Q2 2020 Intercept Pharmaceuticals Inc Earnings Call
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Tom I would like to turn the conference over to Mr. Li Lisa Defrancesco, Ma'am you may begin.
Thank you good morning, and thank you for joining us on today's call. This morning, we issued a press release announcing our second quarter 2020 results and financial position and also posted a company.
Size, which are available on our website at www Dot intercepts pharma dotcom.
Before we begin our discussion I'd like to note that during our call me well be making forward looking statements, including statements regarding ARPU product in clinical development program.
And regulatory matters, including the potential approval of Oh, CIA for liver fibrosis due to Nash.
And our strategy prospects financial guidance and future commercial and financial performance.
Those are cautioned not to place undue reliance on forward looking statements, which speak only as of the date of this cost and we undertake no obligation to update such statements except as required by law. These forward looking statements are based on estimates and assumptions that although believed to be reasonable are inherently uncertain subject to a number of risks and uncertainties, some but not necessarily.
All of the risk factors that could cause <unk> actual results to differ materially from our historical results or does it took theater predicted or forward looking statements are discussed in this mornings press release, and then our periodic public filings with the FCC.
Today's call will begin with prepared remarks from our CEO Dr. Mark Pruzanski, followed by those from our Chief operating officer, Jared or so that our chief financial Officer Sandeep capacity as well then open the call to take your question. Please.
Please limit yourself to one initial question in order to allow time for all questions. Let me address let me now I'll turn the call over to our CEO Dr. Mark Pruzanski.
Next we saw and good morning, everyone. Thank you for joining us on our second quarter 2020 earnings Conference call.
Following the receipt of the complete response letter for Omsseven Nash announced on June 29, we've been focused on two main objectives first to prepare for a type a meeting with that.
And second to ensure that we remain in a strong financial position as we work to get the U.S. regulatory process supporting the approval of those shape for Nash back on track.
Based on our latest review of our available data together with the leading Nash experts in advance of our upcoming interactions with FDIC. We've continued to reaffirm our strong conviction in the positive benefit risk profile associates for the treatment of patients with fibrosis student.
Supporting our application for accelerated approval.
As you well know regenerate remains the only phase three Nash trial to produce positive interim data, meaning after his guidance for accelerated approval and we continue to believe Oceania has the potential could become a foundational treatment.
Okay, let me for patients with advanced fibrosis, and highest risk are progressing to cirrhosis and its complication.
In addition to achieving the complex comp is the primary fibrosis endpoint of regenerate hi statistical significance.
He had demonstrated robust anti fibrotic efficacy across a range of histologic noninvasive and biochemical parameters.
This benefit has continued to be reaffirm through ongoing analysis.
We look forward to sharing important news supportive data at the upcoming virtual useful conference next month as well as that subsequent scientific meetings.
In preparing for our type a meeting with FDA, we've been focused on comprehensively addressing the issues that you raised on both sides of benefit risk reframing the available core efficacy and safety data, while demonstrating how effective risk management tools can ensure appropriate patient selection and even further enhance years benefit.
Profile in the post marketing studies.
We believe this should prove helpful to ensure a productive type b meeting, which we expect will take place by early fourth quarter and set the stage for any further steps, we may need to take to gain alignment with the FDA regarding the resubmission of our India.
In parallel we are also gratified to have received strong support from external stakeholders, including Nash opinion, leading clinical experts and patient advocates who share our strong conviction and she is basis for approval and who are eager to express their views to the agency.
As always as we navigate through this process, we will remain committed to providing any material updates as we have.
Regarding the anticipated timeline, we expect that on reaching agreement on a sport and once we then resubmit already a.
We anticipate receiving a six month review during which we would anticipate an advisory committee meeting where Nash clinical experts in patient advocates would have the opportunity to express their views publicly on the merits of those yet that's the first potential treatment for fibrosis due to know.
In the meantime, I'd like to remind you that our EMEA for <unk> for conditional approval on doug's yet in Nash in Europe continues to undergo you May review, which remains on track.
As I mentioned earlier, we've undertaken an internal review of all of our investments.
We are of course, postponing our national launch preparation effort and if identified other savings across the business. As a result, we announced today that we have lowered our 2020 non-GAAP adjusted operating expense guidance range by $100 million, while still retaining the critical resources needed to continue supporting our Nash clinical program successfully.
We submit R&D I continue to drive growth in our foundational PBC business.
Now moving to our operating results our global PBC business continues to perform well our performance for the quarter was strong with reported net sales of $77.2 million, our biggest quarter since launch.
While others results Harold promising signs of recovery, we continue to closely monitor the coded 19 situations and its impact to our business.
With respect to our global clinical development programs as you know our phase three Nash trials regenerate and reverse had been fully enrolled for some time and I'm gratified to see that today pandemic has had little apparent impact on these ongoing trials.
Meanwhile, while we previously announced the decision to temporarily pause enrollment in our other trials I'm pleased to announce we had been re initiated screening and randomization of patients in our phase for cobalt outcomes trial in PBC and we plan to soon restart enrollment in our combination study, we don't see investment fibrous.
Given the positive previously reported clinical data we've seen supporting the development of this combination therapy. We continue to have strong conviction in the value of our long term PBC business.
We have not experienced any significant disruptions to our supply chain and we continue to successfully supply product globally for our own Ocala, but you see business and investigational product for our ongoing trials.
Before I turn it over to Jerry I wanted to take a moment to highlight what continues to inspire all of us. It intercept as we continue driving forward to bring associated to patients with advanced fibrosis due to Nash.
We've received an enormous outpouring of support from external stakeholders within the Nash and brought her epidemiology community.
The support is the result of the conviction they have in the strength of our data supporting approval of those yet coupled with the serious nature of this disease that has become a leading cause of liver failure with no available for therapy.
We truly value the strong relationships and supports that we have within the community and we'll remain focused on our mission to lead the way in supporting those living with progressive non viral liver diseases.
Now I'd like to turn the call over to Jerry to provide an update on our global PBC business and commercial activities.
Thanks, Mark and good morning, everyone.
I'll start by discussing our old caliber results for the quarter and then provide you an update on the adjustments we've made to our commercial activities. Since we received a complete response letter.
The first quarter, we reported $77.2 million in worldwide O'callaghan, net sales, which represents growth of 17% versus the prior year quarter and as our highest quarterly sales to date.
In the U.S., we achieved net sales of $59.6 million into second quarter as our end market demand was strong and we continue to see good total prescription growth versus the prior year quarter.
In the International region, we achieved ex us O'callaghan net sales of $17.6 million in quarter two.
These results reflect the continued strong performance in our key international markets.
In Europe, we did see reversal the trend from last quarter, where some customers. We're proactively increased inventory levels in response to the uncertainty of the early cobot 19 period.
Our global caliber business has proven to be resilient through koeppen 19, and we've been pleased with our ability to maintain patients on therapy. Despite the challenges of the pandemic.
As you would expect with the overall slow down in patient visits we did see an impact during the second quarter to new patient starts which remained at a lower level than quarter. One when cobot 19 began to emerge as a global issue.
Turning now to Nash our teams that made significant progress over the last 18 months and our overall efforts to educate stakeholders on the implications of advanced fibrosis due to Nash and the appropriate identification of these patients.
Following our receipt of the complete response letter we conducted a full review of our global commercial plan.
We were able to take advantage of the flexibility we had built into our commercial strategy and lower our expected operating expenses going forward in 2020.
For example, we have eliminated our contract sales organization.
Additionally, we've made it difficult, but necessary decision to postpone our Nash launch preparation activities for the immediate future and our refocusing commercially on the growth of our core PBC business.
I believe the progress we've made on education and awareness within the Nash community will have a lasting effect.
Where does the devastation of this disease on patients with advanced fibrosis is evidenced by our market research results as well as to support that we're experiencing from the community.
Once we have a better understanding of our regulatory path forward in the U.S., including our timelines for Resubmission, we will be well positioned to scale as necessary and re initiate our Nash launch efforts based on our learnings to date.
In the meantime, we've acted quickly in a redeployed our field teams to focus on PBC.
And that effort as timely as customer interactions are rebounding.
Our territory business managers have begun to interact with physicians again through multiple virtual channels and in person where appropriate.
For example in June our interactions doubled relative to the prior bond and our market research shows that health care providers are eager to hear from our PBC field teams again.
So overall, we refocused our commercial efforts towards PBC, while reducing our expected 2020 operating expenses by significant amount.
Im pleased with the steps that we've made to date to facilitate those reductions and we'll continue to evaluate sensible cost saving opportunities as we move forward.
And now I'll turn the call over to our Chief Financial Officer, Sandeep capacity for our financial update.
Sandeep.
Thank you Jerry and good morning, everyone.
Please refer to our press release issued earlier this morning for full summary of our financial result, the quarter ended June Thirtyth 2020.
I'd like to take the opportunity to share with you important updates on our strong Q2 commercial adult.
For new 2020, O'callaghan net sales guidance.
Our updated 2020 non-GAAP adjusted operating expense guidance.
Starting with our Q2 commercial performance.
In the second quarter, Rebecca night 77.2 million held in itself.
Our highest quarter to date.
Up from 65.9 billion the second quarter 2019.
Our second quarter Calvin net sales comprised of U.S. net sales of 59.6 million an ex us net sales of 17.6 million.
This represents a growth of approximately 18% and 16% respectively versus the prior year quarter.
Our GAAP operating expenses for the second quarter were 129.3 million.
And our non-GAAP adjusted operating expenses were 112.4 million.
As a reminder, our non-GAAP adjusted operating expenses excludes stock based compensation depreciation.
Non-GAAP adjusted operating inside the non-GAAP financial measure under FCC regulation.
Please refer to our press release issued earlier this morning for full explanation and reconciliation of this measure.
Our cost itself for the second quarter for 1.9 million compared to 0.7 million in the prior year quarter.
Our selling general and administrative expenses for the second quarter when 93.4 million.
This represents an increase of 23.7 million over the prior year quarter and it was driven primarily by increased investment in our NASS pre launch activities.
Our research and development expenses for the second quarter 34 million.
And include the anticipated 22 million offset related to the UK R&D tax credit.
Absent the impact, but this tax credit.
R&D expenses generally consistent with prior year quarter.
As of June Thirtyth, 2020, we're well positioned cash cash equivalents.
Cricket cash and investment that security available for sale of approximately 540.6 mill.
Now turning to our updated financial guidance for the year.
As we focus our commercial effort on PBC in the back half of this year.
We have decided to provide Calvin net sales guidance and now expect full year 2020 of helping that though in the range of 300 million to 329.
As Mark and Jerry mentioned following the receipt. The complete response letter we carefully reviewed our investment plan and have determined to postpone or NASS launch preparation activity and did the education efforts.
In connection with its review, we've reduced our 2020 non-GAAP adjusted operating expense guidance range.
Hundred million.
Well Jerry covered some of the specific actions we've taken at factor into our updated guidance range. We expect to provide additional details as we move forward into the second half of this year.
Given that we no longer expects to launch in Nash. This year, we believe the steps we've taken reducing expenses.
<unk> with our growing PBC business will allow us to support regulatory process with yeah yeah.
Continue to invest in our growing PBC business.
And fund our key ongoing clinical trials.
We now expect 2020 non-GAAP adjusted operating expenses to be in the range 460 500 million.
Now from the previous range of between 560 600 million.
In summary, I'm pleased with these initial steps we've taken to reduce our operating expenses and assure you that we will continue to be prudent as we assess our future investments.
We remain and strong financial position as we focused on bringing important therapies patients with non viral liberty.
With that I'd like to turn the call over to the operator for any questions operator.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one or your telephone keypad.
If your question has been answered or you wish to remove yourself into Q simply press the pound cake.
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Our first question or comment comes from the line of Michael Yee from Jefferies. Your line is open.
Hey, good morning, Thanks, and congrats on a good PBC quarter, maybe for Mark where the team. Obviously you made a comment about preparing for a type a meeting I have a discussion on Nash.
Maybe you could you shed some light on.
Do you think the two or three scenario should we think some some find that could be you're still thinking that filing this year working with the next year and would you wait to get your meeting minutes backup data sure. If there was pretty good clarity you would come back pretty quickly shoot me. Thanks.
Yes, Thanks, Mike.
So so as you mentioned you know we were very focused right now and preparing for the type in meeting.
And as I mentioned in my prepared remarks, we've been really working meticulously.
With a number of external experts Nash experts.
To ensure that we.
Really refrain.
All aspects of benefit risk here with the percent of an overlay and set the stage for our proposed resubmission of the NDA.
I think it's difficult right now to speculate on on what the timeline could look like.
But of course, you know if we were too.
Two alignment.
In the context of single type a meeting.
And we would do everything possible to work toward the next dishes, we submission, which we'd hope would be prior to two year end.
Additional clarification or steps will be required that to the type a meeting to to reach.
Adequate alignment to support Resubmission of the timeline could get pushed out a little further.
The last time, we had we spoke about this on June 29, we've obviously, taking a look at precedence in while every case of the CR letter with with additional data requested.
Is unique.
On average we've seen from from receipts Youre to approval and successful cases go somewhere in there in the range a bit of your 14 months and as I also mentioned in the call. Upon Resubmission, we would access pure a six month.
Review clock.
Expecting of course to see.
As you can mediocre.
So and then the second part of your question when we.
We will update on you the moment, we you know we have anything material.
To to update you on.
And I can't speculate exactly when when that will be.
Okay. Thanks.
Thanks, Mike.
Thank you. Our next question or comment comes from a line of Yasmeen Rami from Piper Jaffray. Your line is open.
Hi team. Thank you for taking my questions. Two quick questions. The first one is can you show nice how what your expectation that's in terms of what how much feedback you're gonna get from DFT type a meeting.
That could be informative for you and then the second question is can.
Can you shed a little bit light into the upcoming late breaker poster, which is you'll be sharing with us. It's a 24 month data of Transat Minis noninvasive Biomarkers and thank you again for taking my questions.
Sure sure yes.
And congrats on your new role.
I think with respect to the first part of the question.
Then we are.
Taking the time to really prepare well for this type a meeting and set the stage hopefully for the most constructive.
Our action with the review division as possible such that we really maximize the chance that that we are able to to reach alignment on on key issues to support Resubmission.
So while typically.
Type a meeting following CRL letter is more meant to you know.
For the agency to communicate.
Its view on deficiencies here were.
We are really working to ensure that we provide them with a comprehensive refrain, meaning the basis for by the Resubmission. So hopefully hopefully that will be.
Productive, but as I mentioned in answer to the previous question.
Could very well be and we'll be prepared for this that additional interaction and steps might be required to reach alignment with respect to use all I mean, we're we're excited about the upcoming virtual these all at the end of the ended the month, but a number of abstracts on both the Nash in PBC programs you mentioned.
A late breaker I mean, I believe that all the abstracts, including the late breakers, you're going to be made available by my useful or mostly crackers.
In about 10 days.
I'm now.
And you know in general I would say we were excited that we'll be able to present.
Data.
Longer term exposure date of 24 plus months.
That are highly suggested.
In our view of continuing and further benefits that these stations on those she a are receiving with longer term.
Treatment.
Thank you Mark.
Backs that block as it as you head into the meeting.
Thank you.
Thank you. Our next question or comment comes from a line up at least a young from Cantor. Your line is open.
You guys. Thanks for taking my question and I just wanted to maybe to ask a little bit about depend on what happens in Taipei is there way to potentially appeal and escalate further on that could help expedite the process. Thank you.
Yes, thanks to the question always yet.
So there you know the first step here and what we are absolutely focused on.
Is it type thing.
And.
I mentioned in his.
Previous two questions you know, we hope to position ourselves to to really have a highly constructive interaction with with the review division.
And we will absolutely be prepared to take additional steps.
In support of our view that the totality of data on both.
Both sides of benefit risk.
You know very much to support the basis for accelerated approval.
And we'll continue to to make that case with the agency.
Great. Thanks.
Thank you. Our next question or comment comes from a lot of Joel Beatty from Citi. Your line is open.
Hi, Thanks for taking the question have you seen any unblinded outcomes data from from the ongoing regenerate trial and is it possible that they could see that.
The future money refile. Thanks.
Yes. Thanks, Joel So you know the way the studies designed on again as an outcomes trial by the time to that analysis.
You know weve after the month, they Keane interim analysis.
We but as the sponsor.
And the agency.
Our two remain blinded to outcomes data.
Right until the end of the study.
It is theoretically possible that ask you could access unblinded outcomes data along the way up but thats not currently provided for.
In the in the protocol or the statistical analysis plan.
Got it thank you.
Thank you. Our next question or comment comes from the line of Jay Olson from Oppenheimer. Your line is open.
Hi, Thank you for taking the questions depending on how the type baby goes with FDA would intercept consider a narrowed strategy to focus on rare liver diseases, including strengthening your leadership position in PBC by developing a combination of associated with visa fibrate.
And possibly pursuing as you see a for PSC based on the strength of your Aesop study and potentially walking away from Nash.
Well look I mean.
First I would answer that.
We are confident.
In in our data from regenerate and are talking Nash program and supportive approval Oh CA as the first a treatment and gnashing and of course.
[music] truck is accompanied right now it's too.
Starting with the type a meeting that we're planning for.
Just to get on review back back on track and and work as hard as possible to ensure that we get the for the first national treatment to patients with advanced fibrosis, who.
As you know I'm currently have no available treatments to that.
You know.
But the trust in your question is.
I think is important to point out you see.
He is the enormous value I think our foundational.
Business and PVC, we just reported as you know a record quarter since launch business continues to grow.
And.
We continue very much to be committed to patients with TV C.
Who has I need in or out are eligible for calibre treatment worldwide. So we will continue to drive like to build that business.
And you know.
In the unexpected eventuality bids that you're.
Flagging.
We certainly have a great foundational business to continue to build the company up on.
Great. Thanks for taking the questions.
Thank you our next question or comment comes from the line of <unk>.
I'm tiny from B. Riley your line is open.
Thanks, Dean for taking my question then appreciate this detail update on the CIA so they quickly on the.
Could you could you maybe comment on the B. I come back is that do and working on and conviction that why they incremental that you might be working towards this early October meeting up would I be.
I think you said dataset in context of both benefit and risk, but Mark would you be more specific what do you may have had before and for your AD com versus.
You might be thinking about putting it IP.
Yes.
Yes.
Too many fix your because.
As I've mentioned or you know is.
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Data set out from regenerate all along the course of review and and specifically in the context of preparing for the Advisory Committee.
We continue to generate additional data additional analyses.
For lending further support.
To to our conviction in benefit rest of the drug.
You know and now as as Dan I mentioned prepared remarks in prepared and preparing for the type a meeting we had.
Additional analyses that hold a benefit.
I will give you one one recent example.
I've mentioned before the fact that.
Agency has become seized up the fact that.
There is that in the pathologists assessment of these semi quantitative categorical endpoints not surprisingly well known in the literature there is.
Decent amount to cause variability.
On an intra and inter reader basis, and actually points you too.
Paper this impress right now and the journal of Hepatology by Davidson.
At all that that looks is quite comprehensively in context of.
The phase two study that read out last year called eminence.
And they really did a deep dive on on.
This intra and inter reader variability in the context of the Nash histology endpoints.
With really statistically supported conclusion that what this variability does lead to an under powering of studies and more importantly under estimation.
Treatment effect.
And so.
In support of the robust results that we reported now got into well controlled studies Flint and then of course, our pivotal study regenerate.
It's important to note on the fact that she in both of those trials overcame. This this noise of the variability.
And showed with high statistical significance.
The ability to reverse fibrosis, which again is unprecedented so that's just one one example in the FCC side on the safety side I mentioned in the call. We had on June 29.
But that the there was an enormous.
Piece of work that we did but doing a comprehensive assessment of liver health and safety across our entire Nash study population. This is really I think groundbreaking work and of course looking at home. She is safety profile liver safety profile in that context, and that's really important additional who's on the safety side.
And most importantly, this they're very reassuring conclusions from from this exercise that.
Perhaps as expected on these patients who have.
Clearly strongly suspected cirrhosis or confirmed cirrhosis with in any case evidence.
Of declining hepatic reserve of hepatic impairment of clinically significant portal hypertension.
These these are the patients who are they're.
And secondly, greater risks from a liver safety standpoint.
And can relatively straightforwardly be identified noninvasively with routine.
Lab.
Amateurs and other tests that that that are used on every single day to assess deliver functional status of patients like these so that's that's.
Important example, on the safety side of something that we'll get more framing up for the.
Typing.
Good day has good dialogue and if they can quickly.
On the put a quick follow up on the.
R&D tax credit you would be Steve I believe from the UK government.
No one buying things or should we be modeling.
Something out in the coming quarters.
Yes, hi, Matt could be fair, yes.
Benefit that's offered by the UK government or.
Today, you know pert certain percentage of our R&D expenses, there that providers.
As a credit back.
We've applied for a few years and we're pleased that we received some of the.
Payment here I mean, I wouldn't say than annual thing that you would kind of model then but.
As we make progress on our claims would certainly continue to update.
I bet, you, but it but it certainly very pleased with the upward.
And to support.
On this which allowed us obviously to reduce our.
Operating expenses this quarter.
Great. Thanks, so much for taking my question.
Thank you. Our next question or comment comes from line or Brian Abrahams from RBC capital markets. Your line is open.
Hi, there. Thanks, so much for taking my question.
Can you share any thoughts in light of the CRL and some of the evolving data analyses as to whether there may be any more specifically appropriate Nash sub populations.
That could maximally benefit for most EA and for whom FDA overall view a benefit risk may differ how that overall relates to this idea of every framing and then you also mentioned the expectations for an AD com have you guys, formerly requested an AD com as part of any sort of dispute resolution process and if so.
Have you heard debt and writing.
Thanks.
Thanks, Brian I mean with respect to the first part of your question.
As you know.
Did the population studies, our breakthrough designation is in Nash patients with liver fibrosis.
Which stands you know the range potentially of everything from.
Early F. One fibrosis to walk to non cirrhotic ecpthree.
Fibrosis in the initial indication that said you will know.
We had an S commercial day in December and we very clearly outlined have specific focus on patients with advanced fibrosis, who our greatest risks.
Progressing to cirrhosis and its.
Complications because that's where the highest unmet need is that's where the value proposition is highest and that's where we think we with those CA akin to the the most good so.
That that already represents a subset.
The potential indicated a population and I do think thats important to frame.
With the agency.
In bringing up their overall benefit risk.
Assessment.
With the second part of your question was with respect to requesting an advisory Committee.
Again.
Our sole focus right now.
Just to prepare comprehensively for.
Type a meeting.
And again, assuming you know whether whether the wake of that meeting or subsequent.
Yes that that may be needed.
Our assumption right now you said upon resubmitting the NDA that the agency will continue to to wish to have an advisory Committee and you know we've repeatedly stated that you know what one one key aspects of the in completeness.
Of the first cycle review.
Was the absence of opportunity for patients and for Nash clinical experts to publicly opine on the merits of those yeas first treatment.
Or for patients with Nash fibrosis.
Thanks, so much.
Thanks.
Thank you. Our next question or comment comes from a line of Jim Birchenough from Wells Fargo. Your line is open.
Hi, guys. Congrats on your calendar quarter, maybe a tough question to answer but you know you've mentioned a few times looking to reach alignment with FDA and clearly off the CRL latter there's not alignment yet.
How do you avoid hearing what you want to hear and and getting true alignment and how do you communicate that to the street that that your view of alignment as ft Ace view of alignment. Thanks.
Thanks, Jim.
Look I think it starts with being meticulously prepared.
In terms of the the briefing book, but that we expect to shortly submit and B.
And the lead up to and participation in the meeting where hopefully we set up set the stage for a truly constructed.
Transparent.
Turning to abuse and.
Something that we can we can.
Based alignment on.
As a basis for Resubmission.
Yes of course at the moment, whether it's at that meeting or or any required follow up interactions.
Where we feel that we have enough.
From the agencies to to base Resubmission on we'll obviously be communicating that to you.
But I think that.
It's difficult to speculate right now on exactly what that's going to look like.
In market data, you'll presented easel is that data that would be new to ft and are you, bringing that to the type a meeting.
Yes, I mean, some of that somebody will be new at least with respect to the prior submission.
Yes, I'm sure, we'll have an opportunity to see it presented to diesel.
And yes, we intend to.
Include really to core efficacy data with the primary focus on the fibrosis benefit.
In the in the type a meeting.
Great. Thanks for taking questions.
Thanks you.
Thank you. Our next question or comment comes from the line of something Richter from Goldman Sachs. Your line is open.
Hi, good morning, Thanks for taking the question I can I just elaborate a little bit further and what you mean by re framing the risk benefit profile, what does that really look like versus how you initially is that going into the agency.
Well, it's really it's really a question of focusing on on the submitted did I mean, as we mentioned on June 29.
It's it's our clear belief.
Based on the complete response letter.
But on there was not a complete review of the data.
And an appreciation of the magnitude of benefit.
And I gave an example couple of questions ago about recent.
Elements in appreciation of the impact.
Of pathologist variability.
And how that leads to an underestimation of treatment effect.
And so part of the refraining of this is just really clarifying the magnitude of benefits.
Also clarifying.
Additional safety and then and then pointing the way and this is new work that frankly, we're really proud of.
How how to.
Straightforwardly help clinicians quite straightforwardly can identify.
Patients appropriate for treatment versus patients more with more advanced disease, who should be excluded.
So it's really the took bringing together and re frame the totality of data in that way, which includes incorporating it.
She is.
The Asian had a chance to review yet.
Great. Thank you.
Thanks.
Thank you. Our next question or comment comes from the line of Alan Carr from Needham and company. Your line is open.
Hi, Thanks for taking my questions can you give some more detail on where things stand in the European review has had a decision which expect this year and then what's your latest estimates on.
Penetration.
US in Europe in that PBC market, where do you think you can get thanks.
Sure I'll answer the first part and I had to carry for the second.
So in Europe as a mission my prepared remarks on view remains on track obviously it really just started in January so were earlier stage in the review.
But as we've we've guided before Alan we do not expect.
Approval or revenues.
In Europe this year.
It's going to be a next year.
Completion of review with respect to.
Penetration, Jerry if you could take that.
Yes, Thanks, Alan it's Jerry.
You know we continue to believe.
And see that the PBC market has good remaining potential for us to access both in the U.S. and in Europe, I think if you look at the growth.
We posted in the first half and the sales guidance despite.
The disruption, that's obviously out there with co bad it's an indicator that.
There continues to be patients out there that need to be identified for appropriate.
There are piano calibre it within the indication.
You know the confidence that the individual prescribing physicians have as they gain more experience over time leads us to that so there are more patients I think the opportunity now.
With the CRL to really refocus commercially back.
To PBC.
As we move in the next period is going to allow us to continue to grow in and we still again feel we have a significant opportunity yet in the PBC opportunity.
Yeah, Thanks for taking my questions.
Thank you. Our next question or comment comes from a lot of Brian Skorney from Baird. Your line is open.
Hi. Thank you. This is Jack dialing in for Brian I know you mentioned, a little bit on regenerate and that you plan to share some new data with the FDA from the Eagle abstract, but I was wondering if you could also give us an update with respect to the long term outcomes data from our generate.
Do you see that data unblinded has seen any of that data on an unblinded basis and I was there any of any Oh, I guess aspect of that dataset that you would plan to use a for a potential resubmission. Thank you.
Yes, thanks for the question so.
No I mean, as I mentioned earlier in the call I mean regenerate isn't ongoing blinded outcomes data and.
Howard this time to event off with a target 291 against prior to UN blinding.
And as currently.
Plan.
We and the agency will remain blinded to outcomes data until the completion of study.
It is theoretically possible.
That.
The agency, we could make provision for the agency to view accrued outcomes data along the way, but thats not currently not plant.
Awesome. Thank you so much.
Thanks.
Thank you. Our next question or comment comes for the line of Geoff Meacham from Bank of America. Your line is open.
Hey, guys its asking on for Jeff Thanks for taking my questions I.
I guess first up on Nash do any of today's update the lowered opex guidance the Calvert revenue guidance.
Redeployed PBC field force does any of that speak to maybe a strategic shift away from Nash depending on.
How the how they type a meeting and aligned with that can't goes and then quickly on PBC love to get your thoughts on latest thoughts on the competitive landscape given that some of your competitors are already there already in phase three are starting to move into that is thank you.
Yes, I'll sort of answer and maybe unfair Sunday through given but did the short answer is no theres no strategic pivot whatsoever.
From Nash, we are just being prudent given the the delay right now that we face in getting.
To to Nash approval, but as I mentioned my prepared remarks.
Throughout this call.
We are very very focused on preparing for.
Type a meeting with the agency.
To start the process of getting.
Our Nash and create a back on track and get associate to Nash patients is the first ever Nash crops. So.
You should not read into todays.
In essence, as a pivot away, but rather a prudent prudent.
Pruning back of investments.
While we get things back on track.
The Nash application.
I'll go to the PBC side, the competitive landscape, but again, there's really.
No no major shift I mean, o'callaghan has now been for years and market.
The business continues to grow.
We have an entrenched position in second line in multiple countries.
We also.
Keep in mind continue to generate data. So one of one of the abstracts easel coming up is six year open label data from our phase three poise trial, we actually now have clearance SCO and communicate a five year long term durable safety efficacy data.
In the market, which were preparing for.
And we have we just we initiated enrollment of cobalt our phase for outcomes trial. So we will irrespective of comp competing.
Products that fit may or may not come.
In the next few years, we will continue to we believe the remain.
Far ahead with.
Data supporting the value.
Although CA and of course.
With respect to long term lifecycle.
We are committed to developing a combination fixed dose combination of associate with with that's a fibrates and we have reason to believe based on available clinical data. So far looking at best of five great on its own.
In patients on worse or.
Not responses or so on and also limited but but.
But reassuring and supported data sets up the combo of those CA with specified but that have been presented a different scientific meetings.
That we will remain very very strongly competitive in the PC market.
Thank you.
Gerry Sandeep on the I don't know Kevin indebted about.
Refocusing investments.
No I guess, just maybe one other point is that obviously the opportunity now to refocus.
The commercial efforts on PBC will continue to be as Mark suggested.
At the center of the scientific conversation with Nash.
Won't change I think the final point is that we have obviously learned a huge amount in terms of our efforts in market and as I said in the prepared remarks believe strongly that the education, we've already taken under way, we'll have a lasting effect and that as we progress.
And really have a better understanding of our path forward, we'll be well positioned to do the right things quickly in order to to pivot back as and when it's appropriate.
Thank you. Our next question or comments comes from the line of Steve seed House from Raymond James Your line is open.
Good morning, Thanks for taking my question Mark I, just have to drill down more on the discussion of patient selection and risk benefit because you pretty nicely highlighted the rationale for focusing on the fibrosis subsets bridging fibrosis et cetera, you didn't really mentioned narrowing the focus on what potential risk side of the equation, which of course is a sensible.
Hi, us and patients on Stan diabetics et cetera, So maybe could you clarify a part of the regulatory strategy is in fact narrowing the initial label with respect to co morbidities versus what you originally intended that'd be helpful. Thank you.
Yes. Thanks for the question. So so there isn't that kind of broader intact, but let me just took a step back and point out that.
But the way that the FDA and the DNA view the Nash population. So two distinct populations through their Nash patients with fibrosis, who has not yet developed cirrhosis and then their patients who are already.
Cirrhotic and as you know we have.
A fully enrolled phase three trial reverse on studying O'shea 10, and 25 milligrams.
Nash patients with compensated cirrhosis, which was expected to read out by the end of next year, but thats opened under a separate plan b and so what that means for us and for any anyone developing.
Nash drug within an initial focus on Nash fibrosis is that that will.
Defined the population.
So on the risk side of it on the risk side of equation, obviously, cirrhotics or it significantly stepped up risk, particularly well really exclusively in our view cirrhotics with evidence.
On some amount of hepatic impairment of declining hepatic reserve.
Andrew or clinically significant portal hypertension, and so when I talk about the managing risk and identify patients appropriate for treatment and and to exclude from treatment.
I'm really talking about identifying such patients credit risk, who will not be part of the initial indicated a population that's true for US. That's also true for anyone who follows.
US with a initial focus at least on the Nash fibrosis mclish.
But actually to be complete in response to your question. We don't intend, we we saw benefit diabetics and non diabetics.
Weve long maintained with respect to.
Patients who are just slip at the mic and this is into Italy, and Eagle guidelines that.
These patients.
Conns can safely and effectively use satin therapy and we.
Generated a lot of data showing that the safe use in effective use of settings in combination with with associate to manage Sylvia.
Great. Thank you.
Thanks.
Thank you. Our next question or comment comes from the line of Nap and drink up from you, but yes. Your line is open.
Hi, Tim Thank you for taking their questions just honest non fair enough in.
Two quick ones, if I may I wanted to ask first about the pushes and pulls on behind this new Opex guidance. If you could give us a sense of how that $100 million shakes out between R&D versus that Shannay and then our second question, but just the how should we think about pricing going forward.
So did.
Yes, hi, Andy Thanks, Thanks for the question I think what I mean since the the letter I mean, we're very much focused on having a plan in place to which allowed us to give an updated.
To take that operating expense range by 100 million you know with regard to contact further on on that I mean, Jerry that speak a little bit about discontinuing of our contract sales force.
Now I'm pulling back on our Nash prelaunch investments as well as we're looking at expenses across the rest of the organization as well. So I can't really provide like you know if you want to call a breakout at this stage, but I can assure you that we'll continue to be prudent.
That's our future investments and continued update you as we.
Execute on our plan.
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Thank you our next question or comment what comes from a line of micro Morabito. Your line is open.
Thank you team for taking the questions I wanted to ask you.
You know generally the guidelines for.
The M.A. are viewed a slightly more different difficult that then FDIC and so.
Considering the CRL and the submission that you have with me what gives you hope about your submission there on how that regulatory processes going that you would expect more positive outcome.
Yes, well I think you're referring to the.
Yeah, a reflection paper, which is equivalent to adapt GAAP guidance.
On the development.
Nash fibrosis drugs, which came out last.
So you're going to happen go now.
And that does suggest that.
That both of the primary endpoints fibrosis improvement I was no worsening in Nash and Nash resolution no worsening fibrosis needs to be demonstrated.
There's also provisioned for for drugs that are primarily anti fibrotic to support the fibrosis benefit with demonstration of the two fibrosis stage improvement and weeklong maintain.
That based on the totality of our data were those.
Regenerate.
Okay.
We have convincing.
I can see.
As a basis for submission of our M&A.
And we continue to feel that we have a constructive basis for continued to proceed in that review.
DNA I'd also point out that while it's true that.
Two agencies.
You interact with one another.
In General and then specifically on Nash and certainly data and an opportunity to.
Exchange views us through things like the liver Forum.
You know and maybe overtime that will be harmonization of approach.
Yeah, maybe of course as an independent regulatory agency.
And we would expect that their review of our India will be their own.
And of course, you know as it's true on the on the U.S. side.
We are able to support.
Got that the data generated in the.
One thing.
Someone else Rick.
We support.
Center.
Chris.
Uh-huh approval.
Thanks, Mike.
Thank you at this time want me to into Q1 day session I would like to turn the conference back over to Dr. presents be for any closing remarks.
Yes. Thanks.
Crater.
On a quarterly earnings call.
As you can see just delivered our strongest forever in our international business with she.
Can you to.
Okay.
Yeah.
Develop globally.
And making sure that.
It's too.
You need the same time.
We are very very focused on.
Getting towards review in the U.S. back on track with respect.
I mean.
Comprehensively preparing for about what we hope will be a highly constructive exchange should not coming typing. So that we get as expeditiously as possible in position to recently.
Okay.
Of course.
As fiscal stewards of shareholder capital, we've taken appropriate steps to to step back by $100 million.
In terms of our guidance range, our opex and preserve capital.
For an extended period of time.
As we navigate the delay on the Nash side.
We have the wind at our backs.
We have been nor support.
From the Kettlewell community.
And from patient advocates who are passionate.
On on our behalf.
That most you get to patients in need with Nash and advanced fibrosis as expeditiously as possible on so we will continue.
Leading the way.
In.
In Nash in PBC, and progressive gone far liver disease on behalf of patients. Thanks, very much and look forward to providing our next update.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.
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