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Edited Transcript of CBAY earnings conference call or presentation 6-Nov-18 9:30pm GMT

Q3 2018 Cymabay Therapeutics Inc Earnings Call

NEWARK Nov 19, 2018 (Thomson StreetEvents) -- Edited Transcript of CymaBay Therapeutics Inc earnings conference call or presentation Tuesday, November 6, 2018 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Charles A. McWherter

CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer

* Daniel Menold

CymaBay Therapeutics, Inc. - VP of Finance

* Pol F. Boudes

CymaBay Therapeutics, Inc. - Chief Medical Officer

* Sujal A. Shah

CymaBay Therapeutics, Inc. - President, CEO & Director

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Conference Call Participants

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* Fang-Ke Huang

SunTrust Robinson Humphrey, Inc., Research Division - Associate

* Jay Olson

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Joseph Patrick Schwartz

Leerink Partners LLC, Research Division - MD, Biotechnology

* Steven James Seedhouse

Raymond James & Associates, Inc., Research Division - Research Analyst

* Tyler Martin Van Buren

Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst

* Yasmeen Rahimi

Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to CymaBay Third Quarter 2018 Financial Results Conference Call. (Operator Instructions) Please be advised that the call will be recorded at the company's request. It is also being webcast live on the Investors section in the CymaBay website at www.cymabay.com.

I would now like to turn the call over to Mr. Dan Menold, Vice President of Finance at CymaBay. Mr. Menold, please proceed.

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Daniel Menold, CymaBay Therapeutics, Inc. - VP of Finance [2]

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Thank you, operator, and good afternoon, everyone. Earlier today, we issued a press release announcing our third quarter 2018 financial results and business update. You can access that release on our website, under the Investors tab.

Joining me on the call today are Sujal Shah, Chief Executive Officer; Dr. Pol Boudes, Chief Medical Officer; and Dr. Chuck McWherter, Chief Scientific Officer. They will provide an update on our financial position and clinical programs and review upcoming milestones before we open up the call for Q&A.

Before we begin, I'd like to remind everyone that statements made during this conference call, including the Q&A session relating to CymaBay's expected future performance, business prospects, events or plans, including clinical plans, are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecasted due to the impact of many factors. The company assumes no obligation to update or supplement any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Participants are directed to the cautionary statements set forth in today's press release as well as the risk factors set forth in CymaBay's quarterly and annual reports filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements.

This conference call is the property of CymaBay, and any recording or rebroadcast is expressly prohibited without the written consent of CymaBay.

At this time, I'd like to turn the call over to Sujal.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [3]

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Thank you, Dan. Good afternoon, and thank you all for joining us. We have four updates we'd like to focus on today, including first, the initiation of ENHANCE, our global Phase III registration study of seladelpar for patients with primary biliary cholangitis, or PBC; second, new data from our ongoing Phase II PBC study of seladelpar to be featured in 2 late-breaking presentations at The Liver Meeting hosted by the American Association for the Study of Liver Disease, or AASLD, on November 12; third, significant progress with the enrollment of our Phase IIb study of seladelpar in NASH, for which we now expect enrollment to be completed in the first quarter of 2019, one quarter earlier than originally anticipated; and finally, organizational growth with experienced individuals appointed to key roles that we believe will support our development objective in PBC and NASH and position us well for future diversification of our pipeline.

Let me start with our progress with seladelpar in PBC. Over the past few months, we have made significant steps in advancing seladelpar. The most exciting step was the initiation of ENHANCE, our global registration Phase III study in PBC, the first registration study in CymaBay's history. ENHANCE is a 52-week, placebo-controlled randomized phase III study in PBC patients to evaluate the safety and efficacy of seladelpar. It will be conducted in more than 20 countries over 5 continents. Approximately 240 PBC patients will be randomized to seladelpar 10 milligrams per day, or seladelpar 5- to 10-milligram per day, where patients starting on treatment at 5 milligrams have the possibility to escalate the dose to 10 milligrams after 6 months or placebo.

Eligible patients must have a diagnosis of PBC, with elevations in alkaline phosphatase, or AP, of at least 1.67x the upper limit of normal. They also must have had an inadequate response to UDCA after at least 12 months of treatment or have a prior history of UDCA intolerance. Patients who are inadequate responders to UDCA will continue their treatment, with UDCA being provided to our patients as part of the study. The primary outcome measure is the composite responder rate after 52 weeks. A responder is defined as a patient who, at week 52, achieved an alkaline phosphatase level below 1.67x the upper limit of normal, with at least a 15% decrease from baseline in AP and has a normal level of total bilirubin. Two key secondary outcomes will compare the rate of normalization of AP at 52 weeks and the level of pruritus at 6 months as assessed by a numerical rating scale as recorded with an electronic diary.

After completing the study, patients will be offered continued treatment in an open-label extension study, with those on placebo having the opportunity to start seladelpar treatment. We expect ENHANCE to support the submission of a global registration dossier to health authorities to obtain approval of seladelpar. The study is anticipated to be fully enrolled by the end of 2019, with the 52-week treatment period targeted to be completed by the end of 2020. We believe the outcome of ENHANCE has been significantly derisked by data generated to date from our ongoing Phase II study of seladelpar in PBC.

I'd like to turn the call over to Pol to discuss the exacting updates planned for AASLD starting later this week. Pol?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [4]

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Thank you, Sujal. New 52- and 26-weeks results from this study will be featured in 2 late-breaking presentations at The Liver Meeting taking place in San Francisco, from November 9 to 13. Dr. Chris Bowlus, Professor and Division Chief of Gastroenterology and Hepatology at the University of California at Davis Health will present 52-week data of seladelpar, 5- to 10- and 10-milligram, demonstrating a sustained reduction in alkaline phosphatase, resulting in composite responder rate of 59% and 71%, respectively. We believe, in addition to the good tolerance and safety reported to date, these results support the potential for seladelpar to offer our patients better efficacy and better risk benefit profile than existing second-line treatment.

In a second late-breaking presentation, Dr. Andreas Kramer from the Department of Medicine and Translational Research Center at the Friedrich-Alexander University Erlangen-Nuremberg in Germany who is a recognized expert in the area of cholestatic pruritus and one of our key European investigators, will present an analysis, evaluating the effects of seladelpar in pruritus in PBC patients at the 26-week time point in the Phase II study. The 26-week time point is important because this is the time point that we'll be using ENHANCE to evaluate this key outcome. This 26-weeks analysis shows that the median changes in pruritus, as measured by the visual analogue scale, or VAS, were minus 50% and minus 55% in the 5- to 10-milligram and 10-milligram seladelpar groups, respectively. These data strengthens our belief that seladelpar is not associated with drug-induced pruritus and further supports our hypotheses that seladelpar has the potential to decrease pruritus in PBC patients.

To help put these results in perspective, we believe that the data highlighted elected in our late-breaking presentation compare favorably to the approved second-line PBC treatment with the caveat, of course, that this does not represent head-to-head comparisons. The responder rates for the composite endpoint, as well as those seen from normalization of alkaline phosphatase and reductions in pruritus VAS, encourages that if we can confirm these results in ENHANCE, seladelpar has the potential to be an improved second-line treatment for PBC. The objective of ENHANCE will be to demonstrate enhanced responses without causing or worsening of pruritus and potentially to improve pruritus in those with the background itching. Detailed data to be shared next week in this presentation support the potent anti-cholestatic and anti-inflammatory effect of seladelpar in PBC.

In addition, with 119 patients enrolled in the Phase II study, we continued to see good overall safety and tolerability of seladelpar in these patients. At the end of October, the first 50 patients that were eligible to enter into the extension phase of the study all elected to continue treatment with seladelpar. This extension study will also provide very important safety data to support the registration package.

Finally, we also have additional important presentation during The Liver Meeting, which will be our busiest scientific event so far. Professor Bowlus will also present promising data regarding the efficacy and safety of seladelpar in PBC patients that have already reached decompensated cirrhosis stage, when starting seladelpar. We will also present, in collaboration with the global PBC study group represented by Professor Bettina Hansen in Toronto, a modeling of the Phase II data using the GLOBE score that predicts an improvement in clinical outcomes for PBC patients treated with seladelpar. These additional presentations further derisk, in our mind, the seladelpar Phase III program. Sujal?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [5]

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Thank you, Pol. Our third key update today includes significant progress, with enrollment of patients in our Phase IIb study of seladelpar in patients with NASH, where we now expect enrollment to be completed in the first quarter of 2019.

This study is a robust, dose-ranging, double-blind placebo-controlled study intended to enroll 175 patients with biopsy-proven NASH, with a fibrosis score of F1 to F3. We expect there to be a significant number of patients enrolled in the study with diabetes, a population of NASH patients who are at an increased risk for disease progression. In this study, we will evaluate 10, 20 and 50 milligrams of seladelpar daily versus placebo. The primary endpoint is change in liver fat at 12 weeks as measured using MRI-PDFF.

Key secondary endpoints include additional imaging and wet biomarkers of inflammation, steatosis and fibrosis. The histological improvement in NASH and fibrosis will be evaluated at 52 weeks. I'd like Chuck to say a few words about the potential opportunity for seladelpar in NASH. Chuck?

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [6]

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Thank you, Sujal. We believe that seladelpar may have the potential to be a foundational therapy for NASH. With its pharmacological benefit, it expands the spectrum of disease progression. In a preclinical mouse model of NASH that we published last year, we observed restoration of insulin sensitivity, reductions in pro-inflammatory lipids and measures of liver inflammation, the reversal of NASH as well as a reduction in fibrosis. At this year's Liver Meeting, we will be presenting a poster describing new results in a biopsy-confirmed mouse model of NASH. These new results both confirm and extend our previous mechanistic work. Like our first model in NASH, this second model reflects a more aggressive phenotype for fibrosis than our previous model. Like the results of our first study, in this second model, we were able to confirm the ability of seladelpar to completely reverse hepatocellular ballooning, a key component required for the clinical endpoint of NASH reversal.

In addition, as part of a collaboration with Professor Marc Hellerstein of UC Berkeley, we employed a heavy water labeling of mice to document acute inhibition of collagen synthesis in the liver. This analysis of deuterium-labeled collagen corroborated the other measures of fibrosis and established directly the acute effect of seladelpar on fibrogenesis. To recap, the effects on liver fat, inflammation, NASH pathology and fibrosis are all aligned with the endpoints we are assessing in the ongoing Phase IIb study in NASH. Sujal?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [7]

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Thank you, Chuck. Finally, on the organizational front, we have been extremely pleased to recruit key individuals throughout the organization to support our major objectives in PBC and NASH. These include the appointments of key team members to expand and strengthen our development capability. Dr. Patricia Rohane has been appointed as VP, Clinical Development, and she will lead the seladelpar clinical team. She brings extensive Phase III and global registration experience, having spent more than 15 years at Sanofi-Aventus and Celgene.

Dr. Stephen Rossi joined as VP of Early Clinical Development. Steve brings more than 15 years of experience in liver diseases, both from academia and industry. Most recently, he led the development of NGM282 for NASH, PSC and PBC at NGM Biopharmaceuticals. He also held senior roles at Gilead and Roche. And finally, Kamal Sigel has been appointed VP of Quality. Kamal is a certified quality auditor and brings substantial experience ranging from Phase III to commercial in the areas of manufacturing, compliance and quality control. She joins us after more than 10 years at Entera Pharmaceuticals and Hyperion Therapeutics. I believe we have added to our high-quality team with relevant experience in our areas of focus to allow us to continue meeting our highly focused objective.

Turning briefly to our financials. Our cash, cash equivalents and marketable securities were $198.1 million at September 30. Based on current projections, our existing cash is expected to fund the current operating plan into 2021. For our operating results for the 3- and 9-month periods ending September 30, I will refer you to the press release and to our 10-Q filed with the SEC. As we close out 2018, we are looking forward to having a significant presence at The Liver Meeting at the end of this week and continuing to execute on enrollment in ENHANCE and our phase IIb study in NASH. With a strong balance sheet and key operational objectives in PBC and NASH progressing well, we expect significant catalysts in 2019 to further highlight the potential benefits of seladelpar across multiple indications. We look forward to speaking more about our progress with seladelpar and these additional opportunities as our plans are formalized.

Thank you for joining us today. We would now be happy to take your questions. Operator?

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Questions and Answers

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Operator [1]

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

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [2]

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Congrats on the continued strong execution. Two questions. First question is on NASH. Can you provide us some insight what are the factors that contributed to your rapid enrollment into your NASH study ahead of schedule? And then, the second question is on PBC. Can you share with me maybe how your view of the PBC market has shaped up over the last 6 months, especially since the OCA label revision? And have you done any preliminary work on the payer discussion? And what feedback are you getting in regards to prices in order to price it in line with the OCA?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [3]

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Sure, Yasmeen. Thanks for the questions. Yes, I'll first start off with your question on NASH. On prior calls, we've mentioned that we've been extremely pleased with the level of engagement in each of our sites. We took particular specificity around the sites involved in the study, the leadership of Stephen Harrison as our lead coordinating PI has also been, of course, integral. The entire team has been highly focused, ultimately, on screening, and how it's been progressing at every site. So it's been largely a hands-on approach to making sure that each of the sites have been engaged and continue to screen. At this stage, we've seen that those efforts have effectively translated into higher screening rates, overall faster enrollment. So I'd say it is largely an effect of great execution by a broad team and being highly focused in terms of getting through this enrollment a bit faster than we would have otherwise anticipated. Maybe I'll also start, and perhaps Chuck and Pol can chime in here, with respect to PBC. I think from our perspective, we continue to believe there's a significant need for patients that are at risk of disease progression. And I think the ramp of obeticholic acid post the labeling update, from my perspective, really underscores this point. I think it continue -- we continue to see a significant number of patients that need second-line treatment. And from our perspective, when we look at the overall profile of seladelpar, we continue to believe that there's a potential for seladelpar to have both improved efficacy and improved tolerability and ultimately offer patients, I think, significant treatment alternative from what exists today. With respect to the work that we've been doing on the commercial front with respect to payers and pricing, we're still very much in early days of that work. So I think we'll have more to report as we get much more -- much deeper into that analysis and into that work. Of course, how the overall market really plays out in the coming 6 to 12 months will be a factor in that impact. And the overall profile of seladelpar through ENHANCE will also be a key element of that.

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Operator [4]

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Our next question is from Jay Olson with Oppenheimer & Co.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [5]

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Sujal, can you talk about what percent of patients from your Phase II PBC study have rolled into the open-label extension? And how should we think about that percentage in terms of the efficacy and safety and tolerability of seladelpar in PBC?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [6]

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Thanks for the question, Jay. I think, first of all, as Pol had mentioned in the prepared remarks, the first 50 patients in fact that were eligible to roll into the extension at the conclusion of the 52-week treatment period in the Phase II study have all elected to be enrolled in long-term extension. We think that's a very encouraging sign. Certainly, as it points to the potential tolerability and safety of seladelpar thus far, I think from -- and that affects almost half the patients at this point. The total number of patients enrolled into the Phase II study is 119. So extremely pleased by the response we're seeing relative to patients wanting to continue on treatment into the long-term extension. With respect to efficacy, I think the headline results that we've placed out that will be really the subject of the late-breaking presentation by Dr. Chris Bowlus next week at The Liver Meeting, we continue to see robust, sustained decreases in alkaline phosphatase that are translating very strongly into responder rates at 52 weeks on the composite endpoint, which in fact, is this same composite endpoint in the ENHANCE Phase III registration study between 60% and 70%. So we're seeing really the patients that are reaching 52 weeks respond quite well to treatment. And again, with almost half the patients enrolled in the study electing to move into the long-term extension, we're again very pleased with what we're seeing thus far with respect to overall tolerability and safety.

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Jay Olson, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [7]

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Okay. And then with regards to normalization of alk phos at 52-week as an endpoint, is that the ultimate treatment goal here? And would you expect those rates of normalization at 52 weeks to increase over time for those patients who enroll in the open label extension?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [8]

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So let me maybe first address that really the primary endpoint, of course, in ENHANCE is a composite responder rate in which responders are defined as patients whose AP levels drop below 1.67x, the upper limit of normal, with at least a 15% drop in AP from baseline to 52 weeks and normal bilirubin at 52 weeks. Those endpoints and those markers have been correlated with improvements in transplant-free survival, and that's really the target, of course, in the Phase III study. You do point out something that we think is very important with respect to the overall profile of seladelpar, which is we're seeing as many as 25% to 30% of patients at 52-weeks roughly actually experiencing a normalization in AP. And we believe and are working on continuing to collect data demonstrating that taking patients not only below 1.67x the upper limit of normal, but actually into the normal range, also improved potentially a transplant-free survival even further. So we think it's a key differentiating factor of seladelpar. We think the percentages of patients that are normalizing AP is greater than what's been seen with other agents. And of course, it's why we have it as a key secondary endpoint in ENHANCE.

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Operator [9]

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Our next question is from Joseph Schwartz with Leerink Partners.

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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [10]

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So given the very rapid enrollment in the Phase II NASH study, it sounds like you have a lot of quality initiatives and quality sites. But I was just wondering, since other companies, in fact those that were -- have gone through the same exercise with PPARs, have found that rapid enrollment could be problematic. I was just wondering if you could talk a little bit about any of the ways in which you're planning in order to prevent that from happening such as -- like the stratification or paying close attention to randomization protocols and things like that, which tripped up other people in the past.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [11]

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Yes. Joe, I think from our perspective, what we're seeing largely, I think is a reflection of what's gone into the development of seladelpar holistically. This is our first study in NASH patients, but of course, we've now we've run 2 very large proof-of-concept studies in PBC. There's a breadth of overall safety data from that experience, as well as the experience that we're seeing around the beneficial effects in these patient populations. I think all of these things from our perspective had helped elevate the profile of seladelpar. I think mechanistically, there is a significant amount of interest in this target as really being the only highly selective and potent PPAR delta agonist in development for liver disease. So all of these factors we think have really contributed significantly in us moving through enrollment in this study quite rapidly. And I think we continue to see very strong engagement from that perspective. Pol?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [12]

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Joe, it's Pol, sorry. I think you're making a good point. For us, quality is front and center. One of the advantage we had, when we started this program -- I mean, is that we were not the first one and we were able to learn what's working and not working. I can tell you the selection of centers has been very careful and we are working with people who are used to run high-quality clinical trials in NASH. We also have been very careful in the vendors we are selecting, whether it's for the reading of imaging technology, whether it's for the reading of the biopsy. And we are also very conscious that all the patients that we have are really vetted very carefully so that we do not accept any violation of exclusion or inclusion criteria. So we are very, very careful in running our clinical trial to the highest quality. And I think you are making a good point because it allows me to further emphasize this point, which I think for all of us is very important here at CymaBay.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [13]

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I think one other thing I'll mention, Joe, is as you know, with seladelpar, we studied both 50 and 100 milligrams in a very robust 8-week study, in patients with mixed dyslipidemia, a study that has been published. It's available on our website, Mr. Harold Bays, as the first author of the study. And what we see in that study are effects on lipid parameters that we believe are quite important for this population, drops in LDL cholesterol, drops in triglycerides. These effects, I think also are known with respect to seladelpar along with what we believe are anti-inflammatory and potentially anti-fibrotic effects, I think have elevated the potential profile of this mechanism in this population.

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Joseph Patrick Schwartz, Leerink Partners LLC, Research Division - MD, Biotechnology [14]

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Right. Yes. The CRP as well is pretty impressive. What are your recruitment or how are -- are your recruitment timeline evolving in any way for the ENHANCE Phase III study in PBC as a result of what you've experienced so far in NASH?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [15]

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No. I think these are quite different. And I'll say that now we've had a considerable amount of experience enrolling in PBC. We've expanded significantly, of course, for the Phase III global study of ENHANCE. But the presence of seladelpar as the highlight in late-breaker presentations at key liver meetings over the past 2 years as well as the upcoming Liver Meeting, I think have really supported the profile of seladelpar in PBC, as well as elevated the visibility of seladelpar amongst key hepatologists and G.I. docs that will be looking to enroll this study. It is orphan disease and so we recognize the need to be broad and to be very focused as we enroll. But overall, I think the timelines with respect to completing enrollment in ENHANCE by the end of 2019 are reflective of what we've put into the overall design in terms of number of sites, number of countries that we've gone out to as well as our own experience.

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Operator [16]

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Our next question is from Steve Seedhouse with Raymond James.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [17]

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First, just on the PBC clinical program. I believe the titration, the 5- to 10-mg titration in the Phase II trial is at 12 weeks. And I think you mentioned in Phase III that assessment of whether or not to titrate based on ALP response is done at 6 months. So I'm curious what's significant to that change? And do you think it will increase or decrease how many patients ultimately end up titrating?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [18]

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Yes. You're absolutely -- it's Pol -- absolutely correct. I think the bottom line is that it doesn't make a difference. The decision to escalate at 12 weeks or beyond 12 weeks, in the end, what counts is the 6-month time point. So that was an agreement we had with the regulators, so that was the best time for them to suggest the dose escalation. So I think in practice, it doesn't make a big difference. Actually, I think it doesn't make any difference.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [19]

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Okay. And just, I guess, on the 6-month endpoint. Will you complete a pooled blind analysis, I guess, of the pruritus endpoint and sort of know what the blinded data look like prior to the 12-month ALP responder analysis?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [20]

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No. We intend to complete the 1-year study before we go out with any results.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [21]

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Okay. And just last quickly on sort of market dynamics in PBC. By the time seladelpar potentially launches, this market is ultimately going to be split between patients who have started and discontinued Ocaliva, those who are on Ocaliva, obviously Ocaliva-naive patients. So basically, 3 buckets at least. So there's a couple questions implicit there, but I was just wondering if you could clarify maybe if all of those populations are eligible to enroll in the Phase III program? And do you think you will be able to generate a critical mass of data in each of those different subgroups?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [22]

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Yes. It's a good question, Steve. So in terms of eligibility in ENHANCE, patients that have been on obeticholic acid can in fact be enrolled in ENHANCE. There is a washout period of 30 days before they're allowed to enroll in ENHANCE. They do need to also meet the eligibility criteria. So for example, their AP does in fact have to be elevated above 1.67x the upper limit of normal. But whether a patient has been an inadequate responder to obeticholic acid or whether they dropped obeticholic acid due to tolerability issues, they would, in fact, be eligible to enroll into our study. And given we're going out to a broad range of sites in the U.S. where it's predominantly available as well as globally, we would expect to see some of those patients enrolled. Fundamentally, we're targeting a label for seladelpar that we believe would have the potential to position it, in fact, as the preferred second-line treatment alternative of choice. So whether it's for patients that are naïve or patients that are unable to tolerate or inadequate responders to obeticholic acid, we really think that if seladelpar, in fact, has the profile in ENHANCE that we've seen thus far in Phase II with significant responder rates and good tolerability and overall safety, then we feel quite confident that the right place for seladelpar, in fact, is to be the preferred choice for patients in second-line treatment.

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Operator [23]

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Our next question is from Tyler Van Buren's with Piper Jaffray.

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Tyler Martin Van Buren, Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst [24]

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Looking forward to the upcoming late-breaker presentations. I guess given the fact that the 26 weeks pruritus seems to be going in the positive or opposite direction relative to obeticholic acid, I was hoping that you guys could elaborate on some of the clinical consequences currently observed with patients on obeticholic acid in terms of it affecting compliance and patient's ability to stay on drug and just what you're hearing from physicians. And then the second question would be with respect to the primary endpoint of change in liver fat content with the MRI-PDFF in the NASH trial. I guess we've seen data over the course of the last year that could help set some expectations for whatever delta that we should see. But how do you think the different fibrosis stages could affect those results and why did you choose to enroll fibrosis scores 1 through 3, when you see a bunch of -- I guess, on the later-stage trials, we're going all the way up to 4, thoughts around that would be helpful.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [25]

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Sure. I'm mean, I'll let Pol talk a little bit about what we've heard. It's been only anecdotally, is all we can tell you about the experience with patients on obeticholic acid that has been challenged with pruritus. But...

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [26]

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Yes. I think when we talk to patients and when we talk to physicians also, I think that for us the take-home message is that, no surprise, I mean, pruritus can be a tolerance issue for patients. I think they also view pruritus as being a very important symptom for their quality of life, so anything that can impact pruritus is actually impacting their quality of life. So I think it's a very important symptom, if you want, in the grand scheme of PBC. I don't want to comment too much about Ocaliva and pruritus. I don't think this is really my role. All I can say is that we see pruritus as being a very important differentiating factor for seladelpar.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [27]

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Yes. So this is Chuck, maybe I'll try to take on your question around liver fat and other agents that have recently reported results. And our strategy as well as other strategy with respect to what to expect for liver fat reductions as a function of disease stage as represented by the fibrosis score. So I think that we've seen recently reports, I'll just call out 2, MGM282, the FGF19 analog, has reported results from a couple of studies with some very striking reductions in liver fat. It's somewhere between 40%, sometimes even higher percentages in terms of relative reduction. And then Madrigal had 40% reductions with a 10% -- roughly 10% background placebo rate. So I think that helps to kind of center us in terms of what the expectations that have been seen with other agents are. I would say that seladelpar really has a unique feature, we believe, in terms of its ability to reduce fat. We've seen this [in 2] mouse models of NASH, where steatosis is a predominant component. We published last year in Hepatology Communications, where we had very strong reductions. And upcoming at The Liver Meeting, we'll have another poster presentation, where once again, we see striking reductions in hepatic fat, we see reductions in hepatic cholesterol, and we know that we'll reduce bile acids, all strong drivers to the disease. What's been seen with respect to fibrosis stage and liver fat reductions when people have done subset analysis is that, generally, the reduction of fat seems to be independent of that stage. So I think the way many sponsors are viewing the disease in terms of non-cirrhotic NASH is to focus early on, on a broader range, allowing F1 into the study, perhaps with other comorbidities like diabetes just to make it more feasible to quickly enroll and address the effects on fat and the downstream consequences on histology. But I think the intent would be going into Phase III, where we know that we're more concerned with outcomes, that you'll see the lens narrow a bit to F2 and F3. So the thinking would be then the effects seen in the earlier studies from a scientific rationale perspective should translate into the more advanced stages.

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Operator [28]

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Our next question is from Edward Nash with SunTrust.

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Fang-Ke Huang, SunTrust Robinson Humphrey, Inc., Research Division - Associate [29]

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This is Fang-Ke Huang for Edward Nash. Congratulations on the progress. Other question on Bezafibrate, so basically it's a pan PPAR, and also demonstrates pruritus resolution and ALP normalization. There's some safety issue with ALT elevation. But can you comment on -- do you consider Bezafibrate as a threat, especially in the European market? And can you also talk about what are other factors that differentiates seladelpar?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [30]

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Sure. Maybe, I'll start off, and then Pol, you can add a few more comments as well. So these Bezafibrate, as you correctly mentioned, is a pan PPAR that's generic, available in Europe, not available in the U.S. I should highlight that Bezafibrate is only available at 400 milligrams. Seladelpar is a much more highly potent and selective PPAR delta agonist. Of course, we're seeing really key clinical benefit as low as 5 and 10 milligrams of seladelpar relative to 400 milligrams of Bezafibrate, which we think is, of course, very important. Particularly as you correctly pointed out, in about a 50-patient study, in terms of patients on Bezafibrate versus another 50 on placebo, they had several patients with a significant transaminase elevation. And thus far, we have not seen Grade 3 transaminase elevations in our study with 119 patients now enrolled in our Phase II study at either 5 or 10 milligrams. And in fact, as we've reported, we're seeing very robust decreases, in fact, in transaminase through 26 weeks and as we have reported now next week, even through 52 weeks. So we're seeing a good anti-inflammatory benefit. We're seeing good responses overall on the cholestatic markers, which you also see Bezafibrate. But thus far, we think that there's a very significant profile for seladelpar. In terms of use in Europe, certainly, I think the academic study with these 50 patients on Bezafibrate has generated interest and likely more use of Bezafibrate in Europe so it's certainly a factor in terms of overall potential use in Europe. But we continue to see a real significant opportunity for seladelpar given its overall efficacy thus far as well as its safety and tolerability profile, not only in the U.S., but also globally.

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Fang-Ke Huang, SunTrust Robinson Humphrey, Inc., Research Division - Associate [31]

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Great. And I have a follow up on the ALP elevation in the Phase -- in the seladelpar study. So based on our numbers, in terms of ALP normalization, week 12, it was 41%. And that goes through week 22 -- 26, there is 32%. And according to abstracts from the AASLD, at week 52, the normalization is around 29%. We see a trend that is steadily decreasing over time. We've realized that the patient number probably is different for the 10-milligram. I'm talking about specifically. And just can you comment on that data point? Are we like over-reading the data?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [32]

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Yes. I think you correctly point it out. We're talking about different patients at each time point, given this is an ongoing progressive study that's been reported. So that's likely one key input into those numbers being somewhat different over time as we progress. It's not the exact same number -- same patients at each time point in those cohorts. I think at the end of the day, the key takeaway from our perspective is when you see 25% to 30% of patients normalizing in AP, this compares, and I'm not making a head-to-head comparison, but if you just look at the data that's been presented and published for obeticholic acid, both in Phase II and in Phase III, largely single-digit percentages of patients that are experiencing normalization of AP at those respective time points from those other studies. So we're quite pleased, just fundamentally, overall, in what we're seeing with seladelpar. We continue to believe this is a significant potential differentiator in terms of overall response, thus far.

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Operator [33]

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(Operator Instructions) We do have a follow-up question from Yasmeen Rahimi with Roth Capital.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [34]

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Chuck, this is question for you. Can you remind us again what the role of PPAR alpha is in the pathogenesis of PBC and sort of the differentiation, I guess, activating PPAR delta versus a PPAR alpha/delta agonist?

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [35]

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Right. Okay. Thank you for that question. So I think the easiest way to summarize it is that the expression profile of PPAR alpha and PPAR delta in the liver are somewhat different. They share the features that both are expressed in hepatocytes, and in hepatocytes, in the study of PBC, both with suppressed bile acid synthesis, which would reduce the accumulation of what we would believe toxic bile acids that would then instigate and then perpetuate downstream inflammatory reactions. But what's different, we believe, about delta compared to alpha is its expression in nonparenchymal liver cells, in particular, in cholangiocytes, in Kupffer cells, in macrophages that infiltrate in response to inflammation as well as stellate cells. So we have been able to show with seladelpar, for example, with the human macrophages, we have direct inflammatory effects. We've been -- we've seen in 2 NASH models now, direct effects on acute fibrogenesis, so reduction of stellate cell markers, decreased collagen deposition as reflected in less hydroxyproline, and decreased collagen synthesis in a poster that we're going to present. So I think to kind of sum it up, yes, PPAR alpha and PPAR delta would share some expected effects in hepatocytes on bile acid homeostasis. But where delta would come to shine, we think, is its potential for direct anti-inflammatory as well as anti-fibrotic effect in a disease after all, that has -- is an inflammatory fibrotic disease at the end of the day.

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Operator [36]

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Ladies and gentlemen we have reached the end of our question-and-answer session. I would like to turn the call back over to management for closing remarks.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [37]

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Thank you. Let me close by just saying that we are grateful for our employees and our external collaborators, the support of patients, their families and their physicians. We look forward to providing greater insight into seladelpar at The Liver Meeting starting next week. And as we begin to turn our attention to 2019, we look forward to sharing updates in our key areas of focus, including enrollment of ENHANCE, enrollment in our Phase IIb NASH study and diversification of our overall pipeline. Thanks again for joining us today, and if you haven't yet done so, please go out and vote. Thank you.

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Operator [38]

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