Q2 2021 DURECT Corp Earnings Call
Good afternoon, and welcome to our second quarter of 2021 earnings Conference call. This.
This is Mike Aaron Berg, Chief Financial Officer of direct Corporation.
I will provide a brief review of our financial results and then Jim Brown, our president and CEO will provide an update on our programs.
And we'll then open up the call for a question and answer session.
Before beginning I would like to remind you of our safe Harbor statement. During the course of this call. We may make forward looking statements.
And regarding direct products and development expected product benefits, our development plans future clinical trials or projected financial results.
These forward looking statements involve risks and uncertainties that can cause actual results to differ materially from those and such forward looking statements.
Other information regarding these and other risks can be found.
And in our SEC filings, including our 10-K, and 10 Qs and under the heading risk factors.
Let me now turn to our financials.
Total revenue in Q2, 2021 was $2.3 million compared to $24.5 million and Q2.2020.
This year over year difference is primarily due to the recognition.
Of $23.1 million and deferred revenue from the termination of the Gilead agreement and Q2.2020.
Excluding this deferred revenue total revenues increased from 1.4 million and Q2, 2020 to $2.3 million and Q2.2021.
Collaborative R&D revenue.
And excluding the large recognition of.
Of deferred revenue in Q2, 2020 increased by approximately $530000 year over year.
Product revenue now essentially from the sale of all of that pumps increased from $1.2 million and Q2, 2021.6 million and Q2.2021.
Q2, 2020 was a down quarter as.
Impacted by Covid disruptions to our all of the customers.
Our gross margin from product revenue was 77% and Q2.2021.
Revenue continues to be strongly cash flow positive.
R&D expense was 7.4 million and Q2, 2020, 1 as compared to $6.6 million and Q2.2020.
As it was the increase was primarily due to higher clinical trial expenses and higher contract manufacturing Pos or do you are 19 weighted.
SG&A expenses were $3.2 million and Q2, 2021 as compared to $3.3 million and Q2.2020.
Our underlying burn rate during the quarter was $8.7 million.
At June 30th 2021, we had cash and investments of $88.6 million as compared to $56.9 million at December 31, and 2020.
I also wanted to briefly mentioned and SEC filing that will take place tomorrow.
The 3 year term of our existing shelf registration statement expires on October.
And we will be filing.
2 shelf registration statements.
Our filing of tomorrow to leverage certain efficiencies of filing right. After our 10-Q.
These filings as normal corporate housekeeping, but I felt it was worth mentioning.
With that thanks again for joining our call and I will now turn the call over to Jim for an update on certain of our programs.
Thank you, Mike and Hello, everyone. Thank you for joining us today.
We made good progress and the second quarter of 2000 of 21.
We're enrolling at a good rate and affirm our phase <unk> study of <unk> 98, and patients with severe alcohol associated hepatitis.
We made excellent progress and opening additional clinical sites and the U.
The us with the addition of 7 new clinical sites since our last earnings call.
And now have 26 sites enrolling per firm, which represents 75% of our goal for U S sites.
We're also closing in on getting clinical sites up and running in Europe, the United Kingdom and Australia.
We presented the deal on HOA program at the Epogen.
Therapeutic target conference and additional D of our 90 day clinical data in 2 posters at the easel International liver conference and we're in negotiations with potential partners for possible.
Now, let's move to our most important program, Dr and accurate and alcohol associated hepatitis or a H.
As you all know.
Genetic I think of very important clinical trial do you aren't nitrate and a H called affirmed.
Our firm is our ongoing phase <unk> efficacy and safety study. It is of placebo controlled double blind multinational study targeting 300 patients.
There are 3 treatment arms, 30 milligrams and 90 milligrams.
On the grounds of dealer and age weight and the placebo arm.
As with the Phase Iia trial patients and the ascend trial and receive and infusion of do you are not to wait or placebo on day, 1 and if they are still on the hospital on day 4 day received a second infusion.
The primary endpoint for the trial is 90 day survival.
I will begin with an overview of the timeline for the different trial.
We enrolled our first patient at the end of January and since and had been steadily adding new clinical trial sites and.
And the United States. We now have opened 26 sites, which represents 3 quarters of the planned U S clinical sites with 9 more sites pending.
We are also on track to open.
Both sides and the U K, Europe, and Australia, and the coming months.
We are pleased with the enrollment rate several of the initial clinical sites have been enrolling subjects at a high rate well above our internal target rate, we expect the overall rate to accelerate as newer sites start to hit their stride.
We look forward to providing an update to our.
Expected completion date once this latest wave of Covid passes and the hospital environment at our clinical sites stabilizes for a few months.
Based on enrollment so far we are hopeful that we will be and are positioned to guide to a shorter timeline to trial completion.
The main focus of the company is to execute this trial to the highest level of quality and.
And then the timely fashion.
The firm is the highest priority of the company.
Hospitalized patients with a H are in desperate need of an effective therapy.
There are approximately 132000 hospitalizations per year, and the United States for a H and there is no approved treatment.
What physicians have available to them.
Okay.
Primarily involved accidents and support of care, which includes the nutrition and hydration.
Corticosteroids are used and some cases, but have been shown to have no survival benefit of 90 days or 1 year.
The average overall mortality of 8 H across clinical trials is 26 per cent and 28 days.
Is 29% at 90 days and 44 per cent at 180 days and has not improved and the past 50 years.
Unfortunately, even prior to the Covid pandemic the incidence of 8.8 was increasing and younger patients and during the pandemic alcohol consumption and the United States of decreased by approximately 30%.
Them today H has a significant economic impact on the U S health care system as well.
The average hospital stay for a H patient is approximately 7 days with many staying significantly longer the average hospitalization costs were and age patient as more than $50000 and the first year.
Alcoholic liver.
The disease is becoming a leading cause of liver transplants in the United States and the cost of a liver transplant exceeds $875000.
We estimate the annual cost of a H to the U S health care system to be as high of $6 billion.
Let's review why we are so optimistic.
About the use of D var, and actuate and the treatment of patients with severe a H.
First of all and our first trial of do you on actuated H patients all 19 patients, including 12 severe a H patients survived.
12 of these 19 patients were classified as severe based on meld scores.
15.
And of the 19 were classified as severe based on a scoring system that is specific to a H <unk> discriminant function score or MDF.
Based on the degree of liver damage and suggested by the scores historical data suggests that several of them were likely to not survived 28 days yet all of them did survive.
And 14 of the 19 patients were discharged and less than 4 days after receiving the only 1 intravenous infusion of the EUR 928.
Additionally, prognostic scores, including Lille and meld as well as bilirubin and other biomarkers were improved compared to baseline and the phase Iia trial.
Third from a safety standpoint.
And that much weight and was well tolerated by all of the patients and at all of the doses evaluated and the phase Iia trial, there were no serious drug related adverse events reported and this trial.
And fourth we can gain some additional insight into treating severe a H patients like those who are in the of firm trial by examining the severe patients from our phase Iia.
The trial and the cross study analysis.
Dr. Mcclain from the University of Louisville, or UL conducted of comparative analysis of the 8 severe a H patients treated with you on edge weight and the 30 and 90 milligram cohort from our phase Iia trial with 13th severe H patients from the University of Louisville study.
The new operations receive supportive care, including steroids.
Both groups had similarly high initial meld scores at $24.5 and high M. D F scores of greater than 60.
The deal on edge way of treated patients had substantially lower Lille scores as compared to the U L group and all.
D var and 19.8 patients survived the 28 day follow up period, while 3 of the UL patients did not survive past 28 days.
This analysis was presented by Dr. Craig Mcclain at the 2019, a a S L D liver meeting.
A slide of this comparison can be seen and our corporate deck on the direct website.
The fifth reason.
All of the to why we're so optimistic about the use of deal on the edge weight and the treatment of patients with severe a H is that in addition to the clinical trial results. We also have numerous and vivo animal model supporting the data. The demonstrates do you on nitrates potential against multi organ failure, which can occur and a H patients.
The final rationale.
Now as to why we are optimistic regarding the dealer and nitrates potential to treat patients with severe a H is due on nitrates mechanism of action and how it connects with the remarkable results. We saw in the treatment of AAV patients.
Do you on isolate is an endogenous epigenetic regulator and the vast majority of what is at the nucleus of the cell it's not DNA.
And the proteins and other molecules that determined which genes are expressed and are known as the LPG now.
Do you want and I to 8 X on 1 of these proteins DNA metal transfer Aces also known as the D and MTS through which it regulate gene expression.
1 way to visualize the importance of the epigenome.
Compare it to the software of the computer.
You had the same DNA or hardware and every cell and your body.
The same DNA of every cell, but think about the different cells and tissue types and make up your body.
The reason for this is that the epigenome, which is and this example would be the software.
Trolls, which changed the expressed and which are not.
It's because it's effectively the brains of the operation.
Do you are of 19, 8 extra repair of malfunctioning software without changing the hardware.
Do you and I to 8 bytes do and inhibits the activity of the N M T, 138% and <unk>.
D and empties RMP genetic regulating enzymes the AD methyl groups to.
And the process called DNA methylation.
Treatment good deal on nitrate and stress liver cells led to decreased DNA congratulation and modulate the expression of more than 1000 genes that are associated with multiple crucial cellular signaling pathways.
These modulations can lead.
DNA of crude organ function and survival.
<unk> lipid accumulation and inflammation as we have observed the various in vivo animal models and and the promising results from our completed clinical trials and a H and Nash.
And July of 2019, our journey at all published the study in nature of communications.
In the study.
Lead to and per samples from 82 patients with liver disease, including 27 day H patients plus samples from 10 subjects with normal livers were examined.
The gene transcription patterns of the H patients were found to be distinctly different from the control subjects and from patients with other liver diseases.
Importantly, and the H patients there was DNA.
<unk> really hyperventilation, ultra transcriptome mix and liver cell dysfunction.
The expression of D N M and T, 1 and D and empty 3 a were found to be profoundly increased and age patients, but not in control subjects or patients with other liver diseases.
The liver cells of the H patients were characterized by increased.
The expression of the DMT DNA hyperventilation transcript chromic reprogramming and loss of mature liver cell function.
The results of the study suggests that inhibition of the N M piece could be of novel therapeutic approach for H.
During this quarter, we were also invited to present at the 2000.
'twenty, 1 epigenetic therapeutic targets virtual summit.
As for leading companies and the field of epigenetics to present to their peers.
To our knowledge, we were the only presenter utilizing and epigenetic regulator to restore function and entered yourselves as opposed to most who were using epigenetics to kill cancer cells.
Our.
Cash and was well received.
In conclusion, the results from our phase Iia study, demonstrating 100% survival with 14 of 19 patients, leaving the hospital before day 4 and the positive safety profile that was observed and the severely ill patients the.
The comparative analysis with the U L severe HVAC.
Presentation data the.
The in vivo animal model results and the correlation of D var and actually its mechanism of action with the epigenetic dysregulation scene and a H patients.
All together make us optimistic regarding the potential for the affirmed trial.
Given the high unmet need for hospitalized patients the lack.
Current treatment options and the high mortality rates, we believe of robust survival benefit and the FERC trial would support an NDA filing.
In addition, the FDA has granted fast track designation for D var, and 90 weight and the treatment of H.
Approval based on the single trial is not uncommon and fact, 37% of new drug approvals between.
Lack of 2.5 and 2012 were based on a single pivotal trial and.
And <unk> 42 per cent of new drugs launch and the United States and 2018 were approved based on the single trial.
Next I will update on the D oar and accurate Nash program.
And 2020, we reported positive results from our phase 1 B trial of do you.
2008, and Nash patients with stage 1 to 3 fibrosis.
This was the randomized open label and multi center study of dealer and 19 weight and Nash patients conducted and the United States.
You are and I to weight was dosed orally for 28 consecutive days and the patients were followed up for an additional 28 day.
A total of 6.
And I try and patients completed the study and there were at least 20 patients per dose group.
You aren't accurate treatment and this trial resulted in a reduction from baseline of liver enzymes liver fat by imaging liver stiffness by imaging and biomarker share.
And on lipid and insulin resistance.
Many of these reductions were statistically significant.
The 16th.
A statistically significant and 24% reduction from baseline of <unk>.
Some of triglycerides was seen and 16 patients who had baseline levels above 200 milligrams per deciliter.
At 28 days, 43% of all patients had at least the 10% liver fat reduction by MRI P. D F F.
With the median reduction of 20% from baseline, which was statistically significant with a P value of less than zero point of 001.
And this group of patients a L. T levels were also significantly reduced from baseline and additionally, liver stiffness by transient elastography or T E share of lipids and some biomarkers.
Including the fibrosis biomarker and cell death markers were statistically significantly reduced from baseline and certain dose groups.
EUR and isolate was well tolerated at all 3 doses evaluated there were no serious adverse events reported during the study data from this trial was presented and a poster at the 2020 a S. L D b.
At the June 2021 ease of meeting we presented 2 posters on D. You went on to it.
The first reviewed additional data from the 28 day Nash trial. The second poster review data from a PK trial of EUR 19 weight and patients with child, Pugh, B and C liver function impairment.
The additional Nash day to.
Demonstrated potential of deal on a 2 day 2 impact of liver fibrosis or stiffness.
Overall reductions and MRE and proceeds of 3 of 28 days were consistent with the data on T. He and MRI PDF F.
This poster also showed you on <unk> potential and improving insulin resistance and these.
Nash patients.
There were approximately 20% media and reductions from baseline of homeostatic model of insulin resistance of Homa IR. Following 28 day oral dosing and certain dose groups, although they were not statistically significant.
The data were consistent with what we have observed and animal models. The D var and <unk> significantly increased influence.
And sensitivity and improved glucose tolerance.
And the second poster we review data from the safety and PK study of dealer and 19 and patients with moderate or child, Pugh, b and severe or child Pugh C liver function impairment.
Are you on actuate was very well tolerated by these patients with no adverse events reported throughout.
Okay.
Moreover, a statistically significant reduction and CK eighteens of biomarker of apoptotic cells was observed at 12 hours. After do you are graduate dosing.
Regarding the mechanism of action of the Euro and enjoy the Nash recall, the do you aren't actuate reduces DNA hyperventilation and inhibits DMT.
The 2017 Hardy T at all published and got a study that evaluated 26 patients with biopsy proven non alcoholic Seattle and hepatitis.
They found DNA hyperventilation and that the <unk> gamma promoter region, and hepatocytes, which could also be detected and the plasma of these patients and.
Used as the stratification marker for the fibrosis stage.
The clinical results, we've observed the deal where and actuated Nash patients together with the continued safety profile and its mechanism of action all support further valuation of the Euro 90 weights potential and Nash.
We are planning on next steps for Nash.
Next to the pause of our program.
T Sars and Mers and novel non opioid sustained release local anesthetic that is approved to produce post surgical analgesia for up to 72 hours following arthroscopic Subacromial decompression.
I was on the case more bupivacaine and any other approved single dose sustained released bupivacaine product. We believe this may be an important differentiator and the market.
And other potential differentiator for polymer is the ease of application pause of our supply directly into the surgical wound. The primary source of post surgical pain at the end of the surgery <unk> administered into the Subacromial space under direct arthroscopic visualization, where it continuously releases bupivacaine for 72 hours of more.
FDA approval is based on the pivotal trial of arthroscopic Subacromial decompression surgery with and intact rotator cuff.
The primary outcome measures would mean pain intensity and total opioid rescue analgesia administered both evaluated over the first 72 hours after surgery versus placebo.
The opioid epidemic and our country is responsible for approximately 200 desk every day. The objective of the partner program is to give healthcare providers and in turn their patient and non opioid alternative for post operative pain control or at a minimum of way to reduce the amount of opioids required to reduce post surgical pain.
The call.
The decompression of the shoulder surgery used to treat impingement syndrome of common repetitive use injury that causes pain when the arms raised over the head.
There are over 600000, and surgeries and evolving arthroscopic subacromial decompression performed each year and the United States.
We view Subacromial decompression as the beachhead.
At the pause button on the market and we believe the opportunity to expand the label to cover a broader group of surgical procedures represents significant upside.
To summarize we believe there are a number of product features that have the potential to differentiate plasma and the market.
How's the Mers approved to provide of 72 hours of post surgical analgesia from the single application.
<unk> and and the pivotal trial and demonstrated a statistically significant reduction of both the level of pain and use of opioids.
Plasma contains more bupivacaine and any other approved the single dose sustained released bupivacaine product and according to our investigators and the clinical studies Pas and nurse ease of application and there'll be a welcome benefit.
In addition to these attractive features we believe there are potential avenues available to expand the label to include more surgical indications.
We are in negotiations with potential commercial partners for parts of our our plans to use the proceeds from partnership to help fund our epigenetic program and our flagship product do you on 98 for the treatment of.
Associated hepatitis.
In summary, this was a good quarter for Durect.
We are making great strides with the firm we of 26 U S sites up and running and we are pleased with the patient enrollment rate.
With 26 clinical sites recruiting patients. We're now at 75 per cent of our U S site initiation goal.
Additionally, we remain on track to initiate sites and the UK, Europe, and Australia and in the next few months.
We expect to have between 30, and 40 clinical sites and the United States and 15 to 20 sites across the UK Europe and Australia.
Elevated DMT expression and DNA hyperventilation reported and the liver samples of.
A H patients fits well with deal and Thats why its mechanism of action and helps to explain the efficacy signals, including survival of patients observed in our phase Iia H trial.
We have fast track designation by the FDA for our <unk> program.
We expect that if we achieve a robust survival benefit.
To support an NDA filing.
The commercial partnership process for PAH Zimmer is ongoing.
We presented 2 posters that diesel, which further affirmed the mechanism of action and activity of the euro and activate and patients with Nash and severe liver disease.
The mechanisms of action of the D O R I S.
It helps explain the efficacy signals, including survival of patients and our phase Iia trial as well as the encouraging results from our phase <unk> Nash trial and provides further scientific rationale for developing the euro 19, and wait for the treatment of multiple other acute organ and chronic diseases.
With that we would now like to take any questions you might have.
The study thank you ladies and gentlemen at this time, we will be conducting a question and answer session. If the.
I'd like to ask a question you May press star 1 on your telephone keypad. The confirmation tunnel of any Kate Your line is in the question queue. You May Press Star 2 if you would like to remove your question from the queue.
For participants using speaker equipment and may be necessary.
Of your handset before pressing the Starkey. Our first question comes from the line of Kristen <unk> with Cantor Fitzgerald. Please for please proceed with your question.
Hi, good afternoon, everybody thanks for taking the questions.
And the base.
Sorry to pick up the line with the share was just based on some of the comments you made that the trial is enrolling faster than your internal projections just wanted to see if you could elaborate for us what some of these factors might be 1 of your estimates for example, conservative to consider some impacts from COVID-19 hospitalizations is.
Is it in part driven by the number of cases and general being on the rise or any other factors that you could potentially point to this trend.
And that's very interesting yeah, we first of all of the Covid definitely has an impact and theres no ignoring that and and the continuation of Covid continues to have an impact.
The first on the sites.
We have as we said we have certain sites and are enrolling at a rate that is faster than we had originally projected and then we have other sites that are coming up more slowly and it's gonna be balance of these as we go forward and time that will define whether or not we're able to complete the trial early on right now at this point in time of what we're saying is we're going to give an.
Update on that in the future, but the.
The update will come after this delta of wave has passed and when the hospitals and had 3.
And we're 4 months of more normalcy and enrollment is also on the call. So I guess I'll, let him maybe speak to that as well.
Yeah, Thanks, Hi, Kristen.
And I I I I agree with what Jim said, the Covid had this very sort of are the effect to the increased shrinking there was a much higher incidence of people.
Getting into trouble with alcohol, but then also it affected both the.
And the availability of bids and the availability.
2 of staff. So many times the research that were not considered essential and therefore not allowed in and that was improving but we'll have to wait and see what effects of this delta of wave has and the way the hospitals will start to again block.
And your block non essential personnel from coming in.
A brief.
Thank you and then there was an accepted article that was published and herpetology. The week that looked at the impact of COVID-19 on liver transplant and alcohol associated liver disease, including severe a H and 1 of the findings there was talking about just the number of.
Waiting weightlift periods for the liver transplants and that a H and L D.
And the biggest drivers here, especially after COVID-19, and and I also know this year and Eagle there was a lot of the presentation looking at different steroid and antibiotic regimens as well so.
And you know get your thoughts I know you've talked about this a lot and the past, but just you know how does the has reinforced the the level of unmet need for you. When we're hearing about studies like this and and other ways that physicians are looking to treat their patients right now.
And I think that's out of the question for Norman.
Okay.
So just and so.
Very good and I see I don't have to make sure I always stay up to date on my journalist.
Ask the question.
Yes, so and so what we are.
And what we've seen is and.
At the the data for 2020 I think were just published the.
And the annual CSR.
And the <unk> report shows the continued decline in hepatitis C and the continued increase in.
On the undefined, which is mostly nash non alcoholic fatty liver disease sort of neck and neck with alcohol and alcohol includes both the chronic alcohol with cirrhosis.
And the Q E H.
And the C. If you survey the.
If you survey across the country and transplant centers, there's quite a wide range of responses from people, saying, we will of transplant people.
Who have only very recently stopped drinking to some.
People, having fairly stringent criteria of back when you don't do it net debt is still shaking out so and so there's quite a lot of variation across the country and also in our sites some of our sites of saying, we werent transfer like anyone with a H if they haven't been absent and for some period of time and others are saying world transplant them and then trying to deal with it on the backend.
And.
And there was a very nice publication by.
By Brian Lee on the outcomes and and on the.
Post transplant drinking.
The series strength and turned out to be about 10 or 11%.
But the the 1.
1 and 3 year survival were comparable to any of the indication for transplant.
Thank you and then the last question I have and I know that a age of the main priority for the company, but now that it's been a few months.
The detailed M of way has been published and you've been at some conferences, including 1 that particularly related to the epigenetic therapies curious is any experts that you've engaged.
And with or others have highlighted other potentials that they see for either D oar and 92.8 or the concept of general Thanks again.
Sure No there is definitely a lot of interest and this week.
And when I think about you know its interest in go having had an opportunity to participate and that epigenetics conference.
<unk>.
The.
The vast majority of almost all of the effort and the in the.
Utilization of the Epigenome and medicine today is in the realm of trying to find a way to disrupt the of the genomic cancer cells, which is the.
And the wonderful thing and they've got some really good results and helping patients, especially with these.
Horrible diseases.
<unk> AML and the others.
But the other side of that coin is to try and.
And and helped the the cells by virtue of of supporting the epigenome, which becomes dysregulation and disease, and we have that opportunity with D var and actually it's an extremely.
Jesus the complex twice a day and that there are there are literally millions of sites of of methylation and we're so fortunate that we have a naturally occurring molecule and we understand how well it works and we understand the thousands of surgeons and it turns on and turns off and so that gives us and insight that is.
And a way ahead of anywhere else so to try and the Cook.
<unk> produced.
At least that de novo would be.
And many careers to be of maybe lifetime and scale to do that and at this point of the current capacity per month.
The deal with the data. So we're really fortunate that we have that kind of insight and that has opened the door for a number of potential disease, sorry about the long weighted introduction at the end of the day we are.
Are talking to people, we have a number of indications we're evaluating it was really nice to see the additional Nash data, we published on the insulin improvement and insulin resistance as well as the improvement and those markers of fibrosis that certainly show of the 90 day, It's got great potential I believe and Nash, but then there are a number of other acute.
Indications.
And some chronic indications that were also pursuance of the company is going through and evaluation process to select our next nitro 8 effort beyond what we're doing and a.
The H and Nash to to put into the clinic and so.
We're very fortunate to have the of the opportunities that we have in front of us.
Our next question comes from the line of French Walbridge Boys with Oppenheimer. Please proceed with your question.
Hi, Thanks for taking the questions.
I was just wondering on the and I know and not much as it could be share it on on potential partnerships, but are we still thinking debt you know if the partners.
The ship came around for Pas and married that it would be ready and that the partner would be ready to launch by the end of of this year, whether or not he launches by then and in terms of potential label expansions.
And above and beyond what is currently on on on the label.
Any thoughts about you know what.
The partnership want to see that expansion and prior to a partnership or is it something they would be willing to do and you know any color you can give on.
And if the label maybe had hernia and it or the label expansion just the size of the market with the current label right now would be would be very helpful. Thank you.
Sure Mike do you want.
And anyway.
The address that.
Sure.
Yeah, I think the first question about will the partner so they'll be able to watch by the end of the year.
We think that's still possible.
Part of the part of the talent is the commercial manufacturing has been a little bit delayed so.
On the timing of getting commercial supplies of made and it's gonna be a little tight to get something out by the end of the year.
And also of sort of up to the partner.
Whether they would want to watch launch something late in the year or wait until the start of the next year or so could could happen either way.
And then the second part of your question about label expansion.
I think certainly all of the partners, we're talking to recognize the the.
Massive potential of getting label expansion and what it would mean to grow the opportunity.
And so I think once we put a partnership in place.
It is likely that the partner will take the lead on.
The working towards that label expansion.
Okay, great and something that's something everybody I'm sorry.
Okay, no great and the and you mentioned you know fast track designation for alcoholic hepatitis and any potential for what would it take to potentially.
C breakthrough therapy designation and any.
Potential on timing there is just something that we wouldn't expect the head of data.
Yes, I think what you need for breakthroughs you need control data and so.
You will need data from a firm to be able to do that.
And if a firm of statistically significant and.
And that will bring breakthrough with it because we will have this acute.
Unmet need.
And of the patients die at 90 days no treatment out there that is effective today and if we have those kinds of data and then I think theres a very good chance, we would get breakthrough.
Okay. That's it for me. Thank you very much okay sure.
Yeah.
Our next question comes from the line of Ed Arce from H C. Wainwright. Please proceed with your question.
Good afternoon, everyone. This is Thomas Yip asking the questions for congratulations on all of the progress and here, so far and 2021.
So first of the.
Good to hear.
And our clinical sites for a firm Brent on up AR and.
And the U S and as you mentioned and we'll just have to wait until.
On the topic of every and cools down a little bit for more if the tariffs.
But so far what geographical areas, when you say of stronger than the others and and also.
Can you remind us what you're on target patient number of per site.
We don't have a target patient number per site.
There may be at some point of certain sites and roll it dramatically high rates. We may we may put a cap on them, but we don't have we don't have a minimum.
And the number the as with any clinical trial, the always sites it performed better than others as far as geographic distribution I think our enormous could speak much better to that across the U S moment of the.
Is there.
Yeah.
We we have very specifically trying to cover all the areas.
Partly because the big idea.
The most of the centers are transplant centers and so that's the way the highest density of alcohol associated hepatitis is found and also of the most experienced investigators and so we have tried to cover most of the most I would say with Covid.
To cover the whole country. It just happens curiously debt our highest enrolling sites are in the Midwest and the east coast.
And some of the West coast sites have taken a little longer to come up.
And I don't expect that to I didn't expect that to the last but we've chosen the sites with the specific.
The goal of heavy.
The first population and by geography suits and site C suite and kind of shoot and the ratio of groups more commonly they and others and so we're hoping that the trial will end up being very well balance both geographically and by race and ethnicity.
And that makes sense. Thanks, thanks for the details for the neuroscience.
It's perhaps for the ex U S sites and the firm that are opening later this year.
And what else what are some steps are before they can fully open and are targeting.
Kind of the same type of risk the patient demographic for the sites as well.
And.
Having a day.
[laughter], yeah, so and so the the sites are going to the U.
Okay.
Of the EU and Australia. So the Australia has I would say of relatively homogeneous population, but we are going all the way across the country, because they're the big sites and.
The.
And so on the east and the West side of Australia, mostly along the southern and the sudden edge.
On the U K and we have about 5 sites.
And we'll expect to see a fairly uniform group there and then Europe tends to be more uniform and the U S. But we have targeted.
And I think it is 4 countries.
And then the the question the answer to your question is and all of these have and have national committees and require approval. So we're working through those at the moment and I think we're making pretty good progress on getting out.
And the necessary approvals. So that includes both the the regulatory of the competent authorities and the the.
The review of the ethics committees.
Got it and then.
The reports of that perhaps 1 final question.
Regarding customer.
And getting there and internal date that debt.
You have so far of that when the could possible with the launch possum, there and the U S. A width of third party sales organization.
Well as Mike was saying the manufacturing is growing on kind of independent of the negotiations but.
I don't.
You know there isn't going to definitely be a date by which it doesn't make sense, but I don't know Mike what your thoughts are there.
Yeah, we don't we don't have a drop dead date, but part of it depends on the partner right.
The different strategies and.
Capabilities in place the fixed.
And just the sales forces and such so we.
We don't have a drop.
For getting it this year, but frankly, the most important thing is getting on with the right partner and.
And in combination with the right strategy to expand the label so.
Yeah, that's more important and arbitrary deadline of the end of the year, but obviously, we're hoping to do it sooner sooner than later, but getting the right partner.
<unk> and the right strategies and places the most important piece.
I think that sounds good on the emphasize the above.
And Mike said I think getting the expanded label is really crucial to 2 <unk>.
And the opportunity.
Right right.
On a cents.
Okay.
We'll look forward to the progress for the second half this year and thanks again for taking on all questions.
Sure. Thank you.
Okay.
That concludes our question and answer session and I'd like to hand, the call back over to Mr. Jim Brown for closing remarks.
With that we want to thank you for your time today.
And as always we're available.
So please reach out if you have any further questions. Thank you so much and take care.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Yeah.