Enanta Pharmaceuticals Inc
NASDAQ:ENTA
Earnings Call Analysis
Summary
Q1-2024
Enanta Pharmaceuticals reported fiscal Q1 2024 revenues of $18 million, a decrease from $23.6 million in the same quarter the previous year. The revenue primarily came from royalties on MAVYRET sales by AbbVie. Enanta is paying 54.5% of these royalties to OMERS from a previous sale transaction treated as debt. Research and development expenses dropped to $36.4 million due to a shift in COVID-19 program strategy, while general and administrative expenses increased to $16.5 million due to higher stock compensation and legal costs from a patent suit against Pfizer. The quarter ended with a net loss of $33.4 million, slightly higher than the previous year's $29 million. Their cash position of $337 million is expected to fund operations through fiscal 2027.
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Good afternoon, and welcome to Enanta Pharmaceuticals Fiscal First Quarter Financial Results Conference Call. [Operator Instructions]. I would now like to turn the call over to Jennifer Viera, Investor Relations. Please go ahead.
Thank you, Operator, and thanks to everyone for joining us this afternoon. The news release with our fiscal first quarter financial results was issued this afternoon and is available on our website. Making remarks on today's call are Dr. Jay Luly, President and Chief Executive Officer; and Paul Mellett, our Chief Financial Officer; Dr. Scott Rottinghaus, our Chief Medical Officer; and Dr. Tara Kieffer, our Chief Product Strategy Officer, will be available during the Q&A portion of this call. Before we begin with our formal remarks, we want to remind you that we will be making forward-looking statements, which may include our plans and expectations with respect to our research and development pipeline and financial projections, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent Form 10-K and our other periodic reports filed with the SEC. Enanta does not undertake any obligation to update any forward-looking statements made during this call. With that, I'd like to turn the call over to Dr. Jay Luly, President and CEO. Jay?
Thank you, Jennifer, and good afternoon, everyone. In the first quarter of 2024, Enanta began an important year, which has the potential to advance our programs in both virology and immunology and drive value across the company. Through our recent expansion into immunology, our mission continues to center around the development of small molecule treatments for indications of high unmet need, and we are leveraging our drug discovery capabilities to bolster our pipeline for near and long-term value creation. Today, I'll provide an overview of our progress during the first quarter, beginning with our respiratory syncytial virus or RSV program and then Segway into our new immunology program targeting chronic spontaneous urticaria or CSU. RSV is a severe respiratory infection associated with significant morbidity and mortality that can cause serious disease in infants, children and other high-risk populations, including the elderly and individuals with congestive heart failure, chronic obstructive pulmonary disease or asthma. Despite the availability of vaccines and prophylactic monoclonal antibodies, the uptake has been low and breakthrough infections will still occur. The current rate for adult RSV vaccine adoption is estimated to be only 11% of the eligible population. Further, both strategies for pediatric prophylaxis, the maternal vaccine and monoclonal antibodies provide short-term passive immunity for infants and only shift the infant's first infection to the next season. Because of this significant need for safe and effective treatments, our goal is to develop an oral best-in-class treatment for RSV through our broad development program, which includes zelicapavir, an N-Protein Inhibitor, formerly known as EDP-938 and EDP-323 an L-Protein Inhibitor, both have fast-track designation from the FDA. Our conviction in our approach to RSV is rooted in the core mechanism of our molecules replication inhibition. We believe both zelicapavir and EDP-323 have robust potential as monotherapies, but we're also excited by the opportunity to combine them and potentially broaden the treatment window or addressable patient populations. Zelicapavir, the only N-Protein Inhibitor in clinical development is currently being studied in 2 Phase 2 studies of high-risk patient populations, RSVPEDs and RSVHR. RSVPEDs is a randomized double-blind, placebo-controlled study in hospitalized and non-hospitalized pediatric RSV patients aged 28 days to 36 months. It is a 2-part study of approximately 90 patients. The objective of the first part is to evaluate zelicapavir's safety and pharmacokinetics in multiple ascending doses to select the optimal dose for each age group. And the second part, the objective is to evaluate zelicapavir's antiviral activity at the selected optimal dose. Symptoms scores will be assessed throughout the treatment duration. RSVPEDs was designed as a smaller study that would allow us to demonstrate a trend toward improved virology metrics for zelicapavir and to also move forward expeditiously into registrational studies. RSVHR is a randomized double-blind, placebo-controlled study in adults with RSV infection who are at high risk of complications, including the adults over 65 years of age or individuals with asthma, congestive heart failure or chronic obstructive pulmonary disease known as COPD. Approximately 180 patients will be treated with 800 milligrams of zelicapavir or placebo for 5 days and evaluated over a 28-day period thereafter. RSVHR's primary endpoint is time to resolution of RSV lower respiratory tract disease symptoms as assessed by the respiratory infection intensity and impact questionnaire or RIIQ symptom score scale. We will also be evaluating multiple secondary endpoints, including other clinical efficacy measures and antiviral activity as well as pharmacokinetics and safety. In RSVHR, we are primarily looking to see a clinically meaningful improvement in time to symptom resolution. The goal of this proof-of-concept study in high-risk patients with community-acquired RSV is to obtain directional efficacy data that would give us the confidence to move into Phase 3 as efficiently as possible. Currently, both RSVPEDs and RSVHR continue to enroll, and we have taken necessary steps to set up the trials to achieve enrollment around the world as quickly as possible with each study having a global footprint spanning at least 15 countries. We have been pleased to see a more normal RSV season in North America. Based on current enrollment trends, we anticipate reporting top line data from RSVPEDs in the third quarter of 2024. As for RSVHR, we will provide additional guidance as the RSV season continues. Also ongoing in our RSV portfolio, is the Phase 2a challenge study of EDP-323, a highly potent L-Protein Inhibitor in development as a once-daily oral treatment for RSV. In this randomized, double-blind, placebo-controlled study up to 114 adult subjects will be infected with RSV and then randomized 1:1:1 to receive once-daily dosing of either 600 milligrams of EDP-323, 200 milligrams of 323 with a loading dose of 600 milligrams on the first day or placebo for 5 days. Primary and secondary outcome measures include safety, changes in viral load measurements and changes in symptoms from baseline. We advanced EDP-323 into the challenge study based on positive Phase 1 results in which the drug demonstrated favorable safety, tolerability and pharmacokinetics in healthy volunteers, and we are on track to report data from the challenge study in the third quarter of 2024. Now, I'll turn to our work in immunology, where our pipeline expansion builds on our expertise in small molecule drug discovery and virology, a scientifically adjacent area. Our team is focusing on areas where there is a strong understanding of the underlying disease pathology, allowing us to target the root cause of the disease. Moreover, we are concentrating on indications with high unmet medical need and a clear clinical development path, including well-defined populations and biomarkers available for early signs of efficacy. We believe that we are well positioned to pursue immunologic indications and are excited to advance our new program in chronic spontaneous urticaria or CSU, which is a severely debilitating chronic inflammatory skin disease. Clinical manifestations include hives, which is also called Urticaria or angioedema, which is characterized by pronounced deep tissue swelling or both. Patients with CSU also experienced symptoms beyond the skin manifestations, including sleep disturbances, fatigue, irritability, anxiety and depression. The disease can be severely disabling significantly impair quality of life and affect performance at work or school. CSU is typically a self-limiting disorder persisting for 2 to 5 years, although some reports estimate that more than half of the patients suffer for more than 5 years. It may also recur after months or years of full remission. CSU is estimated to affect 0.5% to 1% of the global population at any given time, and there is a substantial unmet need for an efficacious oral agent. The standard of care treatment for CSU is antihistamines. However, in approximately half of the patients symptom alleviation is not adequate. There is a substantial unmet need for an efficacious oral agent as only a minority of cases are treated with one indicated biologic. Given the high unmet need for CSU patients, the opportunity in urticaria is significant. Our goal is to develop a best in disease oral KIT inhibitor treatment to reduce the number of mast cells, which are the primary driver of the disease. As mast cells are implicated in multiple allergic diseases, we have the potential to study our KIT inhibitor in additional indications. This strategy is supported by anti-KIT monoclonal antibodies demonstrating potential best-in-disease efficacy in a Phase 2 clinical trial in CSU. Our prototype inhibitor exhibits potent inhibition of KIT in binding and cellular functional assays and is highly selective for KIT versus other kinases. We've observed favorable in vitro and in vivo ADME properties in our prototype, including a low potential for off-target tissue penetration, a long half-life and low drug-drug interaction potential. We plan to announce a development candidate for CSU this year. We are very excited about our pipeline growth in immunology and are pursuing additional targets with plans to introduce a second immunology program this year. With that, I'd like to conclude by highlighting our upcoming milestones. We look forward to reporting results from our Phase 2a challenge study of EDP-323 in the third quarter of 2024. And assuming the season continues to be a normal RSV season in the Northern Hemisphere, we anticipate reporting data from the RSVPEDs Phase 2 study of zelicapavir in the third quarter of 2024. Further, we plan to identify a clinical candidate for our CSU program this year. And finally, we plan to announce a second immunology program in 2024. Now, I'll turn the call over to Paul to discuss our financials. Paul?
Thank you, Jay. I'd like to remind everyone that Enanta reports on a September 30 fiscal year schedule. Today, we are reporting results for our fiscal first quarter ended December 31, 2023. For the quarter, total revenue was $18 million and consisted of royalty revenue earned on AbbVie's global MAVYRET net product sales. This compares to total revenue of $23.6 million for the same period in 2022. As a reminder, 54.5% of Enanta's ongoing royalties from AbbVie's net sales of MAVYRET that are included in our revenue are being paid over to OMERS, the royalty buyer and our April 2023 royalty sale transaction. For financial reporting purposes, the sale transaction was treated as debt with the upfront purchase payment to us of $200 million recorded as a liability. As such, we continue to record 100% of the royalties earned as revenue and will then amortize the debt liability proportionately as 54.5% of the cash royalty payments are paid to OMERS into a cap of 1.42x the purchase payment is met. After which point, 100% of the cash royalty payments will be retained by Enanta. Noncash interest expense on the debt will be recorded in Enanta's consolidated statement of operations based on an imputed interest rate. Interest expense was $3.4 million for the 3 months ended December 31, 2023. Moving on to our other expenses. For the 3 months ended December 31, 2023, research and development expenses totaled $36.4 million compared to $40.9 million for the same period in 2022. The decrease was primarily due to a decrease in costs associated with our COVID-19 program, as we previously announced that our plans to pursue any future COVID-19 efforts would be in the context of a collaboration. General and administrative expense for the quarter was $16.5 million compared to $12.7 million for the same period in 2022. This increase was primarily due to an increase in stock compensation expense and an increase in legal expenses related to the company's patent infringement suit against Pfizer. Other income net totaled $0.9 million. Enanta recorded an income tax benefit of $0.6 million for the 3 months ended December 31, 2023, for interest earned on a pending $28 million federal income tax refund compared to an income tax benefit of less than $0.1 million for the 3 months ended December 31, 2022. Net loss for the 3 months ended December 31, 2023, was $33.4 million or a loss of $1.58 per diluted common share compared to a net loss of $29 million or a loss of $1.39 per diluted common share for the corresponding period in 2022. Enanta ended the quarter with approximately $337 million in cash and marketable securities. We expect that our current cash, cash equivalents and short-term marketable securities as well as our ongoing retained portion of royalties will continue to be sufficient to meet the anticipated cash requirements of our existing business and development programs through fiscal 2027. Further financial details are included in our press release and will be available in our report on Form 10-Q when filed. I'd now like to turn the call back to the Operator and open up the lines for questions. Operator?
[Operator Instructions]. And our first question comes from Roy Buchanan from JMP.
I just had a few on zelicapavir. First one on the RSVPEDs readout, presumably in 3Q. I guess, under the negative scenario where you don't see any virological effects, is it conceivable that you just wind down the program, stop RSVHR or would you still see RSVHR readout? And then in that same scenario and if the challenge trial for 323 is highly positive, would you potentially look to immediately combine the 2 agents? Then I have a follow-up.
Thanks, Roy. This is Jay. So, starting with the challenge study, 323 is also on track for Q3. It's a very potent L-Inhibitor as you know I know you know a lot about the data. Given the potency, given the PK, given the huge multiples we drive over the protein adjusted EC90, we're very hopeful that it should show efficacy comparable to zelicapavir. The question of getting into combination studies right away is an interesting one. But I think we'll probably be most interested in fully characterizing single agent efficacy for both zelicapavir and 323 in real world and then contemplate combinations. Of course, in parallel, you could be scouting out some of the combinations and challenge studies for shadowing. But I think we wouldn't want to slow down single-agent characterization of 323. The PEDs study, again, we're on track for Q3 and you're asking an interesting question, if PEDs didn't show anything, what would you do with HR. In different patient populations, I think you got to look at the facts and circumstances around any clinical trial result in one patient population done under one set of conditions and then make good judgments as to how it might or might not relate to a different clinical trial and a different patient population under a different set of circumstances. So, we just need to look at data. So, that's my thought on that.
Presumably, HR is not too far behind. And then just a follow-up. I wondered for zelicapavir, if you can put a dollar value on the 2 markets, the PEDs and the HR, just in your view, what do you think is a rough dollar value?
Well, there are no established therapeutics in this market. So, I think there's a great opportunity to build the first opportunity for an RSV treatment ever in each of those patient populations and yet other high-risk patient populations. I'm not going to be able to give you an exact dollar amount, but it's got to be a $1 billion market opportunity. It has $1 billion on it, let's just say that and PEDs directionally is probably the bigger piece of that, although I think there's more data and information on RSV in PEDs than there is in adults. And so, we're also not going to underestimate what the adult market could ultimately look like. Clearly, there's been a lot of interest in that space in promoting vaccine opportunities for elderly and they're doing quite well in prophylaxis, even though only a small portion of the eligible patient population is getting vaccinated and everybody else, which is the overwhelming majority of people aren't getting vaccinated and would still be susceptible to infections. And even some of the vaccinated people could be getting breakthrough infections. So, give us more time to see how that market evolves a little bit, the workup final bids on a potential product profile. But we're very encouraged by our position in the field. Sort of the leadership position we have in RSV portfolio and also the fact that there are no approved drugs in the market use unmet need. So, it's a good opportunity.
And our next question comes from Roanna Ruiz from Leerink.
So, a question on your CSU program. So, could you walk us through some of the elements that excited you about this indication over other similar immunology indications? And I was curious what additional optimization might you try to be working on to get to a final candidate that could be deemed like best in disease. And I have a follow-up after that.
Okay. Well, I'll handle part of that question, and then I'll let Tara Kieffer, that's our product strategy, talk about the other part. So, with regards to the optimization, I think we showed some data at JPMorgan on a prototype molecule, which we think is far along in terms of our optimization profile. We're still making lots and lots of molecules continuing to tweak bits and pieces. But obviously, among the things we're looking at is just really honing down potency, selectivity, making sure we've got good safety. And, of course, our old friend, pharmacokinetics and hopefully, once daily dosing, all of those kinds of things that we like to build into every one of our molecules. CSU is attractive and maybe I'm already answering some of the questions. But we're not certainly eliminating ourselves to that. I think it happened to be the first program that we've announced in the area, but we're working on a few other things. We're piloting other programs getting involved. So, you can expect that there will be a broader footprint, certainly, as our slide deck anticipates in the field. And we go about it in the way that we've done in a lot of our, well, in pretty much all of our programs, we get the biology figured out and sorted really important to do that, try to figure out a chemical matter that we can get in to make sure we've got strong commercial rationale in terms of competitive landscape, potential product profiles. We sort all that stuff start making molecules, get on the boards, start filing intellectual property and we tend to do all of that before we really announce the program. So, suffice it to say, that's ongoing in other areas and as the year rolls out, we'll come out with more. Does that answer your question?
Yes. That helps. And I have a follow-up on RSVPEDs as well. So, given the top line coming, what do you hope to see in terms of efficacy and safety results and how might you use that data to inform a go or no go decision for advancing to registrational trials?
Yes, maybe since I didn't give Tara, the chance of the last question, I'll let her take this one.
Sorry. So, Roanna, as you know, the RSVPEDs study first in PEDs, so doing some dose ranging and then looking at that optimal dose at virology to the primary endpoint in the second part of the study. We'll certainly look at other endpoints, clinical endpoints like symptoms, but with the size of the study, we'll primarily be looking at virology endpoints. And, really, what we're hoping to see is some directional data and numerical trends in the virology endpoints that give us the confidence to take the program forward into a larger, more robust Phase 3 program as we move forward. So, that's really what we're looking to achieve in this kind of initial PEDs study.
And our next question comes from Akash Tewari from Jefferies.
This is Phoebe on for Akash. It doesn't seem like the Phase 2b RSVP study is powered to hit on symptoms or viral load reduction. So, what would be a strong enough signal for you to move it into Phase 3? And then additionally, how are you thinking about the oral Remdesivir failure for Gilead? Does that change strategic value for your protease inhibitor at all?
Do you want to just build on?
Yes, I can build on for the RSVPEDs tease. We will, again, primarily be looking at virology and I think there's not a lot of benchmarks in this area that we could point to or compare to. There is one data set out of a company called Arc Bio, where in a Phase 3 trial, they showed about a 0.6 log drop, and that did translate into an improvement, statistically significant improvement on symptoms. So, that is the one sort of benchmark that we have. But again, numerical trends and directional data showing that zelicapavir is showing an improved trend in virology compared to placebo would give us the confidence to move forward into a Phase 3 study. Again, we'll look at symptoms. And, as you said, it is a small study, and the likelihood of seeing something on that, certainly a specifically significant way is probably not as high, but we'll look at that and see what we get.
And the second part, I guess, is relates to oral Remdesivir for COVID. I mean I guess our initial reaction, I mean, we, like everybody else just got that news late yesterday afternoon. I think it simplifies the COVID landscape, which is one of the things that I think everybody who's involved in COVID, including us, everybody who's interested in COVID whether it's strategic or the government, they're trying to figure out what the competitive landscape is or what the arsenal of drugs is going to be available for COVID patients. And it seems like there's one fewer now. So, that's going to help clarify things. I guess Shionogi is another one that's due to turnover a card pretty soon here. I guess there's a question about what Pfizer doing, with their follow-on molecule. We haven't seen that they've advanced it. So, a question mark there that will hopefully get sorted here in the nearer term. And then we'll have a more complete view of what that competitive landscape looks like, which is again important for anybody who would be making funding decisions going forward. Our plan, as we've stated a few times before, is to only pursue 235 in the context of a collaboration.
And our next question comes from Eric Joseph from JPMorgan.
Just your 3Q guidance for reading out RSVP, does that anticipate full accrual of your target of 90 patients, if you sort of end up tracking under that goal after this season, do you go ahead with the readout or do you perhaps sort of push out time lines a bit?
No. I think we're still targeting to at least hit the target enrollment. That's the plan, that's Plan A and to report data on the full set in Q3.
And sorry if I missed it earlier, but can you just comment a little bit on just how accrual is taking place with RSV high risk and sort of how much further behind it might be from a full accrual or how much further behind basically a readout from that study is tracking relative to RSVP?
Yes. So, quarter after quarter, I've been asked, which study do you think is going to read out? And I could never answer the question because especially when we targeted a goal of Q3 for data. But as I said, I think at the JPMorgan conference as we get a little further into the season a better sense of it and should be able to make a call. And clearly, today, we're making that call. It looks like PEDs is the one that will. In terms of HR, how far behind us, and I think we just got to continue the recruitment in that. Obviously, I think we're going to need to go to the southern hemisphere continue on beyond the Northern Hemisphere season. And we'll just give updates as we go, once we have a good, more crisp target guidance to provide if we will. And to remind you, it's a larger study than PEDs, right? So, it's roughly twice the size and it started later than PEDs. But we did see a nice uptick in this Northern Hemisphere season. It was really gratifying to see that. So, we've got over 100 sites now, we are in over 15 countries. We've got a pretty big catcher Schmidt on now and it's just all about execution and hoping the trends towards normalcy continue. But that's been, again, something that we've seen this COVID season in terms of when it started and the shape of the season and everything else. This is the first season we've seen like this in years.
Maybe one follow-up, if I could. If you have what needs to be clear evidence of reducing viral load in RSVP, can you talk a little bit about getting steps running an efficacy study in the pediatric population? Is that dependent on results from RSV high risk?
No. I mean, I can let Scott comment on that. But they're just very different patient populations.
Sorry, I'm Scott Rottinghaus. It's different patient populations, and we feel comfortable moving forward in pediatrics with positive results from our pediatric study.
And our next question is Jay Olson from OpCo.
This is Cheng on the line for Jay, congrats on progress. Maybe 2 questions from us. First, on the RAC program. Just for zelicapavir if you decide to move the program into a pivotal study, just wondering how are you thinking about the adoption of RAC vaccine in your target patient population? And would you maybe exclude patients who recently took vaccine? Were there some other thoughts around that for the moment? And I have another question for the CSU program.
Thanks. Scott, do you want to take the RAC?
Yes, for sure. So, from a vaccine perspective, obviously, the coverage of vaccines is going to be far from 100%, and they're not 100% efficacious. So, we still see the market and the clinical opportunity persisting there. So, that's the first important point. And then in terms of a putative Phase 3 study in pediatrics, we envision including patients broadly, including patients who breakthrough on vaccine or Nirsevimab. So we, again, envision broadly studying patients in pediatrics.
And for the CSU program, I'm just wondering how would you position the oral KIT Inhibitor into the treatment landscape for CSU and that's like recent BTK inhibitor read out positively. So, just wondering if you think that's kind of a good benchmark for efficacy you're shooting for.
This is Tara. Yes, thanks for the question. I guess the way we look at the CSU landscape is broadly at all the different mechanisms. If you think about the standard of care being anti-histamines and only 50% of the patients really being controlled on that, very few of those go on to get the only indicated biologic, which is XOLAIR. The data coming through from the BTK inhibitors, which are an oral option in development. Those studies did read out positive. I would kind of put their efficacy to be somewhat similar to XOLAIR in that camp. What we're excited about from a KIT inhibitor perspective is the data that was generated through an antibody program in Phase 2 where they have seen some of the best efficacy in this disease so far. And that's really the benchmark we're looking towards and hoping to replicate that data with some oral option. So, that's sort of how we're seeing this evolve. Obviously, we'll continue to watch as the data comes out, hoping to provide additional efficacy over and above what a BTK inhibitor might provide.
Just maybe a quick follow-up on the last part. I assume there are some light side effects for antibody approach, maybe including the hair color change or some change in blood cells. So, do you think the oral KIT inhibitor may have some advantages on safety as well?
Yes. So, there are certainly known side effects on target side effects for KIT inhibitors. Overall, the antibody has had a good safety profile. Most of the AEs were mild and moderate and they resolved. The ones that are known on target that you mentioned in terms of neutropenia. There were generally mild hematologic impacts and the neutropenia is sort of stabilized after a short time period of a week or 2 of dosing. And so, what we did find out is that it didn't get worse with longer dosing. And so, it seems quite manageable at least at the levels that they're observing so far in the clinic. They were not associated with infections, at least in the trials with Nirsevimab. And so, we're obviously keeping an eye on it, but we don't think that will be a limitation.
And our next question comes from Brian Skorney from Baird.
This is Charlie on for Brian. Just a couple of quick ones here. We were wondering if you could give us some more color on how severe symptoms are and how long RSV tends to last more thinking about pediatric and high-risk patients relative both to each other and to low risk adults such as those that were enrolled in the RSV trial? And then secondly, just you spoke to antibodies and CSU. Just wondering, is this a main focus for you guys in terms of how you're designing the specificity of your lead candidates? And do you consider that a bar for you to reach? And how else are you thinking about that?
So, I'll jump in on the RSV question. The kids that we've been enrolling are typical kids often with their first episode of RSV infection, and they have symptoms typically pushing 2 weeks longer than you'd expect to see in young healthy adults, given their immune naivete. So, that's kind of the length of symptoms, 10 to 14 days. And again, severity varies in our study, the sort of symptoms that can often get you hospitalized. So, fairly severe. And with adults, again, the high-risk adults that we're enrolling in our study patients with COPD, CHF, again, have a more severe symptomatic profile, again, a couple of weeks in most cases. So that's, I think, the general severity and length of that disease, if that helps.
And I'm sorry, could you repeat your question on CSU?
Yes. And that's very helpful on RSV. But for CSU, we are just wondering how you're thinking about designing a specificity and thinking about the antibody that you mentioned earlier. Is that kind of your goal in terms of the specificity of your molecules?
Yes. So, I mean, the goal of the program is to have something that's potent to KIT. And so, we've looked at that preclinically in both binding and cellular function assays, and we see nanomolar activity there and then to be highly selective against KIT versus other kinases. We shared some preliminary data towards that a few weeks ago and showing good selectivity. We continue to optimize the compounds that we have and study them for selectivity, but that is the goal. Yes.
[Operator Instructions]. And our next question comes from Ed Arce from H.C. Wainwright.
This is Thomas asking a couple of questions for Ed. So, for the new immunology program that is to be later this year, just trying to figure out what are some expectations that you have for now? Will it be for a large disease or a small disease or something along the line of the new KIT inhibitor program in terms of large market and then a large unmet need as well?
Yes. So, we're primarily targeting chronic spontaneous urticaria with this molecule as a primary indication.
I'm sorry, were you talking about a future to be announced program?
Yes, the second immunology program that's to be announced this year.
Yes. I mean, we're trying to be very thoughtful about it going after good markets, right? Good market scenarios where we think a small molecule could make an important impact. But beyond that, we'll announce the program when we announce it.
I mean, I think some of the things we think about in selecting programs, obviously, having a good market opportunity, something that has a high unmet medical need, ideally, programs where there's a clear clinical path and biomarkers or early signs of efficacy that we can get early on in the program and really understanding the kind of underlying disease, cause of the disease and having confidence in the target and mechanism are some of the criteria we look at.
And then next question, one financial question addressed to Paul. Just trying to confirm, last quarter for fiscal year 2024 OpEx guidance, R&D 100, 120 and then G&A, 45 to 50. Just trying to figure out whether that's still on target for this fiscal year?
Yes. That is still our targeted spend at this point, yes.
Thank you. And I am showing no further questions. I would now like to turn the call back over to Jennifer Viera for closing remarks.
Thank you, everyone, for joining us today. If you have additional questions, please feel free to contact us either by e-mail or call the office. Thanks so much, and have a good night.
This now concludes today's conference call. Thank you for participating. You may now disconnect.