Q4 2019 Earnings Call
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Greetings and welcome to the direct Corporation fourth quarter and fiscal year end 2019 earnings conference call.
At this time, all participants are in listen only mode.
Brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference call. Please press star and zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Mike Aaron Berg Chief Financial Officer. Thank you you may begin.
Good afternoon, and welcome to our fourth quarter 2019 earnings Conference call. This is Mike or in Burke, Chief Financial Officer of direct Corporation.
I will provide a brief review of our financial results and then Jim Brown, our president and CEO will provide an update on our programs.
Well then open up the call for question and answer session.
Before beginning I would like to remind you of our safe Harbor statement.
During the course of this call we may make forward looking statements regarding directs products in development expected product benefits, our development plans future clinical trials or projected financial results. These forward looking statements involve risks and uncertainties that can cause actual results could differ materially from those in such forward looking statements.
Further information regarding these and other risks can be found in our SEC filings, including our 10-K and 10-Q's under the heading risk factors.
Let me now turn to our financials.
Total revenue in Q4, 2019 was $10.7 million compared to 3.6 million in Q4 2018.
Q4, 2019 included 6.1 million recognize from deferred revenue associated with the Gilliat license agreement.
Adjusting for this total revenue was 4.6 million in Q4 2019 versus 3.6 million in Q4 2018.
Excluding the recognition of deferred revenue collaborative revenue for Q4, 2019 was up about $350000 or 45000 or 45% compared to Q4 2018.
Product revenue largely from the sale of all that pumps and LACTEL polymers was 3.4 million in Q4 2019 as compared to 2.9 million in Q4 2018.
This 20% increase was was driven by LACTEL polymer sales.
For the year as a whole the product revenues from all that in LACTEL were 11.4 million as compared to 10 point Fourmillion and 2018.
The gross margin for the combined product lines was 59% in Q4 2019.
These product lines continued to be strongly cash flow positive.
R&D expense was 9.5 million in Q4, 2019 as compared to 5.9 million in Q4 2018.
Primarily due to higher clinical trial expenses for do you are nine to eight as well as higher cost associated with Possum air to prepare for the Advisory Committee meeting.
<unk> expenses were 3.8 million Q4, 2019, as compared to 3.5 million in Q4 2018.
Our underlying burn rate during this quarter was 5.3 million, although it should be recognized this benefited from 1.7 million and proceeds from option exercises.
Decemberthirty, one 2019, we had cash and investments of 64.8 million.
Compared to 34.5 million at December 31, 2018.
With that thanks again for joining our call and I will now turn the call over to Jim for an update on certain of our programs.
Thank you, Mike and Hello, everyone.
The fourth quarter of 2019 was a strong one for direct and capped off a very good year for the company.
The following your highlights from the fourth quarter.
Based on the impressive data from our do you aren't actuate phase two way alcoholic hepatitis or age trial. The American Association for the study of liver disease or a F.L.D. granted an oral late breaking slot to the to present the trial results at their annual conference known commonly as the liver meeting.
Dr. Tefferi company, who was one of our principal investigators presented the trial results, including impressive data unimportant endpoints like believe Roman leal and meld scores.
The large audience attended the presentation and the data were well received.
The study results were also honored with inclusion in the best of the liver meeting summary, slide deck and the alcohol related liver disease category.
In addition, Dr. Craig Mclean from the University of Louisville presented a poster at the liver meeting showing the that's severe A.H. patients treated with do you worry about nine to wait and our study had significantly better outcomes as compared to similarly severe A.H. patients treated with quarterly cortical steroids any contemporaneous study.
[noise]. We also made good progress with enrollment in the 28 day Nash study in the fourth quarter. So much so that today, we announced that we have achieved the goal of this study a by enrolling 60 patients. In fact, we will end up with more than 60 patients with the last patient scheduled.
Be dose next week.
We also announced data from the psoriasis trial and although the active did not outperformed the placebo group Interestingly both group showed significant improvement over baseline.
With regard to polymer based on our interactions with the FDA since our Advisory Committee meeting in January we believe the FDA is actively conducting their review of our pending application.
And one last point, we ended the year with.
668 point 60, excuse me $64.8 million in cash, which is almost twice the cash which when we started the year.
All that being said our primary focus remains on our epigenetic regulator program and the lead compound do you weren't actuate do you weren't actuators and naturally occurring first in class small molecule that plays an important regulatory role in the vital functions I've looked at homeostasis inflammation cell survival and tissue regeneration.
It may have broad applicability in acute organ injury, such as alcoholic hepatitis any chronic liver diseases such as Nash.
We are currently developing do you aren't actuate for alcoholic hepatitis by injection.
And for non alcoholic Seattle, hepatitis or Nash by oral dosing.
I'll begin with an update on our alcoholic hepatitis program.
H. represents a significant unmet medical need with no approved therapies.
H is an acute form of alcoholic liver disease or L.D., it's associated with long term heavy intake of alcohol and often occurs after recent period of increased alcohol consumption.
Age is typically characterized by recent onset of Jarvis and liver failure.
And analysis and analysis of 77 studies published between 1971, and 2016, which included data from more than 8000 patients showed that on average the one month mortality from age was 26%.
According to the most recent data provided by the agency for health care researching quality or HR Q, a part of the U.S. Department of health and human services. There were over 117000 hospitalizations for patients with age in 2016.
And our recent publication analyzing the mortality and costs associated with alcoholic hepatitis estimated that the cost per patient was over $50000 in the first year and a L.D. is also one of the leading causes of liver transplants in the United States, which cost in excess of $800000 [noise].
[noise] last year, we completed a 19 patient phase two eight open label dose escalation clinical study evaluating the safety and pharmacokinetics of 30, 90, and 150 milligram doses of Dior nitrate in patients with moderate and severe A.H.
This study using Mel just to determine the H. severity. It was a multi study excuse me a multicenter study conducted in the United States.
In this trial patients with moderate and severe h. were treated with one or two doses of intravenously administered Dior nine to eight.
[noise] study objectives included assessment of safety, pharmacokinetics, and pharmacodynamics signals, including liver chemistry, Biomarkers and prognostic scores such as Leo and melt.
The trial results were presented at a late breaker.
As of late breaker in a podium presentation Dr. has any one of the trials principal investigators presented the results.
In a separate poster presentation Dr. Mclean presented additional comparative data from the phase two a clinical trial of Dior nitrate, what the control group of severe h. patients treated with corticosteroids in a contemporary and he is a study conducted at the University of logo.
This poster showed that little scores from this eight severe age creations treated with 30, a 90 milligrams or nitrate were significantly lower than those from 13 severe patients treated with corticosteroids.
Additionally, the do you weren't actuate H. results were selected for inclusion in the best of the liver meeting 2019 summary, slide deck in the alcohol related liver disease category inclusion in this slide deck is considered to be a singular honor and indicates the high level with which the American associates or for the study liver diseases review.
Committee regarded this research.
All 19 patients treated with nine to aid in this trial survived the 28 day follow it up follow a period and there were no drug related serious adverse events.
Patients treated with the were on to eight had acidic statistically significant reduction from baseline and Billy Rubin, a day seven and 28.
And model of end stage liver disease or meld score at day 28.
We will scores are used in clinical practice to help determine the responses and prognosis of h. patients. After seven days a treatment the lower the legal score the better the prognosis or probability of survival for an age patient.
Patients with a little score below 0.45 have a six month survival rate of 85% that's compared to those with little scores above 0.4, or five who have a six months survival rate of only 25%.
[noise] when compared with historical control group, consisting of 15 h. patients with similar severity of A.H. at the beginning of the study from a contemporaneous University of Louisville age trial did you are nitrate treated patients had statistically significant Lee lower legal scores.
In the night to eight study the mean Leo score for the 18 A.H. patients treated with nine to eight who tuned for their seven day digits was 0.10 these companies.
Excuse me. This compares to immediately will score of 0.41 for the patients and the Louisville study.
Additionally, 89% of the night to wait treated patients had a little score below 0.4, or five as compared to 53% or the lugo patients.
In addition to having statistically significant lower legal scores than those from the well matched control group of patients from the contemporaneously to Cry Lugo study then actuate treated patients also had said they've actually physically significant legal score lower legal scores assay compared to publish sleep.
Accuse me historically published control groups.
[noise], 74% of all night, you a treated patients at 67% of those with severe A.H.. We're discharged from the hospital within four days after seeing receiving a single dose of nine to wait the patient population typically remains in the hospital. This type of patient population for an extended period of time.
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Nitrate was well tolerated and all patients at all doses are treated.
And there were no seriously related adverse events associated with any dose level.
After being discharged on on day, two one patient did not return for the schedule day, seven or day 28 follow up visits therefore, the legal and believe we're gonna Mel data I just reported are based on 18 patients.
As stated earlier, all 19 patients treated with nitrate, including want the one that did not return for the follow up visits survived. The 28 day follow up period by contrast, two of the 15 patients from the loop of historical control group died in the first month.
[noise], we're working with the FDA NR advisors to finalize the phase Twob protocol. This phase Twob trial will be a multicenter international randomized double blind placebo controlled study in severe A.H. patients.
We are planning to initiate the trial the middle of this year and based on our current working assumptions related to trial design number of clinical sites enrollment rates, we anticipate topline data from this trial in 2022.
The next program I'll update is the night to wait Nash program.
Today, we announced that we had exceeded our 60 patient enrollment target for this.
Multicenter U.S. Nash trial with the final patient scheduled to be dose next week.
The trial is a phase one be randomized open label clinical study evaluating the safety pharmacokinetics and biological activity of night to wait and Nash patients.
With stage one to three fibrosis.
And this study were evaluating lightweight at doses of 50 milligrams and I didn't really 50 milligrams once a day and 300 milligrams twice a day patients in the trial take nitrate orally for 20 consecutive days and our followed afterwards for 28 days.
We've already enrolled approximately 20 patients for dose group and we'll end up with a few more than 60 patients. After the final patients initiate their dosing next week.
She endpoints for this study includes safety and pharmacokinetics clinical chemistry in Biomarkers as well as liver fat and stiffness spy imaging.
We remain on schedule to have all patients complete their dosing and follow up visits in the first half from 2020 and expect you announced topline data in the middle of this year.
Non alcoholic fatty liver disease or NAFLD is one of the most common forms of liver disease in both children and adults. It's estimated that NAFLD affects about 30% to 40% of adults and about 10% of children in the United States Nash more severe and progressive form of NAFLD is one of the most common.
Chronic liver diseases worldwide with an estimated prevalence of 3% to 5% globally. No drug is currently approved for NAFLD forefront ash.
And now to then I to eight psoriasis program.
In January 2020, we announced the results from the phase two a clinical trial in patients with mild to moderate plaque psoriasis.
22 patients completed the study applying nachtwey topically to the block on one arm and the vehicles with similar block on the other arm for 28 days.
You are nitrate did not demonstrate it met if it over vehicle based.
On the Investigator's global assessment ore, Ida, which was the scoring system for the primary analysis or in any of the secondary analyses.
However, at the end of the four week application period patients in both Tonight to eight and vehicle treatment group experienced significant improvement over baseline in both <unk> and local so psoriasis severity index or L.P.S. high scores. The improvement was observed as soon as one week after dosing in fact, 90% of the patients in both groups.
At least a one point reduction and Lps high score after the four week daily application period.
Daily topical application of nitrate was well tolerated with no meaningful differences in adverse events between the treatment and the vehicle groups.
Based on the topline data, we do not plan to continue development of topical eye to wait in psoriasis at this time.
They will focus our near term development activities on A.H. and Nash.
Now to our legacy drug delivery business, beginning with caused summer.
Customer is an investigational post operative pain relief depo product that utilizes our patented sabre technology. It is designed to be administered directly into the surgical site.
To deliver bps pivot came up three days after surgery.
Comprehensive review of the Posner program in light of the issues raised by the FDA and our communications with them, including the complete response letter was prepared and submitted a as a response to the complete response letter.
The FDA initially assigned a user goal three date of December 27th up last year, but then scheduled on Advisory Committee meeting for January 16th of this year and a new user fee goal date has not been aside.
[noise] and it's split vote six Advisory Committee members voted to recommend that the efficacy safety and overall risk benefit of profile a pause Mercer board approval well six did not support approval based on the information presented.
Although the FDA considers a recommendation of the Advisory Committee.
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[noise] when they didnt make a decision the recommendation or the panel is not binding.
The effort to evaluate the program develop the strategy for firing the response and prepare the response has been under the direction of Dr. Lee Simon who was formerly the FDA Division director of the analgesic anti inflammatory an optimal logic drug products Dr. Simon also led our.
Our preparation efforts for the Advisory Committee meeting.
Subsequent to the Advisory Committee meeting, we continued to interact with the FDA as they continue their review.
As a reminder into adequate and well controlled clinical trials conducted in patients undergoing inguinal hernia repair and sub incremental decompression or shoulder surgery.
Polymer demonstrated they significant decrease in pain and opioids consumed over the zero to 72, our period following surgery as compared to placebo.
We believe these trials support the safety and efficacy upon somewhere in the post operative pain and meet the requirements to be considered pivotal clinical trials.
And all the company's completed 16 clinical trials in deposit program involving over 1400 patients with over 850 of who receive posner and the remainder our control groups.
Insufficient post operative pain control remains a significant problem with studies, indicating that approximately 65% of patients experienced moderate to severe pain after surgery.
New non opioid pain products are much needed in the post operative pain setting and we believe the positive it could be an important contributor if approved.
If approved we would plan to license pause merger partner with excellent commercial capabilities.
Given the potential value of polymer we believe the deal could get could garner significant economic terms.
Now to the Gilly ideal in July we signed a license agreement with Gilead to develop and commercialize a long acting injectable HIV investigational product utilizing our sabre technology.
We have received 35 million it upfront milestone put these <unk> plus R&D funding since signing the deal.
The product is currently being reformulated and will undergo additional preclinical development work.
The final protocol update on today is per Cirrus under our agreement when they give you are we receive quarterly earn out payments based on a single digit percentage of U.S. net sales for Pacira is a long acting.
Injectable anti psychotic the product was launched at the end of February in 2019 bind DVR and has been a they've given guidance for this year up between $15 million to $25 million in sales.
As it is still early in the launch we've received modest earn out payments so far.
In summary data from the do you weren't actuate H phase two a trial is compelling.
Compared to historical data suggested the drug maybe life saving for patients who have no good therapeutic options and it condition with a high mortality rate.
The a esselte SL D granted us an oral late breaking slot to present the trial results at their annual conference known as the liver meeting Dr. Acenine, who is one of the principal investigators presented the trial results.
Including impressive data unimportant endpoints like Billy Rubin, Leo and meld scores.
The study results.
We're also honored with inclusion into the best of the liver meeting summary, slide deck and the I'll call. It related liver disease category. In addition, Dr. Mclean from the University of Louisville presented a poster at the liver meeting showing the severe h. patients treated with nine to eight in our steady had significantly better Ics outcomes as compared to similarly severe.
H. patients treated with corticosteroids in a contemporaneous study.
[noise], we believe it do you aren't actuate has the potential to be life saving an age patients and we plan to started phase to be placebo controlled age trial in the middle of this year.
We announced today that we have already exceeded the 60 patient enrollment goal in or do you were not to a 28 day Nash trial and remain on track to report data in the middle of this year.
Post the Advisory Committee meeting, we continue to interact with the FDA as they continue their review of polymer.
We look forward to potential approval Posner and a potential commercial partnership most of all we're looking forward towards the overnight you wait maybe able to do to help patients with devastating conditions, such as alcoholic hepatitis with that we'd now like to take any questions that you may have.
Thank you.
We will now be conducting a question and answer session. If you'd like to ask a question. Please press star and one on your telephone keypad a confirmation Todd will indicate your line is in the question kill you May Press Star and Q. If you would like to remove your question from Q4 participants using speaker equipment, it may be necessary to pick up.
Our hands that before pressing the star keys.
One moment, please will we pull for questions.
Our first question comes from Eli Merrell of Cantor Fitzgerald.
Hey, guys. Thanks, so much for taking my question Congrats on all the progress.
Terms of best Nash study can you talk a little bit more about what do you know you're hoping to see I'm, particularly after the one month time point are there particular biomarkers that yeah, you know must focus on of bank predictive of activity and then.
Do you added the higher dose level versus the last on phase one see what's your expectation for the dots relationship that you will see and you know do you expect to see greater activity at that 300, Meg Yankee gas.
Oh sure. This is wage Helane, Oh, I'm, so no patching Lang.
So I think our data for this Nash study, we'll certainly look had all the clinical chemistry data as well as Paul Matteis remember that we get Oh faced one be single dose trials in Australia, and several years only oh it was a in those patients including cirrhotic patients.
We saw some are a significant reduction following that single dolls, all thought that alone and the also CK jeans, both Cleveland <unk> agreed to see taking an up all then CK team as well as Oh, capralos inflammatory markers, let's stop at.
12 to 20 and 24 hours.
So well this I repeated dosing because it's a daily oral dosing for 28 days well see what are the marketplace or.
Maybe I'll.
CK jeans or other inflammatory markers similarly, well be affected following repeating dosing of cost. These patients on F 123 that not that including a slow patients as we get into a single dose Oh, However, all other clinical chemistry.
And now all the including a Ltd, STD and and then I will then and then biomarkers, including CK AG inflammatory markers like <unk> and are looking.
As well as Ah Ah that imaging data to lock had at that level five to end. This definition, so well basically it's a like us.
Casting than that well see a how how much will influence how what kind of thought biological sit now we are going to achieve falling respi daily dosing, even though it's the only one month then the study what else can help us with Genzyme the next phase Nash.
Wow, all with regard to adults with bonds.
We don't know we'll have to see we'd get cost out a very wide dose range from 52 to 600 milligrams a day.
I'll add this wide range of falling Daily administration I'll start talk all we'll have to see what Mako is primarily moved by what those levels. So in other words that daily dosing may be on maybe not asking the same way that single dolls that wasn't good luck.
Clue that a lot of our Nextel, we all know for the Nash. It's a long time administration often for dogs. So again, it's not like a age tall. What does single all two doses at most sellers that are often repeating dosing what kinds of the market's why the move and then well what do we need.
Okay and low adults all do we need to hire those intensified and Nash patient population. There I hope that helps yeah. I think that's important to note. We did casting that very wide is way. She said, there's a tenfold difference between the low in the high and the concept behind that was to get a sense of where we're going to goes we don't know when or what dose to go forward with so are we gonna be.
Circling the lower end and exploring around there the higher end or did we you know find a the bracket and is there something in between so that's that's where we're going to go.
Thanks, so much.
Our next question comes from Manic Montani of F. B R.
Hi, Dan Good afternoon, congrats on the progress and thanks for taking my question.
Very impressive data on its indeed.
They quickly can you dig a little the based on your dialogue with the agency on some of these working assumptions.
The timeline seems a little.
I was thinking more of 22 anyone but it seems like 2020, Duke and like could you maybe talk to the longer survival endpoint also they would what you're thinking then that a three month versus the six month and sure what you're heading from good wells around that.
Yeah, Yeah, we're working with that with K 12 that a lot of them actually as you can imagine, but we had a team that was that the there was a meeting that's been they've had to these meetings now in the last one was in October of last year and it was a meeting of the European and American associations for the study of liver disease. So it was a ASIL D and it was easily from Europe.
And the FDA and these three groups got together, particularly around alcoholic liver disease, and general and focusing a lot on alcoholic hepatitis because it's such a terrific problem. There then there's really no good answer out there and so a lot of time spent talking about endpoints and the like and so coming away from that meeting we believe the duration that we will be per se.
So in fact direction. We've suggested the trial, we'll see what the feedback is at the end of it all but but it looks to be a 90 day follow up for 90 day mortality and we'll be looking at Leila as well and prognostic. So and then obviously all the other indicators in between.
But thats the thought as far as how long does it takes into the study you know we're basing our estimates now on what we can glean from what's been done before and.
No there's really no not been a successful trial yet it was a trial done by Gilead, where they enrolled 100 patients in 18 months. They fall under six months and they used I think more than 40 centers something like that 50 50 centers. Yeah. So we're going to have a lot of centers will have centers in the U.S. and in the EU certainly if we can conductor trial a more rapidly we will.
And we'll do everything we can but we're trying to be you know realistic and as you know to the point of even maybe a little on the conservative. So I was saying 2022, just too you know yeah I'll call. What do you sound like they go down yes, that's true right, but most likely will enroll more patients that fall right. So I think a too yes.
Leasing of all right. Thanks, Yeah, Yeah, yeah, Okay, Great and then I had a follow up on Nash.
Is there any reference point do you could guide do how to think about.
The market in particular or even deliver fad when you think the epigenetic modulators mechanism.
Yeah, you know all that which you further if she wants to add up on <unk> behind me, but as you know there haven't been as you know because I know you follow the space very closely there aren't any really good biochemical markers you know thats why people use biopsy right to really define Nash and so you collect everything you can have tried to get how to read the tea leaves as it.
More from all of the data coming from from these patients we will be gathering leveraging data from ever IP. It if effort for liver fat in fiber scan for stiffness at a month, but that's not something that typically done is people look at amongst where these things. So you know if we see some changes we'd be wonderfully excited to do to see that.
You know be more difficult to put that in relationship to others. Since most other everyone else does 12 week were longer studies, but I don't know, which you would you want to add to that but yeah. I think that's quiet and then all without full week daily treatment and then secondly, low cat Oh, the markets change of Costa.
A tough target lumpy.
Pdfs change last night content.
No [laughter] deafness change follow that's a short such a short time tweets Meyer Yeah. That's definitely we'll look at all off the mark to see if we see any trends and give us what we're trying to do with its remembers we're trying to scout out what range to be able to pick to go forward into the next study.
Okay, and the high those and also learnings from the edge in acute injury model should definitely help from do see some of that I'm just one more on on if I may on on Dosimeter. When you say active review with the agency.
Good to go into any more detail if it's about labeling audience it's about.
Any other additional requirements and any other color as you can we maybe able to give the good obviously the the user Goldade is not then to work with his [noise].
Yeah, Mike its a.
We can't really give anymore guidance about what the nature of the interactions have been we just wanted to convey that there that there is activity going on because without that PDUFA date and after the AD com. We just wanted people to be aware that there's it seems that the FDA is continuing their review actively so.
That's really all we can say, though.
Okay and last thing with Yume Mike.
Spend how how to think about.
Obviously nice is a big swing factor. So whether you do go ahead with the bigger study on the back half of the but just you in one way or you are you not giving any guidance due there. This takes you.
Well, we don't give guidance on future cash spend because there's a lot of factors that will be reviewing in real time that will decide that but you know our historical burn rate has pretty pretty consistently been 6 million a quarter.
It'll probably go up a little bit this next year given the.
Dancing stage of some of the trials were doing so but beyond that I don't want to give any specific numbers.
Great. Thanks for taking my question Congrats again on the progress now thanks.
Our next question comes from friends, Bob Brisbois of Craig Hallum [noise].
Hey, guys. Thanks for taking my questions. Just quickly here can you remind us a little bit what are the reasons were given maybe by ideally I'd for why they struggled in age and why it might be different with with you guys.
Well, it's really the the mechanism of the drug is very different we know you know nitrate isn't epigenetic regulator and there's dysregulation and in the liver and ER and the for number of diseases, but certainly for alcoholic hepatitis and we know.
From some papers that had been published that you know, which part of the epigenome is dysregulated and we know nitrate interacts there and and and so Ken.
You know there's a good mechanistic reason for why and then we have all the good animal data that suggests that in and the the trial that they give me a dead was was that ASCII. One inhibitor. So it really is just hitting one component. If you look at multiple pathways nitrates associated with it would be one out of I don't even know a dozen or so and so it it really.
Probably didnt have the breadth of reach to be able to do something for the patients and certainly with the results from nine to eight reflect that outcome I don't know when she would you add yeah that a actually there is a very good publication just don't recently came out and the 19 and was published by a again me and others.
Bunge itself Uh huh.
All right and then the lead all the its Oh professor, but that Oh, probably in the last time, Pittsburgh and then they actually started the patient samples of thumb a alcoholic hepatitis they found that add a pete patients where the alcoholic peptide as they have lot.
Moscow regulators, what this lag related that and I pad sites and now which causes the epigenetic. This regulation. So it's a very good on a call and then that would eat held study what went wrong led the alcoholic hepatitis patients.
So from that article a actually one can take a long cats and why some drugs. If they have lost singled that target may not work and then by the end of Twog went on multiple targets and then I'll kick holiday acting at a very high a.
Level off Mostra regulators my work, well, which isn't the case also ideal I'd like to light.
Excellent. Thank you that's very helpful. And then lastly, why did you include as we're trying to figure out a little bit the Nash space and whatever one would have to at a three really is and how to differentiate the different stages. Why did you include as once in a the repeat those and why.
They exclude S. Four I guess.
Well, we would've loved to include therefore, but in Australia, we were able to but we hadn't done. This study in severely damaged patient enough for patients with nitrate for the U.S. So they they didn't allow that I can do in the interim we're doing that work now and so we will be free to dose any patients going forward.
But that was that was the reason why and so we included the earlier stage patients, which you think about the potential of nine to eight.
It's not that it can't might be able to help these patients but it really is if you look at what's doing an A.H. patients you. It's really a drug I think that's it I'm looking forward to being able to help the severely ill I don't know way too so.
Ask Ed will hire before you'll go into I'm never going to use the patients. So you'll have to go into the mild moderate and Cynthia hepatic impaired the patients. So that's how we actually get a mild hepatic impaired the pacing.
The time, when we initiated the Nash study, we haven't started a mild moderate and severe hepatic impaired patients Oh.
Oh H. pacing have thought a lot of stands that had an addict bouncing impact the patients true by that these out by injecting regardless they reach that that drug levels reached a much high oh plasma concentrations. However, because it's definitely a dose routes. So we still have to.
No doubt oral route of administration in the moderate and severe hepatic impaired the patient that flaw that agency would allow us to move into the asphalt pacings in the U.S. So last year, while we were finishing up the long term talks to allow for unlimited dosing, but the same time. We're doing this other works are now will be in position.
Post this 28 day Nash trial to be able to have the freedom to dose of patients that we'd like to it and think we can help that to the durations that makes sense.
I understand that has something where well have some sense of dose range to sorry, okay.
Your answer it's great. It's very helpful for what to kind of expect when you're looking at biomarker wise.
For the repeat dose, but is there any chance obviously single does repeat those these are different trials.
Is there any reason that it it would be difficult to see a real read through between the data on the single dose and the repeat dose.
[noise] well, that's a I think that and if you look had that you are nine to age because it's oh first in class epigenetic regulator. So not there's no send a lot to out like that I previously so that single dolls and the mountain.
Dolls.
They could be a friday that caused a mechanism of action because they regulate the about epigenetic level and then working armed amassed a regulator sell direct t. dosing and the single dolls. They somehow sometimes these epigenetic rather late because they could have a long.
Lasting effect.
And then depends on that disease state and then depends on individual patients and then when you give repeat dosing some if some assaf our long lasting and then some if at all show last week. So in other words, a single dose most is done rep. He knows in can be threatened.
So that's why we have two loans had oh, well now, saying well, we will look at a single dose data inside the well have to incorporate all the data as we achieved so far including the age pacing data to consolidate and then get a sense at all for what the repeating dosing.
Even longer tightened longer than one month daily dosing will be like I mean, there'll be things that will lead to understand as including dose regiment going forward you know for A.H. witness that were dosing on day, one and then again three days later, we're not dosing every day.
Because you get this it's really a master regulator master switch changing and and so when you have that kind of thing occurring.
These effects can last for a while so to determine the frequency with which to modulate that switch is something that needs to be a you know also understood as we go forward.
All right. Thank you that's it for me congrats on all the progress.
Thanks.
Once again, if you have a question. Please press Star then one our next question comes from Adam Walsh at Stifel.
Hi.
You know awesome.
Oh, well, Adam I have a falloff constant on each of these to be design. So what are your working assumptions on the.
Total patients enrollment, Oklahoma it appears unlikely to be low on home any drug arms.
Hello.
Also.
But I need tunes regarding the petitions inclusion or exclusion.
Q area compared to the fixed way so.
There was a great questions I'll start with the last one first yeah and this trial, we're not gonna be including moderates, we're looking to severe patients. Because these are the ones that really need need our help they not that the moderates don't have.
You know aren't very ill and their livers aren't aren't severely damaged, but the severe ones are the ones, where you can see that got the greatest opportunity to to see a difference and so we're going to be looking at patience with a with higher melds and on the higher what they call madry discriminatory function.
Oh scores and as far as the dose level is considered to be severe patients I guess, that's one quick answer and then with regard to the the dose groups right. Now we're looking at 30 milligram, a 90 milligram of night to eight as compared to to a placebo and so those are the three.
Arms that we're looking for.
Don't have final numbers now we're estimating maybe 50 patients for group is what was what we're thinking.
Currently.
Hmm.
You're welcome.
Our next question comes from Ed Arce of H.C. Wainwright.
Hi, guys. Thanks for taking my questions and congrats on the recent progress with nine to wait and and both H. and Nash.
So some of my questions have been asked already but I didnt want to ask a couple here first to confirm and ER and this Nash study that youre about who enroll now.
Uh huh.
Could you remind us again I didn't quite get it earlier when when you spoke about.
The range of doses and how many of those doses I think you went from 60 to 600 mix, but just wanted to be sure.
Yeah, what would there are three different dose groups and they'll each have a 20 patients for group a couple more because we're going it we've enrolled more than 60 by the time to trial was completed but.
We're looking at dosing or we work we have dose to 50 milligrams once a day.
And 150 milligrams once a day.
And then 300 milligrams twice a day for a total daily dosing that last group of 600 milligrams. So the range is more than 10 fold daily exposure between the 50 milligram group single dose and the and the 300 be I'd.
So that's the dose range and.
Okay great.
And then.
Just turning to the design that you're working on.
For the phase to be a study later this year.
I understand.
The there's there's you're setting a precedent here and you don't really have much to go on and is a bigger trial. Then then then Julie has but just thinking about.
The timeline that May go into 2022 before we get a readout just wondering if there are any plans.
Or any sort of an interim.
Look.
Or any sort of.
In advanced look into.
Either safety or efficacy.
You know, we will certainly have safety always be monitored.
But as you start to look to have a peak at efficacy and get into these Beijing statistical analyses and all the rest that kind of stuff it becomes quite complex and can weaken the power of your study and and so it's not something that we're embracing right now we're looking to be more straight up and just to evaluate those three dose groups that.
I described earlier in a head to head to head trial, basically and that being said you will have to see how the enrollment goes I think we're being realistic I think we changed the team are being realistic in there as they estimate right now and you know if we get fortunate maybe you know maybe things happen more rapidly, but you can't bank on it I think we should just consider it is what it is.
You have to remember the differences if the difference.
At the end of that you know, let's say it does take two years, but at the end of that will have.
You know if it works as it has before and the other 19 patients will have a therapy that can be lifesaving and a condition that affects more than 100 <unk> more than 120000 people this year.
Hospital Hospital presentations every year for it for this disease state that's their quoted for that very costly 50000 or more per some end up going to liver transplant. So the cost on the health care system and the potential to save lives is dramatic so the value will have for the health care system for the patients and for shareholders are direct is dramatic absolute.
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Just to dramatically different from where we are today, where we sit today and value of a company and the prospects. So its two years two years always will go buy right and at the end of that we could be in a very different spot.
And just to confirm Oh, well I think this is still to be seen but.
There is a the prospect at least that if the results are clearly positive.
As they were in the earlier 19 patients study.
This space to be could.
Pose the potential of being a one off to confirmatory pivotal studies.
It might be enough by itself. If if the data are good enough. It may be adequate for for approval. That's something that we'll just have to see as we go forward and what the data will dictate if the data are as as you just suggested as good as they we have seen or close to that then.
You know then that would be I would think would hope would it be enough to be able to get it out there to save lives because you're talking about a lot of people dying every year that that might not needed to die. If if this drug available to them.
Yeah.
And then just one last follow up for me, Jim and that is on your release today or one of the milestones you mentioned it was a new potential license and collaboration agreements could you just expand on that a little bit for us. Thank you. Yeah, you know I I really can't expand.
And what they are there we have these things that we call feasibility agreements that we always have as an under underlying component, where we have people in our drug delivery side of the business, you're working on and occasionally one of those things mature as to the point, where we put in place development deal. This happened with that and what the up up in the logic project happened with Gilead with the HIV product and and it has happened without.
Theres over time, and but we always get the difficult projects and so they are so that's why we don't talk about every feasibility deal because for every half a dozen that we'd work on maybe one goes forward maybe for every 10, one goes forward, so they're always difficult projects and but if you're successful it's tremendously valuable for the health care system, the patient set ourselves and our partners.
Potentially okay, we are right.
Okay sure.
Sure.
This concludes the question answer session I would like to turn the floor back over to the management team for closing comments.
Thanks again, everyone for joining and we're at a time, where we're excited about the progress, we're making and look forward to a great 2020.
Thank you so much bye.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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