Intercept Pharmaceuticals Inc (ICPT) 2023 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the First Quarter 2023 Intercept Pharmaceuticals Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nareg Sagherian, Executive Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us on today's call to review Intercept's First quarter 2023 financial results and key business updates. We are also pleased to share an overview of our commercial launch strategy for OCA and NASH. Our first quarter 2023 press release and accompanying slides are now on our website at interceptpharma.com.

Before we begin our discussion, I'd like to note that we will be making forward-looking statements, including statements regarding our approved product and clinical development program; certain regulatory matters, and our strategy prospects, financial guidance and future commercial and financial performance. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call, and we undertake no obligation to update such statements, except as required by law. These forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. Some but not necessarily all of the risk factors that could cause our actual results to differ materially from our historical results or those anticipated or predicted by our forward-looking statements are discussed in this morning's press release and in our periodic public filings with the SEC.

Today's call will begin with prepared remarks from our President and CEO, Jerry Durso; our President of Research and Development and Chief Medical Officer, Dr. Michelle Berrey; our Chief Financial Officer, Andrew Saik; and our Chief Commercial Officer, Linda Richardson. We will then open the call for questions.

Please note that our prepared remarks on today's call are more in-depth than typical but we have a lot of additional time for Q&A during the call. Let me now turn the call over to our CEO, Jerry Durso.

Thanks, Nareg, and good morning, everyone. Thank you for joining us on our first quarter 2023 earnings conference call. Today, we will review key business updates for the first 3 months of the year and preview our commercial launch strategy for OCA and NASH. The strategic actions we took in 2022 established a strong base for us to build on in '23. As we proceed through this critical year for Intercept, I'm pleased with the disciplined execution our team has taken to grow our leadership in PBC to work through the regulatory review process for OCA and NASH and prepare potential commercial launch and to advance our pipeline.

First, I want to highlight our important upcoming milestones in NASH, and then I'll discuss the sales performance of Ocaliva and our outlook in PBC. We're actively preparing for our advisory committee meeting on May 19 to review our new drug application for OCA as a treatment for pre-cirrhotic fibrosis due to NASH. Given the robust body of evidence we've gathered through our OCA NASH clinical development program, we're confident in the improved benefit-risk profile of OCA and believe it has the potential to become an impactful therapy for patients in urgent need of pharmacologic intervention. We look forward to discussing the strongly confirmed antifibrotic effect of OCA as well as its monitorable and manageable safety profile with the advisory committee.

At the same time, we look forward to our upcoming PDUFA target action date on June 22. In parallel, we're progressing our launch readiness activities, which Linda will elaborate on later in this call.

Now turning to PBC. Our PBC business continued to perform well in the first quarter. We recorded $68 million in net sales for Ocaliva in PBC, representing 15% growth over the prior year quarter. This strong performance is evidence of the sustained growth of our foundational PBC business. Importantly, we're seeing a consistent trend in attracting new first-time Ocaliva writers, which is a key factor in our growth trajectory. Specifically, 4 out of 10 total prescribers in the first quarter of 2023 were, in fact, first-time Ocaliva writers.

Looking ahead, we have strong conviction in the strength and long-term opportunity of our foundational PBC business for several reasons. First, we know that patients on Ocaliva persist on therapy at a rate better than what is typically seen with many other chronic disease therapies. In fact, over 95% of our business is driven by existing patients, and our refill rate continues to be strong at approximately 90%. Additionally, our market research shows that patient satisfaction on Ocaliva therapy remains high. 85% of patients report a strong intent to remain on therapy and would highly recommend Ocaliva to others living with PBC.

This satisfaction rating jumps to 95% when you survey patients from Interconnect which is our patient assistance platform. Because of these high satisfaction ratings, 65% of currently active patients on Ocaliva have been on therapy for more than 2 years. Our market research also shows that published data of the impact of Ocaliva on clinical outcomes is a strong motivator among health care providers when considering their intent to prescribe PBC therapies in the future. We know the primary treatment goals for managing PBC are to prevent liver transplant or death. We assess the ability of Ocaliva to meet these goals with multiple real-world analysis that were published in gastroenterology and presented last year at medical meetings. This includes 6 years of data through our POISE open-label extension study, demonstrating that OCA has a sustained impact on key biomarkers of liver health.

Ocaliva is the only second-line therapy in PBC to demonstrate a positive impact on outcomes. Driving greater awareness of the real-world applications and benefits of Ocaliva in PBC is an important differentiator and part of our long-term strategy. Supporting our well-established leadership position in the PBC market is strong IP protecting Ocaliva market exclusivity into the 2030s. And finally, our OCA and bezafibrate fixed-dose combination program, which Michelle will discuss in a moment, further adds to our long-term leadership in this space.

In summary, I'm confident in the strength of Ocaliva's market position and the long-term opportunity with our foundational PBC business, as evidenced by double-digit sales growth for the third consecutive quarter and clinical development progress for the OCA bezafibrate fixed-dose combination. Importantly, our strong financial position gives us the optionality to drive continued growth in PBC, execute on our upcoming milestones in NASH and develop innovative new medicines through our pipeline programs.

I'll now turn the call over to Michelle.

Thank you, Jerry, and good morning, everyone. As you can imagine, our organization is actively preparing for an advisory committee meeting on May 19. Our NDA for OCA is supported by a robust body of evidence, including 2 independent positive 18-month interim analysis from the pivotal Phase III REGENERATE study and the pooled safety database of almost 2,800 patients with nearly 1,000 patients on study drug for 4 years.

In these analyses, OCA has demonstrated a strong and consistent antifibrotic effect as was seen in the Phase II FLINT study, the first clinical study to show antifibrotic benefit. Additionally, our safety database, which is the largest in the NASH field with the longest duration of patient exposure, provides a well-characterized safety and tolerability profile that supports the potential chronic administration of OCA. It's also important to remember that while there are various pathways being studied in NASH drug development, patients with NASH exhibit signs of impaired signaling in the FXR pathway, specifically, which triggers progressive fibrosis.

Therefore, addressing underlying mechanisms related to FXR dysfunction is one important aspect of NASH treatment. OCA is an antifibrotic, meaning it drives fibrosis improvement through direct restoration of FXR mediated signaling. It does this in 3 ways: decreasing fibrogenesis and collagen deposition, regulating inflammation and reducing bile acid-induced cytotoxicity. As we move toward our advisory committee meeting, we continue to believe that OCA has the potential to become an impactful therapy and the first approved therapy for this devastating disease. Based on the additional data we have generated, we believe that the benefit/risk of OCA has improved since our initial regulatory submission. We look forward to discussing this with the advisory committee next month and progressing toward our June 22 PDUFA target action date.

I'll now share more about our commitment to innovating in PBC with our fixed dose combination of OCA and bezafibrate the first potential fixed-dose combination of an FXR agonist and a PPAR agonist. We're excited about the progress we're making. Our Phase I study is now complete, and we expect to complete the planned interim analysis from our 2 ongoing Phase II studies this year. Pharmacokinetic data, dynamic biochemical changes and safety tolerability will serve as the basis for an end of Phase II meeting with FDA. We plan to provide an update on the timing of that meeting as well as a Phase III study once we have those data in hand.

At the upcoming EASL meeting in Vienna, interim analysis results from 1 of the 2 Phase II studies evaluating the effects of the combination of serum biomarkers and PBC will be presented. This podium presentation is one of 7 abstracts in PBC in NASH accepted for the congress. We look forward to providing more information in the EASL embargos list. We believe that a fixed-dose combination of OCA and bezafibrate presents an opportunity to optimize the doses of each medicine and further improve the treatment of PBC and with the potential to establish best-in-class clinical benefits. We know from many years of data in Europe that OCA and bezafibrate and synergistic mechanisms of action and have the potential to drive relevant biochemical markers to well within normal ranges, changes that have been associated with improved clinical outcomes in PBC.

In late 2022, we published data on the improved transplant-free survival, demonstrating the long-term clinical benefits of OCA in PBC. In other words, its impact on lives, not just labs. We believe that a fixed dose combination of OCA and bezafibrate may meaningfully improve treatment options for individuals living with PBC. While our fixed dose combination program advances, we also remain on track for a regulatory submission to FDA this year in support of fulfilling our post-marketing requirements for Ocaliva in PBC. This submission will include data from our post-marketing study, COBALT with external controls, real-world evidence from the global PBC patient registry and supportive evidence from the POISE open-label extension.

At this point, I'll turn the call over to Andrew for a brief financial update.

Thank you, Michelle, and good morning, everyone. I encourage you to refer to our press release for a detailed summary of our financial results for the first quarter ended March 31, 2023. I will begin by sharing some highlights for the first quarter. First, we are pleased with our strong sales performance this quarter. Recording $68 million in net sales as compared to $59.2 million in net sales in the prior year quarter. This represents 15% growth, which is in line with the midpoint of our annual revenue guidance provided during our last earnings call.

Selling, general and administrative expenses were $57.7 million in the first quarter of 2023 compared to $37.8 million in 2022. The period-over-period increase was primarily driven by NASH commercial launch preparation as we approach our PDUFA date in June and to a lesser extent, costs related to our Amneal litigation, which was settled prior to trial. Research and development expenses decreased to $41.7 million in the first quarter of 2023 from $47.6 million in the prior year quarter. This decrease was primarily driven by the closeout of our Phase III Reverse study and R&D cost sharing reimbursements.

Interest expense in the quarters ended March 31, 2023 and 2022 was $2.8 million and $6.7 million, respectively, and is related to our convertible notes outstanding. We reported a net loss from continuing operations of $31.9 million for the first quarter of 2023, a decrease compared to a net loss from continuing operations of $33.4 million in the first quarter of 2022. As we mentioned last quarter, we anticipated a heavier than normal cash burn to occur in the first quarter relative to the rest of the year. We experienced a typical revenue seasonality in Q1 as patients were impacted by the resetting of insurance plans and Medicare coverage gaps.

Additionally, cash outflows related to accrued expenses were higher in Q1 than in a typical quarter as can be seen by the drop of approximately $20 million in accrued liabilities in AP from year-end to the end of this quarter. As of March 31, 2023, Intercept had cash, cash equivalents, restricted cash and investment debt securities of $435.2 million. As previously mentioned, we plan to use $110 million to pay off the convertible notes due on July 1, 2023.

In summary, we believe that our balance sheet, cash position and foundational PBC business provide us with the financial strength to grow our existing business and meet our strategic objectives. Including preparation for a commercial launch in NASH should we gained approval by the FDA or a pivot to profitability if we are unable to achieve an approval in NASH. Finally, we may choose to revise our 2023 guidance later in the year, pending potential regulatory approval for our NDA for OCA and precirrhotic fibrosis due to NASH.

With that, I will now turn the call over to Linda to provide more detail on our commercial launch strategy for OCA and NASH. Linda?

Thank you, Andrew. Good morning, everyone. I'm excited to provide greater insight into the opportunity we see ahead for OCA as the first potential treatment for patients who have advanced fibrosis without cirrhosis due to NASH. This is a specific subset of the overall NASH patient population and our REGENERATE population, one where patients and their health care providers are in urgent need of a pharmacologic intervention. The work we've been doing to prepare our strategies and plans for launch is grounded in robust market insight and analytics using third-party databases, primary and secondary market research, data from publications and feedback from multiple advisory boards. We've included HCPs, patients and payers in the prelaunch work that I will discuss in my upcoming remarks.

In addition to our robust market research program, we also have considerable marketplace knowledge from our years of directly engaging the hepatology and gastroenterology communities through our work delivering Ocaliva in PBC. Now let's start by digging into this advanced fibrosis population in a little more detail in terms of both the size and the significance of this group of patients. We are focusing on this population for several reasons.

Notably, these patients are fundamentally at greater risk for mortality as their fibrosis progresses to cirrhosis. One in 5 patients with advanced fibrosis progresses to cirrhosis within approximately 2.5 years. The fact that we cannot currently predict which patients are most likely to progress makes treating these at-risk patients an urgent priority. Also, we've updated our understanding of the size of this advanced fibrosis segment as you can see here on Slide 14. Starting near the top of the funnel on the left, the subset of adult NAFLD patients who are believed to have NASH is approximately 26 million U.S. adults. Of this group, slightly more than 5 million are estimated to have a NASH diagnosis. As NASH ICD-10 codes are not consistently used, we would expect that the number of formally diagnosed cases should grow over time as new treatments become available.

We then look to evaluate how many of these NASH patients are under the care of a specialist, meaning a hepatologist or gastroenterologist. Currently, this seems to be in the range of 2.7 million patients. We believe that these specialists will primarily oversee the management of NASH in the advanced fibrosis without cirrhosis population and will, therefore, be the primary focus of our commercial efforts. Our in-depth work with these specialists has strengthened our belief that these patients can be readily identified using noninvasive tests. This is the group that we refer to as patients with advanced fibrosis without cirrhosis due to NASH. We now estimate this OCA target population to be approximately 700,000 patients. This is an updated number from the roughly 500,000 figure we've previously referenced based on work done several years ago.

Over the past few years, we've seen significant increases in recognition of the importance of fibrosis as the strongest predictor of disease progression and awareness of negative outcomes in NASH. In a retrospective study comparing NASH patients with and without fibrosis, survival among those with fibrosis was significantly reduced as their fibrosis progressed.

Our recent market research shows that heps and gastros clearly understand this risk of progression in their patients with advanced fibrosis. 6 out of 10 respondents agreed that fibrosis reversal of one or more stages is more important than improvement of steatohepatitis. And 7 in 10 believe that preventing progression to cirrhosis and fibrosis reversal of greater than 1 stage are the most important treatment goals for this patient segment. We've been tracking physician sentiment on the importance of fibrosis and the need to treat advanced fibrosis patients differently in one of our large market research studies.

The most recent research confirms the following: An increasing number of heps and gastros believe that advanced fibrosis patients need to be treated urgently, they require a different management approach and reversing their fibrosis is more important than improving steatohepatitis. We see similar beliefs from patients under the care of a gastroenterologist or hepatologists. These patients cite that they are aware of the risks of advanced fibrosis, know it must be urgently treated and intend to speak with their physician about treatment options. Later on in the presentation, I will show complementary data from payers who also see the importance of addressing advanced fibrosis.

We know the importance of treating these advanced fibrotic patients in NASH, but how can physicians readily identify and stage them? This is where the use of noninvasive tests or NITs becomes a very important element of the care pathway. We believe the availability and acceptance of these diagnostic and staging tools in NASH is a potential game changer. Numerous practice guidelines from a variety of associations, including AASLD and the joint ACG CLDF publication now endorse the use of NITs as an appropriate option to liver biopsies.

Liver biopsies are invasive, not without their own risk and are often very painful for patients. Thought leaders in the NASH space have indicated publicly that biopsies are infrequently used in office settings and are instead primarily used for screening patients in NASH clinical trials. The levels that everyone, NITs include simple scoring tests like FIB-4 or APRI, proprietary serum tests like ELF and FibroSure and imaging done with a FibroScan or by MRA. To increase sensitivity and specificity, many of the guidelines suggest that a 2-step system be used, starting with a simple scoring test like FIB-4, followed by imaging or a serum test, such as FibroScan or ELF, respectively.

In fact, FIB-4 has now been added into many electronic health records like Epic, making it even more accessible to many medical professionals and simplifying the identification of NASH patients. The availability of NITs is certainly important, but it's critical that healthcare professionals use them and have confidence in these test results. Our market research shows that target prescribers, meaning heps and gastros are familiar with NITs and are increasingly using these options. Approximately 4 in 5 surveyed hepatologists, gastros and APPs indicate that they are already using at least 2 NITs to diagnose NASH and confirm fibrosis stage. A growing number of these HCPs are using FibroScan for their imaging and the majority feel that it's the most ideal approach to noninvasive imaging for their NASH patients.

Conversely, our analysis of the Komodo Health database showed that only 14% of confirmed or suspected NASH patients were ever biopsied, meaning nearly 9 and 10 were not. We believe that the growing adoption of NITs among KOLs and specialists will help drive and facilitate the identification of NASH patients with advanced fibrosis without cirrhosis, exactly those patients who need to be treated. The inherent impracticality of using biopsies to identify and stage potential NASH patients contrasted with the growing endorsement of NITs will be considerations for all aspects of the health care ecosystem as it relates to NASH. Payers' willingness to use NITs will also be an important factor in the reimbursement and access space.

Earlier in our call, Michelle spoke about the importance of the FXR pathway in NASH. To reiterate, weakened FXR signaling in NASH is associated with the disruption of multiple biologic processes, which lead to the progression of liver fibrosis. OCA directly targets these fibrotic, inflammatory and bio acid cytotoxic mechanisms. The majority of other late-stage compounds in NASH development targets steatosis or fat in the liver, which occurs in earlier phases of the NAFLD spectrum. For example, GLP-1s appear to regulate food consumption and weight. Other drugs in development address steatosis by thyroid hormones that regulate hepatic lipid metabolism.

Understanding where and how OCA fits into the treatment of the disease is an important foundational understanding of the demonstrated antifibrotic effect OCA produces. We previously highlighted the efficacy of OCA in NASH from our Phase III REGENERATE trial, evidence supported not only by liver biopsy data, but also by NITs. Using histology, we see that OCA 25 milligrams demonstrated double the response rate of placebo in reducing liver fibrosis without worsening NASH. Our NIT data reinforced the findings of histology data showing similar efficacy and measurements of key biochemistries and liver stiffness associated with fibrosis.

Furthermore, our antifibrotic effect is even more pronounced in patients who are considered more advanced at baseline, the F3 like patients, so to speak. Importantly, we also see improvement in fibrosis in nearly 40% of patients who had baseline and month 18 liver biopsies in REGENERATE. This compelling efficacy data on fibrosis reversal, the most important parameter of concern for specialists and the driver for urgency comprise the message platform that we plan to carry forward to prescribers.

So far, I focused on the size of the target population for OCA therapy, the strong desire among specialty prescribers to urgently stop or reverse advanced fibrosis. The increasing availability of NITs to facilitate staging NASH patients, ensuring the most appropriate patients receive treatment, the role of FXR disregulation in NASH and how OCA as an FXR agonist addresses that to help stop and reverse fibrosis and our compelling efficacy data.

I'll now focus on how we are planning to leverage our current knowledge and resources in this space to launch effectively in the landscape. As an organization, we have been working to understand the NASH market for years and are leveraging our deep knowledge to ensure launch readiness. We've done extensive modeling using claims databases to confirm our target prescribers, hepatologists gastroenterologists and advanced practice providers. We have learned that 3 in 4 of the highest potential NASH prescribers are heps and GIs already in our existing PBC target list, allowing us to easily pivot to a NASH launch focus while maintaining critical support for our PBC business. We have existing relationships with these offices and prescribers.

Importantly, reaching this substantial percentage of identified NASH targets can be achieved at launch using our current field footprint, which we view as a strength and differentiator. Of course, we will assess the decision regarding whether to add to our field forces as we progress through regulatory and market access milestones. We've also started to prioritize these HCP targets based on our insights regarding accessibility, influence within the NASH space, familiarity with obeticholic acid through PBC prescribing, projected patient loads and proximity to FibroScan machines to facilitate inclusion of a second NIT when staging NASH patients.

We understand the Gastro Group affiliations and networks and the roles that internal staff play in handling reimbursement paperwork. We believe this gives us a significant advantage when it comes to being the potential first-to-market mover in NASH. Additionally, we are sharing research results that show our reps are highly regarded in gastro and hep offices. And our corporate reputation is equally strong in the NASH field. We believe that it is not just the educational messages that we will deliver regarding OCA in NASH, but who is delivering that information. We are already underway with prelaunch activities to prepare the market as Slide 22 highlights. We are engaging with key audiences at major congresses using peer-to-peer dinner programs to educate HCPs on NASH and our disease awareness website is up and running as well. We are already training our reps to deliver NASH education in the field, which we plan to start in May. Our medical affairs teams are also engaging in appropriate educational efforts.

Now I'd like to discuss what we are hearing from our payer communities as access and reimbursement are critical drivers of launch success. First, I can share that we plan to expand our field reimbursement manager team to help facilitate reimbursement processes at launch. We are committed to providing assistance on this front including the use of a hub for additional patient support. As this slide highlights, payers share many of the same sentiments that heps and GI stated regarding the significance of treating patients with advanced fibrosis and a willingness to use NITs, especially if they are supported by KOLs and guidelines. There is an overarching recognition of the unmet need in NASH and an acknowledgment that different pathways and corresponding therapeutics may be needed. We see all of these as positive indicators for productive reimbursement conversations following a potential approval and access to a final label.

In our discussions, we are focused on the advanced fibrosis without cirrhosis segment of NASH patients. We believe this focus helps payers understand exactly the segment where an FXR agonist like OCA has the potential to yield the greatest benefit for appropriate patients. Regarding pricing for OCA in NASH, the value proposition for OCA will be tied to the final label that we would receive upon a potential approval. We'll make a final decision about our pricing with full insight from our label, along with the most up-to-date insights from our key payers. At that time, we'll be able to provide our pricing decision.

Slide 24 depicts the range of prices within the continuum of categories. We believe that OCA falls into the chronic specialty drug segment and are assessing our pricing options within that context. As this is a separate NDA with a 25-milligram tablet and a unique trade name and NDC code, we will have the opportunity to consider differential pricing from Ocaliva in PBC, which is an orphan disease with a distinct value proposition for PBC patients especially as Ocaliva is the only approved second-line treatment and has demonstrated real-world evidence that shows improved transplant-free survival. Our strategy remains to have optionality and make the best decision with full insight in hand.

In closing, we are excited about the opportunity to potentially bring OCA to market as the first treatment for NASH in the patient segment that most urgently needs it. The approximately 700,000 patients with advanced fibrosis without cirrhosis due to NASH who are under the care of a hepatologist or gastroenterologist. The NASH landscape in 2023 shows a greater understanding of the real risks caused by advanced fibrosis and the endorsement and growing acceptance of NITs to diagnose and stage NASH patients. Much has changed over the past 3 years, including a better understanding of the safety and efficacy profile of OCA in NASH from our REGENERATE trial. Paired with our commercial expertise in the liver space and deep knowledge of our hep, GI and APP customers, we stand poised to successfully launch OCA in NASH later this year.

I'll now turn the call back over to Jerry.

Thank you, Linda. In summary, I'm proud of the progress we've made in the first quarter of the year. And believe we're in a strong financial position as we manage our upcoming milestones, including our advisory committee meeting for OCA in NASH and planning for a potential launch. I'll now open the call for questions for the team.

(Operator Instructions) Our first question comes from Yasmeen Rahimi with Piper Sandler. Yasmeen please check your mute button.

I am so sorry. Thanks you so much for allowing me to ask my question. And congrats on the great updates that you provided for us this morning. You noted that the payer discussions really recognizes the need of patients with advanced fibrosis and I think the slide says F3 and above. Could you maybe help us understand how one could identify with the current available NITs, that particular patient population. And therefore, and then secondly, if you have any flexibility in pricing if you chose to go very specifically into F3 instead of F2 and I'll jump back into the queue.

As Linda indicated, obviously, we're doing deep work with the payers as we progress here. Importantly, just for clarity, so the patient group that we outlined in -- is clear on the slide, which is available and people can pull it if they don't have access to it currently. That 700,000 we're defining as the launch target for OCA. You can describe as F3 like population. This is a group that can be found in the real world, again, utilizing usually 2 NITs. We've done quite a bit of work using both the published information and the cutoffs that are out there. We've also -- and we'll in the future, put some of the additional analysis of our own data from REGENERATE and some of the work we've done specific to the NITs.

Also importantly, in that algorithm, we're also trying to make sure that we're opting out patients that might have a high probability to be patients with cirrhosis since we expect those to be outside of our indication. So the 700,000 is F3-like found, we think by noninvasives that is a little -- and we did note this. It is growth from the number we put out in the past, but it's essentially a similar population. As you can imagine, over the last 2 to 3 years, both based on the epidemiology and the growth in NASH as well as a greater understanding of the disease, we've seen that population grow.

But it's a similar -- it is F3 and that's when we talk with payers currently about our value proposition, we're focusing on this group. The fact that it is a subset of our potential indication is a productive place for the discussion with payers.

One moment for our next question. It comes from Mayank Mamtani with B. Riley.

Congrats also on the progress. So on the OCA beza combination a planned interim analysis at EASL would love to hear what specific efficacy end points that we should focus on? And also maybe if you could put in context the solid paper from 2 years ago, which gave us a more stringent biochemical response definition and any other population or sequencing differences that we have from that real-world study versus what you did in a clinical trial setting.

Thanks for the question, Mayank. I'll turn it to Michelle, of course, with our caveat that we're under embargo in terms of the information and the data that we're going to present at EASL coming, but a program that we're really excited about, Michelle.

Yes. Thanks for the question. We are looking forward to the podium presentation at EASL. As Jerry mentioned, we are under embargo. But with regard to the endpoints, we are looking at all relevant biochemical parameters the similar population to the paper that you referenced and similar also to -- POISE may be a little more advanced than that patient population, a little higher ELP at baseline, so we can really see the improvement. We will be sharing some additional information too both at EASL and in some upcoming publications about the importance of driving multiple parameters well into the normal range and some data that we have there on how predictive that is from outcomes with our large data set now that we have both from clinical trials in PBC, but also in the real-world evidence.

We've now been able to take a really great look at the multiple parameters that are predictive of the good outcomes that we've been able to see for patients on Ocaliva improvements in transplant-free survival. So we look forward to sharing the data in a couple of months.

Great. And if I could just quickly squeeze in a follow-up. It's kind of related -- the NASH AdCom preparation, if there's any implication of the PBC data set to that briefing documents that we expect to see in a month's time. And also clarify the biopsy efficacy definition, fibrosis improvement and NASH resolution, which I think you reported in your Lancet publication but curious if that definition is also required as part of the reanalysis, if you could clarify that? And I'll hop back in the queue.

So with regard to the NASH briefing document, we did include in our pooled safety database at the FDA's request all the post-marketing data from PBC. So that includes 30,000 patient years of data. So that's clearly relevant for our large safety database and ability to support the potential chronic dosing for OCA for NASH. So yes, that will be included in the briefing book.

And just to clarify that on the primary endpoint. So the current draft guidance for NASH for an accelerated approval, is 1 of 2 potential histologic endpoints at month 18, either resolution of NASH without worsening of fibrosis or at least 1-stage improvement in fibrosis without worsening NASH defined as any of the 3 parameters, steatosis, inflammation or ballooning. So that's the same endpoint with just a different methodologic reading procedure. So we used instead of 1 central reader, 2 central readers on glass life. We had a panel to achieve consensus. So that follows the new draft guidance that was issued by the FDA in late 2020, early 2021.

And look forward to the panel next month.

Our next question comes from Ritu Baral from Cowen.

I wanted to ask -- I wanted to revert back to Slide 14 and that 700,000 target patient population. Jerry, you mentioned that these were sort of F3-like and could be defined by NITs. With some of the ongoing conversations we've had with NASH KOLs there's been this sort of further slicing up of the F3 population as they see it. And maybe this is them thinking out loud, but we've heard about high risk versus low risk F3 and we've started hearing about F3A, F3B, F3C. Could you maybe frame the conversations that I had with KOLs around those terms with that 700,000?

Yes. So there's a little bit of overlap, as you say, in some of these populations because we're always talking sometimes with some of the data which has been built historically in small data sets and histology with obviously everything that's emerging more population-based on NITs. The group of 700,000 that we described, we would we keep saying is F3-like again. Of course, there are patients that are straddling sometimes a late F2 by 1 pathologist, or by certain NITs might be an early F3 by others, but we think we do a good job of identifying patients who are in that category who are most likely to be progressing to cirrhosis.

Of course, in any category of patients, and it's true in F3, there are other things going on besides their liver in terms of other risk that is ongoing. So physicians are continually looking at different shades in these subpopulations. But based on all the data around fibrosis, and the risk of an F3, a broad F3 population, and the data we've generated, we feel it's in a very appropriate place for us to focus the launch. Again, a subset of the indication that we are -- we're pursuing, which would be mirroring the F2 and F3 patients we studied in REGENERATE.

But again, I think, as always, there will be different physicians who are assessing risk differently, but we think this is a category that definitely, from all the work that we meet -- we've done meets the a greater urgency to treat than some of the earlier segments.

Yes. And I would say, too, that KOLs are looking at certain patient populations factors, what can we do? Can we predict who is more likely to tip over. We know the 1 and 5 within 2.5 years may progress to cirrhosis. Right now, we don't know. So the 700,000 is really a good place for us because we know they are in an urgent bucket, and that's where the risk is. And there may be ways to refine later. But I think the -- if you're talking about going into the gastroenterology community and the APPs associated with them as well as heps, you do right now, I think, simplifying it and making it practical and ensuring the right patients are involved is probably the way to go where we are in the field right now.

Got it. And if I could just squeeze one last angle of this question in, do you think that this is a topic that will be brought up at the AdCom?

So we do anticipate the discussion to be about -- around risk benefit given the history and the initial CRL. Of course, we're preparing for questions about the appropriate population, how to find the appropriate population. We'll get more detail on the specific questions from the agency when we get closer. But we're certainly prepared to discuss appropriate populations and what we've learned from our data and our work in the real world.

Thank you, One moment. We have a question from Steve Seedhouse with Raymond James.

Good morning. This is Ryan Deschner on for Steve Seedhouse. Question from -- you have your own suggested an IT protocol threshold to guide heps and gastros, particularly to facilitate reimbursement. And are there any specific subgroups in the advanced fibrosis without cirrhosis population that you plan to target earlier in the launch?

So I would say that we're looking at certainly the general guidelines that exist on what the appropriate ranges are that stand now. But we have the benefit of biopsy-confirmed patients and screened patients for our clinical trials. So we can take some of the learnings that we have there, knowing how the patients were kind of scored and graded and then look at the NIT data that we have to run that against the appropriate patient type. So we may tweak what we've learned considering tweaking those -- that guidance in that range to ensure that we have the right patient population. We certainly are wanting to make sure that we don't have F4 population within that our study was not positive there.

So I think as we learn and can go through the data and compare all of these data points that we have from NITs as well as our biopsy data, we will get more refined in identifying our patients. And I think that's to everyone's benefit.

Sure. And then in terms of NIT protocol threshold sort of guidance for heps and gastro, I mean, how far are you planning to delve into that? Or would they just be relying on roughly the NIT guidance from the different consortiums?

So we're using the published cutoffs, but we're also informing it with our own data, and that's the data that you'll see in the future where we've looked at the robust learnings from REGENERATE. And of course, we're also -- it's not always the case in the guidelines. We're also being sure that we're identifying the patients on the upper end who might be at risk. So again, it's a combination of what's out there and what we've learned and we'll communicate more specifically on that as we get closer to launch. But it really is both the published cutoffs and what we've learned from our own data set.

One moment. We have a question from Joseph Stringer from Needham & Company.

A question on pricing. You're guiding for chronic specialty drug pricing with a pretty wide range of $20,000 to $110,000 per year. Just curious what types of label scenarios or potential internal research would put the price near the low end around that $20,000 end or would going the other way, what type of scenario would put it towards the higher end or around the $110,000 range?

Yes. Look, obviously, there's quite a bit of work that we've done and work that's ongoing. I think -- we've continued importantly to focus on this subset of our indication, which is an important part of the value proposition and the discussion with payers, also a focus on those patients that are already with specialists. So we're not looking at efforts in the launch phase to be pushing patients in to specialists. And of course, look, we'll get more information. And the pricing decision is going to be as important a decision as we take for the launch. We're going to do that with the full information on hand. So while I fully understand all the interest here, we'll communicate that when we have the right information in hand as we move forward.

And importantly, all of the discussions that we're currently having with payers are an input -- are part of that input as well. And obviously, you can understand we need to make sure that we're containing those discussions with the payers directly with them at this point.

We have a question from Brian Skorney with R.W. Baird.

I guess real quickly, first question I have is, I know it's a little early for the statutory requirement for the FDA. And I'm just wondering have they send you the briefing documents yet. And then on the upcoming OCA and bezafibrate combo results, maybe you can -- just give us some insight into what you may ask the FDA at the end of Phase II meeting in terms of registrational pathway requests? I know that the hope would be that PPAR would have a role in treating the underlying disease and ultimately leading to reductions in the long term liver related outcomes. But I also know that some PPAR data has indicated reductions in pruritus. So when you sit down with the FDA with the data you've generated would you be thinking that the registrational pathway would be potentially through sort of clinical symptom reduction in pruritus? Or do you see this as another biomarker-based approach.

So Brian, on the first one, we do not have the briefing book from the agency. As you said, it is early according to the normal timetable. Michelle, can you answer the question on the FDC, please?

Yes, absolutely. So the endpoint we suspect will still be the important ones about the biochemical changes that have been correlated with long-term outcomes. The pathway currently is accelerated approval on that basis with a longer-term outcomes follow-up for confirmation. Though it certainly is important to look at the ability for individuals to remain on drug. And we think overall symptom improvement would be really critical for that. We're looking forward to sharing the data at EASL and a lot more conversations to come in the second half of this year.

Our next question comes from Thomas Smith with SVB Securities.

Just on the NASH regulatory front, I was wondering if you could clarify whether there's been any kind of mid-cycle review meeting at this point? And whether there's been any request from the agency for data from the Phase III REVERSE trial, either safety or efficacy?

Michelle?

So we have been in communications with the agency since the submission in December and I can't really comment on the topics there. But a lot of clarifications on data that were submitted with the package December 22. An then on -- with regard to REVERSE, so that study was under a separate IND. And we did have top line but had not completed all of our analyses. So for those 2 reasons, we've not -- we didn't include it in the NDA for REGENERATE. However, I think it is important that we didn't see differential safety in that patient population with cirrhosis even though we didn't hit the primary regulatory endpoint, there'll certainly be some more analyses that are forthcoming for that patient population. But we are excluding patients with cirrhosis in our proposed population as Linda walked through earlier.

Okay. Got it. That's very helpful.

Our next question comes from Jon Wolleben with JMP Securities.

You spent a fair bit of time and it's been super helpful hearing about identifying patients using noninvasive tests, but are you also proposing a strategy for monitoring response on drug? And is that something payers or FDA are focused on as well in your early discussions on how to tell who's responding and what that looks like over time.

This is Linda. Thanks for the question. I think really what we're seeing is the use of NITs can help in the staging. But when we look at the regulatory requirements for approval, which were very straightforward and talking about one or the other when we hit the fibrosis reversal, what we know is also clinically very meaningful is to look at reversal stopping progression. So if they don't move forward, this is a great thing in clinician's eyes and preventing getting to cirrhosis. The cost, the trouble, the impact on the patient is such a flip over when you get to cirrhosis. Efficacy and regulatory standards versus real world can be a bit different.

So obviously, NITs can be used to monitor that as well. and it will be up to payers and physicians as part of the routine monitoring of their patients to see how they're doing. They'll continue to use these tests. That's kind of how we're looking at it right now.

I think for our recommendations for -- on the safety side, it is really the same -- following the same clinical standards that they're already using for monitoring their patients with NASH because if someone does progress, if they are more advanced than they thought they were at the time that they started drug and they see evidence that they have had a decompensation event or biochemical changes that would indicate that they've progressed to cirrhosis, then those patients would also discontinue drug. So that -- it's really more of the clinical monitoring that we would be recommending as part of our education during the launch.

We have a question from Ellie Merle from UBS.

Just on PBC with the 4 out of 10 prescribers were new prescribers. Can you elaborate a little bit on that and sort of what you're seeing in terms of the new prescriber growth, what's driving it? And how you expect this to continue going forward? And just overall, I'm thinking about the PBC penetration, sort of where you are versus the total potential prescriber pool.

Yes. So maybe I'll take a quick one on that, and then Linda can comment if she likes. So yes, the fact that this far into the life cycle of Ocaliva we still have 40% this quarter of the prescribers being new prescribers for the first time, is a really good sign that our strategy to expand to a larger number of gastroenterologists is, in fact, having the desired effect. We still see less than 40% of the potential eligible patients have received Ocaliva. So again, there's still quite a bit to go.

The challenge in PBC is that the patients are spread across a very large number of these gastroenterologists, they tend to have a small number. So in order to continue to source growth, we have to get new prescribers. And it's been good to see the cause and effect as intended to the plan that Linda and the team are executing.

Our next question comes from Michael Yee with Jefferies.

Thanks for letting me ask a question. I have 2, one was around your visibility on launch and what does your work in the field suggest around any bolus of patients or recently biopsied patients in the last 6 to 12 months that would be ready to go. And appreciating their needs to be payer coverage, how does that visibility look for you in terms of any sort of bolus? And the second question is related to your view of how the spend go up in the base case of an approval versus what I think you said was pivoting to profitability in the case that it was not approved. And maybe you could clarify a bit about that.

Okay. Thanks, Mike, for the questions. I'll take the first and then Andrew can take the second. So there are patients that are with the specialists who understand that they have NASH and who have been previously counseled that their risk is going up. Nonetheless, I think while that urgency is there, we -- all the work that we do, Mike, continues to indicate that those patients will probably present according to their normally scheduled visit pattern. So while there's a willingness to act we're not anticipating to expect a "bolus" in that upfront period. I think the other normal element is the one that you mentioned, of course, that the payer decisions happen over time depending on which payers. So again, I think we're anticipating if we get approved, we'll be ready to launch quickly. We'll go to the most important and highest potential prescribers first, but we don't anticipate a warehousing effect like you might have seen in some other categories.

Yes. So Mike, thanks for the question. With regard to the expenses, we obviously guided the 360 to 390 at year-end. We're spending to that level. As you can see, the spend this quarter was well within the guidance range if you extrapolate that out. We don't expect a big change this year, we're holding steady. And as we said before, we've been very careful to manage our expenses. So we're obviously spending everything we need to be ready, right? So the launch prep is going. We're working with the payers. We're doing -- Linda's team is doing all the hard work to get us ready to launch. What we haven't done is commit to an infrastructure build. We're going to wait and see how the regulatory agency responds. And if we choose to increase our footprint for field force we'll let everybody know at that point, and we'll revise guidance.

But at this point, we're holding where we are. We feel very comfortable with our spend. You asked what happens if we pivot to profitability. So obviously, the first thing to do would be to stop the NASH trials if we don't get regulatory approval. That would take a lot of our expense down right away. We obviously then look at the organization to make sure we're rightsized. But those are things that we'll deal with later if we're not able to achieve regulatory approval. We are full speed ahead with our AdCom and getting ready for PDUFA, and we're hopeful that we get an approval here next quarter.

Okay. That was super helpful. I appreciate that. If I may ask one quick follow-up. I would love to hear Michelle or Jerry's view on this, which is I mean I think your base case would be that there could be another oral competitor on the market by next year. Is your view that 2 drugs on the market is a good thing? Or what is your view of how that impacts the landscape in the short and medium term?

It's Linda. I'm happy to take that. I think for us, really, because of the way this market exists and is very mile-wide, inch-deep with patients in PBC. I think that now in NASH?

Maybe I'll jump in there. Look, I think that one of the things. Yes, yes, or both, but I'll jump in on NASH, and then we can clearly take the PBC, but there is a common factor here, which is with, both PBC and NASH, there's still high unmet need. And I think one thing we know about chronic classes and this will, I believe, apply to NASH, it won't be satisfied by 1 or 2 or 3 drugs or mechanisms here. And there is an effort, as we have talked about a lot, multiple companies have talked about a lot to educate, to ensure that the right information is out there, to start to organize the treatment continuum in a way that gets patients treated.

So we prepare as if we like the opportunity we have to potentially be the first. But of course, we see a future where there's multiple therapies for patients. And there is clearly some commonality in some of the objective of helping patients get the right treatment in terms of the right utilization of NITs, where you can imagine some common messages out there that would be important for the development of a large chronic class where there's a lot of unmet need here.

Our next question comes from Brian Abrahams from RBC.

I appreciate the very clear and comprehensive overview. On the noninvasive diagnostics, can you give us a sense as to what the comfort out there is discerning the OCA target population from an -- from F4 patients using NITs. And then I guess I'm curious if you have a sense of the percent of that 700,000 patients you mentioned who have biopsy confirmed NASH at this point? Is it that -- right around that 14% that you mentioned for the fuller population? Or do you have more specific metrics for that 700,000?

So I think for that, it's probably no -- not that much different. It's a low number. These patients are typically not getting biopsies. And then some that do get biopsy don't always get the formal ICD-10 code. So it is -- it's a low number, and we know that biopsies tend to be avoided except for clinical studies or some complicated patients where they're trying to do something else.

Michelle, maybe you can comment on Brian's first question around the identification of those patients that might be on the upper end around cirrhosis that we would be looking to identify to opt out.

Yes, yes. So what we've recommended using is more of the sort of upper bounds criteria, more so than the noninvasive tests. They're really good at identifying and excluding the patients who have not yet progressed to precirrhotic fibrosis. So excluding the F0s, F1s and concentrating on kind of F2 and up, you can use FibroScan, so a combination and some of the wet biomarkers plus FibroScan can help delineate some of the F4s. But really the -- using sort of what we call upper bounds criteria looking at platelets, albumin and other markers that the patient may have progressed even prior to decompensation events.

And physicians in the data that we've looked at, in particular, the screening data for our REVERSE study, are pretty good. So these GIs and heps are pretty good at delineating exactly who has cirrhosis. So that's why it's going to be important for patient identification at baseline, but also for monitoring patients using standard clinical practice, they will be seen every 3 to 6 months typically for a battery of a blood test and maybe a FibroScan. And that should be sufficient for them to be monitored both for safety, but also to make sure they haven't progressed to cirrhosis.

Our next question comes from Jay Olson with Oppenheimer.

Great. Thank you for providing this update. Can you talk about the key questions that you expect to come up at the FDA AdCom and how you plan to address them? And then I have a follow-up, if I could, please.

Michelle?

Yes. So as we've discussed, the issues around the CRL were about overall benefit/risk. So what's changed between our prior submission and this NDA that was submitted in December, that will be the topic of the Advisory Committee meeting is really looking at the efficacy, the confirmation of antifibrotic benefit that we've shown with this second validated endpoint, again, showing very consistent antifibrotic benefit, double what's seen in the placebo to estimates for our treatment effect.

The second element is safety. With the initial submission, there were some safety questions that couldn't be addressed with the data that had been submitted. At that time, the median exposure for patients was about 15 months, and we didn't have any patients who had yet reached month 36. We now have patients 3.5x more exposure. So our safety database of almost 2,500 patients in the Phase III study alone, another 300 or 400 patients from the Phase II studies. So 2,800 patients a median of 39 months of exposure, 1,000 patients with 4 years or more of exposure. So really focusing on the overall benefit risk but specifically being able to review those adjudicated AEs of special interest, so the hepatic safety, cardiovascular safety and AKI. And we now have all of those events fully adjudicated by panels of experts and have shown that there is no excess cardiovascular risk that we have a low and balanced AKI. And that's important in a patient population that is at increased risk for both cardiovascular and renal disease and very specific guidance on hepatic safety in a disease that is progressive.

So it will be important, as we've talked about, how those patients continue to be monitored using that regular cadence of clinical visits and noninvasive tests to make sure those patients haven't progressed to cirrhosis at which time the drug should be discontinued, but also looking for any short-term excursions in biochemistries that would indicate the need to have a short-term discontinuation for intercurrent illness, hospitalization, things like that. So I think that will be predominantly what is focused on and that's what we're fully prepared to address in just a couple of weeks.

Great. That's helpful. And thanks also for sharing your market research. Could you comment on any feedback on the competitive positioning of OCA in NASH as it compares to other drugs in development that have demonstrated efficacy in both NASH resolution and fibrosis improvement and how physicians might perceive OCA's position in the NASH competitive landscape?

Yes, absolutely. So I think when we look at our strong data in the more advanced patient population, that really resonates with the physicians who are -- it's really a nice intersection of high unmet need in that particular patient population. The urgency to treat and risk of progression and then our data fit. And the FXR pathway, and what we're talking about in terms of what happens there and how our FXR agonism addresses this very strongly in fibrosis is resonating. I think it really makes sense to them and in the patient population that they're most concerned about.

So as we look at that the reception to that is very strong, and there has been historically a lot of data on fibrosis. So the mechanism ties, we believe, to the efficacy that we've shown there. And frankly speaking, we've even seen control of fibrosis in our OCA Ocaliva study. In multiple areas, we are clearly very strongly in antifibrotic drugs.

One moment for our next question. Our next question comes from Ed Arce with H.C. Wainwright.

Two for me. Firstly, I just wanted to ask, Jerry, I know you mentioned earlier on that you -- you've been doing a lot of deep work with the payers. And so wondering in those discussions, if you had any payers confirm that a NIT only diagnosis would be sufficient to support a reimbursement coverage. And if there's any differential there in terms of restricted or unrestricted coverage?

And secondly, I know there's a lot of different algorithms and combinations of NITs out there that are used. Wondering if, in your discussions with those payers, there is any sort of differential preference for a specific algorithm with perhaps a strongest accumulation of data that could support that.

Maybe, Linda, you can comment on the ongoing discussions, which, of course, will continue as we get more information on the regulatory front, but maybe start with the -- what we've heard.

I think, first of all, the receptivity to the advanced fibrosis story and the use of NITs to get there versus biopsy has resounded with payers as it has with our physician treating community. What they've said is if there is a willingness to use the NITs if they're endorsed by guidelines and KOLs. And I think we certainly showed that in my opening remarks that numerous guidelines from groups that are very involved in the treatment of NASH and identification of that, they have already incorporated these guidelines, the NITs into the guidelines. The impracticality of really performing biopsies on every patient who may or may not have NASH coming into the market space, I think, is a little bit prohibitive in and of itself. They're not inexpensive there's -- there would be a delay potentially in getting them, et cetera, et cetera.

So what they want is a reasonable way to ensure that the right patients are getting on drug. And that, I think, is something that in this whole health care continuum is aligned between all of the audiences. So there -- we haven't heard honestly a preferred use or algorithm right now. There are slight differences between the guidelines, which is why I think it's incumbent upon us to understand our data and look at the NITs and how that crosses over with our biopsy data to ensure that we know how to recommend the right patients for us. So we continue to do deep work there.

So more to come on the payer front. I think we're doing the important things on an ongoing basis. And just to underline, of course, we sometimes in these sections, talk about the payers as if they are 1 group, and you obviously are meeting and having discussions along the way with the individual payers who sometimes have a different perspective on one part of the equation or another. So we'll do the deep work and continue to update appropriately as we progress here.

One moment for our next question. It comes from Salveen Richter with Goldman Sachs.

This is Matt on for Salveen. Could you share any feedback you're getting from docs or payers on how OCA will coexist with resmetirom within this target population? And then also, how are you thinking about the use of Ocaliva in NASH patients that have morbid obesity or diabetes? In particular, do you have any feedback on how that could be used in combination approaches with other agents like GLP-1s.

So certainly, we don't have -- I'll take the last one first. We really don't have outside of our own patient population, where we did have patients on SGLT2s and GLP-1s there was carryover there. I can say from a practical standpoint, given that the different mechanisms of actions that are working there where you see the GLP-1s really used for weight reduction, clearing fat out of the liver in that manner, that is an interesting proposition paired with a antifibrotic agent like ourselves.

In terms of where they see resme and OCA being used in the NASH patient population. I think that there are no -- there's going to be patient profiles that perhaps people feel more comfortable with. We'll see how they go about it. But for advanced fibrosis, I think we're positioned very, very well there with the strength of our data. It is perceived to be not just about our data and efficacy that we've shown on fibrosis, but also understanding the safety profile of this drug, the use that they've had with obeticholic acid in this population, managing side effects, understanding how to use our drug, the patient support services that we offer. That's a whole package of looking at where you would use OCA in your patients. It's not just one bit of it.

I can't really speak to -- haven't seen, I think, all of the data on resme and safety and efficacy to this point and how that holds up. But we're really focused on running our race and understanding our patient population where we have the greatest benefit.

We have a follow-up from Ritu Baral from Cowen.

I guess the question is for Linda and Michelle, as we talk to the payers, when you mentioned cost savings in preventing progression to cirrhosis and how that resonates. Is there data that you can be generating from that 1,000, 4-plus year treatment experience that you can bring to the table for payer discussions? Even though it's interim, even though it may not be published, are there cost savings analysis that you can start extracting from this to have those discussions?

One of the things I can tell you...

(inaudible)

You can start and then I've got some other practical numbers to share. You still there?

Yes. So there -- as you know, we're focused on the month 18 histologic data, which is focused only on improvement in fibrosis. But one of the key things that has changed between the prior submission and this submission is the strengthening of the data that shows that fibrosis is really the only of the NASH parameters that has been associated with improved outcomes with clinical benefit. We now have data not just on a single measure and staging and risk of all-cause and liver-specific mortality, but have shown that improvements in liver stage that have shown improvements in those risks, improved risk of progression to liver transplants and death.

So I think those -- the strength of that data has improved. We are not yet looking at our outcomes data. So we can't go into the specifics on there. But as I think Linda is going to share with you, there's a lot of data there that does show the importance of fibrosis. And certainly, fibrosis over any improvement in steatohepatitis alone without improvements in fibrosis. Linda?

Yes. I think if you -- let's take it at a high level first, Estimates are that the distribution of NASH population in the U.S. has about 10% of patients with cirrhosis. Those 10% have a total annual predicted direct medical cost in NASH of $8.3 billion. So once they tip over into cirrhosis, you're seeing a lot of expense dedicated to those patients versus maybe 90% of the population with $1.9 billion. So it's not inexpensive, but when you think about it in those numbers, the obvious benefits of preventing the progression to cirrhosis, not only from a cost management side kind of perspective, but also from the health and the terrible consequences to patients, both tie in. When you go back to it, you can -- there's a 2-year kind of follow-up study that was done looking at the cost related to NASH without cirrhosis baseline and then with cirrhosis baseline over time. And you see 3x the cost difference. You see cost per member per month going up.

So just in terms of payer lens, on what it's costing them, whether they're tracking it currently that way or not is very important. And then we'll pair it with what we can get out of our other trials and doing the work. But I think that there's a recognition and that the payer community sees what's ahead. So the benefits of preventing that are pretty strong.

As there are no other questions in the queue, this does conclude today's conference call. Thank you for participating, and you may disconnect.