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Edited Transcript of CBAY earnings conference call or presentation 7-Aug-19 8:30pm GMT

Q2 2019 Cymabay Therapeutics Inc Earnings Call

NEWARK Aug 14, 2019 (Thomson StreetEvents) -- Edited Transcript of CymaBay Therapeutics Inc earnings conference call or presentation Wednesday, August 7, 2019 at 8:30:00pm 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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* 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

* Joon So Lee

SunTrust Robinson Humphrey, Inc., Research Division - VP

* Mayank Mamtani

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

* Steven James Seedhouse

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

* 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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Greetings, and welcome to the CymaBay Therapeutics Second Quarter 2019 Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Dan Menold, Vice President of Finance for CymaBay Therapeutics. Please go ahead, sir.

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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've had a chance to review the press release we issued announcing second 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; Dr. Pol Boudes, Chief Medical Officer; and Dr. Chuck McWherter, Chief Scientific Officer. They will provide an update on our financial position and clinical program 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 time lines and potential developmental outcomes, 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 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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Good afternoon, everyone, and thank you for joining us. In the first half of this year, we have made significant progress driving seladelpar forward in ENHANCE, the global Phase III registration study in patients with primary biliary cholangitis, or PBC. ENHANCE is currently active in 23 countries across 5 continents and at more than 145 study sites. We are targeting an NDA submission for seladelpar in PBC in mid-2021. And the study is currently on track to complete enrollment by the end of this year, with top line results expected soon after completing the 52-week treatment period.

The advancement of seladelpar towards the market has injected significant energy and planning for the next stage of seladelpar and the company. For that reason, I couldn't be more pleased to have announced earlier this week that Janet Dorling is joining us as Chief Commercial Officer. Beyond executing on our clinical plan, our most important goal is to develop a cogent commercial strategy and to build out a commercial team for its implementation. Bringing over 15 years of experience in commercial sales and marketing to CymaBay, Janet is ideally suited to this high-priority effort. As Chief Commercial Officer at Achaogen, she built a commercial organization and launched the company's first approved product. Importantly, her roles at Genentech and Roche included VP, Global Product Strategy for the breast cancer franchise and VP, U.S. sales and marketing life cycle leader. I expect there will be many opportunities going forward for you to meet Janet and to appreciate as we have her outstanding leadership skills and the depth of her acumen, and of course, to periodically learn more about our plans for seladelpar as she works with us to advance our goal of bringing it to PBC patients.

The focus of my opening remarks on PBC is quite intentional given the significant results reported to date in our open-label Phase II study that has enrolled 119 patients. Seladelpar has consistently demonstrated a pattern of anti-cholestatic, anti-inflammatory and hepatoprotective effects through 52 weeks of treatment. Our enthusiasm for seladelpar is not only derived from the robust responder rate for the composite regulatory end point that combine alkaline phosphatase and total bilirubin, but also because it has done so without exhibiting the signs for causing or worsening pruritus as seen with the only approved second-line treatment.

Furthermore, the potential for seladelpar to improve pruritus is a key secondary outcome in ENHANCE and will be monitored using an electronic diary. This profile, which was observed in Phase II, suggested to us that seladelpar may have the potential to be positioned as the preferred second-line treatment for patients with PBC.

Our confidence in seladelpar's safety and tolerability profile has further been bolstered by our experience in Phase II where 104 out of 106 eligible patients have elected to roll over into a long-term safety extension. The safety experience continues to build as we now have a significant number of patients in the extension study that have been treated for over 2 years. As the core of the Phase II study is completing, we expect to present data from the study that will provide a robust 52-week set of results in early 2020, about 1 year in advance of top line ENHANCE Phase III results. And subsequently, our goal will be to publish these data.

I would like to remind those on the call that seladelpar's potential extends beyond PBC. I will shortly describe 2 other active Phase II development programs with seladelpar. One, for nonalcoholic steatohepatitis, or NASH, and one for primary sclerosing cholangitis, or PSC. We believe the actions of seladelpar through PPAR-delta agonism is uniquely suited to reduce inflammation both directly through its effects on Kupffer cells in the liver and circulating macrophages, and indirectly by decreasing several key drivers of inflammation and liver injury, including bile acid in the setting of PBC and PSC, and lipotoxic lipids, precholesterol and bile acid in the setting of NASH.

Let me now turn to recapping recent events in our NASH program. In early June, we announced interim 12-week top line data from our ongoing Phase IIb dose-ranging study of seladelpar. This study enrolled 181 patients with biopsy-confirmed NASH [,] advanced fibrosis with over 80% having stage 2 or 3 fibrosis and high baseline liver enzymes, reflecting liver inflammation as part of their ongoing disease.

As a reminder, we reported 12-week top line results showing a striking pattern of reductions in liver enzymes known to be associated with liver damage and pathology, but with minimal changes in total liver fat content as explored with noninvasive imaging. The study remains blinded to the 52-week end-of-study biopsy to evaluate NASH pathology and fibrosis.

Seladelpar treatment resulted in robust, dose-ordered and clinically meaningful reductions in key markers of inflammation and liver injury, including alanine aminotransferase, or ALT. Seladelpar's dose-dependent improvement 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.

Patients receiving the 10, 20 and 50-milligram doses of seladelpar achieved mean ALT reductions of 15, 20 and 32 units per liter, respectively, versus a decrease of 9 units per liter in placebo-treated patients. It was encouraging for us to see a consistent pattern of improvement with seladelpar treatment in other liver enzymes, with reductions seen in AST, GGT and alkaline phosphatase, including an over 40% reduction in elevated GGT at 50 milligram. To put the results into context, a recently published analysis of histological responses in the FLINT study for obeticholic acid found that decreases in ALT of 17 units per liter or greater were correlated to an improvement in histologic response. Data published from other NASH studies have also supported the association of ALT reduction with improvements in NASH histology.

Other key results at 12 weeks included decreases in the inflammatory marker hs-CRP as well as decreases in LDL cholesterol and triglycerides, supporting a favorable cardiovascular risk profile.

Seladelpar appeared to be safe and well-tolerated at doses up to 50 milligrams through 12 weeks. The majority of treatment-emergent adverse events were mild to moderate in severity and deemed unrelated to the study drug. There were 2 serious adverse events that had occurred after randomization through week 12, neither of which was deemed to be related to the study drug.

While we're surprised and disappointed to not see a meaningful reduction in total liver fat at 12 weeks, we believe that reductions in markers of liver damage are encouraging and supported by what is known about seladelpar's mechanism of action. We look forward to establishing histological evidence of seladelpar's benefit in NASH, a second population, in addition to PBC with a serious inflammatory liver disease.

As the final portion of my clinical update, let me share our excitement as we turn to development of seladelpar in primary sclerosing cholangitis, or PSC, another cholestatic fibro-inflammatory liver disease. The mechanistic underpinning of seladelpar with activity in cholestasis, inflammation and fibrosis led us to initiate clinical development in this devastating disease for which there is high unmet need and no approved therapies. We recently announced that we had concluded successful regulatory interactions with the FDA and are initiating a Phase II study of seladelpar in patients with PSC. PSC is a rare area chronic cholestatic liver disease that is characterized by diffused inflammation and fibrosis of the bile duct. The disease predominantly affects the medium- to large-sized bile ducts inside and outside the liver, and is manifested by ongoing ductal destruction leading to cholestasis, advanced fibrosis and cirrhosis. Patients are also at a high risk of developing cholangiocarcinoma. PSD (sic) [PSC] is an orphan disease affecting approximately 40,000 patients in the U.S. and share some underlying pathology with PBC, although it is generally a more heterogeneous disease.

Activities for the study are well underway, and we expect to begin screening patients this quarter. The Phase II study will be randomized placebo-controlled dose ranging that will enroll approximately 100 patients at 60 sites globally. Seladelpar at doses of 5, 10 and 25 milligrams once daily will be studied versus placebo in a 1:1:1:1 randomization. The primary efficacy outcome will be the relative change in alkaline phosphatase from baseline at 24 weeks. Key secondary end points will include FibroScan, imaging evaluations, including [RI] with contrast and MRCP and other exploratory measures, including serum biomarkers of inflammation and fibrosis.

My goal today has been to summarize the status and potential of seladelpar in inflammatory liver disease. Well down the path towards global registration for PBC, we have begun building out our commercial team to develop and implement plans for launch and market success. We've continued to execute in NASH where signals of improvement in liver damage await histological readout in the second quarter of 2020. And now we are embarking on a proof-of-concept study in PSC, yet another orphan cholestatic disease that we believe fits well with seladelpar's mechanism and offers the potential to extend our franchise into yet another underserved patient population.

Turning briefly to our financials, our cash, cash equivalents and marketable securities were $241.2 million at June 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 and 6 months period ending June 30, I will refer you to the press release and to our 10-Q filed with the SEC today.

I'd now like to open up the call for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question today is coming from Ellie Merle from Cantor Fitzgerald.

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Eliana Rachel Merle, Cantor Fitzgerald & Co., Research Division - Research Analyst [2]

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Could you just give us a little bit more color on the PSC study? I know you mentioned that you're looking at a lot of secondary and exploratory metrics, but just what are your thoughts on, I guess, which of these metrics could be predictive of long-term outcomes? And I guess we know that alk phos reduction is not as tightly linked to long-term outcomes in PSC as it is in PBC. So just curious on your thoughts there. And then maybe your thoughts post speaking with the regulators as well and what they're thinking in terms of this [underlying space].

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

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Yes. Thank you for the question, Ellie. I'll start off and perhaps ask Pol to add anything that I may have missed. PSC, like PBC, is, in fact, a cholestatic disease, so alkaline phosphatase is an actually -- a very important indicator overall of the level of cholestasis that patients experience, and we expect it to be at least part of a key measure in understanding the overall benefit for patients long-term. You're absolutely correct that in the setting of PSC, there is, in fact, a greater degree often of inflammation as well as fibrosis than you typically see, particularly in early-stage PBC. And so what we're looking to do with the host of secondary markers, including imaging as well as wet biomarkers of both inflammation and fibrosis, is to get a better understanding overall of the impact of seladelpar on liver health. Now [this] is a 24-month -- 24-week assessment [in this space] to study. So these are all largely providing us some indication of the potential impact overall longer-term on both inflammation as well as fibrosis. And fundamentally, the regulatory agency hasn't yet firmly described an end point outside of histology and biopsy in PSC to date. But recognizing [similar] to PBC where biopsy is uncommon, there's a tremendous amount we think we'll learn from these secondary end point on markers that may, in fact, correlate overall to liver health.

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Operator [4]

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Our next question is coming from Yasmeen Rahimi from ROTH Capital Partners.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [5]

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So a couple of questions for you. So let's start off with PBC. So can you tell me a little bit more about what type of PROs have you built into ENHANCE that ensure sort of high orphan pricing for seladelpar? And then the second question is on NASH. So I know we have had some time to go back probably to the top line. Are there any nuances that you learned that you would like to share with that, specifically around reasons why placebo response ran higher than expected? And then I have a quick follow-up.

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [6]

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Yasmeen, it's Pol. So I can take the first part of the question on the PRO for ENHANCE. So as you know, the main PRO we are using is actually the reporting of pruritus, which is done by the patients. And we are using an electronic system, and we are using the NRS scale. And that is going to confirm our hypothesis -- or inform our hypothesis that we not only do not see association between seladelpar and pruritus but potentially we have a beneficial effect to treat pruritus. For the other PROs, we are using, as you know, the PRO, which has been specifically developed for PBC, which is called the PBC-40 scale, which is an interesting scale because it's -- what is really specific in a way for PBC is that there is a lot of asthenia and in this scale, it's really focusing on fatigue, which is really one of the main symptoms with pruritus with PBC patients. We are using other scales, but I would -- for pruritus, you have something called that is the 5D pruritus scale, which is 5 dimensions of pruritus. But the main PRO for pruritus is going to be on NRS, and that's going to be a key secondary outcome for this study.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [7]

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Yes. This is Chuck, Yasmeen. Just, yes, we're continuing to try to broaden our view on understanding the placebo effect and in fact, the liver fat content. We're hampered to a degree because we're still blinded in the study. So the study will remain blinded all the way to 52 weeks so pretty much limited to the top line group averages. We will be conducting a number of additional biomarker assessments that will focus and allow us to examine things like markers of fatty acid oxidation, lipolysis, some other characteristics of inflammation, effects on bile acid synthesis, which is also a key factor associated, we believe, with NASH pathology. But at this point, until we're able to get down to patient-level data, look at subpopulations, see if there is an association, for example, with little weight loss or other baseline physiological factors, it's a little challenging to put a very specific interpretation on it.

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Yasmeen Rahimi, Roth Capital Partners, LLC, Research Division - MD, Senior Research Analyst & Co-Head of Biotechnology Research [8]

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And then you guys have done an amazing job in getting into [late breaker] at AASLD and EASL. Can you give us a quick glimpse into what we should be seeing at the upcoming liver meeting in Boston?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [9]

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Yes, Yasmeen, I think as you've seen from us over the past few years as we've advanced seladelpar in PBC and as we've now taken our first steps into NASH, we'll continue to have a presence at key medical meetings, including AASLD this fall as we've had at prior meetings. We continue to learn quite a bit about seladelpar, its mechanism, the chemical structure and how we think we're seeing benefits in various patient populations. So without too much specificity until we're able to obviously share any details or until these are determined ultimately, I'll shy away from being overly specific. But fundamentally, we continue to see seladelpar advancing, particularly in the setting of PBC, not just through Phase III but ultimately, if we're successful, to an NDA filing. And all of the efforts that we continue to focus on here internally as well as externally in the medical community are largely focused around making sure people understand what we've learned thus far with our experience with seladelpar, how we believe it'll impact patients longer term if we continue to be successful. So you'll see our activities continue to broaden not just from our own clinical experience, but of course, we've been very active at holding our own advisory boards, investigator meetings, activities that are really crucial and fundamental to the way we think about continuing to move seladelpar forward, ultimately getting it in the hands of patients.

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Operator [10]

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And the next question is coming from Steven Seedhouse from Raymond James.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [11]

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Given you've hired a Chief Commercial Officer and are beginning to build out a commercial team for PBC, can you just talk about the near-term priorities and deliverables for that team just given the NDA submission would still be almost 2 years away based on current time lines?

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

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Thanks for the question, Steve. This is an intentional effort here to build really just a core team to think through the overall commercial strategy. So we'll be very deliberate in a small team here on the commercial front that Janet will clearly lead and just understanding the patient needs, understanding the overall market, understanding how the impact has been for really the only second-line treatment approved recently that based on Phase III data provides adequate benefit in only about half the population and also has tolerability issues, as we know, in terms of causing or worsening pruritus in some patients. So part of what we'll be doing and part of the effort that Janet will lead is just better understanding the market and the nuances overall for patients so that we're best positioned as we approach NDA and as we ultimately approach launch in terms of the way we think about the strategy for seladelpar, not just with the first filing but thinking through opportunities to continue expanding patient populations and activities that we can ultimately invest in longer term to get seladelpar in the hands of as many PBC patients that we believe will benefit.

Now outside of even just commercial, we've got a very specific and focused effort on medical affairs. In fact, we've made several key hires of individuals in medical affairs as well as former MSLs that have been -- that are now field directors. These are individuals that know the PBC space quite well. They know the liver space and hepatology field quite well also and have really been active in these areas for quite some time. So we feel great about some of the additional team members that have joined recently that build up our efforts in the med affairs area as well.

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Steven James Seedhouse, Raymond James & Associates, Inc., Research Division - Research Analyst [13]

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And speaking -- just going back to that second line agent in PBC. It continues to slowly churn higher in terms of its uptick. I'm curious if you've seen over the course of the Phase III ENHANCE study any evolution in the type of patient you're enrolling. Are you enrolling more patients that are OCA-experienced as the study has proceeded? Or has the commercial use of OCA been an impediment to enrollment at all?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [14]

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Yes. Sure. So we do see patients that have been on OCA and in many cases are not able to tolerate or [make the decision] , they're not able to tolerate that treatment. I wouldn't say we've seen any impediment. I think you're absolutely correct. Part of what we're seeing with, I think, the continued strong launch of Ocaliva is an underpinning of the tremendous need for additional treatment alternatives for patients. So despite its tolerability issues, I think what I -- what we saw earlier today was in fact a very strong quarter and a continued very strong launch. And from our perspective, everything that we see as we continue to enroll patients in ENHANCE are population of patients that continue to have a need for both what we believe seladelpar has the potential to deliver, which is improved efficacy as well as better tolerability. And so fortunately for us, on the heels of what has been very strong Phase II data that's been presented in the medical community over the past 2, 3 years with seladelpar, the strength of that data set is largely fueling our ability to continue to enroll ENHANCE in our overall time lines that we prespecified as we initiated this Phase III study.

So we continue to see strong support. I mentioned in some of the opening remarks that in our Phase II study of the 106 patients eligible to roll into the long-term extension, we see 104 out of those 106 elect to effectively stay on seladelpar treatment longer term. And today, in fact, we're seeing many patients that are now out to 2 years. So overall, what we see with our experience I think is largely fueling our ability to continue to enroll ENHANCE even in an environment where the uptick in scripts and sales overall for Ocaliva continue to increase.

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Operator [15]

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Our next question today is coming from Ed Arce from H.C. Wainwright & Co.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [16]

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Appreciate the nice recap over the quarter. Just a couple of questions for me. Some have already been asked but a couple here. First, with regard to PSC, obviously there is some similarity with PSC but of course PSC is strongly associated with IBD mainly, ulcerative colitis. And I would venture to guess that probably it has something to do with the higher inflammation and fibrosis that you see a little bit earlier in the disease. Just wondering how you think about controlling for that sort of [externality] if at all or how that impacts the way you thought about the design of the trial.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [17]

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Yes. Thanks, Ed. This is Chuck. I'll take a run at it. So I think I'll come back to your design question in a second. I think the -- just to kind of speak to the comorbidity of IBD and PSC, about 70% of patients with PSC do have IBD as well. I think the disease itself is complex and incompletely understood. But I think it does make sense that there's a component of cholangitis that is recurrent bacterial pressure on the liver from the underlying IBD. So the kind of the inflammation, the recurrent pattern of infections, which is a common feature of PSC is one likely, if incompletely described, a connection between the 2 diseases. And obviously, there's the underlying common autoimmune characteristic of the diseases as well.

We were fortunate because CymaBay was able to recruit Steve Rossi as our VP of Early Clinical Development. He came to us from NGM where he had run a PSC study before. And the value to us with that expertise is really just being able to develop a study design that had been informed by experience in the complexity of PSC study, not just the population with concomitant IBD, as you've mentioned, but also study end point. In this particular case, the experience about being able to balance the desire to have a simple, clean population versus the practicality of being able to enroll a population really led us to position where the study will enroll patients who have IBD, that you need to be able to do that. They'll be able to be on background therapy for IBD, and I think that probably makes a lot of sense because, at the end of the day, that's kind of the background therapy that exists in the population at any rate. So you want to be able to have a measurable effect in the face of those [con meds.]

So I don't think that really represents -- there's -- the physicians, the investigators involved in the study are very experienced in managing these patients. The tools that you use to evaluate their baseline IBD is very clear. There is clear specification in the protocol in terms of them having had an assessment ahead of time like colonoscopy and then a baseline assessment about episodes if you will. But they need to be stably controlled. So we don't think and based upon Steve's experience, I think it's a well-informed position [and] that there's going to be any specific challenges relative to IBD in the study.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [18]

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Okay. Great. That was very helpful background. I appreciate that. Only the other question, I guess, around PSC, and I know that we -- this was touched upon on the last call. But in the absence of a sort of definitive registrational end point for PSC as of yet, and I know there's some further work going on with this, but are there any updates in terms of how to think about what particular end points, if perhaps maybe a composite end point or one or the other, would be most likely for a pivotal study in PSC?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [19]

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Ed, it's Pol. I think the -- it's still discussion ongoing on what is the appropriate end point for Phase III program. I think some people are in favor to have [it] as part of the composite biopsy outcome. And when you look at the biopsy, I think the component that is really a part of this evaluation of the tissue is fibrosis actually. And it's a little bit easier in PSC to evaluate that compared to PBC for example. So I don't think there is a definitive answer.

The good thing I would mention is that there is discussion between academia, the FDA, also the European authorities and sponsors, so there is the Liver Forum, which is a very good vehicle for this kind of discussion. So we'll see when it will be established. I think it makes sense to have some kind of composite outcome because also it's a rare disease, so when you go in Phase III, probably it makes things a little bit easier also in terms of sample size calculations. Well, I think, for us, at the moment what is really important is the proof of concept for PSC. We are kind of optimistic because we already have the proof of concept of the anti-cholestatic effect in PBC. So we'll see. It's going to be an interesting evolution.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [20]

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I guess the only other comment that I would add is that there seems to be an evolution to think about PSC. You could kind of say in some sense an analogy to what's happening in NASH. So to think about noncirrhotic and cirrhotic PSC and so those subpopulations may lend themselves to different kinds of end points. If you're noncirrhotic, you have the potential to progress to cirrhosis. So blocking that or having some measure whether it'd be an invasive measure like a biopsy and maybe an evolution towards accepting noninvasive measures, which are clinically suspected cirrhosis, something like that, whether it be biochemical markers or a noninvasive test, whether it be a wet biomarker or perhaps a measure like liver stiffness, something along those lines. So I think that we're understanding that those 2 subpopulations really represent some interesting but somewhat different approaches in terms of what the end points might end up looking like.

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Antonio Eduardo Arce, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [21]

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Great. Well, that's obviously helpful. I would think even for rare diseases moving away from a biopsy [is] a bottleneck is always going to be helpful.

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Operator [22]

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Our next question is coming from Joon Lee from SunTrust Robinson Humphrey.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [23]

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It appears there was quite a bit of controversy around liver fat reduction or lack thereof in the recent Phase IIb. Both of our liver specialists, [KOLs] [on] a recent clinic, they were actually both highly positive on the totality of the data and thought maybe the lack of a run phase might have contributed to the motivation-related reduction in the placebo group. Love to hear your thoughts on that and if you have any plans on incorporating a running Phase II to depress the placebo effect in the pivotal study. And I have a couple of follow-ups.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [24]

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Yes. Joon, it's a great observation. I don't think we can dismiss that, that may have been a possibility, particularly for what was seen with placebo. Again, I think, as Chuck mentioned, until we have patient-level data, it'll be challenging for us to ultimately determine what we've seen relative to the placebo group so far at 12 weeks.

As it pertains to our thinking in Phase III, of course, everything that we learn as we get to the completion of the study at 52 weeks and have an opportunity to understand the impact of seladelpar on histology will truly inform how we think about the development path going forward for seladelpar. And each of the considerations around the study design, for example, part of what you bring up will be the types of things that we certainly think through.

I think on your first point, we also see a tremendous amount of enthusiasm as we have conversations with a broad group of thought leaders with respect to what we saw at 12 weeks. Absolutely somewhat surprising certainly and disappointing not to see a total fat reduction, but what we do see is ultimately indicative of the improvements you would want to see that would otherwise lead to an overall improvement in liver health and manifest in an improvement in histology. And so we continue to see a significant amount of enthusiasm for the consistency, the robustness of the drops in key liver enzymes, both ALT as well as GGT, with the latter being really a very sensitive marker of oxidative stress. The magnitude, the dose order relationship that we've seen, these are the things that are I think the most encouraging with respect to what we've seen so far at 12 weeks. So we'll continue to remain very focused on seeing the study to completion and ultimately seeing really the end points that'll help define how we think about the clinical development plan going forward.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [25]

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Great. And please correct me if I'm wrong as I'm still getting up to speed on your programs, but I recall you mentioning that you quantify inflammation using a noninvasive method called cT1 at baseline and at 12 weeks. Are you able to share anything on that? And what kind of correlation is there between Tc1 (sic) [cT1] and histopathology?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [26]

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Great question. Yes. cT1, yes, this is coming from the multiparametric MRI technology from Perspectum called LiverMultiScan. We've implemented that for each of the patients in the Phase II study. And as Chuck mentioned, that's one of a number of additional biomarkers and parameters that we'll be assessing ultimately to try to get a better idea of what we're seeing thus far at 12 weeks. So it is, in fact, as you mentioned, a quantitative measure of inflammation through noninvasive imaging. We think it can -- it is still yet exploratory. But we think, as we look at the overall picture across multiple parameters, it can only continue to be [somewhat informative] of what we're seeing thus far and what we ultimately see with respect to histology and how that correlates to some of these noninvasive biomarkers, including cT1.

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Joon So Lee, SunTrust Robinson Humphrey, Inc., Research Division - VP [27]

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Okay. And lastly, what are your plans for the end of Phase II meeting with the FDA prior to the Phase III start? Will you wait for the entire 52-week study to complete before you meet with the FDA? Or will you or have you already started dialogue with the data on hand?

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

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No. I think ultimately, the plan given histology forms the basis for the regulatory end points for Phase III. We'll wait until we read out histology and have the [fulsome] data set from the Phase IIb study. Again, we expect to have histology data in the second quarter of next year. We'll do that before we go and meet with the agency for an end of Phase II.

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Operator [29]

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(Operator Instructions) Our next question is coming from Mayank Mamtani from B. Riley.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [30]

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Congrats on the progress. Just back on PSC. If I'm not mistaken, there is a workshop in September. And the reason I only ask that is, is there any guidance document from a regulatory standpoint now that we have learnings from a number of other trials. I think [in the end] you mentioned with Gilead and others that also worked on it. And then on PSC progression, my understanding is that cholestasis is more of a disease driver in the more advanced forms of the disease. So could you maybe comment -- maybe build on what you already talked about the screening of patients in the study?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [31]

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Yes. Sure, Mayank. Thanks for the question. I'll answer the first part, and I'll ask Pol to comment specifically on the patient population. There have been ongoing efforts by way of a specific forum outside of even the liver forum that's centered and focused on PSC and called the PSC forum. As Pol mentioned, it includes individuals from industry as well as regulatory agencies and thought leaders alike, all working towards the dialogue with respect to thinking about clinical study design and end points in the setting of PSC. So it's been an ongoing effort. The group meets at least once or twice a year. And so in the fall, that conversation will in fact continue.

There hasn't yet been a specific guidance that's been released by the group necessarily from PSC, but it's ultimately the type of thing that the group typically does and works through. So we're involved in the dialogue and have been and will continue to be. But it would be something that we would expect to see at some point in time as the group continues to understand and develop a thesis here.

Mayank, can you repeat the second part of the question with respect to the PSC population and [really] cholestasis around how we think about enrolling?

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [32]

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Yes. Sure, sure. Obviously, we understand it's a heterogenous population, but just on the cholestasis bit, my understanding is that the more advanced forms have that as the underlying disease driver. So just from a patient selection standpoint, are you planning on maybe enrolling more advanced forms of PSC versus maybe less advanced? And I don't know how you measure that. Is it biopsy that you're thinking or other measures like liver enzymes?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [33]

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So -- it's Pol. So in terms of advanced disease, so there are different ways you can approach that. I think the first dichotomy, if you want, is to have cirrhosis or noncirrhosis. So the study we are going to complete will be in noncirrhotic patients because the cirrhotic population really -- it creates different kind of evolution and inclusion/exclusion criteria. So that's one thing.

One way also to evaluate, there is this relatively new tool, which is called the FibroScan, which helps you also to look at the amount of fibrosis you have in the liver, and that's also a nice way to evaluate the patients in terms of potentially also cirrhosis.

Chuck mentioned also that we're going to get patients who have associated IBD, but the patients we're going to get in the study are basically, I would call that quiet IBD. They are controlled, and in general and based on previous studies, it doesn't seem that it's really a compounding factor, so a nice way to control these people.

The -- in terms of cholestasis, we're going to recruit the study based on the AP levels, so it should be an elevation of the AP level. What is a little bit different from what we have done in PBC is that we are requesting patients to have not too viable AP at baseline. So there will be a [limit band] of AP that they should have during the screening period.

And the last points, which is pretty similar [than] PBC actually is your level of bilirubin. So that's also a convenient way to exclude patients who have [a] too high bilirubin. So we will enroll patients up to twice the upper limit of normal, which is basically what we are doing also in PBC because when you are in a cholestatic disease above this level [then] the population, start to be a little bit different also.

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Charles A. McWherter, CymaBay Therapeutics, Inc. - Senior VP & Chief Scientific Officer [34]

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The only other thing I would add, and this is very common for contemporary studies, is the diagnosis and the staging of the patients with cholangiography. So you use an imaging that's one of a few available and commonly available, use imaging to look at the biliary [tree] to -- well, for one thing, to reduce the possibility that they also have cholangiocarcinoma but also to look for the characteristics of PSC in terms of segmental dilation and [stricture] and make sure they have stable dominant stricture and also to focus on the appropriate type of disease because there are different characteristics, small duct disease versus large duct, intrahepatic versus extrahepatic. So I think that there is, as I've mentioned, Steve and also of course, we have I think the best available input from KOLs and an ad board. We've really I think focused in on the most modern and contemporary approach for appropriate selection of patients in this noncirrhotic population.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [35]

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That's really helpful color. If I can squeeze a follow-up to that, are these alk phos and bilirubin levels -- and I know it's a band. Are these higher or lower relative to the baseline screening criteria you have for PBC trials?

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Pol F. Boudes, CymaBay Therapeutics, Inc. - Chief Medical Officer [36]

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I can make -- it's Pol. I can make a general statement not related specifically to the studies. But if you look at studies in PSC compared to study in PBC, they -- the PSC patients tend to -- enrolled in clinical trials tend to have higher level of alkaline phosphatase and sometimes also they have more viability in the alkaline phosphatase. So cannot really comment on what we're going to get in these patients, but I suppose it's going to be more or less the same thing. So you could expect levels that are going to be a little bit higher than what we see in PBC.

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Mayank Mamtani, B. Riley FBR, Inc., Research Division - Research Analyst [37]

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Great. And then on PBC and just piggybacking on the earlier conversation and understanding the Ocaliva strong results earlier today and Janet onboard, I mean are there any workstreams to try to understand the underdiagnosis of the disease? In other words, are we -- is there any sign to make an inference that maybe the penetration rates are improving in that patient population?

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [38]

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Yes, it's a great observation, Mayank. Of course, we'll spend a fair bit of time better understanding the undiagnosed population. Part of this population are, let's say, at times asymptomatic, but there are many that are symptomatic and not yet fully identified. So I think the efforts of having additional treatment certainly raises awareness and helps to increase that undiagnosed patient population fundamentally. But we'll spend a fair bit of time here. It's a good observation. It's part of why we do fundamentally believe that the opportunity and the need for patients here in PBC is one that we'll continue to see growing.

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Operator [39]

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We've reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

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Sujal A. Shah, CymaBay Therapeutics, Inc. - President, CEO & Director [40]

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Thank you, Kevin. I'd like to close with just a few important points that we've touched upon today that I think often get lost when [external] attention on the company is disproportionally focused on a single data point or a single news event. First, we continue to believe there is a significant need for improved treatment alternatives for patients with PBC as we've discussed today. We believe seladelpar is best positioned to deliver both improved efficacy and tolerability for these patients should our Phase III results mirror what we've seen thus far in Phase II, where we're studying the same doses of seladelpar over the same treatment duration in the same population across the same end point. Our central focus has been and continues to be on delivering seladelpar to patients with PBC, and with the addition of Janet to our senior team, we'll begin the work to solidify a commercial strategy and effort that maximizes this value to patients, their caregivers and to all supporting the advancement of this program.

Second, along with others working in the NASH field, including thought leaders, we continue to learn more with each study about the most effective ways to target and treat this disease. What we've seen thus far with seladelpar is the profile of a therapeutic candidate that has a clinically meaningful effect on multiple markers of inflammation and liver injury [improves] cardiovascular risk parameters and thus far, is generally safe and well tolerated.

Our Phase IIb study was designed from the outset to include a 52-week biopsy to assess the effects of [our] seladelpar on [the] only 2 regulatory end points, NASH resolution and fibrosis. Getting the -- given the striking effects that we've seen across key liver enzymes observed with seladelpar over just 12 weeks of treatment, we continue to look forward to the 52-week histology data in the second quarter of next year.

And finally, the consistent anti-cholestatic and anti-inflammatory effects seen with seladelpar in multiple clinical settings, particularly in PBC, has given us a tremendous amount of excitement about moving forward this quarter in PSC, where once again no approved treatment alternatives exist for patients today.

We are well funded as we highlighted in the opening remarks, and we continue to execute on the activities that we've discussed here today and look forward to providing further updates in the future. Thanks again for joining.

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Operator [41]

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Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.