study? Thanks so much for concluding that.

Greg Williams

Thank you, Ted. That is a great question. And yes with any available CFTR, it's possible that additive therapy with a potentiator could make a big difference. We've actually looked at this in a number of different models including human bronchial epithelial cells as well as organoids. We've seen increased responses when those compounds are used together, not a surprise at all. Is this something that could be evaluated down the road? Yes, it could be. That said, we think it's really important to get our Phase 2 data where we could really understand the potential benefits and safety profile of ELX-02 in these patients. And then depending upon what we see, there may be no need for any concurrent medication or we might want to think about some other combination therapy.

Ted Tenthoff

Yes, that makes a lot of sense. Probably it's something about considering it for [indiscernible] looking forward to more data. Thanks so much.

Greg Williams

Thanks, Ted.

Operator

Thank you. Our next question comes from the line of Yun Zhong from Janney. Your line is now open.

Yun Zhong

Hi. Thanks for taking the questions. So, the first one is a follow-up question about the design of the cystic fibrosis study. Are those different dose, are they separated by washout period?

Greg Williams

Thank you, Yun. Yes, Yun. Yes, there is a washout. There is a washout between doses. And during that period, we are assessing safety. We're collecting pharmacokinetic data. And then there is a safety review committee that will evaluate data prior to enabling patients to escalate to the next dose.

Yun Zhong

Okay. And then -- so are you able to share any information regarding your plan after the top line data readout, assuming the data is positive, supporting continued development for the program?

Greg Williams

Well, sure. After we get our Phase II data, the next step would be for us to talk with health authorities to gain alignment on what the next steps would be going forward. And then we would start to plan our Phase III program.

Yun Zhong

Does the cash guidance include that activity?

Greg Williams

I'm sorry. One more time, please?

Yun Zhong

Sorry. Does the guidance on operating expenses for 2020 and 2021 include your planned activity for the program?

Greg Williams

So the organizational realignment has extended our cash runway through the end of 2021, which is well beyond the completion of our Phase II proof-of-concept trials. Once, again, when we have the Phase II data, we'll meet with health authorities to gain alignment on next steps.

Then in 2021, we expect to complete the closeout of the Phase II trials, complete our regulatory interactions and begin ramping up for Phase III trials. We've also previously guided that upon completion of our Phase II studies we would consider other opportunities, potentially for financing. So the short answer is, yes, we have those key activities in the model today and we'll certainly be opportunistic as we go forward.

Yun Zhong

The final question is the prospective study. Would that be funded by the HIT-CF and the consortium? Or would that be funded by the company?

Greg Williams

The HIT study is being funded through EMA, I believe, as part of that HIT program.

Yun Zhong

Including the prospective clinical study then --

Greg Williams

Yes, that's correct.

Yun Zhong

-- is being planned. Okay.

Greg Williams

Yes, that's correct.

Yun Zhong

Thank you very much.

Operator

Thank you. At this time I'm showing no further questions. I would like to turn the call back over to Dr. Greg Williams, Chief Executive Officer, for closing remarks.

Greg Williams

Well, thank you everybody. Really appreciate your attention today and your interest in Eloxx. This is going to be a great year for Eloxx. We're looking forward to completing enrollment to reporting our top line data in the first half of this year. And we look forward to talking with you again soon. Goodbye.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.