Galmed Pharmaceuticals Ltd (GLMD) 2020 Q1 法說會逐字稿

Good day. Welcome to the Galmed conference call to discuss financial results for the first quarter of 2020.

Today's conference is being recorded.

Before we begin, please note that we will be making certain forward-looking statements on today's call, including those regarding financial results, statements and forecasts regarding anticipated time lines and expectations with respect to our regulatory and clinical development programs as well as other statements that relate to future events.

These statements are based on beliefs and expectations of management as of today and actual results, trends, time lines and projections relating to our financial position and projected development programs and pipeline could differ materially. In particular, there is significant uncertainty about the duration and severity of the COVID-19 pandemic, its impact on Galmed's business and operations.

We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the SEC including, without limitation, the risks under the heading Risk Factors described in our annual report on Form 20-F filed with the SEC and the risks and uncertainties included in the Form 6-K filed with the SEC earlier today. Galmed assumes no obligation to update any forward-looking statements or information, which speak as of their respective date only.

I would now like to turn the call over to Allen Baharaff, President and Chief Executive Officer. Allen, please go ahead.

Thank you, Sherri. Good morning, and thank you for joining us on today's conference call.

I'm pleased to be here today with our Chief Scientific Officer, Dr. Liat Hayardeny; our Chief Medical Officer, Dr. Tali Gorfine; and our Chief Financial Officer, Yohai Stenzler, to provide you with an update on our clinical development programs as well as report to you on our financial results for the first quarter of 2020. As always, we'll be happy to take any questions you may have at the conclusion of our prepared remarks.

I'd also like to say, I hope you and your family are safe and well, and we work to overcome the COVID-19 outbreak. I know this issue is very much on your mind, and shortly, I will provide an update on its impact on our operations.

I'm delighted to share with you today new preclinical PK data comparing Aramchol free acid, the drug substance that is currently being evaluated in our ARMOR NASH Phase III study with our new form of Aramchol, Aramchol meglumine. Over the last few years, Galmed has been in the process of developing a new product, Aramchol meglumine, which is the sole form of Aramchol free acid. It is important to note that Aramchol meglumine and Aramchol acid circulate as Aramchol regardless of which drug product is administrated.

Our research found that meglumine salt of Aramchol increases solubility of Aramchol by 5 orders of magnitude, which was very surprising result for anyone given the art of pharmaceutical chemistry. Based on this data, we submitted in December 2014 a new composition of matter patents protecting Aramchol meglumine as well as wide range of other salts worldwide.

Of importance, Aramchol meglumine is considered a New Chemical Entity. As such, it is eligible for New Chemical Entity patent protection until December 2034. Patents were already granted and maintained in 37 European territories, in Japan, Australia, China and Canada.

Discussions on the patent protection in the U.S.A., India and several other jurisdictions are ongoing with the relevant patent offices. We are aware that without this important development, our patent protection for Aramchol was concerned since the U.S. patent of Aramchol free acid for the treatment of fatty liver would otherwise expire in 2023 before any potential Hatch-Waxman patent term extension.

Now results from the single and multiple oral administration dose of Aramchol free acid and Aramchol meglumine in a crossover PK study in dogs demonstrated bioequivalence with reduced variability. In particular, after single dose administration, the AUC Aramchol free acid and the Aramchol meglumine are almost identical. After multiple dosing, steady state, AUC for the Aramchol meglumine was higher compared to Aramchol free acid.

Of major importance is a threefold reduction in the coefficient variation in steady state in Aramchol meglumine arm compared to Aramchol acid, suggesting lower variability among patients receiving Aramchol meglumine in the future, which is a major added value. Half-life of Aramchol, while administration of both Aramchol acid and Aramchol meglumine is identical in single and multiple dosing, steady state. This data supports the same admin profile for Aramchol and Aramchol meglumine. Cmax was higher in Aramchol meglumine compared to Aramchol free acid in a steady state.

We plan to submit these results, along with other supportive data to the FDA and discuss with the FDA, as soon as practical, a plan to appropriately transition from Aramchol free acid to Aramchol meglumine in the ongoing ARMOR Phase III study. Based on our regulatory and scientific review of relevant FDA guidance and precedents, our assessment is that this change during Phase III could be considered acceptable provided bioequivalence of the 2 products is established and a number of other data considerations are addressed. We are planning to hold in the coming months a virtual Analyst Day to discuss all details of this program.

I would like to move now to report updates on our ARMOR Phase III NASH study as well as to assess the evolving impact of COVID-19 for the first quarter of 2020. As an Israeli-based company, working under disruptive events is almost second nature to our way of life. More so, our long experience working across different time zones required us to adopt remote work arrangements pre-COVID-19. Thus, the pandemic had very little effect on our ability to maintain our regular operations.

In reaction to the rapidly evolving global pandemic, affecting the safety of our patients, site practices, investigators and burdens on hospital systems and in accordance with the local restrictions and regulations, we decided to temporarily halt the screening of new patients for the ARMOR study. Throughout this time, we maintain an open and close communication with clinical study sites and our partners in the management of the study. We continuously monitor and perform a thorough assessment on a regular basis according to the local situation in the U.S. and other countries around the world, aiming to resume activity on a country-by-country, state-by-state and side-by-side basis.

Accordingly, during Q2, we expect to lift some constraints in states in the U.S. identified as green states allowing individual investigators to determine whether it is safe to resume screening activities. We are using the time to advance the approval and initiation of additional sites in new and existing countries. Such activities will allow us to minimize the ramp-up time for site activation, so that we expect many sites will be ready for activation when screening and randomization will be possible. Our current assessment is that by Q4 2020, we should be able to resume recruitment in many of our sites.

Accordingly, we are moving our guidance for completion of recruitment of patients for the first part of the study from Q2 2021 to Q4 2021 and reporting top line results for the first part of the study from Q4 2022 to the second half of 2023. Of course, the rapid development and fluidity of the COVID-19 pandemic precludes any firm estimates that the ultimate effect of this disease will have on ARMOR study and is subject to change.

To help mitigate cost overrun, we have taken several protective measures to reduce costs. We have minimized all clinical-related expenses, mostly to the ones which are mandatory to the monitoring of the randomized patients. As communicated in our previous investor call, our clinical expenses are directly correlated to patient enrollment, and therefore, delays in the enrollment also reduce our cash burn until patients are enrolled in the study. In addition, we made adjustments to clinical staff and pay according to the current and predicted level of activity and reduced cash fees of the Board by 50% for the first half of 2020.

I would like to take this opportunity to express our sincere gratitude to ARMOR investigators and the clinical teams, who are going out of the way to avoid unduly early termination, while assuring patient safety and scheduled follow-up.

Before we open the call for Q&A, let me turn the call over to Yohai to provide you with an overview of our financial position at the end of Q1. Yohai?

Thank you, Allen, and good morning, everyone. This morning, I will be providing you with our financial results for the first quarter of March -- ended March 31, 2020. For more information, please refer to our report on Form 6-K filed earlier today with the SEC, which among other things, provides a summary of such financial results.

For the first quarter of 2020, our net loss totaled $6.1 million or $0.29 per share compared with a net loss of $3.5 million or $0.17 per share for the corresponding quarter in 2019.

Research and development expenses totaled $5.6 million for the first quarter compared with $3.3 million for the first quarter in 2019. The increase resulted primarily from an increase in clinical trial expenses in connection with our ongoing ARMOR study.

Our general and administrative expenses for the quarter totaled $0.9 million compared with $0.8 million for the corresponding period in 2019. The increase resulted primarily from an increase in noncash stock-based compensation expenses.

During the 3 months ended March 31, 2020, we had a net financial income of $0.4 million versus $0.5 million in the previous quarter.

Our cash balance as of March 31, 2020, which includes cash, cash equivalents, restricted cash, short-term deposits and marketable securities, totaled $69 million compared with $75.6 million in December 31, 2019.

With that said, operator, please provide instructions for the Q&A portion of our call.

(Operator Instructions) Our first question is from Yasmeen Rahimi with Roth Capital.

This is Rachel Yang on for Yasmeen. So 2 questions for you. First is, can you provide some color on health safety profile of meglumine compares to Aramchol, whether there's any completed long-term talks [for meglumine] to get clearance for Phase III? And what does the FDA need to allow you to switch from Aramchol to meglumine? And there's a follow-up.

So thank you for your question. We are building our case on comparing with the name of VYNDAQEL and VYNDAMAX, which is tafamidis meglumine and tafamidis free acids. Both of them are [for RX] pharmaceutical by Pfizer. Tafamidis acids was approved in March 2019, and I'm referring all of you to the case supported by FDA. Those compounds are considered same active moeity and tafamidis is the speculation agent in plasma and data on tafamidis in both forms is exchangeable, and approval was achieved for both forms. Meglumine in this, all the toxicology of meglumine is well published. So we see no further need for any toxicology studies to be performed based on the other cases that already use meglumine as counter ion.

Okay. That's very helpful. And a follow-up question. How many patients have been dosed with Aramchol? And if you switch to meglumine, will the data set from Aramchol and meglumine be combined in the final analysis?

We are not disclosing this information, Yasmeen (sic) [Rachel] and we will -- once we will reach a milestone, pretty fine milestones of randomized patients, we would disclose the information.

Our next question is from Steve Seedhouse with Raymond James.

Interesting development. Liat, I think -- I couldn't hear you very well, but I think you were just talking about tafamidis and the precedent here for the meglumine salt. And my understanding is that VYNDAMAX and VYNDAQEL, so the free acid or the meglumine salt are actually dosed differently on a milligram basis. I don't know if that's because of the pharmacology of tafamidis or if there actually is sort of a question about the interchangeability of the dose of the salt versus the free acid. So I'm just wondering if you can comment on that. Is there a point of uncertainty about whether you can actually just swap in one for the other and keep the same dose? Or do you have to do some dose-finding work or even add multiple doses to the Phase III?

So thank you, Steve. In the case of tafamidis the dose assessment was per AUC or per exposure and not per dose. Well said, by the way. The acid was adjusted to 61 milligrams from 80 milligrams in meglumine salt because the active molar is different. So the FDA actually went one step further in allowing adjustment per molar and not per dose. You're right with your answer or with your questions. It's not the same as adjusting same dose administration and the same dose regimen as you do with generics. This is a different case.

Okay. Just following up, does this give you...

Just bioequivalence is here per exposure. So you do AUC per AUC. Exposure is built in the amount of the compound that you're seeing in the plasma of the patients and not per the dose that you're giving.

Okay. A follow-up to that would be, did this give you an opportunity to go -- return to once-daily dosing? Or are you going to stick with the BID dosing that you had previously sort of switched to based on the PK studies?

We will do every possible way, but cannot promise anything at this stage. We are putting a lot of effort for that. And if it's not going to be in -- as part of the ARMOR, it will be as a life cycle management. So we are putting every effort in formulation for that exact method that you are actually asking.

Okay. And then could you just talk about the -- your level of confidence in the non-obviousness of the innovation step here of the meglumine salt and its patent ability in the U.S.? Any worries there? Because I noticed you mentioned discussions regarding patent in the U.S. were ongoing with USPTO.

Yes. So I think the number speaks for themselves that, as I said, already 37 European countries and Japan, Canada, Australia, all accepted that. I mean there's no question and that came as a surprise and when we compare Aramchol meglumine to other salts, Aramchol meglumine features are clearly distinctive. And so as you know, patent officers are -- have their own independence. And in some countries, it's taking faster. In others it's slower, but we are highly confident. This is something fivefold bio -- solution of a compound is not likely taken.

Okay. Appreciate that thought. Just...

Sorry, 30 -- so Liat is correcting me. 30,000-fold.

Yes, of solubility higher than Aramchol acid.

Of solubility. 30,000. 3-0. 30,000-fold solubility.

I see. Okay. That's a lot. Last, just a quick clarification question. So the press release, you mentioned that the innovative step here has led to a New Chemical Entity patent. I just -- because there's multiple terminology here, I just want to make sure I'm understanding that correct. So this is, in fact, a product patent or a composition of matter patent and not a formulation patent. Is that correct?

That's absolutely correct. A new composition of matter patent, and in fact, it might even be on an independent IND.

It's a New Chemical Entity.

It's a New Chemical Entity. This is not just formulation.

Our next question is from Edward Nash with Canaccord Genuity.

Galmed and team, this is [Adam] on for Edward today. Congrats on the press release here. And Steve and Yasmeen (sic) [Rachel] got most of my questions, but just one more for us. Could you add any more color around the current status of research sites worldwide on a regional basis, like whether there are any open sites as China seems to have mostly reopened? And a related question is, how are you approaching or planning for a second potential spike in COVID cases in the fall?

Let me start with the second question about the second wave. Interestingly, we are running a global study. And as a global study, we get on a daily basis news from 5 different continents. And as you're -- I'm sure you're aware, there is different waves and different timings in different countries and different regions. So we feel that some areas like Australia, we feel very confident that we had very few cases recorded to start with. And we feel that Australia will probably start recruiting very soon.

Korea has already passed the first wave, and we recently had a very successful webinar with our Korean investigators, and they are eager to start recruiting patients. So I think Korea will also be a second country to start to reopen the recruitment.

And U.S., you know better than we do is not homogeneous. So we leave it for the investigators. We are getting on -- literally on a daily basis request from investigators to reopen their sites. And we are monitoring that, and we want to make sure so it will be done gradually. And after only if we are, I would say, convinced that they will not need to close that again for a second wave.

So this is for your second question, but your first -- can you repeat your first question, please?

No, you more or less answered it in answering that second question.

Our next question is from Adam Walsh with Stifel.

Couple of questions here. I just want to be clear. I was having difficulty with my connection. I couldn't hear all that well. Allen, is there any chance that you'll have to restart the trial essentially with patients with meglumine? In other words, is there any chance that the current formulation is going to have to be superseded by this one with a whole new set of patients?

So tafamidis, we are using tafamidis as a very good precedent, and they've made the change during this study with cross-referenced data from -- one, from the free acid to the meglumine. And there is no reason why we should not be able to do the same. Another example that you may be aware of is atorvastatin, that they've changed formulation from amorphous to crystalline within Phase III and begin the -- restart this study.

So this time, there are a number of guidance, FDA guidance. And it is done, not a lot, I must say, but it has been done before. And the -- tafamidis gave us an excellent, very timely precedent because it was only approved in 2019. And as you know, you can access all the data, both the European and the U.S., and we are relying very much. And of course, we had a consultant, we -- regulatory consultant that we consulted with along the process before we decided to take this change. So we feel comfortable that the FDA would accept this view.

That's helpful. And then you mentioned that you're going to have an Analyst Day in the coming months. We could potentially get clarity on some of these issues at the Analyst Day. It seems that for the meglumine, there's a couple of things that are important to you. One is the potential for U.S. patent, and the other is the FDA sign off on potentially integrating the new formulation into the Phase III. Would you expect both of those to kind of precede the Analyst Day? Or is an Analyst Day kind of independent of those 2 items?

Sure, Adam. So first of all, I want to correct, it is not a new formulation. It's a new compound. It's a New Chemical Entity. This is a very important change. This is a completely different patent protection. And by the way, the tafamidis acid was approved with -- in Phase III. If without a Phase III, this is very interesting. They use the cross reference, Pfizer cross-referenced the data from tafamidis meglumine. And without running a Phase III study, they got an approval an IND approval for the tafamidis base. So this is an interesting point to talk about the cross-referencing data.

We are doing our best, but COVID-19, of course, here is -- can disrupt a little bit our plans because I'm not sure when the FDA will be able to have -- to allow us to present the data and how long it will take until we get a reply. So we will have to juggle between our core data and -- that we get from the FDA and our intention to provide additional information in this Analyst Day. We would also like to discuss in this Analyst Day our pipeline products. So I hope that it will be done sooner rather than later, but it also depends, as I said, on things which are not dependent on us like FDA responsiveness.

That's great. And then just one final one, Allen. We've had data from other NASH companies kind of coming out. I wonder if you could maybe opine on kind of what you've learned about how Aramchol kind of stacks up and your thoughts on the space in general as it pertains to Aramchol.

So I think Tali will be more appropriate person to do so, our CMO. So I'll let Tali answer.

Okay. So indeed, this week, had highlighted many questions we have been considering for a long time. We are, of course, disappointed with the GENFIT results. We're curious about the novel Phase II results.

Like everyone, we are awaiting further information about potential contributions to the higher placebo rate. That would include the usual suspects of weight loss, imbalances in concomitant medication, (inaudible). For example, diabetes versus non-diabetes, lifestyle intervention and I think also methodology for pathology need. So we're always seeing for more information, and I think we'll be very, very important for the field.

At the end of the day, the active treatment has to be placebo, and the magnitude of effect is measured within one study relevant to the placebo rate in that study. I think the best example is plants and REGENERATE, where the fibrosis improvement values were 21 versus 14 plants and 12 versus 23 in REGENERATE. So different placebo rate, but still the magnitude of effect about stable.

With respect to Aramchol, we have emphasized all along, it's a liver-targeted drug. We think this is highly important. It has the mechanism of action and clinical data to support an effect on both NASH resolution and fibrosis improvement. Again, we always emphasize that these 2 go hand-in-hand and are desirable for NASH drug.

The ARMOR study is a large study. It's powered for both endpoints. Add to that, the population, which we continue to maintain that will be enriched targeted population with pre-diabetes, diabetes or over with all these patients. So altogether, I think that we will learn from information that comes out. But the ARMOR study and Aramchol are well on track for a good product.

Our next question is from Kristen Kluska with Cantor Fitzgerald.

So the first question I had is, are you able to discuss whether IP was a topic that was asked about during your ongoing partnership discussions? And how do you think this might change now that there's been some developments in the NASH space in general? And also, you may have extended IP here.

So it's too early. I think that I'd like to see more data coming from the study, from the GENFIT study. And clearly, it's -- there is one less Phase III candidate in development, but -- which I must say, personally, I feel very sad because for 20 years that GENFIT has been part of my life, it's satisfied for the patients and for everyone who've been involved in this study, of course. But we always said this is a marathon run. And as a marathon run, as Tali said before, we are planning the study as a robust long study to meet both endpoints, and we keep on our mantra that we think that Aramchol is the best candidate in the market for the chronic treatment of NASH. And I hope as to review patent life that would remove any overhang that was on such things.

Okay. And do you anticipate to plan -- on planning or to discuss keeping the Fast Track designation status for this?

It's still early. I mean we are not sure yet, and this is something that for the regulatory consultants, whether this is going to be an independent IND or we are going to tag along to the existing IND. If it would be an independent IND, then yes, of course, we'll go over the Fast Track, but it may likely be that faster way to go is not to your Type B meeting, but the Type C meeting and continue the development with the same IND. So I won't be able to tell you until we have a guidance from the FDA.

Okay. And I know you haven't disclosed number of patients that have been treated thus far, but could you talk about whether you anticipate any challenges? And if there are any solutions at this time to collect follow-up data from patients during these times?

Tali?

Yes. So actually, I must say we are heart-warmed by the dedication of the investigators and the patients to remain in the study. And while we allow flexibility along with the line to what it allows regional and regulatory guidelines, we see that all our patients are ongoing and that the follow-ups are performed adequately. And this is very reassuring.

Okay. And then my last question here is Intercept tentative FDA AdCom meeting is scheduled in a few weeks from now. So I wanted to ask what you as a late-stage NASH developmental company are on the lookout for as it relates to your own company and program.

I'm not sure -- could you repeat the question? I'm not sure really what you are asking?

Sure. So Intercept AdCom is scheduled to take place in a couple of weeks from now. So I was curious if you had any thoughts about whether there were any topics or questions you might -- things could happen that you might think about as it relates to your own program so that down the line when you potentially file for approval things that you might consider based off of what's asked of Intercept?

So like you, we are awaiting this advisory board. Intercept has paved the way for a long time in the NASH field. And we -- now we're at a critical milestone, and we will learn from this aspect exactly what is required for a successful NDA, and we still have time to adapt as required for things that may come up in this aspect.

Our next question is from Jason McCarthy with Maxim Group.

It's Adheip on the line for Jason. So I just wanted to see if you guys had any concerns about how the new salt formulation of Aramchol potentially exacerbating in high blood pressure in patients with hypertension, especially given the fact that high blood pressure can potentially be a contributing factor to the development of NASH?

Thank you for the question, but we have no such concern. There's no signal on hypertension with Aramchol. The safety of the product we have disclosed many times, and hypertension is not one of them.

Our next question is from Ed Arce with H.C. Wainwright.

And very happy to hear that you are and have been apparently addressing this long-standing overhang of the short patent protection. You and I, Allen, have talked about on numerous occasions in the past. So I know this has already been touched upon by several questions previously, but I just wanted to drill down a bit further. Clearly, this is a new NCE, and you're filing for a CMO or have filed a CMO patent. My question is, you're clearly confident on this path. I guess what my question is on the 2 key areas here with the FDA and the USPTO, what could potentially go wrong? What -- where are the key areas of risk where despite everything you've done to date, there could be either some disagreement or even just a delay on moving forward?

Thank you, Ed. So it's a yes or no question. This is not something which is shades of gray of another formulation, whether this formulation can be accepted or not. It's about the essence of patents of -- whether it's novel or not. And here, we have a very clear statement coming from the, as I said before, 37 independent patent offices, which all gave us this new composition of matter patent in flying colors. And discussions in the U.S., maybe they are -- take longer, maybe they are more prudent or -- but we feel very -- that we have extremely good arguments. And it's almost for us impossible to envisage a possibility that this patent will not be accepted.

We feel very strongly about the patent. It's not a huge patent. It's not a formulation patent. It's a very strong new composition of matter of something, which nobody could expect, neither did we.

And I'm sure that -- but, no, I don't see any risk in some of the programs because we are advancing this transition. So we work simultaneously. Sometimes, it takes a bit longer to have patent granted, but that would not change anything in our plan.

Okay. Another question for you...

Just to clarify, Ed, one other thing. There is no development risk. I mean this is, as we said before, Aramchol meglumine and Aramchol circulated is the same as Aramchol. So there is no -- it's not a different moiety, which has some development in terms of the product itself.

And maybe just to say that, to add on what Allen is just saying, the synthesis allows us -- is very good and very well clarified. There's no impurities, and the validation process are all set. And we don't see any problem in the chemical development of CMC that is related to this compound.

Great. So another question is there are a couple -- while this is a very similar compound, of course, it's distinct and novel, and there are 2 areas that you mentioned are different, the higher steady state AUC and much higher solubility.

You mentioned before that given those attributes, you will be trying every -- make every effort to try to see if a once-daily dosing is possible. Is there -- are there any other specific benefits or attributes that you would look for that would have been improvement over the data we've seen to date with Aramchol?

Yes. It's a very -- it's a great question. Thank you for asking this. When you have a compound, which is class IV, there's a very -- there is a slight variation in exposure among patients because it's not soluble. So with Aramchol meglumine, the main added value is reduction in coefficient of variation. That being said is that exposure of all the patients is going to be quite similar and not very much varied from one patient to another.

This is a very good -- very significant avid value when we talk about pharmaceuticals with the exposure among patients is almost similar and not variable. And it gets to a lot of homogeneity when -- later on looking at the clinical data.

Great. That's very helpful. And then just one last question for me. Given your extended time lines here and a certain degree of lack of visibility here at least in the near term, do you -- are you prepared to give us an estimate of your cash runway?

So it hasn't changed. We are still -- the cost of the study, as we said earlier, is not going to increase because of this change. There will be some additional CMC costs, but this is budgeted. And we are -- we keep the same burn rate. We are still relatively small company, so we have a very managed burn rate, and -- which is about USD 1.5 million per quarter as you can see. And the additional cost for the CMC for the fixed burn rate, the additional cost for the CMC for preparing the additional Aramchol meglumine is already accounted in our budget.

Okay. Great. Allen, thank you so much for this, and congratulations on this development. I very much look forward to your Analyst Day coming up.

Thank you so much, Ed. We look forward. Thank you.

And our next question is from Mayank Mamtani with B. Riley FBR.

Congrats on the progress. Most of my questions are addressed, but I do have a couple of quick follow-ups. So as you think about the process of engaging the agency, and also sort of what human studies you may have to do with the NCE? And what sort of process? Is it like a Type C meeting you would have to have with them? Like very similar to how you, I think, went through last year with the BID versus QD, where, obviously, you had to do the bioequivalence and drug-drug interaction study. Could you just clarify that piece? And also I know for your NDA, you had these other early stage studies like hepatic impairment, mass balance, TQT. What is the impact on that?

So the only thing that we are currently doing, of course, is going to bioequivalence in humans and just to see that we are around the same. We will do -- we will try to do our best via very good formulation or few formulations to maybe allow reductions from BID to QD. Not sure this is going to be as possible.

We do need to stay within our AUC, within the exposure, in order to be able to use all the data that is coming with us, i.e., toxicology and everything that's accumulated thus far. So we will stay within the range of the exposure of the Aramchol BID 300-milligram is given now in ARMOR.

So just to clarify, we are not aiming for higher exposure. We are keeping the same exposure, the same way, same philosophy generics are being developed. And hence, we will only need a Phase I bioequivalent study. There's no necessary -- we don't need any other toxicology, drug-drug interaction or any of these kind of studies are not needed. It's preclinical data and the Phase Ib data.

Always remember that the circulating active moiety is the same. We are still talking about circulating Aramchol in the plasma. And everything that has to do with this from this point of view is the same active ingredient.

And could you clarify the impact to other studies that you started? And I think one of those study had to have data by the end of the year, I think the hepatic impairment.

So the only study that have starting and advancing is the hepatic impairment, which is ongoing. And again, it's not going to be impacted, and other Phase I are not going to be impacted as well.

The other study, the mass balance study, is also advancing. It's a widely labeled compound, so it takes a bit longer. And the rest of the studies are still planned. Some of them are delayed because of COVID-19, but we don't think there is any -- there is no urgency in completing this study. Those are studies that are needed for NDA.

Great. And then a follow-up on Phase III ARMOR trial design. Have you disclosed sort of your powering assumptions? And also on this underlying or concomitant medications, of course, you have the diabetics as a majority, but what are you allowing versus what are you excluding in terms of antidiabetic drugs?

So I hope I heard the question correct, we have in the protocol, and we feel foolish, more detail the strengths of this one, but we have written the inclusion/exclusion criteria very meticulous and aligned with the FDA guidance that was out. We allow diabetics medication if they're stable for different time points, different time duration depending on the drug. Of course, we only enroll stable patients based on hemoglobin A1c and other parameters. So we make sure that the patients at the time of bringing or baseline are stable and on stable medication.

Now of course, we know that the study is a long study, and patients may require adjustments or change in their medications. By the way, the same for diabetes and other comorbidities, hypertension, et cetera. So all these standards of care adjustments we acknowledge may happen during the study, and we do not impose any specific disallowments on such required changes.

There are a few drugs that we ask the investigators to consider the indication and sometimes discuss with us. But based on -- we have no disallowments on specific drugs for diabetes or other comorbidities. Maybe you've asked because of drug-drug interaction because of your previous questions. So I may also add that...

And also the learnings from the GENFIT study and the placebo response there and also the metabolic parameters not really showing that much of a difference drug versus placebo.

So we don't have yet the -- GENFIT hasn't disclosed whether from concomitant medications has -- is related to the placebo [response]. Actually in the initial call that they had that day, I listened to it, and they say that the first look that they have done indicates that probably weight loss and concomitant medications are not responsible for the higher placebo response rate. I don't have more information than you have on this issue.

I hope I -- I don't know if I answered with respect to drug-drug interaction. We don't have concerns with respect to either diabetic medications or patents with respect to drug-drug interactions.

And that concludes our Q&A session. I would like to turn the conference back over to Mr. Baharaff for closing comments.

Thank you very much, Sherri. So thank you all for joining our call today, and I wish you all to be safe, stay safe and well. And as always, please do not hesitate to contact us for any follow-up questions that you have. Thank you, and bye-bye.

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.