CymaBay Therapeutics, Inc.
Q4 2017 Earnings Call Transcript

Published: 16 Mar 2018

[Operator:]

Good day, ladies and gentleman, and welcome to the CymaBay Full Year 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call for your questions. Please be advised that the call will be recorded at the Company’s request. It is also being webcast live on the Investors section of CymaBay’s website at www.cymabay.com. I would now like to turn the call over to Mr. Dan Menold, Vice President, Finance at CymaBay. Mr. Menold, please proceed.

[Dan Menold:]

Thank you, operator, and good afternoon everyone. Earlier today, we issued a press release announcing our fourth quarter and full year 2017 financial results and business update. You can access that release on our website under the Investors tab. Participating on the call today are Sujal Shah, Chief Executive Officer, Dr. Pol Boudes, Chief Medical Officer and Dr. Chuck McWherter, Chief Scientific Officer who will provide an update on our clinical programs and review upcoming milestones. I will then summarize the Company's financial results. After our prepared remarks, we will open up the call for Q&A. Before we begin, I would like to remind everyone that statements made during this conference call, including the Q&A session relating to CymaBay's expected future performance, future business prospects, or future events or plans including future clinical plans 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 could differ materially from those forecasts due to the impact of many factors beyond the control of CymaBay. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise. 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 would like to turn the call over to Sujal.

[Sujal Shah:]

Thank you, Dan, and good afternoon everyone. The past year has been truly transformational for CymaBay. We have focused the company around improving the lives of patients with liver diseases and are taking key steps to align our pipeline and development activities with that mission. Early in 2017, we announced the out-licensing of our Phase 3 ready gout asset, arhalofenate allowing us to focus our efforts towards advancing what is now our lead-clinical product candidate seladelpar in primary biliary cholangitis or PVC and non-alcoholic steatohepatitis or NASH. Interim data from our ongoing Phase 2 study of seladelpar in PBC was featured in a late breaking presentation given by prominent international PBC expert Professor Gideon Hirschfield at The Liver Meeting hosted by The American Association for the Study of Liver Disease in October 2017. This was the second consecutive year in which data from our development of seladelpar for patients with PBC was featured as a late breaker at this important medical congress. We believe that the data that Pol will briefly summarize again today. Support the potential for seladelpar to offer patients improved efficacy and better tolerability over the current second line treatment for patients with PBC. Over the past year we had significantly strengthened our balance sheet and also made key hires including in senior management to support increasing development activity. As we look forward to the year ahead, CymaBay is poised to initiate a Phase 3 study of seladelpar in PBC in the second half of the year and to begin diversifying our development program by initiating a proof-of-concept Phase 2b study of seladelpar in Nash. A key step in the repositioning of CymaBay as a liver focused company with the out license of U.S. rights to develop and commercialize arhalofenate, to Kowa Pharmaceuticals America. We are pleased with Kowa’s continued commitment to advance the development of our arhalofenate for patients with gout. In January, of this year we announced receipt of an additional $5 million milestone payment. This milestone was specifically related to the initiation of a study evaluating the pharmacokinetics of arhalofenate in subjects with renal impairment, which is a key step towards Phase 3 development. Data from this study have the potential to inform enrollment criteria for a Phase 3 trial that could further differentiate arhalofenate from currently available treatment. Now let us focus on updates for seladelpar in both PBC and NASH before closing with a review of our financial results. Seladelpar is a highly potent and selected agonist of the nuclear receptor peroxisome proliferator-activated receptor delta or PPARd. We believe that seladelpar is particularly well suited to the potential treatment of inflammatory liver diseases including PBC. In this disease seladelpar has been shown in patients to improve cholestasis by decreasing the hepatocellular synthesis and accumulation of toxic bile acids. The decreased synthesis results in part from down regulation of the gene for 6781, which encodes the rate limiting enzyme responsible for the biosynthesis of bile acids. Seladelpar also decreases the synthesis of cholesterol as well as the dietary absorption. Together these effect decrease the amount of cholesterol available as a substrate for bile acid synthesis. Thereby enhancing its effect on 6781 in reducing total bile acid pool. These seladelpar effect together with anti-inflammatory activity have been demonstrated clinically and are a potential benefit for the treatment of PBC. Over the last two years, we have collected data from two Phase 2 studies in patients with PBC examining a broad range of doses from two to 200 milligrams daily and with the treatment duration for some patients now exceeding one year. This has allowed us to establish not only doses that demonstrate the benefit risk profile but also mechanistic in sight into the potential actions and benefits of seladelpar. In August 2017 results from the first study were published in the prestigious peer review journal The Lancet Gastroenterology & Hepatology. And as mentioned earlier results from the second study were presented in October 2017 at AASLD. Thus we believe that we have convincingly established proof-of-concept in PBC as well as identified a dosing regimen that can be carried over into our Phase 3 program. Our ongoing Phase 2, study at seladelpar and PBC was a cornerstone of the progress we made during 2017. I'd like to hand the call over to Pol to provide summary of results shared today and upcoming activities and updates in the program. Pol?

[Pol Boudes:]

Thank you, Sujal Shah. As a reminder our second Phase 2 study in PBC is an orphan label dose ranging study evaluating the safety and efficacy of lower doses of seladelpar in patient with PDC. These patients have an inadequate response to all our intolerance to the first line therapy, Ursodeoxycholic Acid. Patients who complete this study can enroll in a long-term extension study after receiving one year of seladelpar treatment. While Phase 2 study is actively recruiting patient, as we continue to build our long-term safety database in parallel with our clients to initiate Phase 3 in the second half of this year. With the long-term extension study, we offer patients who appear to benefit from seladelpar the option to continue treatment and receive drug without interruption as the development program progresses. We are proud to be able to contribute to the PBC community this way as the benefits we can bring to patient is the most important objective of CymaBay. To recap the interim Phase 2 results announced at the ASLD meeting last year, in the five and ten milligram per day dose groups, 12 weeks of seladelpar treatment resulted in rapid and clinically meaningful reductions of serum alkaline phosphatase from baseline of minus 39% and minus 45% respectively. AP is a key biochemical marker of cholestasis and reduction in AP has been correlated with the improved liver transplant-free survival. In the setting of PBC the AP level after 12 months of dosing is the key parameter in the composite end point recently used for the conditional approval of a Ocaliva through just 12-weeks of dosing we observed 45% and 82% of patients at five or 10 milligram respectively achieved an AP level below 1.67 times, the outer limit of normal, which was the regulatory threshold for responder analysis for the approval of Ocaliva. Further more, 18% and 45% of patients on the five and 10 milligram group respectively completely normalized that AP level. Additional highlights of the interim data including reductions in other marker of cholestasis including gamma GT and bilirubin and reduction in markers off inflammation such as high sensitivity CRP and transaminase levels. This reduction in transaminase level is important as it potentially indicates a reduction in the level of interface hepatitis that is frequently seen in PBC patients. The key potential differentiating feature of seladelpar observe of course both Phase 2 studies in PBC is the absence of drug induced pruritus. Pruritus or itching is a very problematic effect of PBC affecting between 20% to 70% of patients. Pruritus can be quite severe for some patients, severe enough to disrupt the daily activity and sleep and often require medical intervention. Overall the positive results from our low dose study highlight the potential of seladelpar to offer improved efficacy and better tolerability as a differentiated second line treatment in patient with PBC. Our plan in 2018 is to initiate a Phase 3 program for seladelpar in the second half of the year. We are in discussions with both the FDA and EMA to gain agreements on the design of a pivitol Phase 3 trial that can meet the requirement of both agencies and expect to provide an update once our plan finalized. In the ongoing Phase 2 study, we continue to collect safety and efficacy data up to 12 month of dosing, a timeframe that is consistent with that’s used in the Ocaliva registration study in PBC. Last week, we learn that the new data consisting of 12 and 26 week analysis from this study will be featured as a late-breaking poster presentation at the International Liver Congress sponsored by the European Association for the Study of Liver Disease or EASL this April. We are extremely pleased that for the third year running seladelpar, PBC clinical results will be featuring the highly competitive late-breaker category at the most important in International Liver meeting. We look forward to providing you with further update on the program at EASL and in the months ahead. Sujal?

[Sujal Shah:]

I would like to shift gears now and ask Chuck to talk briefly about the data we have collected so far that support our plans to initiate our Phase 2b proof-of-concept study of seladelpar in NASH in the first half of this year. Aside from the anti-cholestatic effect of PPARdelta agonism. We know this mechanism has direct effect on inflammation and fibrosis as well as regulating metabolic processes that otherwise results in an increase in the lipotoxicity implicated in the progression of NASH. Chuck?

[Chuck McWherter:]

Thank you Sujal. As you know NASH is now a disease area in which there are currently a significant number of drug in late stage clinical trial. What is especially interesting about the PPARdelta mechanism is its multifactorial role in controlling insulin sensitivity. Glucose, lipid and sterile metabolism as well as is the fact on inflammation in fibrogenesis, I wanted to specifically mention the results of our collaboration with Jeff Barrow and his team at the Australian National University in which we study the action of seladelpar and a diabetic in dyslipidemic obese mouse model of NASH. The results were published last summer in the peer-reviewed journal Hepatology Communications. Among the many interesting conclusions, I point out the ability of seladelpar to reduce liver fat and particularly to reduce hepatic toxic lipids, because of the characteristic ballooning and inflammation that are the hallmark of NASH pathology. That coupled with the metabolic and antifibrotic activity provided the impetus for the endpoints in the design of a Phase 2b study in NASH that we're preparing to initiate. Our confidence in the potential of seladelpar is supported by the results obtained in an eight week Phase 2 study in obese mixed dyslipidemic patients published in The Journal of Clinical Endocrinology and Metabolism. This study examined doses of 50 and 100 milligrams of seladelpar both alone and in combination with atorvastatin. And seladelpar was bound to have an antiatherogenic activity as reflected in decreases in triglycerides. LDL-cholesterol as well as in other pro-atherogenic lipoprotein particles and inflammatory markers. What we intend to soon describe more details around the NASH Phase 2b study design. We’d like to mention a few of basic features. First we're targeting a dose ranging study with the placebo-controlled in a biopsy confirmed disease population. These will be noncirrhotic NASH patients with similar disease levels, fibrosis stage and background co-morbidity such as diabetes as of the news recently by other sponsors. We plan to have a primary endpoint looking at change from baseline in hepatic fat by MRI-PDFF at 12 week. And we will be looking at a key secondary outcome of NASH pathology using an end of study biopsy. We are currently expecting this to be a 52-week. What is particularly exciting is that the features of the mechanism of seladelpar seem to be closely linked to the endpoint that we're planning for this study. In particular, liver fat inflammation and lipotoxic driven hepatocyte ballooning, were all strongly affecting our mouse model and these are the focus of this study. The other characteristics of this actions on lipid lowering and insulin sensitivity are also of great interest as we look to discover the potential for seladelpar and how the long-term benefit in treating NASH. We look forward to providing you an update on the study design specifics around the middle of the year. Sujal?

[Sujal Shah:]

Thank you, Chuck. As transformational of year as we had in 2017, we believe we are well positioned for significant progress through the rest of 2018. In addition to progress with clinical development in seladelpar, last month we successfully closed on a public financing that’s generated net proceeds of $135.5 million providing us with a capital needed to complete both our planned Phase 3 PBC study and Phase 2b NASH study. With more details on our fourth quarter and year-end 2017 financial results. Let me turn the call back over to Dan.

[Dan Menold:]

Thank you. Sujal. Cash, cash equivalents and marketable securities totaled $97.2 million at December 31, 2017, compared to $17 million at December 31, 2016. The 2017 year-end cash balance does not include $5 million milestone payment we received in January 2018 under our collaboration and licensing agreement with Kowa Pharmaceuticals America, nor does it include $135.5 million in net proceeds we received from our public equity offering in February 2018. We believe that our current cash position together with deal funds received in 2018 will be sufficient to fund our current operating plan into 2021. Turning now to our operating results. We’ve recorded collaboration revenue of $5.2 million in the fourth quarter of 2017, primarily due to the achievement of a $5 million milestone under our collaboration licensing agreement, which we earned upon Kowa’s initiation of renal impairment study. No collaboration revenue was recorded in the fourth quarter of 2016. Research and development expenses were $6.7 million in the fourth quarter of 2017, as compared to $3.8 million in the fourth quarter of 2016 and consisted primarily of PBC clinical trial expenses and seladelpar drug manufacturing expenses in each period. General and administrative expenses were $2.9 million in the fourth quarter of 2017 as compared to $2.8 million in the fourth quarter of 2016. And finally, the net loss was $5 million or $0.11 per share in the fourth quarter of 2017 as compared to $7 million or $0.30 per share in the fourth quarter of 2016. Net loss was lower compared to prior year, primarily due to the recognition of collaboration revenue offset in part by higher research and development expense and a noncash mark-to-market loss on the revaluation of our warrant liability. Moving on to our operating results for the year ended December 31, 2017. We recorded collaboration revenue of $10 million, primarily due to $5 million upfront payment received from Kowa, as well as the achieved of a $5 million milestone earned upon Kowa’s initiation of our renal impairment study. No collaboration revenue was recorded in 2016. Research and development expenses were $18.9 million in 2017, as compared to $15.9 million for the prior year period and consisted primarily of PBC clinical trial expenses and seladelpar drug manufacturing expenses in each period. General and administrative expense was $12.4 million in 2017, as compared to $9.6 million for the prior year period. The increase in G&A expenses was largely due to one-time noncash stock compensation expense associated with the retirement of our former CEO in April 2017. In summary, the net loss was $27.6 million or $0.79 per share for the year ended December 31, 2017, as compared to $26.7 million or $1.14 per share for the prior year period. Net loss increased compared to prior year, primarily due to higher research and development expenses in a noncash mark-to-market loss on the revaluation of our warrant liability, offset in part by collaboration revenue. I’ll now hand the call back to Sujal. Sujal?

[Sujal Shah:]

Thank you, Dan. Let me close by leaving you with a few thoughts about our key upcoming milestones that I believe will further drive value through the rest of 2018. We are excited about the opportunity to share updated 12 and 26 week data from our ongoing Phase 2 study in PBC at the upcoming International Liver Congress in April impaired. In addition, we expect to conclude discussions with the FDA and EMA around the Phase 3 registration study for seladelpar and PBC over the coming month, which should allow us to provide you with an update on our plans before the end of the second quarter. In the second half of 2018, we will have 52 week data from the ongoing Phase 2 PBC study and should also be in a position to begin enrollment in the Phase 3 study. We will also look to share with you detailed plans around our Phase 2b study design and timelines for seladelpar and NASH as they are finalized in the coming month. We look to 2018 as another year in which we believe CymaBay can experience significant growth and advanced even closer to our goal of bringing novel treatment alternatives to patients suffering from liver diseases with significant unmet need. Thank you for joining us today. We will now be happy to take your question. Operator?

[Operator:]

At this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question is with Jay Olson with Oppenheimer and Company. Please proceed with your question.

[Jay Olson:]

Hey, guys. Congratulations on other progress and thanks for taking my question. I had a couple of them. First can you please walk us through the timeline for initiating a Phase 3 study for seladelpar and PBC, how long do you think it would take to enroll when will you expect data and then when could you potentially file and get approval?

[Sujal Shah:]

Sure, Jay. Thanks for the question. And appreciate your participation. So as we’ve discussed what’s ongoing currently a dialogue between both the EMA and the FDA are with both the EMA and the FDA that continues to progress, while we've been very pleased with the level of engagement by both agencies as you know this is a process that includes both the submission of materials, responses to questions that arise and then the meeting itself along with confirmation of the conclusion of those meetings. So as we wrap up that process in the first half of the year, the goal was actually to initiate enrollment in the Phase 3 study in the second half. When you look at general enrollment timelines for the type of study that we would anticipate, our goals was to have a single pivotal registration study in order to have registration in both the U.S. and Europe. The similar studies that have been done in this setting as we think about our study design. It typically have about a 12 month enrollment period and the endpoint itself is another 12 months from there. If you're looking at about a full two years from the beginning of enrollment to the completion of dosing in that study. So that brings us to a point of close to the end of 2020 for completion of the study and a filing sometime in 2021.

[Jay Olson:]

Okay, great. And then I guess maybe just in terms of the data that you’ve mentioned demonstrating the antiatherogenic properties of seladelpar. Can you just maybe elaborate on the importance of those properties in a NASH population?

[Sujal Shah:]

Yes, I’ll ask Chuck to give you some detailed color?

[Chuck McWherter:]

Hi, how you are doing? Yes, I think as you know that rate of cardiovascular events in the NASH population is really the highest adverse outcome in that population. But having a beneficial feature where we lower cholesterol, LDL-cholesterol, VLDL, triglycerides, pro-atherogenic model, lipoprotein particles, all features that you would think that we have a benefit in that population. And in addition, we saw reductions in three fatty acids, which are basically a characteristic that indicate a peripheral action in addition to the liver action, which we think would also be a benefit in that population, which are carrying consider amount of CVD risk.

[Jay Olson:]

Okay, thank you. That’s helpful. And then I guess maybe just a last question, can you help us think about dose finding in a Phase 2 NASH study, what sort of dose ranges do you plan to explore?

[Sujal Shah:]

Yeah, we haven't yet given any specific guidance but I can tell you just to kind of give you a bracket as you know that our PBC study, we see activity down as low as five milligram, five and 10 milligrams we think quite significant levels of activity, it's reflecting liver directed action. The other end of the spectrum, we had conducted a study in mixed dyslipidemic that I mentioned in my comment. And then we studied the activity of 50 milligrams was comparable to that seeing that 100 milligrams. So we think that range of action especially in a population that already has fatty liver disease, in other words the obese mixed dyslipidemic patient, probably makes a lot of sense in terms of the range that we’ll consider. But I think you can expect to get a little bit more granularity as we have our protocol finalized and we moved into the final stage.

[Jay Olson:]

Okay, super. Thanks for taking my question.

[Sujal Shah:]

Thank you, Jay.

[Operator:]

Our next question is with Josh Schimmer with Evercore ISI. Please proceed with your question.

[Josh Schimmer:]

Hi, thanks for the question. Just a couple, from the NASH program any plans to evaluate the combination programs with other mechanism, not something that you expect, obviously NASH?

[Chuck McWherter:]

Yes, I don't know if I can comment on the timing relative to approval. But I can say that that's something that very much on our mind as we consider what we understand around seladelpar, we think its suggesting that its the foundational mechanism, it could be a background therapy not only for all the features that I mentioned, it's really across metabolic load, as well as inflammation in fibrosis. We're very actively exploring scientific rationales for how to combine with other treatment, that treatment mechanisms that are current we know of currently in development, we benchmark those preclinically and we're engaged in research that would help us understand how they might work together preclinically, there is nothing to report yet that's an effort that will take a lot, take some time in order to mature. But I think that is important that there be a scientific basis for to finding a way forward once we understand the single agent activity of seladelpar.

[Josh Schimmer:]

Somewhat a tangential question, any plans to advance clinical program, to the clinic G-protein-coupled receptors [indiscernible] contributed towards NASH as well different indications?

[Sujal Shah:]

That’s a really good question, Josh and maybe I'll make a couple of comments here. But of course we're singularly focused where we sit today on continuing to advance seladelpar particularly in PBC where we're quite encouraged by the proof-of-content data that we've generated thus far in a path to carry forward into Phase 3 this year, equally encouraged and excited about the opportunity now diversify in NASH. With the balance sheet we have today of course we continue to think more broadly and really developing as Chuck mentioned scientific rationale for thinking through other opportunities to diversify development particularly with the GPCR program. Currently we're continuing at least from clinical development plan perspective to focus in both PBC and NASH with seladelpar. But as we continue to mature and develop more knowledge in supportive data from a preclinical perspective. I think that will be another area in which we would look forward to providing updates in the future.

[Josh Schimmer:]

Thanks very much.

[Operator:]

Our next question is with Joseph Schwartz with Leerink Partners. Please proceed with your question.

[Dae Gon:]

Hi, guys. Thanks for taking our question and congrats on the progress. This is Dae Gon dialing in for Joe. So I just wanted to clarify with regards to the NASH Phase 2 study. I thought I heard one half initiation, but also getting some study specifics around mid-2018. Can you clarify that for me?

[Sujal Shah:]

Yes, I think – of course, our goal is to actually initiate that study in the first half of this year. I think Chuck was just giving an overall framework at the time, that the protocol is finalized and we initiate the study, will be able to share with you those specific update that could certainly be before the middle of this year. The goal again is to actually initiate the study in the first half and we continue to progress well along that timeline.

[Dae Gon:]

Okay, great. Thank you very much for the clarification. And then with regards to FDA updated label for OCA and PBC. Just wanted to get your take on how the market has evolved since the updated label and how you see your Phase 3 PBC plans or even market opportunity changing as a result of the updated label?

[Sujal Shah:]

Sure. Maybe I'll start off and perhaps Pol and Chuck can jump, if there's anything that I miss. First I think its important for us to make sure and clarify that the vast majority of PBC patient either don't have hepatic impairment or have a mild degree of hepatic impairment. The label changes specifically for Ocaliva are related to the appropriate dosing regimen and potential risks for patients with moderate-to-severe hepatic impairment, the so-called Child-Pugh B or C cirrhotic population. That's not a broad population that targeted and clinical development in Phase 2 or Phase 3 for Ocaliva. As we think about our Phase 3 registration program for the broader population, very similar study design to what intercept conducted for Ocaliva is what our target is for that broadest population, I think the disease is relatively, although the spectrum relatively consistent across rare population versus the more severe population. So the endpoint that have been used and the measures that have been used that correlate towards the prediction of transplant-free survival and real outcome is very specific across that population. I think the label update changes highlight a couple of things for us and really anyone now thinking about development in PBC. And that’s too the importance of gaining better understanding as to not only the safety profile but the potential efficacy profile for patients with moderate-to-severe hepatic impairment as development continues, rather than doing so through PK modeling or doing so after registration. I think it's a small population but a more proactive understanding of the overall benefit risk in that population. I think warrants, a different approach if you will to better understanding dosing in that population and again with the overall benefit risk would be.

[Dae Gon:]

Okay, great. Thanks very much my last question is with regards to your planned Phase 2 trial. I mean, obviously we can expect more clarity on the study design, what it emerges but I guess given that there are a number of large scale trials that are ongoing already and the space seems to be getting more competitive by the day. What are your plans to expediting enrolment given the competition and also you mentioned an endpoint will be at this point, MRI-PDFF but will you also be taking a baseline never biopsy as well as an endpoint never biopsy to supplement the MRI-PDFF. Thanks very much.

[Pol Boudes:]

Hi, it’s Pol. So I will answer the last part of the question the answer for biopsy is here, we want to have a baseline and then treatment biopsy and for the other part which is the – if you want the competitive field to recruit clinical trials, I think one of the good thing for us is that we are very well aware of this situation. And we will address it. I mean if you think about this situation, this is not that different than I think one of our characteristic at the company that we are – they send it through equipment issues. And in general we do all recruitment according to our plans, but we are working very much to do the kind of things and to plan well in advance. So for NASH its going to be the very same thing for us. We look very much as the environment and we are going to one of the things we’re going to do is, we’re probably very well aware for the name of [indiscernible] know-how in terms of unveiling NASH study if somebody was extremely well organize and very enthusiastic. So we are very active at the moment to – if you want to prevent the problem of being that midways in enrollment. So we are working very odd on that.

[Dae Gon:]

Awesome. Thanks very much for taking our question and congrats on the progress.

[Sujal Shah:]

Thank you.

[Operator:]

Our next question is with Yasmeen Rahimi with Roth Capital Partners. Please proceed with your question.

[Yasmeen Rahimi:]

Thank you so much for taking my question. Two questions. Question is tailored on your PBC program. Intercept Phase 3 took about a year, but at that time there was not many studies ongoing. Given the fact that several Phase 2 studies in PBC are enrolling as well as patients seeing on OCA to still anticipate that enrollment would take it here do you anticipated including patients on OCA to expedite or actually include patients that are on OCA have a wash out period to ensure rapid enrollment. And then I have one question on NASH.

[Sujal Shah:]

Sure, I’ll answer that. Yes, thanks for the question. You point out a very important aspect of development in PBC today, as opposed to when Intercept was moving forward in Phase 3 with Ocaliva. So certainly there is it more competitive. This is an orphan disease as Paul mentioned, we’ve been working in PBC now for two plus years. And the expertise the knowledge gained here internally and the commitment here internally to liaise with real experts in the field of thought leaders, investigators in the field, it really is a process that we’re engaged in with very heavily. So certainly it’s more competitive. We think that the advantages for seeing that they clearly have related to the fact that we have some real meaningful proof of concept data that suggests the potential to really improve therapy and treatment alternatives for patients. The ongoing Phase 2 study continues to generate a significant amount of interest from not only investigators, but also patients. We mentioned in January of this year that we had initiated and began enrollment in the long-term safety extension study and protocol, that these patients from the existing Phase 2 and eventually from the Phase 3 study after 12 months of enrollment, really important criteria for patients who understand that as they’re benefiting from therapy, they’ll continue to have the opportunity to receive treatment uninterrupted. All of these things I think are critically important as highlights of our commitment to the patient population and important for us, as we think about continuing to efficiently enroll the Phase 3 study. Obviously, all enrollment in orphan disease and rare disease is presented challenges, but we feel very good about where we sit today relative to the opportunity to really improve patient care and enroll as efficiently as we can.

[Yasmeen Rahimi:]

Thank you.

[Sujal Shah:]

But the other part of the question Yasmeen around, whether we'd allowed patients and who had experience Ocaliva.

[Yasmeen Rahimi:]

That's correct.

[Sujal Shah:]

Yes. So that's right. I think the – you've highlighted I think in part of that question appropriately that there have to be inappropriate washout period for any patient that had been on Ocaliva treatment prior. And of course, the enrollment criteria relative to the AP levels and other parameters would have to be met even both that washout period.

[Yasmeen Rahimi:]

Great, thank you. And then one more question on the NASH. So hepatocyte ballooning, we announced the toughest part ahead, because there's a lot of their ability when we read in the histology. And your animal model the most, I mean hepatocyte ballooning with completely absent and this would probably the most compelling data I've ever seen in any animal model with any other therapeutic agent and specifically with other than PPAR can you provide us some mechanistic insight, why peer PPARdelta could have such a remarkable effect. And therefore could have really potentially half time trans ability to what we would be seeing in humans.

[Sujal Shah:]

Yes. I think I will just caveat my comment to say that it, I would characterize them as a hypothesis. Not necessarily you would take further investigation to confirm it. But I think the key feature that we thought is that – thesis that are very pro-inflammatory and insight for example, activation of the NLRP3 inflammasome, which has been playing to stress induction of pathways ER stress. And then apoptosis are potentially strongly attenuated. So we know that we strongly – I would say almost without maybe not exaggerating profoundly reduced free cholesterol level, free cholesterol is extremely pro-inflammatory. As well as level of the palmitate ceramide other agents that are known to really drive ER stress. So I thinking is that at least in the mouse, in this model, which has the strong feature of lipotoxic driven necroinflammation that the ability of delta to really strongly reduce free cholesterol. That is the asset form or the non-esterified form, as well as the Lipotoxic. This is maybe the reason why we had such a strong effect on ballooning.

[Yasmeen Rahimi:]

Great. Thank you so much and congratulations team for being selected for EASL late breaker what a competitive year this year. So we’re very excited for you.

[Sujal Shah:]

Thank you, Yasmeen.

[Operator:]

[Operator Instructions] Our next question is with Ed Tenthoff with Piper Jaffray. Please proceed with your question.

[Ed Tenthoff:]

Great, thank you very much. Let me echo my congratulations on a great year. And I’ve just been dig a little bit more into what we should expect at EASL, I apologize if you answered, because I’m juggling between calls. But what is the update that we should expect in Paris? Thanks guys.

[Sujal Shah:]

Yes. So, thanks for the question Ted. So we’ll obviously excited to have the opportunity at EASL for the third year in a row to have a key presentation at one of the key liver meeting. As we’ve discussed previously and Pol talked a little bit about this we’ll have an update more patients through 12 weeks of dosing as well as patients through 26 weeks of dosing at 5 and 10 milligram. We do have experienced now with patients on 2 milligrams. And just to remind you we initiated a 2 milligram dose after the interim read that was announced last July, 12 weeks of dosing at 5 and 10, given the robustness of the response that each of those doses in anticipation of the either of the agencies asking us if we had explored a minimally effective dose. The hypothesis as we less of a response in 2 milligrams but that’ll be another update will be able to provide with the data set. At EASL, we’ll obviously be looking at really the key parameters that we’ve been following alkaline phosphatase reduction looking at responder rates relative to alkaline phosphatase both below 1.6 times, 1.7 times, the upper limit of normal as well as the normal range. And as we know from the data that was shared at AASLD another parameter that we’re following that impacts PBC patient considerably is pruritus. And so we continue to collect pruritus data and we’ll give an update around pruritus at EASL as well. And finally just an overall update on the safety experience will be part of that presentation. I believe the abstract for EASL is published on March 28, according to their website. So that will be a time frame at which that information at least the high level will be available in advance of the Congress.

[Ed Tenthoff:]

That’s really helpful. I’ll too look for that data. Thanks.

[Sujal Shah:]

Thank you, Ted. Ladies and gentlemen, we have concluded our question-and-answer session. And I would like to turn the call over to Sujal Shah for closing remarks.

[Sujal Shah:]

Thank you, operator. And I’d like to thank you all again for joining us on the call today. The energy and the commitment by everyone here at the company has never been greater. And I thank everyone here for their tremendous work and I think it goes without saying that we are grateful for the support of the investigators and of course the patients involved in our studies. As we’ve discussed today, we have many update which we look forward to sharing with you in the coming months and through the rest of 2018. Thank you.

[Operator:]

Ladies and gentlemen, this concludes our teleconference. You may disconnect your lines at this time. Thank you for your participation.