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Edited Transcript of BIOD earnings conference call or presentation 8-Aug-19 2:00pm GMT

Q2 2019 Albireo Pharma Inc Earnings Call

DANBURY Aug 16, 2019 (Thomson StreetEvents) -- Edited Transcript of Albireo Pharma Inc earnings conference call or presentation Thursday, August 8, 2019 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Pamela Stephenson

Albireo Pharma, Inc. - Chief Commercial Officer

* Patrick T. Horn

Albireo Pharma, Inc. - Chief Medical Officer

* Ronald H. W. Cooper

Albireo Pharma, Inc. - CEO, President & Director

* Simon N.R. Harford

Albireo Pharma, Inc. - CFO & Treasurer

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Conference Call Participants

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* Alan Carr

Needham & Company, LLC, Research Division - Senior Analyst

* Antonio Eduardo Arce

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Eun Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Lachlan Hanbury-Brown

William Blair & Company L.L.C., Research Division - Associate

* Matthew Lee Kaplan

Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research

* Ritu Subhalaksmi Baral

Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst

* Vasiliana Vireen Moussatos

Wedbush Securities Inc., Research Division - MD of Equity Research

* Yasmeen Rahimi

Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research

* Paul J. Arndt

LifeSci Advisors, LLC - Head of IR and MD, Communications

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Presentation

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Operator [1]

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Good morning. Welcome to Albireo Pharma Second Quarter 2019 Earnings Call. (Operator Instructions) Please note, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Paul Arndt of LifeSci Advisors. Please do with your question.

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Paul J. Arndt, LifeSci Advisors, LLC - Head of IR and MD, Communications [2]

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Thank you, operator, and good morning, everyone. Thank you for joining today's call, during which management will provide an update on Albireo's performance in the second quarter of 2019. Earlier today, Albireo issued a press release highlighting recent business accomplishments and noting its financial results for the second quarter ended June 30, 2019. This press release is accessible via the company's website at www.albireopharma.com.

Before proceeding, let me mention that comments today may include forward-looking statements made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements other than statements of historical fact regarding the plans for or progress, scope, cost, duration or results of development of odevixibat, elobixibat, A3384 or any other Albireo product candidate or program, including prevalence data, target indications for development, size, design, population, location, conduct, objective, duration, endpoint, timing for initiation or completion of or for reporting the results from or regulatory feedback regarding any clinical trial, including Albireo's Phase III trial of odevixibat in patients with PFIC, planned pivotal trial for odevixibat in biliary atresia, Phase II trial of elobixibat in NAFLD/NASH, the timing for submission or approval of odevixibat, the commercial outlook for any Albireo product candidate, program or opportunity in any target indication, including potential approval, coverage, pricing or reimbursement and any payment that HealthCare Royalty Partners or EA Pharma may make to Albireo, the period for which Albireo's cash resources will be sufficient to fund its operating requirements or Albireo's plans, expectations or future operations, financial position, revenues, costs or expenses. Actual results may differ materially from those expressed or implied by any forward-looking statement as a result of many factors, including those described under the heading forward-looking statement in Albireo's press release from earlier today or under the heading Risk Factors in its most recent Form 10-K or in later filings with the SEC. Albireo cautions you not to place undue reliance on any forward-looking statement. Also, any forward-looking statement that is made speaks only as of today, Thursday, August 8, 2019, and should not be relied upon as representing Albireo's views as of any future date. Albireo disclaims any obligation to update any forward-looking statement, except as required by applicable law.

With that, I'll turn the call over to Ron Cooper, Albireo's President and Chief Executive Officer. Ron?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [3]

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Thanks, Paul, and thank you, everybody, for joining us on today's conference call. With me on the call is Dr. Patrick Horn, Albireo's Chief Medical Officer; Simon Harford, our Chief Financial Officer; and Pamela Stephenson, our Chief Commercial Officer.

We're pleased to be here to update you on our progress during our second quarter of 2019. Before providing a business update, I wanted to share some insights from having spent time with families at the recent Alagille Syndrome Alliance Symposia and the first PFIC Family Conference. I was absolutely amazed at the courage and resilience displayed by the parents that I had the pleasure of meeting. Their experiences with these rare liver diseases have been life-changing for their families, and they've had to reset expectations and define a new normal for growth and development of their children. Hearing their stories, I was struck by the anxiety and pain they experience and their resilience. These families persevere through worry about the need for liver transplant, debilitating pruritus that never seems to go away, significant nutrition challenges, sleepless night after sleepless night, disrupted families and a terrible sense of isolation. For the parents I met who have children with PFIC and for parents like them, we at Albireo represent hope.

With odevixibat in Phase III, they're excited about the potential for a once-a-day treatment given by oral capsule or sprinkled over baby's food. Side effects of safety are always a concern. And parents like that odevixibat is shown to have a low level of systemic exposure and a favorable tolerability profile in early clinical studies. They have hope in odevixibat's potential to reduce or slow liver damage, beat pruritus and improve sleep. We want to bring hope to patients and their families and to provide support and develop treatments of the potential to help them live more normal lives. It really was inspirational to meet these parents, and we are committed at Albireo to execute our development plan in helping to make these hopes a reality.

So back to our business. Our focus is threefold: One, complete enrollment in our pivotal study in PFIC and assuming positive data, advance towards filing, potential approval and launch of odevixibat in its first rare pediatric cholestatic liver disease indication; two, begin to develop odevixibat into a pediatric cholestatic medicine with the potential to benefit people across multiple rare cholestatic liver diseases, starting with biliary atresia; three, expand our portfolio by progressing the NASH program with our elobixibat Phase II trial as a first step. As these programs reach new milestones this year, momentum is building for Albireo, and we're ramping up our preparations to become a commercial organization. I'll provide a brief review of our program. Beginning with odevixibat, and the PEDFIC Phase III clinical trial program in PFIC, we're well beyond the halfway point of patient randomization and believe we have enough patients currently in screening and prescreening to complete the study. There are 44 global sites actively recruiting as of the end of July. We anticipate top line results in mid-2020 and continue to project a potential approval and launch in 2021. The high number of participating sites speaks to the enthusiasm we've seen among investigators and centers. Many of these sites have just come online this year, and we anticipate these sites will provide an additional boost to enrollment.

Patient enrollment has progressed well with new patients enrolling each month. We've identified and enrolled in excess of our randomization target of 60 patients but have only randomized over half of our target due to a higher-than-expected rate of screening failures. The most common cause of screening failures have been genetics, liver biochemistry and bile acid level. For example, a genetic test may report that a PFIC-2 patient has a genetic mutation that might result in the inability to transport bile acids from the liver to the intestine, resulting in a severe clinical course and the inability of IBAT inhibition to be of therapeutic value. This patient may have a less severe clinical presentation suggesting that some bile acids are transported from the liver to the intestine, presenting a potential for IBAT inhibition to have a therapeutic benefit. We made the decision to screen this patient out. It is our belief that this tight inclusion criteria creates greater homogeneity in the PFIC type 1 or type 2 patients enrolling in the trial, which should help preserve the predictability of the clinical response. We're well on the way to completing the trial and plan to provide a further update when the study has reached our randomization target.

We've always been committed generating as much data in as many different types of PFIC patients as possible and are pleased to have initiated the first trial site in the expanded second cohort in PEDFIC 2, the long-term open-label extension study of PEDFIC 1. Cohort 2 is expected to broaden the evidence base for odevixibat by including PFIC patients who do not meet the eligibility criteria for PEDFIC 1 but have elevated serum bile acid level and pruritus. This includes patients with all types of PFIC and patients younger than 6 months or older than 18 years of age. The expanded cohort allows patients who were screen failures in PEDFIC 1 to enroll in PEDFIC 2. The second cohort will be analyzed separately without affecting cohort 1.

As we move forward with odevixibat on multiple fronts, we've been preparing for commercialization by initiating key activities and prudently building our capability. We're executing on our commercial planning and to develop an activated plans for physicians, market access and patient support. We continue to gain insights from physicians around the world regarding the burden of PFIC, their needs and how they would use odevixibat. Our research continues to reinforce our estimates of the size of the patient population and that there are approximately around 200 key pediatric hepatologists in the U.S. and EU combined, which allows for an efficient and streamlined medical and commercial infrastructure.

On the market access front, we have fielded and completed payer research in the U.S. and EU. Payers have told us that they want more information on the disease but understand that the unmet need is high. They've liked that the population can be easily confirmed with genetic testing. They view disease modification as an important driver of treatment value, and they expect that the total budget impact should be relatively small. Work is already underway to create a compelling value package for odevixibat with strong supporting data.

Part of our responsibility is to create greater understanding of PFIC and shed light on the true impact of this devastating disease. And we've been actively engaging patients and patient advocates to bring a higher level of awareness and understanding of PFIC, we launched PFIC Voices, an initiative we've been building in collaboration with PFIC parents, patients and physicians. PFIC Voices is about telling the story of PFIC families and supporting the PFIC community in its advocacy efforts. We recently launched a social media campaign and a website, pficvoices.com., which we plan to continue building with information on PFIC and family stories.

Our current plan is to commercialize odevixibat ourselves in the U.S. and Europe, where there are approximately 30,000 to 40,000 individuals with rare cholestatic liver diseases among our planned target indication. Recently completed research suggests that there is a substantial opportunity ex U.S., EU, and we've begun the process of identifying potential partners. Albireo holds all of the global rights unencumbered, and we hope to agree on partnership agreements that will generate incremental non-dilutive revenue. So as you can see, we're well on our way in commercial planning and execution to help ensure a successful odevixibat launch.

Our second priority is to create a pediatric cholestatic liver disease franchise with odevixibat. The mechanism of action of odevixibat and the method of use patent into 2034 with patent term extension provide a good rationale to expand usage. We continue planning for development in multiple pediatric liver diseases and have prioritized biliary atresia for the next pivotal trial. We're engaged in a productive discussion on the final protocol with regulatory agencies, and we expect to begin the study in 2020. The pivotal trial on biliary atresia will differ in size, length and endpoints for our pivotal trial in PFIC, given the nature of the disease. For example, we estimate that less than 1/4 of biliary atresia patients have pruritus, whereas virtually all the PFIC patients are pruritic.

The third priority is to expand our pipeline, and we took an important step forward with our NASH program in Q2. We initiated our first Phase II trial with elobixibat in NAFLD and NASH and have enrolled our first patient. Bile acid modulation through IBAT inhibition holds promise as a therapeutic approach for the treatment of NASH based on measures of efficacy, safety and convenience. In clinical and nonclinical studies, IBAT inhibitors have demonstrated decrease in the serum bile acids, cholesterol, liver inflammation and liver fibrosis as well as an increase in GLP-1, all effects that are a potential benefit in the treatment of NAFLD/NASH. IBAT inhibitors can be given orally once a day and they have a low systemic exposure level, reducing the potential for off-target effects and raising the possibility that they could be used concomitantly with other NASH or other cardiovascular risk medicines. The Phase II study is a multicenter placebo-controlled trial designed to enroll 46 patients with biopsy-confirmed NASH or a diagnosis suspect of NAFLD or NASH based on metabolic syndrome definitions. Now we believe NASH is fundamentally a metabolic disease. Our approach is based on showing a cumulative impact across multiple disease parameters rather than an impact on a single measure. The study design is consistent with the recent guidance from the FDA on NASH studies. We expect top line data mid-2020 and believe our NASH program could create strong value for potential partnering opportunities.

All right. Now it's my pleasure to turn the call over to Simon for a financial update. Simon?

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Simon N.R. Harford, Albireo Pharma, Inc. - CFO & Treasurer [4]

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Thank you, Ron. Let me quickly highlight our financial results for the second quarter 2019 ended June 30, which we released earlier today. We closed the second quarter with a balance of $157.7 million in cash and cash equivalents compared to $150.3 million at March 31, 2019. The net increase in our cash balance of $7.4 million during the quarter was as a result of receiving a net amount of $20.8 million from an ATM transaction in May, which resulted in the issuance of an additional 637,367 shares, offset by $13.4 million of cash spent during the quarter, primarily as a result of costs related to our PEDFIC 1 Phase III trial as well as people-related expenses. As a result of the ATM transaction, shares outstanding are now 12.7 million.

Our revenue was $1.3 million for the second quarter ended June 30, 2019, compared to revenue of $730,000 in the same period last year. Revenue during Q2 this year is due to ongoing royalty revenue from our partner, EA Pharma, in Japan, for elobixibat for treatment of chronic constipation, which is ultimately passed on to our royalty partner HCR. The year-on-year increase in revenue is primarily related to growing sales of elobixibat, approximately 1 year post launch.

Our research and development expenses for the second quarter 2019 were $11 million compared to $6.4 million in the second quarter of 2018. R&D expenses in Q2 were driven primarily by headcount additions to support activities related to odevixibat as well as program spends related to our preclinical and elobixibat NASH programs.

Our G&A expenses for the second quarter of 2019 were $5.4 million compared to $4.2 million in the prior year period. The increase in G&A expenses was principally attributable to headcount additions to support the company's strategy. Net loss for the second quarter ended June 30, 2019, was $16.6 million or a loss of $1.35 per share compared to a net loss of $14.6 million or a loss of $1.22 per share in the second quarter of last year. Based on our current operating plans, we anticipate our total operating expenses, including R&D and G&A expenses, for 2019 to be in the range of $75 million to $80 million. Consistent with what we have said previously, we anticipate our current cash balance to be sufficient to meet our operating needs into 2021, with the additional funds received from the ATM. With that, let me turn the call back over to Ron for closing remarks.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [5]

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Super job, Simon. Thanks, very much. Okay. So to summarize, the momentum is building for Albireo. We're getting closer to translating hope into reality for many PFIC patients and their families. We're pleased with the progress of our development programs for odevixibat and hope, ultimately, to be able to demonstrate that once-daily odevixibat given as an oral capsule or as a sprinkle on food improves debilitating disease symptoms and positively impacts the course of liver disease.

In addition, we believe the commercialization of odevixibat presents an attractive business opportunity that there's a large patient population without pharmacologic treatment, a small group of target physicians, solid IP regulatory exclusivity that should take us into 2034 and unencumbered global rights. On top of the tremendous progress of odevixibat, we've begun to expand the portfolio with a major step into a Phase II study in NASH, while our preclinical product candidate continue to advance nicely. We have sufficient financial resource to execute our plan and are well positioned for the second half of the year and beyond.

So with that, I will open up the call to questions. Over to you, operator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Eun Yang with Jefferies.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [2]

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So in PFIC-2, in terms of prevalence, do you know what percent of the PFIC-2 patients receive liver transplant?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [3]

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Eun, thanks for the question. Yes, I think the challenge in this space overall is, there is no registry data, there is no prevalence data, really difficult for us to estimate that. I think in the natural course of the disease and natural history of the disease, there is a percentage of patients that land up with partial external biliary diversion surgery. And then there are some patients that land up with liver transplant, and we're hopeful with odevixibat that we would either delay those from occurring or hopefully even eliminate them.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [4]

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Okay. Is there data -- I'm sure there is, but I'm going to ask you anyway. Is there data showing that PEBD surgery actually delays time to liver transplant in PFIC-2 patients?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [5]

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Eun, this is Pat. So yes. So there hasn't been a lot of natural history data, but the NAPPED database is really expanding everyone's knowledge of data. And so if you look in PFIC-2 and even in PFIC-1, when PEBD surgery lowers bile acid, it significantly prevents -- or significantly delays or even prevents the need for lipid -- excuse me, liver transplantation.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [6]

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I need to just remind you that the NAPPED database is, remember, the largest database of PFIC patients that Pat is talking about.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [7]

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So in PEDFIC 2, the open-label extension study, which is about 18 months, do you think we may be able to see some signs of delay in time to liver transplant?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [8]

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Certainly, that's our intention to investigate that. And there is a plan then to use the data that's collected in the NAPPED database and do a mass comparison to the patients that are enrolled, actually in both 005 and 008, because those in 005 that roll over into 008, who are on active drug, will actually have 2 years of data rather than 18 months. So that's the plan. And it looks like from our early investigations that, that will be a long enough time to show some delay.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [9]

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Just to note, 005 is PEDFIC 1 and 008 is PEDFIC 2.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [10]

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Right. Great. And the last question is, in terms of the patient enrollment, do you find any subtype, whether PFIC-1, PFIC-2 is harder to enroll than the other?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [11]

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Well, PFIC-2 is just much more common. So our enrollment really seems to mimic the distribution of the 2 types of PFIC in the overall population.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [12]

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The unmet need is the same across both of them. In both of those, PFIC-1 and PFIC-2, patients generally have terrible pruritus, elevated bile acids. So we feel excited about potential of odevixibat with those patients.

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Operator [13]

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Our next question comes from the line of Liana Moussatos with Wedbush.

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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [14]

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So for PEDFIC 1, the press release says potentially there's enough patients in screening now to complete the trial based on the current screening success rate. What is the current ranging success rate? And then for PEDFIC 2, can you talk about the data release plan? And my last question, what are the next steps for testing Alagille?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [15]

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Okay. So screening, PEDFIC 2 data release and Alagille. Let me take the first and the second one. And then, Pat, maybe you can talk about PEDFIC 2 data release. So from a screening perspective, the screening period in the PEDFIC 1 study is a 5- to 8-week period. And what we said was that we have identified sufficient patients that are in the screening period and the -- and in the prescreening period to finish the trial. So we feel confident in our ability to randomize enough patients to complete the trial according to the time line we put forward. And then as it relates to Alagille, we've given guidance that we're going to be looking at other indications in 2020. We're still working on those. Alagille is one of them, and we hope to provide you more color as time goes on.

Pat, you want to talk about PEDFIC 2?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [16]

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So did you mean the data release for PEDFIC 2 or PEDFIC 1?

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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [17]

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Well, you've already said about PEDFIC 1. So PEDFIC 2, you're going to have different patients in there? When are we going to -- are we going to see some data from that?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [18]

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Well. So overall, we haven't looked -- we haven't really talked about the data release plan from that. That's an 18-month study, which is just now starting enrollment. So I would anticipate that the data release would be similar. That means, there would be top line data released and then the details would be presented at scientific conferences.

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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [19]

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Would we see any kind of interim data from that?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [20]

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That's not our plan. I think we're -- while it is open-label, we are blinded to that data. So we're not actively involved in the data. And I think our plan is to -- when we put up the PEDFIC 1 results, we will give an update on PEDFIC 2, and then at subsequent scientific meetings, we will release more of the details.

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Vasiliana Vireen Moussatos, Wedbush Securities Inc., Research Division - MD of Equity Research [21]

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And you said our next update for PEDFIC 1 would be when you reach your randomization target. You're half enrolled now? So would that be like Q4?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [22]

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So as we said, we've enrolled more than half of the patients at this point. I guess, we will provide an update when the trial is fully randomized and then -- and from there, you'll be able to determine exactly when we'll get the top line results because it is a 24-week study plus analysis, which reiterates our guidance of mid-2020.

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Operator [23]

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Our next question comes from the line of Ritu Baral with Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [24]

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Ron, I apologize, I missed the number that you mentioned on the call as the number of prescribing physician targets as you think about the commercial rollout. Can you just review that number and talk a little bit about the distribution of the major treatment centers and -- I guess, the overlap with the clinical sites that you have going and how that might impact, potentially ease any precommercialization activities and communications?

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Pamela Stephenson, Albireo Pharma, Inc. - Chief Commercial Officer [25]

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Sure. It's Pamela. So as mentioned, there are approximately about 100 pediatric hepatologists in the U.S. and about 100 across Europe as well. And to answer your question on overlap of clinical sites, they are the same. They are the same in terms of the treating physicians and the clinical investigators. And as mentioned as well, this allows for a very efficient commercial infrastructure, both here in the U.S. as well as in the EU.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [26]

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Yes, I think that's what's great about it. I think our business proposition, as Pamela said, the 100 in the U.S., the 100 in the EU are sort of the key individuals, they would be sort of A targets. And there's probably another somewhere between 1,200 and 1,500 B targets that would be important for us as well.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [27]

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Who are those B targets? Are they sort of more general community hepatologists?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [28]

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Well, in general, Ritu, they are at the tertiary centers. But our A targets would be defined as pediatric hepatologists, right? So all they do is deal with children, and they only do -- deal with liver. But as you move around -- move down the list, there are pediatric gastroenterologists who -- they deal with those kids, but they do other GI diseases as well. And so that expands the target universe and then you'll thrown in some nurse practitioners and some PAs and the like, that gets us to the larger target group.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [29]

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Got it. Any first thoughts on commercial force and costs?

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Pamela Stephenson, Albireo Pharma, Inc. - Chief Commercial Officer [30]

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Yes, we are thinking in the neighborhood of 15 to 25 field-deployed individuals in the U.S. and about the same number in Europe.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [31]

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It's probably a little early to think about costs, right, because we're still putting the -- sizing things. But I think that we're looking at a pretty efficient structure. So when we start looking at our commercial P&L, given the revenue potential, given the cost of goods and the target audience, we believe that we have a pretty attractive business proposition.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD and Senior Biotechnology Analyst [32]

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Got it. And then for your NASH trial, can you review for us what your definition of NAFLD is for enrollment in that study? And are you looking for like a minimum number of biopsy-confirmed NASH patients for any stratification analysis? How should we think about those 2 groups of patients as they move through that study and the data that they're going to generate?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [33]

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Yes. So this is Pat, again. So the entry criteria are either biopsy-proven NASH or NAFLD. And NAFLD is based on metabolic syndrome. They have to meet the metabolic syndrome, and they have to have 10% liver fat to meet in that. We don't have any specified distribution. We don't have any specified number of patients we're are trying to recruit in either group. It's kind of a first come first serve in enrollment.

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Operator [34]

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Our next question comes from the line of Yasmeen Rahimi with Roth Capital Partners.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [35]

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So I have 2 for you. So the first one is, so PEDFIC 1 is enrolling PFIC-1 and PFIC-2 patients, both with and without diversion. So can you, part one, remind us of the data in the open-label study of patients included that had diversion and how that impacts sort of the efficacy? And then did you ever disclose in PEDFIC 1, what percentage of the patients are exhibiting or have received biliary diversion? And then I have a quick follow-up.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [36]

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Yes. I guess, thanks for the question, Yasmeen. And thanks for joining us. I think the way that we think about things in this space is, we want to make sure we generate as much data in as many different patient populations as possible, both for regulatory purposes and for reimbursement purposes. When we look at patients that have had the diversion but still had elevated bile acids, above 100, and they're still pruritic, we believe that they really are no different from some of the other patients and should respond very well to odevixibat. In the Phase II study, we didn't allow those patients. So we hope to have a few of those patients in our -- in PEDFIC 1 to help us generate some additional data and insight.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [37]

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Very helpful. Congrats on launching PFIC Voices, what a great website. We spent some time on it. Do you think that has helped sort of the enrolling and awareness? And then, can you comment on the screen failure rates, whether it was the same or different between U.S. versus ex U.S.?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [38]

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So on the second part of the question, we haven't really looked closely at that. But I think we would assume the screen failure rate is the same because it's really a genetic disorder, right? And then thank you for the kind comments in regards to PFIC Voices. I think it speaks to our commitment to this community and engaging the community overall. We've had some overwhelming response from parents that are -- that have been involved in the trials, but parents that are interested in the trials. And I think that by raising awareness overall, it raises awareness of the tremendous burden on these patients, the potential for medication, and I think that peoples talk to each other and if there are individuals that would benefit from being in the trial, we believe that helps as well.

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Operator [39]

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Our next question comes from the line of Alan Carr with Needham & Company.

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Alan Carr, Needham & Company, LLC, Research Division - Senior Analyst [40]

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Couple of them. Can you give us an update on discussions with the FDA and EMA around biliary atresia? What -- you mentioned that pruritus isn't as common with these patients. Maybe [just trying to search] what sort of endpoints you think might be most relevant here? And then also, with respect to the screen failures in the PEDFIC 1 trial, is it mostly tied to patients coming in with the right genotype but not as symptomatic as you expected? Or are there other situations involved there, too? And does this impact your view on the size of the patient population or commercial opportunity?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [41]

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Yes. Alan, this is Pat. Over to the first question, biliary atresia. And so obviously, they're ongoing FDA discussions. So we can't really comment a lot about what they are. But as you might expect, this is -- will be the first registration study conducted and kind of approved by the FDA. So both of us, both us and the FDA are really trying to identify what are the appropriate endpoints in biliary atresia. So they're talking to their external experts. We're obviously talking to KOLs and our advisers here. We're continuing to have very fruitful discussions, and it really right now is on the endpoint.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [42]

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Yes. So Alan, I think that -- just to comment a little about what Pat has said. I'm really delighted with just the level of engagement with the regulatory authorities. I think they recognize that biliary atresia is a very serious disease. It is the #1 cause of pediatric liver transplant. And I think they're working really well with our team to find a way forward for a pivotal program. To your question about screen failures, they really fall into 3 categories. It's usually genetics, about liver biochemistry, bile acid and, I guess, other. And what we're trying to do is really preserve the integrity of the study. And with our screening criteria, I think what we're trying to do is make sure we have patients who have bile acids in their small intestine, making sure that we have patients that have livers that are healthy enough to sustain our treatment and make sure that individuals can complete the trial as needed. But because we're looking for a specific patient population as such, I don't think it reflects the population nor the commercial opportunity. When we sit down with investigators, they kind of go through their list of PFIC patients. We see the ones that would make sense for the trial. They also have a number of other patients, which they think would respond to therapy. And that's one of the reasons that we started the expanded cohort, which we announced is up and going as well. So many of those patients will go into the expanded cohort, and we'll generate more data on them. So thank you for your questions, Alan.

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Operator [43]

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Our next question comes from the line of Matt Kaplan with Ladenburg Thalmann.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [44]

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Just wanted to focus in a little bit more on the PEDFIC 2 study. Can you tell us how that is -- that study is progressing in terms of patient enrollment, given, I guess, you probably had a kind of cohort of patients that had failed the screening process for PEDFIC 1 that could have been -- could avail themselves of the 2 study.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [45]

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Yes. So Matt, I think that what we've announced with both the 2 cohorts of PEDFIC 1 -- PEDFIC 2, pardon me. With PEDFIC 2, there is the rollover cohort where patients go from PEDFIC 1 into PEDFIC 2 and the expanded cohort. We've announced that we have sites open for both of those. And we haven't provided any further detail as yet.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [46]

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Okay. And then in terms of your -- some of your prepared remarks, you spoke about market access study and work that you've been doing. What are -- what parameters in terms of pricing were included in those discussions if any?

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Pamela Stephenson, Albireo Pharma, Inc. - Chief Commercial Officer [47]

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It's Pamela, again, we -- of course, the final price is going to be dependent on Phase III data and our label. But in the research, what we looked to is relevant analogs in orphan drug space. They are in the $300,000 to $500,000 range.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [48]

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And these are in diseases that have similar severity, similar prevalence. And as Pamela stated, a lot -- our price will be highly dependent upon our Phase III data, the label and whatever the market conditions are at that time.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [49]

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Okay. That's helpful. And then in terms of partnering discussion ex U.S. and ex EU, will you, I guess, wait for Phase III readout to partner the product? Or what are your thoughts there?

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Simon N.R. Harford, Albireo Pharma, Inc. - CFO & Treasurer [50]

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This is Simon. I think the way we're looking, frankly, at markets outside of the U.S. and Europe is, we're looking at a number of partners who have expressed interest, both at different levels, at the sort of the larger, more global players, regional players as well as some market-specific players. And really, we're at the beginning of that journey, I would say. And what we're trying to do is obviously to maximize value from a shareholder perspective on the one hand, but we also want to make sure that what we undertake from a partnering perspective is also balanced because given the size of the organization we are, we don't want to have many, many, many different partners, just from a manageability perspective. So that work is sort of in the early phases, but we'll be accelerating fast in the coming months.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [51]

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What we found, Matt, is, actually we've done some research in the ex U.S., EU markets. And initially, that's -- we've been highly focused on that because that's where we're going to commercialize. But the reality of it is, we want to make sure odevixibat is available around the world as well. And in that research, it suggested there was a pretty significant opportunity outside of the areas we're going to be. And so as a result, as Simon has said, we started to engage in some dialogue with some potential partners, and we just want to make sure that odevixibat is available around the world.

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Simon N.R. Harford, Albireo Pharma, Inc. - CFO & Treasurer [52]

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And I think, additionally, we have better understanding now of some of the markets outside of the U.S. and Europe from a potential perspective through some deep-dive analysis that we're doing that's sort of setting the groundwork to understand the opportunity for those partners.

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Operator [53]

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(Operator Instructions) Our next question comes from the line of Ed Arce with H.C. Wainwright.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [54]

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Congrats, Ron, on all the team for the progress recently. A few questions for me. First, you had mentioned your -- one of your focuses is on really preparing a strong suite of supporting data for odevixibat in PFIC. And I know that you have some PROs around sleep and pruritus, obviously. Could you talk a little bit more about how you think that sort of complete data set will further help with commercialization and engaging the key physicians like the pediatric hepatologists?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [55]

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Yes. Thanks for the comments, and thanks for the question. I think the way that we think about things is that we need to have a good balance of our Phase III data, some other open-label data, some natural history data and whatever -- and any other secondary data that we can put together to make a compelling case for the regulators as well as for the payers over time. So the way we think about things is the bedrock is going to be PEDFIC 1, right, where we're starting PFIC-1 and PFIC-2 patients with our planned commercial formulation, right? We think that's going to be a very solid part of it. Then we're going to generate some pretty interesting data, we believe, in the 2 open-label cohorts. So the patients enrolled from PEDFIC 1 into PEDFIC 2, that will give us some long-term data on that, so at least 18 months. And when we file, we'll have some patients that would've been on drug for a couple of years. That's going to be pretty valuable. But as we've discussed earlier, expanding PEDFIC 2 to other patients are -- is pretty important as well. And so we hope to have a range of other types of PFIC patients to help supplement our filing.

And then beside all of that is the data that's being generated by the NAPPED Consortium, which is an independent academic consortium, which is the world's largest database for PFIC patients. I believe it's somewhere over 600 patients now. And that's valuable data because that NAPPED data suggests that in the natural history, when you do diversion, reduction of bile acid surgically, that there's a statistically significant difference in survival. And also, if you reduce bile acids below 118 or by 70%, there's a pretty high level of survival associated with that. And so when you think about what we're trying to do with odevixibat, the responder definition is a reduction of 70% or reaching a level of 70, we believe that NAPPED data paired with the other data we generate is going to make a compelling value story.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [56]

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Okay. Great. Thanks, Ron, for that. And then as a follow-up sort of dovetailing from that discussion and this perhaps is maybe best for Pamela, perhaps, is the greater question around early launch and how you think about the trajectory. Clearly, you have a very targeted list, about 100 in the U.S. of your primary target, and you've really fulsome data. It seems like there is a good setup for a fairly rapid uptake, just given how engaged these patients -- these parents are, aware of the trial, of the data and all of that. So maybe perhaps if you could discuss qualitatively how you think about how that early ramp could look like?

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [57]

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Ed, Pamela is looking at me and she's saying that you're already setting her, her first-year objectives, right? So she is getting uncomfortable already. I think, Ed, it's probably a little early for us to give any sort of guidance from that perspective. Let us get through the Phase III results and see what data we have. But I think to your point, there's a lot of enthusiasm between the prescriber community and the patient community to potentially have the first pharmacological treatment for PFIC. But let us get to the Phase III study, then we can talk about that.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [58]

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Fair enough. Yes, understood. One last one, if I could sneak in. Just thoughts around CMC and having sufficient supply for the launch and any sort of comments around full preparation for that.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [59]

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Yes. Thanks for that question, Ed, and thanks for all your questions. So first of all, CMC should not be a gating factor to launch, and there's 3 bits of information that I would share with you in that regard. One, we've had a very good discussion with the FDA. Last fall, we came to an agreement on a CMC plan, and we are executing against that plan. Two, we are using the planned commercial formulation in the Phase III study right now. And three, given that we have a tremendous amount of experience with elobixibat taking it from preclinical compound all the way to commercially available elobixibat with our partners Eisai Ajinomoto in Japan, a lot of experience in that supply chain, and odevixibat sits on the exact same supply chain. So the expertise from elobixibat can be transferred to odevixibat. So we feel pretty comfortable and confident about our CMC plan. We're excited about the fact that our product is an oral capsule, once a day, and they can be sprinkled on food for the young babies as well. And so we should be set from a launch perspective.

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Operator [60]

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Our next question comes from the line of Tim Lugo with William Blair.

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Lachlan Hanbury-Brown, William Blair & Company L.L.C., Research Division - Associate [61]

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This is Lachlan on for Tim. A couple, if I may. First of all, what are the gating factors to starting the biliary atresia study. And given the high screening rate that you saw with PEDFIC 1, what have you learned from that study that might be applied to the biliary atresia study? And then second, again, related to the biliary atresia study. I know you're still in discussions with the regulators on the design. But at this sense -- at this point, can you give us a sense of what you're expecting for the study design? Are you expecting 2 dose arms, placebo control? Or is there some other kind of randomized discontinuation study design that you might pursue?

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Patrick T. Horn, Albireo Pharma, Inc. - Chief Medical Officer [62]

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Yes, this is Pat. So in biliary atresia, a couple of things. So I think the enrollment in biliary atresia is likely to be very different from PFIC. So for example, we are considering enrolling biliary atresia patients immediately after Kasai. So these are patients that really haven't yet been born. They'll be born during the course of this study. So it's not like we can go out and identify a number of sites who already have biliary atresia patients. Instead, we'll have to identify patients who historically have a significant number of patients per year. So that's one of the big differences on that. In terms of study design, it's still really too early to give any details. Until we have a final agreement with the FDA, we'd just like to keep those confidential right now.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [63]

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And I think -- Lachlan, thanks for the question. What's gating is our discussion with the regulatory authorities. We're ready to go from other perspectives. So like I said, we're engaged in really productive discussions with them. And we hope to get up and going as soon as possible.

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Operator [64]

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Since there are no further questions left in the queue, I would like to turn the floor back over to Mr. Ron Cooper for closing remarks.

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Ronald H. W. Cooper, Albireo Pharma, Inc. - CEO, President & Director [65]

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All right. Thank you, operator, and thank you all for participating in today's call. First of all, I appreciate the feedback from many of you that said that this 10:00 time slot is a better time slot, so our plan is to continue with that. So I appreciate that. Thank you for attending today's call. I think what you see from our organization is that we made tremendous progress from a clinical perspective, where we are with odevixibat, where we are moving into NASH and, frankly, where we are with our preclinical compounds as well, which we haven't talked a lot about as yet. But also from an organizational capabilities perspective, our organization is growing, we're readying ourselves for a potential launch, and we're going to be ready. So we thank you for your interest, and wish you all a really terrific day. Thanks very much.

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Operator [66]

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This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation, and have a wonderful day.