Albireo Pharma, Inc.
Q4 2018 Earnings Call Transcript

Published: 7 Mar 2019

[Operator:]

Good morning, ladies and gentlemen and thank you for joining us for Albireo’s Conference Call to provide a business update for year end 2018. Following management’s prepared remarks, we will open the call for questions. I would now like to turn the call over to Paul Arndt from LifeSci Advisors representing the Investor Relations Company. Please go ahead, sir.

[Paul Arndt:]

Thank you, operator and good morning everyone. Thank you for joining today’s call during which management will provide an update on Albireo’s performance in 2018. Earlier today, Albireo issued a press release highlighting recent business accomplishments and noting its financial results for the full year ended December 31, 2018. The press release is accessible via the company’s website at www.albireopharma.com. Before proceeding, let me mention that comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements other than statements of historical fact regarding the plans for or progress, scope, cost duration or results of development of A4250, elobixibat, A3384, or any other Albireo product candidate or program, including prevalence data, target indications for development size, design, population, location, conduct, objective, duration, endpoints, timing for initiation or completion of or for reporting of results from or regulatory feedback regarding any clinical trial, including Albireo’s Phase 3 trial of A4250 in patients with PFIC, the timing for submission for approval of A4250, the commercial outlook for any Albireo product candidate, program or opportunity in any target indication, including potential coverage, pricing or reimbursement, any additional payment that HealthCare Royalty Partners or EA Pharma may make to Albireo, the period for which Albireo’s cash resources will be sufficient to fund its operating requirements, or Albireo’s plans, expectations or future operations, financial position, revenues, costs or expenses. Actual results may differ materially from those expressed or implied by any forward-looking statement as a result of many factors including those described under the heading Forward-Looking Statements in Albireo’s press release from earlier today or under the heading Risk Factors in its most recent Form 10-K or in later fillings with the SEC. Albireo cautions you not to place undue reliance on any forward-looking statement. Also, any forward-looking statement that is made speaks only as of today, Thursday, March 7, 2019 and should not be relied upon as representing Albireo’s views as of any future date. Albireo disclaims any obligation to update any forward-looking statement, except as required by applicable law. With that, I will turn the call over to Ron Cooper, Albireo’s President and CEO. Ron?

[Ron Cooper:]

Thank you, Paul and thank you everybody for joining today’s conference call. With me today is Dr. Patrick Horn, Albireo’s Chief Medical Officer and Simon Harford, our Chief Financial Officer. We are very pleased to be here today to review our delivery versus plan for 2018 and outline our priorities for 2019/2020. 2018 was an important year in which we executed on our commitments. We expect 2019 and 2020 will be a transformative period for Albireo and I will provide a roadmap for the development of the company during that period. But let me begin with a quick review of 2018. We delivered on our commitment of starting the A4250 PEDFIC1 trial in the spring. PEDFIC1 is proceeding according to plan with 37 trials placed and issued versus our guidance of 35 to 45 as of February 28, 2019. And we continue to expect top line ended this year early 2020. We delivered on our commitment on the approval of elobixibat, our other IVAD inhibitor in the first half of 2018. Elobixibat was approved in Japan for chronic constipation making it the first IVAD inhibitor approved in the world further validating our bile acid modulator scientific platform. We delivered on our commitment to communicate important supportive data on A4250 pediatric liver diseases and PFIC natural history which were presented at the major U.S. and European liver scientific meetings. We delivered on our commitment to strengthen our regulatory position, achieving our A4250 orphan drug designation in the U.S. and EU combined as well as gaining Priority Review Voucher eligibility and Fast Track designation in the U.S. We delivered on our commitment to prepare for a high quality A4250 launch agreeing with the FDA on the manufacturing plan, gaining acceptance of a proposed INN and gaining FDA conditional approval of the brand name. And we began our commercialization efforts with key leadership commercial and medical hires including Simon as our CFO and Treasurer, Pat as our CMO and Jason Duncan as our General Counsel. So as you can see 2018 was a year in which we made excellent progress and it’s provided a strong base to prepare us for success in 2019, 2020. Now let’s move to 2019-2020 and the roadmap for Albireo. Our three development priorities are; Number one, complete enrollment of the PEDFIC1 A4250 Phase 3 study, submit to regulatory authorities for approval and ready for launch; number two, bringing A4250 to a significantly larger patient population by initiating a trial in biliary atresia; number three, expanded NASH with advancement of elobixibat and acceleration of our preclinical bile acid modulator compounds as candidates to partner in the future. Let me go into greater detail. First in PFIC, we begin 2019 with much anticipation for the PEDFIC1 study results which are expected end of this year or early 2020. PEDFIC1 remains our highest priority. So as a reminder this Phase 3 program is a single randomized double blind placebo controlled multi-centric clinical trial designed to enroll approximately 60 patients with PFIC type 1 or type 2 and in open label extension study to assess long-term safety and durability of response. The placebo control trial is evaluating two doses of A4250 for 24 weeks. The primary end point for the FDA evaluation and the key secondary endpoint for the EMA is improvement in pruritus. The primary end point for the EMA and the key secondary end point for the FDA is serum bile acid responder rate. PEDFIC1 is progressing well and we remain optimistic about the outcome. We are preparing for potential approval and launch of A4250 in the first half of 2021 and we will refine guidance as we get closer. Second, we are extremely excited to begin studying A4250 in biliary atresia. Our intent has always been to expand the use of A4250 beyond PFIC into biliary atresia, Alagille syndrome, primary sclerosing cholangitis and other areas. We are pleased to announce that we will begin a pivotal study of A4250 in biliary atresia, our rare pediatric liver disease with major unmet medical need and relatively large population. And we will do this in the second half of 2019. Now biliary atresia is a disease of liver and bile ducts with symptoms developing about two weeks to eight weeks after birth. Damaged or absent bile ducts resulted in bile and bile acids being trapped inside the liver and that results in liver cirrhosis and failure. About 80% of the patients require liver transplant within the first two decades of life making biliary atresia the most common indication for pediatric liver transplant. Now although there are no published prevalence data available our estimate show biliary atresia is one of the most common rare pediatric liver diseases with 15,000 patients to 20,000 patients estimated in the U.S. and EU combined. We have received orphan drug designation for A4250 in biliary atresia in the U.S. and the EU and we have engaged regulators on trial design. We are in the process of finalizing the trial design with the regulatory authorities. The study will build on the encouraging results we saw in our Phase 2 trial in pediatric cholestasis and we anticipate starting the trial in the second half of 2019 and we will provide more details in the coming months. Biliary atresia and PFIC are the beginning for Albireo in rear pediatric liver disease. We continue to see potential for A4250 beyond these initial indications and plan to expand development into additional orphan pediatric liver diseases in 2020. Now, while Albireo is primarily focused on pediatric orphan liver diseases, the potential of our NASH pipeline has continued to merit greater attention. And this year we plan to take important steps forward in NASH. This is our third clinical development priority. Bile acid modulation provides a strong rationale for development in NASH from both an efficacy and a convenience tolerability perspective. Elevated bile acids along with elevated cholesterol, insulin sensitivity, liver inflammation and liver fibrosis are some of the key markers in NASH patients. We have clinical and preclinical data that show IVAD inhibitors may have a positive impact on these parameters. Additionally, elobixibat is a once-daily oral medicine that is showing minimal systemic exposure potentially aligned for dosing with cardiovascular disease risk reducing medicines or other NASH products. Finally, elobixibat has a safety database with more than 1,500 exposures, which strengthens our understanding of its safety profile. While NASH is projected to become the leading cause of liver transplants in the U.S., research has shown that most NAFL patients die of cardiovascular complications. There is evidence of the elevated cholesterol and bile acids in the liver maybe major contributors to the disease and that reducing some of them to the elimination from the body could result in significant clinical effects. We are therefore excited to move elobixibat into a Phase 2 trial in NASH in Q2. In addition, we are delighted with the progress of our preclinical compounds and have made a decision to allocate additional resources to accelerate their development. We hope to provide more detail on these compounds at a later date. The intention of the NASH probably is to create additional value for the company through potential partnering. As the new preclinical compounds warrant more resources and we are now accelerating multiple compounds in NASH, we will be reallocating resources from A3384 in bile acid malabsorption. As we have previously guided, we believe A3384 has potential to become the first drug approved to treat bile acid malabsorption in the U.S. But further development has been gated on the issuance of certain patents which remain pending. We are confident these patents will issue, but have delayed trial initiation into 2020 and will focus our resources on our activities with A4250 and in NASH. So in summary, 2018 was a historic year for Albireo in which we execute on our plan and build momentum coming into 2019. We expect 2019 to be a transformative year for Albireo. While we advance our Phase 3 trial in anticipation of top line results at the end of the year or early 2020, we also plan to take a major step forward with our broader pipeline, including A4250 in biliary atresia and elobixibat and our preclinical compounds in NASH. Simon, it’s my pleasure to hand it over to you for financial update. Simon?

[Simon Harford:]

Thank you, Ron. Let me quickly highlight our financial results for the full year ended December 31, 2018. We closed the fourth quarter with a balance of $163.9 million in cash and cash equivalents compared to $53.2 million at the end of December 2017. Our cash balance was reduced by $9.7 million during the fourth quarter primarily as a result of our Phase 3 PFIC trial for A4250. Our revenue for the year ended 2018 was $12.7 million compared to nominal revenue in the same period last year. Higher revenue was related to the $11.2 million milestone payment received earlier in the year from EA Pharma due to the approval of elobixibat for chronic constipation in Japan as well as $1.5 million of royalty revenue received from EA Pharma for elobixibat since approval. As you may recall, we monetized the royalty and sales milestone revenue in Japan with healthcare royalty partners. Therefore the royalty revenue that we are reporting is offset by non-cash interest expense in the income statement which will continue going forward. Our research and development expenses for the full year ended December 31, 2018, were $31.7 million compared to $30 million in the same period of 2017. R&D expenses were primarily driven by costs associated with development of A4250 including costs incurred for manufacturing and clinical development activities for our Phase 3 trial in PFIC. Higher headcount costs as we implement our strategy and preclinical work primarily associated with NASH. Our G&A expenses for the full year were $18.1 million compared to $15.2 million in the same period of 2017. G&A expenses increased 18.5%, principally attributable to increases in headcount and recruitment costs as well as stock based compensation costs. Total expenses for the full year 2018 were $50.6 million, slightly above our guidance for total expenses of the high end of the range of $45 million to $50 million as we continued to make progress with the execution of our strategy. Net loss for the full year ended December 31, 2018, was $46.1 million, the loss was $3.94 per share compared to a net loss of $24.4 million or $3.12 per share in the same period of 2017. Based on our current operating plans we anticipate our total operating expenses including R&D and G&A expenses for 2019 to be between $75 million and $80 million, driven primarily by expenses related to our Phase 3 PFIC clinical trial for A4250 as well as funding for our other clinical development priorities in biliary atresia and NASH. In terms of cash, we continued to expect our current cash balance to be sufficient to meet our operating requirements into 2021 under our current plan for clinical development. And with that, let me turn the call back over to Ron for closing remarks.

[Ron Cooper:]

Great. Thank you, Simon. So to summarize, we expect this year will be truly transformational. We are fortune that compelling assets that continued to show promise as we have leveraged our novel bile acid modulation science and move forward in our commitment to bring potentially life changing therapies to patients suffering from devastating liver and GI diseases. So with that, we will open the call to questions. Operator?

[Operator:]

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Eun Yang with Jefferies. Please proceed with your question.

[Eun Yang:]

Thank you. I have a question on biliary atresia. So in your Page 2, I think you have about 30 patients in the efficacy trials, can you call over why you have seen there and also the patients, are you kind of you are focusing on patients who ever undergone the biliary duct reconstruction surgery and if so what percent of biliary atresia patients to actually undergo such a surgery? Thank you.

[Ron Cooper:]

Good, Eun. Thanks very much to your questioning. I think that first of all we are pretty excited to announce that we will be stepping into a trial in biliary atresia. I think for A4250, we have always talked about A4250 becoming important pediatric cholestatic liver disease drug and our strategy has always been to start with PFIC and to expand. And our thoughts on expansion are based upon the Phase 2 results that you referred to and within the Phase 2 study we are able to show good improvements in serum bile acids and improvements in pruritus. We had a handful of patients in biliary atresia, where we showed some good effects as well. Pat, you want to talk a little bit more about kind of the patient population we are thinking of?

[Patrick Horn:]

Yes. And so in terms of the results we saw in our Phase 2 biliary atresia study, we are actually going to have a poster that specifically addresses that at the upcoming ESO meeting and so that data will be in there, but in general, we saw the same that we saw with the other population and a decrease in pruritus and a decrease in bile acid. In terms of the population you are absolutely right, so patients when they are diagnosed with biliary atresia immediately echo for the Kasai portoenterostomy. So they try to reestablish blood cell. So in this study we do, we will be in patients post that Kasai procedure.

[Ron Cooper:]

Thanks for question, Eun.

[Operator:]

Thank you. Our next question comes from the line of Katherine Xu with William Blair. Please proceed with your question.

[Katherine Xu:]

Yes, hi, good morning. I am just wondering whether you have applied for breakthrough designation for 4250 in any indication. And also why biliary atresia versus Alagille, just little bit curious about that, is it just the data, etiology or just avoid direct competition with other company? And if you could just comment a little bit on the NASH Phase 2 design and thoughts and strategy going forward, what kind of data are you expecting and what class of agents you think is most combinable? Thank you.

[Ron Cooper:]

Okay. So, Katherine, let’s just make sure we – first of all, good morning, Katherine, thanks for the question around breakthrough, question on our selection of indication and a little bit about our NASH design. Maybe I will start with the first one and then I will hand the second one over to Pat, so breakthrough, no, we have not applied for breakthrough designation as yet. I guess, we probably have the opportunity to do so in biliary atresia if we chose through. We already have for A4250 a number of important regulatory badges. So we have 8 orphan designations in Europe and United States and we have fast track in U.S. which as you know allows us hopefully a speedier process as well and quite frankly the agency has been fantastic with us. We have enjoyed a really good dialogue back and forth and they have been really helpful and appropriate. So we would anticipate that going forward, talk about our selection of biliary atresia, Pat?

[Patrick Horn:]

Yes. So, you are absolutely right, when we look at it biliary atresia Alagille as some of the other ones like PSC and PBC are also possibilities. We look at it, there is truly huge unmet medical need in the biliary atresia population. Right now, there really is no medical therapy for them and that disease progresses very rapidly and it’s among the fastest that we have [indiscernible] of any of the patient population. So just in terms of that unmet medical need, there is some strong data presented at last year’s liver meeting where even where post biliary atresia, elevated bile acids can lead to a decreased liver function. There is real possibility to build in that population. I think in terms of study feasibility is also one patient population size is also another factor. It certainly does exclude us from going into Alagille and we are certainly considering it. One of the other real indications is in our discussions with the FDA they expressed a real enthusiasm about having a trial in the biliary atresia population since this is an unmet need. So again we need to just from resources predominantly people resources we need to stay to, so we can’t start big programs at the same time. But clearly we hope to expand into other indications as quickly as possible, but biliary atresia will be our first one.

[Ron Cooper:]

So just to summarize that one, Katherine, I think we are committed overall to developing A4250 across a multiple pediatric cholestatic liver diseases. Our approach has been one of the really trying to understand the disease really deeply, work with key opinion leaders, work with patient advocacy and obviously work with the regulators to get with the trial design that we are comfortable with. And I think in this case with biliary atresia we feel pretty confident from that perspective. We will continue to evaluate some of the other pediatric cholestatic liver diseases. And as we have guided our intent is to chip away those over time as well. And Pat do you want to talk a little bit about the NASH program.

[Patrick Horn:]

Yes. So, the NASH study is a Phase 2 study. The population is going to be patients with metabolic syndrome either in NAFLD or NASH and it is our primary end point is going to be changed in LDL cholesterol. Obviously we are going to look at liver fat and other markers that Ron mentioned are applicable such as insulin sensitivity and cholesterol. It’s a pretty standard Phase 2 study that really meets the new FDA guidance this is for Phase 2 studies in NASH and NAFLD.

[Ron Cooper:]

So Katherine – thank you, Pat. As we previously guided and we think about this Phase 2 study as a good proof of concept study to indicate similar things the effects that we have talked about previously and the study that would be consistent with the guidance of the FDA has put out on NASH. So I hope we got all of your questions Katherine. Thank you very much for them.

[Operator:]

Thank you. Our next question comes from the line of Yasmeen Rahimi with ROTH Capital Partners. Please proceed with your question.

[Unidentified Analyst:]

Hi everyone, good morning. This is Katie on for Yasmeen today. I have a few questions regarding biliary atresia, first can you provide us with any additional color about the size, design and primary end points for the pivotal study and can you describe how easy or difficult you think it will be to enroll, I guess do you think it will be faster to enroll than PFIC?

[Ron Cooper:]

Hi Katie. Good morning. Thanks for very much for the question. It’s probably a little early for us to talk a little bit about trial design at this time, because we are still in discussions with the regulatory authorities. But we are pleased about the regulatory that really expressed the love and enthusiasm for our study in biliary atresia. And we plan to be able to provide more information of our plan in the coming months. Pat, maybe you want to talk about how we think about recruitment?

[Patrick Horn:]

Yes. So the biliary atresia population is the larger population and so we would anticipate being able to enroll patients faster. I think ultimately the length of this study will depend upon the number of sites we recruit and ultimately how many patients we need in the final study design.

[Ron Cooper:]

Yes. I think the other thing in that study as well Katie, we are also dependent upon births so because in this case these are patients that are newborns that undergo the Kasai procedure. So we feel pretty confident on our ability to recruit the staff of this study. We look forward to providing you a little bit more detail as we finalize our discussions with the regulators. Thanks Katie.

[Unidentified Analyst:]

Okay. Just a couple – one more follow-up, how many Kasai procedures are performed annually and what percent of patients are not responders and what do you think will be the percentage of bile acid reduction needed to improve liver outcome, will it be similar to what you found in the [indiscernible] consortium with PFIC patients?

[Patrick Horn:]

Yes. So this is Pat again. So we are looking at the feasibility and we are looking at kind of the projected numbers. We would anticipate that in the United States, one number we have is if you look at the Children’s Network which is a consortium of 14 of the leading hepatology centers in the United States, they have on average 50 biliary atresia patients and Kasai patients per year. So we are trying to expand that into the overall population and what that number will be then. It also means that Europe has about the same prevalence there. So that was the first question. What was the other part of the question?

[Unidentified Analyst:]

The percentage of bile acid reduction needed to improve liver outcome?

[Patrick Horn:]

So again that will be something we have to determine yet. We would anticipate obviously with our mechanism of action being able to show a significant reduction in serum bile acids, what degree will be required remains to be same.

[Unidentified Analyst:]

Okay. Thank you guys so much.

[Patrick Horn:]

Thanks, Katie.

[Operator:]

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

[Ed Arce:]

Hi, guys. Good morning and thanks for taking my questions and congrats on all the recent progress. Some of my questions have already been asked, but I have a couple others. First, now as you look towards a pivotal read-out perhaps as early as the end of this year, I know Ron had touched upon some preparations early on that have begun in terms of commercial readiness for PFIC. And so perhaps you could expand a little bit about what you are doing, what you are planning throughout this year to prepare for that. And then secondarily, you had mentioned also pretty excited about the potential for some preclinical compounds in NASH and so I would imagine you are keeping some of that pretty close to the best for now, but what could you share with us in terms of your potential differences with elobixibat and how you see it particularly in terms of combinations. Of course, everyone is thinking about that in terms of combination strategies for NASH today. Thank you so much.

[Ron Cooper:]

Yes, great. Thanks for the questions, Ed. I think that we are starting to pivot the organization now when we went from an organization that was discovery organization to develop an organization where we are becoming a parried commercial organization. And I think one of the things that I made in my prepared comments was that I think some of the people that we brought into the organization are those that have significant experience in commercializing products around the world successfully. So, our understanding of what’s needed to successfully launch products I think is different from others in significance. You might recall that, Simon has put many years in both Lily and GSK. He was the CFO of the Global Web Medicines business, so had a huge geographic approach in multiple therapeutic areas. Pat has spent years with Abbott and I spent many years with Bristol Myers Squibb in multiple commercial roles around the world. So, we are trying to do is first of all pivot the organization and hire appropriate individuals. And then right now our budget calls for making sure that we invest in things that are precommercial activities that ensure that they are rate limiting things to a successful launch. So the types of things that we are involved in is making sure we are banging through things like brand strategy, commercialization plan. We are starting to be more active on the advocacy front, more active on the market access front seeking through patient support deepening our market research and understanding both the market and the need from our key stakeholders. So, I think we are pretty excited about that. And then underneath all of that work as well as the work to ensure that we follow the product appropriate, so the regulatory [indiscernible]. So as I said I think it’s going to be a big year from a pre-commercialization perspective. And then I am pretty excited about preclinical compounds. The expertise in our organization extends multiple decades in bile acids. We have talked before that elobixibat is a validation of that bile acid platform with A4250 in a Phase 3 study. And I think that this is really the strength of the platform and we are excited about the new agents. These are new chemical entities. These have a different mechanism of action. They will have new IP associated with them. And as we have indicated they are products that field off of our understanding of bile acid modulation. And we are hopeful that they will be an important part of our overall product portfolio and as the year progresses we hope to give you more color on that.

[Ed Arce:]

Alright. Thank you.

[Operator:]

Thank you. Our next question comes from the line of Ritu Baral with Cowen and Company. Please proceed with your question.

[Ritu Baral:]

Good morning everyone. Thanks for taking my question. Did I hear or interpret your – one of your comments about the preclinical NASH drugs correctly that you are evaluating potential partnership strategies for one of them or for some of them, could you go into that a little bit how you think about the candidates for partnership versus moving it forward yourself. And also your strategy on timing of any potential partnership and value creation as you think about this?

[Ron Cooper:]

Yes. Good morning Ritu. Thanks very much for the question. I think just to backup, it starts with our overall corporate strategy. So our intent is to build a pediatric liver company on the back of A4250. We plan to commercialize in the U.S. and in Europe and use partners for the rest of the world and that’s how we are going to build the company around and that’s where we have the expertise. And I believe that that we are credible in our ability to do that. We have always been pretty clear though that we would like to provide to our investor a stream of non-dilutive capital demonstrates our ability to do that having the sign of pretty good – a really good agreement with our partners EA Pharma, Eisai-Ajinomoto Pharma in Japan for elobixibat. So our intent for those products that are outside of our footprint in pediatric cholestatic liver disease is we will seek partnerships with them. And I think the timing part of that I think is pretty much dependent upon when we have data. But I think what’s exciting about our compound goes back to what I said in my comments earlier. These agents in NASH, what’s beautiful about them is currently elobixibat, it’s once a day product, right, very low systemic exposure, as a result it co-travels nicely with other potential NASH products and co-travels quite nicely with other cardiovascular risk products, right. And so we would anticipate something similar for our pre-clinical compounds as well. So just to summarize, strategy of the organization to build the pediatric cholestatic liver disease can be on the back of A4250, generate non-dilutive capital for the organization through some of our other products through good partnerships.

[Ritu Baral:]

In NASH, Ron do you necessarily think that optimal value creation can be reached before biopsy generated data?

[Ron Cooper:]

I think Ritu it’s really dependent upon the partner and dependent upon the assets. So we continued to work hard in generating data. We have had some nice dialogue with some potential partners, ongoing discussions. I think the number one thing is we are going to generate some data and then we are going to see where that takes us.

[Ritu Baral:]

Got it. I have got a follow-up on the PEDFIC trial conduct, do you feel that you guys have reached your final number of sites, how is enrollment in the sites that are up and going meeting your expectations?

[Ron Cooper:]

Yes. So we have guided 35 sites to 45 sites, so we have reached our trial activation targets and still our few sites that we are still sort of finishing up, so there is a handful of those, right and that that will help us. And in terms of enrollment, enrollment is progressing. We are pleased with what’s occurred thus far. We would just reiterate that our plan for top line results by the end of this year, early next year.

[Ritu Baral:]

Got it. And then moving to biliary atresia specifically that disease and it’s I guess pharmacoeconomic burden and comparing that to PFIC, I am just wondering if you are commercializing one drug for two indications, how do you sort of view the burden of those two diseases and what it could mean for pricing down the line, and if you have any preliminary thoughts on how Alagille might impact that as well?

[Ron Cooper:]

Yes, yes, thanks for that question. Yes, I think the burden of these diseases is significant right across the board. These children are suffering with pediatric cholestatic liver diseases. Most cases they have elevated bile acids, they’ve terrible pleuritis, they don’t sleep, they don’t grow. Whether it’s biliary atresia, PFIC or Alagille or PSC, there is no drug currently available. And I think that we’ve guided overall that patient population is between 30,000 to 40,000 in U.S. – in Europe. So, while there’s differences in these diseases, I think there’s a lot of homogeneous situation in this case, right, seriousness, no other drug. And so I think that when we think about biliary atresia versus PFIC, both are very rare, both have a high burden on the family and the patients. So, I think we think about these with – in terms as being comparable pricing as we go forward. And obviously it’s highly dependent upon the data that we generate and highly dependent upon the label that we have, but I think our current thinking is that this is a more homogeneous group versus a heterogeneous group when it comes from a pricing perspective.

[Ritu Baral:]

Very helpful. And last question, appreciate your patience. As you think about your NASH study and enrolling potentially both NAFLD and NASH patients. Is there a specific mix, a certain number of NASH patients that you’re strategically thinking about making sure you have as you run that study?

[Ron Cooper:]

Yes, so thanks, Ritu. I think that as we said before, we’ve given you a sense of what that study is going to look like. It’s – think of it as a proof-of-concept study and think of it as something that’s consistent with the FDA has given from a guidance perspective. We haven’t given all the details yet in that study. So, as we finalize that income going in Q2, we’ll give you a little bit more color on that.

[Ritu Baral:]

Fair enough. Thanks for taking all the questions.

[Ron Cooper:]

Yes, thank you, Ritu.

[Operator:]

Thank you. Our next question comes from the line of Liana Moussatos with Wedbush Securities. Please proceed with your question.

[Liana Moussatos:]

Thank you. You mentioned expanding A4250 in 2020 into other indications. What are your thoughts about indication selection for the next in 2020 with Alagille, PSC or others? And then following up on Katherine’s question about breakthrough, why not apply for breakthrough since you could potentially get a voucher and monetize it?

[Ron Cooper:]

So, I start with the second question. Just to remind you, Liana, first of all, thank you for the questions and good morning. Start off with our product is – A4250 was hardly been given designation for priority review voucher from the FDA. So, we feel pretty good about that and we believe that’s a value creating opportunity over time. And frankly the question about breakthrough, I don’t think that’s an unreasonable question, but right now we’re sort of focused in on finalizing the protocol with the agency and perhaps we’ll get – we’ll get to that over time. And then in terms of our selection of diseases, we continue to believe there is a really significant rationale for A4250 across multiple pediatric cholestatic liver diseases, but the approach that Pat and the rest of our team is taking is, these are ultra-orphan diseases. We want to make sure that we have trials that really capture the ability of A4250 in these patient populations and that takes a fair bit of work in trying to put together little bits of information, the comp sort of information, where we are really comfortable that we can show the true effect of A4250. So, we have ongoing discussion with key opinion leaders, with patient advocates on trial designs in these other diseases. We went for with biliary atresia first basically because it’s a pretty significant opportunity. There are quite a few patients as Pat had indicated earlier, this unmet need is super high. And we’ve really enjoyed a wonderful dialog with the agencies about this because they actually recognized that this is an unmet medical need as well. So, I think that’s where we are with this – with biliary atresia to comply the same criteria to the other potential diseases.

[Liana Moussatos:]

Thank you.

[Operator:]

Thank you. Our next question comes from the line of Alan Carr with Needham and Company. Please proceed with your question.

[Alan Carr:]

Hi, thanks for taking my questions, and couple of them. So, I want you to talk a bit more about rationale for going straight to a Phase 3 as opposed to maybe running a larger Phase 2 in biliary atresia, and then also at what point do you start to think more aggressively about building a commercial organization, is that after Phase 3 or is that something you might do before? Thanks.

[Ron Cooper:]

Let me start with the second question on the commercial aspects of things. I think the way to think about our commercial planning is really around making sure nothing that is rate-limiting to a successful launch is not there or has to be there, right. I got – there’s too many double negatives in that one, so it’s – so our focus really is in pre-commercial activities, what we don’t want to find ourselves is as we’re getting towards launch that we’re missing a key component, so that’s what’s being done now. Now, obviously, as we get closer to the data readout and when we put the card from the data readout perspective and file A4250 for regulatory approval then we’ll start accelerating our efforts. And so I think just to summarize, the way to think about our commercial operations right now are, very careful planning, deployment of careful resources, making sure that rate-limiting issues are out of the picture, such as things like as INN name and brand name not – it should not be an issue for us. Those are things we’re focused in on and we’ll accelerate as the data presents itself as we get into the regulatory pathway. Pat, maybe you take the first question.

[Patrick Horn:]

Yes. So, in terms of clinical development programs in rare diseases, it’s always a difficult decision in how to proceed. So, we’re looking at biliary atresia, there are some strong scientific rationale why A4250 should be a benefit there. We have some data in our previous Phase 2 study like I said, that data is going to be presented and all of that support moving forward. So, what we did was, we designed this study to really demonstrate the efficacy of A4250 in biliary atresia. And in the discussion with the regulatory agencies, we are designing a study that if successful will not only prove the efficacy of A4250, but be considered a pivotal study that will support a registration application. So, it’s kind of the best of both worlds. And partly that’s because in these rare diseases, the studies even a relatively small study are longer than in a different indication. So, I think we were very pleased that the regulatory agencies were willing to work with that and have this study if it’s positive support a regulatory application.

[Alan Carr:]

Great. Thanks for taking my questions.

[Ron Cooper:]

Thank you, Alan.

[Operator:]

Thank you. Our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

[Matt Kaplan:]

Hey guys. Good morning. Couple of follow-up questions, just thinking a little bit more into the BA pivotal program, can you give us nor from kind of a 30,000 foot view, what you’re thinking about in terms of the potential timeline for the program, obviously, you’re launching study in the second half of this year, but kind of help us understand kind of the timeline to data and potential NDA filing if it’s successful?

[Ron Cooper:]

Yes, good morning, Matt. Thanks very much for the question. I think this morning, we wanted to introduce to you that we’re excited about expanding the potential from A4250 just from PFIC into other pediatric cholestatic liver diseases and particularly biliary atresia being that it is a major disease with huge unmet medical need. We’re still in discussions with the regulatory authorities to finalize the protocol, so, we’ve given guidance that we’ll start the study in the second half of this year. So, I think it’d be premature probably for me to make further comment, but now let us finish up the discussion with the regulatory authorities then we can probably move that over time.

[Matt Kaplan:]

Okay, fair enough. And then just also on the commercialization plans, could you give us a little bit of a sense in terms of the size of that commercial organization that you would need to go after the kind of your focus on the pediatric cholestatic liver disease area, what could it look like?

[Ron Cooper:]

Sure. I think that it starts with what is the customer base look like, right. So, you think about in the U.S. and Europe, in each of them, let’s say orders of magnitude 100 key pediatric hepatologists and there is probably another 1,200 other individuals that might be prescribers as well. And think about it that most of these individuals are at teaching centers, right, so there a tertiary center, so we would not need a very significant field force to deploy against the large potential, right. So, think of it some are along the lines of both for Europe or the U.S. somewhere between 15 to 20 to 25 individuals, field deployed individuals. And remember for – and remember that these are the same prescribers for all these cholestatic liver diseases, right. So, the pediatric hepatologist sees the PFIC patients, the biliary atresia patients, the eligible patients at separate, so there’s a lot of synergy over time.

[Matt Kaplan:]

Okay, very good. That’s helpful. And last question just jumping back to NASH for a minute just so kind of fully understand your strategy there with respect to elobixibat and your earlier stage pre-clinical molecules. How do they fit into your NASH strategy, is it – are you developing proof-of-concept data with elobixibat and putting that on the sidelines and then moving forward with your next-generation programs to pre-clinical compounds to – from a commercial point of view and development point of view or is it that you’ll bring – you potentially bring elobixibat to the next stage and Phase 3 with a partner?

[Ron Cooper:]

Yes, it’s a great question, Matt. I think it starts with – we are very confident about elobixibat in the NASH space given that the well-characterized compound, we have a significant level of exposures over 1,500 exposures, so we understand that compound. And so as a result, the risk moving forward is somewhat less than the pre-clinical compounds, which we’re still trying to understand, so, there’s some differences in that. I think really what’s going to determine how we go forward with our partnership strategy is what the data we generate. And so I think it’s probably again premature to speculate as to exactly how we deal with both the compounds, but I think that our plan is, let’s generate the data, let’s continue the dialog with potential partners and we’ll see what works best from that perspective.

[Matt Kaplan:]

Okay, very good. And then just last question, elobixibat, how is it performing in EA’s hands now following approval in Japan?

[Ron Cooper:]

Yes, so, thanks for that question as well, Matt, I was in Japan with our partners late last year and I have to say the enthusiasm is fantastic. They’ve shared some market research on satisfaction levels, it was pretty impressive. The nice thing about elobixibat, it is the second of the new generation CIC product, chronic constipation products being launched in Japan. And what’s special about elobixibat, it has a unique mechanism of action, because it has both an ability to bring secretions into the colon, but a motility effect as well. And so it seems that patients that had not responded to other medications had done pretty well. And as a result, I think our Japanese partners are pretty pleased with the uptake. That being said, it’s still relatively early. They only have half year of sales but they remain – around half year sales, they remain pretty optimistic and we’re pretty optimistic of the potential for elobixibat in Japan.

[Matt Kaplan:]

Great. Well, congrats on the progress and thanks for taking the questions.

[Ron Cooper:]

Yes, thanks very much, Matt.

[Operator:]

Thank you. Our next question is a follow-up from Ed Arce with H.C. Wainwright. Please proceed with your question.

[Ed Arce:]

Hi, Ron, thanks for taking the follow-up. So, I was just thinking through this group of rare pediatric cholestatic diseases. And as you’ve mentioned several times in the call, there’s a lot of similarities given the high unmet medical need, the no approved therapies for each of these and as you mentioned the pricing at least at this point would seem to be pretty similar, and even from a commercial perspective, they are largely into these concentrated treatment centers that you just mentioned. So, as I think about all this and your announcement today where you’re sort of unveiling your second indication for A4250. What exactly is the deciding factor for going for BA versus Alagille or PSC? Is it the faster enrollment that you mentioned? Is it the larger population? I noticed it’s much significantly bigger than some of the other ones. What exactly led you – if there’s one or more factors that led you to that decision? Thanks.

[Ron Cooper:]

Yes, thanks, Ed, for the follow-up question. I think it’s not one thing, it’s multiple things that have led us to come to BA, and some of them, we’ve alluded to earlier, but the things that we think about is, first of all, unmet medical need, right. These are babies that are born and very quickly after life have the Kasai procedure and have no treatment right now. So pretty significant unmet medical need. And as we talked to both key opinion leaders and we talked to the regulators, I think people want us to do something in this space. So, I think that’s the first thing. The second thing is, as you pointed out, the size of the opportunity is pretty significant. And if you look at what we’re trying to do from a commercial perspective of A4250, we’re trying to build a big pediatric cholestatic liver disease product, and so I think it’s not illogical to start with a very large GI indication for our next indication. And I think then the third part really is about the insight. Pat and his scientific team have spent a considerable amount of time with key opinion leaders and patient advocates to really understand this disease and put together small pieces of information to the point where I think we have pretty deep insight into what’s happening with this disease and where A4250 could make an impact. So, I think those are the three reasons that why we’re focused on biliary atresia with this – at this point. That being said, in the background, we continue to do work on other cholestatic liver diseases and our intent is to go forward with those over time, but we’ll use the same criteria against those as well, unmet need, size of opportunity, and when we feel we have a good handle on what’s going on from a size perspective, then we’ll go forward. Thanks again for the question, Ed.

[Ed Arce:]

That’s great.

[Operator:]

Thank you. We have reached the end of our question-and-answer session. I would like to turn the call back over to Mr. Cooper for any closing remarks.

[Ron Cooper:]

Great. Thanks, Michele, and thank you, everybody. So, to summarize, I think what you – I hope you saw that we had a strong 2018. We’ve really delivered against our commitments. We expect the upcoming period to be truly transformational for Albireo with the continued progress with A4250 and PFIC, the beginning of a trial in biliary atresia and we plan a major step forward with NASH. So again, thank you all for joining us today. Have a good day.

[Operator:]

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.