Intercept Pharmaceuticals Inc (ICPT) 2015 Q2 法說會逐字稿

Thank you for joining the Intercept Pharmaceuticals 2015 second quarter financial results conference call. At this time, all participants are in a listen-only mode. Following the formal report, Intercept Management will open the lines for a question-and-answer period. Please be advised that this call is being recorded at the Company's request, and a webcast of this call will be archived on the Company's website for the two weeks from today's date. At this time I would like to introduce Dr. Mark Vignola with Intercept's Director of Investor Relations. Please go ahead.

Thank you and good afternoon. Thanks for everyone for joining us on today's call. We are reporting on financial results for the quarter ended June 30, 2015.

Before we begin, please remember we will be making certain forward-looking statements on today's call, including statements and forecasts regarding our future financial and operating performance, anticipated timelines for the potential approval and commercial launch of obeticholic acid, and our regulatory, clinical, and commercial plans, goals, and estimates, as well as other statements which relate to future events. These statements are based on the beliefs and expectations of Management as of today. Our actual results may differ materially from our expectations. Investors should read carefully the risks and uncertainties described in our reports filed with the SEC, including the Risk Factors section of our most recent annual report on Form 10-K, and in Intercept's other filings with the SEC. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events, or otherwise.

The format for today's call will include opening remarks from Intercept's Management team, and then we will open up the call to take your questions. At this time, it is my pleasure to turn the call over to our CEO, Dr. Mark Pruzanski.

Thank you, Mark, and thanks to everyone for joining us on our conference call and webcast today. I'm going to provide you with a brief update on the development of our lead product candidate, obeticholic acid, or OCA. Lisa Bright, our Chief Commercial and Corporate Affairs Officer, will provide an update on our commercial preparations. Barbara Duncan, our Chief Financial Officer, will then discuss our financial results and cash position. Rachel McMinn, our Chief Business and Strategy Officer, is also here with us today for the Q&A section at the end.

The first half of 2015 has been an exciting time at Intercept, characterized by both executional success and operational growth. Key milestones over the last quarter include the submission of the Company's first regulatory filings for approval of OCA in PBC, the announcement of the design of our Phase III REGENERATE trial in NASH, and the addition of several key members of our medical affairs and commercial teams. I look forward to reporting on additional progress during the second half of the year, as we continue to build Intercept into a global biopharmaceutical Company.

Starting with our PBC program, I'd like to provide the following update. In June, we announced that we had completed the submission of our applications in the US and Europe for marketing approval of OCA for the treatment of PBC. As the first regulatory submission in PBC in nearly two decades, this achievement marks not only an important milestone for the Company, but also an important development for PBC patients who are in need of additional therapeutic options.

Needless to say, I'm exceptionally proud of our team who worked nights and weekends to make this possible. Our NDA and MAA submissions are robust, supported by data from 28 clinical trials, including three randomized double-blind clinical trials in patients with PBC that all reached their primary end point with high statistical significance. The submissions are also supported by two clinical databases that between them comprise more than 10,000 patients from the global PBC study group and UK PBC study group. In addition, we continue to enroll patients in the international Phase III-b COBALT study, our long-term outcomes trial to confirm the clinical benefit of OCA in PBC patients on a post-marketing basis.

Assuming we get priority review from FDA, the current filing timeline suggests a potential US approval date within the first quarter of 2016. In the meantime, we're preparing for the regulatory interactions that may be needed prior to approval, such as a potential FDA advisory committee meeting early next year. In Europe, we anticipate a longer review time by EMA, with approval anticipated in the second half of 2016. In the mean time, we're making great progress in preparing for the anticipated launch of OCA next year.

A key part of this is recruiting the best talent to build a top-tier organization, and to this end, we've recently added several key members of our medical affairs and commercial teams. In June, we named Dr. Juan Carlos Lopez-Talavera Senior Vice President of Medical Affairs, and we more recently named Richard Kim Senior Vice President, Head of US Commercial. Juan Carlos and Richard both bring with them deep knowledge and experience in the hepatology field, and I'm very excited to have them as part of the team.

We of course recognize that successful launches are built on a strong foundation of pre-launch activities. On the medical affairs side, we've had a highly experienced team of medical science liaisons, or MSLs, in place in the US for some time, who are focused on developing a deeper understanding of PBC as a disease, and seeking advice from the GI and hepatology community on how to improve the management of PBC. Since the beginning of the year, we've also been establishing our medical teams across Europe and Canada. At least 80% of those hired to date have significant experience in hepatology or gastroenterology, reflecting the exciting scientific developments that have been occurring outside of viral liver disease. I will leave it to Lisa to discuss the extensive launch preparations that are under way on the commercial side in just a few moments.

Now turning to our NASH program. In May, we announced details of our Phase III Regenerate trial. This is the first Phase III registrational trial in non-cirrhotic NASH patients with fibrosis, a serious chronic liver disease with no approved therapies. The trial design was the result of substantial collaboration and interactions with both FDA and EMA, and represents a key milestone for patients with the disease. REGENERATE will be a very robust trial, with two key objectives: First, to support accelerated approval based on an interim analysis at 72 weeks; and second, to provide liver-related outcomes data on a post-marketing basis, to confirm the clinical benefit of long-term OCA treatment. We remain on track to initiate the REGENERATE trial this quarter.

Let me review a few important aspects of the trial. We will target enrollment of 1,400 biopsy-proven NASH patients with stage two or three fibrosis. After 72 weeks of treatment, these patients will undergo a second liver biopsy, and an interim analysis will be performed. The histology data collected in these 1,400 patients will form the basis for the anticipated accelerated approval filing to market OCA for the treatment of NASH with fibrosis.

The interim analysis will be based on two co-primary end points: The proportion of patients achieving at least a one-stage improvement in fibrosis without worsening of NASH, and the proportion of patients achieving NASH resolution without worsening of fibrosis. Importantly, while both end points will need to be achieved in the study population as a whole for the trial to be successful, they do not need to both be reached within each individual patient to be considered a responder. In addition to the 1,400 patients supporting our regulatory filings for marketing approval, we will also target enrollment of up to an additional 1,100 patients. We will continue to follow the entire study population through to clinical outcomes on a post-marketing basis, for confirmation of clinical benefit in order to support full approval of the drug. Outcomes will capture mortality and a variety of end-stage liver-related complications, but we expect progression to cirrhosis to comprise the vast majority of outcomes events. The trial will finish and be un-blinded after a pre-specified number of events is reached.

One final comment on dose selection in REGENERATE. We will be evaluating two doses, 10 mg and 25 mg, given once daily. Recall that the 25 mg dose was the dose studied in FLINT. Our decision to add a 10 mg lower dose in the Phase III study was based on our experience in PBC. In our Phase II PBC studies, we found that doses higher than 10 mg conferred no additional efficacy, but were dose-dependently associated with increases in pruritus. In FLINT, the 25-mg dose was associated with pruritus in roughly 25% of the patients studied. While this only resulted in one patient discontinuing, our experience in PBC lends support to the premise that a 10-mg dose may also be efficacious in NASH, while demonstrating an improved tolerability profile.

Later this year, our partner Sumitomo Dainippon Pharma my will complete their Phase II-b Japanese NASH trial, and we continue to expect to report top-line results prior to year end. I'd like to take a few moments to review the trial design and what we can anticipate. The trial is quite similar to FLINT, and is evaluating OCA treatment over 72 weeks in biopsy-proven NASH patients. The primary efficacy end point is the same as that used in FLINT. That is, histologic improvement as assessed by a two-point improvement in the NAFLD Activity Score, with no worsening in fibrosis.

That said, there are several key differences from FLINT that we want to highlight. First, this is a study of the safety and efficacy of OCA exclusively in Japanese NASH patients. There's several unique attributed that have been described in the literature for this population, as compared to western NASH. These include lower BMI, higher rates of dyslipidemia, and lower rates of diabetes and hypertension. Second, this is a dose-ranging study evaluating 10, 20, and 40 mg of OCA once daily versus placebo. The highest dose is well above the 25-mg dose studied in FLINT, especially when taking the anticipated lower BMI in the Japanese study population into account. Third, this trial is meaningfully smaller than FLINT -- 200 patients versus 283 patients, with four arms rather than the two in FLINT, and it is not powered to show an improvement on fibrosis in any case.

We are deeply committed to advancing a comprehensive NASH clinical development program and building a leading NASH franchise. We remain on track for initiating our NASH lipid study in the second half of this year, and are currently finalizing plans for a NASH cirrhosis program, with additional clinical opportunities in NASH also being evaluated. I look forward to sharing more details with you on our plans for the expansion of the NASH program later this year. With that, I'd like to turn the call over to Lisa to discuss our commercial preparations for the launch of OCA in PBC.

Thank you, Mark. Good afternoon, everyone. I'm really excited to be able to share some of the work that we're doing to prepare for a successful launch of OCA in PBC. Here at Intercept, we're focused on bringing new medicines to patients with unmet liver diseases, both big and small; of course, so are hepatologists and gastroenterologists. At the end of the day, we share the same focus and passion to make a meaningful impact to patient outcomes, with the ultimate aim of extending transplant-free survival. We're committed to building credible partnerships with patients, physicians, payers, and policymakers to accelerate access to new medicines to patients who need them the most.

Today, though, I'd like to focus our discussions on two key areas: First, infrastructure build-out; and secondly, the work that we've done to better understand the PBC patient and their physicians. Firstly, infrastructure. Our plan is to launch OCA for PBC in the US, Canada, and the major European countries with our own local teams. I'm delighted with the progress that we've made over the past few months in assembling a world-class and highly regarded global team. You have a mix of expertise in successfully launching orphan and specialty products, as well as experience in launching products with a significant public health impact. The common thread, though, is that they have a passion for, and a deep knowledge and expertise in liver disease.

Although we're preparing for a launch in all of our key markets, our launch readiness in the US is of course our top and immediate priority. Several of our key teams supporting the US commercial team, now led by Richard Kim, have been in place for well over a year, such as marketing, managed markets, and sales leadership. We have made great progress in all of these areas. Now we're building our sales and commercial field organization. Our first regional directors are coming on board this month, and the field force hiring is targeted to be completed later this year, depending on the regulatory timeline.

We're also well under way with hiring outside of the US. To date, we've appointed experienced regional and country general managers in nine EU countries, including the UK, France, Germany, Spain, and most recently, Canada. They in turn are making great progress in hiring their teams, with a strong focus on market access. To support and guide the country teams, we've established a small but highly experienced team of functional experts, including global market access, and this global approach is already enabling a strong entrepreneurial environment that is very focused on supporting access for patients.

Along with our infrastructure build, we've been focused on better understanding epidemiology and PBC from both the patient and the physician perspective. In addition to advisory boards with physicians and community advocates, to date we've completed over 1,500 hours of market research as part of 20 different studies in the US and the EU, including a large multi-country study to understand how patients with PBC flow through the health care systems, from presentation of symptoms, diagnosis, initiation of therapy, and unfortunately, for some, the development of fibrosis, cirrhosis, liver transplant, or death. There isn't a lot of published epidemiology data, and so we've been validating and seeking consensus with thought leaders in key countries. We plan to get this published, as it will be important in helping payers understand the true burden of disease.

Obviously, ensuring rapid access for patients after regulatory approval is top of my mind. We've conducted rigorous qualitative and quantitative research to understand how US payers will cover and reimburse for OCA in PBC patients. Our US managed care markets team is in place, and has extensive experience in launching and gaining coverage for specialty therapeutics in orphan diseases. We are confident that the team will be able to successfully navigate the complex US coverage and reimbursement process, to ensure that PBC patients and providers have appropriate access to OCA.

What's very clear, though, is that payers and physicians need to be aware of the recent published literature from both the UK PBC and the global super-group data that has reinforced the correlation between lowering ALP and bilirubin, even within the normal range, and improved outcomes for patients with PBC. We are actively engaged in discussions with payers in the US and the EU, and based on our initial discussions, we believe there is a strong appreciation of the unmet therapeutic need in PBC. As we get closer to an anticipated approval, we've been defining our customer-facing approach. Earlier this year, we worked with a number of multiple analytic firms to inform our sizing of customer-facing organizations in the US and in the EU, which has helped us identify not only URSO-prescribing physicians, but specifically physicians that are treating PBC patients.

Overall, I'm really pleased with the progress that we've made thus far, and I'm thrilled to be at Intercept during such a pivotal time for the Company. I look forward to providing you with additional updates in the coming months. I will now turn the call over to Barbara to review our financial position.

Thank you, Lisa. Good afternoon, everyone. Please refer to our press release issued earlier today for our summary of our financial results for the three- and six-month periods ended June 30, 2015.

We ended the quarter with $732 million of cash, cash equivalents, and investment securities available for sale on our balance sheet. For the full year 2015, we are increasing our non-GAAP adjusted operating expense guidance from $180 million to $200 million, to approximately $240 million. This represents approximately $170 million of adjusted operating expenses in the second half of 2015, with the weighting of these expenses to come in the fourth quarter. This guidance excludes stock-based compensation and other non-cash items.

This increase from our previous guidance is due primarily to the accelerated infrastructure build-out supporting our commercial and research and development efforts. The significant increase represents our commitment to building a world-class orphan liver disease franchise, starting with the successful PBC launch, building a sustainable and leading NASH program, and maximizing opportunities for our bile acid platform.

I'd like to provide some additional guidance beyond operating expenses as you update your models. I want to reiterate that with an anticipated approval within the first quarter of 2016 in the United States, we do not expect meaningful revenues until the second quarter of 2016. In addition, with an expected second half of 2016 EU approval, and a product launch gated by reimbursement on a country-by-country basis, we do not expect meaningful EU revenues until 2017.

Our financial results are contained in our press release issued this afternoon after the market, thus I won't go in details on this call. However, in relation to the $170.8 million warrant re-evaluation expense recorded in the first six months of 2014, recall that in connection with some of our pre-IPO equity financings, we issued warrants that were classified as liabilities and were adjusted to fair value on a quarterly basis, with the change in the fair value being included in that loss. The last of the warrants were exercised on a cashless basis in April 2014, so there were no such expenses after that time.

Adjusted operating expense as presented above is a non-GAAP financial measure. We anticipate that stock-based compensation expense will represent the most significant non-cash item that is excluded in this adjusted operating expense guidance, as compared to operating expenses under GAAP. Let me now turn the call back over to the operator to open the line for questions.

Thank you.

(Operator Instructions)

Our first question comes from John Eckard with Barclays. Your line is open.

Good afternoon, and thanks for taking my question. You've -- again, forgive me, because I've been still ramping up here, but your guidance is significantly higher than last quarter. I heard a reference and suggestion of accelerated or priority review and hiring of the sales force. Is it fair, or have you announced, that you will get priority review for this filing? Is that based into your change in OpEx projections?

Thanks, John. I'll take the first part of the question. As I mentioned in my prepared remarks, we're hoping under fast-track to be given priority review, but we cannot confirm that yet. We are planning our business on the basis of a priority review so that we are ready to launch within the first quarter of 2016.

Okay, great. Then I had a question for either Rachel or Mark. It's more of a big-picture question regarding business development. Given the fact that Intercept is the lead in the NASH development, how do you think about the Company leveraging this position most effectively with regards bringing in a specific diagnostic, a strategic collaboration, or even a small acquisition of a complementary mechanism to FXR? Any big-picture thoughts there about how you think about this going forward?

Yes, John. Thanks for the question. It's Rachel. We're not giving any specific guidance on business development, but to your point about big-picture strategy, I think it is important to note that we do have a leadership position here. We have the first successful Phase II trial demonstrating some initial proof of concept efficacy, both on -- well, primarily on improving fibrosis, which we think is very important. Mark can probably elaborate a little bit more on that.

When you think about that, and thinking about where the overall space is in the overall development space, most companies are behind us, right? Most companies don't actually have -- they are not in Phase II. That does make us an attractive potential partner. I think you and I may be have had conversations in the past about bigger picture, we are in favor of building the best regimen for NASH. How that plays out is yet to be determined, but we do think that we have an important competitive advantage.

Great, thank you.

Yes, John. I would just add on to that, as Rachel alluded to, OCA is the first therapy to have ever demonstrated a fibrosis benefit in the context of a chronic active ongoing disease in a relatively short period of time. I've mentioned this before, but there's recent studies that have been published, namely Angulo out of Mayo, who showed that fibrosis is really the most important pathologic feature of this disease that predicts all-cause mortality, not just liver-related complications and mortality.

I've said this before. I think that as an FXR agonist we have really the optimal approach out there, and I could see OCA being positioned as backbone therapy in this disease. But as Rachel mentioned, we are looking at other mechanisms. We do think that other drugs will find a place in the treatment of this huge heterogeneous disease population over time.

Great. Thank you very much.

Thank you. Our next question comes from Ying Huang with Bank of America Merrill Lynch. Your line is open.

Good afternoon. Thanks for taking my questions.

Can you talk about the first on the patent for OCA. I know that you do have plans to extend that from 2022, potentially to 2027. Can you update us where that is? Also, can you talk about the commercialization effort you are building for PBC indication? For example, how many sales reps do you plan to have in both US and Europe? Thank you.

Yes, thank you. Just to confirm, we have issued composition of matter patents on OCA that expire on their face in 2022. We do expect to get the five-year maximum extension under Hatch-Waxman and similar legal provisions in other jurisdictions, which would take it to 2027. We have additional manufacturing process-issued IP that goes to 2028. Then pending patents on commercial -- the commercial manufacturing and additional composition of matter that could take market exclusivity to 2033.

For part two, I'll hand over to Lisa.

Okay, thanks for the question.

I think we are in the middle of doing significant amount of work to really understand those physicians in the US and Europe who are the key prescribers for PBC. We can take some good proxy measures looking at Urso use, as well, but then really focusing it down on the PBC prescribers. In the US, for example, we think there are about 1,200 hepatologists and probably around 14,000 gastros, of which a proportion of those are going to be really focused on PBC.

As we start to go through that sales-force-sizing exercise, we recognize that what's important is that we are committed to ensuring that all physicians, regardless of really who they are, get the scientific information they need about OCA and PBC. Whilst we're still doing the work, I think our initial expectation is that the field force that we'll need in the US will be quite focused, and we certainly would expected it to be no more than about 50 sales representatives. We're still in the process of doing a sales force sizing across Europe.

Great. Thanks for the color.

Thank you. Our next question comes from Michael Yee with RBC Capital. Your line is open.

Thanks for the questions. Two topics. One is going back to the Japanese study, which is going to report out soon, can you remind us about what work was done at higher doses, and what one should expect at higher doses, and why that was actually looked at here, particularly in the skinnier population? If that's -- given that information, would -- is there any differences in the management of lipids? What is your base case to expect some possibility higher absolute rates of LDL cholesterol? Just wanted to understand a little bit about that dynamic.

The second topic was a commercial question for Lisa or somebody else. I know you're doing work and thinking about your PBC launch, but in your discussions with payers, what type of pre-auth, what type of coverage do expect here? Is it -- is this a situation where you've identify tons of patients that have already failed Urso, or is this a fast launch? How should we think about that, the pace of that? Thanks.

Thanks for the questions, Michael. I will take the first one, along with Rachel, and then hand over to Lisa on the second part. With respect to the prior experience at higher doses, recall that our first Phase II actually in very similar patients, this was our initial proof of concept six-week study in NAFLD patients with diabetes, was at 25 and 50 mg.

Really, the data from that study were the only data available in this kind of patient population at the time that FLINT was designed, and at the time that the Japanese NASH study was designed -- did not obviously have any data for the 25-mg dose. Our partner SDP decided not having had experience in the Japanese NASH population, to do most -- more of a dose-ranging study that I described -- the 10, 20, 40-mg doses.

I think as I mentioned in my prepared remarks, given the fact that FLINT unequivocally showed that 25 mg is an efficacious dose, and that we also did see generally mild, moderate, and lower incidence than PBC type pruritus, we nevertheless did see pruritus in about 25% of the patients. We did have one patient discontinue. That underlies that the premise for a lower-dose selection -- taking 25 mg forward, of course, in the Phase III Regenerate study, but also adding the 10-milligram dose, given as I said, our expectation that we would see efficacy with that those, and a better tolerability profile. I can't speculate on what we will see at the higher dose in the Japanese study, but we will find out towards the end of this year.

But what about the management of lipids? The 20 or the 40, what would you expect for the lipids?

Sure, Rachel will take that part of the question.

Yes, just so you have the Phase II data in PBC, because really this is the most experience we have with higher doses, Michael I just figured I'd give you those numbers from the Phase II Urso study. It was 47%, nearly 50% pruritus with 10 mgs, and it went upwards of 80% to 87% with doses from 25 to 50 mgs. While we can't make any kind of speculation on what happens in NASH, you at least have some Phase II data that you can consider for pruritus.

In terms of lipids, we really don't have any experience above 25 mgs. There's no dose-ranging data. This is the kind of information that we will be -- we will be exploring dose-ranging information on lipids in our upcoming NASH Satin or lipid study that we have talked to you about. You'll have to stay tuned on that. We don't know if there's a threshold effect.

In terms of management, I think we've said before that there is not really been an active management on lipids within the SDP trial to our knowledge. We'll have to wait and see what those data look like; but that will be the first dose-ranging data on lipids in that particular population.

I'll turn it over to Lisa.

Okay, following up on the question about payers in the US, I think the first thing to say is, obviously, the expectation at this stage is that OCA would be used in patients who haven't had an adequate response to Urso. We are in the process right now of through our managed markets team, talking to payers really about their understanding about PBC, and where they see OCA fitting in. What's important at this stage is to say that we expect that payers will manage OCA similar to the way in which they have managed other oral orphan therapies to ensure appropriate use.

Yes, and Mike, just to add something to Rachel's comments, because I had mentioned the earlier Phase II study, the six-weeks study in diabetic NAFLD patients. If you look at the lipid data there, there is really no significant difference between the two doses tested. It was really too small a study to be able to draw any conclusions from -- just echoing Rachel's remarks.

So there may not be a difference there, but the management was not as active? If that was the difference, that could be -- trying to preempt anything, that could be a difference why it might be higher?

I don't know that we can really speculate beyond what Mark just said in terms of lipids, but keep in mind this data is going to be important and interesting, because it's a second Phase II trial in NASH, plus placebo-controlled for OCA. That being said, it's not, given all of the differences that Mark mentioned about the uniqueness of this population, it's not going to be guiding our Phase III plans. As you know, the Phase III, Mark spent a lot of time going through all the details there. We indeed have actually taken a lower dose forward for the reasons he's already cited. I'm not sure that the spending a lot of time thinking through the higher dose is going to have any relevance to the future of how we're thinking about OCA.

Thanks.

Thank you. Our next question comes from Joel Beatty with Citi. Your line is open.

Hi, thanks for taking the questions. Following up on an earlier question around the strategy to build the best regimen in NASH, what type of mechanism or features would you see as complementary to OCA and NASH?

That's something we're currently evaluating. I'd love to be able to answer that question and point you to all kinds of mechanisms that we're interested in, but I think at this point we're not ready to share any of that -- any of those thoughts publicly.

What I would say, though, is we think we have a really good framework. When you think about the different areas of NASH, you've got a fibrotic mechanism. You've got a metabolic mechanism, and an inflammatory mechanism. OCA actually hits across all three of those big giant buckets of what we think contribute to the disease. Having that as a backbone therapy to build upon we think is a really -- puts us in a nice position and an attractive position. As Mark said earlier, I think big picture what I can tell you is that fibrosis is really the only clinical metric that's been associated with long-term health of these patients' clinical outcomes. That's a long-term read of how we're thinking about it.

Sure. Thanks for that color. Then one other question. In comments about the Regenerate trial, I thought I had heard the up to 1,100 additional patients added for the outcomes portion beyond the 1,400 that would re enrolled -- does that mean there will be a decision on how to decide up to -- adding up to 1,100 or a smaller number? If so, how would you decide that?

I think you asked how did we decide on up to 1,100 more.

Well, will it definitely be 1,100 more, or do you decide later on?

I think maybe the best way to answer that is there's a lot of different pieces that feed into this trial design. One piece is looking at the interim analysis and what that power is. Another is looking at the total safety exposure and figuring out how many patients we need from a regulatory perspective to satisfy basic guidelines. Then a final piece that goes into the overall size is the outcomes piece. How many of them.

I think we're putting rough numbers out here. We're not giving a specific number, but generally speaking, we're talking about a total trial size of 2,500 that would satisfy all three of those buckets. It's not our expectation that somehow we'd only enroll an extra 200 because of the events. That's not the way we're thinking about it. It's both safety, as well as outcomes that drive that bigger piece. Does that answer your question?

Yes, it does. Thank you.

Thank you.

(Operator Instructions)

Our next question comes from Robyn Karnauskas with Deutsche Bank. Your line is open.

Great. Thanks for taking my question. This is Mohit filling in for Robyn.

I just wanted to ask a question regarding the patient population for PBC. In the checks we have done, we found the doctors were talking about different estimations on how many patients do not respond to Urso. Lisa and her team has done a lot of work, a lot of market research in the field. Based on that work, how confident are you in the number -- 30,000-patient number you cite? Do you think there is a number -- there could be up side to that number? Thank you.

I think what we're doing right now a large number of market research studies in a number of areas. Firstly, we're trying to validate epidemiology. As you know, there's not a huge amount of published data that's available. We've been working with thought leaders and stakeholders in the key markets to try and validate, first of all, the epidemiology. That's ongoing, and we are hoping to try and publish that, so it will really help give some guidance to payers.

When it comes to number of patients with an inadequate response to Urso, thank you for raising this because it's a very important question. As you know that recent literature from the UK PBC has really highlighted that any elevation in ALP and any elevation in bilirubin, particularly within the normal range -- and this is really important -- is associated with an increased risk of transplantation or death.

The challenges at the moment is there's just no consensus on what the definition of adequate response is. Giving you a direct answer to that as a percentage is actually very difficult. I suspect it's going to be some time, probably several years, before there's widespread agreement on what that definition should look like. That said, there's certainly a lot of interest, as I think you're picking up, and excitement about this data as it's being expressed at scientific meetings and other forums.

Got it, thanks.

Thank you. Our next question comes from Liana Moussatos with Wedbush Securities. Your line is open.

Thank you for taking my question. When do you expect data release from the Phase II PSC trial?

Hi, Liana. We have not given any public guidance on that study. It is enrolling right now, and we will be providing details in future calls.

Thank you.

Thank you. Our next question comes from Adam Cohen with MLV. Your line is open.

Hello. Can I ask you, what is the current OCA supply? How is it manufactured, and if it is internal, if it's internally or externally manufactured?

Thanks. It's a good question. OCA is a derivative of kino deoxycholic acid, which is a naturally occurring bile acid. Just like Urso, the only product approved for PBC data synthesized from -- right now from cow bile. We right now are commercially ready. We are manufacturing at scale, and are confident that we will have adequate drug supply for our launch and thereafter.

Just a quick additional comment to your question about internal versus external. This is all external. We do have a number of suppliers that go into the whole supply chain, something that's obviously important to us. I think we've mentioned in the past that we are planning our supply around success in NASH, and that does require investment earlier. While we're very confident in our supply for next year, we are also investing currently. That's part of even our operating expense guidance that we've given in the past, that we're making a big investment to have adequate supplies for a much larger population.

Thank you.

Thank you. Our next question comes from Matt Roden with UBS. Your line is open.

Thank you. This is Jeff Hung in for Matt.

On PBC pharmaco-economics, how do you think about the value proposition versus the economic proposition? Will the outcome of the Japanese study in OCA have any bearing on your registrational program? Will it trigger any changes? The last one is for Lisa. For the epidemiology data, you mentioned that you hope to get it published. Can you elaborate on that? Is that form of meta-analysis or marketing materials in some other format, and would that come out this year? Thanks.

Okay, I'm going to take it in reverse order, actually. From an epidemiology perspective, what we've been doing is taking the literature that exists, which I've said is not that great. There's not a huge amount of data that exists around this country level, and really getting the thought leaders to try and validate that data. We haven't yet figured out how or where we're going to do that, but we do think it's important to make this data available to help payers think about the burden of disease.

Pharmaco-economics, I thank you for raising that. Clearly, it's really important for us that we develop pharmaco-economic models that allow us to collect the costs associated with the true burden of disease. Obviously, that's going to include costs of managing transplants, cirrhosis, et cetera.

There is so little published data about the true costs in PBC at the moment that we think it's going to take some time to do that. That's clearly a very important part of inputting into the value proposition. I think payers get the economic benefit for these patients with higher met need with no other treatment options. But of course, we will continue to look to collect the cost data that would populate those models.

To address the third part of your question, I want to stress that the Japanese study is a Phase II study, as was FLINT. We do not believe that there is any opportunity to file based on the Japanese study data coming in, and look forward to getting the Regenerate study up and running as quickly as possible this quarter.

To add on to that, in terms of your question will these results trigger any changes, that's certainly not in any way our expectation. I'll reiterate what Mark said earlier. This is a unique Japanese exclusive population. There are similarities to western NASH, but there's also many differences. For all those reasons and the trial size and the dosing, et cetera, but we don't see this in forming our Phase III plans in any way.

Thanks.

Thank you.

(Operator Instructions)

I am showing no further questions at this time. I'd like to turn the call back to Management for any closing remarks.

Okay. No, thank you very much for listening in, and for your interest in Intercept and the progress we're making for PPC and NASH patients.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a great day.