3Q21 Reported A Smaller Loss Than Expected. During the quarter, Axcella made significant progress enrolling its two clinical trials, had scientific studies accepted for presentation, and announced a new indication for AXA1125. The company's loss for the quarter was $15.6 million or $(0.41) per share, compared with our estimated loss of $16.1 million or $(0.43) per share. The quarter ended with $66.1 million in cash.A New Trail For AXA1125 In Long COVID. Recent studies have indicated that COVID-19 infection can have damaging effects on mitochondria, changing energy production in the cells, and causing long-term fatigue. The AXA1125 mechanism of action impacts mitochondria and may be able to restore normal activity. A Phase 2a study in Long COVID patients is planned, with a target enrollment is about 40 patients, with data available in mid-2022.Two Phase 2 Trials Added Clinical Sites and Patients. AXA1665 The EMMPOWER Phase 2 study began enrolling patients in June 2021. This trial is testing AXA1665 in OHE (overt hepatic encephalopathy), a complication of liver dysfunction found in about 40% of cirrhosis patients. AXA1125 The EMMPACT Phase 2b study began enrollment in April 2021 in NASH (non alcoholic hepatic steatohepatitis.Scientific Publications. Earlier in November 2021, two posters were accepted for presentation at the upcoming Annual Meeting of the AASLD to be held from November 12-15. In August, the American Journal of Gastroenterology published data from studies with AXA1125 and AXA1957 in NASLD. In our view, these selections support the scientific foundations of the products.Conclusion. During 3Q21, Axcella added clinical sites to screen and enrollment for its two clinical studies, and added a new trial for Long COVID. We believe the company has sufficient cash to complete its data milestones through 3Q22, and are reiterating our Outperform rating and price target of $10 per share. Read More >>