Q2 2021 Cymabay Therapeutics Inc Earnings Call
[music].
Good day, ladies and gentlemen, and welcome to Simba days second quarter, 2021 financial results and business update conference call.
At this time all participants are in a listen only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the company's request.
It is also being webcast live on the investors section at December de website at Www Dot Simba day dotcom.
Now I'd like to turn the call over to Mr. Dan Mental Vice President of Finance at CYMBA Bay, you may begin.
Thank you operator, and good afternoon, everyone.
Hope that you've had a chance to review the press release, we issued announcing our second quarter 2021 financial results and business update.
You can access that release on our website under the investors tab.
Joining me on the call today are <unk> Shah Chief Executive Officer, Dr. Chuck Mcwherter, Chief Scientific Officer, Dr. Dennis Kim Chief Medical Officer.
Following our prepared remarks, we will open up the call for Q&A.
Before we begin I'd like to remind everyone that statements made during this conference call, including the Q&A session relating to <unk> base expected future performance business prospects events or plans, including clinical plans regulatory approvals funding and repayment schedules anticipated timelines in trial enrollment days.
Cash runway and planning for commercialization.
Any future products are forward looking statements as defined under the private Securities Litigation Reform Act of 1095.
Although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions actual outcomes and results are subject to risks and uncertainties and could differ materially from those 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 as risk factors set forth in the company's quarterly and annual reports filed with the SEC 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 Sema Bay, and any recording or rebroadcast is expressly prohibited without the written consent of sema back.
At this time I'd like to turn the call over to Suzhou.
Thank you Dan good afternoon, and thank you for joining us today.
One year ago, we successfully gained regulatory clearance to restart clinical development of cell of del Mar.
We did this with a staff of approximately 20 employees in the midst of the global pandemic that continues even to this day.
The second quarter saw us achieve significant milestone.
That has positioned us once again to attain our core objectives of delivering innovative treatments to patients in need while also providing value to our shareholders.
We added experienced talent across the functional areas vital to getting sell Adele parts of patients with primary biliary cholangitis or PBC.
This includes those executing all of the necessary studies for global regulatory submissions, including response, our global Phase III study.
And the many who are preparing us for regulatory filings.
Manufacturing product and commercial launch.
Paramount to our plan.
We have now also secured the funding needed to complete the <unk> development through a non dilutive risk sharing development funding agreement with adding work.
In this agreement we have a partner with a long history of funding innovative and successful life Sciences companies.
And who importantly shares our belief that sell adult bar has the potential to meaningfully improve the treatment of patients with PBC.
Underscoring this potential or the results and our latest presentation featured at the international liver Congress in June.
And those patients with cirrhosis.
A more advanced stage of this rare life threatening disease.
On today's call I will begin by summarizing key aspects of the development financing agreement with adding words.
And then ask Dennis to discuss the progress in our response and our most recent presentation at the international liver Congress.
<unk> by the European Association for the study of liver disease.
Chuck will provide a brief update on our early stage pipeline programs.
Followed by Dan summary of key financial highlights in the second quarter and first six months of the year.
We will have Q&A following our presentations.
Our announcement of a non dilutive risk sharing funding agreement with adding worth highlights our commitment.
To find innovative means to support our mission.
Improved treatment alternatives to patients with chronic inflammatory liver diseases like PVC.
Proceeds from this transaction are expected to support the completion of our development program for <unk> in PBC include.
Including the ongoing global Phase III response study.
And the long term open label <unk> study up to the time of regulatory filings.
And various NDA, enabling studies as well.
By securing this capital and strengthening our balance sheet, we are well positioned to deliver on the promising opportunity ahead of us to deliver value to patients and shareholders.
Under the terms of this strategic development funding transaction.
We will receive from adding worth up to $100 million to fund the development of cell Adele par for PVC.
Of which $75 million.
Will be received in three installments over approximately the next six months.
We have the option to receive an additional $25 million within approximately two months of the completion of enrollment of response.
In exchange, we will make fixed payment equal to two times the funded amount spread over a six year period. Following the first regulatory approval in either the U S or the EU.
And in addition sales milestone payments capped at one one the funded amount based on U S product sales.
Specific payment schedules for the regulatory and sales milestones are outlined in the 8-K filed with the SEC last week.
We believe the terms, including the repayment caps and back end weighted repayment schedule in this agreement or some of the most favorable found in recent precedent transactions of this kind.
We also retain the ability to accelerate payments at a reduced amount upon regulatory approval.
<unk> retained upside potential for solid ALP or in the U S along with full worldwide commercial rights.
We examined a wide variety of funding vehicles and worked closely with outside financial and legal advisors and a competitive process before making a final selection.
Commonly risk sharing funding agreements in biotech are for programs that are commercial or at least have regulatory approval.
We believe the level of interest from multiple parties reflects the significant efficacy and safety data generated to date for <unk> in PBC.
Finding a financial partner in <unk> worth with the background to conduct significant diligence and come to a shared view of the long term potential for cell Adele par was key to consummating the deal.
We are excited to have <unk> support as they have deep scientific operating and financial experience in biotech.
Moving on to our key business updates.
Let me begin by reviewing response before turning the call over to Dennis to discuss key milestones achieved to date and our focus going forward.
Completing the development of cell Adele par for patients with PBC remains our top priority.
As a reminder, response is a 52 week placebo controlled randomized global phase III registration study evaluating the safety and efficacy of <unk> in patients with PBC.
The study is intended to enroll 180 patients.
In a two to one randomization to oral once daily sell Adele bar 10 milligrams.
Or placebo.
As an add on therapy to patients with an inadequate response or intolerant to first line <unk> therapy.
The primary outcome measure is the composite biochemical responder rate after 52 weeks for alkaline phosphatase and bilirubin.
The same endpoint used to register Ocala.
The only approved second line treatment alternative for PVC.
Two key secondary endpoints include the rate of normalization of alkaline phosphatase at 52 weeks.
And the change in <unk> from baseline to six months in patients with moderate to severe pruritus as reflected in a baseline <unk> numerical rating scale value of four or greater.
As many of you know the design for a response is based off our enhance phase III study in which after only three months of dosing.
<unk> 10 milligrams demonstrated meaningful statistically significant improvements in biochemical markers of disease and reductions in symptom burden in patients with PBC.
In addition to enrolling the same patient population.
<unk> the same primary and key secondary endpoints.
Studying the same optimal 10 milligram dose of <unk> as we did in enhance.
Our plan is to leverage our prior experience and success by taking response to over 20 countries and over 100 sites around the world.
In 2019, we randomized 265 patient been enhanced from first patient in to last patient enrolled in approximately 11 months.
Screening and respond.
Where we are intending as mentioned to enroll 180 patients was initiated at the end of the first quarter. This year with our first patient randomization occurring in April.
We set an aggressive goal for response.
And although our priority remains to complete enrollment in response as quickly as possible.
With a continued focus on year end.
We were always aware that we would have to work through challenges presented by the global pandemic.
As with any global study of this size in a rare disease such as PVC.
Enrollment began slowly and accelerates as site activations and screenings begin to accelerate.
Study startup activities, including IRB and Ethics Committee approvals.
And site Activations have been affected by the pandemic, even as effective vaccines have recently become available.
Lately, the spread and evolving risks related to the Delta variant have added uncertainty and complexity to clinical research.
As we assess the impact of these developments.
We have to be prepared to keep sites active and enrolling patients into the first half of 2022.
We will provide additional guidance around enrollment timelines on a quarterly basis.
As we progress and as we gain greater clarity into the impact of the pandemic and the effectiveness of initiatives. We are implementing to address these challenges.
I'll now turn the call over to Dennis to review, our progress to date and our strategies to complete our phase III program Dennis.
Thank you Joe and Thanks also for the opportunity to participate in the first of what should be many seem abate, earning calls earnings calls to come.
Before detailing the status of our pivotal phase III study response, I'll remind you as usual did they in that.
We enrolled 265 patients and enhance and just under a year.
Our goal has been to enroll response targeting 180 patients by the end of this year.
We as a company have a greater great deal of experience in PBC, having conducted in enhance.
Even though we are targeting 80 fewer patients and response, our intention is to put even greater effort into patient recruitment for response to.
To mitigate the challenges that COVID-19 is having on clinical studies as well as having greater competition for patients.
We're still in the earlier stages of this process and because patient enrollment typically increase as quickly as more sites are activated.
We expect to see meaningful growth in the number of patients screened and enrolled in the coming months.
Especially as study site personnel and potential study volunteers returned from their summer breaks.
Due at least in part to these headwinds.
It's taken longer than anticipated to get study sites activated and if you look at clinical trials Dot Gov, but are approximately 60 studies study sites in 15 countries activated to begin patient screening and enrollment.
As we accelerated site activations in the coming months, we expect to see a commensurate increase in patient screening activities and enrollment numbers to follow.
To overcome the challenges related to the pandemic compounded by intensified competition for patients.
We are actively engaged in increasing the number of participating study sites across additional countries.
As well as efforts on programs to maximize the patient enrolment and potential of study sites already identified and are activated.
As we've come through these inflection points and site activation and patient screening numbers in the near future.
We will have a better grasp of our patient recruitment rate and be better able to project. The study enrollment completion date.
Before I hand things over to Chuck to discuss our pipeline updates.
Like to quickly remind you of the recent sell bell part clinical abstracts and presentations made at the 2021 European Association for the study of liver diseases.
Increasingly PBC patients with cirrhosis is an important sub stage of disease. As you may have been made aware of because of the recent label changes for <unk> in which patients with compensated cirrhosis and portal hypertension are now contraindicated.
We have for several years, it's been steady and Philadelphia as a potential treatment option across a spectrum of disease stages and severity of PVC.
Including in those patients with compensated cirrhosis.
We recently presented an analysis of more than 50, PBC patients with compensated cirrhosis and a poster titled <unk>.
<unk> safety and Tolerability of <unk> in patients with compensated liver cirrhosis due to primary biliary cholangitis, a pooled analysis of phase II and phase III studies.
And you can find this presentation on our website.
This pooled analysis of cirrhotic patients from the open label Phase II study and placebo controlled enhanced study reported on three months efficacy and safety.
Five or 10 milligrams of Citadel par.
After three months, the efficacy tolerability and safety in patients with compensated cirrhosis at a consistent pattern at magnitude of biochemical response in liver biochemistry to that of non cirrhotic patients.
And importantly was accompanied by a similar safety profile.
These results are consistent with our previous previously reported sell bell par exposure data in PBC patients with cirrhosis.
Which showed no significant drug accumulation and more importantly, only nominal increases in PK parameters at the 10 milligram dose.
Our second clinical presentation demonstrated that in PBC patients with prior treatment with medical with acid or <unk>.
<unk> appeared to be safe, well tolerated and showed meaningful and dose dependent improvement in biochemical markers of cholestasis.
In addition, PBC patients with prior treatment with OCA or medical like assets or fibroids.
As responsive to sell of all par as those who did not have prior exposure to these therapies.
We are leveraging these exciting study results to educate and communicate with our study sites with an eye toward highlighting the overall efficacy and safety profile of <unk> and the potential benefits to be gleaned by response study patients.
Chuck.
Thank you Dennis.
I'll be providing two updates today, one for Mdx 2982, and internally discovered <unk> thousand 19 agonist currently being studied in an ongoing phase II proof of pharmacology study in patients with type one diabetes.
And the other for CB 0406.
Which has just completed a phase one single and multiple dose PK and safety study in healthy volunteers.
Last quarter, we announced initiation of patient dosing of <unk> thousand, 982% and a two period crossover pharmacology study using hypoglycemic insulin plants to evaluate stimulation of glucagon release under conditions of low blood sugar.
As a brief reminder, mdx 2982 as of <unk> thousand 19, agonists discovered and developed by Sema Bay.
It has completed five previous clinical studies, including in pre diabetic and diabetic subjects.
The product concept being investigated for Mdx 2982 is an agent to potentially prevent hypoglycemia in patients with type one diabetes.
The study is being conducted at advent held translational Research Institute in Orlando, Florida, Florida.
And it is fully funded by the Leona M and Harry Helmsley charitable Trust.
<unk> retains all rights to <unk> thousand 982.
This last quarter patient recruitment has continued and is moving forward with the goal of completing recruitment for the approximately 30 subjects planned for this study.
In addition to safety and Tolerability. The primary endpoints are maximal glucagon release, and glucagon area under the curve for Mdx 2982 versus placebo treatment periods.
These results will guide our decision on whether to pursue further development for diabetic hypoglycemia.
Moving now to <unk> 0406.
This is the active metabolite of the prodrug or hallow opening that we had previously studied in diabetes in gout.
PV 0406 is a <unk> gamma non agonists ligand that attenuates the expression of inflammatory genes.
It has been shown to block innate immune responses to the Nf Kappa B and MLR P. Three inflammatory pathways.
In PK studies in monkeys. It was found to give greater exposure of CV zero for us or six than does the dosing of the prodrug.
Raising the possibility that it could be even more effective form of the drug for a wide variety of high unmet need disorders involving NLP III.
With this in mind, we have now completed a phase one single and multiple ascending dose study in healthy subjects examining its PK and safety.
We were able to confirm that CD 0406 gave approximately dose proportional increases in exposure for single doses from 100 to 1000 milligrams.
And then its exposure were greater than those historically achieved with the pro drug or <unk>.
A single doses had good safety and Tolerability.
The multiple ascending dose portion of this study explored daily dosing for 14 days of cohorts from 100 to 800 milligrams.
At two confirmed a pattern of greater exposure for CBS 0406 up to 800 milligrams and it was well tolerated and safe at up to 400 milligrams.
However, and unexpectedly dosing of 608 hundred milligram cohorts led to one case each of moderate and severe thrombocytopenia respectively.
Both subjects fully recovered without additional sequela.
It is worth noting that these findings were unexpected based on dosing of more than 1700 subjects with the pro drug <unk>.
Nonetheless, after consultation with experts and given the serious nature of the events. We have concluded that this is the development challenge that cannot be easily overcome.
Accordingly, we have decided to stop further development of CBS 0406.
We believe the program was well conceived and achieved its goal of understanding the exposure and safety in a capital efficient manner.
Of course, we are disappointed because of the promise we believe the compound held and we hope to be able to publish some of our preclinical research.
Dan.
Thank you Chuck.
As other members of the management team have highlighted in the first half of 2021. The company continued to accelerate efforts to execute its late stage PBC development program for <unk> and to advance other early stage programs in development.
Our primary focus and most of our resources were directed towards PBC, where we continue to enroll patients in response and assure as well as other NDA, enabling phase one studies.
As of June 30, the company's head count grew to 50 employees as we successfully recruited key new clinical regulatory and commercial talent.
Our recruiting efforts will continue in the second half of 2021, as we look to further augment our growing strategic and operational knowledge and capabilities.
With a which will enable us to appropriately plan and prepare for critical future clinical regulatory and commercial development milestones for <unk> in PBC.
Overall, we completed the quarter ended June 32021, with cash cash equivalents and short term investments totaling $106.1 million.
We believe our existing cash and investments together with the initial $75 million in proceeds now available to us from the development financing agreement with adding words will provide sufficient capital to fund our current operating plan into 2023.
Furthermore, the additional $25 million of development financing available to us at our option upon the completion of enrollment in <unk>.
Sponsor would further extend our runway.
Turning now to a brief review of our operating results net loss for the three months ended June 32021, and 2020 was $23.2 million and $10.7 million or -34, and minus <unk> 16 per diluted share respectively.
Net loss for the six months ended June 32021, and 2020 was $48 million and $23.8 million or minus <unk> 59, and minus <unk> 35 per diluted share respectively.
Net loss during the three and six months ended June 32021 was higher than the comparable periods in 2020, largely due to increases in clinical operating expenses, which were incurred following the resumption of our clinical development of Philadelphia in PBC during the second half of 2020.
In particular cost increases were primarily driven by enrollment activities associated with response and assure our two active global late stage clinical trials in PBC.
We expect our operating expenses to increase in 2021, as we continue to execute on our clinical development plans in PBC and as we further exploration of other clinical development opportunities.
Finally, I'd like to provide you with a brief update on our current operating environment.
Due to the ongoing impact of the global Coronavirus pandemic, we continue to conduct operations remotely for all employees, which is a lot of business activity to continue as seamlessly as possible while.
While vaccination progress worldwide through the second quarter of 2021 was encouraging it is still ongoing and the recent surge in Covid cases due to the Delta variant has led to uncertainty regarding the duration and effects that the pandemic will have on future operating milestones.
Therefore, we will continue to closely monitor pandemic developments and their associated risk to our business, including our ongoing clinical development of Philadelphia in PBC, and we will continue to take actions available to mitigate these risks where possible as.
As always all our actions will continue to be guided by our commitment to ensuring the health and safety of our employees as well as patients enrolled in our clinical studies.
Thank you Dan.
As we have discussed today all of US at Sema Bay remained centrally focused on our opportunity to bring cell Adele parts of patients with PBC.
The development funding agreement with adding work enables us to execute on the necessary tasks required for us to complete phase III development and position the company for future success.
Our prior experience and the rich datasets, we have generated to date highlight what we believe to be a significant opportunity to improve upon the very limited treatment alternatives that exist for PBC patients today.
We remain steadfast in our commitment to patients and we are confident in our team's ability to meet the global challenges we are facing today.
We're now happy to take questions operator.
Thank you at this time, we'll be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Our first question comes from Yasmin Rahimi with Piper Sandler. Please proceed with your question.
Thank you so much team for all the updates maybe the first question I had for you.
Comment that Dennis on that additional sites.
You're interested in opening additional sites beyond that 60 that are listed on clinical trials that GAAP can you maybe give us your perspective on sort of the totality of new sites that you hope to.
And then the second question I have for you is.
And this is may be directed to Joe can you maybe provide us some color on the on all the work that's being done on sort of commercial preparedness and market research and payer discussions.
What type of activities are ongoing and to the extent you can share some of those findings that would be very helpful. And thank you for taking my questions.
Yes. Thank you, yes, I appreciate the questions.
Generally speaking as we've discussed in enhance.
We've had an opportunity to initiate a study in randomized a full phase III study previously with 265 patients. We did so in over 20 countries with over 100 sites.
And so although in response, we're targeting 80 fewer patients were recognized at the outset the challenges that the global pandemic would present and we do have greater competition for patients today. So our approach has always been to have a study size with country mix as well as number of sites on par with what we have.
With response, we're dedicated.
This effort the capital that has come into the company through the adding worth funding agreement allows us to execute on our strategy at the same scale as we had for enhanced so ultimately in response, we fully expect to have north of 100 sites activated and screening patients in this trial.
I think you also had some questions around.
Just thinking through the future opportunity for us.
To share some of the insights around the market opportunity for <unk> I think we've been very focused with our clinical studies.
An approach to get sell at El <unk> to as many patients that we fundamentally believe can benefit from the drug.
Early we think that Philadelphia has the opportunity to be the preferred second line treatment alternative of choice, but we have been doing a significant amount of work around thinking about expanding the addressable patient population additional datasets that would continue to support a broadening of that addressable patient population some of that.
In fact, we had an opportunity to present at easel now, albeit relatively early data the significance of having had 50 patients with cirrhosis and prior clinical experience.
Albeit a relatively smaller patient population with PVC is a meaningful and promising data set that we continue to expect to expand and have an opportunity to speak more about in the future. Yes. I mean, we will look towards the end of this year in and around <unk> in November to actually hold a PVC analyst day.
That would give us an opportunity to share with the street and with all of our constituents. How we view the overall market, how we view patient populations in PBC and how we think about positioning solid ALP or long term. So we will look forward to having that opportunity to share much more with you towards the second.
Half of this year.
That's great. Thank you so much for sharing that and we very much look forward to it.
Thank you.
Our next question comes from Steven <unk> with Raymond James. Please proceed with your question.
Good afternoon. Thank you it looks like there is a new executive review committee, comprising chemo band out and work that expense from the recent financing I was hoping you could just comment on how thats structured what role that committee will have.
In the current phase III, but also any future development or commercialization decisions related to sell both our MTBC or beyond PBC.
Yes, it's a great question, Steve. So importantly, the agreement was struck to really fund the remaining development of cell Adele par.
And as we know the phase III study responses really.
Built off of our prior clinical experience and enhance we're studying the same patient population same optimal dose of cell Adele par and the same primary end same two key secondary endpoints to the executive Committee is really there to continue to have discussions around any meaningful changes to the existing clinical development.
<unk>.
Think we're well set on what we believe we need to execute to get <unk> approved so fundamentally it's really a joint committee for us to continue to have the discussions around the progress of the study and any different decisions, we would make from here towards the path of filing an NDA.
I think as we've disclosed this risk sharing agreement is such that adding where carries the risk of clinical and regulatory success and so that's really where both groups our focus with this executive Committee.
I'd also want to point out Steve that now being worth is a group that has rich technical and scientific experience as an investor a number of folks within the organization. There in fact have also diligence this space in various targets in this space and.
And our opportunity to leverage that experience that broad set of experienced across the industry is something that we think is valuable even through this committee.
Okay. Thanks, that's great.
Multipart question just on Phase III PBC study as you are monitoring patients coming in I'm curious.
If the number of patients volunteering or electing for biopsies at baseline.
Sort of met your expectations to accrue to the type of data you would want to accrue in the study from biopsies.
Similar question just on enrollment of cirrhotic patients.
If the label change real caliber.
Is having an influence on patients may be funneling in that are cirrhotic looking for alternatives.
Yes, good questions.
I'll, let Dennis talk a little bit about where we are with this study and how we continue to progress and perhaps Chuck can provide some commentary around the cirrhotic data that we have in some of the recent updates with respect to El caliber.
Okay with respect to the number of biopsy.
We would have in the response study I think it's a little too early to be able to predict just how many patients. We would have in that category suffice to say that we're going to monitor that monitor that number of closely so that we can come close to what the FDA would expect to see.
So we will be able to tell you more about it at a later date.
Yeah, Hi, Steve Thanks for the question on the cirrhotic patients.
Patients with compensated cirrhotic. According to our estimates which are based on our clinical studies as well as <unk>.
The access to information coming out of the global PBC study group as well as the UK PBC.
Cohort is about 25% of patients.
And so that's the stage of disease, which is more advanced and for which patients do need treatments.
To respond to buy.
That could improve bile acid homeostasis the ad.
<unk> inflammatory and importantly affect patient symptoms. So this is an area that.
We've been fortunate now having dosed over 315 patients with cell Adele par who have PBC with a good body of cirrhotic experienced 50 or more than 50 of those have been those many past a year and some even out to two years.
We continue to look at both the on the efficacy side as well as safety.
In terms of now to your question is that influencing patient interest.
In this study I think that's hard something hard to really gauge I do believe that this is an area that we will continue to collect data sets on.
And we're really committed to understanding sell adele per across those stages.
And if we're able to confirm what we've seen thus far I think that's something that will be interesting in terms of a treatment alternative.
For patients with that more advanced stage of disease.
Yes.
Great. Thank you.
Our next question is from Patrick <unk> with lifestyle capital. Please proceed with your question.
Hi, Thanks for taking the questions. So as it relates to the non dilutive financing transaction.
Provide us provide us with some background surrounding the decision making process in selecting this type of financing versus other options and then speak to whether it was a competitive process that enabled the terms that were obtained.
And then with respect to the Mdx to allow me to two program could you just remind us of the timing of initial data, perhaps characterize what a successful readout would look like in this initial phase Iia.
Yes, thanks for the questions Patrick.
We've always been focused on continuing to surround the salad ALP, our story and the company fundamentally.
With with long term oriented investors and I think we've been quite successful at it we're quite proud of the shareholders. We've had over the years and that we have today.
As we turn the corner into the beginning part of this year and initiated our new Phase III study response, we always had it as in our objective to make sure that we had capital to complete the entirety of the study and really position the company to file an NDA upon success.
So as we evaluated throughout the year various sources of capital and I'm happy to say that we do believe we had multiple different alternatives that we could have triggered.
We did an analysis fundamentally on cost of capital as we explored the structured financing alternatives relative to many of the traditional pads to raising capital as even we've followed in the past.
I think based on our own valuation and the disconnect between our valuation and what we believe the long term potential value opportunity is for sell at El par. We ended up running a process given we had multiple inbound interest around these risk sharing funding agreements. So the process in fact was quite compare.
It is as we mentioned in our press release last week, we had hired financial advisors to run a full process.
And actually put us in a position to evaluate and finalize an agreement that I think for our shareholders provides capital at the lowest cost of capital available to the company today, while also bringing in significant expertise when you look at risk sharing funding agreements as I mentioned in the prepared remarks typically.
Even these are done for companies that already have commercial products or at least already have drug approval and are about to launch.
In our case of course, adding worth is willing to take some risk in terms of crossing those hurdles clinical and regulatory success.
And fundamentally we think that the capital here provided in this.
Funding agreement in fact again in the backdrop of multiple recent agreements that have been struck as perhaps some of the best terms than we've seen in this market.
We talked in the remarks about a total cap return of three one inclusive of regulatory milestone repayments as well as sales milestone repayments.
That's approximately 1% to one five turns lower than many of the recent comparable transactions that have been done. So we felt that this was really a transaction that provided the best terms to the company relative to many other transactions that have been done of this style and was in the best interest of our own shareholders going forward.
Yeah. So maybe I'll answer the question about <unk> thousand 900, <unk> I think there's three points to bring up just to give you a little bit of background on the nature of the agreement.
Secondly to talk about the timing, which you asked about and third just to speak a little bit to what we could think success factors would look like.
So we were approached by the Helmsley Trust, who has an interest in type one diabetes from a philanthropic point of view and really there are only needs are too to advance knowledge in this space and potentially to advance patient care.
And together, we concluded an agreement where we provide.
Experts.
Clinical trial material as well as regulatory expertise and we're compensated for that so there is no capital from us on that.
And they engaged TRA, which is.
Clinical CRO that has deep expertise in metabolism and diabetes to conduct this study.
So what that means is we're a collaborator but we're not actually running the study and so this <unk> is responsible for.
Recruiting patients executing this study and meeting all the needs.
To conduct an get get to a quality dataset.
And so from that perspective that kind of plays into your question around timing.
There's about 30 subjects in this two period crossover study and we still continue to believe that.
Goal is to recruit the studies this year, but which would mean that the data would be available towards the end of this year or early next year, that's a little bit outside our control.
We do have confidence that the TRA is really committed to doing this and we hope that we'll be able to give you an update as we proceed into the end of the fourth quarter. So what does success look like I think the design of the study which is designed to replicate the effects of 119 agonist seen with isolated tumor.
<unk> as well as in rodent studies.
Is really to understand and they're low blood glucose conditions.
Can we elaborate compared to placebo levels of glucagon, let's say are in the regimen of what you would see in a healthy volunteer.
And so I think thats really kind of a benchmark. We don't have a specific number we would let the data and the quality of the data really inform a decision.
Ultimately what matters is the ability of the glucagon release to increase blood glucose levels when youre under conditions of hypoglycemia.
So I think Thats I would.
Direct you to think about glucagon levels and the response of glucose as being the key success factors that we would look together with experts in the area to make a decision about whether this would make sense.
To explore in further studies for diabetic hypoglycemia.
Great. Thanks for taking the questions.
Our next question comes from Jay Olson with Oppenheimer <unk> Company. Please proceed with your question.
Hey, This is Matt Peterson on for Jason Thanks for taking my questions.
We were just curious what physician feedback you might have gotten from the recent analysis presented at diesel and.
And how that might inform.
Youre kind of thinking about the potential market opportunity for solid fr.
And I think you mentioned in cirrhotic patients as well.
And then we have a follow up as well for that really appreciate it.
Well thanks for that question Matt.
As I've tried to highlight in my earlier answer I think you're I think you're onto something I think there is.
Of course, an obvious high unmet need for patients with PBC, especially those with.
With cirrhosis given the recent.
Alterations to the adjustments to the label for <unk> No doubt there is a heightened interest in having an agent that might be able to be used in.
In patients with cirrhosis.
I'd also mentioned that of course these are five grade as well as senior five rate.
Are used off label in that population in the labels do an income.
Include language around concerns around patients with advanced liver disease, so that that.
<unk> is an area that those.
Our agents have not been in.
In.
Randomized controlled trial has been systematically de risked.
In terms of their use in cirrhotic patients.
So that's kind of the feedback I think we've had advisory boards, we've had discussions with our experts.
And I think they are encouraging us to continue our studies to confirm and expand the profile that we've been able to see so far.
So I think thats.
Really where our focus is going forward is to make sure we.
Understand sell adult par across the spectrum of disease.
And I think the only thing I'd add here Matt.
The sentiment from those in the medical community as we've been developing cell Adele par in PBC since 2015.
It's continued to be consistent.
I think they appreciate the fact that we've run multiple studies in PBC continued to generate data sets that we share at multiple medical meetings.
Really in full transparency with the interest of trying to meet the needs of patients.
So as we continue to have these presentations and as we will look to have more through the rest of this year from the very rich datasets that we continue to mine.
The relationship that we have with those in the medical community is very close we seek their input as Chuck mentioned at Advisory Committee panel meetings frequently and much of the discussion continues to turn around how we can think about addressing the needs of a broader sets of the patient population. This is something of significant interest.
Among many of the experts as well so we're going to continue to work closely with them. So that we can in fact continue to generate data sets that broaden that opportunity for selling <unk>.
Okay got it thank you.
And the other question I had was just.
What are your current thinking on partnership opportunities.
Potentially in <unk>.
And also for Nash and PSC your current thinking there that would be great I appreciate it.
Yes, I think with respect to PBC. In fact, we are now entrenched in a significant amount of work as I mentioned, we will look to doing a PVC analyst day later this year and just evaluating.
The market opportunities for <unk> outside the U S. Not just in Europe, but more broadly outside the U S. As well are fundamentally we believe response positions us.
For regulatory approval in both the U S and in Europe.
So on the basis of that we're going to continue to March forward with the strategy of taking Philadelphia or at least the patients in the U S ourselves.
And also continue to assess the level of interest and strategies to get <unk> in the hands of as many patients outside the U S as possible and some of that will very likely come from potential partnerships. So those continue to be explored we <unk>.
<unk> that this is something that will continue to speak to you about at upcoming calls and as we do more work here as well.
Yes.
Okay got it thanks again for taking my questions Congrats on the progress.
Our next question is from Alethia Young with Cantor Fitzgerald. Please proceed with your question.
Hi, This is Emily on for Alethia. Thanks for taking my question I'm curious what the long term safety data are you specifically looking for in the study.
I see.
Two to focus on anything barristan, you've mentioned that it's needed to file with the NDA.
Thank you.
Yes happy to answer the question and I may ask Dennis and Chuck to jump in if I Miss anything.
Fundamentally as we think about NDA filing of course, the responses are key phase III registration study.
But as is required and we need to have.
Robust of a safety database as we can as well we think we're advantaged here with the shore. We've in fact collected significant amount of patient data with patients taking cell adele far longer than even one full year out to two and three years and assure it gives us the opportunity to collect that longer term safety data as well as collect effort.
Is the data even in this open label study.
There is nothing special that the agency has asked us to monitor in a sure. This is a standard open label study just to continue to collect patient experience and patient safety long term commensurate with the timing of our phase III study in alignment with that timing. So that we're prepared to file an NDA with large and robust of a safe.
The database as possible, we actually think relative to others in the field that we're likely to have as large if not larger a safety database thats ever been assembled at the time of NDA filing. So fundamentally we think its just an advantage for us, but nothing special or in particular, the agency has called out.
In a sure.
Our next question comes from Thomas Smith with SVP Leerink. Please proceed with your question.
Hi, everyone. This is Mike on for Tom just on the subject of enrollment for the response study to what extent are you seeing drag on enrollment from the other ongoing phase III and confirmatory PBC studies competing for these second line patients.
And more specifically at this point do you feel that the impact of competing for patients against these other ongoing studies is actually outweighing the impact from Covid.
Well, that's a great question I think at the outset, we've been very clear that we recognize.
That is we initiate and execute response, we're really facing two key headwinds and really the first is in fact, the global pandemic and the second is more competition for patients than we had previously.
Fundamentally say that really the number one headwind of course is the global pandemic, we see slowdowns and IRB and ethics committee approvals that ultimately impacts our ability to get sites activated.
Some of the challenges that I think many others in the space have been experiencing as well in terms of staffing at various clinical sites impacting timelines I think these are in fact, the most robust challenges we're facing with respect to competition I think here, we have an advantage of course.
Competing for patients.
It is also something that we're working through but one of the things I think we're advantaged around again as the significant dataset with solid ALP or theres, great experience in the medical community to using Philadelphia in PBC patients.
Very significant patient experience, particularly relative.
To other phase III study, that's ongoing and that I think again is a significant advantage for Sema Bay and for <unk> and for the execution of our studies, having said all that we recognize this is a rare disease.
And there are fewer patients.
And so it's important for us to leverage those relationships to route leverage the rich experience. We've specifically had I think youll see US go in fact to countries where some of these other studies actually are not initiated or enrolling in some of that actually comes from our prior experience as well so fundamentally.
I can't say, it's a quantitative answer to your question, but I think the challenges of the global pandemic are more broad.
And more significant perhaps.
Got it thanks, very much and appreciate you taking our questions.
Our next question comes from in Yack, Tommy with B Riley. Please proceed with your question.
Hi, Yes. This is William wood on for Mountain <unk> I was just thinking broadly.
Knowing after in your response study youre going after or intolerance group DCA.
Maybe you can make a case for first line therapy.
But it's a good question I think first important for me to point out that the vast majority of patients that take you DCA.
And require a second line treatment or in fact patients that have an inadequate response and the relative proportions are estimated proportions of patients that are intolerant to <unk> may be a smallest five.
To 10% so it's not.
<unk> the majority of the patient population in order to actually and so the label of course in this setting Nevertheless would allow for the use of cell Adele par in patients intolerant to <unk>. In addition to on top of EDC for those that are inadequate responders that is how the study population.
And how we would envision ultimately the label and use <unk>.
To really be first line treatment ahead of you DCA <unk> I'll remind you has actually been approved on outcomes. The approval pathway here for <unk> and what is a very slowly progressing disease is accelerated subpart H approval.
And so when we think about expanding the use case and the patient population for <unk>, it's really thinking about patients that still have validate elevated alkaline phosphatase, even if it's not above one five or 167 times the upper limit of normal where we know that additional decreases in.
Markers of disease can translate into improvements in long term outcomes for patients.
Our segments of patients that are not classically defined as second line that we think can potentially benefit from <unk> and so those are some of the areas. We think about in the future of generating datasets.
To support that potential use case.
Excellent. Thank you very much and then.
How are you evaluating NRL and your response study and how might itching specification or specific differentiation, possibly make it to the label.
Yes, so I think here, we are using an electronic diary and having patients record their worst edge and a 24 hour period.
Using the numerical rating scale a scale of zero to 10.
That's ultimately how we're actually collecting the data and we're collecting it over six months and so the key secondary endpoint in this study is to compare.
The change in edge from that six month period to baseline in these patients. So similar experienced similar same endpoint as we had of course in our enhanced study as well. So we've got we've had good experience good compliance from patients and collecting the NRM, yes, I will point out that although that endpoint is <unk>.
Key importance to regulators.
Also collecting additional <unk> the five D itch scale. The PBC 40 question are these are validated scales in the setting of PBC I think all of this upon potential dili successfully once again hitting the <unk> endpoint as we did at 10 milligrams versus placebo and enhanced.
I think really positions us well to have a key differentiator in the setting of PBC. There are no drugs approved.
For pure riotous in PBC patients.
<unk> has not shown.
Benefit first line treatment here is not necessarily shown a benefit on edge and we also know that second line treatment with Ocala, Ava can cause or worsen hedge. So we think if we're able to once again as we did in three months and the enhance study show statistically significant benefit.
On edge and response that it really could be a game changer for patients and really meaningfully impact and improve the quality of their life beyond any treatment alternatives that they have access to today.
And if I might add because this is a <unk>.
Important endpoint for us and for the patients, especially.
We've gone a little bit beyond what we need to in terms of powering for the study such that we're powered adequately for pruritus outcomes as well.
As well as the primary efficacy outcome of.
Composite response.
So we're hopeful and encouraged that we will see a real change benefit.
On this endpoint at the end of response.
Really appreciate that.
Then last question.
You just received obviously a large amount of non dilutive funding do you think that COVID-19.
Allow you to be more creative and building a pipeline and then yes.
What sort of external programs might make strategic sense, given the company's mission and vision.
Yes. Good question so to be very clear. This funding agreement is specifically for <unk> in PBC. So the proceeds of the non dilutive.
<unk> action with adding words are all centered around these.
This capital being dedicated to get Philadelphia or across the finish line in PBC. It does however to your point open us up to other sources of capital and future sources of capital to in fact continue to expand our pipeline.
First and foremost I want to say that we all here at this company believe we should be centrally focused on <unk> and PBC first and foremost.
From that we firmly believe we can continue to build upon success.
<unk> seen us creatively find ways to move other programs. The Mdx 2982 phase Iia study being fully funded by the Helmsley Charitable Trust is an example of exactly that I think all of this continues to allow us to focus other potential futures or future sources of capital as we look for other assets we have.
Built along.
History, and success here and focusing on inflammation and fibrosis.
Particularly in liver disease.
That expertise really broadens even beyond that I think fundamentally wed like to continue to stay focused on rare disease settings with high unmet need but these will be things that we continue to explore in the future.
Right.
Thank you so much and thank you for taking my questions today.
Okay.
Thank you.
Our next question comes from Ed Arce with H C. Wainwright. Please proceed with your question.
Hi, good afternoon, everyone business Thomas here.
And for Us.
And your progress.
The studies.
Responds enrollment impeded by Covid.
Full enrollment by year end 2021, this is still possible.
Oh, Okay take over some pressure points, where renew COVID-19 restrictions because of the impact.
Online.
Yes. Thank you for the question look I think important here as we've discussed in the past it's not a typical two experienced exponential growth in enrollment and clinical studies of this kind. This is a global clinical study.
Enhanced to give you some idea in the first four months of approximately 12 months that we took two randomized 265 patients with.
We had about 5% to 10% of the total patients enrolled in the first four months. It gives you some idea that it is not atypical.
To see a slower start because of course, you have only a few activated sites when you begin.
If you've looked closely over the last couple of months, we've actually added a meaningful number of sites and continue to be very encouraged thats an area that we're focusing today. So when you talk about pressure points. Some of those we're trying to alleviate our slow turnaround times and contracts and getting sites fully activated. So those are some of the areas in which.
We know that with our concerted effort and our prior experience we can be successful at really seen a further acceleration in site Activations, which ultimately leads to an increase in screening and then randomization. So as you pointed out we're very focused on completing the enrollment in this study as quickly.
As possible, we continue to keep our eyes towards progress through the end of the year, but I think importantly, because there are unknowns, particularly as the Delta variant continues to spread given those unknowns. We also know it's important for us to make sure we message to our sites.
We may in fact have to keep sites active and enrolling patients into the first half of next year. So that's our mindset, we want to get this study enrolled as quickly as possible for now were focused towards year end, but recognizing that some of the uncertainty with respect to the pandemic additional restrictions in various countries.
Of course, very very likely to have some impact as we continue to progress further so we will look to future quarterly updates to provide more clarity as we gain it as well.
That makes a lot of sense, thanks for the info.
So.
Speaking of our clinical sites.
There are over 60 open today are there any plans to open sites in China and Japan.
Yeah.
As you can see in the clinical trials Dot Gov. Those two countries are not on the list of activated countries. So we will give you more updates as we see them.
Understood. Thanks.
With so much. Thank you look Africa all questions.
For power prices this year.
We have reached the end of the question and answer session I'd now like to turn the call back over to Mr. Shah for closing comments.
Thank you operator, we appreciate all of you joining us today as we move into the second half of the year I am confident in our team's experience and focus and in our ability to leverage relationships. We have built over years with investigators and patient advocacy groups in PBC.
As I mentioned, we will also be mining the rich data sets, we have gathered through our prior phase II and phase III studies and look to share any meaningful updates at future medical meetings later this year.
And as we approach Asl D. We will also look to hold a PVC analyst day, where we will highlight how we have sized and evaluated the potential market opportunity for solid alpha we.
We look forward to providing these further updates to you as we progress through the year. Thank you.
This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.