CymaBay Therapeutics Inc (CBAY) 2017 Q4 法說會逐字稿

Good day, ladies and gentleman, and welcome to the CymaBay Full Year 2017 Financial Results 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 of CymaBay's website at www.cymabay.com.

I would now like to turn the call over to doctor -- to Mr. Dan Menold, Vice President, Finance at CymaBay. Mr. Menold, please proceed.

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 our -- and review upcoming milestones. I'll then summarize the company's financial results. After our prepared remarks, we'll 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, 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 forecast 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'd like to turn the call over to Sujal.

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 have taken key steps to align our pipeline and development activities with that mission.

Early in 2017, we announced the out-licensing of our Phase III-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 PBC and nonalcoholic steatohepatitis or NASH.

Interim data from our ongoing phase II study of seladelpar in PBC was featured in a late-breaking presentation given by a 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 have 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 III 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 IIb study of seladelpar in NASH.

A key step in the repositioning of CymaBay as a liver-focused company was to out-license the U.S. right to develop and commercialize arhalofenate to Kowa Pharmaceuticals America. We are pleased with Kowa's continued commitment to advance the development of 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 III development.

Data from this study have the potential to inform enrollment criteria for a Phase III trial that could further differentiate arhalofenate from currently available treatment.

Now let us focus on update for seladelpar in both PBC and NASH before closing with a review of our financial results.

Seladelpar is a highly potent and selective agonist of the nuclear receptor peroxisome proliferator-activated receptor delta or PPAR delta. 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 acid. The decreased synthesis results in part from down regulation of the gene for CYP7A1, which encodes the rate-limiting enzyme responsible for the biosynthesis of bile acid.

Seladelpar also decreases the synthesis of cholesterol as well as its dietary absorption. Together, these effects decrease the amount of cholesterol available as a substrate for bile acid synthesis, thereby enhancing its effect on CYP7A1 in reducing total bile acid pool.

These seladelpar effects together with its antiinflammatory activity have been demonstrated clinically and are a potential benefit for the treatment of PBC.

Over the last 2 years, we have collected data from 2 Phase II studies in patients with PBC, examining a broad range of doses from 2 to 200 milligrams daily, and with treatment duration for some patients now exceeding 1 year. This has allowed us to establish not only doses that demonstrate the best benefit/risk profile, but also mechanistic insight into the potential actions and benefits of seladelpar.

In August 2017, results from the first study were published in the prestigious peer-review journal 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 III program.

Our ongoing Phase II study of seladelpar in PBC was a cornerstone of the progress we made during 2017.

I'd like to hand the call over to Pol to provide a summary of results shared to date and upcoming activities and updates in the program. Pol?

Thank you, Sujal. As a reminder, our second Phase II study in PBC is an open-label, dose-ranging study evaluating the safety and efficacy of lower doses of seladelpar in patients with PBC. These patients have an inadequate response to all our entire run to the first-line therapy ursodeoxycholic acid. Patients who will complete this study can enroll in a long-term extension study after receiving 1 year of seladelpar treatment.

Our Phase II study is actively recruiting patients as we continue to build our long-term safety database in parallel with our plans to initiate phase III 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 benefit we can bring to patient is the most important objective of CymaBay.

To recap the interim Phase II results announced at the AASLD meeting last year, in the 5- and 10-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 endpoint recently used for the conditional approval of Ocaliva. Through just 12 weeks of dosing, we observed 45% and 82% of patients at 5 or 10 milligram, respectively, achieved an AP level below 1.67x the upper limit of normal, which was the regulatory threshold for responder analysis for the approval of Ocaliva.

Furthermore, 18% and 45% of patient on the 5- and 10-milligram group, respectively, completely normalized their AP level. Additional highlights of the interim data, including reductions in other marker of cholestasis, including Gamma GT and bilirubin, and reductions in markers of inflammation such as high-sensitivity CRP and transaminase level. 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 patient.

A key potential differentiating feature of seladelpar observed across both Phase II studies in PBC is the absence of drug-induced pruritus. Pruritus or itching is a very problematic aspect of PBC, affecting between 20% to 70% of patients. Pruritus can be quite severe for some patients, severe enough to disrupt their daily activity and sleep, and often requires medical intervention.

Overall, the positive results from our low-dose study highlights 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 III 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 pivotal Phase III trial that can meet the requirements of both agencies and expect to provide an update once our plan are finalized.

In the ongoing Phase II study, we continue to collect safety and efficacy data up to 12 months of dosing, a time frame that is consistent with that used in the Ocaliva registration study in PBC. Last week, we learned 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 hosted 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 featured in the highly competitive late-breaker category at the most important International Liver Meeting. We look forward to providing you with further update on the program at EASL and in the months ahead. Sujal?

Thank you, Pol. I'd 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 a Phase IIb proof-of-concept study of seladelpar in NASH in the first half of this year.

Aside from the anti-cholestatic effect of PPAR-delta agonism, we know this mechanism has direct effect on inflammation and fibrosis as well as regulating metabolic processes that otherwise result in an increase in the lipotoxicity implicated in the progression of NASH. Chuck?

Thank you, Sujal. As you know, NASH is now a disease area, in which there are currently a significant number of drugs in late-stage clinical trials. What is especially interesting about the PPAR-delta mechanism is its multifactorial role in controlling insulin sensitivity, glucose, lipid and sterile metabolism as well as its effect on inflammation and fibrogenesis. I wanted to specifically mention the results of our collaboration with Geoff Farrell and his team at the Australian National University, in which we studied the action of seladelpar in a diabetic and dyslipidemic obese mouse model of NASH.

The results were published last summer in the peer-review 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 that cause the characteristic ballooning and inflammation that are the hallmark of NASH pathology. That, coupled with the metabolic and anti-fibrotic activity, provided the impetus for the endpoints in the design of the Phase IIb study in NASH that we're preparing to initiate.

Our confidence in the potential of seladelpar is supported by the results obtained in an 8-week Phase II study in obese mixed dyslipidemic patients published in The Journal of Clinical Endocrinology & Metabolism. This study examined doses of 50 and 100 milligrams of seladelpar, both alone and in combination with atorvastatin. And seladelpar was found to have an anti-atherogenic activity as reflected in decreases in triglycerides, LDL cholesterol as well as in other pro-atherogenic lipoprotein particles and inflammatory markers.

While we intend to soon describe more details around the NASH Phase IIb study design, we'd like to mention a few of the basic features.

First, we're targeting a dose-ranging study with the placebo control in a biopsy-confirmed disease population. These will be non-cirrhotic NASH patients with similar disease level, fibrosis stage and background comorbidity 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 weeks. And we'll be looking at a key secondary outcome of NASH pathology using an end-of-study biopsy. We are currently expecting this to be in 52 weeks.

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 the study. The other characteristics of this actions on lipid lowering and insulin sensitivity are also a great interest as we look to discover the potential for seladelpar to have a 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?

Thank you, Chuck. As transformational of a 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 of seladelpar, last month we successfully closed on a public financing that's generated net proceeds of $135.5 million, providing us with the capital needed to complete both our planned Phase III PBC study and Phase IIb NASH study.

With more details on our fourth quarter and year-end 2017 financial results, let me turn the call back over to Dan.

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 a $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 these funds received in 2018 will be sufficient to fund our current operating plan into 2021.

Turning now to our operating results. We 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 and licensing agreement, which we earned upon Kowa's initiation of a 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, 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 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 achievement of a $5 million milestone earned upon Kowa's initiation of a 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 a onetime noncash stock compensation expense associated with the retirement of our former CEO in April of 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 and 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?

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 II study in PBC at the upcoming International Liver Congress in April in Paris. In addition, we expect to conclude discussions with the FDA and EMA around the Phase III registration study for seladelpar in PBC over the coming months, 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 II PBC study and should also be in a position to begin enrollment in the Phase III study. We will also look to share with you detailed plans around our Phase IIb study design and time lines for seladelpar and NASH as they are finalized in the coming months.

We look to 2018 as another year, in which we believe CymaBay can experience significant growth and advance even closer to our goal of bringing novel treatment alternatives to patients suffering from liver diseases with significant unmet needs.

Thank you for joining us today. We will now be happy to take your questions. Operator?

(Operator Instructions) Our first question is with Jay Olson with Oppenheimer & Co.

I had a couple of them. First, can you please walk us through the timeline for initiating a Phase III study for seladelpar in PBC? How long do you think it would take to enroll? When would you expect data? And then, when could you potentially file and get approval?

Sure, Jay, thanks for the question, and I appreciate your participation. So as we've discussed, with ongoing currently dialogue between both the EMA and the FDA or 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 III study in the second half. When you look at general enrollment time lines for the type of study that we would anticipate, our goal is to have a single pivotal registration study in order to have registration in both the U.S. and Europe. So similar studies that have been done in this setting as we think about our study design, they typically have about a 12-month enrollment period and the endpoint itself is another 12 months from there. So you're looking at about a full 2 years from the beginning of enrollment to the completion of dosing in that study. So it brings us to a point of close to the end of 2020 for completion of the study and a filing some time in 2021.

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

Yes, I'll ask Chuck to give you some detailed color.

Yes, I think -- as you know that the rate of cardiovascular events in the NASH population is really the highest adverse outcome in that population, so having a beneficial feature where we lower cholesterol -- LDL cholesterol, DLDL, triglycerides, pro-atherogenic small dense lipoprotein particles, all features that you would think that would have a benefit in that population. And in addition, we saw reductions in free 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 considerable amount of CVD risk.

Okay. That's helpful. And then, I guess, maybe just a last question. Can you help us think about dose finding in a Phase II NASH study? What sort of dose ranges do you plan to explore?

Yes. We haven't yet given any specific guidance, but I can tell you just to kind of give you a bracket. As you know, in our PBC study, we see activity down as low as 5 milligrams. At 5 and 10 milligrams, we think quite significant levels of activity. It's reflecting the liver-directed action. At the other end of the spectrum, we had conducted a study in mixed dyslipidemics that I mentioned in my comments, and there we studied 50 -- the activity at 50 milligrams was comparable to that being at 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 dyslipidemics patients, 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 stages.

Our next question is with Josh Schimmer with Evercore ISI.

Just a couple of remaining. On the NASH program, any plans to evaluate combination programs with other mechanisms or is that something that you expect we'll have to wait until, obviously, NASH approval.

Yes, I don't know if I can comment on the timing relative to approval. But I can say that that's something that's very much on our mind as we consider what we understand around seladelpar. We think it's suggesting that it's a 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 and fibrosis. We're very actively exploring scientific rationales for how to combine with other treatment mechanisms that are current -- we know are currently in development. We benchmark those preclinically and we're engaged in research that would help us understand how they might work together preclinically. 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 scientific basis for defining the way forward once we understand the single-agent activity of seladelpar.

A somewhat related tangential question. Any plans to advancing the preclinical programs to the clinic, the G-protein-coupled receptor (inaudible) program or the (inaudible) program, and may be targeted towards NASH as well in different indications?

Yes. So it's a really good questions, Josh, and maybe I'll make a couple of comments here. So 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-concept data that we generated thus far in a path to carry forward into Phase III this year. Equally encouraged and excited about the opportunity to 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 and supportive data from a preclinical perspective, I think that'll be another area in which we would look forward to providing updates in the future.

Our next question is from Joseph Schwartz with Leerink Partners.

This is Dae Gon dialing in for Joe. So I just wanted to clarify with regards to the NASH Phase II study. I thought I heard one half initiation, but also getting some study specifics around mid-2018. Can you clarify that for me?

Yes, I think -- so 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 that time, but the protocol is finalized and we initiate the study, we'll be able to share with you those specific updates 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 time line.

Okay, great. 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 III PBC plans or even market opportunity changing as a result of the updated label?

Sure. Maybe I'll start off and, perhaps, Pol and Chuck can jump in if there's anything that I miss. First, I think it's important for us to make sure and clarify that the vast majority of PBC patients 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 risk 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's targeted in clinical development in Phase II or Phase III for Ocaliva. As we think about our Phase III 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 it's a spectrum relatively consistent across that population versus the more severe population, and so the endpoints that have been used and the measures that have been used that correlate towards a 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 to 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, what the overall benefit/risk would be.

Okay, great. My last question is with regards to your planned Phase II trial. I mean, obviously, we can expect more clarity on the study design when 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 enrollment given the competition? And also, you mentioned an endpoint will be at this point MRI-PDFF PDFF, but will you also be taking a baseline liver biopsy as well as an endpoint liver biopsy to supplement the MRI-PDFF?

It's Pol. So I will answer the last part of the question. The answer for biopsy is yes. We want to have a baseline and (inaudible) 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 the situation and we will address it. I mean, if you think about it, the situation with PBC is not that different and I think one of our characteristic, as a company, is that we are very sensitive to recruitment issues. I mean, in general, we do all recruitment according to our plans, but we are working very much to do these kind of things and to plan well in advance. So for NASH, it's going to be the very same thing for us. We look very much at the environment and we are going -- one of the things we're going to do is you're probably very well aware of the name of [Stefan Erickson] who is a key investigator in this field and [Stefan] I think, has special know-how in terms of enrolling NASH study, is somebody who's extremely well organized and very enthusiastic. So we are very active at the moment to -- if you want to present the problem of being stuck midways in enrollment. So we are working very hard on that.

Our next question is with Yasmeen Rahimi with Roth Capital Partners.

Two questions. Question one is tailored on your PBC program. Intercept Phase III took about a year, but at that time there was not many studies ongoing. So given the fact that several Phase II studies in PBC are enrolling as well as patients being on OCA do still anticipate that enrollment would take a year. Do you anticipate excluding patients on OCA to expedite or actually include patients that are on OCA and have a washout period to ensure rapid enrollment? And then I have one question on NASH.

Sure. I'll answer that. Yes, thanks for the question. You pointed out a very important aspect of development in PBC today as opposed to when Intercept was moving forward in Phase III with Ocaliva. So certainly, there's -- it's more competitive. This is an orphan disease. As Pol mentioned, we have been working in PBC now for 2 plus years. And the expertise, the knowledge gained here internally and the commitment here internally to liaise with real experts in the field, 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 CymaBay 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 II 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 feeds patients from the existing Phase II and eventually from the Phase III study after 12 months of enrollment. A 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 III study. Obviously, all enrollment in orphan disease and rare diseases present these 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. I think the other part of the question, Yasmeen, around whether we allow patients in who had experienced Ocaliva.

That's correct.

Yes, so that's right. I think you highlighted I think in part of that question appropriately that there have to be an appropriate 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 post that washout period.

Great. And then one more question on the NASH. So hepatocyte ballooning we know is the toughest part ahead because if there's a lot of variability when we read in histology. In your animal model, the most -- I mean, hepatocyte ballooning was completely absent and this is probably the most compelling data I've ever seen in any animal model with any other therapeutic agent, and specifically, with other PPARs. So can you provide us some mechanistic insight why a peer PPAR delta could have such a remarkable effect, and therefore, could have really potentially half [transability] to what we would be seeing in humans?

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 saw is that species that are very pro-inflammatory and insight, for example, activation of the NLRP3 inflammasome, which has been linked 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 levels. Free cholesterol is extremely pro-inflammatory as well as levels of palmitoyl ceramide, other agents that are known to really drive ER stress. So our thinking is that at least in the mouse, in this model which has this strong feature of lipotoxic-driven necroinflammation that the ability of delta to really strongly reduce free cholesterol, that is the acid form, the nonesterified form as well as these lipotoxic species maybe the reason why we had such a strong effect on ballooning.

And congratulations team from being selected for EASL. It's like what a competitive year this year is. So we're very excited for you.

Our next question is with Ed Tenthoff with Piper Jaffray.

I just wanted to dig a little bit more into what we should expect at EASL? I apologize if you answered this. I'm juggling between calls. But what is the updates that we should expect in Paris?

Yes, sure. Thanks for the question, Ted. So we are 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 Meetings. As we've discussed previously and Pol talked a little bit about this, we'll have an update on 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 the 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 at each of those doses and -- in anticipation of either of the agencies asking us if we had explored a minimally effective dose. So the hypothesis is, we'd see less of a response at 2 milligrams, but that will be another update we'll be able to provide with the dataset at EASL. We'll obviously be looking at really the key parameters that we have been following, alkaline phosphatase reduction, looking at responder rates relative to alkaline phosphatase both below 1.67x the upper limit of normal as well as the normal range. And as you know, from the data that was shared at AASLD, another parameter that we're following that impacts PBC patients 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 book for EASL is published on March 28, according to their website. So there'll be a time frame at which that information, at least at the high level, will be available in advance of the Congress.

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

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 updates, which we look forward to sharing with you in the coming months and through the rest of 2018. Thank you.

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