Q3 2023 CymaBay Therapeutics Inc Earnings Call

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Good day, ladies and gentlemen, and welcome to the team of base third quarter 2023 financial results and business update conference call.

At this time all participants are in 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 this he might be website at www dot she might be dot com.

Now I would like to turn the call over to Mr. Paul Cleveland General Caso at Sema base. Mr. Quinlan. Please proceed.

Thank you operator, and good afternoon, everyone I hope that you've had a chance to review the press release, we issued announcing our third quarter 2023 financial results and business update you can access that release on our website under the investors tab.

Joining me on the call today are Suzhou Shah Chief Executive Officer, Chuck Mcwherter, Chief Scientific officer, and President of R&D.

Stuart Chief commercial officer, and Harish, Sean Penn Chief.

Angela Officer.

Following our prepared remarks, we will open 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> in the days expected future performance business prospects events or plans, including critical planned regulatory approvals, finding and repayment schedule and.

Dissipated timelines and data release dates cash runway and planning for commercialization are forward looking statements as defined under the private Securities Litigation Reform Act of 1995.

Although the company believes the expectations reflected in such forward looking statements are based on reasonable assumptions actual outcomes and results are subject to risks and uncertainty.

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.

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 the risk factors set forth in senior base 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 scheme of de <unk> and any recording or rebroadcast is expressly prohibited without the written consent casino des.

At this time I'd like to turn the call over to Suzhou.

Thank you Paul and good afternoon.

We appreciate everyone, taking the time to listen to our updates that seen a day in the midst of a busy earnings period.

2023 has been a remarkable year for steam a day in the third quarter was especially momentum with the achievement of multiple significant milestones advancing us towards our goal of improving the lives of people living with PBC.

Burst salad out bar met its primary and two key secondary endpoints with high statistical significance in the phase III pivotal response trial for patients with PBC.

The consistency and depth of the clinical data set generated from phase two enhance and now response.

Demonstrate that sell Adele par has the potential to be the first ever approved treatment for patients with PBC to significantly reduce both markers related to the risk of disease progression and symptoms.

Reaching this milestone required focus resilience and perseverance by our team here at Sema Bay.

But it would not have been possible without the commitment of our partners, including the patients who participated in all our clinical trials and their family members and caregivers investigators and patient advocacy groups, who are part of this journey.

The reaction from all quarters on the response results have been very positive and Louis will provide color on some of the feedback we've received from the medical community and patient advocacy groups later in his remarks.

Our team is now working with singular focus to deliver high quality regulatory applications for approval as soon as possible and are actively engaged with F. D. A N HRA and E M. A.

We were very encouraged by the Fda's granting of a revised breakthrough therapy designation for salad out PA N. P. D. C that now covers the treatment of PBC, including pure writers and patients who are inadequate responders or intolerant to DCA without cirrhosis or with compensated cirrhosis.

The unmet needs for people living with PBC today are for treatments that provide a significantly lower risk of disease progression, while also reducing symptoms across a broad spectrum of patients, including those with compensated cirrhosis.

We believe that Philadelphia <unk> is the only drug in development for PBC that has received a breakthrough designation that includes pure writers and compensated cirrhosis.

We look forward to working with the FDA and other regulatory agencies as they conduct their regulatory review post completion of our submission.

Our commitment to PVC runs deep.

And we will continue to add to what we believe is already the largest clinical development program N P. B C.

The ideal study that we announced earlier in the third quarter targets partial responders to first line treatment with alkaline phosphatase levels between one and 1.67 times the upper limit of normal who continue to have higher risk of disease progression and negative outcomes.

We believe that this study has the potential to be transformational for this neglected population potentially resetting expectations for second line treatment.

In September we also announced the initiation and design of our long term outcome study affirmed.

That will serve as our post marketing regulatory commitment.

Leveraging years of dialogue with regulators and work interrogating rich datasets gathered by the global PBC study group we.

Designed a unique event driven fixed duration study evaluating philadelphia or in patients with compensated cirrhosis assessing its benefits on outcomes relative to placebo.

The design of a firm attempts to also address the challenges inherent in recruiting placebo controlled outcomes trial in PBC.

These studies demonstrate our unwavering commitment to advancing care for people living with PBC.

We are too early in startup for us to comment on the timelines for enrollment and results, but Chuck will provide more detail on these studies during today's call.

We now have a majority of our U S medical field team in place and they are actively engaging with the community on disease education, and Philadelphia, our clinical data and have initiated additional collaborations with the scientific community to fully understand the potential of salad all par.

We have also made significant progress this year with pre commercial planning efforts and it will be accelerating these activities with positive phase III pivotal results now behind us.

We are currently determining the size and structure of our commercial field team to optimize its reach for effective coverage of healthcare providers, while also enabling patient activation in preparation for a potential sell at alpine launch.

On the manufacturing and distribution front.

We have now established our commercial supply chain and will soon finalize our distribution channel partners in the U S.

In summary, I'm extremely proud of our achievements to date with a quality team we have put in place and a strong balance sheet. We are ready to execute on our key near term deliverables and continue to March towards our goal of helping people with PBC lift potentially longer and better lives.

With that I will turn the call over to Chuck.

Thank you Sergio.

Drug development journey as we all know is a marathon littered with many hurdles, but there's no better feeling and entering that final mile with the finish line in sight to deliver on the promise to improve patient care.

That's the feeling we had with the positive phase III results from the spot response study.

And the evidence provided on the potential of solid all part to benefit patients.

I Echo <unk> sentiments, we are now energized more than ever and our team is dedicated to submitting a high quality application for regulatory review as soon as possible.

This quarter has seen many significant achievements on the clinical development and regulatory friends.

Two weeks ago.

We announced the FDA granted a revised breakthrough therapy designation for sell at El par.

The revised designation specifies sell at all par as a potential breakthrough therapy for the treatment of primary biliary cholangitis, including pruritus in patients without cirrhosis with compensated cirrhosis child, Pugh, Hey, who are inadequate responders to or intolerant to U D. C E.

The breakthrough designation is for serious and life threatening diseases for which the FDA recognizes there is a high unmet need.

We were extremely gratified with this revision as it emphasizes the significant unmet need for patients dealing with the impact of pruritus in their day to day functioning and underscores the unfulfilled needs of patients across a range of disease severity to include those with compensated cirrhosis.

Among the benefits of a breakthrough therapy designation is the opportunity to submit the NDA on a rolling basis and to request a priority review both of which we intend to do.

Our team is moving as quickly as we can to complete and submit a high quality regulatory applications to.

S T. A M H R E N E M E for their review.

We look forward to working closely with these agencies during the review process to potentially bring sell it apart to patients with PBC as quickly as possible.

Let me now provide highlights of results from our pivotal phase III study response.

Mind, you that additional details will be shared at an oral late breaking presentation at the liver meeting in Boston next Monday November 13th.

We will present, both the time course of the effects seen across multiple endpoints important supporting results and additional safety reporting.

To remind you sell.

Sell adult part met all the key pre specified trial endpoints in response with high statistical significance.

The primary composite endpoint a L. P normalization in a L. P reductions from baseline on 12.

All meaningful and highly significant.

62% of patients on sell at Alpine achieved the primary composite endpoint.

25% of patients receiving Philadelphia had normal levels of alkaline phosphatase after 12 months of treatment.

In patients with clinically significant baseline itch.

Philadelphia had meaningful and highly significant reduction in patient reported price intensity measure.

With an electronic diary to.

The mean reduction of 3.2 points using the pruritus numerical rating scale.

Overall safety was comparable between placebo and sell it help our groups and was consistent with previous studies.

Treatment emergent adverse events serious adverse events and patient discontinuation.

Generally balanced across the treatment and placebo arms.

There were no treatment related serious adverse events in the study.

The response study.

Also included voluntary paired liver biopsy for a subset of enrolled patients and.

An expert panel of pathologists with significant experience in Cola static liver disease, including P. B C F.

I've completed a blinded review for these subjects.

While we are continuing to analyze these data are intended regulatory submission and publication.

We can now report that the panel concluded there were no findings quiet safety adjudication in any of the biopsies collected.

We look forward to sharing more data from response terrain or oral late breaking presentation to be delivered by Dr. Gideon Hirschfield.

We're now in Cola static disease expert at the liver meeting in Boston next Monday.

Cause more deaths from the southern part program to share beyond response.

Last week, we announced the publication and elementary pharmacology and therapeutics with the results from our first long term safety study with two year open label follow up.

Treatment of more than 50 patients for two years showed strong improvements in a L. P N a L T.

With more than 40% of patients normalizing maybe L. P.

You should expect more to come as our second long term safety study assure currently has more than 300 patients taking daily sell it up or 10 milligrams.

We expect to shore to contribute a rich source of important information in the years to come on the long term impact of Sabadell, part treatment and disease and symptoms.

Now turning to the ideal program that we initiated in August.

Making good progress with site activation and initial screening of patients.

As a reminder, ideal as a phase III randomized placebo controlled study.

<unk> with a diagnosis of P. D C, taking a stable dose of UGC, yet unless intolerant.

A L P levels between one and 167 times the upper limit of normal.

In effect. This study targeting patients who have partial responders to treatment after being treated with first line.

And they're not currently receiving additional treatment from which they may benefit.

These patients would typically be managed by treatment B U D C. A N a wait to fail paradigm.

Spite of the evidence for the risk of progression.

We believe ideal has the potential to lead the way.

Gather critical evidence for this overlooked but sizeable part of the PBC population.

Let me close out the update on the sell it up our program to pay with a firm a randomized placebo controlled confirmatory study to evaluate the effect of sell it all par on clinical outcomes.

Patients with compensated cirrhosis due to primary biliary cholangitis.

Yeah firms study was initiated to characterize the efficacy and safety of cycle par in the PBC population with advanced disease.

It is designed to fulfill post marketing requirements for sell at a par to confirm its benefit on clinical outcomes.

Your firm's study is planned to enroll approximately 192 patients.

Who have compensated cirrhosis child, Pugh, a or child Pugh b.

Just on pre specified clinical criteria.

Patients will be randomized using a two to one ratio to oral once daily sell it at par or placebo for a fixed duration of three years.

Primary outcome measure is the time from start of treatment.

Because the first occurrence of predefined clinical events, including all cause deaths liver transplant hospitalization for other serious liver related events and progressing to child Pugh C D compensated cirrhosis.

Additional key outcomes include overall survival.

Liver transplant free survival and time hospitalization for serious liver related events.

Over the past few years, we have had significant interactions with regulators to develop a study in the backdrop of many known operational and ethical challenges.

Ducting or placebo controlled long term outcome study.

Our efficacy and safety data among cirrhotic patients and Philadelphia are across phase two and phase III enhance studies have enable us to select this population and design it.

To establish the effect the seller upon outcomes within a reasonable timeframe.

We remain fully committed to meeting our scientific and regulatory commitments, while prioritizing the health of people living with PBC.

Now, let me shift gears and provide an update on Mdx 20 1982.

The phase Iia proof of pharmacology study to assess whether M. B X 2982.

Can enhance glucagon accretion during insulin induced hypoglycemia in subjects with type one diabetes has been completed.

This was a placebo controlled double blind two period crossover study.

Subjects with type one diabetes.

Randomly aside in period, one to treatment with daily blinded placebo or Mdx 29, 82 for 14 days.

All of it by 14 days of washout before starting period to.

Which consisted of 14 days of daily dosing with the opposite treatment of either MTX 29, 82 or placebo.

Each of these two periods ended with hyper insulin they make hypoglycemic clients, which were conducted on day 14 and 42.

Primary objective was to compare relative to placebo treatment the effect of Mdx 29 82.

And glucagon counter regulatory responses to insulin induced hypoglycemia in subjects with type one diabetes.

The study found that there was no change in glucagon secretion during clients in subjects with type one diabetes dose with Mdx 29 82 versus placebo.

In contrast, healthy volunteer studies on a single location for comparative purposes.

So the glucose dependent increase in their glucagon released during hypoglycemia.

Further target engagement by Index 2019, two was demonstrated by increases in G. L. P fund levels in subjects with type one diabetes.

While disappointing the results demonstrate a well designed and executed study that demonstrated pharmacodynamic action of Mdx 29 82.

But without demonstrating the pharmacology needed to benefit the type one diabetes population.

The scientific questions were answered.

And <unk> is not planning any further studies with N B X 29 82.

We would like to thank Dr. Richard proudly and his team at advent Health Research Institute in Orlando, Florida.

As well as pro Santo anchored California.

Conducting a well defined and executed study and.

Yeah on a M and Harry B Helmsley charitable trust.

Their support of the study through a grant to add that health.

We are also grateful to the patients with type one diabetes in healthy volunteers.

For their participation in the study.

Before I turn the call to Lewis.

It is an opportune moment to mentioned that deployment of our field medical team and.

The early impact on KLM engagement data dissemination and expanded participation in the regional P. B C related medical conferences.

We have gathered a stellar medical affairs team the expertise in PBC and other rare diseases, who will be the core interface facilitating scientific exchange and addressing questions regarding further understanding of our data.

This team will also play a key role in raising awareness of PBC and the key unmet needs that remain for patients today.

As we interact with the medical community and patient advocates at the liver meeting in Boston next week, and we look forward to seeing that day and saw the calls are being featured prominently.

With that I'll hand, the call over to Lewis.

Thank you Chuck throughout the quarter and leading up to response topline results. We have been focused on the expansion of our commercial leadership team. We recently added senior commercial leaders and marketing commercial operations and market access all while realizing progress on commercial.

Structure projects that are in alignment with our launch readiness schedule.

Shifting comes to Sema Bay with an average of over 20 Years' experience beginning in large pharma with more recent successes in emerging biopharma, where they each played a central role in building the commercial capabilities.

Lead product launches.

The arrival of our commercial leaders has been followed by the hiring of key commercial staff positions, including the deployment of our field based market access team.

We're excited to begin scheduling introductory meetings with payers in parallel with the build out of our specialty pharmacy network and other key patient support deliverables and.

In addition, our medical affairs team will play a central role supporting market access and educating payers on the emerging PVC landscape and new Gold's for treatment.

Our commercial operations team has initiated the work of standing up the data and analytics platforms to support sales planning such as sales force size and structure as well as the integration of market intelligence performance monitoring and other essential launch readiness components.

We are very encouraged by the early impressions from both key opinion leaders and patient advocates both of whom expressed confidence and positivity regarding the response dataset and its potential impact on sell of El Pas target product profile.

Many thought leaders expressed excitement over sell a depth of our offering both biochemical improvements and symptomatic relief the rate of a L. P. Normalization was particularly highlighted as a key differentiator alongside the statistically significant pruritus reduction.

Patient advocates also welcomed to the benefit on itch as a key milestone for those living with PBC given the inability of a proven PBC treatment to improve symptoms that they believe play a key role in their quality of life.

Given the unique properties of the ballpark class Celebral par has consistently demonstrated broad clinical utility across the spectrum of PBC and may prove to be the first and only treatment that both normalizes liver biochemistry and reduces the symptom burden of pruritus.

This would be a major advance for patients and their caregivers and lead to a profile that has the potential to position <unk> as the second line agent of choice for PBC.

Overall, we are pleased with the progress we've made so far and our pre commercial planning efforts, which has only accelerated since the reporting of positive topline pivotal response study results.

With that I will hand, it over to Harish.

Thank you Louis and good afternoon, everyone.

As stated earlier, the third quarter and was a very successful one for Sema Bay and sell on our part as we achieved significant milestones by delivering strong topline results from our phase II response trial, initiating two new clinical trials ideal in a farm and executing an upsized capital raise to strengthen our balance sheet.

Operationally all activities related to NDA preparation as well as pre commercial planning continues to move forward at a brisk space.

In terms of financials, we finished the quarter with a strong balance sheet with cash cash equivalents and investments totaling $438 8 million as of September 32023, aided by our Upsized public equity offering in September.

Proceeds from the offering by $242 8 million after deducting the underwriting discount and other offering expenses.

Following the cash inflow from this offering we believe that cash and investments on hand are sufficient to fund sema base operating expenses into the first half of 2026.

Research and development expense for the quarters ended September 32023, and 2022 was $20 million and $15 5 million respectively.

The increase was primarily driven by higher employee count and clinical activities related to the initiation of our ideal and perform studies.

<unk> continued to progress in the late stage development I'll sell at <unk> Park in PBC, We expect our overall research and development expenses to increase in the future.

Turning briefly now to a review of general and administrative expenses. These costs for the quarters ended September 32023, and 2022 were $12 $2 million and $5 $9 million respectively.

The increase in general and administrative expenses were primarily driven by commercial and medical affairs organization build and related spend in preparation for potential commercialization offset at alpha in PBC.

We expect these efforts to accelerate further in the fourth quarter has to be ramped up further our pre commercial planning efforts.

Overall, our net loss for each of the quarters ended September 32023, and 2022 was $33 $9 million and $24.5 million or 32 cents and 28 cents per share respectively.

Net loss for the quarter ended September 32023 was higher than the corresponding period in 2022, due primarily to an increase in operating expenses overall, we expect operating expenses to increase in the future as we continue to execute our development and potential commercialization.

<unk> plan for sell at Alpha in PVC.

With that let me hand, the call back to social.

Thank you Eric let me close out this portion of the call by relaying some of the enthusiasm of both the team here in the room and colleagues throughout Sema Bay.

We are eager to continue the positive momentum and are working diligently on our near term milestones for cell Adele par and our primary goal of improving the lives of people with PBC.

We are happy to now take questions operator.

Yeah.

Thank you well now be conducting a question and answer session. If you would 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 would like to remove your question from the queue for participants using speaker.

Shipment it may be necessary to pick up your handset before pressing the star keys.

Our first question comes from Yasmine <unk> with Piper Sandler. Please go ahead.

Hi team. This is Jim speaking for yes, thanks for taking our questions we have to.

How soon could you get your NDA submitted and could you provide any thoughts on receiving priority review versus standard review.

Yeah.

Yeah happy to take that question. So you know I think as we mentioned this is of course, our key and sole focus inside the company with phase III response pivotal data now behind us it wouldn't be unreasonable as an expectation to assume four to six months roughly to file for regulatory submission for <unk>.

Certainly by the early part of next year that gives you some indication of what might be a standard timeline. Our focus of course is to drive as quickly as we can towards filing and so internally processes resources are all geared towards now concluding with our pre submission meetings with regulators and then.

Getting the filing a quality filing is that submitted as quickly as possible.

Obviously, the breakthrough therapy designation and in particular, the revised breakthrough therapy designation now.

Really reflecting some of the added benefits. We believe we have seen with the data in hand to date.

Not just in the ability to treat in a second line setting for patients that are inadequate responders to U D C a or intolerant, but also being able to deliver improvements reductions in pruritus.

Seeing these effect in a broader patient population, both non cirrhotic as well as compensated cirrhotic. This revised breakthrough therapy designation.

Words us the opportunity to seek an indication a label that really fully reflects the differentiation of cell Adele par relative to existing treatments and potentially other treatments in development. So as Chuck mentioned, we will of course look to have a rolling NDA submission as well as request.

Priority review that of course is still up to the agency, but again the revised breakthrough therapy designation encourages us around these paths forward.

Thank you so much and then for a second question on what are some key data points you hope to hear at the liver meeting to establish its all Delphi is best in class second profile that online product profile.

Yes, perhaps I'll ask Chad to give you some overview of additional information that we think could be helpful. As we look towards the end of this week in the presentation Monday.

Okay.

Yeah, well. Thank you for that question I think we're quite excited to be able to you know finally, unveil and share with them the delegates to the committee.

To the meeting.

What we've found so far of course, we've already.

Described.

Demographics of the base by baseline population quite balanced really are.

A very very good and well conducted study in our view, we won't be sharing of course, our primary and key secondary endpoints. So that's the composite response previously used.

To register a caliber as well as the normalization and then of course.

Patients with clinically significant it's the change in niche months' six.

I think the way, we think about it as I think folks will be quite interested to see the consistency in those endpoints across the study visits so right through month 12.

I think that's something that we would look to share.

Additional information on the the the magnitude of the effects on composites the components of the composites.

Looking at other markers of liver chemistry things like.

Transaminase and alike.

And importantly, I think a whole broad array of measures of improvements in symptoms.

Symptoms, so and I think that's really something that we're quite excited to look for and of course.

As we think about the magnitude of effect on disease activity markers and normalization and symptoms.

Also keenly aware of the interest in safety having.

Having drugs that can be used safely in a population to reduce risk is vital.

Not just enough to focus on efficacy. So additional safety reporting is something that we look forward to sharing both at the eating and eventually in a publication I think that's quite important for all the stakeholders and in development.

And thank you so much.

Yeah.

Our next question comes from Stephen seed houses Raymond James. Please go ahead.

Good afternoon. Thanks for taking the questions I just had two lines of questioning first on Europe versus the U S.

I'm curious if you have any sense of whether those regulators are diverging in terms of their expectations for outcomes data and just the quality of data. They are looking for or is it your sense that there basically aligned.

I'm still and then separately the breakthrough designation.

Language seems to portend, a differentiated label in the U S. I'm curious if it's your expectation that you would get a.

A similar differentiated label in Europe that would include prejudice in cirrhotic specifically.

Yeah, Great question, Steve and then I appreciate that.

I think first it's important to recognize that alpine phosphatase and bilirubin in the composite endpoint has been used as a regulatory bar for improving obviously, the only existing second line treatment and in the U S and in Europe today, and I think regulate.

<unk> of course are aligned in terms of the need to demonstrate that those here against actually correlate to improving outcomes. So I don't think there's any misalignment between U S regulators and European regulators.

And the fact that we have sponsors need to make an attempt to demonstrate that these are against our of course are correlated to outcomes and I think certainly there can be different views around study.

The study design datasets, one year two year data for example, but I think in the end.

From our perspective. These agencies are of course aligned and the need for us to demonstrate some sort of outcome benefit.

I think both regulators here in the U S and in Europe also recognize some of the inherent challenges.

In generating long term outcomes data in P. D C and so I think both have been open to dialogue around generating the right real world data and real world evidence.

To to be alongside these efforts to generate outcomes data there are challenges with those paths as well, but I think folks should understand that we had seen a day.

Are effectively executing on both executing on the affirmed study that we think is a novel design certainly relative to others that have been conducted in the past and others that are being conducted today.

And we are also looking very closely at generating the right sets of real world data and evidence alongside in parallel with these activities.

In terms of your second question with respect to the breakthrough therapy designation, obviously be T D.

U S F D a specific designation.

We have prime designation with the MAA.

But I think as to whether or not.

The regulators outside the U S. We'll look at the data sets that we will look to provide it will certainly be our intention.

To have an indication in label in the U S that mirrors, what we would expect to have outside the U S as well.

But I think it's a little bit early for us to really come to some conclusion around how our regulators outside the U S will view these things specific that's in the P. T D.

Okay. I appreciate that very helpful and I also wanted to just ask separately audit firm.

First if you're willing to just comment on the powering of that primary endpoint.

Your comfort there and then also since the study is enrolling cirrhotic, which of course, we will let you complete it.

And an adequate period of time and hopefully.

Your success.

Of completing that study I just wanted to confirm that FDA is comfortable inferring an outcomes benefit in non cirrhotic.

If a firm is successful.

Yeah, great great questions, and perhaps I'll ask Chad to talk a little bit about the datasets that we've really interrogated to come up with the assumptions around a three year fixed duration study the populations of patients between compensated cirrhotic child, Pugh, a and child Pugh B and event rates I think again we've.

Probably wouldn't go in too far into the detail of the powering per se, but maybe Chuck you can talk a little bit about how we approach to the study design.

Yeah of course, we had a very rich source of.

Discussions with FDA, we had multiple.

Face to face meetings going back for several years to discuss various approaches that one could consider to confirm the outcomes and we did settle on this design with their with their input.

And the pre planning phase and then of course after the protocol.

Was drafted it was shared more than once and we got there their alignment and input.

Before we started to move forward in terms of the design elements. Steve you know we were fortunate in this particular rare disease that theres been a.

And international collaboration between investigators called the global PBC study group.

Which is collected data on several thousands of patients both in Europe, and in North America, including characterization of patients with different severity of disease, including child Pugh a and.

And child Pugh B.

The level of effort to create a.

The quality of data needed in the database to address not only death and liver transplant, but also liver related events.

Really matured over the years, so we were able to collaborate with a with that group to.

Develop and understanding those event rates.

Incidence prevalence.

And to come up with a design that allowed us to estimate as you allude to the hour.

Of what we would expect to see in a in a patient population based on not only their natural history and rate of events.

But also taking into consideration some thoughts around.

What we expect to be the risk reduction that we have seen in prior studies with sema pay based upon the circuit. So you know the circus.

<unk> on the composite for example, and we could factor that and so we think we've.

Yes, we could use the phrase thread the needle.

Balance between the practical aspects of asking patients to participate.

In the longer term placebo controlled study, but for which they might have benefited in this particular advanced population.

There really in many cases don't have other treatment options, especially child to be there's nothing on label.

Trial, Puma, a theres a limitation and agents that are approved that might be used in that population are not available in every in every country and in every situation.

So I think it's a it's a nice balance to really try to take into account.

The developing a scientific evidence placebo controlled as the gold standard, but also keeping the patient in mind.

Having an opportunity it's a two to one ratio active to placebo. So there's an opportunity to get benefit.

They really in many cases have no other way to go and then and and it's a fixed duration, it's not it's not a.

Some of these event driven trials typically would enroll a patient they would go on placebo and they just go until you collect.

Our total number of events would could be many many years many more than three years in duration.

Thank you so much.

And Steven I just ended out I know you asked about cirrhotic and non cirrhotic and we do believe that regulators.

Have.

Yeah at least confirm that showing outcome and in the cirrhotic population, where would portend to the broader population.

Our next question comes from Christian Costco with Cantor. Please go ahead.

Hi, everyone given the unique observations that you've shown with it are you planning to do more work around IL 31, and the response study and if so when can we see that data and then second now that you have a larger and number of patients you can fall out are there any other analysis of your China.

Conduct to further understand what's driving your differentiated benefits. Thank you.

No I. Appreciate that question is question, perhaps all I can talk I can ask Chuck to talk a little bit more about edge and IL 31, and I can answer the second question with respect to additional data sets coming out of a sure.

Yeah. Thank you for that question Christian of course, we're quite.

I'm interested in.

Delving into understanding the improvements in symptoms in particular itch that.

That we've seen and I think you're probably alluding to.

The poster that we had Indiana useful meeting, which.

Correlated baseline itch with bile acid levels, and IL 31 levels, where we saw the PBC patients have.

Up to up to 30 fold higher levels of IL 31 unknown.

Pretty generic molecule at least in a dermatological diseases.

And we do of course have an interest in you can expect us to follow up.

Understanding that mechanism and including in response.

And as always our commitment compete to to share it at a medical meeting as well as in publications and.

We're really trying to understand that the molecular and cellular level, meaning which which cells in the liver or elsewhere.

What's the driver of IL 31, and can we develop.

Develop convincing evidence that has a that we've seen so to confirm what we've seen so far as to why.

Sell adult part might be impacting etch and in terms of our.

Our molecular explanation so stay.

Stay tuned.

You can be assured that we have a continued interest in this area.

Yeah.

And then Chris.

Yeah. So you asked him great, but Oh, sorry is this gonna say, yes, some great questions about number of patients today that are taking solid alpine north of 300 and assure us of course, we're also enrolling patients in the ideal study.

Just very quickly tell you that our commitment to BBC patients of course doesn't end with response or this phase III data set or even our post marketing commitment and a firm. It is absolutely our intention to continue to generate data that helps us better understand the advantage of treating patients earlier.

Treating patients to normal and better understanding the impacts on symptoms and how they translate to quality of life and so both ideal and assure we expect to be very rich datasets.

So for news flow and milestone generation for years to come.

Even as we hope to be successful at gaining approval for and launching sell Adele par will continue to generate data that support.

The potential for this to be a very differentiated option and a meaningful option for patients.

Okay.

Thanks.

Thank you.

Our next question comes from car each had been deal with lifestyle capital. Please go ahead.

Thanks for taking our questions a couple from US we touched upon this a little bit earlier in regard to the availability of existing therapies, but in a firm how do you plan on tackling some of the feasibility challenges that might emerge.

Specifically in keeping placebo patients on study assuming something about Dell part may likely be approved within that time frame.

That's a great question, maybe I'll make a few comments and then invite Chuck to share anything in addition.

Clearly there is no question that long term outcome studies as we mentioned are challenging in this setting.

Part of what's unique around the firm as a target to have a three year fixed duration study, that's really sad by assumptions with respect to event rates in compensated cirrhotic again, specifically child Pugh, a and child Pugh B, we hope that that'll be one factor Corey ultimately that drives too.

A greater feasibility and getting patients to participate Chuck mentioned, the two to one randomization, so more likelihood of patients being on treatment and of course, you asked specifically about placebo of course. This is a challenge we will look to execute this study at certainly in areas, where they may be more limited options for patients there are already.

I'd say more limited available treatment alternatives for this patient population to begin with and I think those are the things that we ultimately anchor on with respect to what is a commitment of ours with regulators.

Yeah.

Okay.

Got it and in regard to the breakthrough designation.

Hansen for soda apart it'd be great to hear more about the the data package that was submitted to the FDA to obtain that expansion.

Was this primarily driven by symptom improvement in response.

Obviously, you've done quite a bit of work on IL 31, as a biomarker for price in previous studies would love to hear more about.

What really moves the needle in terms of the F. T is our thoughts there.

Yeah, you know I I think I can comment our initial breakthrough therapy designation in fact.

Caine yeah.

Before we really generated the substantial phase two dataset, one year as well as.

Two year extension data that was recently published in fact, and certainly before the subset of data from enhance.

And so I think much of the anchoring around the revised breakthrough therapy designation came from the additional data sets looking at effects of Philadelphia on pure writers in both our prior phase two long term extension as well as our prior enhanced study all.

All of these studies in fact also included compensated cirrhotic so.

We think that the revision largely came from datasets that continue to mature.

And therefore again, although never guaranteed we're encouraged by the revised breakthrough therapy designation.

As it pertains to the indication in the label.

Even the additional datasets only continue to reinforce these potential benefits.

Excellent thanks, and the last one from US can you speak a bit more to the ongoing pre commercialization efforts for Philadelphia for.

Last year, you presented some really great market opportunity data, we'd love to hear more about.

About how or if your commercialization assumptions or strategy has changed post a response.

And I guess also.

I'm thinking about it.

Potential range for the number of sales reps, you're targeting do you have a range that you're thinking about.

Yes. Thanks for the question I think from a commercial perspective, I'll start really with our medical Affairs Department I think we're right on schedule with where we hoped we would be at this stage in time coming out of topline readout and being able to engage kols and some of the critical accounts here in the U S and so I think things.

We are progressing very nicely there I think we begin now to deploy our market access team and began to really engage payers, we'd hope to begin that process here in this quarter and moving into early next year.

Really based on for them, a <unk> 14 guidance and being able to really update payers on you know really the treatment goes for PVC and helping doesn't really understand the opportunity as it relates to supporting these patients are salesforce process.

We started a lot of the initial analysis here over the last couple of months or so I would tell you that generally speaking our salesforce somewhere between 50 and 60 Representatives is kind of where we would typically see deployment and I think that generally speaking this is going to allow us to reach somewhere between.

Five to 7000.

The gastroenterology in herpetology.

Target audience folks this is gonna get us somewhere around 80% to 85% of the opportunity. So very early on right now in terms of some of that analysis, but that's kind of how we would see some of that at this point.

Excellent. Thanks, so much for taking my questions.

Our next question comes from Ellie Merle with UBS. Please go ahead.

Hi, it's Sam on for Ali earlier, you mentioned that the ex U S filing preparations are kind of in progress. What is your latest thinking around your strategy with ex U S commercialization and whether or not you'd seek a partner.

I think we're still in the same place Sam as we have been for some period of time, we've always had confidence that response as a pivotal phase III study would allow us to register cell at alpine both in the U S as well as potentially in Europe, and so we're continuing to move forward with.

Our strategy to complete and submit filings ourselves working these in parallel in fact, so that we can do so as quickly as possible and closest proximity to one another.

We're going to continue at the same time in parallel to evaluate potential interest.

From licensed stores that already have infrastructure and capabilities in Europe.

Today, the good news for US is with the balance sheet. We have we can keep old and broader strategic alternatives for the company and not make that decision too quickly, but I think you'll you'll see us continue to evaluate each of these opportunities in parallel inclusive of the potential for us to think about a staged commercial law.

<unk> on our own so I think we're fortunate to be in a position where each of these are alternatives. We can continue to evaluate in the near term.

Great. Thank you so much.

Our next question comes from Jay Olson with Oppenheimer <unk> co. Please go ahead.

Oh, Hey, congrats on the progress and thanks for providing this update.

As we look ahead to the liver meeting.

Can you just talk about how you'd like investors to compare the results to the response study to the latest results for L. A children or and maybe compare and contrast, those two drugs and where do you think they'll fit into the treatment landscape assuming they both become approved thank you.

That's a really good question, Jay it's a little bit challenging for us to really comment because we've seen so little of the topline results for alethia burner out of Alex has I think when we look an anchor around the data that we've shared to date from response and obviously an expanded dataset will love to share a week from today.

<unk>.

A week from.

Yesterday in fact.

I think we are really quite anchored around the fact that fell Adele par already appears to be distinguished with respect to normalization rates.

Just really where physicians are driving the need to normalize biochemistries in PBC patients and therefore treat a much broader set of PBC patients today that remain at risk of progression. We're also anchored on the fact that now response was our second global placebo controlled study in which we hit statistical significance.

On reducing itch in patients with PBC.

This is not an insignificant milestone its something thats been proved to be challenging for other agents in other settings.

Clearly something that PBC patients have not yet had an opportunity to potentially experience with treatment alternatives. This is something that we think is already differentiated from at least the top line data results. We heard from the <unk> study, where they did not hit statistical significance on reductions in etch.

I think we will look more broadly to compare and look at the safety profiles of these two agents as well.

There are mechanistic differences between LSA burner and sell at El par.

We continue to think that sell at alpha is well positioned to be both anti.

Anti Cola static and anti inflammatory remember while a L. T. In transaminase is are not part of the primary endpoint for approval. This is a chronic inflammatory fibrosis liver disease and the impacts we see with Philadelphia are on a L. T and on inflammation. We think are also differentiating with <unk>.

Listing datasets to date and we'll continue to look towards.

The liver meeting at seeing this differentiation as well so again anti cola static anti inflammatory and now antipruritic.

With a safety profile that we believe are also well positioned so at alpine.

Okay.

Our next question comes from Andy <unk> with William Blair. Please go ahead.

Thanks for taking our questions.

Two.

One has to do with Geely.

Curious if you can share the approach that you're taking at the sponsor to de risk this is potential.

Regulatory risks.

Perhaps.

How's emulators kind of deep investigation that FDA will likely undertake just to prevent any sort of surprises that we've seen in the field.

Yeah happy to answer that question Andy.

Maybe Chuck if you'd like to give some color here.

Yeah. It is of course, it's always important for any drug in development. The F D. A.

Place close scrutiny too.

The risk for <unk>.

Over toxicity.

There is a tried and true algorithm that's employed I believe every sponsor today would be <unk>.

Employing that theres, an adjustment to that algorithm that's implemented in this setting of liver disease and.

And of course, we follow it its theres a published consensus paper and there's.

A very specific guidance about how one.

Evaluates you know to the the risk for drug induced severe hepatic toxicity.

And we followed that pattern as well I think it's really encouraging for me to say that.

Across our program or we studied 10 milligrams or lower as we as we've reported previously we've had a really saw.

Solid experience, we feel that.

In the setting of liver disease that you know.

Sell it up are really has a really good profile, so theres not any.

A level of concern that we have at this point, but of course, we we do use a protocol specified methodology.

And accepted way to analyze and report.

Any any changes for example in liver enzymes.

And that's all part of the regulatory package that we've huh.

That we're putting together and submitting to F D. A.

As well as other regulators.

Got it that's very helpful and as you think about commercialization.

Speaking with.

Key opinion leaders they.

There appears to be some stickiness in.

Patients, obviously as you kind of think about in a way.

<unk> one wave two in terms of.

Perhaps oce treated and discontinued patients being the easiest to penetrate as you kind of think about expansion into potentially.

Currently on <unk>, but having either.

High frequencies of a pure writers.

What's what's the strategy here to overcome that inertia and really communicate with health care providers.

Convincing them that there is.

Better option out there.

Andy I think it's a good question first of all and I'd say.

Setting when you only have where you only have one approved second line treatment.

Concept of stickiness, maybe very different when you have various alternatives I think the first most important thing for me to call out as you described as there are many patients that have been on second line and have already discontinued.

In fact, we think that number is greater than even those that have remained on a vertical like asset is the only second line approved here in the U S.

And so I think theres clearly an opportunity to serve those patients.

Overall, there are many more patients that is still not yet been on second line treatment as well and so I think the opportunity is very significant before you even contemplate any patients that may switch over from current second line treatment. We do expect some of that to occur certainly patients that have ultimately tolerability issues.

May in fact seek other alternatives those that do not.

And our avid Chile, having an adequate response, we agree with you well should remain on the treatment there they're being given.

But again I think Philadelphia really has the opportunity to completely change the treatment paradigm in the setting of PBC.

So ultimately we're excited about what we've seen with respect to the efficacy profile.

You're right. It is something that to date has always been talked about as a tolerability issue and for us would sell at El par the effects on pure itis or actually an efficacy parameter the ability to actually reduce pruritus is significant in improving the quality of life for patients.

We know with existing second line treatment for example that most patients don't actually uptight trade from five to 10 milligram. So again, I think youre going to see it very different view and approach to giving patients. The most optimal treatment and so right now our focus is to really get through the.

The regulatory process, because we do believe sell at El par may offer significant advantages to patients if we're successful.

Great. Thank you very much.

Our next question comes from Ed Arce with H C. Wainwright. Please go ahead.

Hi, Good afternoon, everyone is Thomas Yip, asking a couple of questions for Ed or really appreciate it that there are no questions.

So just wondering what's the ballpark figure.

Incremental U S a.

Or in preparation launch in the next 12 months.

And then the second question is.

Or.

Do you launch it's on the table as she mentioned.

The stat factor in the first half 'twenty to 'twenty six cash runway.

What are some major assumptions behind the cash runway customer alright. Thank you so much.

Yes. Thank you can you can you repeat the first question again I know you asked something related to launch where it were you asking about costs or timeline estimate.

Our cost estimate or perhaps the incremental spend.

The next 12 months related to our U S launch.

Yeah, well I'll ask <unk> to answer both of the questions related to the balance sheet and cost.

The way I would answer that question our cash runway takes into account the investments that we're we'll see accelerate actually now that we're on the other side of data in all our commercialization efforts actually that Louis alluded to I believe we have the medical affairs team onboard and we're actually building on our commercial organization the sales piece Rfps probably.

We'll come in more closer to the launch timeline once we have a sense of what I produce that data looks like so it's not uncommon in the property by one two months before so that's kind of how I would so that is baked into our assumptions and our cash runway and so you would assume it'll it'll build now between now and when you get to commercialization and all of the free market.

Planning efforts and then you would end up having a more of a higher run rate now that we have the post launch when we have the full team on board.

And to your second part of the question.

We are full scale you EU commercialization is not included in our cash runway.

We're still again, we're making progress with respect to regulatory filings and our earnings.

Commercial understanding efforts, but I wouldn't say a full beta commercialization is not in that estimate.

Understood.

Thank you so much for taking my questions.

Our next question comes from my uncommon tiny with B Riley Securities. Please go ahead.

I appreciate you taking our questions. This is actually William on for my own.

So just a couple of follow ups here.

I'm curious if there was any indication that the caliber of the article 20 investigation has anything to read into for your review.

Thank you.

So you know there's nothing that we're aware of frankly, we know little outside of what everyone knows from the public domain with respect to the article 20 review for Ocala Ava.

We don't believe that there's anything that would affect our discussions in process forward with solid L bar.

Okay. Appreciate that and then one quick follow up.

What do you think we should focus on when your your food safety adverse event table info as disclosed since that wasn't really part of the top line release should you be needing to show improvement on Friday.

I'm sure. This is a differentiating attribute that is also included or will be included on the label.

And the extra color.

Yeah, I think the statements we made at topline or that the safety suite.

Served in a response in the treatment arm with Philadelphia 10 milligrams is comparable to what was observed in placebo. We also made a statement that the safety was in fact consistent with what we've seen in previous studies, Inc. For cell Adele par that's a fairly significant data set to phase II north of 100 patients out to a year.

<unk> 50, plus of which went out to two years and then the enhance study that had actually randomized 265 patients all of which are in the published domain and so I think theres, a very rich safety dataset to interrogate in the public domain for cell Adele par already.

And so what we haven't served in response is very consistent with the safety profile that we've now published on in.

In multiple studies and so I think that should garner some level of confidence and we will look towards next week again to share more of that data out of response, you asked specifically about aes with respect to pure write us again remember.

Perhaps up to 70% of patients with PBC can experience pure writers in the course of their disease.

Not uncommon in the setting of clinical studies to observe aes of pure itis.

But more important tool to assess whether or not you actually have an impact on reducing edge of course are the NRL tool that we've incorporated in response as well as our prior enhance study other <unk>, including five D itch as well as PVC 40 peer right as domains I think.

Interrogating. These tools really gives you the best sense of whether or not you have an impact on reducing hedge.

So I think all of these collectively are insightful.

And we'll look forward to sharing more of this data next week.

Awesome I appreciate that congratulations again and.

Any other questions.

Yeah.

Yeah.

Our next question comes from Thomas Smith with Leerink Partners. Please go ahead.

Hey, guys. Good afternoon, thanks for taking our questions.

Just wanted to clarify now that you have the revised breakthrough therapy designation in the U S. There are plans to engage the EMA and a similar conversation on the scope of the prime designation and.

Is that something you think could be valuable to either your regulatory path in Europe or.

Perhaps securing more favorable reimbursement or access there.

And Chuck would you like to make some opening comments.

Yeah. So yeah. Thank you Thomas.

A very very logical question you know I think our focus now is on submitting our application and then having the kinds of pre submission meetings that you have rather than opening up once again, you know what the regulatory path for prime.

Jim is the celadon par's position with respect to prime is very unique.

Most of the prime designated products.

In Europe or in the U R.

Actually oncology products or other more not more but different types of serious.

Diseases, So we think.

The benefits that come to us.

From the Prime does that designation.

<unk> provides us with <unk>.

Close access and interactions with rapid tours.

Well to.

Have a frequency and a quality of regulatory interactions. So I think I would I would not be guiding you towards thinking that we're going to just repeat the same.

The same process that we did in the U S. Even though I think it's logical that people kind of think that breakthrough designation and prime or the same thing. They do they do have some semblance, but they're they're not exactly the same same thing. So we think the most important thing for us to do is.

Sure the datasets to move forward towards submission and get into regulatory review.

As soon as we can as Sergio mentioned earlier.

I think it's the one of the strengths of our program is that you know we've had more than 500 patients with PBC dose with solid L. Par.

We have more than 300 ongoing as we speak now.

Size of the datasets and the consistency around the features that came with the revision.

Family practice and two placebo controlled studies also pruritus effects in the open label study.

And then the totality of pace.

Patients that we've treated that have cirrhosis is something that is a it's an opportunity we have more than just response, you've got the other studies to supplement those experiences in the subpopulations.

Got it that's helpful and if I could just sneak in a quick follow up here I know you collected some paired liver biopsy data and the response study based on guidance from the FDA and I was just wondering if theres any requirement or.

If you were conducting any optional collection, a paired liver biopsies in the affirm trial with the compensated cirrhotic patient population.

Chuck.

So we've we've.

We just once we started response, we for most studies not all of them.

We've.

Continued on that commitment, we think to be able to characterize.

Histology with disease status is a unique and differentiating feature.

I hope to sell Adele par program, so we've actually collect.

Paired liver biopsies and assure.

And we will be collecting biopsies.

So in a firm now there they are optional.

So it's not a requirement because it's not part of.

Standard care in P. B C.

So for those patients who are interested and willing to understand.

The status of their histology for their liver and to help us.

Gain an understanding of what might happen in treatment responses, we think that's it.

An important effort to be making.

Got it that makes sense alright, guys. Thanks for taking the questions looking forward to seeing the data next week at <unk>.

Thank you Thomas.

There are no further questions at this time, so that concludes our Q&A session I would like to turn the floor back over to the company management for closing comments.

Thank you operator.

As we've discussed to date with positive pivotal phase III data now in hand, our team is accelerating each of the activities necessary to get sell it out parts of patients as quickly as possible. Just a few weeks ago. We were fortunate to have several people living with PBC share their stories with all of US here at the company.

They remind us of the need they and others have for us to advance a potential treatment alternative.

It has the potential to treat earlier to treat to normalization.

To treat to reduce symptoms and improve quality of life.

Their daily struggle continues to inspire us to be focused to be driven and sincere and the work that we do here every day.

We could not be more excited as we've mentioned again today about the liver meeting in Boston starting later this week.

Again as Chuck mentioned in his room smart <unk> fortunate to have Dr. Gideon Hirschfield on behalf of all of the study investigators.

A more detailed summary of the response phase III results in a late breaker presentation on Monday November 13th.

This will be our most significant presence at the liver meeting since we began development of cell Adele par in PVC in 2015.

And we expect seen at Bay and sell at Alpine to be featured prominently at the Congress as we meet with health care professionals as well as patient advocates.

Many of which have been our valued partners for many years.

And again as we discussed in today's Q&A session. Our commitment to people with PBC continues beyond response with our ongoing studies of shore ideal and a firm and we expect to share much more of our progress with you in the months and years ahead. Thank you again for joining.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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