Q1 2020 Earnings Call

Well, ladies and gentlemen, thank you for setting bodied walk into the Q1 2020 intercept Pharmaceuticals earnings conference call. At this time all participants are in listen only mode. After the speakers presentation. There will be a question answer session to ask the question during the social media. The press Star one on your telephone if you require operator systems. During the program. Please press Star then zero I wouldn't electronic sell through.

This conference call mistakes would be for Cisco head of Investor Relations you may begin.

[music].

Good morning, and thank you for joining us on today's call.

This morning, we issued a press release announcing our first quarter 2020 result.

Financial position and also posted accompanying slides, which are available on our website at www dot intercept pharma dot com.

Before we begin our discussion I'd like to know that during our call we will be making forward looking statements, including statements regarding our approved products and clinical development programs certain regulatory matters, including the potential approval most used for liver fibrosis student, Josh and our strategy prospects financial guidance.

Future commercial and financial performance.

Listeners are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this call and we undertake no obligation to do such statements except as required by law.

These forward looking statements are based on estimates and assumptions that although believes to be reasonable are inherently uncertain and subject to a number of risks and uncertainties, some but not all three factors that could cause our actual results could differ materially from our historical results are those anticipated for predicted by are forward looking statements are discussed in this mornings press release and in our periodically.

Filings with the FCC.

Today's call will begin his prepared remarks from our CEO Dr. Mark Pruzanski, followed by those from our Chief operating officer, Jerry's ourselves and our Chief Financial Officer Sandeep capacity as well then open the call to take your question. Please limit yourself to one initial question in order to allow time for all questions to be addressed.

Let me now I'll turn the call over to our CEO Dr. Mark.

[music].

Thanks, Lisa and good morning, everyone. Thank you for joining us on our first quarter 2020 earnings conference call.

Hope that everyone joining us on this call and your families have remained in good health during this challenging and unprecedented.

Before diving into our business update in financial results I'd like to discuss the current global situation that we are all pacing and how we as a company have been navigating.

Sure. It intercept we remain strong and resolute and continuing to serve the needs of our colleagues customers and the patient community globally.

We are monitoring to cope with Nike and situation closely and mobilized early in the course of the pandemic to secure the safety of our employees and take steps intended to ensure business continuity, while remaining focused on are important objectives for the year.

It goes without saying that adjusting to the new reality of remote working has been challenging and I'd like to thank our employees for their solidarity determination and successful efforts and continuing to drive our enterprise for.

Turning to our ongoing clinical trials, we're focused on ensuring patient safety and maintaining trial integrity consistent with recent regulatory guidelines.

With more than 40000 patients enrolled across our gnashing PPC programs at approximately 400 sites around the world.

We've been finding new ways to Compliantly support patients and investigators participating in our trials by a telemedicine homecare visits direct delivery of investigational product and other measures.

As you know our phase three Nash trials, regenerate and reverse or fully enrolled and ongoing.

We made the decision to temporarily pause screening and randomization of patients in our phase for cobalt outcomes trial in PBC as well as they have in our phase two study evaluating oceana in combination with specifies it.

We are carefully evaluating adult evolving circumstances in light of dependent dynamic and look forward to restarting enrollment in these trials as soon as possible likely on a regional basis.

With respect to our supply chain, we've been working continuously with our third party manufacturers distributors and other trusted partners to avoid any potential disruptions to our product supplies as a result with the pandemic.

At this time weak not experienced any meaningful interruptions in the supplies commercial product for our Ocala, but PBC business, we're investigational product for our ongoing clinical trials.

Looking now at our performance I'm pleased to report that are well caliber PBC business continued to perform well in the first quarter of 2020 with net sales of $72.7 million, representing 40% growth over the prior year quarter.

In the first quarter, we saw higher than anticipated net sales supported by continued strong total prescription trends and modestly higher than expected inventory demand towards the ended the quarter has certain customers responded to the uncertainty of the all the corporate banking area.

These strong results continue to provide a solid foundation as we advance during this pivotal year for the company.

On the regulatory front, we continue to work closely with the FDA on our priority review application for associate and liver fibrosis, Peter Nash as we look toward our could do could target action date of June 26.

Of course, the next important review milestone is our Advisory Committee meeting tentatively scheduled for June at night.

As you may be aware given the current environment. The ask is publicly indicated that it is moving ahead with its plans to host virtual outcomes and our team is preparing accordingly.

We're pleased that the FDA has been working to ensure that their technology platforms are robust and that their virtual meeting format will facilitate productive discussions amongst all the participants.

In the meantime, within conducting virtual market had comps and I've been encouraged by our ability to execute these remotely.

With the first ever in San Diego on filed for a Nash fibrosis syndication, we're preparing for a wide range of topics to potentially be discussed at the outcome.

Now she is a complex disease and many of these patients have co morbidities, which involve treatment by very specialties that made therefore be represented on the panel.

Following the assets on our next review milestone will be the anticipated approval associate based on our PDUFA target action date.

Or launch preparation has been extensive and we will be prepared to launch as soon as possible following the expected approval.

Based on the on certain duration and potential variability in government imposed restrictions Judy the pandemic. Our commercial team has been hard at work on a thoughtful and flexible plan to launch associate for Nash with appropriate customer engagement and patient safety and access foremost on our minds.

Intercept is a company that has accomplished many first as the leader in progressive non viral liver disease. It seems only appropriate that we anticipate yet again, having the opportunity to lead the way navigating the first Nash launch in this evolving commercial environment.

Our team has prepared and opt for the challenge the Hepatologists and Gastroenterologists, who care for Nash patients with advanced fibrosis continue to be highly engaged and the unmet medical need remains significant in this vulnerable populations.

For all these reasons I remain confident in our ability to successfully execute on this potential blockbuster opportunity and.

A final word as a member company of bio.

Okay, Great pride in the way the entire biopharmaceutical industry has mobilized in response to because its 19 crisis.

I believe we will get through this and then ultimately our industry will once again demonstrates the value to society of our collective efforts to drive scientific innovation to improve health outcomes and save lives.

I expect we will emerge a stronger more united industry and be well position to pursue our common objectives to treat patients in need and conquer disease.

Now I'd like to turn the call over to Jerry to provide an update on both our global commercial PBC business, and our Nash prelaunch activities and commercial readiness Jerry.

Thanks, Mark and good morning, everyone.

The first quarter, we reported $72.7 million in worldwide Ocala, but net sales, which was our highest quarterly sales to date.

The U.S., we achieved net sales of $50.8 million into first quarter as our end market demand performance was strong we continued to see good total prescription growth versus the prior year quarter.

In the International region, we achieved X U.S., so caliber net sales of $21.9 million into first quarter. These results reflect the continued strong performance in our key international markets.

Now we did not see the anticipated seasonality in worldwide Ocala, but net sales in quarter, one that was modestly higher than expected inventory towards the end of the quarter, a select trade customers in the U.S. and in Europe proactively manage inventory in response to the uncertainty of the early cobot 19 period.

As you would expect we have begun to see a slowdown in new patient starts as the impact of social distancing directives has caused a reduction in physician office visits.

To give some context on that dynamic as you know recalibrate, the chronic medication and new patient starts or a small percentage of overall prescriptions.

Turning to Nash prelaunch activities. Our teams continue to make significant progress in preparation for our launch which will be fully prepared to execute upon FDA approval.

Talk a little bit about that progress nothing adjustments that were making related to cope with 19 and its impact on our launch planning.

The good news is our strategy and our overall opportunity in Nash remains the same.

The global pandemic has not impacted the fact that a significant unmet need exist in non cirrhotic Nash patients with advanced fibrosis, and we remain committed to moving forward with our launch as soon as possible following the anticipated approval of those yet.

As we began 2020, we're encouraged by the strong momentum we saw as we progressed in our efforts to educate stakeholders on the implications of advanced fibrosis, do Dinesh and the appropriate identification of these patients.

We were able to continue to expand the reach and the depth of our educational efforts based on our expanded feel teams and our increased utilization of digital programming.

For example by the end of the first quarter, our field forces have the liver disease state education to well over 11000 physicians treating Nash patients.

Of course at the end of the first quarter. The covert 19 situation began to emerge and it's caused disruption to the health care system.

Therefore, we've been working to update our launch plans to account for the changes in the market environment.

As a result of the crisis overall patient visits across the industry in the U.S. are down between 50 and 60% from this time last year.

However, we are observing in increasing the utilization of telemedicine and remote monitoring of patients that is growing practically on a weekly basis.

Our next target physicians about the hospital and the community setting haven't rapidly adopting virtual platforms and we're looking to harness this emerging trend.

At our Nash commercial day last December we talked extensively about our initial target patient population for launch and that has not changed our initial target population remains non cirrhotic patients with advanced fibrosis due to Nash who are already under the care of a hepatologists Ora G.I. specialists and we estimate that their approach.

Some at least 500000 such patients existing in the U.S.

We know that success with the Paris is a critical priority for a launch and remain encouraged by what we see on that front.

Our payer discussions have continued to progress with little if any interruption, even as the payer dialogue moved to a virtual setting.

As part of our progressive dialogue with payers, we have now advanced to corporate level discussions. We are pleased to see a high level of the pair engagement on Nash. Despite the demands on payers, resulting from the covert 19 situation.

Our overall objective is the same we're working to ensure that there are no surprises and that our payer customers have a clear understanding of our target population and the unmet need that exists today in non cirrhotic Nash patients with advanced fibrosis.

Our objective is to ensure that we're well positioned for the final negotiation phase with payers, which will happen. Once we have approval a final label in a price.

Since mid March as a result of the cobot 19 pandemic and the implementation of government imposed social distancing directives, we like the rest of the industry have experienced a disruption of our efforts to educate the community.

Face to face meetings with the physician community are just not possible right now so our educational efforts have transitioned completely to virtual platforms.

We've been pulse inappropriate disease education content to the physician community regularly and our field teams have begun to reengage with physicians to personalize remote communications.

Over the past several weeks. We've also been focused on further increasing the region. The frequency of our virtual programs to provide additional opportunities to bring relevant education content to health care providers.

It's our goal to ensure that our launch plans enable us to keep our customers and our employee safe.

So we can safely move back to in person interactions in the field, we expect that the early stages of our national launch will be conducted virtually.

We expect the recovery from covert 19 will be regionally phase. So our local teams will be assessing each geography and monitoring customer trends in each of our markets in real time, so that we had the flexibility or a launch plan to adjust our customer interaction model as local situations evolve.

Consistent with our objective to be fully ready for launch as early as the PDUFA target action date, we've hired and trained the majority of our targeted field based teams across sales market access and medical affairs and I'm very encouraged by the talent that we've assembled.

With regards to the final group of open positions in our targeted field structure. We plan to continue to evaluate the evolving covert 19 situation on the local level and we'll take a measured approach to the addition of incremental personnel as we look to optimize our available resources.

In summary, upon approval will be ready to execute the first launch in this category during what we know will be a dynamic market situation.

We look forward to providing access to oversee a for non cirrhotic patients suffering from advanced fibrosis due to Nash and we continue to believe OCI is well positioned to become the foundational therapy for these patients.

And now I'll turn the call over to our Chief Financial Officer, Sandeep capacity for a financial update Sandeep.

Thank you Gerry and good morning, everyone. Please refer to our press release issued earlier. This morning are full summary of our financial results for the quarter ended March 31st 2020.

Our regulatory and commercial launch readiness activities continued during the first quarter.

We responded rapidly to support business continuity and took important steps intended to minimize disruption to our supply chain and clinical studies in response to the code at night and endemic.

All while maintaining strong execution in the PBC business and advancing Nash pre launch activities.

In the first quarter, we recognize 72.7 million in O'callaghan, that's though our highest quarter to date.

Up from 51.8 million in the first quarter 2019.

Our first quarter or Calvin net sales comprised of U.S. not sale of 50.8 million and X U.S. net sales of 21.99.

This represents a growth of approximately 34% and 58% respectively versus the prior year quarter.

As Jerry mentioned earlier, we did not see the anticipated.

Overall, Q1 sales seasonality for California, typically experience with certain customers proactively managing inventory at the end of Q1 in response to the uncertainty and the early cobot 19 period.

We also saw lower new patient starts towards the end of the first quarter. That's we began to experience impact of covered 19 on our business.

Our GAAP operating expenses for the first quarter for 156.1 million and our non-GAAP adjusted operating expenses for 142.9 million.

As a reminder, our non-GAAP adjusted operating expenses.

Talk based compensation depreciation.

Non-GAAP adjusted operating expenses is a non-GAAP financial measure under FCC regulations. Please refer to our press release issued earlier. This morning for a full explanation and reconciliation of this measure.

Our cost sales for the first quarter Reserve point 9 million compared to zero point Sixmillion the prior year quarter.

Selling general and administrative expenses for the first quarter or 98.6 million.

That's with an increase of 21.4 million over the prior year quarter and was driven primarily by organizational growth and our Nash launch preparation activities.

During Q1, we completed the majority of the U.S. feel for its expansion support the launch in Nash.

Our research and development expenses for the first quarter for 56.7 million and generally in line the prior year quarter.

As of March 31st 2020.

We were well positioned with cash cash equivalents district cash and investment that securities available for sale of approximately 554 million.

Turning to our financial guidance for the year, we expect a couple of a total prescription demand continue to grow on a year over year basis. We also expect second quarter or Calvin itself to be relatively in line with first quarter of Calvin itself.

On the anticipate a reversal and the second quarter, but the cobot 19 related inventory build seen in Q1.

With respect to operating expenses, our guidance remains unchanged and we continue to expect non-GAAP adjusted operating expenses for 2020 to be in the range 560 million, the 600 million, reflecting our investments to support launch of us yet liver fibrosis due to Nash or commercialization efforts.

PBC, our clinical development program and pipeline programs and other operating expenses.

This expense guidance assumes a series of crude and Nash on or about the PDUFA action date of June 26 2020.

In summary, we have a strong financial foundation and our teams are proven we can adapt and rapidly changing environment.

Remain well positioned to achieve our strategic objective for 2020.

So I'd like to now turn the call over to the operator operator.

Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one key on your Touchtone telephone. If your question. That's been answered you were seeing with yourself from the Q. Please press the pound key.

First question comes from at least your young with Cantor.

Hey, guys. Thanks for taking my question correctly. Your congrats on just a couple from me one I'm can you just talk a little bit about no kind of here I'm kind of recent communication with the idea around upcoming panel and I'm you know kind of what you guys kind of really focus on and prepping are there things there.

It was it takes about or is it just kind of the things that a topic that we've all kind of integrating overtime and then the second one is if I'm <unk> commercial perhaps I guess do you think with a fair amount paid has been under care there.

Focus on kind of trying to do patients as far as doing kind of early patient education. It seems like most people in the U.S. and honestly, probably Europe don't really know whatnot is it you know that's obviously a unique <unk> launch over the long term thing.

Thanks.

The first one this is mark and I had to change the second one so as I mentioned in my prepared remarks.

Looking for a tentative June nine date, we are confident that 50 is planning on proceeding.

With advisory committees at this time and you know they publicly stated that they are working on facilitating a virtual formats right and that's what we've been preparing for.

You know with respect and topics.

We don't have a clear line of sight, we won't be till we get their briefing book, but what I can say and we've said this before and this is the first ever Nash approval, a it's an accelerated approval.

And and so and it's a complex disease with with significant comorbidities right. So the range of topics that could come up we're preparing for for everything worked very confident based on the progress we've made.

But it will be well prepared.

I think you know to be more specific just looking across you know what you typically expect.

You know obviously.

The on the efficacy side on the surrogate endpoints that histology endpoints, so looking at Uh huh.

And then of course with fibrosis and that's that's nothing.

With respect to the so she ocean preclinical <unk>.

There's also.

With recent Readouts big even three Theres no necessarily standardized way to assess these endpoints from from a biopsy reading standpoint so.

And of course, there we learned a lot from Flint and you know we have we have great results in two large randomized studies.

But biopsy could come up.

In that context.

And then you know moving over to the safety side Theres overall exposure that we have and then the safety topics that are well known with respect to our drugs.

That said or in the literature.

Right as being one tolerability.

And then adequate more broadly hepatic failure and of course B D on target with the changes that we know very well.

So those would be the anticipated topics there and then finally.

Given all the interest in non invasive there could come up a discussion about noninvasive means of and accuracy of identifying patients perfect for treatment versus biopsy. So those would be sort of range of topics that we are preparing for.

In the outcome Jerry on the second part of the question.

Thanks for the question Lisa as we've indicated a up to now we're going to continue to stay focused on the advanced patient that's gonna be true in terms of the education.

Both physicians and with patients in the Preapproval period, and then once we entered the launch phase after approval.

Mike why so there's still a good amount of work to do so we think about again the effort as a targeted one on the education side, particularly with the patients where we do know.

That there is information or the the advanced patients are more interested in understanding their care are more urgent, but do need information. So we would anticipate on an educational basis that we'll stay focused.

In that a in that launch phase on that advance population of course, we'll do some things overall to make sure that the overall understanding of the impact of fibrosis and the patient issues.

Our our more well understood a with the patients that are out there, but again the the messages are really a focus on this advanced population.

Great. Thank you [noise].

Our next question comes from Michael Yee with Jefferies.

Hi, guys, Hi, Mark Congrats on a good quarter or turn accretion environment. Two questions that are related my first question is I'm, assuming approval and assuming everything goes smoothly can you talk about how are you guys will now about biopsy requirements for managed.

Care and how the street will now about which parish border when not require it how how should we think about going about that journey and ER and what information is out there and then second related to that how do you think or whether a patient requires a biopsy or not changes the patient journey to get a script.

And how that would change our thinking about launch a in a cobot environment. Thanks, so much.

Gary could you tackle those.

Sure Mike.

I think on my first question.

We expect.

Linda.

Yes.

You described up to now through this.

Journey went to payers, which is about a the importance and need.

Okay.

Patients with advanced fibrosis their population.

Concerned about and ultimately with the label in hand.

And it kind of price, which we would set at the point of time then enter into.

Phase and we would anticipate Mike that those access decisions, where you know formally where you land with payers.

What happened on the commercial side in that first six to nine months.

We still do see that as being a period of time, which.

Aligning with payers on how they're going to look at.

The overall considerations for access to too.

Yeah in Nash and again, we're progressing I think well on that discussion there are still some of those key elements, which we need in hand, like the label and I'd like to price to to have that final.

Phase of conversations then those happen on the one on one basis with the payers the payers make their decisions usually at different timetables, but that's six to nine month window is is the is a good frame of mind and of course.

I would anticipate to that as we progress through the launch window. After approval will be a communicating a back to two you with a with update on the progress as those individual.

Conversations continue and again ultimately on the commercial side, a end up occurring in that and that's six to nine month window.

And can you kind of make a comment about the second part of my question, which was just you know in a coping environment different drugs have different.

Impacts in terms of what it means to see patient and she doctors you know I don't think consensus has really changed at all and I don't think anyone's I think roster of just waiting to see how it plays out but do you have some comments about how that would play out in this environment, whether we would be some headwinds are not in how to think about that thanks. So much yeah I mean.

I think we're all Mike looking intensely on a weekly basis about how things are progressing and maybe a couple of key things that.

That we have in mind I think a as Oh, we we move up close to the point, hopefully where we're able to finally brings the first therapy for patients with advanced fibrosis to the market one thing that hasn't changed amidst all of this is that the unmet need is there is recognized more and more and you know as part of.

Really our long term focus in terms of ensuring that the a the first opportunity for patients to get treatment that we're able to two to bring it to to market effectively of course, you're seeing and we do expect for for some foreseeable future that there was a comp impact and disruption at the customer level I think this key dynamic that.

Of course.

If due to social distancing patients aren't entering the physicians offices as they normally would that's one dynamic and you see some of the the impact happening in terms of just new patients. So that's one dynamic that we'll be watching closely as we look at you know the evolution locally now as directives are.

The east in some areas quicker than others, how does that change.

Change things on a local level. So we really look at the local situations as as being a as being critical we do know that we have.

Good knowledge about a core group of our customers. The 5000 physicians that we've been seeing a with PBC said during a period like this where there is some disruption in the communication is good that we have this base of knowledge about these customers and it allows us to.

Yeah, hopefully work and and plan effectively I think on the other side, we have moved to our communications being we're now exclusively virtual and while we feel good about the impact that we can have on virtual communications, both now and the education and after launch.

We also have to acknowledge that this is a different model.

And so we'll continue to to go deep on that and react. So we're encouraged by some of these dynamics, but like everyone. We're adjusting or looking at what's happening on a week to week basis, and I think remaining focused on the high unmet need that exists and really the unique long term opportunity that we have here.

Thanks I appreciate it.

Thanks, Mike. Our next question comes from Yasmeen, Rahimi with Roth Capital partners.

Hi team. Thank you for taking my questions Ken I'm. Congrats on the continued progress you're making during this environment two questions for you. The first one is.

Can you can you any dialogue with the empty or.

Let me know guard sub analysis of liver, given certain Cabot time, especially if biopsies at 72 week a man.

How can we think about that and then the second question. It for Jerry can you share set some wide on how parents actually understand unmet need for Nash given in the carbon era. Many of the patients that are in high mortality potentially our enhanced speech and do you think that this environment could actually be far more favorable.

Thinking about I, the unmet need as more recognized and allows with you in terms of Harrison adoption and thank you for taking a question and then if you know who will be we're presenting the data from the investigator site at the outcome that would be also great. If you could share it with that.

Sure. So it gives me I'll take the first in the last part I think you meant analysts.

Yeah, We don't know yeah, we don't know who they're going to be yet.

So so that's an easy one the first one you asked about reverse and and to treatment biopsies months 18, and clearly look it's as you know well, it's a global issue not just in the context of Nash trials.

But.

The vast majority of ongoing clinical trials FDIC that technology division as well aware.

Talents in the context of a reverse and other studies and you know is providing a dispensation for sponsors to take action and extend biopsy windows et cetera. So.

I mentioned my prepared remarks, we've gone to great Plains.

Luckily starting with the fact that our two pivotal phase three trials are fully enrolled but that's a very fortunate position for us to be it and so we can focus exclusively on taking measures to.

Im sure you know maintained integrity it'd be studies on patient retention, then and you know where needed.

Go go directly to the patient essentially.

Can't access clinics. So we we are doing everything and acquired manner to to ensure continuity in these studies, including with respect to managing the biopsy when done getting worse.

Interrogated goodbye.

Thanks.

The I guess the middle part of your question I think that we have seen good progress and I think that's been a prior to the cobot 19 window in terms of the understanding on the pair side as they've done a deeper dive getting ready for the first approval in Nash I think understanding the risk, particularly.

The productive conversation, we've been able to have on the medical side about really this differential risk in this increased risk that patients.

Reach when they become advanced in terms of their fibrosis. So I think there's a growing recognition of the risk and again I think thats good cohesion with.

Our focus in our strategy against the advance population now a lot of conversation and a lot of I think interest around the the co vid common into conditions and I think.

The payers are digging into this on the medical side and trying to understand.

The risk profile I think it would be premature to speculate on exactly how that specific element impacts the payers view on the Nash population.

But I do think ER, we start with a good progress in terms of understanding about the advanced risk and the implications of progression to cirrhosis that I think has been a a result of a lot of movement overall lot of momentum overall from the the medical community. In addition to.

The educational efforts that we've been engaged with so I think this will be a key area of a further conversation across both the physicians and the payers about how the overlap of common in conditions impact the risk of.

The of Cobot 19 patients. So we'll look I think that'll be something that again.

We'll will play out in more detail overtime.

Thank you team for taking my question.

Ladies and gentlemen, as a reminder, we ask that you limit yourself to one of initial questions. We can get really went into Q.

Our next question comes from brought Abrams with RBC capital markets.

Hey, good morning, Thanks for taking my question.

So back in December provided some extended follow up data from a subset of regenerate patients on fibers.

I'm wondering as we approach the AD com can you talk about types of additional updated datasets are analyses highpin submitting to the FDA that may emerge and the briefing documents or AD com discussion out overall, that's evolved your confidence I know sees.

Benefit risk profile. Thanks.

Thanks, Brian and.

Electric question you you know as you can imagine we're with a huge dataset like this we continued to generate.

A lot of analyses both in the context of you know our launch preparations and of course regulatory review, what you're referring to.

We presented at our Nash commercial day.

In the subset of patients remember, we've been accruing patients in the study for a long period of time.

By the time, we cut off on on the month 18, 931, pushing back to two cohort and so we have experienced all the way up to an including three years and we were able therefore to show what happened in the subset of patients from that from a non invasive fibrosis testing standpoint.

Past the month 18 interim.

And you know very reassuringly saw with respect to fibrous can you mentioned a continued improvement.

Through that be called about the month 30 analysis. These are patients plus months six months at that point in time.

And that's the strongly suggested.

Renewed ongoing benefit which is not surprising given you know how many years it takes to accumulate on scar that results in its an advanced fibrosis. So.

The short answer to your question is yes, there are additional analyses.

You know you.

As you'd expect you'd see a you'll see more data in our briefing book.

Certainly when that becomes available and discuss that that's the advisory committee we in totality.

Only have more confidence therefore.

In the robustness of our data in support of accelerated approval.

Thanks very much.

Thanks Bye.

Our next question comes from re to borrow a code.

Hey, guys institutions offer too I, just two from our end versus how is the FDA and enters understanding evolving and identifying and treating those patients that are likely to be faster grocers and my second question is as you, reaching more consistently and marketing efforts whats the feedback that you're receiving from then regarding comfort.

With new patient initiations of PBC in a virtual format.

Could you take ones.

Okay. So if you can just repeat the last part of the question.

The first one new patient initiations I'm sorry go ahead.

Yes, superstitious Im just wondering is your commercial efforts are reaching new physicians of engaging with them Howard, but what's the feedback you're getting from about nutrition initiation for PBC membership format.

So I think were seen to date.

Well the group of targeted physicians that we've been focusing on with PBC has been relatively stable.

So as we expand we talk about the expanded effort of the team that's really.

And expansion for our disease State communications on Nash, while the target audience that we've been really promoting to for PBC has.

Stable.

Roughly 5000 physicians that were targeted to when we do see as a as I indicated earlier that as the number of or the patient visits to physicians has slowed as a result of of Cobot 19, we do see new patient starts start to to drop off in a similar pro.

A portion, although we do see new patients getting initiated during this with this window during cobot 19 on PBC, albeit it has been in the first Oh eight weeks or so here at a lower rate, which is what we signaled to.

Earlier, I think you do see an evolution.

In how physicians are thinking about tele medicine, and really have Walt while there's good progress than you do see when you look at the ought to type of audited data that's out there and increasing the number of of ER.

Physicians that are seeing patients via Tele medicine, there isn't a one consistent view on that it is evolving in different practices.

At different rates. So this is gonna be something that that we're going to watch quickly I think when we think about the Nash world.

There are a couple of things that are important we do we will be targeting for Nash a group of patients that are already with specialists or.

As we've indicated in who already have been a in a specialist practice and already have information that the physician has gathered on them through a variety of different noninvasive means that that gives you.

Pretty that these patients have.

Advanced fibrosis. So there are some elements there that that I think we think about the patients are a more well known let's say a then maybe patients that were a needing to be referred so we'll take a look at that as as things progress, but the PBC a picture again, we do see new patient starts happening it is at a rate that.

It is lower consistent with the fact that less patients over the past eight weeks have been going into physicians offices.

Got it journeys to fall off in other question, how does the FDA payers understanding evolving regarding identifying and treating those patients that are likely to be faster grassroots with Nash.

Yeah, I mean, I'll speak to the payer side I mean, I think that the the payers do recognize and again their focus.

Their priority, because it's where they see the implications as is the.

Yeah progression to cirrhosis, that's their concerns so they do look at this group of advanced patients.

That they see at times and again, there's always some variability of how are the payers might be looking at their own population and can comment in conditions, but I think the notion that fibrosis is an indicator and as the fibrosis gets more advanced that those are the patients that are at risk.

Progression to cirrhosis and the progression to cirrhosis being the priority for the pair I think the connection to how advanced fibrosis is is one of really the key.

Elements that the payers understand well and I think has been the focus of a lot of our discussion with them and we'll continue to be a as we move forward.

Got it thank you.

Our next question comes from happened Jacob would you be yes.

Good morning, Thanks for taking my question two if I may and number one sorry, if I missed a miss this but.

Wondering if your latest thoughts in the a feasibility of having a dual pricing.

But differential pricing for PBC and Nash number two.

Wondering mark its what the latest or with the Fibrate, a and sort of a corollary to that how are you thinking about a potential combinations in nash beyond that as a as other drugs start aggressing do see feasibility beyond beds are too.

Combined with okay. Thank you so much.

Hey, maybe it's all I'll take the second question first and then and contrary for pricing question. So with respect to present as I mentioned my prepared remarks, you weve pause temporarily.

Screening randomization in our combo study in PBC.

We don't think that this is ultimately going to other material impact and as I mentioned, we're looking carefully at the evolving situation.

And to the opportunity to restart of recruitment.

Likely or on a regional basis.

So you know we continue to be fully committed to the to the combo. There and also course in the meantime from a product development standpoint things are.

Continue apace without interruption.

On the fixed dose combination formulation side.

I think you know looking beyond that.

You know Wilder there have been some intriguing cut results reported in phase two in the last say six months or so most recently the this magnetite high does some degree injectable.

Clearly had benefit on the Nash endpoint.

As you know as we've we've long anticipated would I think that we're seeing things evolve as as we kind of anticipated in terms of the core mechanisms. We think are going to have a role to play in a complimentary manner alongside our drug whether use directly in combination.

You know in the form of single pill, as we intend to exercise.

Sure.

Just simply administered in combination different ways.

But but it remains you know the field continues to progress relatively slowly the bar continues to be extraordinarily high particularly to meet the fibrosis endpoint I continue to point out.

The only investigational new drug to have demonstrated robust fibrosis improvement.

To a mid and late stage randomized trials.

So the bar remains very high and that's of course fibrosis is archrocks I think what we saw the most recent data side is what we've been saying all along which was that what what's currently defined at least as Nash resolution.

Does not translate necessarily.

Two fibrosis improvement, which is much more elusive.

In order to achieve so we keep watching the field of course very closely.

And but I don't have a specific update in terms of additional mechanisms.

Yeah and on the question on.

Yes.

Yeah. So.

We have a.

Clearly done I think the.

Right measures to make sure that we had options to implement a the the right pricing strategy based on all the information.

That will have by the time, we make this decision I think Oh continue to progress. The work. It's an important question I know for for you and for US as well. So you know we continue to progress with a separate.

D.A., which we we hope that upon approval that would mean, a separate label and and brand name and give us the option now of course, we're continuing to do all the deep work so that at the time, we we have to make the decision. It's the best informed.

Decision, we're still I think a needing information from the continuation of the payer dialogue as well as of course, a the final label on Nash at that point at approval, where we set a.

A.

List price on.

Our Nash product and also come back to you with an indication of what we plan to to do with with PBC. So again I think optionality.

We feel good about where we are in terms of potentially having the option to execute a whatever we determined is the the best pricing approach, but we'll continue to do the work and come back to you at the right time with a with finality on that and obviously.

Looking at the feedback from our customers and the environment.

We'll be part of that so look for that a in the future and again I think we all understand the importance of of that being the right decision.

Thank you. Your next question comes from Salveen Richter with Goldman Sachs.

Thank you for taking the questions as Ross on for Salveen I just want here can you just talk about some of the feedback that you guys are receiving and any update on this on this point in terms of the potential to print price M.C. differently.

In Nash and in PBC.

Sure. Thank you just touched one but.

Yeah, I'm, sorry, that's you know kind of where I just went and again I think the the key takeaway for US is we believe we'll have the option to to price the products individually. If we determine that that's the best approach, however will be taking that decision.

Once we have a a final label set a price on Nash and then make a decision about to what our intentions are in the future in terms of the strategic approach will take with PVC.

So we'll come back to you that after approval.

Our next question comes from Geoff Meacham with Bank of America.

Hey, guys. Thanks to the question.

Mark you briefly touched on that but I wanted to ask you a little bit more on the competitive landscape. What do you think about the effect size.

From the Nova data and I guess more broadly.

How are you thinking about the that class down the road as an efficacy benchmark.

Then the second question is on Nash Precommercial, how much insight you guys have.

Into the queue of already identified Nash patients just this in your your physician feedback I'm just thinking about the initial rollout. Thank you.

I show so with respect to the first question. The no go data and the effects I think where do you may be alluding to is you know the outsized placebo response, which which took a lot of people by surprise would be interesting to see how how they actually evaluated.

Coins that wasn't clear to me, but it clearly.

As expected with some advertising as a quick one.

Yeah, we saw the effect on Nash resolution, particularly the you know the high dose I think it's important to keep in mind. This is a daily injectable.

The glut, one that will be interesting to see how they choose to design the phase three and if they're going to continue to to go with the daily as opposed to weekly which is their commercial commercially improved schedule.

So so no no real surprises, there and and again as I pointed out a couple minutes we go.

Despite.

The clear efficacy on on Nash on the Nash side of things and what would I assume what I presume will be a you know the expected weight loss.

Yeah, we did not see and their data any any significant fibrosis improvement highlighting underscore interest just how unique that feature is.

With that goes here so.

You know I.

We have long been saying that we expected clip warn that particular smagley Todd I will have a world where in the treatment of these patients that's complementary to associate.

But of course, a long road to go after them now having just read outs phase two study.

Jerry I'll handover of for the other question too.

Yeah, when we think about that early window of launch again, we've been focused on this five one group of 500000 patients.

Who we talked about in the past and who we know were already with specialists being treated for liver condition and who already have.

Variety of different noninvasive measurements taken that would.

Determined not that patient has a high likelihood of being an advanced type products that are already in with the specialist I think the good thing that's happened as we've gone over.

Over the past couple of quarters and had more a detailed discussion and done a significant amount of pro filing with the expanded target group that we're talking about in this disease state window pre launch.

The type of patients that we described when we size the 500000, our patients that the physicians a recognized in their practice and I think we've been able to confirm through that work that this group of 15000 physicians that we're talking about targeting in fact have the patients.

And that these patients are ones that physicians can recognize the when described so I think we got a good sense over the more detailed work we've done that the target audience. Both on the physician side and on the the patient side or are the ones that are.

Not only are right for us to focus on but also not our recognize clinically which I think is an important dimension I think that's been one of the points of progress in the the prelaunch education efforts.

Okay. Thanks.

Our next question comes from Brian scoring there.

Hi, Good morning, guys. Thanks for taking my question I'm, just wondering kind of outline your current thinking around how you're going to utilize the 10 milligram dose data from regenerate.

As far as.

Approval goes.

Are you guys really leveraging this is a signal of a dose response to support the 25 milligram dose repositioning.

Steppers are being positioned as essentially approved dose agenda in of itself.

Yes, Thanks, Brian I'll take that one so so.

As you know.

20 to 25 milligram dose is good dose that met the pre specified.

To school bar hurdle for success in this study and so we've long said that that's the goes thats the efficacious dose.

We are proposing.

In patients with advanced fibrosis due to two Dinesh the 10 did not meet the hurdle. Although clearly there was activity there in a subset of patients and I think that that bolsters confidence to to your point.

Seeing very consistent dose response, it bolsters confidence in the in the biological activity.

The truck.

Obviously for completeness data for the 10 milligram are presented.

Good you've got the a and apparel wish to discuss.

That dose will be prepared for it but come from our standpoint is the sponsor here. We are only proposing the 25 milligrams a once daily for these patients.

Great. Thanks, Mark.

Thanks Bye.

Our next question comes from the seat House with Raymond James.

Hi, Good morning ice or recently published the draft evidence report.

No no see for Nash their threshold analysis concluded about 15000 dollar annual price would result in the 50000 dollar per quality threshold Mark I just wanted to get your thoughts on that number but also on the analysis in the report, particularly their projections and comments on cardiovascular events interest.

[music].

Gary do you want to talk lower.

Yeah, I mean, I think we have to first keep in mind that the the ice or Ah.

Information that's out there is preliminary.

We do intend to provide feedback during the public comment period, I think we'll continue to encourage ice or.

To consider a not only our comments, but also incorporate some of the necessary changes to.

So the modeling I think there's some opportunities for.

It to more accurately reflect how patients with advanced fibrosis, Oh should be considered in and how to think about a treatment or with a with those CA. So a work in progress there from from ice or as it is preliminary and again I think some some opportunities for for a us to convey.

When you to ensure.

That we're communicating a appropriate changes based on what we know in depth and I think.

Also would expect to other external experts to have a point of view on some of these key topics.

Appreciate it thanks.

Yeah. So building building I'd add is yeah, I think at the 100 150000 dollar cost could quality range, which is really where we're focused on you see higher cost effectiveness price cost effective price.

You know in the target population north of 20000, and as Jerry said, I mean never going to work.

Sure you know we clearly.

Take issue with some of the assumptions they made in their modeling.

So what will proceed from here.

Great. Thank you Mark.

Thank you. My next question Sorry next question comes from recent Baker with JMP Securities.

Hi, just a quick question for me I'm can you give us a sense of how much experience that they will have with virtual outcomes. Prior to you hear scheduled orbcomm I'm just curious if there's any we can like ours, but that's not from.

<unk>.

Thanks, Lisa I am not aware or another.

You know virtual AD com scheduled prior to two to the United States involving a sponsor.

And then be a review so.

I think to the to the extent that that doesn't change.

We will be we were the first test case.

This and obviously were coordinating closely with them on the on the tech side.

To to try to ensure that you know this this is gone and seamlessly as possible.

Okay.

Thanks, Susan.

Our next question comes from Michael Moore, B. Dobell shorten.

Hi team as thanks for taking my questions. Just wanted a quick update the you know you mentioned that once approval comes are still six nine months of discussions be had with payers. So.

So what exactly are you envisioning.

Shouldnt approval come on or before June 26.

What are you envisioning for how quickly.

The product can be launched and start being delivered to those 500000 patients that you're targeting and I know you haven't given sales guidance, but if everything goes according to plan what are you anticipating over the first half the second half of 2020.

Sure I could you take that.

Yeah.

So so as I said.

Our objective is to be ready quickly to launch a as soon as possible after a potential approval and so all the good background work in terms of ER launch planning on the supply chain side on the.

On the other elements a is a you know progressing as as we would expect right now so I think when we think about the opportunity to bring the.

First product to to patients with advanced fibrosis, there hasn't been a therapeutic option. So we feel certain level of of urgency is warranted.

Obviously, we do know that a as we've talked about before there is a window of time, where the six to nine months on the commercial side is typical for a new specialty product, we would expect that to be the rhythm upon which we'll see the key commercial payers make their decisions.

We also know that we would anticipate physicians to be assessing patience for initiation that their next visit so we'll be in that early period.

Where again the variability of how the parents are gonna be looking at the situation will vary some and that early window.

Until the formal.

Decisions on on access or taken.

We have not communicated yet done on sales.

Guidance over that initial window I don't know sundeep wants to add anything.

On to that but Oh, we haven't yet given guidance out on on the the sale side in the launch window.

Yeah, I mean, nothing that I mean registry premature to talk about sales guidance, though but we'll certainly if you asked me a closer to launch.

Okay. Thank you very much.

Last question comes from Mitek meant to me with B. Riley B. Riley FBR.

Good morning, Thanks for taking my question Congrats on a strong quarter just one quick follow up.

Jerry maybe could you just remind us if there's any doc fix on new patient starts that you are learning about in PBC that could be applicable to nice given the end customer being relatively more similar and then maybe mark if you could just remind us on the progress on the EMEA side and.

And if there's any requirement on the endpoint.

A patients need to attain both now should position in fibrosis improvement. Thanks, so much.

Yeah, I mean, I think we have taken the opportunity.

The fact that we are in the market window CA in PBC.

To learn a lot and to test a lot of things and this is not just in this this recent window, but we have taken the opportunity both on the education side.

Means of promotion, how weve mixed historically, a digital and in person promotion. So there has been accumulation of frankly, a lot of learnings. It is a big advantage being in market with these customers and we have consistently even before the period that we're in now had the opportunity to.

Test things in PBC, and then to apply them into into the launch plan. So that's been a rich window now obviously in the period that we're in right now with a.

They focus on a.

Virtual communication, we are actively doing some things on the PBC side.

We're considering some things on the PBC side, which will give us some quick feedback to markets. So that's kind of a real time.

Opportunity for US again importantly, with a group of physicians of many of which will be important for for us.

With Nash so that's a part of the DNA and the company an advantage of us being a focused liver company and we.

We think an incremental learning because of the fact were in market that we're applying even before this period and obviously pulling through a lot of things into the launch.

Yes, Thanks, Jerry and just to get we're we're already overtime. So good quickly on became a side. We as you know we call late last year, we expect the typical one year. So a review period. So so.

Please don't expect.

Approval or launch in Europe until.

Until next year.

The.

And with respect to the endpoints yeah, we have confidence in your I think alluded to the reflection paper that's out draft essentially equivalent of draft guidance that requires either on meeting the co primary endpoint of fibrosis improvement can Nash resolution or if you've got fibrosis improvement supplementing it supporting it with at least two stage improvement and as you know weve.

We demonstrated that with those yet so we think we've got a great.

Position.

Going forward and.

In review.

With that I know, we didn't get too to sum up questioners, we will follow up with you happy to do so over the course day.

And thank you all for all for listening in and Stacey. Thank you.

Ladies and gentlemen, just conclude todays presentation you may now disconnect and have a wonderful day.