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Edited Transcript of CBAY earnings conference call or presentation 5-Nov-19 9:30pm GMT

Q3 2019 Cymabay Therapeutics Inc Earnings Call

NEWARK Nov 10, 2019 (Thomson StreetEvents) -- Edited Transcript of CymaBay Therapeutics Inc earnings conference call or presentation Tuesday, November 5, 2019 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

* Sujal A. Shah

CymaBay Therapeutics, Inc. - President, CEO & Director

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Conference Call Participants

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* Antonio Eduardo Arce

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

* Eliana Rachel Merle

Cantor Fitzgerald & Co., Research Division - Research Analyst

* Mayank Mamtani

B. Riley FBR, Inc., Research Division - Research Analyst

* Shawn Michael Egan

Citigroup Inc, Research Division - Senior Associate

* Timur Ivannikov

Raymond James & Associates, Inc., Research Division - Senior Research Associate

* Yasmeen Rahimi

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

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to CymaBay's Third Quarter 2019 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 at the CymaBay website at www.cymabay.com.

Now I would 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. I hope that you had a chance to review the press release we issued announcing our third quarter 2019 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; and Dr. Chuck McWherter, Chief Scientific Officer. They'll 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 and anticipated data release dates, and cash runway 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 forecast due to the impact of many factors. The company assumes no obligation to update or supplement any forward-looking statements, 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 would 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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Good afternoon, and thank you for joining us. I begin our call today with today with several exciting updates related to seladelpar, our highly selective and potent PPAR-delta agonist currently in development for multiple inflammatory liver diseases, including primary biliary cholangitis, or PBC; primary sclerosing cholangitis, or PSC; and nonalcoholic steatohepatitis, or NASH.

Yesterday, almost 1 year to the day since its initiation, we announced that we had reached target enrollment of 240 patients, earlier than expected, in ENHANCE, our global Phase 3 registration study of seladelpar in patients with PBC. We now expect to complete randomization by the end of this month and to report top line Phase 3 data in early 2021.

As a reminder, ENHANCE is a double-blind, randomized, placebo-controlled, 52-week study evaluating the safety and efficacy of 5 and 10 milligrams of seladelpar versus placebo in patients with PBC who have had an inadequate response or are intolerant to first-line treatment with UDCA. Importantly, the doses of seladelpar being studied, the treatment duration and the primary efficacy endpoints being evaluated in ENHANCE are identical to those from our Phase 2 study.

In case you are not familiar, PBC is a rare chronic inflammatory liver disease primarily affecting women over the age of 40. It is characterized by impaired bile flow, or cholestasis, and the accumulation of toxic bile acids in the liver, leading to inflammation and destruction of the intrahepatic bile ducts, which can result in fibrosis, cirrhosis and liver failure. Common clinical symptoms of the disease include potentially debilitating fatigue and pruritus.

I cannot overemphasize the significant achievement of our team working together with our partners, investigators, their staff and patients, to get this study enrolled ahead of schedule. Enrolling a study of this size in a rare disease in which there is already an approved therapy is in our minds a statement about the unmet need that still exists for patients as well as a testament to the reputation of seladelpar based on its profile to date in Phase 2.

Speaking of our ongoing open-label dose-ranging Phase 2 study, we expect to release full top line data early next year. As you may recall, various interim data sets from this study have been presented in late-breaking presentations at 3 consecutive AASLD meetings over the past 3 years and most recently at EASL this past April. These results supported our breakthrough therapy and prime access designations for seladelpar in PBC and served to establish the potential of seladelpar to offer patients improved efficacy and better tolerability over existing second-line treatment.

To date, seladelpar has demonstrated a pattern of anticholestatic and anti-inflammatory effects. Importantly, we observed these effects without a worsening of pruritus, a key potential advantage over current second-line treatment for patients with PBC.

This study randomized a total of 119 patients with 104 out of 106 eligible patients electing to continue seladelpar treatment beyond 1 year in our long-term study. Our safety experience with seladelpar in patients with PBC continues to grow, and there are now over 45 patients in the long-term study who have been on treatment for over 2 years.

Finally, as our PBC program continues to achieve key milestones, we'll be presenting new clinical and preclinical data for seladelpar at the upcoming Liver Meeting hosted by AASLD in Boston from November 9 through 12. The first presentation examines the pharmacokinetics of seladelpar in PBC patients with or without compensated cirrhosis. For those of you attending, this abstract is number 1328 and will be presented on Saturday, November 9, from 5:15 to 6:15 p.m. Eastern time. It focuses on the exposure of seladelpar in PBC patients with confirmed cirrhosis, an area of increasing interest for both clinicians and regulators. It builds upon our presentation at EASL last April in which we observed similar anticholestatic and anti-inflammatory treatment effects in noncirrhotic and compensated cirrhotic patients without any new or overt safety signals in this challenging population. As our PBC program advances, we believe it is vital to understand the effects of seladelpar across the spectrum of PBC disease severity, and communication of these results reflects our commitment to broadly share what we learn.

The second abstract, number 2253, will be presented on Monday, November 11, from 12:30 to 1:30 p.m. Eastern time. It explores the structural and biophysical characterization of the origins of and differences in the selectivity of seladelpar and elafibranor, a dual PPAR-alpha-delta agonist. This poster will highlight at the structural level how and why seladelpar is able to achieve its potency and selectivity and gives insights at the target level of the potential origins of differences in clinical doses of these agents.

As we discussed last quarter, we are committed to expanding our development of seladelpar for rare orphan cholestatic liver diseases. In the third quarter, we made significant progress on this objective with the initiation of a Phase 2 proof-of-concept study of seladelpar in patients with PSC.

PSC is a rare chronic cholestatic liver disease that is characterized by diffuse inflammation and fibrosis of the bile ducts. The disease affects approximately 40,000 patients in the U.S. and shares some underlying pathology with PBC, although it is generally a more heterogeneous disease. As with PBC, many patients suffer from pruritus, and there is also a high comorbidity of inflammatory bowel disease in this population. There is a significant unmet need in PSC with no approved pharmacologic treatment. The only effective option for patients is liver transplant.

We recently completed investigator meetings in the U.S. and Europe, and site initiations and patient screenings are now under way. In this Phase 2 study, we will be evaluating 3 doses of seladelpar -- 5, 10 and 25 milligrams -- versus placebo in a 1 to 1 to 1 to 1 seladelpar dose group to placebo ratio, and are targeting enrollment of approximately 100 patients at 60 sites globally. The primary efficacy endpoint will be the relative change in alkaline phosphatase from baseline to 24 weeks as a proof-of-concept endpoint for potential pharmacologic activity. Key secondary endpoints will include liver stiffness by FibroScan, imaging evaluations including MRI with contrast and MRCP, measurements of pruritus and patient quality of life, and other exploratory measures, including serum biomarkers of inflammation and fibrosis. The study will also include an interim assessment of safety and efficacy after approximately 10 patients in each dose group reach 12 weeks of treatment. We will provide guidance in the coming months on anticipated timelines for interim and final top line data as we progress further with enrollment.

As you can see, our development of seladelpar in inflammatory liver diseases is focused in areas of high unmet medical need. This is not only true for our cholestatic disease program in PBC and PSC, but also in our evaluation of seladelpar for patients with NASH. Let me ask Chuck to provide updates with our ongoing Phase 2b study in NASH. Chuck?

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [4]

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Thank you, Sujal. We remain focused on completing the ongoing Phase 2b study in NASH to the 52-week histology endpoint, with results expected in the second quarter of 2020.

As a reminder, the study remains blinded, and we reported 12-week top line interim results this past June that revealed clinically meaningful and dose-ordered reduction in liver enzymes known to be associated with inflammation and liver damage, but unexpectedly showed minimal changes in liver fat content using MRI proton density fat fraction.

As I mentioned, seladelpar treatment resulted in robust, clinically meaningful and dose-dependent reductions in several key markers, and these included alanine aminotransferase, or ALT, with decreases in the seladelpar 50-milligram group at 12 weeks of 32 units per liter, or 37.5%, versus 9 units per liter decreasing in the placebo arm. Underscoring the consistency of the liver enzyme pattern reductions, changes were seen in AST, GGT and ALT, and they included a 43% reduction in the plasma-elevated GGT levels at 50 milligrams. These dose-dependent improvements in liver enzyme markers and their potential association with histopathology has generated considerable interest in understanding if the effects seen at 12 weeks will translate into histological improvement at 52 weeks.

To put these results into context, an analysis published at the beginning of this year examining histological responses in the FLINT study of obeticholic acid found that decreases in ALT of 17 units per liter or greater were correlated to an improvement in histological response. Data published from other NASH studies have also supported the association of ALT reductions with improvement in NASH histology.

Other key results at 12 weeks included decreases in the inflammatory marker high-sensitivity C-reactive protein and decreases in LDL cholesterol and triglycerides, supporting a favorable cardiovascular risk profile. Seladelpar appeared to be safe and well tolerated at doses of up to 50 milligrams through 12 weeks. The majority of the treatment-emergent adverse events were mild to moderate in severity and deemed unrelated to study drug. There were 2 serious adverse events that occurred after randomization through Week 12, neither of which were deemed to be related to study drug.

Since reporting these results, we have completed some additional assessments of pharmacodynamic markers, again done in a manner where we can report group means, but in which we maintain the blinding of the study. The first marker is a measurement of 7-alpha-hydroxy-4-cholesten-3-one, or C4, a key circulating intermediate of the bile acid synthesis pathway, and whose level exclusively reflects action in hepatocytes. Levels of C4 are modulated by regulating the gene CYP7A1, which expresses the enzyme responsible for the rate-limiting step in bile acid synthesis. We have previously shown that seladelpar suppresses CYP7A1 in primary hepatocytes and decreases C4 in patients with PBC. In this study, we once again observed dose-dependent reductions in C4 at 12 weeks with a median decrease of 55% at 50 milligrams. These results confirm target engagement and the activity of seladelpar in suppressing bile acid synthesis in patients with NASH, a potential benefit given the role that elevated bile acids may play in the pathogenesis of NASH-related liver injury.

Another area of interest has been to try to gather mechanistic insights related to the known effects of delpars in lipid catabolism. Therefore, we evaluated a second set of markers of target engagement that were directed to confirming seladelpar's effect on promoting fatty acid oxidation and mitochondrial respiration. We analyzed samples at baseline and 12 weeks for levels of carnitine and short-chain acyl carnitines in plasma. These metabolomic analytes reflect fatty acid turnover at the level of the mitochondria, the site of fatty acid oxidation, and are known to accumulate in the plasma from tissues including liver, peripheral fat and muscle. At 50 milligrams after 12 weeks of treatment, increases from baseline were seen in carnitine, acetyl carnitine and butyrylcarnitine levels of 36.1%, 34.7% and 38.5% respectively, while corresponding placebo changes were 2.5%, 12% and 2.9%.

Effects on these 3 markers were also dose-dependent. We interpret this to mean that seladelpar retains the beneficial effects on lipid catabolism that we expected despite not seeing a meaningful effect on reducing total liver fat at the 12-week time point.

Finally, we also evaluated effects at 12 weeks on ELF score, a biomarker of fibrosis, and corrected-T1, a noninvasive MRI method designed to explore effects on inflammation. Neither measure showed any treatment effect at 12 weeks. Although other targets have shown effect on these markers in this timeframe, we remain interested to discover if longer treatment times may be needed with the delpar mechanism. A robust panel of these and other assessments are being collected in the study at various time points and at 52 weeks. We remain blinded, and we will report them along with top line histological results in the second quarter of 2020.

Let me now turn the call back to Sujal for a review of our financials and closing comments. Sujal?

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

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Thank you, Chuck. Our cash, cash equivalents and marketable securities were $218.6 million at September 30. Based on current projections, our existing cash is expected to fund the current operating plan into 2021. For a detailed overview of our operating results for the 3-month and 9-month periods ending September 30, I will refer you to the press release and to our 10-Q filed with the SEC today.

The third quarter has been one of our most productive periods, culminating in reaching target enrollment in ENHANCE, our global Phase 3 registration study of seladelpar in PBC, earlier than originally projected. We expect to complete randomization in ENHANCE by the end of November and remain on track to report top line data from this 52-week study in early 2021.

We also made significant progress in our efforts to expand development of seladelpar into a second rare cholestatic liver disease with the initiation of our Phase 2 dose-ranging proof-of-concept study in PSC. We look forward to providing future updates to timelines for expected interim and final top line data as the study progresses.

In the coming months, we look forward to top line data from our completed open-label Phase 2 study in PBC and top line 52-week biopsy data from our Phase 2b study in NASH in the first and second quarters of 2020, respectively.

I'd now like to open the call to questions. 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 Yasmeen Rahimi with ROTH Capital.

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

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I have 2, one on NASH and one on PBC, so congratulations on completion of enrollment. So on the PBC, I would love to hear your thoughts on, would you be required to do a long-term outcomes PBC trial? And how do you think your thoughts are in regards to building out potentially commercially, or is it more for positioning of seladelpar in the case that COBALT results become available and if potentially they're positive?

And then the second question in regards to NASH is, given that there are no changes seen in ELF and biomarkers of fibrosis, is it just a function of short duration? Or does it jeopardize your thoughts that as we’re going into biopsy results? And then when should we be expecting the 26-week data points? Is that something that we're going to see this year or later next year? And thank you again.

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

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Thanks, Yasmeen. I'll address your first question and I'll ask Chuck to specifically talk a bit about our impressions with the early 12-week additional analyses in the NASH study.

So first of all, in PBC, let me once again highlight the tremendous accomplishment fundamentally by everyone here internally, the partners that we've worked with for ENHANCE, including folks in the medical community and their staffs, patients of course, in what I think is a tremendous achievement for us to conclude the full enrollment in ENHANCE by the end of this month, and having hit, already, target enrollment.

Specifically to your question, Yasmeen, as you know, approval in PBC, based on the composite endpoint inclusive of alkaline phosphatase and total bilirubin, is a surrogate endpoint for Subpart H, accelerated approval. So we would in fact have to make a commitment to having and conducting a long-term outcome study in this setting, and this is effectively the path that Intercept has forged ahead of us, and we would follow that same path.

I think you asked a question around what would change in the potential scenario in which COBALT read out; I think it's hard to predict today. The long-term study that Intercept is conducting with obeticholic acid is one for which I think enrollment timelines are quite long. Even projections from their site include timelines that extend beyond 7 years. Our conversations with the agency have really been honed in on conducting a confirmatory study effectively similar to what Intercept has been doing for obeticholic acid, and that's effectively our intent. We think there's an opportunity, clearly, with seladelpar post the potential Subpart H approval, should we be successful with ENHANCE, and an NDA filing to execute a confirmatory study, that also, I think, strengthens the positioning of seladelpar relative to its potential in having both improved efficacy as well as better tolerability.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [4]

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Hi, Yasmeen, this is Chuck. So great to have your question on ELF, and I'll try to help you with our perspective in terms of how to interpret it. I mean, first of all, just recognize that ELF is enhanced liver fibrosis score test, a commercial test, as you know. It was originally developed and has been a good measure for viral hepatitis, so hep B, hep C, HIV, especially for severe fibrosis. It's also been used in some other liver diseases as an exploratory measure, cholestatic diseases like PSC, but has begun to be adopted and used, as I'm sure you know, in NASH as an exploratory marker. And of course, it reflects, because it has 3 components -- hyaluronic acid, the N-terminal -- the procollagen N-terminal peptide, as well as the TIMP, the tissue inhibitor metalloproteinase -- various processes, both fibrogenesis -- that is the deposition of matrix as well as its turnover.

There are other measures -- for example, PRO-C3, which some feel has some advantages around sensitivity, but it comes with cost, and because there's really only one provider for that assay, you have to manage getting in the queue.

So now to what we think about the result thus far, it's really, for us, we're hampered in the sense that the study is blinded. So we don't have patient-level data to begin to look at subsets of patients -- for example, patients with elevated parameters, either a histological score or even elevation in transaminase as a baseline, nor can we look at subsets of responders to begin to tease out what the results might mean.

I think for us it's really a matter of staying the course. I think that as we've thought about the results that we had in June, just the pattern of effects that we think are a good sign, they're proximal to liver injury, that's really what the pathology is about, and that if we were just to let the data ripen, we will collect data, additional data, as you mentioned, at Week 26 as well as on through to Week 52. We'll have an opportunity to understand whether many of the parameters that we've collected, whether it be ELF, PRO-C3, the MRE elastography, the MRI-PDFF as well as the corrected-T1, will really give us a really robust data set by which to make a decision about how we believe seladelpar should go forward in NASH.

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

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And Yasmeen, I'll just simply add, I think it's a very reasonable hypothesis that when you think about histologic change, particularly effects on fibrosis, that you would need longer time on treatment in order to see those effects. In fact, of course, the histologic assessment itself is typically done, as you know, at 52 and 72 weeks. So it's not all that surprising to us that even early markers of fibrosis would need more time, potentially, to reveal any kind of impact post treatment.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [6]

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Thank you, team. And then 26-week data should be coming out next year?

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

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Well, I think as we've mentioned before, Yasmeen, on some of our prior calls, really our commitment is to drive patients all the way to the 52-week treatment period. There is a 26-week assessment that's done. It's not a planned interim assessment in this study, but those markers and assessments are taken, and we'll see that data along with 52 weeks so that we have a better sense on the progression of treatment effects from 12 to 26 to 52 weeks once the study concludes in the second quarter of next year.

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Operator [8]

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Our next question comes from Ellie Merle with Cantor Fitzgerald.

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Eliana Rachel Merle, Cantor Fitzgerald & Co., Research Division - Research Analyst [9]

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Congrats on the PBC enrollment. Just on PSC, on this interim analysis that you're taking after 10 patients in each arm reach 12 weeks, what are you looking to see in this interim? And what would you view as encouraging data, given this is an early time point? And outside of alk phos, what endpoint in PSC are you most focused on, whether it's liver stiffness, and if you could just sort of talk about kind of the magnitudes that you're hoping to see there. And then I have a follow-up. Thanks.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [10]

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Yes, sure. Thanks for the question, Ellie, and I'll kick it off and perhaps let Chuck add some things to the degree I miss something. Really just to address the latter part of your question, we think about the potential benefit matched up with the unmet need in PSC -- of course, this is an indication for which there are no approved treatments for patients today. It is an autoimmune cholestatic liver disease like PBC, although we recognize that there are complexities. There's a greater degree of heterogeneity, typically a greater degree of inflammation and fibrosis.

So when we think about, broadly, assessment on various impacts of seladelpar, I think one, we would like to continue to see and would expect to see the anticholestatic activity that we've seen in PBC and even in the setting of NASH for PSC patients. We're also very focused on understanding whether or not the anti-inflammatory effects that we also see in both PBC and NASH translate to specific benefits in patients with PSC. The primary endpoint on alkaline phosphatase at 24 weeks I think answers part of that question with respect to the cholestasis that patients suffer from, but as you know, there are a host of key secondary measures that are in our study, including liver stiffness, as you pointed out, with FibroScan. So very focused on understanding the impacts on liver stiffness over that 24-week period. We'll look at a host of additional wet biomarkers of inflammation as well as fibrosis. We're going to be doing some imaging in this study as well, MRCP, as well as MRCP plus, is actually incorporated in this study.

And I think fundamentally, what we're trying to get a better view on is the potential benefit, again, specifically on inflammation, and also on fibrosis in the setting of PSC. And so to the degree that these secondary measures give us a better view on overall liver health and particularly on potential effects on fibrosis, those, we think, could be quite meaningful for this population of patients.

With respect to the interim analysis, as you've seen us do in the setting of PBC, a vast majority of the anticholestatic benefit that we've observed typically occurs within 12 to 16 weeks. So part of the interim is to give us some idea of the various doses that we've incorporated into the study and the effects on alkaline phosphatase at that 12-week time point. It also gives us some interim analysis around general overall safety in the population as the study progresses. So I think it can be quite informative.

For us, the key in adding an interim analysis to a study in particular is to give us further insights on the conduct of the study beyond, and we think this will give us an opportunity to have some view on the potential benefit of seladelpar in this population and how that may translate as patients stay on treatment to the conclusion of the 24-week treatment period.

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Eliana Rachel Merle, Cantor Fitzgerald & Co., Research Division - Research Analyst [11]

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Got it. That's very helpful. And then just in terms of thinking about the timeframe for this interim, I know you just started, but if there's any sort of way we should think about how long enrollment will take in order to get to the 10 patients per group and how we should we think about kind of when this interim might occur, that would be helpful. Thanks.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [12]

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Yes. Sure, Ellie. This is part of the challenge as we just get the study kicked off. I think what we'd like to be able to do is provide more specific and more accurate guidance as the study progresses. So it's about a 100-patient study, as we've identified, so it wouldn't be atypical for the study to really take till the end of 2020 to fully enroll, but here again, we'll provide more specific guidance, particularly around interim and final top line data, as we get further into enrollment.

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Operator [13]

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Our next question comes from Steve Seedhouse with Raymond James.

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Timur Ivannikov, Raymond James & Associates, Inc., Research Division - Senior Research Associate [14]

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This is Timur Ivannikov on for Steve Seedhouse. We had a question about a couple of abstracts at AASLD that talked about proof-of-concept studies for fenofibrate and bezafibrate. And in those cases, patients started sort of in the 300 to 500 units per liter of ALT range and went down to about 100 fairly quickly, sort of similar to what you saw in the Phase 2 study with seladelpar. And so I guess in the case of bezafibrate, it was actually part of a triple regimen with UDCA and OCA, and there was quite a wide range of outcomes and there was also some inconsistent outcomes in terms of pruritus. So how do you see these results in comparison to seladelpar? And would you consider, in the future, perhaps running a head-to-head study?

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

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Great question, and I think it's a little premature for us to comment specifically about what type of future clinical studies that we might contemplate, but I do think that we, as anyone would in our position, continue to make ourselves aware and to look and understand how other agents in this space are used, particularly in Europe. As you know, bezafibrate has off-label use, so it's used quite consistently.

We saw the paper from Christophe Corpechot in the New England Journal -- that was, I think, in 2017 -- with some nice effects on biochemical normalization, and then we saw last year -- or actually it was earlier this year at EASL. Frederik Nevens had an investigator study looking at triple therapy. And then here in this particular case, we have Professor Corpechot once again coming forward with a study where he's looking at triple therapy.

I think that the signals are interesting. I think in the case where obeticholic acid, you see where you have, in some instances, incomplete responses, it makes sense that a PPAR really validates our position. PPARs really have a lot to offer in terms of anticholestatic and anti-inflammatory effects. Kind of working the other way -- and as well as to potentially help to ameliorate some of the itching issues that have been -- are well known in part of the label for obeticholic acid. Kind of working the other way around, I think bezafibrate then to add onto it, which was also part of the study, showed that there was some additional benefit when added on top.

I think the challenge for these studies is they're small. The study that you mentioned is not just in PBC; it's also in PSC. They're not studies that would be conducted in a typical double-blind, randomized, controlled fashion. So it's a little hard for us to draw conclusions, but we do agree that there's some interest here and ability to combine mechanisms where patients are unable to get to treatment goals.

For ourselves, we remain convinced that seladelpar really looks quite favorable in terms of the profile we've seen through Phase 2. We seek to confirm that in ENHANCE. But if you can imagine a future state where we're approved on the market, I think that we'll certainly look towards comparing ourselves to others as well as in the future, we'd be open to contemplating looking at combination therapies as well. But right now, front and center for us is getting ENHANCE across the finish line.

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Timur Ivannikov, Raymond James & Associates, Inc., Research Division - Senior Research Associate [16]

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Okay. Thank you for the detailed answer here. And I guess our other question is on NASH. So your NASH readout is in 2Q '20, and it's going to be a busy time because, obviously, there's also a couple of competitive updates, at least 2, starting with -- there's potential for semaglutide update, and also elafibranor, around April of next year. So on one hand, elafibranor would be a more direct read-through, but semaglutide could also be -- if those results look good, could potentially be a negative for the NASH space because there's also recent updates using oral semaglutide, not just subcu. So I guess, what are your thoughts on those competitive updates coming up in 2020? Thank you.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [17]

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Well, thanks for the question. Well, first of all, I think NASH is a very complex disease with several different contributors to its etiology and treatment, and I think everyone is pretty well grounded in the fact that it's probably going to take more than one therapy, that not all patients are going to respond to just a single magic bullet.

We do agree oral semaglutide and the GLP-1s look like they have some beneficial effects on parameters that should translate into NASH benefit; particularly weight loss, I think, is one feature. Also the ability to help with glucose control in a population that has a large comorbidity with diabetes.

So our view is that it's inevitable, but that there'll be a need for multiple therapies. Last year we had made some presentations where we've examined combinations of seladelpar with -- in this case we used liraglutide, but I think mechanistically, conceptually, it showed that both agents worked well together. There were additive effects on weight loss, on hepatic lipid control, on inflammation, and in particular, seladelpar really added an additional component of antifibrotic activity, at least in this mouse model, that wasn't present with the GLP-1 analogues. And as you may know, in the LEAN study, that was a similar profile as was seen in the mice.

So I think that's an inevitable world that sponsors that work in NASH live in. There's a lot of data readouts. There's a lot of emerging therapies. There's a lot of interest, and there's a lot of need as well.

With respect to elafibranor, I think that we understand folks are naturally comparing and contrasting seladelpar, which is a potent and selective delta, to elafibranor, which is a mixed alpha-delta, but there are some key differences in terms of the potency effects and the selectivity we point out. We haven't conducted any head-to-head studies, so of course it's a challenge to be able to interpret, but from what we've seen, for example, effect on transaminases at 12 weeks in NASH, we think seladelpar looks favorable. If you look in PBC, cholestatic disease, again, effects on transaminases for seladelpar in the delta mechanism look to us to be something that's a feature that you'd like to have in a drug, at least. And of course, people will react how they react in terms of how elafibranor reads out. If it's positive, I'm sure I would say that's good for us. If it's not, then I would just draw people to the clinical data. And fortunately we'll be arriving at the endpoint around the same time.

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Operator [18]

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Our next question comes from Joel Beatty with Citi.

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Shawn Michael Egan, Citigroup Inc, Research Division - Senior Associate [19]

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This is Shawn Egan calling in for Joel. Can you remind us what the clinical development pathway currently stands in PSC? Have discussions with the FDA established what type of endpoints could support a registrational pathway, or are there components of your Phase 2 data that you're kind of hoping to -- that could shape that discussion? And I have a follow-up as well.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [20]

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Yes, sure. So thanks for the question, Shawn. We're having dialogue with the agency, particularly as part of, really, a consortium where folks here at CymaBay, along with other sponsors, regulatory agencies, patient advocacy groups and thought leaders all participate in some discussions at the PSC forum. Much of that dialogue in the setting of PSC is focused around study design and endpoints in particular, given, once again, there's nothing approved for patients with PSC today.

I think the dialogue largely is focused around a recognition that, in addition to benefits around cholestasis, there's a need for demonstrating an overall benefit on liver health. And so today, what we do know is that Gilead is launching into a Phase 3 study in which biopsy is required at this stage. I will point out that biopsy is not typical for PSC patients, similar to PBC. But nevertheless, their Phase 3 study includes a biopsy assessment. Now, in particular, the read on fibrosis and biopsy is an endpoint around not seeing progression of fibrosis as opposed to seeing improvement, as you need to do in the setting of NASH. So I think that forms at least the agency's current view, but as I mentioned, there's a significant amount of dialogue and recognition that biopsy is not normal for patients, and the potential to develop surrogate endpoints in PSC is an active discussion that we're involved with here internally as well.

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Shawn Michael Egan, Citigroup Inc, Research Division - Senior Associate [21]

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Great. I appreciate it. But maybe I'll just follow up one on your answer. Are any of the nondiagnostics in NASH -- are there any potential read-through in PSC in that regard?

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

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Yes. I think when we think through some of the markers that can be potentially correlated to overall liver health, I think if you look at liver stiffness with FibroScan, you look at some of the wet biomarkers of fibrosis, be it ELF or PRO-C3, there's some data that's been collected in other studies, particularly the simtuzumab study that Gilead conducted with their LOXL oxidase inhibitor, that's generated a fairly significant amount of data that's helping point toward some of these noninvasive markers as potential surrogate endpoints. And that -- those are the types of things that are in active discussion at the PSC forum, which again, involves the regulatory agencies.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [23]

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I mean the only thing I would other -- add in maybe in a bit of contrast, it's certainly matrix biology. There's some shared characteristics, some shared cell types. There's deposition of matrix and some of the activation pathways potentially could be the same. And then you have, of course, there's a natural, as part of the wound healing and the scarring process, turnover. So those things quite commonly from afar are all kind of treated -- well, they're the same, right? But anatomically, the location, at least in the early stages of fibrosis, PSC is a peribiliary fibrosis that can involve extrahepatic ducts as well as intrahepatic ducts. And it has a very particular type of pathology, usually referred to as an onion skin. And that's really different than lobular inflammation and fibrosis.

So some things are the same, some things are different. And so while we might hope that the biochemical measures are shared and so maybe they will be something that predicts read-through to outcome, I think it -- I would just say that it's a little bit -- it's a natural thing to do, and we will do it, but I think time will tell as the whole field learns more about how these noninvasive tools are going to be used.

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Shawn Michael Egan, Citigroup Inc, Research Division - Senior Associate [24]

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Yes, it makes sense. I appreciate the color on that. And 1 more if I could -- pricing in PBC. I appreciate there are a number of moving levers right now, but if you can talk about any kind of market research you have done and how your thoughts are kind of evolving there.

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

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Sure. So I think as you correctly pointed out, there are a whole host of moving pieces, and we have in fact initiated some of the work here for us as we continue to progress seladelpar through the clinic. And as we mentioned on our prior call, Janet Dorling joined us as Chief Commercial Officer, so there's a concerted effort ongoing now here internally, inclusive of some folks we have in the field and medical affairs, in gathering the kind of information and data that we need to better understand the overall patient population, the overall opportunity.

I'll highlight this -- from our perspective, on the strength of the Phase 2 data that we've generated to date, the advancement into Phase 3 and now nearing the completion of full enrollment in ENHANCE, our positioning for seladelpar really is focused on rare and orphan disease. So when we think about the overall pharmacoeconomic benefit, our mindset is thinking about seladelpar in the context of rare and orphan diseases, as PBC fundamentally is. And that's effectively how we continue to progress in our understanding of what we think is a very significant opportunity for seladelpar, frankly even independent of how some of these moving pieces may play out from the market, if you will.

Today, there continues to be a very significant need for patients to have improved efficacy. There are still a significant number of patients that are effectively incomplete responders, as Chuck was mentioning. And of course the clinical symptoms of the disease are not yet ameliorated with any treatments that are available today for patients. So the significant challenges patients have with pruritus, with fatigue, we think all of these things offer a real opportunity for seladelpar to be positioned in this fashion.

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Operator [26]

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(Operator Instructions) Our next question comes from Mayank Mamtani with B. Riley.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [27]

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Congrats on the progress especially the EMBRACE study enrollment. Quickly on PSC -- most of my questions are follow-ups. PSC, in the context of the Gilead PRIMIS trial that you mentioned, Sujal, I see there the 400-patient goal that they have is a pretty aggressive goal they have for within a year period, given that 96-week endpoint they're looking at for fibrosis. I'm just curious, just as you start your study, are you experiencing, like, diagnosis for these patients improving now that there are treatment options that investigators have while they're doing enrolling trials?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [28]

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Yes, I think -- thanks for the question, Mayank. Look, I think a couple of important things for me to point out. The strength of the data to date in PBC is something that's generated a significant amount of enthusiasm for investigating seladelpar in the setting of PSC, so that is clearly to our advantage. Again, going beyond the anticholestatic effects we've seen to date in PBC patients, but really the anti-inflammatory benefits we're seeing as well across other populations have generated a significant amount of enthusiasm, not to mention, again, the effects we see on clinical symptoms in those settings. So we have that as wind at our back, if you will.

What we've decided to do, clearly, here is a very robust dose-ranging in PSC, as we typically have done in all of our proof-of-concept studies, be it in PBC or in the setting of NASH. So that's important when we've thought about this specific study design.

And we also recognized that it was important for us to collect a host of secondary measures that would give us some greater insight into the potential to advance seladelpar into Phase 3 as the dialogue at the agency continues to progress away from biopsy. That clear difference between our Phase 2 study and Gilead's Phase 3 study, other than the patient size, as you mentioned, is their study requires biopsy. And I think if you talk to those in the field, you'll clearly see that that is a fairly significant hurdle in terms of enrollment in the setting of PSC.

So we have an advantage, I believe, in terms of being able to get this study up and running and enrolled as quickly as possible so that we have an opportunity to better understand the potential benefit seladelpar may in fact provide.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [29]

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Great. And on NASH, Chuck, are there any markers of insulin sensitivity that have been looked at in this incremental PD analysis?

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [30]

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Yes. No, they certainly will be, but typically the types of things that we would look at are fasting plasma glucose and fasting insulin. But there were no -- of course, A1c will also be available to us, but there's not been any specific procedure measures like clamps or anything like that that were part of the study.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [31]

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Okay. Great. And then lastly on PBC, so just thinking about the 2020 spend, any incremental trial you would expect -- obviously you are seeing very promising data on the compensated cirrhosis patient type. There was a discussion on combinations. Anything from an R&D standpoint for 2020? And also, obviously, now that ENHANCE is progressing ahead of plan, and with the breakthrough designation, the launch could be potentially pushed up also, so anything on -- any color on that would be great.

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

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Yes. Let me maybe start with the latter question. Again, we couldn't be more excited about having hit these key achievements with ENHANCE earlier than originally projected. We continue to be on pace to have data in early 2021, and as you correctly pointed out, in particular with the breakthrough therapy designation, of course we have an opportunity to have a rolling NDA submission and the opportunity to submit various parts of the NDA even ahead of the clinical piece.

So our focus, clearly, Mayank, is to progress as quickly as possible. But it is a little bit premature for me to talk specifically about changes to overall filing deadlines and eventually, ultimately, the approval process and launch, but it is without question our #1 focus here internally.

I think -- Mayank, remind me what the first part of your question was?

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [33]

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Just lifecycle planning for beyond ENHANCE for seladelpar for late-stage trials.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [34]

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Yes. No, it's another good question. I think as Chuck mentioned, there's a fair bit of dialogue we've having here internally thinking about beyond ENHANCE, around the overall positioning for seladelpar. These considerations include potential head-to-head or switch studies. They're not yet baked into our guidance with respect to the operating plan and the burn, so the carryover in terms of cash taking us into 2021 are really outlined by the activities that we've currently specifically been committed to. And that's largely just a focus of ours internally to get to the finish line in PBC, but also to make sure that we have proper thought around those additional studies that would best position seladelpar. So that's been -- that'll be an ongoing area of an update for us to provide you as well.

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Operator [35]

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Next question comes from 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 [36]

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I did have a couple more, just more granular. First on ENHANCE, congratulations, by the way, on the enrollment. So target is 240, which you've reached, and you're going to continue through the end of the month. I'm just wondering, is there -- if you could remind us what the powering assumption is for the study, and since you're slightly ahead of schedule, is this just a question of having the time to strengthen the powering a bit more with the extra patients?

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

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Thanks for the question, Ed. No, I think in terms of the execution of the study, as you know, you have a host of patients in the screening window even as you reach your target enrollment, and you want to make sure that you stop screening at a specific time, after which you're going to at least get to your 240, not under it. And so it's the idea around the fact that there are still some patients that were in the screening window at the time we stopped screening, is what'll ultimately contribute to slightly over 240 patients into the study overall. So screening has been stopped as soon as we knew we would hit the 240, and it's not atypical to still have patients that are in that screening window that ultimately qualify, and that you would eventually put into the study. That's typically a comfort level that's somewhere around 5% to 10% beyond your target. So that's what we imagine will likely happen with those final patients in -- that are still in the screening -- that were still in the screening window when we stopped the study.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [38]

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Right, right. Okay. Understood. Thanks for the clarification. And then maybe just one follow-up on your PBC study. This has been asked a couple times in various different ways, but I wanted to get back to the regulatory pathway here. Obviously this is still something of a debate, as you mentioned, the PSC forum. And you had mentioned 2 particular areas of interest to show benefit cholestasis as well as overall liver health and function. And I'm wondering how the discussions are evolving in terms of which are the likely markers, where ALT might fit into that. And any sort of commentary there would be helpful.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [39]

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Yes, well -- this is Chuck. Hi, Ed, how are you doing? Maybe I'll just -- I'll try to reiterate some of the high points that I think that Sujal mentioned. First of all, I think the agency is really dividing PBC into 2 subpopulations. It's similar to what they've done in other liver diseases, in particular NASH, both -- one being noncirrhotic and the other being cirrhotic. They view the severity of the disease and the risk for the patients and the features of this disease that need to be addressed as being kind of different in those 2 categories.

Our first study is in noncirrhotic PSC, and there, I think you have potentially a different set of measures or markers of the disease progression one could think about. We're limited in the sense that our study is only going to be 24 weeks, but just in general, for noncirrhotic PSC, you can imagine the features of cholestasis, the ones that we've already mentioned, that people think about, alk phos -- there are a number of others. GGT, I think, is one that's particularly interesting -- transaminases, bilirubin is obviously something that you monitor as well, and then a variety of the noninvasive markers.

Then I think that you have the issue of liver stiffness. So this is a disease with progressive fibroinflammatory processes beginning in the peribiliary spaces and then potentially spreading as the disease worsens. And so some measure of being able to use that as, say, some way to assess clinically suspected cirrhosis could be another measure. I think the agency, for noncirrhotic, may be open to thinking about progression to cirrhosis as being one kind of endpoint. At least, that's some of the discussion. So anything that could reflect on that in terms of measures of progression to that would be something that could part of a consideration in a longer, larger study in that population.

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Operator [40]

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Thank you. I would now like to turn the floor over to Sujal for closing remarks.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [41]

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Thank you, operator. I'd like to close by once again thanking those that make our work possible. We're grateful for the commitment of our patients, their families, caregivers and their staff, and all of those we partner with to accomplish our goal of advancing care for patients with serious liver diseases. As active of a year as it's been thus far in 2019, we expect an even busier year ahead. We look forward to seeing many of you in Boston later this week at The Liver Meeting, and thank you once again for joining us today.

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Operator [42]

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