Galmed Pharmaceuticals Ltd.

Good day and welcome to the GALMED conference call to discuss financial results for the fourth quarter and year-end 2021. Today's conference is being recorded. Before we begin, please note that we will be making certain forward-looking statements on today's call, including those regarding financial results statements and forecasts regarding anticipated timelines and expectations with respect to our regulatory and clinical development programs. as well as other statements that relate to future events. These statements are based on the beliefs and expectations of management as of today, and actual results, trends, timelines, and projections relating to our financial position and projected development programs and pipeline could differ materially. We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the SEC. Including without limitation, the risk under the heading risk factors described in our latest annual report on Form 20F filed with the SEC. Gallimant assumes no obligations to update any forward-looking statements or information, which speak as of their respective dates only. I would now like to turn the call over to Alan Bariff, President and Chief Executive Officer. Alan, please go ahead.

Thank you, Peter. Good morning, and thank you for joining us on today's conference call. I'm pleased to be here today with our Chief Scientific Officer, Dr. Liat Hayardeni, our Chief Financial Officer, Daron Cohen, and Chief Accounting Officer, Yochai Stensler, to provide you with an update on our clinical development programs, as well as report to you on our financial results for the 2021 fourth quarter and full year financial results. As always, we will be happy to take any question you may have at the conclusion of our prepared remarks. On April 28th, Gambit published interim results from the open-label part of the Armour Phase III study. As a quick reminder for those of you who are new to our story, the open-label part of the Armour study was designed to explore the effect size of the higher dose of Aramcol or NASH-induced fibrosis and the kinetics of histological outcome measure as a function of treatment duration in preparation for the registrational double-blind placebo-controlled part of the study. In simple words, the aim of the open-label study was to explore the speed and the extent of fibrosis reduction, testing the hypothesis that higher R-alcohol exposure results in an improved efficacy profile. Acknowledging the complexity, variability, and moderate reproducibility in liver pathology reading, the open label part was also used to further assess different methodologies that may support and improve fibrosis scoring. All slides were assessed using three histopathological reading methodologies. A central pathology committee scored the biopsies according to the conventional formal NASH-CRN scoring system, F1 to F4. Scoring was initially performed individually by the three independent pathologists, followed by consensus reading by the committee. Since peer reading may reflect real-world pathological assessment, the same central committee was also asked to perform a rank assessment, improvement, worsening, stable, of paired pre- and post-treatment biopsies, scrambled and blinded to sequence, i.e., not knowing which is the baseline and which is the post-baseline. Furthermore, artificial intelligence, AI-based tools, are at the forefront of the development of a more sensitive, automated, continuous scoring system for the detection of fibrosis change for future NASH and fibrosis clinical trials. Accordingly, the same slides were also read using Fibronest, a quantitative digital pathology image AI analysis, providing a continuous fibrosis composite severity score, FCS. This allow identifying fibrosis improvement that may be missed by the formal scoring as well as the statistical quantification of change from baseline. Results of post-baseline biopsies perform either at 24 weeks or 48 weeks from 46 subjects with NASH and F1 to 3 that received Aramcol, support the antifibrotic effect of Aramcol, and reinforce the favorable safety profile of Aramcol. Treatment with Aramcol 300 mg BID resulted in a high rate of subjects with fibrosis improvement across the three separate pathology reading methods. Both spirit and AI evaluations identified more subjects with fibrosis improvement, indicating greater sensitivity to detect change versus categorical scoring. For all methods, The treatment effect was larger at 48 compared to 24 weeks. At week 48, fibrosis improvement was identified in 40%, 65%, and 100% of patients according to NASH-CRN paired in AI, respectively. Quantification of change from baseline by AI demonstrated that reduction in fibrosis was statistically significant both at week 24, P of 0.017, and at week 48, P value smaller than 0.0001. Further analysis based on AI are being prepared for publication in upcoming scientific conferences. Altogether, we believe the results highlight the need to reassess histological analysis in future NASH studies. With regard to the initiation of the double-blind placebo-controlled registrational part of the Phase III study, it is our current assessment that despite considerable efforts from the scientific community and regulatory agencies, there are significant uncertainties that remain unresolved. This includes dependence on biopsies as the primary surrogate endpoint, with all the complexities described above. no significant progress in validation of non-invasive biomarkers, and a high screen failure rate that remain a substantial burden on NASH studies. In addition, Gamet is considering more robust changes to its development program for NASH. Changes may include focusing on higher-risk patients, F3, evaluating patients with compensated cirrhosis, F4, as well as change to study design, such as two smaller studies instead of one pivotal study, and the addition of a combination arm. Taking all the above into consideration, Gamet has decided to move the initiation of the double-blind placebo-controlled part of the study with Aramcol meglumine until the second half of 2023, subject to, among other things, the results of our open-label part, sufficient funding, and clarification of the regulatory approval process for NASH drugs, at which time a de-risk scrutinized clinical development plan can be put in place. Importantly, as you may remember, on January 2022, we announced that the United States Patent and Trademark Office, USPTO, granted GalMed new patents related to the use of Aramcol for the treatment of fibrosis and for their treatment for modulating gut microbiota. With this latest patent, GalMed is strengthening and extending the IP protection of its lead compound Aramcol until December 2038. This broad patent protection and the clinical data on NASH-induced fibrosis is broadening the potential of Aramcol in fibrosis treatment. The past 12 months have been an exciting time for GalMed As we reported positive interim data from the open-label part of the Armour Phase 3 study, we continue to advance our pipeline compound, amylo-5-MER. Amylo-5-MER is a synthetic peptide consisting of five amino acids that exerts anti-inflammatory effects by bonding to pro-inflammatory amyloid proteins. preventing polymerization of serum amyloid A, SAA, monomers, and thereby interfering with SAA-induced immune cell activation. On January 2022, we announced the positive results from the first in-human Phase I clinical trial of amylo-5-MER in healthy volunteers. The government is currently assessing a number of potential proof-of-concept studies designed to rapidly generate data that will drive the next steps of the Amilo 5 Merit Clinical Program with a clear and efficient route forward. We intend to provide more details in the next few months. Along with an update on our planned activities, we are pleased to welcome Doron Cohen earlier this year as our newly appointed CFO. Doron brings more than 25 years of experience in the global financial markets, including significant experience on the buy side of life sciences companies. Now let me transfer the call to our Chief Accounting Officer, Yochai Stensler. Yochai?

Thank you, Alan. This morning I will be providing you with our financial results for the fourth quarter in the year ended December 31, 2021. For more information, please refer to our report on phone 20F filed earlier today with the SEC, which, among other things, provides a summary of such financial results. Our net loss for the three and 12 months and then December 31st, 2021 was of $7.5 million and 32.5 million respectively, compared with the net loss of 10.3 million and 28.8 million for the corresponding period in 2020. As a result, our loss per share for the three and 12 months and then December 31st, 2021 was 13 cents per share and $1.32 per share respectively, as compared to $0.48 and $1.35 for the corresponding periods in 2020. Research and development expenses for the three and 12 months and in December 2021 totaled $6.3 million and $27.2 million, this compares with $9 million and $26.1 million for the corresponding periods in 2020. Turning now to G&A, our general and administrative expenses for the three and 12 months and in December 2021 was at 1.2 million and 5.7 million respectively, versus 1.3 million and 4.1 million for 2020. During the three and 12 months and in December 31st, 2021, we had a net financial income of 0.05 million and 0.4 million respectively, versus 0.1 million and 1.4 million during 2020. Our cash balance as of December 31st, 2021, which includes cash, cash equivalents, restricted cash, and marketable securities, was at 34.9 million. This compares with 51 million on December 31st, 2020. With that said, operator, please provide instructions for the Q&A portion of our call.