Q1 2020 Earnings Call
Thank you for standing by just a conference operator.
Welcome to the seemed to be therapeutics first quarter tiny tiny earnings conference call.
A reminder, all participants are in listen only mode and the conference is being recorded.
The presentation.
I would be an opportunity to ask questions. He joined the question Q you make press Star then one telephone keypad should you need assistance during the conference call you May see no operator pressing star and Jeremy.
Now I'd like to turn the conference over to Mr., Dan Marino Vice President Finance. Please go ahead Sir.
Thank you operator, and good afternoon, everyone.
I hope that you've had a chance to review the press release, we issued announcing our first quarter 2020 financial results and business updates.
You can access that released on our website under the investors tab.
Joining me on the call today are just shot Chief Executive Officer, Dr., Chuck Mcwhirter, Chief Scientific Officer, Claire Dickinson, Chief regulatory and compliance officer, our principal investigators in our PBC and Nash programs, Dr., Gideon Hirshfield, and Dr., Stephen Harrison and the chair of our expert review panel Dr.
Paul Watkins.
So Joe and I will provide an update on the review of our Celadon, our investigation and financial position before we open up the call today.
Before we begin I'd like to remind everyone that statements made during this conference call, including the queuing <unk> session relating to Cymabays expected future performance business prospects events or plans, including clinical plans and in particular for this call regulatory approvals and anticipated timelines in data really.
States and cash runway are all forward looking statements as defined under the private Securities Litigation Reform Act of 1995.
Although the company believes that expectations reflected in such forward looking statements are based upon a reasonable assumptions actual outcomes and results are subject to risks and uncertainties and could differ materially from does forecast due to the impact of many factors.
The company assumes no obligation to update or supplement any forward looking statements, whether as a result of new information future events or otherwise, except as required by applicable law.
Participants are directed to the cautionary statements set forth in today's press release as well the risk factors set forth in Cymabays quarterly and annual reports filed with the FCC for factors that could cause actual results to differ materially from those anticipated in the forward looking statements.
This conference call is the property of Cymabay and any recording a rebroadcast as expressly prohibited without the written consent cymabay at this time I'd like to turn the call over to suit.
Good afternoon, and thank you for joining us.
During our last quarterly update call in March we discussed our continued focus on completing the ongoing investigation of the unexpected histologic findings identified by study pathologists.
In our phase to be study of sell it out part in patients with Nash.
I'm pleased today to announce that we have good news on that front.
Although it will take more time to gather and analyze all of the data that we intend to share with the FDA. We have now successfully cleared a key step in our process.
At the end of last week, a panel of eight of the world foremost expert liver pathologists and Hepatologists.
Bringing together extensive knowledge and drug induced liver injury Nash and call a static liver diseases completed a four day independent an in depth review that analyzed the findings from our Nash phase Twob study.
At the conclusion of the meetings the panel unanimously agreed with the following statement.
Well.
The features noted by study pathologist at end of treatment were confirmed on this review.
However, these did not differ qualitatively between baseline and end of treatment.
We suspect. These histologic features are under reported however in the experience of the pathology review Subcommittee. These features maybe observed in patients with Nash.
The panel unanimously concluded that the data and aggregate, including the complete absence of clinical and biochemical evidence of drug induced liver injury and the lack of significant differences in histologic features or there are changes across the placebo and treatment groups do not support.
Or injury related to sell it out bar.
The panel also unanimously supported lifting of the clinical hold and the re initiation of clinical development and quote.
It was extraordinary to have assembled this distinguished group of liver experts with the depth of their experience and their outstanding reputations in clinical science and drug safety.
The committee was chaired by Dr., Paul Watkins of UN see Chapel Hill.
Leading hepatologist in the area of drug induced liver injury.
Who is joined by two are leading hepatologist in liver injury.
Dr Neal capital it.
The U.S.C. and Dr. Willis madry of you'd see southwestern.
Joining the committee, where three influential figures in liver pathology.
Dr., David Kleiner head of the drug induced liver injury network at the NIH.
Dr appear a bit DOSA from the University of Paris.
And doctors that Goodman from Inova health services.
The committee was rounded out with prominent clinical Hepatologists and Nash in PBC Dr., Michael Charles <unk> of the University of Chicago, and Dr., John Virally of the Baylor College of Medicine.
Before describing the basic steps of the investigation I want to emphasize that we have not yet discussed full results from our investigation, nor any of the panels conclusions with the FDA.
Despite the favorable review by the expert panel there is no guarantee that the FDA will agree to lift the clinical hold and allow us to continue the development of sell it out bar.
We are planning to Reengage with the agency as quickly as possible, but the submission of a complete response to the formal clinical hold and their review of all the data gathered will be necessary before the FDA can make a decision that will allow us to restart clinical development of sell it out bar.
In order to provide context for the expert panel review.
I'll first provide a thorough recap of our Nash phase Twob study design.
The study results and histologic findings identified by study pathologist last November that led to halting the development program for sell it out bar.
The study with a randomized double blind placebo controlled dose ranging phase Twob study of cell Adele bar, which enrolled 181 patient with biopsy confirms Nash.
The primary efficacy outcome was the change from baseline in liver fat content at 12 weeks and a key secondary measure included evaluation of histological improvement in Nash and fibrosis as assessed by comparing the scoring of liver biopsies at 52 weeks with baseline.
In June 2019, we reported minimal reductions in liver fat, but robust and clinically meaningful reductions in markers of liver inflammation and injury, including LT FC Gamma GT and alkaline phosphatase case at 12 weeks.
The study remains blinded and what's the plan to continue to the 52 week endpoint to evaluate the effects of celadon bar on histological improvement of Nash fibrosis.
We remained optimistic at that time because of published studies that correlated reductions in liver enzymes, namely a LTV with improvements in Nash histology.
In March of this year, we reported dose ordered improvements in Nash resolution without worsening of fibrosis and in one point or greater improvement in fibrosis stage without worsening of Nash and sell it out far treatment groups versus placebo at week 52 or end of treatment.
The percent responders with resolution of Nash and no worsening in fibrosis were 810.3, 19, and 26.1% in the placebo 10, 20, and 50 milligram, so Adele par groups respectively.
The corresponding responder rates for at least a one stage improvement in fibrosis with no worsening in Nash or 20, 23.1, 23.8 and 37%.
The percentages of patients meeting, both endpoints or eight 5.1, 11.9, and 19.6% for the placebo 10, 20, and 50 milligrams Philadelphia groups respectively.
With most of the patients having completed 52 weeks of treatment last November the study pathologist began their blinded assessment of the 52 week liver biopsies.
Our plan had been for them to conclude the biopsy review in February for the final group of patients still active in the study as they finished their 52 weeks of treatment.
As events unfold it during the review of the first batch of slide.
Identified a subset of patients with what they described to be an unexpected pattern of histological findings overlaid on Nash pathology.
In order to protect the integrity of the investigation by our experts.
Including the blinded pathology review of all paired biopsies.
We've not previously shared additional details on the original findings.
Now that the review panels work is complete we are able to provide additional information.
Out of 181 subjects enrolled 152, or 84% had an end of treatment biopsy, which is comparable in percentage to other Nash biopsies studies.
The study pathologist identified 42 of the 152 end of treatment biopsies as having atypical histology.
With a total of six up 24 or 25% in the placebo group.
Eight up 39 or 21% in the self help our 10 milligram group.
Cannot 42, or 24% and the salad Alkar 20 milligram group.
And 18, a 46 or 39% in the cell Adele par 50 milligram group.
Does the incidence of cases flagged appeared similar between placebo and sell Adele Park, 10, and 20 milligrams, but was higher in the cell Adele far 50 milligram group.
The study pathologist describe these findings as unexpected or a typical in Nash pathology and potentially concerning for drug induced liver injury.
The findings were predominantly characterized as an interface hepatitis with or without bile duct injury or call enjoyed its presence of plasma cells and he ascena fills and in some cases vascular lesions.
It's important here for me to highlight that these eight typical features are not usually examined in Nash clinical studies, where the intent is to established eligibility and evaluate end points by scoring Prestea telesis labriola inflammation hepatic cellular ballooning and fibrosis.
Another element important to mention is that the baseline biopsies were read at least 12 months before the end of treatment biopsies.
And like many studies were not re read as part of the end of study protocol.
Also to remind you of how the situation unfolded there was no clinical correlate with these findings.
Patients with and without these findings had either improving or stable levels of biochemical markers of inflammation and liver injury throughout the 52 weeks of treatment, which included LT FC Gamma GT alkaline phosphatase eight total bilirubin direct bilirubin and high sensitivity CRP.
In addition, there were no signals of immune or allergic reaction as reflected by changes in eosinophils.
Or in clinical symptoms of liver injury, nor were there other changes in markers that can be associated with progressing liver disease, such as platelets are coagulation parameters.
No occurrences of liver decompensation or liver related to ease in association with peaks and liver Chemistries were observed for any of the patients with a paired up 52 week or end of treatment biopsy.
Importantly, these findings were unanticipated based on prior clinical and preclinical experience would sell at El bar.
After consulting what study pathologist and expert Hepatologists and with patient safety at the forefront of our minds. The decision was made to haul development of cell Adele par and all indications while committing to an in depth review of these findings.
The FDA agreed with this decision and formally placed a clinical hold unsettled ELP our development.
And subsequently provided input on necessary steps towards understanding the nature significance and consequence of these findings for the patients flagged in the study.
Our commitment to completing the investigation reflects our responsibility to the patients in our Nash study as well as to those who took part in our global PBC studies.
The discordant picture between the existence of unexpected liver histology in a subset of patients.
And the absence of any clinical or biochemical signals of liver injury and inflammation was the key unknown, we set out to better understand.
Turning to the investigation the first step what's to assemble and analyze a comprehensive profile of all study data, including patient demographics medical history concomitant medications.
And to measure additional biochemical markers typically elevated in drug induced and immune mediated liver injury.
This included immunoglobulins.
Autoimmune and tissue antibody.
Cytokine and other inflammatory markers in search of any signal that may correlate with the unexpected findings.
The outcome of this extensive effort was that there was no pattern of medical history, concomitant medications clinical signs or laboratory or other biomarker changes that were associated with patients having the atypical histologic findings in our study.
The second step in the investigation was a rigorous blinded independent review of baseline and end of treatment biopsies by the three expert pathologists doctors, Kleiner Goodman and but DOSA.
This time intensive process included two levels of review.
A blinded review of all biopsies completely randomized from one another and a second review of the blinded paired biopsies in which the chronological order of the biopsy pair was randomly vary.
Two of the pathologist performed the first review assessing each independently.
This review blinded them to knowledge of baseline and of treatment and dose assignment and use the shock modified histologic activity index, scoring system.
Which has been adapted to identify histologic patterns of drug induced liver injury.
All three pathologist independently performed the second blinded paired review assessing better same or worse across multiple features of histology, including interface hepatitis portal inflammation Perenco mall inflammation hepatic cellular ballooning STI itself.
This and fibrosis.
In addition, the pathologist noted the presence or absence of features including eosinophils plasma cells bile duct injury and vascular injury.
The only direction, we provided to the pathologists what's to highlight generally the types of histology that had been called out by the study pathologist in order to make certain nothing was overlooked.
By its very nature. These reviews are very different from histology reviews conducted to score Nash in phase two paired biopsies study.
First the blinded reviews of baseline in end of treatment biopsies were all done at the same time.
And second it was more comprehensive then what is usually done for Nash clinical studies because it included features that classically defined Nash Dia ptosis lobbying inflammation ballooning and fibrosis as well as the specific atypical types of pathology called out by the study pathologists.
Our intention was to have an objective independent analysis of histology to identify cases that raised a suspicion for drug induced liver injury.
That would then be brought to the full expert review panel to discuss.
What transpired from the independent pathology review was that all three pathologists, we're an agreement that they did not observed any histology that on a case by case basis couldn't be seen in Nash patient biopsies.
And that they did not observed any features of histology that were alarming or would be red flags for drug induced liver injury.
Although the features identified by study pathologists, we're certainly visible.
The review panel pathologist conclusion was that the clinical significance of these did not point to evidence of drug induced liver injury or anything otherwise alarming for these patients in the absence of any clinical or biochemical signal for liver injury.
Furthermore, these under reported features that can be seen in Nash patient biopsies were observed by the panel pathologist at baseline in our study population and deemed to be qualitatively unchanged through the end of treatment.
With this view the review pathologist agreed that having the full expert review panel adjudicate. The 42 cases identified by the study pathologists would be the best course of action to confirmed their overall view that there was no evidence of drug induced liver injury based on.
Review of biopsies from patients in this study.
The third step in the investigation brought together all expert panel members to review the 42 cases flag by the study pathologists.
To discuss the significance of any findings observed and to ultimately assess whether or not treatment would sell dalbar caused drug induced liver injury in our Nash study.
Medical history, concomitant medications patient demographics laboratory markers and liver histology at baseline and end of treatment were reviewed in detail for each of the 42 patients.
None of the 42 patients were deemed to have any clinical or biochemical evidenced of drug induced liver injury.
Furthermore, 29 of the 42 patients were deemed to have no evidence of emergent or progressive unexpected liver pathology.
The remaining 13 patients were deemed to have evidence of emergent or progressive unexpected liver pathology.
All of which 12 were deemed to be either not study drug related or unlikely related to study drug and work equally distributed across treatment groups, including placebo.
One was deemed to be possibly related to sell Adele par for a patient who also had a diagnosis of systemic lupus arithmetic doses.
Although no patients had elevations of LT and Billy Rubin to meet Hys law. The panel review, then discuss and he dish analysis and confirmed their conclusion that there was no clinical evidence of drug induced liver injury.
The final day of discussion at the expert panel review centered around overall observations related to features of histology present in our baseline population.
Presence and progression of under reported features of Nash pathology.
And the clinical significance of what was observed in patients in our study.
We plan to reach out to the FDA to discuss all of the data we have collected to date and the results of the panel review meetings.
Once we gather their feedback.
We plan to submit a complete response to the cell Adele par clinical hold.
Timelines are uncertain at this moment, but this effort remains our highest priority.
Although we cannot guarantee how and when the FDA will respond whether or not they will require us to gather additional information or if they will accept the conclusions that have been made by the panel.
We are confident that we have conducted a truly rigorous independent review with the foremost leading liver experts in the world to help us definitively support the conclusion that sell Adele part did not cause drug induced liver injury in our Nash phase two study.
We have worked closely with our board throughout the investigation and panel review and have their support for our next steps forward.
Before we open up the call for Q anyway, Let me turn the call over to Dan to provide you with an overview of our financial position at the end of Q1, and our projected cash balance through mid year Dan.
Thank you Suzhou as a reminder, during the fourth quarter of 29 team management implemented a restructuring program. Following the placement of our seller they'll put a program on clinical hold pending further investigation of the histologic observations noted in our Nash study and pending completion of our review of strategic.
Options.
We continue to be focused on cost containment.
And looking at additional steps, we can take into fiscal year 2020 in order to close we control the companies operating expenses and associated cash burn.
Late in the first quarter of 2020, the need for sustained cost containment emphasis was further underscored by the unexpected and rapid onset of the Corona virus pandemic and the associated travel restrictions and shelter in place orders that were issued by governmental authorities in jurisdictions, where we are partners investor.
Gators and vendors conduct operations.
In response to these measures we've taken steps such as enabling remote operations for all our employees, which have allowed us to continue on our operating activities.
While our 2020 results to date have not been significantly impacted and our planned clinical and strategic objectives are not currently expected to be affected unforeseen pandemic related disruptions could occur in the future, making the full effect. So the pandemic on our operating capabilities and our business uncertain.
Accordingly, we will continue to closely monitor pandemic developments and their associated risks to our business and we will take actions available to us where possible to mitigate them.
Additionally, everything we do will be guided bode commitment to taking all steps possible to ensure that health and safety of our employees.
I will now briefly turn to a review of key elements of our first quarter financial results beginning with a current update on our fourth quarter 2019 restructuring plan.
[noise] as part of this plan, we froze hiring significantly scaled back future procurement plans announced a 60% reduction in our workforce and scale down or cancel many of our existing contracts for goods and services.
As a result of these actions we recorded a $5.1 million restructuring charge during the fourth quarter, which was primarily comprised of employee severance costs and to a lesser extent costs associated with certain contract terminations.
Of the totaled 5.1 million in restructuring charges $3.3 million of these charges are expected to be settled in cash.
We have paid out $1.6 million through the first quarter of 2020 and remaining cash payments are expected to be paid out over the course of fiscal 2020.
Moving on all next provide a review of first quarter expenses.
Research and development expense for the three months ended March 30, Onest 2020 was $9.5 million as compared to $18.6 million for the same period in 2019.
As a result of the clinical hold placed on the Philadelphia, Our development program in the fourth quarter of 2019 research and development expense in the first quarter 2020 were significantly lower than the same period in 2019 due to declining clinical trial activities related to our PVC phase three Nash space to be PSC.
Phase two clinical trials and other studies as we continue our efforts to scale back and shut them down as planned.
General and administrative expense for the three months ended March 30, Onest 2020 was $4.3 million compared to $5.7 million for the same period in 2019.
General and administrative expense was lower in the first quarter of 2020, primarily as a result of lower continuing labor costs and other administrative expenses following our restructuring efforts undertaken in the fourth quarter of 2019.
Overall, our net loss for the three months ended March 31st 2020 was $13.1 million or 19 cents per diluted share. This compares to net loss of $23.1 million were 37 cents per diluted share for the same period in 2019.
The decrease in net loss for the first quarter 2020 compared to the prior year period was primarily due to decreases in our operating expenses, including our clinical trial from labor related expenses as discussed earlier.
Finally, I'd like to share with your current cash position the outlook for planned activities. During the remainder of 2020, the expected impact of those activities on our operating expenses and our cash burn.
At March 30, Onest 2020, we had $176.2 million in cash cash equivalents in short term investments on hand compared to $190.9 million at December 31st 2019.
As noted earlier in 2020 management intends to fully concluded its investigation move the clinical observation seen in Nash patients, while completing a review of all strategic options.
In addition management will continue work to complete ongoing clinical study close out and monitoring activities.
These activities involve a number of key efforts, including conducting early termination visits with patients recovering investigational drug product caring for monitoring Nash patients with histologic observations conducting investigator site monitoring and close out visits and quality reviewing analyzing and reporting on clinical trial.
All data accumulated to date.
In the first quarter, we made progress on many of these activities and objectives. Despite the unexpected onset of the Croda virus pandemic and the travel restrictions and shelter in place orders that have impacted our operations as mentioned earlier, we will continue to closely monitored pandemic developments and their associated risk to our business and we will take.
Further actions available to us where possible to address them.
Going forward, we estimate our overall cash burn for the first half of 2020 will be between $30 million to $35 million.
Total we expect between 20 and $23 million will be used to fund the clinical study close out patient monitoring and so they'll par investigation activities previously mentioned.
Let me now turn the call back to suitable for final remarks Suzhou.
Thank you Dan.
Before taking your questions I'd like to once again to remind you that we have not yet shared any of the data collected to date during our investigation, nor the conclusions of the expert panel with the FDA.
Thus, while we will refrain from commenting on specifics that are important primarily for our discussions with regulators. We are happy to discuss our process and conclusions from the investigation.
As Dan mentioned at the opening of our call joining me for the Q anyway.
Our our Chief Scientific Officer, Chuck Mcwhirter.
Our chief regulatory and compliance officer Clara Dickinson.
Chair of the expert independent review panel Dr. Paul Watkins.
And our lead principal investigators in PBC, and Nash Dr., Gideon Hirshfield and Dr. Stephen Harrison.
With that I'd like to remind everyone that the purpose of today's call was to discuss our results and the update on cell Adele par.
We're now happy to take questions operator.
Thank you.
We will now begin to question and answer session.
Who joined the question Q you make press Star then one.
Pat.
You will hear its own acknowledging your request.
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The first question comes from Yasmeen Rahimi from Roth Capital Partners.
Go ahead.
Hi team on thank you so much for sharing so much color Rita very helpful and congrats on great progress.
Couple of questions for you. The first one is a direct to choose to so can you share that.
What could be reason why maybe the frequency or the initial observation at the atypical lesions what's seen by the two pathologist made first and then later observed at a lower frequency when the three leading experts pathologist reviewed Ed and then second question is directed to.
Dr. Watkins in the press release, there was no. It died on you stated that.
The committee concluded that these histological features our annual report it can you share with that.
How did the independent committee observe though.
Underrated and why those may have been myth and other study and then I have a follow up.
Okay well. Thank you for the question, Yes main I'll take the first question.
And then let Dr. Watkins address the second at first I think it's very important for me to highlight a number of points.
Particularly points of differentiation between the process. The study investigators conducted as part of the study protocol versus what was done in the independent panel review by the pathologists on the sub committee.
There was not a difference in incidence of the features identified by study pot pathologists and in fact.
As was determined by the panel the findings of the study pathologist upon their review of only the end of treatment biopsies was in fact confirmed.
The real key differentiation yasmeen to the procedures here is that the independent pathologists of course conducted two very thorough and rigorous investigation is one that was blinded.
To each of the study groups as well as baseline in end of treatment in reading the biopsies, specifically, scoring for the modified H. AI.
And a second in which they did a parent review also in a blinded fashion and change as observed between two by biopsies from each patient.
So the real takeaway fundamentally from this study from the review pathologist had more to do with existence of many of these features in fact at baseline.
Andrew or the clinical significance of those features themselves relative to their implication and drug induced liver injury.
And Dr. Watkins, perhaps if you have an opportunity if you could maybe give color from the panel itself around the idea that many of these features that are review pathologist in fact highlighted could be seen on a case by case basis in patients with.
Nash for example interface hepatitis.
Bile duct injury the conclusions around the panel relative to how these features largely may be in fact under reported in the setting of Nash.
Right.
So yes.
Obviously was compensated for my work here, but I hope you stake financial or otherwise.
Well the stroke.
And.
First is set the background one thing I've have a lot of experience with is assessing drug induced liver injury.
Spontaneous reports.
Large experience you clinical trials.
And this was very unusual in the.
Brought the.
The issue to attention was histologic finding.
And actually Histologies, not even part of the usual.
Evaluation of somebody with potential drug induced liver injury.
So one of the first things, but I did and the other two experts was really look at this as we would normally look at.
Data from a clinical trial, which is looking at the routine liver chemistries and a question of.
Liver dysfunction and by the usual ways that you approach assessing drug induced liver injury, there really was no signal there.
And I can come back to that you want more information. So it really came down to the pathology and the three pathologists that were.
Selected.
And along the phone Webex together are really sort of the three tenants. So I would say in terms of pathology that you want both world renowned experts in Nash, but also very importantly in drug induced liver injury. There's no two people in the world who have more experience with installed your drug induced liver injury.
Client or in Goodman.
And so what was done was to systematically go through those 42 cases.
Where we presented the clinician presented clinical to slip 53 year old woman presented the clinical findings. The usual way you look too so sliver injury to the drugs and then they showed the pathology, but also on the line were the two original clinical.
Trial pathologist, who first raise the questions and in some cases, they would say well. We go back look at this other part of the probably this is what we were concerned about.
So there was no a potential for confusion between what they had originally been concerned about and what was specifically looked a little bit on who by the street pathologists.
And in every case the things that they were finding that they were concerned about and there was a list of things it wasn't a consistent pattern.
Was looked at and evaluated and then going back for the first time for the clinical pathologists to look at the initial biopsies and in every case there were a qualitatively the same findings.
And both client or Goodman, and but DOSA. We're saying these are things that we can see in Nash people don't talk about them much.
And that was one of the things that came out of those that there should be manuscript for the world can understand things like interface hepatitis portal inflammation.
Can be part of the match you don't have to think of a separate process.
So I mean.
You know just again I think the most thorough.
Histologic.
I've ever been part of.
And then in addition, the clinical traditional clinical evaluation of drug induced liver injury.
Really led to a unanimous consensus that we were not seeing anything adversely could be.
Attributed to this study drug.
Okay.
Thank you Dr. Watkins for the color into the my apologies for asking one last question.
Can you share without sticks. Thank you can what is the path forward to get clearance from the FDA.
How many patients I guess have completed at the 52 week analysis and the PBC study is there a chance you could run a smaller fate green PVC whatever color or content you can help us to.
Visualize the path forward to be very helpful. Thank you.
Oh, Yes may now I'll have clarified our chief regulatory Oh.
Sorry, Dr. glider go ahead. Please I was going to just say no I think.
There's walk ins, but I I don't.
The next spring.
Okay sure I will ask a clear our chief regulatory and compliance officer to give you some color yasmeen in terms of our next steps forward with the agency.
Yeah, our for our first step with is really going to be reaching out to the FDA to have a meeting with them to discuss the the findings that are presented here today to orient them to what we've learned and our intention to submit the response to the clinical hold it to a store.
The most efficient way in which the FDA can review the information so during that dialogue. It will be primarily focused on addressing their safety concerns as it pertains to liver injury and then after the clinical hold is lifted and we're through that process. We can begin discussing with them.
On a future clinical trials as it pertains to the PTC program.
And he has made you had asked some questions about where we were in our PBC study I'll simply highlight.
That we had somewhere around 100 patients in fact north of six months of dosing, we've not had a meaningful number of patients all the way through the 52 week endpoint in our ongoing phase three study that terminated earlier this year.
But we did maintain the blind in that study.
That data is being has been locked in as being cleaned and there will be an opportunity for us to of course learn a tremendous amount from what was effectively significant number of patients through at least six months of dosing around both primary and key secondary endpoints.
And we'll take that learning into our consideration as we think about next steps forward, particularly in PBC should we be successful and getting the clinical hold lifted.
Thank you syndrome.
Thank you as me.
The next question comes from L. lead Merle from Cantor Fitzgerald. Please go ahead.
Hey, guys. Thanks, so much for taking my question and congrats on the on the the panel finding exciting moment for you guys I'm just in terms of as you're working through the next after the prepared for the after the meeting what exactly are you doing in terms of you know preparations and going through the data are there any final analyses that you plan.
To do as you look through that and sort of you know asks for the clinical hold to be lift that and then just in terms of the findings themselves I mean it in question do you anticipate from the FDI are there any instances where say there's an imbalance in something that you know even if it wasn't a severe safety fine.
Turning or wasn't theme drug related where there any other imbalances.
And the higher dose arm that we're seeing as part of this investigation. Thanks.
Sure, maybe what I'll do as start off with the latter part of your question and invite any of our experts to weigh in as well in order to provide you a key summary.
As I noted in my prepared remarks in fact around 70% of the cases flag by study pathologist were deemed to have.
Features of histology that were present at baseline in as much if not more than than even at end of treatment.
Of those remaining subjects as we noted in fact, where there was some either emergent or progressing unexpected features of histology be it a level of portal inflammation or interface hepatitis.
That progress from baseline to end of treatment.
That were largely deemed to be not related are unlikely related to sell Adele par. There in fact was a balance across treatment groups.
Including placebo 10, 20, and 50 milligrams.
[noise] maybe.
Yeah, Clara you want to talk a little bit about that regulatory face so.
Information, we'll share with with the FDA it'll be summarizing the data that was actually reviewed by the as HRC panel expert panel and reporting out the actual results of the scoring performed by doctors Kleiner, but does the and Goodman toward their review. It will also include the trend.
Scripts from the meeting it so.
Some of the dialogue that transpired and the actual images digitized histology images.
And obviously the safety data from from the lock the database.
So that does that answer the question Alley.
Okay. Yeah, Yeah, that's helpful and I guess, just a follow up in terms of thinking about sort of clinician response to that and obviously, there I'm sort of new results in terms of the panel conclusions that you have but from your initial conversations with physician I mean, you know there's what the FTC wants but then I guess, there's also out what castle session comfortable in terms of reducing piece have.
Actually I am diseases, where it might be chronic dosing I mean, what are some of the reaction and the position that you're speaking right in terms of comfort around these findings and this investigation. Thanks.
Yes, I think we're fortunate to have both dr. getting hirshfield and Dr. Stephen Harrison on the line.
Perhaps I'll, let each of them provide their contacts they were observers across the panel meetings that were conducted perhaps Gideon do you want to start and then Steven you follow.
Yes, sure. It's sometimes you can listen I mean, I think the domestic is ready for me all that you know that's being the most rigorous analysis I think I've ever been involved in all of a a clinical trial are off Nash.
The findings are incredibly reassuring for the patients that we had to under investigation for drug which was looked very promising a very effective in PBC.
So I think sponsor can be congratulates someday good most incredibly difficult cost I'm looking at great detail and histology and what we see is very reassuring and of course fundamentally it fits our experience of using the struck an l. patients with PBC, which we found it could be a safe drug and I we sold.
I'm missing effect so of Africa.
It will vary construction an old very positive.
Yeah. This is Stephen Harrison I'll, just flip stone put Gideon said this was still holds barred reviewed I mean, the sponsor had no.
No hooks in this at all I mean, Paul and his team had free rein to to look at this however, they wanted to look at it underwent a very thorough and rigorous review some of the clinical perspective, you have to remember this took everybody by complete surprise.
The normal way as a hepatologist I look at patients with liver disease is I look at their labs and there was no signal that anything negative was happening in these patients in fact to the counter and a lot of these patients so were very positive signals.
So to find.
Yes.
You know grouping of atypical findings at baseline that led to the clinical hold was really quite a surprise.
And in many of our patients were were upset at the fact that they had to go off this medication because of the benefit the that they had been receiving.
Not just biochemically, but but also symptomatically.
Well I think from from my perspective, I think I speak for quite a few.
Hi, guys that were involved with the trial.
If I clinical hold we're able to be lifted I think there would be a.
You know a groundswell of support to to get our patients.
Back on this drug in a study setting so it can be formally.
The the formal evaluation can be completed and potentially move to drug forward.
Thank you.
Your next question comes from Steve seed Ross from Raymond James. Please go ahead.
Thank you. Good afternoon, my questions are for Dr. walk ins, but suitable would welcome obviously your thoughts as well.
The the first one I have as did the panel.
Recommend a specific clinical path forward.
Any preclinical or phase one clinical studies that are necessitated by this new finding or.
Specific.
Or explicit rather recommendation to restart both in Nash and PVC clinical development. That's question one.
So this is Paul Watkins I mean, it the unanimous.
Conclusion was that there was no evidence to support the stroke, causing liver injury.
We.
And therefore, there was no.
From our perspective, the concern that has been initially raise based on only look at 52 week biopsies no longer existed.
So there wasn't any.
Putting it to bed huh.
And Uh huh.
We were not asked whether the preclinical evaluation was sufficient or anything like that or.
Mission was just too.
Evaluate these new concerns.
Okay. That's right as the mandate was exclusive could die light and not to ability and not to anything else is.
So actually a fair understanding.
That's right Steven.
I mean, it was yeah. It was to evaluate the concern that has been raised the only concern safety concerns in terms of the liberal.
Addressed of course, there was a thorough review of.
We think about the biopsies, but the focus was on those 42 patients that had been singled out by the clinical trial pathologists.
Okay.
[music].
That's helpful and then another point of clarification.
Productive walk ins to is the conclusion of the panel the patients with atypical findings should not have been enrolled in the study in the first place given the baseline findings or to the panel essentially conclude.
That you'd be fine enrolling these patients in the other this study or future studies.
Yeah, I'm not sure.
[noise] that that question was never exactly post, but I I'm pretty sure I know the answer what shows.
Apologists felt they see this in.
In Nash and then it's part of the disease part of the spectrum of disease, and therefore, I don't believe they would say that these patients should not say going forward be included but that the knowledge.
But they have come needs to get out into the public domain.
Yeah. This is Chuck Thats, the I would agree with that statement doctoral I can say in fact.
You know the baseline population.
Example, for enterprise interface hepatitis had between 60 and 70% of subject had interface.
So it's very quite common and I do remember at one point.
In the discussion there was there was a question raised from one of the participants about weathers subjects.
I would have been excluded and I, specifically remember one of the expert pathologist you'll should they not even been enrolled in the study with a question and they said.
Paraphrasing, but close paraphrasing is by God I hope not we'd excludes 75% of our subjects in Nash study. So if we did that so I think I think my my.
My understanding from the comments made from from from both the.
From a all three pathologists was that they see these features in fact, we even had a comment.
From one of them, who said during the review process. He was also simultaneously.
Screening subjects for new for New Nash studies, and having had the conversations are being exposed to this issue. He was saying, yes. In fact, the FCC seen this in subjects that are.
Currently being screened for other studies, so I I think the message is really that.
It was there before but because because the field is focused on the defining characteristics of Nash steatosis lobbies are inflammation ballooning with fibrosis. They often they often don't put particular attention, especially for eligibility criteria.
Okay.
So I could just to maybe one more question and then.
It's perhaps a little bit longer I'm, just having a hard time understanding.
It sounds to me and please correct me if alone but it sounds like there really wasn't a failure in the the trial design here in the from the standpoint of.
These patients will in all likelihood be the type of patient that will enroll the future Nash study.
And really is just a failure of the processes in place to to evaluate liver histology.
I guess it just remarkable that this hasn't happened.
Our manifested in any other trials in the past so maybe the question is.
Doctors Harrison at least and maybe Dr. walk ins as well.
Just I guess, what do you do going forward and reassessment of completed studies assessment of ongoing studies changes to enrollment criteria, if I'm wrong about the first point or screening processes like how does this change.
Cash drug development for both Philadelphia, but for everything really so it's not clear what.
These learnings will do other than obviously, you know revise Philadelphia, which is really remarkable.
Well this is Paul I can walk and so I can take that out I mean, I think the key here was not looking at the 52 week biopsies in isolation.
But [laughter].
With the initial biopsy I think had that's been done by the clinical pathologists although.
They weren't asked to do this I'm pretty strongly believe they would have not felt that there was a liver safety concern.
Yeah. This is Stephen I completely agree with Paul's comment you know.
Yeah.
I think you know moving moving forward one bright spot.
Besides the fact that it's great news for cell Adele par.
Is.
The Nash field I think is going to be a big winner here because.
Again, you had you had five of the world's best Pathologists look at these slides.
And there's kind of been an eye opening experience.
For them.
And then for the clinical Hepatologist as well and for me in particular are living in the Nash World like I do.
It was an eye opener for me.
So I'm not sure we change our criteria for outcome measures.
Based on the findings here, but clearly.
I can see us broadening our aperture a bit.
On what we.
Call.
Histo Pesala G as it relates to Nash and clearly I think there there will be.
A broader understanding of some of the the lesion set that maybe are here to four on.
Unappreciated on a on a broader scale.
So I think you know there's a learning here about.
What's happening relative to the underlying disease remembers this is <unk>.
This is a multi factorial disease lots of different pathways to two activation all kind of spurred on by fatty acid toxicity LIFO toxicity.
And there's an overlay of genetics and epigenetics on top of this so.
Not every patient looks identical to the next patient and so it's like a bell shaped curve I would imagine you know there's very classic lesions and then there's there's non classical but still associated lesions and I think we're just learning about this we're we're still believe it or not in the in the early days of really.
Are you, putting our hands around Nash what this means.
Clinically and then as we develop syrupy used to try to.
You know Suedes this disease patterning and bring health back to the liver <unk>. We're learning about these things. So I think ultimately we're going to take away. Some very positive things from this it will be broadly applicable and then we'll follow the FDA guidance on what.
A positive endpoint will be for drug development. It does it stay in a as.
You know driven was with ballooning of zero and inflammation as you are one.
Or you know was fibrosis improvement of one stage or more with no worsening of Nash, where does it change I don't know, but I think we'll learn from this and we'll see where that goes moving forward.
So I just had something else and brighter.
Yes go ahead.
So I just wanted to I don't think older challenge ourselves about the supremacy of liver biopsy generally it's a very very difficult field of medicine.
And it really is actually quality. It took in many regards and really it's why the whole field of developing drugs for chronic liver disease Nash PBC is trying to move away from liver biopsy.
Precisely because in fact or what you're seeing is it can be very distant depending on how people look at how people interprets. So that's the whole world is trying to move things that are more all sort of independently validate it. So it's really a braunstein did wembley, especially lots of aspects of liver disease.
And maybe I'll just add a couple of points here, Steve because I think this question is a very important one and so just a pause on it perhaps giving you. An example might help to illustrate what each of the experts on the call.
Just identified.
So as we looked at these biopsies and in fact had the three review pathologists do an in depth scoring.
Of 300 plus biopsies.
There was an appreciation for a feature of Nash, that's that's quite well understood. Despite the fact that it's not part of an Apple de activity score. So portal inflammation. For example is a feature that in fact is well described.
Now sitting with 2030 plus year experts in liver pathology and hearing then comment that while it's not while we do well we decided it's not part of the scoring for Nash. It's nevertheless, very prominent and May in fact.
Be under appreciated wasn't learning I think certainly for us as a sponsor but to hear that from 2030 plus year veterans talking about one specific feature of Nash that in fact is well understood, but perhaps under appreciated.
It was an interesting learning from this process and taking portal inflammation forward for example.
Some of the pathologists commented.
That they weren't surprised that in this setting of advanced portal inflammation that you would see interface hepatitis.
Now up until this point at least our understanding was interface was not necessarily typical but even as Chuck represented the AJ I, scoring in a blinded fashion revealed 60% to 70% of patients had at least some level of interface via largely mile, but perhaps anywhere from 20.
20 to.
25%, even having a mild to moderate or even advanced interface.
And once again as really as the perhaps another complication of advanced portal inflammation was a discussion the pathologist had around.
Bile duct injury.
And the fact that at least in some cases within Nash.
Perhaps as a secondary consequence of advanced portal inflammation or or as one pathologist put a quote unquote collateral damage of advanced portal inflammation, you could expect to see some bile duct injury.
And so you know as we move from this process to first engaging with the FDA. It is certainly a key priority of ours to share as much of the learnings out of these panel review meetings the independent pathology review.
To publish and to share this information with the medical community really to advance the entire feel.
Yes.
Thank you pseudo a I just want to say kudos for the persistence and really the rigor of this analysis and talk to the panel and everyone involved thanks for taking the questions. Thank thank.
Thank you Steve.
Congrats on a panel findings and thanks for taking the questions. I was wondering if you could just look into the future and assuming the clinical hold on fellow Bell par is lifted could you talk about how'd, you would pick up where you left off in the clinical development in Nash and then separately.
How you could proceed in PBC and whether or not you might have a registrational dataset, there or would you need to conduct a additional clinical trials in PBC and then separately or since we just learned a from genfit that phase three study avella fabrinet.
Our.
Failed to meet the primary endpoint if you could just comment on a any read across to either Philadelphia car or the Nash space in general Thank you.
Oh, Hi, Jay This is Chuck Mcwhirter I'm going to.
Try to take on the the issues that you raise there so I think a come to Nash shortly but I think just to remind everyone. The phase two data that we had their open label study for Zelikow par has really been robust and it showed a really strong profile.
For a reductions in call a static markers, often faso tastes and improvements in transaction basis and of course, the effects that we saw and provide us we're really encouraging. So we continue to believe that this profile has clearly shown its potential to offer patients a second like treatment alternative with improved efficacy.
Seeing better Tolerability [noise].
So I think that interest is really reflected in.
Okay.
That interest in PBC is really is really reflected in the fact that we had fully enrolled 265 patients into enhancing at about a year in spite of the availability of an approved second line treatment. So with that in mind you know our commitment really is to first work with the FDA does to lift the hold.
And then we initiate clinical development and we think that PBC is likely are most attractive and de risked first entry.
So we've always been very thoughtful about expanding beyond PBC and and we think that the effects that we saw Nash resolution in fibrosis really deserve.
Additional consideration you've mentioned really what happened was announced with l. or prevent or today that obviously has has an impact on the landscape but of course right in front of this is a better cholic acid with regenerate and they're expecting a regulatory decision soon.
And that's going to have a lot of important lessons for us recording launch uptake reimbursement what what's the measure of success and you know how is this being accepted into into the community. So I think just kind of recap I think PDC is really front and center right now the Nash results are really.
Quite interesting and I think we did see some some.
Some encouraging results on efficacy endpoints, but theres, a little bit more to understand there and of course, we don't want to we'd want to get ahead of ourselves too much we still have to be very thoughtful about our interaction with the FDA and try to address any concerns that they might have and I'll just add Jay you know you asked the specific.
A question around differentiation with L. affair Brunner, which is.
Our minds largely a deeper alpha although it's it is a mix to keep our alpha Delta agonist.
You know as you can see from data that we have now both in PBC as well as in Nash.
There are some differentiating features particularly around the robustness of the anti inflammatory benefit that we see would sell Adele par.
Whether or not that's one of the key features leading to the efficacy we saw in our Nash study both on Nash resolution and fibrosis I think needs to have some continued attention, but we've always felt that a very potent selective delta agonist has the potential to provide a meaningful anti and.
Planetary benefit.
And even now with some of this data Nash or what appears to be a good anti fibrotic benefit and a good portion of the patients that we had enrolled.
Great. Thanks for taking the questions.
Thank you Jay.
The next question comes from Joel Beatty from Citi. Please go ahead.
Hi, This is Sean Egan, calling in for Joel Congratulations on all the progress I. Appreciate you taking my question.
Oh, I guess first the on the panel with their reassessment of all the data the photo reassess the fibrosis improvement and Nash resolution with score.
So will that be assured going to future well have a follow up question I'm calling in April.
Yes, I can answer that first part of the question. The purpose of the panel as Dr. Watkins outline was really a to make it takes a deep understanding of whether or not sell adele par caused drug induced liver injury and the Nash study, we did not ask the panel to assess the effects of.
Sell Adele par on Nash resolution or fibrosis.
Okay, great. Thank you for true and then a any comment on the timing and for plans to share the phase III. If you say that maybe if you did a you gathered to date. It also had a.
Moving on the comprehensive findings of the panel.
Yeah. So I think you make a good point as I mentioned enhance.
As a study that we did have to terminate early a double blind placebo controlled a registration study for cell Adele par in PBC. Nevertheless, we maintain the blind in that study that study remains blinded today. The data has been locked in as being cleaned up by the CRL I will offer us an opportunity.
Eventually evaluate and share that data publicly and so we look forward to doing that.
As as as the at the appropriate time.
Great. Thanks, so much.
Thank you.
The next question comes from common Smith from SVB Leerink. Please go ahead.
Hi, this is doing a pleasing for Tom.
Just quick question is histology results were they more associated with a national apology or with fibrosis and then.
Do they anyway, the foreshadow a greater risk progression to more advanced stages of fibrosis or cirrhosis.
Yeah, you know here. So I guess, there's this is Paul right, Yes, if you want to.
Well I think if these things track more with the activity.
The Nash and then the fibrosis.
Whether or not if there's any prognostic value in terms of rate of progression.
For.
Essentially response to Nash treatment I don't know.
Yeah, I think I was going to effectively a share the same sentiment or you know I think it's not necessarily well understood. How the progression of any one of these particular features on their own plays a role in progression of Nash.
But I think important at least from our assessment to highlight a couple of things as we mentioned almost 70% of the 42 patients called out by study pathologist in fact were deemed to have either as much if not more of some of these features of histology at baseline than they did at end of treatment.
So we didn't view the presence or absence of these features in our population baseline or end of treatment as any sort of complicating element of what we saw in terms of some very promising effects on both Nash resolution as well as fibrosis.
Hi, This is Stephen I'll, just chime in there as you bring up an excellent point and this needs to be looked at in fact, we did discuss that.
A future look at placebo group looking at these baseline lesions and marching out overtime to see what happens not just from the Cymabay trials, but you know regenerate resolve it all these big databases, where we have a large placebo contingent going back and looking at some of these baseline findings.
See if that tracks with with outcomes or progression of disease. I mean, maybe this could be a predictor of a rapid fibrosis, you know predictor of rapid development of disease or progression of disease, who knows theres just a lot of.
Data that we could mine as a result of these.
The work that's been done here.
Yeah I appreciate that and then one of the quick question kind of on I guess I'm timelines.
Uh Huh, let's say couple months from now.
Yeah, I assume the FDA gives the best case related to move forward with development do you think you'd have to redo a phase to be program for Nash, where do you think you can move straight to the phase three.
Well, it's a good question I don't know that we've gone as far as a projecting what the agencies response will be at this stage, but the design of our phase Twob study and perhaps Stephen can even provide some commentary what the design.
And that would of course allowed us to move straight into a phase three study I was impaired liver biopsy. So the.
Agency does require.
Apparent liver biopsy of course is you know in phase two to progress into phase three a 152 patients that completed end of treatment biopsies, the vast majority of which actually made it through 52 weeks of dosing.
It was we mentioned the study was actually powered on the primary endpoint, which was a 12 week change in liver fat content not powered.
Ah two or two that the secondary endpoints on Nash resolution and effects on fibrosis. Nevertheless, I think the data that we've gathered for the patients in this study that did have paired liver biopsies.
I think arguably can be viewed as some of them more promising phase two data.
In a pair of liver biopsy, that's been demonstrated at least for an oral agent in Nash.
Yeah, I'll I'll, just chime in as Stephen again, so I mean, when you look across the broad landscape assays to be trials with parents histology that have subsequently gone into a phase three. This this is within that rental and as soon as you all mentioned to the vast majority.
30 of those patients were able to get across 52 week.
Oh finish line and get a follow up liver biopsy, so I think it.
What we've heard today is safety Biochemically clinically histopathological Lee not concerned.
With that in hand, then it just really shifts in my opinion use just my opinion.
It pivots to.
Okay.
Then didnt do we have a dose ranging.
Study that was paired histology with enough data to to move in phase three and I I think if you look at what they published previously the preliminary top line results.
And clearly is a dose response relationship.
And and as soon as Joe mentioned, I mean, you know when you're looking at Philadelphia, or 50, and you're getting.
26% resolution of Nash versus 8% for placebo and let me just comment on placebo there.
That's within what we would consider a normal quote unquote normal placebo response.
That's that's very positive it into fibrosis benefit on top of that I see puts it into a league that would be very reasonable to move into a phase III trial again, that's just my opinion, but I think I think that's that's perf data, we have would would warrant moving to phase III.
Great I appreciate it thanks very much.
Thank you for the question [noise].
Thank you.
This concludes the question answer session I would now like to turn the conference back over to me just can you tell Shaw for any closing remarks.
Thank you operator.
I want to make just a few more and more remarks since our announcement last November every member of our remaining team at seem today has been tirelessly dedicated to the seller Dalbar investigation and our evaluation is strategic alternatives on behalf of all of our stakeholders.
In the face of a suspicion for safety concerns in our Nash Phase Twob study, we took decisive action not to put patients at risk.
Our commitment quickly turned towards pulling together, a deep bench of liver experts.
To help us analyze and interpret tremendous amounts of data we have been collecting over the past five months.
We took no shortcuts in our investigation.
Nash is a complex heterogeneous disease and one for which we have only seen a significant acceleration of clinical development with potential novel interventions over the past 10 years.
I believe there will be much we can share with the field to increase our understanding of the many elements of Nash that today are largely under appreciated.
In the end I firmly believe this effort will only contribute to the base of knowledge needed to continue making significant advances for patients with liver disease.
We look forward to our continued role in this effort and to providing updates as we make progress in the weeks and months ahead.
I'd like to thank all of the experts who participated on our review panel.
Several of my colleagues in the industry, who aided in our efforts.
Everyone here at Sema Bay.
For the patient advocacy groups, who inspired us not to give up.
On the effort to understand the findings from our Nash phase two study and of course of the patients who have participated in our clinical studies.
Thank you all again for joining us today.
Thank you.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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