CymaBay Therapeutics, Inc. (NASDAQ:CBAY) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET

Company Participants

Dan Menold – VP of Finance

Sujal Shah – CEO

Chuck McWherter – CSO

Klara Dickinson – CRO

Conference Call Participants

Yasmeen Rahimi – Piper Sandler

Steve Seedhouse – Raymond James

Jay Olson – Oppenheimer

Mayank Mamtani – B. Riley

Patrick Dolezal – LifeSci Capital

Thomas Smith – SVB Leerink

Derek Archila – Stifel


Good day, ladies and gentlemen, and welcome to CymaBay’s third-quarter 2020 financial results and business update conference call. [Operator instructions] 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 the CymaBay website at Now I’d like to turn the call over to Mr. Dan Menold, vice president of finance at CymaBay. Mr. Menold, please proceed.

Dan Menold

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 2020 financial results and business update. You can access that release on our website under the investors tab.

Joining me on the call today are Sujal Shah, chief executive officer; Dr. Chuck McWherter, chief scientific officer; and Klara Dickinson, chief regulatory officer. Sujal will provide an update on recent progress and plans on the development program for seladelpar. Before I provide a brief summary of our financials. 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 CymaBay’s expected future performance, business prospects, events or plans, including clinical plans, regulatory approvals and anticipated time line to data release date and cash runway are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

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 can differ materially from those forecasts 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 the risk factors set forth in CymaBay’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 CymaBay, and any recording or rebroadcast is expressly prohibited without the written consent of CymaBay. At this time, I’d like to turn the call over to Sujal.

Sujal Shah

Good afternoon, and thank you for joining us. We will keep today’s prepared remarks brief with a focus on two key highlights from the most recent quarter.

First, the significant progress made to reinitiate our late-stage development program of seladelpar for patients with primary biliary cholangitis, or PBC; and second, our continued efforts to effectively manage our cash responsibly with an emphasis on ensuring we are able to deliver on our core operating plan.

The third quarter of 2020 got off to a quick start with the mid-July FDA lifting of the clinical hold on the seladelpar program.

After the agency’s review and acceptance of a thorough safety review by a panel of independent world-renowned liver experts. Just a week later, we announced positive top-line results from our ENHANCE Phase 3 study of seladelpar in PBC.

Despite having halted ENHANCE prior to patients completing the full 52-week treatment period, data for 167 patients who completed at least 12 weeks of treatment demonstrated that seladelpar 10 milligrams provided patients with a statistically significant benefit on the primary and two key secondary endpoints in the trial.

The results for the 55 patients on seladelpar 10 milligrams who were evaluated at week 12, revealed a nearly 80% response on our primary composite endpoint, an accepted regulatory approval endpoint when measured at 52 weeks versus 12.5% for the 56 patients on placebo.

Almost 30% response on alkaline phosphatase normalization versus zero on placebo and a meaningful and significant placebo-controlled effect on reducing pruritus, a key clinical symptom of PBC in patients with moderate to severe pruritus at baseline, measured by the numerical rating scale, or NRS.

In addition, seladelpar appeared to be safe and well tolerated in this study. We have been studying seladelpar in PBC since 2015, having completed four clinical trials with over 300 patients dosed with seladelpar and a subset of these treated for two years or longer.

We believe a profile has emerged from our program in which seladelpar at 10 milligrams is an optimal dose having anti-cholestatic, anti-inflammatory and anti-pyritic activities and good overall safety to date.

This pattern of effect suggests the potential of seladelpar to provide patients with improvements in biochemical markers of disease severity and progression and to reduce symptom burden. Our ultimate goal is that these benefits translate into improved outcomes and quality of life for many patients with PBC. Although ENHANCE was halted early, its results reinforce our near term priority of restarting seladelpar development in PBC.

Its results are invaluable because they allowed us to optimize the design of our next Phase 2 study.

They confirm the endpoint, let us select the optimal dose and gave us confidence to properly size the study so that it is overpowered on its key endpoints while still enrolling as quickly as possible. The study is named RESPONSE, and it is a 52-week placebo-controlled randomized global Phase 3 registration study evaluating the safety and efficacy of seladelpar in patients with PBC.

RESPONSE is intended to enroll 180 patients who have an inadequate response to or intolerance to ursodeoxycholic acid in a 2:1 randomization to oral once-daily seladelpar 10 milligrams or placebo. The primary outcome measure is the composite responder rate after 52 weeks.

A responder is defined as a patient who achieves an alkaline phosphatase level below 1.67 times the upper limit of normal, with at least a 15% decrease from baseline and has normal level of total bilirubin. Additional key outcomes of efficacy will compare the rate of normalization of alkaline phosphatase at 52 weeks and the change in pruritus from baseline to six months for patients with a baseline NRS of four or greater are moderate to severe pruritus.

Pruritus will be assessed using the same numerical rating scale and daily electronic diary as we used successfully in ENHANCE. Importantly, RESPONSE will evaluate the same patient population, the same 10-milligram optimal dose of seladelpar and the same primary and key secondary endpoints as evaluated in ENHANCE.

The targeted size of the study balances our two most important objectives, including demonstrating efficacy on biochemical markers of disease and on reducing pruritus, along with supporting overall safety with the goal of enrolling and completing the study in a timely fashion. As we have done in ENHANCE, we will also encourage patients to volunteer for a baseline biopsy in RESPONSE.

The key difference in RESPONSE will be that these patients will also have the option of a 52-week biopsy instead of at three years as had been planned for ENHANCE. The 52-week biopsy will provide required additional safety information to support registration.

Based on our own dialogue with the FDA, the incorporation of paired liver biopsies in PBC Phase 3 study is part of their new posture toward broader safety assessment than PBC and is unrelated to specific sponsor or compound issues. I am pleased by the progress our internal team has made in start-up activities for RESPONSE, and we will continue to offer refined guidance as we make further progress.

We believe we will commence RESPONSE in the first quarter of next year but want to caution that the impact of the COVID pandemic may introduce unknown risks to study start-up and enrollment. We’ll continue to provide updates as we progress and develop experience in the study.

In addition to RESPONSE, we have also initiated study start-up activities for ASSURE, an open-label long-term study of seladelpar in patients with PBC intended to collect additional safety data to support registration. Like RESPONSE, this study is expected to begin enrolling patients in Q1 2021.

The study will first enroll patients who have participated in our prior studies of seladelpar in PBC, including the open-label Phase 2 study, ENHANCE, and our prior long-term safety study. As patients complete RESPONSE and potentially other future PBC studies with seladelpar, they will also have the opportunity to enroll in ASSURE.

For each of these studies, we also plan to incorporate necessary procedures to ensure patient safety in consideration of the current global pandemic involving COVID-19. In addition to providing valuable input into design considerations for RESPONSE, the results from ENHANCE have formed the basis for raising awareness and excitement around the reinitiation of the seladelpar development program in PBC among patients and physicians.

We believe the positive data from ENHANCE has the potential to drive interest from investigators and their patients in enrolling RESPONSE. Earlier this week, we announced data from ENHANCE will be featured in an oral late-breaking presentation delivered by Professor Gideon Hirschfield from the University of Toronto at the liver meeting sponsored by the American Association for the Study of Liver Diseases on November 16.

We are looking forward to having a significant presence once again at this important meeting, which will also include a poster of distinction, featuring data from our Phase 2 study of seladelpar in patients with nonalcoholic steatohepatitis, or NASH, given by Dr. Stephen Harrison.

As we have previously discussed, we believe these data support the potential for seladelpar to offer meaningful anti-inflammatory and anti-fibrotic effects while improving metabolic aspects of the disease in a combination approach to treating patients with NASH. This poster presentation will offer us a platform to continue exploring opportunities to collaborate or partner with others that may have complementary mechanisms for NASH.

While our focus remains on completing development of seladelpar in PBC, we continue to evaluate seladelpar and our other early stage clinical assets for other indications and development opportunities. Earlier today, we announced plans to conduct a study to evaluate the potential for MBX-2982, our GPR119 agonist to prevent hypoglycemia in patients with Type 1 diabetes.

Insulin-induced hypoglycemia in diabetics is a significant limiting factor in achieving the desired glucose control and is the cause of significant morbidity. In recent preclinical studies, GPR119 agonists were shown to enhance glucagon secretion in response to low glucose levels and were able to prevent hypoglycemia in animal models.

The Phase 2a proof of pharmacology study will assess whether MBX-2982 can enhance glucagon secretion during insulin-induced hypoglycemia in subjects with Type 1 diabetes. While CymaBay retains full rights to MBX-2982, the study will be led by the AdventHealth Translational Research Institute in Orlando, Florida and will be fully funded by the Helmsley Charitable Trust.

We appreciate the opportunity to contribute to this effort to evaluate MBX-2982 for its potential to treat individuals at risk for insulin-induced hypoglycemia, one of the most challenging and potentially life-threatening complications of insulin therapy and diabetes. In addition to the significant momentum behind our efforts to restart and complete development of seladelpar for PBC, a key highlight of the quarter is the successful management of our overall cost for yet another quarter.

On that note, I’ll ask Dan to provide a brief summary of our key financial highlights from the third quarter. Dan?

Dan Menold

Thank you, Sujal. During the third quarter of 2020, we continue to successfully manage our overall cash expenditures while we completed our NASH study investigation, obtained the FDA’s clearance to restart development of the seladelpar program and commenced work to plan our RESPONSE and ASSURE clinical studies and other NDA-enabling studies necessary to complete our late-stage development of seladelpar in PBC.

Overall, our expense management efforts led to third-quarter cash expenditures of $7.6 million, which were in line with our second-quarter cash expenditures of $7.3 million and down significantly from previous quarters. Overall, cash, cash equivalents and short-term investments totaled $161.3 million at September 30, 2020.

We believe our cash is sufficient to fund our current operating plan, including the reinitiation of the full development program for seladelpar in PBC into 2022.

Turning now to a brief review of our operating results. Net loss for the three months ended September 30, 2022, was $11.4 million or $0.17 per diluted share, compared to a net loss of $26.3 million or $0.38 per diluted share in the three months ended September 30, 2019. Net loss for the nine months ended September 30, 2020, was $35.2 million or $0.51 per diluted share, compared to the net loss of $73.4 million or $1.10 per diluted share in the nine months ended September 30, 2019.

Net loss was lower in the three and nine months of 2020 compared to the corresponding periods in 2019, primarily due to a decrease in operating expenses, including clinical trial and labor-related expenses as a result of the early termination of our seladelpar studies and our cost reduction efforts undertaken in response to the FDA’s clinical hold that were placed on the seladelpar program in the fourth quarter of 2019.

Given the FDA’s subsequent lifting of the clinical hold and our restart of the seladelpar program and further exploration of other clinical development opportunities, our cash expenditures and losses are expected to increase in the future as we advance our restarted clinical development programs and activities.

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 has allowed business activity to continue as seamlessly as possible.

To date, these developments have not had a significant impact on our financial condition or our ability to execute our business plan. We will continue to closely monitor pandemic development and their associated risks to our business, including our restarted clinical development of seladelpar in PBC, and we will continue to take actions available to mitigate these risks where possible.

Further, all our actions will continue to be guided by a commitment to ensuring the health and safety of our employees, as well as patients enrolled in our clinical studies. Sujal?

Sujal Shah

Thank you, Dan. We’re now happy to take questions. Operator?

Question-and-Answer Session


[Operator Instructions] Our first question comes from the line of Yasmeen Rahimi with Piper Sandler. Please proceed with your question.

Yasmeen Rahimi

Hi, team, congratulations on the amazing accomplishment on RESPONSE and ASSURANCE. I have two quick questions. The first question, Sujal, can you comment on if the FDA has requested a percentage of patients that should get biopsy at baseline and at the end of 12 months?

And then, the second one is just a quick clarification. If patients who were previously on ENHANCE, are they eligible to be part of RESPONSE? Or do they have to go on to that ASSURANCE? If you could just clarify that for us, that would be very helpful.

And thank you again for taking my questions.

Sujal Shah

Yes, sure. Thanks for the questions, Yasmeen. I’ll start off and answer your second question first. And then, as you know, I have Klara Dickinson here, our chief of regulatory, and can discuss the biopsy implementation in response as well.

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With respect to patients coming out of ENHANCE, fundamentally, RESPONSE is going to be a Phase 3 registration study and so ensuring that we have patients that our seladelpar-naive is important to maintaining the integrity of the study RESPONSE. Of course, in theory, we could allow for placebo patients from ENHANCE to enroll into the RESPONSE study.

We fundamentally made a decision on behalf of physicians, as well as their patients to allow those patients to actually have the option. So fundamentally, RESPONSE is going to be new patients. As you know, we have a tremendous amount of experience enrolling in PBC studies globally.

ENHANCE was in 20-plus countries, over 100-plus sites, so we remain very confident we’ll be able to get new patients into this study.

And to address your first question just from a high level, I’ll just make a comment, as I mentioned in some of the prepared remarks, the agency has really moved to a position across a number of chronic inflammatory diseases, certainly in NASH and PSC and now in PBC of having an interest in reviewing biopsy data as part at least in PBC of an overall safety assessment.

I think the agency is quite aware that given biopsy is not part of medical practice, that it would be incredibly challenging and harmful really for study development overall to require this fundamentally in all clinical studies. But we can talk to you a little bit about how we think about our ability to ensure that we get patients and get biopsy in this study and how we feel confident.

Klara, do you want to talk a little bit about our experience?

Klara Dickinson

Yes, thank you, Sujal. So in the ENHANCE study, it also had a requirement for asking patients to consent to biopsy. And in that study, we had about approximately 15% of the randomized patients that did consent to go on caring having a biopsy, and so we’re pretty confident that we can get an adequate number of patients in RESPONSE to meet addressable needs for the submission to allow FDA to look at the changes in histology over the course of the study.

Yasmeen Rahimi

Thank you so much for answering my question. I’ll jump right back into the queue.

Sujal Shah

Thank you, Yasmeen.


Our next question comes from the line of Steve Seedhouse with Raymond James. Please proceed with your question.

Steve Seedhouse

Hey, good afternoon, thank you. I just want to follow up on the biopsy. So is there anything from an efficacy standpoint that you think you might be able to glean from the 52-week biopsies that you could use for a label claim, given that this has just not been a requirement, I guess, for FDA, for example?

Chuck McWherter

Right. That’s a great question. I think it’s we’re a little bit into unchartered territory here. So, I think one can always be optimistic. If you think about biliary and peribiliary disease with a lot of inflammation and fibrosis, those are certainly things that would be scored on histology.

I do think, given the slow nature of the progression of the disease for the population, we’re enrolling that it would be a bit of a stretch. And I’ll point out that you may know that Chris Bowlus from UC Davis had published a sub study with Intercept looking at biopsy and I think 16 patients after about three years.

And there, they did see some responses. It’s a small set. It wasn’t controlled, but that just kind of helps us to get some view on what’s the likelihood you would see a response in that period of time, that they went for three years in a small number. It feels like it’s not an expectation that we would want to set, but there’s always a possibility of an upside.

And then, there could be an opportunity later on to collect histology over a longer period of times, and I think that would be more likely to reveal any kind of efficacy signal.

Steve Seedhouse

Yes, thanks. That’s helpful. And then, on ASSURE, you mentioned it’s intended, I think, to support registration, but it didn’t sound like that was an FDA requirement per se. I’m just wondering if there is any data requirement from that study or if that’s more like reverse patient inquiry or just a means of getting former patients back on drug?

Klara Dickinson

Well, I think it’s not a definite mandate for the NDA. But I think as most of you on the call probably know, there is a requirement to have a robust overall drug safety database that provides a collection of safety for a longer period of time.

So, the more patients we can have that have longer exposures, especially beyond 12 months of treatment, would be ideal for the FDA. So I think in addition to just our commitment to patients, to allow them to come back to treatment because they would probably still be on treatment today and also to allow FDA to collect, have data that’s longer than 12 months of treatment.

And also with the Intercept NDA filing for Ocaliva, they had longer durations of exposure that were out to, I think, believe, three small subset of patients beyond three years. So the more data we can have in the application, the stronger the filing will be.

Sujal Shah

And Steve, I’ll just remind you that although ASSURE as a new protocol, we, of course, when we are still in development with ENHANCE, had an ongoing long-term study. As you know, we had over 100 about 106 patients in our open-label Phase 2 study after 52 weeks elect to enroll in that long-term study.

This is effectively that study that will allow for the return of those patients, as well as patients out of ENHANCE and future studies, including RESPONSE.

Steve Seedhouse

Yes, thanks Sujal. Last one for me. Just the Type 1 diabetes program, I think this is an asset you guys have had for a while or had rights to for a while. So I just wanted to understand the timing of starting that program and just what it might reflect on your overall strategic thinking for CymaBay in this new sort of reboot stage?

Chuck McWherter

Yes, thank you Steve. Yes, that’s a homegrown compound that came out of a medicinal chemistry effort and we were targeting at that time, Type 2 diabetes. What’s very interesting about the target is it’s expressed in the pancreas and beta cells and in alpha cells.

And in one case, it stimulates secretion of insulin in a glucose-dependent manner and the other glucagon in a glucose-dependent manner, which, as you know, for regulatory, counter regulatory hormones that really control glucose levels. So that is actually emergent science that came out of Yale and Merck that identified that.

In fact, the alpha cell aspect of glucagon was something new to us. And so it was really an opportunity that came to us that represented, I think, a way to leverage the considerable experience.

That compound had been in five previous clinical studies that had been in a Phase 2a Type 2 diabetes study where it showed some significant effects on biomarkers, some effects as well on glucose, but was not really meeting a commercial profile. So it really had been sitting in our pipeline, not really being advanced, and so this really represented to us a significant and exciting opportunity.

As you know, Type 1 diabetes is also an autoimmune disease like PBC, like PSC. It’s a little bit in our wheelhouse in terms of science. And the program was advanced in terms of the nonclinical toxicology program, as well as the CMC program.

So, having an opportunity to collaborate with Helmsley and TRI, very experienced, very committed in this area and a very capital-efficient, meaning no capital for us to create a data set that we retain rights on really raises the possibility an intriguing possibility that we’ll have to manage based upon the data.

If we’re able to show effects in glucagon secretion, and we’ll also look at the blood glucose in this study, then one can imagine looking using continuous glucose monitoring in Type 1 diabetics who have a history of moderate to severe hypoglycemic episodes. You can use that technology to, for example, run a placebo-controlled study, where you would compare the number and the severity of those events.

And then, you have an opportunity to have a whole host of obvious efforts beyond that. There’s regulatory interactions. There’s understanding the commercial landscape, the unmet need. And all of that is pretty far down the road right now. But for us, it was really a kind of a blossoming of something new in the company that we were pretty excited about.

Sujal Shah

And Steve, I’ll just say from a timing perspective, these things don’t happen overnight. Discussions are ongoing, and they ultimately materialize to advance into moving this program forward, again, without any capital from CymaBay.

And so we’re absolutely excited to support this effort for an important indication in this group of patients. And ultimately, I think if we see some meaningful data, just provides us with some optionality, either to develop a program or to out-license and monetize the program as we continue to keep our core focus without question on seladelpar in PBC.

Steve Seedhouse

Very good. Thanks so much for the questions.

Sujal Shah

Thank you.


Our next question comes from the line of Alethia Young with Cantor Fitzgerald. Please proceed with your question.

Unidentified Analyst

Hi, thanks for taking my question. This is Emily on for Alethia. If you could comment maybe on you’ve kind of spoken before about testing seladelpar in combinations for NASH. Have you kind of thought any more about this and what Type of combinations might make sense?

And then also, could you maybe comment on what additional information will be shared from the ENHANCE study next week? Thank you.

Chuck McWherter

Yes, so glad to take those questions, Emily. Thank you. Yes, I’ll start first with the NASH combination study. Just to reiterate some of the data that we are going to be presenting at the AASLD and the NASH poster.

We saw in the 52-week study, looking at the histological improvement, we saw 37% of subjects on the 50 milligram dose have a one stage or greater improvement of fibrosis versus 20% in the placebo group, and 26% resolved NASH, compared to 8% in the placebo group.

So for us, a quite intriguing signal for an anti-fibrotic and, as well as a NASH improvement profile. That really suggested, though, that looking for a breakout therapy in NASH, the opportunity to combine with complementary mechanisms.

So, in our mind, we think about metabolic mechanisms, things like the GLP-1 receptor agonist, which have recently shown very strong effects in NASH resolution with minimal effects on fibrosis. One could wonder whether either combining the anti-fibrotic effect with the NASH and metabolic effect might be very valuable.

Other mechanisms that contribute to either hepatic fat reduction or to weight loss in general or even improvement in insulin resistance, hepatic insulin resistance would be ones that come to mind for us.

Then moving to your second question at AASLD, we’re really gratified now to be able to come back several years in a row now with a late-breaker presentation, this time with very exciting data that we’ve previously shared, of course, looking at response rates that Sujal mentioned on the composite and normalization, as well as the pruritus effects.

We’re under a strict embargo with AASLD, and we need to respect that as all sponsors do. So, not really able to say much more than that, but just to assure you that we’re very excited to have the opportunity to present the data. I think it’s going to garner a lot of interest.

We certainly hope and our commitment really is to continue to share not only that data set but look at subsets of information that I think are very informative in terms of various parameters that the patients have responded to and subsets of patients. And of course, we’ll work as quickly as we can to find a way to produce a high-quality publication from the ENHANCE study.

We think that’s going to be important for really all the stakeholders. I think as soon as we can get it out, it may have an ability to impact enrollment. It certainly encourage investigators and of course, all those who are interested in CymaBay that they are will be very eager to see the data.

Unidentified Analyst

Great, that’s helpful. Thank you.


Our next question comes from the line of Jay Olson with Oppenheimer. Please proceed with your question.

Jay Olson

Hey, thanks for taking the question, and congrats on all the progress. You had a panel of experts that you convened to review histology data for seladelpar. Can you comment on any anecdotal feedback that you’ve got from those experts on how they plan to use seladelpar to treat their patients with PBC?

And then, separately, maybe a strategic question about your GPR119 agonist to prevent hypoglycemia and diabetic — Type 1 diabetics. Can you just talk about how that fits into your strategic vision for the future of CymaBay?

Is that a molecule that you would take all the way through development into commercialization? Or is that something you would plan to partner? Or where does that fit into the future of CymaBay? Thank you.

Sujal Shah

Thanks for the questions, Jay. I’ll again here address the second question first. I think it’s far too premature for us to speculate on what we might do with MBX-2982. Again, this study is one in which our contribution is the molecule itself.

And as we’ve mentioned, we’re excited to partner with these groups and particularly excited to have the Helmsley Foundation really fund this development. It really gives us pure optionality to think about ways to potentially either create future value from the asset.

One opportunity of which could, in fact, be to out-license and monetize the program overall and allow us to continue to keep our efforts focused in chronic inflammatory liver diseases as it exists today. But I think, as you know, our goal is to broaden our overall pipeline at the right time as well.

And so beyond even seladelpar, what CymaBay looks like in the future really has the potential to continue to advance other programs. And so we look forward, in fact, to the opportunity to continue to build value on the heels of potential success with seladelpar in PBC.

So, I think fundamentally it’s a bit premature to make any decision around what we might do. At least as of today, advancing into this study doesn’t require any use of proceeds or capital from CymaBay at this point in time.

And so it gives us, again, the ability to gain a data set without burning our own capital at this point in time. And then, I think you asked a question initially around some of the work that we’ve done with experts in the field. And so I’ll make a couple of comments. And if I miss something, you can correct me here.

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The original panel that we had pulled together to investigate the findings that came out of the NASH study included world-renowned expert liver pathologists in the areas of both drug-induced liver injury, as well as NASH. And it also involved a number of hepatologists, particularly experienced in drug-induced liver injury.

And the outcome of that process, as you well know at this stage is that there, in fact, was no evidence, clinical, biochemical or histological of any sort of injury caused by seladelpar in that study.

That’s a conclusion, of course, the FDA agreed with and lifted clinical holds, and it’s one which all the experts really in the field that we continue to have dialogue with, be it in NASH or particularly in PBC as we advance seladelpar back into the clinic is, frankly, well accepted.

And so there’s really no change in how experts we’ve discussed would view the use of seladelpar in clinical studies, and if we are successful, even beyond. I’d also offer up that, in fact, through this review, we have even greater confidence in the safety profile of seladelpar to date, given the work that was done, in this area.

And so, I think really what excites folks in the area of PBC is the fact that we do believe we have a drug that’s been safe and well tolerated to date and one for which there’s some really meaningful impacts on biochemical markers of disease, as well as on symptom burden.

And the totality of that data set, particularly coming out of ENHANCE, the strength of that data set, we believe, puts us in a position to continue to advance seladelpar through RESPONSE, and ultimately, again, if successful, to an NDA filing and launch.

And so we remain, I think, as many of these experts do, very encouraged by the opportunity for seladelpar, perhaps, not only to be a second-line treatment alternative of choice in the setting of PBC, but actually have a profile behind which we may be able to significantly expand the addressable patient population in PBC.

Jay Olson

Super helpful, thank you for taking the questions.

Sujal Shah

Thank you.


Our next question comes from the line of Mayank Mamtani with B. Riley. Please proceed with your question.

Mayank Mamtani

Thanks for taking my question, and congrats on all the recent progress. I have to come back on the biopsy question. So, you said the 15% that had a biopsy in ENHANCE. Was there a follow-up to that kind of treatment biopsy? Or was that, obviously, not feasible given the short treatment duration?

Sujal Shah

Yes, very good question, Mayank. And originally, in ENHANCE, what had been envisioned similar to Intercept’s POISE study is that the second follow-up biopsy for those that volunteered to have a baseline wouldn’t have actually occurred until two to three years into treatment.

Again, into a long-term extension, with the idea being that the assessment for a subsequent biopsy would have really been around trying to glean from an exploratory perspective, whether or not you could see any benefits around histological changes.

Here, given the agency’s view now on PBC Phase 3 studies going forward, the paired biopsy that we would look to get for any of those patients that volunteer to a baseline would be at 52 weeks really to supplement the overall safety picture during an NDA submission.

So, at least in our prior experience, it was the case, however, that given the investigation that ensued post the end of last year, there were about a dozen patients for which investigators in ENHANCE and it was really just two or three, decided themselves, not a requirement from us or from the agency, but decided to have a post follow-up biopsy.

And at least from what those PIs described, as well as their own pathologist, there wasn’t anything observed in that subset that wouldn’t be seen or expected to be seen in the setting of PBC. So we’re certainly comforted by that element. We wouldn’t expect there to really be anything of significance, but we do know this from at least a small sample set of those that had volunteered.

Mayank Mamtani

Got it. And then, a looking-forward question, you think about the time lines for RESPONSE and also break in a couple of elements of getting the final IRB review and also getting sites up and running but also have the pandemic against you a little bit.

I understand you’re not giving guidance today, but how should we think about the enrollment for RESPONSE? Again, we have a similar study like ENHANCE as a guidepost. Any comments on that?

Sujal Shah

Yes, no, thank you. Another really good question. So, just for reference, we had enrolled ENHANCE with 265 patients randomized in about 11 months. Of course, that was a time in which we weren’t dealing with the pandemic, nor were we dealing with additional competition for PBC patients as we are today.

So, there’s no question those will be two key factors. The study, of course, RESPONSE, as you’ve heard today, is a smaller study than what was targeted with respect to ENHANCE.

And although it’s very challenging and perhaps impossible for us to predict what the precise impact of particularly the COVID-19 pandemic will be on enrollment, we’ve at least set a target for ourselves to enroll what is a smaller study but with these challenges in about a year’s time frame.

So, we’re looking forward to initiating randomization in this study in the first quarter of next year and would look to complete enrollment as a projection as a target by the end of next year.

Mayank Mamtani

Great. And last question, second part of the second question. How are you thinking about if at all just broader, PBC, maybe first-line or a more advanced PBC population, would you have a more comprehensive update on that any time soon?

Sujal Shah

Yes, so another good question. I’ll start off, and I’ll ask my team members here to add anything that I may miss. We continue to have a lot of very constructive dialogue ourselves here internally, as well as with the many experts in PBC that we worked with for years now.

And there are, in fact, a number of different ideas and thoughts we have around additional supportive studies that may, in fact, allow for or support the idea of broader use. And so for example, as we’ve talked about in some of these calls.

Historically, the idea that you may still have a patient with elevated alkaline phosphatase, say 1.3 or 1.4 times the upper limit of normal, not necessarily a patient that would qualify for a second-line treatment study like RESPONSE or even some of the historical studies conducted as second-line treatment.

But nevertheless, the patient that remains at a higher degree of risk progression. And with an efficacious, safe and well-tolerated potential treatment alternative, as we believe seladelpar has the potential to be for successful in the registration study and to get it approved.

These are those core opportunities that we believe are open and can continue to be supported by additional work. Today, our focus, Mayank, really is to get this Phase 3 study up and running a long-term study alongside of it and ensure that our capital gets us to a position where we can execute on this operating plan.

But we do have a number of these thoughts. And then, the one final thing I will mention, of course, the approval — potential approval with RESPONSE as a registration study is a Subpart H approval. So of course, we have to gain agreement with the agency on an outcome study.

That’s a dialogue that we’ve also continued to advance, and it would be the Type of study in which you would have experience in more advanced patients. And so some of those data sets are, in fact, data sets that we believe will continue to generate as the program advances.

Mayank Mamtani

Got it. Thanks for taking my questions, Sujal. And I look forward to future updates.


Our next question comes from the line of Patrick Dolezal with LifeSci Capital. Please proceed with your question.

Patrick Dolezal

Hi, thanks for taking my question. Can you just provide us with the rationale for moving forward with the 10 mg dose exclusively versus incorporating the 5 mg to 10 mg titration arm that was used in ENHANCE? Obviously, curious if the titration strategy was initially used to avert some potential pruritus or safety risk? Or how you’re thinking about it?

Chuck McWherter

Hi, Patrick, this is Chuck. Thanks for the question. Yes, actually, the titration arm that Intercept use was, in fact, designed to avoid the pruritus risk because that drug, as you know, is associated with worsening. That was never our strategy.

We were exploring at that point, the utility of having different dose level options because we didn’t really have the wealth of experience that we have now. As you know, we’ve completed now the 52-week open-label study with an extension beyond that, where we’ve taken patients well past two years.

And then, we’ve just released the top-line results. As you know, we’ve been speaking of today from ENHANCE at month three, and a couple of things emerged. First of all, the correspondence between the rapid and durable biochemical responses at 12 weeks, as well as 52 weeks; the consistent pattern where 10 mgs was superior to 5 mgs.

Not just a biochemical response, ALP, GGT and ALT, but importantly, on pruritus. So, in the ENHANCE study, as you know, we had a statistically significant decrease of 3.12 units on the NRS against the baseline of over six in the moderate to severe itches, whereas we really didn’t get a stat sig on the 5 mg.

And then, I think so it just makes sense that dose is well tolerated. It clearly shines across all of the endpoints of interest.

And then, the last consideration is just this idea that having a single dose that’s very well tolerated and effective is actually an important convenience for patients but also physicians not to have to come back and adjust the dose. It’s potentially a commercial differentiator.

Ocaliva has to start at five. Many of those patients, we know from script data never go to 10. So, this notion you often hear from our commercial colleagues, to have a medication that you can set it and forget it as long as it’s safe and as long as it does the job and avoids real-world disappointment where the lower dose really doesn’t deliver the efficacy you’d like to have, that’s all part of the story.

So, there’s not actually really a compelling reason to have the 5 mg, at least for most patients. We do have a lot of data available on 5 mg, and that’s not to say that in more advanced patients, a lower dose might be part of the picture. But I think for the core of the prescribed population, the core of the market, I think 10 mg is really where we’re positioning the drug.

Patrick Dolezal

Makes sense. And then, just one on alkaline phosphatase levels. Obviously, 1.67 is kind of the current bar for initiation of treatment. Can you imagine that this is going to continue to be the bar going forward in multiple years? Or do you imagine the field is kind of moving more so toward normalization, which it sounds like, Sujal, perhaps you’re alluding to a bit?

Chuck McWherter

Yes. I completely think that there’s a swell of opinion on medical experts and data from epidemiology. Why wouldn’t every patient want the opportunity for biochemical normalization? There’s a log linear relationship with these as risk factors. And I think that that is we hear this consistently from KOLs, medical experts.

How that actually gets translated into regulatory alignment and approval, that’s unclear at this point. But I do think that you’re going to see, at least from as a differentiating feature, first of all, that’s more achievable, the ability to message that this drug gives more patients an opportunity to normalize.

And then, to begin to build the message is lower is better, that’s also something that you can develop with appropriate supporting clinical data. And then, probably the highest hurdle is really getting regulators to agree that there’s a reason to give you something in the label along that. So, that remains to be seen, but I do think that’s a trend, I would agree.

Patrick Dolezal

Great, thank you.

Chuck McWherter

Thank you.


Our next question comes from the line of Ed Arce with H.C. Wainwright. Please proceed with your question.

Unidentified Analyst

Hi, good afternoon, everyone. This is Thomas Yip asking a couple of questions for Ed. Congratulations on the progress you’ve placed back in the clinic. First question for the new RESPONSE study in PBC.

Can you go over some major distinctions versus ENHANCE other than the smaller patient size and also the primary focus on the 10 mg dose?

Sujal Shah

Yes, happy to. Thomas, thank you for the question. There’s much more that’s similar with RESPONSE than ENHANCE than is really different. Of course, you highlighted here that we’re really isolating and focusing in on the 10-milligram dose.

The randomization here is 2:1 as opposed to 1:1:1 as we had in ENHANCE as well. Outside of trying to collect a subset of patients with biopsy data, paired biopsy data for a safety assessment, we are really looking at the same patient population, really the same entry criteria on alkaline phosphatase, bilirubin, biomarkers of disease at entry.

We’re really looking at the same exact primary endpoint that’s been validated and used for registration that we used in ENHANCE, as well as the same two key secondary endpoints. So, in fact, I’d highlight that everything that you really want to focus in on, same optimal dose, same endpoint, same patient population to derisk what we would expect to see in RESPONSE is the case, frankly, with this study.

So, we feel very confident in our ability to get the study up and running and execute the study and hopefully see the same kind of consistent data that we’ve seen across ENHANCE, as well as even in Phase 2 with over 100 patients.

Unidentified Analyst

Yes, that makes a lot of sense. Perhaps for the NASH indication, can you tell us if the plan is still to look for partnership? And if so, what would be your IP or partnership structure? And then, how much scientific input do you want to maintain?

Sujal Shah

Yes. I think that’s also a very good question. We’ve talked about the fact that, fundamentally, we’re not looking to split rights to different indications. The Type of construct that we believe would be interesting for patients and certainly for the program is one in which we have an we would have an opportunity with another party to combine very promising complementary targets and assets.

And Chuck talked already a little bit about some of those that we think could, in fact, be combined with seladelpar to drive an even greater response than what we’ve seen across other studies from other sponsors to date.

And we think there’s an opportunity with a target like PPAR delta and seladelpar specifically, where we do see a very significant anti-inflammatory and anti-fibrotic effect, along with seeing improvements in metabolic elements of the disease, be it LDL, triglycerides. Of course, we know we drive fatty acid oxidation.

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And although total liver fat reduction is not seen to the level is seen with other targets that therein lies the opportunity really to combine and start to drive toward much more meaningful responses in NASH. I’d make an argument that I think the entire field is somewhat yearning to see data sets that are driving toward three, four or five times the kinds of responses you see on placebo or with lifestyle modification on their own.

So with respect to our own process, absolutely, whether or not we move forward in NASH will be dependent on how this dialogue progresses. I think AASLD gives us the opportunity, a platform, if you will, to reengage in that dialogue while maintaining, again, our internal operating focus on getting back in the clinic in PBC.

It’s really a nice platform for us to be able to share these data with the medical community broadly and then to continue these kinds of discussions. And so from an optimal perspective, I think it’s one in which the third-party brings the right complementary asset, obviously, has resources to bear, but again, allows us to do some development work here before we have to think about relinquishing any sort of rights to the overall program.

Unidentified Analyst

Thank you for sharing details on your last talk. And perhaps one last question about 2982 with the partnership. Any details on the new Phase 2a study? How large should we expect it to be? Any primary endpoint that you think will be likely?

Chuck McWherter

Yes. This is a proof of pharmacology study. So basically, the design is a crossover study, where each patient can service their own internal control. So, they have a phase where they would either receive active or placebo and then cross over to the opposite side, it’s a relatively small study.

I don’t think it will take long to enroll. TRI is very experienced in these clamp kind of studies in diabetics, and so I think we’ll look forward to the opportunity to share additional details.

It’s something that we would do in partnership with our collaborator, so we’ll release those details once we have the results in hand.

Unidentified Analyst

Sounds good. Thank you again for taking my questions. And we look forward to a very busy 2021.

Chuck McWherter

Thank you.


Our next question comes from the line of Thomas Smith with SVB Leerink. Please proceed with your question.

Thomas Smith

Hey guys, thanks for taking the questions and congrats on the progress. Just a couple on the RESPONSE trial design, trying to better understand the paired biopsy requirement.

I guess, just to clarify, is it possible for patients to gain entry into RESPONSE without agreeing to the pair biopsy? And then, I guess, if so, you mentioned the 15% of patients in ENHANCE volunteered for biopsy. What proportion of patients are you assuming will consent to this in RESPONSE?

Sujal Shah

Yes. They’re good questions, Thomas. So, first of all, it is not mandatory for patients to have to agree to a baseline or paired biopsy in RESPONSE. Our commitment to regulators is to try to encourage as many patients as possible, of course, to agree. It’s frankly, partially why I wouldn’t argue that there’s some minimal threshold, if you will.

We, absolutely based on our prior experience when it’s been fully voluntary in the setting of ENHANCE without a 52-week paired biopsy, we’re able to get 15%. So, we believe and are encouraged by our discussions with the agency that we’ll be able to meet a subset to allow them to have appropriate review of additional safety assessment.

But at the end of the day, we want to make sure and encourage as many patients to get the biopsy as we can in this study. There’s no question that, although it’s not part of medical practice, there is value, of course, to the patients in having some of this additional data set to understand stage of their disease and even progression.

And so we think it simply allows for an even more robust assessment for the patients involved in our study. And again, want to do our part to ensure that the agency has a sufficient set of data to evaluate at the time we would be looking to file an NDA should RESPONSE be successful again.

Thomas Smith

Okay, got it. Thanks Sujal, that’s really helpful color. And then, maybe just one other question on PBC. You have a competitor out there who’s also actively enrolling their Phase 3 PBC study, and they’ve posted their trivison into

Can you maybe just compare their design versus how you’re thinking about RESPONSE? And then, any sense for the amount of overlap in clinical trial sites and how that might impact enrollment?

Sujal Shah

Yes, no I’m happy to. I think what I’d first say is RESPONSE fundamentally mirrors what we did in ENHANCE. So, even before really making any sort of comparison to GENFIT study design. I’d simply say that the experience we’ve had, the ongoing dialogue we’ve had with the agency really are the key parameters in which we think RESPONSE is designed and really reflects, as we’ve already talked about in detail, what we’ve done in ENHANCE.

Certainly having observed what they’ve put out in terms of their study design on clinic trials, it’s also a 2:1 randomization, single dose versus placebo. So those things are shared in common.

Both the study for elafibranor, as well as RESPONSE with seladelpar, both really mirror again, what we did in ENHANCE. Same patient populations, in fact, the same primary and same two key secondary endpoints that we had in ENHANCE as well.

Thomas Smith

Okay great, got it. Thanks Sujal, I appreciate the insights.

Sujal Shah

Yes, sorry. Chuck, just reminded me. You also asked a little bit about overlap of sites. We don’t know GENFIT’s very specific sites, we would expect that there would be some overlap, that common at centers that are seeing patients with PBC, common as we had conducted our studies in NASH.

I think we are anchored around the fact that ENHANCE was in 20-plus countries across 100 plus sites. And so, I think our experience in PBC has been more significant and more global than the experience with elafibranor in the setting of PBC, at least in Phase 2.

So, I think from our perspective, we have significant number of sites with a lot of experience with seladelpar in the setting of PBC, and I think that’s really key for us.

Thomas Smith

Okay great, thanks very much, Sujal. Appreciate you taking the questions.

Sujal Shah

Yes, thank you.


Our next question comes from the line of Derek Archila from Stifel. Please proceed with your question.

Derek Archila

Great. Thanks guys, for taking the questions, and congrats on the progress. Just two from us. First, just wondering if you could provide some thoughts on the move on the part of the FDA to require biopsy in PBC trials? Has this been something that’s been in the works for quite a while?

Or did it have anything to do with Ocaliva safety issues in PBC? And then, just to follow up on a previous question on the NASH partnering. How important is it to secure a decent size upfront to help fund the Phase 3 program at PBC as part of the deal? Thanks.

Sujal Shah

Yes. Thank you for the question, Derek. So, first of all, with respect to PBC and biopsy, as we’ve worked with quite a few thought leaders in the cholestatic disease space globally, our understanding from the work that we’ve done is that this is something that, in fact, the agency has thought of for a long time.

Even from the days that obeticholic acid was still in development, this was in fact a consideration, again not dissimilar from how they’ve thought about development of therapies for patients with NASH or even PSC. I think what’s unique to PBC here is that it’s not really part of medical practice.

So, the agencies always recognize that it would be quite challenging to implement certainly for every patient in any clinical study for PBC without really hindering overall development. And of course, here again, we’re gratified to have breakthrough therapy designation, I think, underscoring even the agency’s support to see new and novel treatment alternatives for patients with PBC.

But fundamentally, I think this is something that they’ve considered for quite some time, perhaps even well before any of the challenges, more recent potential challenges seen with obeticholic acid from a safety perspective in PBC.

Now I wouldn’t be able to necessarily tell you or argue that some of what they may be observing doesn’t put them in a position of wanting to now going forward see at least some level of biopsy data to provide some additional safety assessment.

I think that’s very logical that as a regulatory agency, they recognize that they’re in a position of wanting to, again, see development but ensure overall patient safety. So, I can’t tell you whether or not some of these recent events haven’t necessarily influenced them.

But I can tell you that our understanding, it is something that they’ve long since thought about very similar to other chronic inflammatory liver diseases. Oh, I’m always forgetting the second question. And then, NASH, sorry. Again here, I would just say, Derek I don’t, we are open to the dialogue.

At the end of the day, if there’s a meaningful opportunity to advance the program in NASH, I think the details of any sort of the arrangement would, of course, be important, but I don’t set any specific threshold.

Irrespective, I’d simply say that we think, even if there isn’t any sort of near-term advancement, and this is something that we’ll continue to explore without question, it’s not fundamental for our strategy to progress seladelpar in PBC, perhaps at some point-in-time again in PSC and continue to establish a very significant opportunity for seladelpar in cholestatic rare orphan liver disease that we think can be quite significant.

Derek Archila

Got it, okay thanks guys. Congrats again on the progress.

Sujal Shah

Thank you, Derek.


Our next question is a follow-up question from the line of Yasmeen Rahimi from Piper Sandler. Please proceed with your question.

Yasmeen Rahimi

Hey team, sorry for the last and additional question. So, thank you for providing us color in terms of time line of what you expect for enrollment. But if you could just help us sort of the sentiment that exists now versus maybe two years ago when you just began the process, you have more data as you go to investigators, you have already turned on many of the sites.

So, just simply maybe summarize to me like three or four key sort of tricks that you found that you believe is going to sort of help with enrollment time lines, that would be just helpful, or even just the sentiment on physicians with the additional data from ENHANCE are being part of this new study?

Chuck McWherter

Thank you, Yasmeen. I’ll take a start and then maybe Klara might have some comments to add if she does, if I miss anything. So I think you kind of touched on or alluded to at least several important considerations.

First of all, the value of having dosed over 300 patients with PBC, having open-label data with strong data sets at 52 weeks and even beyond to two years, having data in compensated cirrhotics and non-cirrhotics, having placebo-controlled data at 12 weeks showing really the concordance with the open label data, and now finally, having data on pruritus can only help.

And I think our experience is very enthusiastically received, both by KOLs, but also by investigators, just kind of the bread-and-butter folks who help enroll the study. We’ve been very active in outreach. We talk with investigators and sites all over the world. It’s not really our style.

We work in close partnership with our CRO. They’re a global clinical CRO, very effective. But we really are a hands-on team, and we believe that the relationship in a rare disease setting is very important. So it just makes it so much easier to arrange those calls to be able to discuss the data, talk about what’s coming next.

They’re just really easy conversations to have. The second thing I’d point to is having been through this before, there’s things that we know about how to train and help sites to find patients who are going to qualify, how to avoid those screen failures. That’s really kind of tactical internal knowledge that we’ve been able to develop.

And even through Phase 2 and into ENHANCE as we move through the recruitment program, we were able to improve, and so we’re able to share and leverage that. That’s the second point. I think the third point is knowing which countries performed well.

What’s the regulatory time line like? How can we avoid issues that kind of slowed us down a little bit before that we know how to move more quickly through? What were regulators asking questions on we kind of can get in front of those?

And then, we had many sites who did so well. It enrolled so well, and those are the sites that we know to bring back.

But it’s not like every relationship was a success story. We had sites that we activated, and for a variety of reasons, maybe sometimes they just didn’t have the patients, maybe they were distracted with other maybe they didn’t have the staff to support it for a lot of reasons.

We know now where not to go back to, and we know where to go back to. If you follow my meaning. So, I think those are all the kinds of experiences that are just invaluable. Some of them are kind of intangible, but they really, I think, position us against some significant challenges that Sujal acknowledged with respect to COVID, and we are competitive. But I think it can only help us going forward.

Yasmeen Rahimi

Thank you, Chuck. That was absolutely excellent for the very granular detail.

Chuck McWherter

Thank you, Yasmeen.


There are no further questions. I’d like to hand the call back to Mr. Shah for closing remarks.

Sujal Shah

Well, thank you all once again for joining us today. I’ll just say that we’re continuing to experience a significant amount of positive momentum.

And as we move closer to getting seladelpar back in the hands of patients in our clinical development programs, we are looking forward to having a significant presence once again at AASLD.

And as we hit our stride, we’ll look to forward opportunities to provide you updates on seladelpar, as well as our other programs as we make progress in the weeks and months ahead.

As always, we’d like to finally thank all those that make our work possible. Thank you.


Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.