DURECT Corp (DRRX) 2018 Q4 法說會逐字稿

Greetings, and welcome to the DURECT Corporation Fourth Quarter and Full Year 2018 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mike Arenberg, Chief Financial Officer for DURECT Corporation.

Thank you.

You may begin.

Good afternoon, and welcome to our fourth quarter 2018 earnings conference call.

This is Mike Arenberg, Chief Financial Officer of DURECT Corporation.

I will provide a brief review of our financial results and then Jim Brown, our President and CEO, will provide a business update.

We will then open up the call for a question-and-answer session.

Before beginning, I would like to remind you of our safe harbor statement.

During the course of this call, we may make forward-looking statements regarding DURECT's products in development; expected product benefits; our development plans; future clinical trials; or projected financial results.

These forward-looking statements involve risks and uncertainties that can cause actual results to differ materially from those in such forward-looking statements.

Further information regarding these and other risks can be found in our SEC filings, including our 10-K under the heading of Risk Factors.

Let me now turn to our financials.

Total revenues were $3.6 million in the fourth quarter of 2018 compared to $19.5 million in the fourth quarter of 2017.

The Q4 2017 figure included $15.4 million in deferred revenue from the $20 million upfront fee associated with our Sandoz agreement.

If one excludes all deferred revenue from upfront fees already received by the company, then revenue from our R&D collaborations was $775,000 in Q4 2018 compared to $841,000 in Q4 2017.

Product revenue, largely from the sale of ALZET pumps and LACTEL polymers, was $2.9 million in Q4 2018 compared to $3.3 million in Q4 2017.

For the year as a whole, product revenues from ALZET and LACTEL were $10.4 million as compared to $13 million in 2017, which was a record year.

The gross margin for the combined ALZET and LACTEL product lines was 62% in Q4 2018.

These product lines continue to be strongly cash flow positive.

R&D expense was $5.9 million in Q4 2018 compared to $6.6 million in Q4 2017, primarily due to lower R&D costs associated with POSIMIR, partially offset by higher costs for DUR-928.

SG&A expenses were $3.5 million in Q4 2018 as compared to $3.3 million in Q4 2017.

At December 31, 2018, we had cash and investments of $34.5 million compared to $36.9 million at December 31, 2017.

With that, thanks again for joining our call.

And I will now turn the call over to Jim to discuss nonfinancial matters in further detail.

Thank you, Mike, and good afternoon, everyone.

I'll begin with DUR-928, the lead product candidate in our epigenetic regulator program.

We're developing DUR-928 for 3 different indications, nonalcoholic steatohepatitis, or NASH; alcoholic hepatitis, or AH, and psoriasis.

I'll begin today with our alcoholic hepatitis indication for DUR-928.

Today, we announced we have decided to continue dosing in our DUR-928 Phase IIa AH trial and that we are advancing the trial into the next cohort in order to dose severe alcoholic hepatitis patients with 928 at the 90-milligram level.

We have now completed dosing at the 30-milligram level in both moderate and severe cohorts.

And as we had hoped, the enrollment rate in the severe patients was much more rapid than it had been in the moderate patients.

We are pleased and encouraged by the changes observed in both moderate and severe alcoholic hepatitis patients in certain blood chemistries and biomarkers such as bilirubin as well as prognostic indicator scores, MELD and Lille, which are used in clinical practice and are correlated with patient survival rates.

We believe these changes in markers and prognosis scores are very encouraging and are excited to see what happens at the 90-milligram dose in the next cohort.

In addition to the encouraging data from the 30-milligram cohort and the relatively rapid enrollment rate for the severe patients, we made the decision to advance to the next dosing level in severe alcoholic hepatitis patients based on the recommendation of the Dose Escalation Committee and because of the strong encouragement we received from several key expert advisers and the principal investigators treating the alcoholic hepatitis patients in this study.

In parallel, we are continuing to recruit patients in the moderate AH 90-milligram cohort, and we are working with Dr. McClain at the University of Louisville on enabling initiation of an NIH-funded DUR-928 AH trial.

As a quick reminder of the AH study protocol, the study involves both safety and pharmacokinetics of IV-infused DUR-928 in ascending dose cohorts in moderate and severe AH patients.

The moderate patients have MELD scores of between 11 and 20, and the severe have MELD scores between 21 and 30.

Each dose cohort is targeting for AH patients.

The protocol was amended late last year to allow us to be in dosing in severe AH patients in parallel with the moderate patients in hope of accelerating enrollment.

This strategy has worked well as we were able to enroll the severe alcoholic hepatitis 30-milligram cohort much more rapidly than the moderate cohort.

MELD and Lille scores are prognostic scoring methods used in clinical practice and correlate with patient survival rates.

MELD, or Model of End-Stage Liver Disease, score assesses the potential -- the patient's survival rate and is used to stage patients perfect for potential liver transplant.

The Lille model score is calculated on day 7 after treatment and has been used to predict the patient's survival rate for 6 months following initiation of treatment.

It was originally developed to understand an alcoholic hepatitis patient's response to steroid treatment.

This study is being conducted as a safety and pharmacokinetic trial, with clinical chemistry, prognosis scores, both MELD and Lille, and biomarkers being collected as part of the evaluation.

When we review these data, it's important to remember that they represent a smaller number of patients receiving the first dose of DUR-928 in a dose escalation study and the study is not placebo-controlled.

With regard to safety and pharmacokinetics, as mentioned, the DEC has reviewed the safety and PK data from the 30-milligram cohort.

And as the safety data continue to look clean, they have approved moving into the 90-milligram dose in the severe AH patients.

Patients in this study so far have MELD scores ranging between 15 to 28.

To put that in perspective, if you have a MELD score of 15, that would mean you have about a 13% 90-day potential mortality rate.

And at a MELD score of 28, it would be a 54% 90-day mortality rate.

And the average MELD score between our 8 patients in this study was, I think, about 21.7, something like that.

We are pleased and encouraged by the changes observed at both moderate and severe AH patients that are treated with DUR-928.

We're pleased with regard to certain clinical chemistry and biomarker changes, including reductions in bilirubin as well as MELD scores and the Lille scores, which are important prognostic indicator scores used in clinical practice and correlate with patient survival rates.

Lower Lille scores are correlated with better survival rates for alcoholic hepatitis patients.

These changes in important biomarkers and scores are consistent with responses that we have observed in a number of preclinical animal models with DUR-928 as well as the previously observed data from NASH and chronic kidney disease patients in our Phase Ib studies.

Alcoholic liver disease, or ALD, is a syndrome characterized by progressive inflammatory liver injury associated with long-term heavy intake of alcohol and involves a spectrum that ranges from mild to severe with regard to life-threatening injury.

Alcoholic hepatitis is an acute inflammatory form of ALD for which there are no effective therapies available.

The prevalence of AH is believed to be between 10% to 30% of heavy drinkers.

There were over 320,000 hospitalizations related to AH in 2010, and the hospitalization cost amounted to nearly $50,000 per patient.

AH is a disease with a significant unmet need.

Steroids or pentoxifylline, the historic standards of care, failed to show a significant reduction in mortality in AH patients in reported study, the STOPAH trial.

Moreover, prednisolone in the study was associated with an increased risk of infection.

The data generated in the AH patients in our trials -- in this trial today are encouraging, but one must consider the small number of patients and lack of placebo control.

If DUR-928 can reduce bilirubin and other important chemistry -- blood chemistry clinical markers and biomarkers and improve prognostic indicator scores like MELD and Lille in the future placebo-controlled clinical trials, it would have a relatively rapid path to market and play an important role in the treatment of alcoholic hepatitis.

We will continue to work with Dr. McClain from the University of Louisville to enable him to conduct a parallel AH trial, which would be funded by the NIH and other grants.

Meanwhile, we are excited here at DURECT to be advancing our study into the 90-milligram severe AH patient dose cohort.

Next, I want to move to the NASH program for DUR-928.

At the beginning of January this year, we announced our strategy to accelerate the DUR-928 program in NASH.

Today, I am pleased to announce that this program is on track to begin enrolling in the 28-day oral dosing study in NASH patients this quarter.

This study will be an open-label Phase Ib trial to evaluate safety, pharmacokinetics and signals of biological activity of 928 in patients with NASH.

It will be conducted in the United States at multiple sites.

Patients will receive oral 928 daily for 28 consecutive days.

This study will include 60 NASH patients and 3 dose cohorts of DUR-928.

We expect to announce initial data from this trial in the second half of this year.

Nonalcoholic fatty liver disease, or NAFLD, is one of the most common forms of chronic liver disease in both children and adults.

It is estimated it affects between 20% to 30% of adults and 10% of children in the United States.

Nonalcoholic steatohepatitis, or NASH, is a more severe and progressive form of NAFLD.

And it's one of the most common chronic liver diseases in the world, with an estimated prevalence of more than 10% of adults in the United States, Europe, Japan and other developed countries.

There are no drugs currently approved for NAFLD or NASH.

Moreover, alcoholic fatty liver disease, or AFLD, and its more advanced stage, alcoholic steatohepatitis, or ASH, develops in approximately 90% of individuals who drink more than 6 alcoholic drinks a day, and may occur in individuals who drink less.

It's a major contributor to the global burden of liver cirrhosis.

As a reminder, we observed significant reductions of bilirubin, IL-18, C-reactive protein, full-length and cleaved CK-18s in a single dose Phase Ib study in NASH patients given oral DUR-928.

Further analysis of data from this study will be presented in a poster at the NASH Summit Meeting to be held in Boston later -- or excuse me, this April.

And now today, we are reporting similar responses, albeit with small patient numbers, in alcoholic hepatitis patients treated with DUR-928.

NASH is a complicated chronic disease state, where there is dysregulation of metabolism, inflammation, autophagy and cell survival.

DUR-928 works through epigenetic regulation of a number of nuclear receptors that in turn modulate hundreds of genes.

An example of one such gene is inhibition of ACC1, the rate-limiting enzyme responsible for synthesis of fatty acids in our body.

Inhibition of ACC1 has demonstrated reduction of hepatic lipids, that is liver fat, in clinical trials.

DUR-928 also down-regulates cholesterol synthesis and triglyceride synthesis, PCSK9, MTP and others.

Regarding inflammation, DUR-928 down-regulates IL-1, IL-18, TNF-alpha, C-reactive protein, COX-2 and others.

DUR-928 also up-regulates autophagy and improves cell survival.

We look forward to generating clinical data in 2019 that could demonstrate the potential of DUR-928 in NASH.

Now to the psoriasis program for DUR-928.

In January, we announced our plans to complete a double-blind placebo-controlled Phase IIa proof-of-concept trial with topical DUR-928 in patients with mild to moderate plaque psoriasis.

The start of this trial is on track with our prior guidance to begin dosing this quarter and to announce top line data in the second half of 2019.

In our previously completed exploratory Phase Ib trial, we observed promising activity in psoriatic patients who received intralesional injections of DUR-928.

In this Phase IIa proof-of-concept trial, 20 patients will be treated with topical DUR-928.

Each patient will serve as their own control in this double-blind study by dosing a plaque on each arm, one with active and one with placebo.

We look forward to these patients being dosed beginning this quarter.

Psoriasis is an immune-mediated condition that causes the body to make new skin cells in days rather than weeks.

In the United States, there are estimated to be about 150,000 new cases of psoriasis every year.

And it affects more than 8 million Americans.

According to the International Federation of Psoriasis Associations, nearly 3% of the world's population has some form of psoriasis and represents about 125 million people.

Psoriasis causes itchiness and irritation and can be painful.

There is no cure for psoriasis, but treatment can ease symptoms.

Approximately 80% of patients with psoriasis have localized disease.

Topical agents remain the mainstay of localized psoriatic treatments.

Other inflammatory skin disorders such as atopic dermatitis, which affects approximately 32 million Americans, represents significant unmet medical need, most currently are treated topically.

They typically use the topical agents as first-line therapy, either to slow down the excessive skin cell proliferation or to reduce inflammation.

We look forward to the potential for positive proof-of-concept data in psoriasis in the second half of this year.

Next, I will discuss Indivior's PERSERIS product.

On January -- or excuse me, on February 27, Indivior confirmed that they had launched PERSERIS for the treatment of schizophrenia in adults in the United States with a 50-person sales force.

PERSERIS is the first and only subcutaneous once-monthly risperidone-containing long-acting injectable available in the United States.

Initial peak levels of risperidone occur within 4 to 6 hours of dosing, and as a result, supplemental oral risperidone is not recommended.

Indivior has provided guidance for peak year net revenue for PERSERIS of $200 million to $300 million.

The U.S. sales of long-acting injectables were in excess of $3 billion in 2017.

Schizophrenia is a chronic and severe mental disorder that requires ongoing treatment to manage symptoms.

People with schizophrenia are often unable to perceive their illness, which is a key reason why they stop taking their medication.

Long-acting injectable antipsychotics, including PERSERIS, provide patients with steady-state plasma concentrations of active drug that remain within the therapeutic range for an extended period.

The full prescribing information, including boxed warning for PERSERIS, can be found at www.perseris.com.

Under the terms of our agreement with Indivior, DURECT receives quarterly earn-out payments that are based on a single-digit percentage of U.S. net sales of PERSERIS into the year 2026.

The last program I will update on this year is -- today, is POSIMIR.

POSIMIR is a non-opioid long-acting local analgesic drug candidate that is capable of reducing postoperative pain for up to 3 days and lowering opioid analgesic use.

If approved by the FDA, POSIMIR could fill an important medical need in both inpatient and outpatient surgical settings.

POSIMIR has the following potential advantages: long-duration of up to 72 hours, driven by the fact that it contains 660 milligrams of bupivacaine in a controlled delivery formulation.

And it's easier to administer into a surgical wound, the site where the nerves have been cut, not injected blindly around the wound.

Last week, we held an investor call, in which we announced that we are planning to submit in the first of half of this year a response to the complete response letter we received for the POSIMIR NDA.

You can access a recording of this call from the DURECT website.

We hired Dr. Lee Simon of SDG LLC to lead this response submission process.

Dr. Simon formerly served as the FDA's division director of analgesic anti-inflammatory and ophthalmologic drug products, the forefather of the division that is reviewing POSIMIR.

In summary, we believe that the present data package, which includes multiple adequate and well-controlled trials addresses the issues raised in the FDA's complete response letter and other correspondents as well.

The filing requires only a modest incremental investment and a small team focused on this program.

We believe that this investment makes sense given the significant upside of a potential approval for POSIMIR.

If successful with this strategy, we'd work to partner the commercialization rights to POSIMIR, thereby creating shareholder value and providing financial resources that would be directed toward the develop of our lead asset, DUR-928.

In summary, the strategy to accelerate the DUR-928 alcoholic hepatitis Phase IIa trial was successful with the rapid enrollment of the 30-milligram cohort in the severe AH patients.

We are excited about advancing this study into the next cohort of severe AH patients at the 90-milligram dose level.

We are pleased and encouraged by the reductions observed in bilirubin in MELD as well as the Lille scores in both moderate and severe AH patients dosed at the 30-milligram level.

We are gratified by the strong encouragement from our key expert advisers and clinical investigators to advance the study into the next dosing cohort.

The DUR-928 28-day NASH trial is on track to begin enrolling this quarter, with initial data to be expected by the end of the year.

The DUR-928 Phase IIa topical proof-of-concept trial in psoriasis is on track to start dosing this quarter as well and to have top line data by the end of the year.

Indivior launched PERSERIS in the United States in February as planned.

They maintain their peak annual sales projections of $200 million to $300 million, and we are pleased to be receiving quarterly earn-out payments associated with the product sales of PERSERIS.

And last week, we announced our plan to submit a response to the POSIMIR complete response letter in the first half of the year.

If successful, this could lead to the FDA approval of the product this year.

We would now like to take any questions that you may have.

(Operator Instructions) Our first question comes from the line of François Brisebois.

So just to double check this, on AH, you mentioned that you're transitioning the program to Dr. McClain, the University of Louisville.

I was just wondering, is that -- did you always think of kind of keeping it going on your own?

And can you talk about the parallel trial for him again?

And then in terms of the results so far, in terms of MELD score or bilirubin, would you disclose these results anywhere in the future?

To answer the last one, first, yes, as we get a few more patients.

Right now, we have 8 patients.

So as we finish the next cohort, once we get a -- enough of a critical mass, we'll feel good about it.

We obviously feel very good about it already, but with only 8, we don't feel comfortable disclosing it yet.

But just to explain to it all because I know it's confusing.

We had started the year with the strategy to transition -- to dose the remainder of this 30-milligram cohort and then to transition the study over to Dr. McClain.

But based on the strength of the data that we have seen from these -- the next 4 patients, these 4 severe AH patients dosed at 30 milligrams, based on that, based on the fact that we enrolled so quickly and also on the strength of the push from the people conducting the trial, based on the responses they've seen in their patients, we decided that we, DURECT, are going to continue the study forward as well.

And so we're going to be working with Dr. McClain.

His study will be a parallel and really is basically the same protocol design but just a few subtle differences.

So that study will be going on based on the NIH support and other support at the University of Louisville, and we will continue our trial.

And our trial then is now continuing with the dosing of severe patients at the 90-milligram level.

So I hope that explains it.

No, no, that's great.

That's helpful.

And then when can we expect then data from different dosing for that, for AH?

It's hard to say.

I mean, obviously, the last cohort went very quickly, but past projection's never good for future -- past performance and future projections and all that.

But we'll be updating as we go along.

One thing that I did want to mention is the Lille scores, because that's a very important score, and people think about MELD and they think about bilirubin, but Lille is really important.

It's been meant to be, if you look at the literature, even a better prognosticator of survival than MELD scores.

And we're very impressed by the Lille data that we have with this drug, and we look forward to collecting more.

So -- but Lille is not given as a difference.

You just basically take my measurements prior to dosing, and then I'm dosed over a week's time.

Seven days later, you take my measurements again, and that change is then calculated as a Lille measurement.

And then that projects your probability of survival going forward.

Understood, understood.

Okay.

And there's no surprise here.

The PSC is discontinued, correct?

Yes, with regard to PSC, we aren't doing any work in that trial at this point.

We are discontinuing that study.

It may be that we open that up again in the future but only from a lot of strength within the company.

We don't have the resources to be able to do that as well.

But we do have the resources to be able to pursue the AH indication.

And the AH indication is really exciting.

It's confirmatory of the animal work that we've done, of the NASH responses we've seen and from some of the other patient population, so it fits very well with what we have.

It fits well with the mechanism of action, how we know, where we know this molecule binds.

And we'll fill you guys in more on that later.

But I think there's a lot of -- a lot of stars are lining up.

Okay.

Great.

And then lastly, this might be more for Mike.

With AH kind of going forward, I'm just looking more at the OpEx numbers.

The R&D came down quite a bit, but the SG&A came up from the third quarter.

Just wondering how to think about this going forward now that you guys are bringing back AH full force.

Yes.

Thanks for the question.

With the trial infrastructure all up and running, IRB approvals in place and CROs in place and everything, the cost of doing a few extra patients to run through this next cohort is incremental compared to the cost of starting up a trial.

So it won't have a huge impact on R&D spend.

Our next session comes from the line of Adam Walsh.

This is Neil Carnahan on for Adam.

Just a quick question on the NASH drug.

Can you just talk to us a bit about the enrollment criteria that was used for that study?

Well, we actually will have an investor call after we've dosed the first patient, and we'll go through a lot more details on it at that point in time as to the stage of NASH and that kind of thing.

But right now, we're just saying 60 patients, 3 different dose cohorts, but not getting into specific details.

But it should be remembered from the Phase Ib study that we did, we had 10 NASH patients per group.

There were 2 different dose groups.

And 4 of those 10 were severe patients.

They had psoriasis -- had, yes, psoriasis -- excuse me...

Cirrhosis.

Cirrhosis, thank you.

Been too much thinking about psoriasis.

They had cirrhosis.

And we saw some pretty nice reductions in the CK-18s, the greatest reductions in the various scores that we had were in the patients that had the more severe disease.

So we do think this being a stress hormone that there's an opportunity to help the more severe patients.

Our next session comes from the line of Ed Arce.

This is Thomas Yip asking a couple questions for Ed.

So first question about the Phase II AH trial.

So is the goal to move to the highest dose as in 150-milligram in the severe patients as well?

And if so, are there any specific group of data that you'll be looking at with the 90-milligram group?

Well, what we're doing is, with any dose escalation study, you dose and you look.

And so you look at first at safety and pharmacokinetics, and we didn't see any signal there.

And so then you also look, obviously, at the biomarkers.

And we are seeing some things that are very encouraging there.

And -- in these scores like Lille and MELD.

And so we'll collect data from the 90-milligram patients.

We'll start to get a sense of is there a difference between those 2 groups.

And if we see something, then we'll go to the higher dose.

The nice thing about this molecule, it seems like their -- high-end wise, we feel fairly comfortable.

We've dosed patients at quite high doses by injection.

We've achieved plasma concentrations that are 1,000x our native level.

So we can give quite a bit.

But it remains to be seen in this patient population.

So I know that will be defined as we go forward.

Okay.

That makes sense.

And then a question for the Phase Ib in NASH.

So for this new trial, are all 3 dose groups enrolling simultaneously?

Or are they going to enroll in sequence?

So, therefore, for those initial data readout in second half of '19, should we expect data from all 3 dose levels?

Yes, we're going to be enrolling that -- all 3 cohorts simultaneously.

So as far as the data, that will depend on the enrollment rate for sure.

But I am encouraged by what I see so far.

So we'll see.

Your next question comes from the line of Doug Adams.

Thank you, but my questions have already been answered.

Our next question comes from the line of [Robert Manning].

Can you foresee whether you are likely to go to the 150-milligram dose for the severe AH patients in parallel with the University of Louisville?

Or is it too early to know about that?

It seems to me a positive that you're going ahead with the 90-milligram dose.

I think yes, Bob, it's very much a positive that we're going forward.

We're not going to be waiting for what's going on in Louisville.

Louisville will be a separate trial going on in parallel to ours but not -- they want be beholden to one another.

So if we dose the 90-milligram dose, we'll see what kind of results we get and how they compare to the 30-milligram dose.

And at that point, we'll make our decision if we decide to go to 150 milligrams or not.

So that -- it will be kind of look at the data and then make a decision.

Likewise, with regard to letting some of this information out as we go forward in time.

But so far, it looks very promising.

So this means you'll have 2 trials going ahead, which presumably means a higher rate of treating patients than we all would have thought 2 days ago.

Yes, but they are -- remember, they are different studies now.

And so eventually, one can look at the data across both studies, but one can't -- in other words, if they do 3 patients and have something -- I mean, I'm just saying, if they get X number of patients in a given cohort and we haven't had some patients, then you can't combine those for any kind of scientific evaluation.

You can, from just across the board, look and see kind of thing, and that's the nice thing about this drug.

It has the tendency to -- when it talks, it lets you know and pretty much in black and white.

So...

But it will be the same trial.

Your 90 milligram trial is the same as their 90-milligram trial.

Or are there differences between those 2?

Only subtle differences and maybe collecting a little bit of additional data.

They can do some additional blood chemistries and things that are more research-y kind of focus.

They'll do that.

But other than that, it's pretty much the same.

Our next question is a follow-up question from the line of François Brisebois.

Yes, just a quick follow-up.

Can you just mention to people why you clearly had the Phase Ib data that you presented at EASL in April of '17.

Why come back and do another Phase Ib?

What's the thought process there?

In NASH patients?

Yes, the reason we're doing it is that first Phase Ib study was a single-dose study, albeit 2 separate doses given 2 months apart.

And from the poster that will come out in Boston in April, you'll see that 8 of those 10 patients actually repeated.

So there's some interesting information that we can be gleaned from that.

But those data demonstrate just a trend, not really a dose response, just a trend, a separation between the 50- and the 200-milligram.

But the responses showed a really nice reduction in those inflammatory markers, CK-18 and -- excuse me, IL-18 and C-reactive protein and then of course, the functional marker of bilirubin being down and then the cell death marker, CK-18, full and cleaved.

So we saw those pieces.

The reason we're doing this next Phase Ib trial is to understand what happens on repeat dosing in patients 1 day after another.

So we're going to do 28 days of continuous dosing.

The reason we're doing only 28 days is because that's the coverage we have right now from a tox standpoint.

Remember, this molecule hasn't shown any toxicity in any of the nonclinical studies so far.

So in order to do the chronic tox, we've had to scale up a tremendous amount.

We actually had to make 18 kilograms of drug in order to conduct those studies because they have to be given just a massive amount of drug.

And we did scale it up.

It took a little bit of time.

We paid that price and we started those studies, and those studies will complete near the end of this year.

So as this year ends, we should have the data from this current NASH trial, which is that 28 days of continuous dosing, which will give us a sense of those 2 biomarker changes and we'll also look at imaging of liver fat and the like, and so we'll have some other additional data points that we can look at to help us understand what doses we would pick for a fulsome Phase II that would then be able to be started sometime next year.

And at that point, we'll have the tox in place to be able to dose patients indefinitely, so we can do a 1-year study if we wanted, if we so wish, that kind of thing, which we have to follow the new guidelines the FDA put on December for NASH studies.

(Operator Instructions) There appear to be no further questions at this time.

I'd like to turn the floor back over to management for closing comments.

Okay.

Well, thank you, everyone, for participating.

And look forward to talking to many of you over the coming weeks.

And feel free to reach out, happy to talk.

Thanks.

Bye-bye.

This concludes today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.