Intercept Pharmaceuticals, Inc.

Good day, and thank you for standing by. Welcome to the first quarter 2023 Intercept Pharmaceuticals earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nareg Sajarian, Executive Director of Investor Relations. Please go ahead.

Good morning, and thank you for joining us on today's call to review Intercept's first quarter 2023 financial results and key business updates. We are also pleased to share an overview of our commercial launch strategy for OCA and NASH. Our first quarter 2023 press release and accompanying slides are now on our website at interceptpharma.com. Before we begin our discussion, I'd like to note that we will be making forward-looking statements, including statements regarding our approved product and clinical development program, certain regulatory matters, and our strategy, prospects, financial guidance, and future commercial and financial performance. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call, and we undertake no obligation to update such statements except as required by law. These forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. Some, but not necessarily all, of the risk factors that could cause our actual results to differ materially from our historical results or those anticipated or predicted by our forward-looking statements are discussed in this morning's press release and in our periodic public filings with the SEC. Today's call will begin with prepared remarks from our President and CEO, Jerry Durso, our President of Research and Development and Chief Medical Officer, Dr. Michelle Berry, our Chief Financial Officer, Andrew Sake, and our Chief Commercial Officer, Linda Richardson. We will then open the call for questions. Please note that our prepared remarks on today's call are more in-depth than typical, but we have a lot of additional time for Q&A during the call. Let me now turn the call over to our CEO, Jerry Durso.

Thanks, Nirag, and good morning, everyone. Thank you for joining us on our first quarter of 2023 earnings conference call. Today, we will review key business updates for the first three months of the year and preview our commercial launch strategy for OCA and NASH. The strategic actions we took in 2022 established a strong base for us to build on in 23. As we proceed through this critical year for Intercept, I'm pleased with the disciplined execution our team has taken to grow our leadership in PVC, to work through the regulatory review process for OCA and NASH and prepare its potential commercial launch, and to advance our pipelines. First, I want to highlight our important upcoming milestones in NASH, and then I'll discuss the sales performance of Ocaliba and our outlook in PBC. We're actively preparing for our advisory committee meeting on May 19th to review our new drug application for OCA as a treatment for pre-cirrhotic fibrosis due to NASH. Given the robust body of evidence we've gathered through our OCA NASH clinical development program, we're confident in the improved benefit-risk profile of OCA, and believe it has the potential to become an impactful therapy for patients in urgent need of pharmacologic intervention. We look forward to discussing the strong and confirmed anti-fibrotic effect of OCA, as well as its monitorable and manageable safety profile with the advisory committee. At the same time, we look forward to our upcoming PDUFA target action date on June 22nd. In parallel, we're progressing our launch readiness activities, which Linda will elaborate on later in this call. Now, turning to PBC, our PBC business continued to perform well in the first quarter. We recorded $68 million in net sales for Ocaliba and PBC, representing 15% growth over the prior year quarter. This strong performance is evidence of the sustained growth of our foundational PBC business. Importantly, we're seeing a consistent trend in attracting new first-time Ocaliba writers, which is a key factor in our growth trajectory. Specifically, 4 out of 10 total prescribers in the first quarter of 2023 were, in fact, first-time Ocaliba writers. Looking ahead, we have strong conviction in the strength and long-term opportunity of our foundational PBC business for several reasons. First, we know that patients on Ocaliba persist on therapy at a rate better than what is typically seen with many other chronic disease therapies. In fact, over 95% of our business is driven by existing patients. and our refill rate continues to be strong at approximately 90%. Additionally, our market research shows that patient satisfaction on Ocaliba therapy remains high. 85% of patients report a strong intent to remain on therapy and would highly recommend Ocaliba to others living with PBC. This satisfaction rating jumps to 95% when you survey patients from InterConnect, which is our patient assistance platform. Because of these high satisfaction ratings, 65% of currently active patients on Ocaliba have been on therapy for more than two years. Our market research also shows that published data of the impact of Ocaliba on clinical outcomes is a strong motivator among healthcare providers when considering their intent to prescribe PBC therapies in the future. We know the primary treatment goals for managing PBC are to prevent liver transplant or death. We assess the ability of Ocalibur to meet these goals with multiple real-world analysis that were published in Gastroenterology and presented last year at medical meetings. This includes six years of data through our Poise Open Label Extension Study, demonstrating that OCA has a sustained impact on key biomarkers of liver health. Ocalibur is the only second-line therapy in PBC to demonstrate a positive impact on outcomes. driving greater awareness of the real-world applications and benefits of Ocalibus in PBC as an important differentiator and part of our long-term strategy. Supporting our well-established leadership position in the PBC market is strong IP, protecting Ocalibus market exclusivity into the 2030s. And finally, our OCA and Bezafibrate fixed-dose combination program, which Michelle will discuss in a moment, further adds to our long-term leadership in this space. In summary, I'm confident in the strength of Ocala's market position and the long-term opportunity with our foundational PBC business, as evidenced by double-digit sales growth for the third consecutive quarter and clinical development progress for the OCA, Bezafibrate fixed-dose combination. Importantly, our strong financial position gives us the optionality to drive continued growth in PBC, execute on our upcoming milestones in NASH, and develop innovative new medicines through our pipeline programs. I'll now turn the call over to Michelle.

Thank you, Jerry, and good morning, everyone. As you can imagine, our organization is actively preparing for an advisory committee meeting on May 19th. Our NDA for OCA is supported by a robust body of evidence including two independent positive 18-month interim analyses from the pivotal Phase III Regenerate study and a pooled safety database of almost 2,800 patients with nearly 1,000 patients on study drug for four years. In these analyses, OCA has demonstrated a strong and consistent antifibrotic effect, as was seen in the Phase II Flint study, the first clinical study to show antifibrotic benefit. Additionally, our safety database, which is the largest in the NASH field with the longest duration of patient exposure, provides a well-characterized safety and tolerability profile that supports the potential chronic administration of OCA. It's also important to remember that while there are various pathways being studied in NASH drug development, patients with NASH exhibit signs of impaired signaling in the FXR pathway specifically, which triggers progressive fibrosis. Therefore, addressing underlying mechanisms related to FXR dysfunction is one important aspect of NASH treatment. OCA is an antifibrotic, meaning it drives fibrosis improvement through direct restoration of FXR-mediated signaling. It does this in three ways, decreasing fibrogenesis and collagen deposition, regulating inflammation, and reducing bile acid-induced cytotoxicity. As we move toward our advisory committee meeting, we continue to believe that OCA has the potential to become an impactful therapy and the first approved therapy for this devastating disease. Based on the additional data we have generated, we believe that the benefit-risk of OCA has improved since our initial regulatory submission. We look forward to discussing this with the advisory committee next month and progressing toward our June 22 PDUFA target action date. I'll now share more about our commitment to innovating in PVC with our fixed-dose combination of OCA and bezafibrate, the first potential fixed-dose combination of an FXR agonist and a PPAR agonist. We're excited about the progress we're making. Our Phase I study is now complete, and we expect to complete the planned interim analyses from our two ongoing Phase II studies this year. Pharmacokinetic data Dynamic biochemical changes and safety tolerability will serve as the basis for an end of phase two meeting with FDA. We plan to provide an update on the timing of that meeting as well as a phase three study once we have those data in hand. At the upcoming EASL meeting in Vienna, interim analysis results from one of the two phase two studies evaluating the effects of the combination on serum biomarkers and PVC will be presented. This podium presentation is one of seven abstracts in PBC and NASH accepted for the Congress. We look forward to providing more information in the easel embargoes list. We believe that a fixed-dose combination of OCA and Bezofibrate presents an opportunity to optimize the doses of each medicine and further improve the treatment of PBC with the potential to establish best-in-class clinical benefits. We know from many years of data in Europe that OCA and Bezafibrate have synergistic mechanisms of action and have the potential to drive relevant biochemical markers to well within normal ranges, changes that have been associated with improved clinical outcomes in PBC. In late 2022, we published data on the improved transplant-free survival, demonstrating the long-term clinical benefits of OCA and PBC. In other words, its impact on lives, not just labs. We believe that a fixed-dose combination of OCA and Bezofibrate may meaningfully improve treatment options for individuals living with PBC. While our fixed-dose combination program advances, we also remain on track for a regulatory submission to FDA this year in support of fulfilling our post-marketing requirements for Ocaliva and PBC. This submission will include data from our post-marketing study, Cobalt, with external controls, real-world evidence from the Global PBC Patient Registry, and supportive evidence from the POIS Open Label Extension. At this point, I'll turn the call over to Andrew for a brief financial update.

Thank you, Michelle, and good morning, everyone. I encourage you to refer to our press release for a detailed summary of our financial results for the first quarter ended March 31, 2023. I will begin by sharing some highlights for the first quarter. First, we are pleased with our strong sales performance this quarter, recording $68 million in net sales as compared to $59.2 million in net sales in the prior year quarter. This represents 15% growth, which is in line with the midpoint of our annual revenue guidance provided during our last earnings call. Selling general and administrative expenses were $57.7 million in the first quarter of 2023. compared to $37.8 million in 2022. The period-over-period increase was primarily driven by NASH commercial launch preparation as we approach our PDUFA date in June, and to a lesser extent, costs related to our ANDA litigation, which was settled prior to trial. Research and development expenses decreased to $41.7 million in the first quarter of 2023 from $47.6 million in the prior year quarter. This decrease was primarily driven by the closeout of our Phase III reverse study and R&D cost-sharing reimbursements. Interest expense in the quarters ended March 31, 2023 and 2022 with $2.8 million and $6.7 million, respectively, and is related to our convertible notes outstanding. We reported a net loss from continuing operations of $31.9 million for the first quarter of 2023, a decrease compared to a net loss from continuing operations of $33.4 million in the first quarter of 2022. As we mentioned last quarter, we anticipated a heavier-than-normal cash burn to occur in the first quarter relative to the rest of the year. We experienced a typical revenue seasonality in Q1 as patients were impacted by the resetting of insurance plans and Medicare coverage gaps. Additionally, cash outflows related to accrued expenses were higher in Q1 than in a typical quarter, as can be seen by the drop of approximately $20 million in accrued liabilities in AP from year end to the end of this quarter. As of March 31, 2023, Intercept had cash, cash equivalents, restricted cash, and investment debt securities of $435.2 million. As previously mentioned, we plan to use $110 million to pay off the convertible notes due on July 1, 2023. In summary, we believe that our balance sheet, cash position, and foundational PBC business provide us with the financial strength to grow our existing business and meet our strategic objectives, including preparation for a commercial launch in NASH should we gain approval by the FDA, or a pivot to profitability if we are unable to achieve an approval in NASH. Finally, we may choose to revise our 2023 guidance later in the year pending potential regulatory approval for our NDA for OCA and preserotic fibrosis due to NASH. With that, I will now turn the call over to Linda to provide more detail on our commercial launch strategy for OCA and NASH. Linda?

Thank you, Andrew. Good morning, everyone. I'm excited to provide greater insight into the opportunity we see ahead for OCA as the first potential treatment for patients who have advanced fibrosis without cirrhosis due to NASH. This is a specific subset of the overall NASH patient population and our Regenerate population, one where patients and their healthcare providers are in urgent need of a pharmacologic intervention. The work we've been doing to prepare our strategies and plans for launch is grounded in robust market insight and analytics using third-party databases, primary and secondary market research, data from publications, and feedback from multiple advisory boards. We've included HCPs, patients, and payers in the prelaunch work that I will discuss in my upcoming remarks. In addition to our robust market research program, we also have considerable marketplace knowledge from our years of directly engaging the hepatology and gastroenterology communities through our work delivering Ocaliba in PBC. Now, let's start by digging into this advanced fibrosis population in a little more detail in terms of both the size and the significance of this group of patients. We are focusing on this population for several reasons, notably, these patients are fundamentally at greater risk for mortality as their fibrosis progresses to cirrhosis. One in five patients with advanced fibrosis progresses to cirrhosis within approximately two and a half years. The fact that we cannot currently predict which patients are most likely to progress makes treating these at-risk patients an urgent priority. Also, we've updated our understanding of the size of this advanced fibrosis segment, as you can see here on slide 14. Starting near the top of the funnel on the left, the subset of adult NAFLD patients who are believed to have NASH is approximately 26 million U.S. adults. Of this group, slightly more than 5 million are estimated to have a NASH diagnosis. As NASH ICD-10 codes are not consistently used, we would expect that the number of formally diagnosed cases should grow over time as new treatments become available. We then look to evaluate how many of these NASH patients are under the care of a specialist, meaning a hepatologist or gastroenterologist. Currently, this seems to be in the range of 2.7 million patients. We believe that these specialists will primarily oversee the management of NASH in the advanced fibrosis without cirrhosis population and will therefore be the primary focus of our commercial efforts. Our in-depth work with these specialists has strengthened our belief that these patients can be readily identified using non-invasive tests. This is the group that we refer to as patients with advanced fibrosis without cirrhosis due to NASH. We now estimate this OCA target population to be approximately 700,000 patients. This is an updated number from the roughly 500,000 figure we've previously referenced based on work done several years ago. Over the past few years, we've seen significant increases in recognition of the importance of fibrosis as the strongest predictor of disease progression and awareness of negative outcomes in NASH. In a retrospective study comparing NASH patients with and without fibrosis, survival among those with fibrosis was significantly reduced as their fibrosis progressed. Our recent market research shows that hep and gastros clearly understand this risk of progression in their patients with advanced fibrosis. Six out of ten respondents agreed that fibrosis reversal of one or more stages is more important than improvement of steatohepatitis. And 7 in 10 believe that preventing progression to cirrhosis and fibrosis reversal of greater than one stage are the most important treatment goals for this patient segment. We've been tracking physician sentiment on the importance of fibrosis and the need to treat advanced fibrosis patients differently in one of our large market research studies. The most recent research confirms the following. An increasing number of hep and gastros believe that advanced fibrosis patients need to be treated urgently, they require a different management approach, and reversing their fibrosis is more important than improving steatohepatitis. We see similar beliefs from patients under the care of a gastroenterologist or hepatologist. These patients cite that they are aware of the risks of advanced fibrosis, know it must be urgently treated, and intend to speak with their physician about treatment options. Later on in the presentation, I will show complementary data from payers, who also see the importance of addressing advanced fibrosis. We note the importance of treating these advanced fibrotic patients in NASH, but how can physicians readily identify and stage them? This is where the use of non-invasive tests, or NITs, becomes a very important element of the care pathway. We believe the availability and acceptance of these diagnostic and staging tools in NASH is a potential game changer. Numerous practice guidelines from a variety of associations, including AASLD and the joint ACG-CLDF publication, now endorse the use of NITs as an appropriate option to liver biopsies. Liver biopsies are invasive, not without their own risk, and are often very painful for patients. Thought leaders in the NASH space have indicated publicly that biopsies are infrequently used in office settings, and are instead primarily used for screening patients in NASH clinical trials. For levels, said everyone, NITs include simple scoring tests like FIV4 or APRI, proprietary serum tests like ELF and FibroSure, and imaging, done with a FibroScan or by MRE. To increase sensitivity and specificity, many of the guidelines suggest that a two-step system be used, starting with a simple scoring test like FIV4 followed by imaging or a serum test, such as FibroScan or ELF, respectively. In fact, FIB4 has now been added into many electronic health records, like Epic, making it even more accessible to many medical professionals and simplifying the identification of NASH patients. The availability of NITs is certainly important, but it's critical that healthcare professionals use them and have confidence in these test results. Our market research shows that target prescribers, meaning HEPs and gastros, are familiar with NITs and are increasingly using these options. Approximately four in five surveyed hepatologists, gastros, and APPs indicate that they are already using at least two NITs to diagnose NASH and confirm fibrosis stage. A growing number of these HCPs are using FibroScan for their imaging and the majority feel that it is the most ideal approach to non-invasive imaging for their NASH patients. Conversely, our analysis of the Comodo Health database shows that only 14% of confirmed or suspected NASH patients were ever biopsied, meaning nearly 9 in 10 were not. We believe that the growing adoption of NITs among KOLs and specialists will help drive and facilitate the identification of NASH patients with advanced fibrosis without cirrhosis, exactly those patients who need to be treated. The inherent impracticality of using biopsies to identify and stage potential NASH patients, contrasted with the growing endorsement of NITs, will be considerations for all aspects of the healthcare ecosystem as it relates to NASH. Payers' willingness to use NITs will also be an important factor in the reimbursement and access space. Earlier in our call, Michelle spoke about the importance of the FXR pathway in NASH. To reiterate, weakened FXR signaling in NASH is associated with the disruption of multiple biologic processes, which lead to the progression of liver fibrosis. OCA directly targets these fibrotic, inflammatory, and bile acid cytotoxic mechanisms. The majority of other late-stage compounds in NASH development target steatosis, or fat in the liver, which occurs in earlier phases of the NAFLD spectrum. For example, GLP-1s appear to regulate food consumption and weight. Other drugs in development address steatosis by thyroid hormones that regulate hepatic lipid metabolism. Understanding where and how OCA fits into the treatment of the disease is an important foundational understanding of the demonstrated anti-fibrotic effect OCA produces. We previously highlighted the efficacy of OCA-NASH from our Phase III REGENERATE trial, evidence supported not only by liver biopsy data, but also by NITs. Using histology, we see that OCA 25 mg demonstrated double the response rate of placebo in reducing liver fibrosis without worsening NASH. Our NIT data reinforced the findings of histology data, showing similar efficacy in measurements of key biochemistries and liver stiffness associated with fibrosis. Furthermore, our antivibrotic effect is even more pronounced in patients who are considered more advanced at baseline, VEF3-like patients, so to speak. Importantly, we also see improvement in fibrosis in nearly 40% of patients who had baseline and month 18 liver biopsies in Regenerate. This compelling efficacy data on fibrosis reversal, the most important parameter of concern for specialists, and the driver for urgency, comprise the message platform that we plan to carry forward to prescribers. So far, I focused on the size of the target population for OCA therapy, the strong desire among specialty prescribers to urgently stop or reverse advanced fibrosis, the increasing availability of NITs to facilitate staging NASH patients, ensuring the most appropriate patients receive treatment, the role of FXR dysregulation in NASH, and how OCA, as an FXR agonist, addresses that to help stop and reverse fibrosis, and our compelling efficacy data. I'll now focus on how we are planning to leverage our current knowledge and resources in this space to launch effectively in the landscape. As an organization, we've been working to understand the NASH market for years and are leveraging our deep knowledge to ensure launch readiness. We've done extensive modeling using claims databases to confirm our target prescribers, hepatologists, gastroenterologists, and advanced practice providers. We've learned that three in four of the highest potential NASH prescribers are HEPs and GIs already in our existing PBC target list. allowing us to easily pivot to a NASH launch focus while maintaining critical support for our PBC business. We have existing relationships with these offices and prescribers. Importantly, reaching this substantial percentage of identified NASH targets can be achieved at launch using our current field footprint, which we view as a strength and differentiator. Of course, we will assess the decision regarding whether to add to our field forces as we progress through regulatory and market access milestones. We've also started to prioritize these HCP targets based on our insights regarding accessibility, influence within the NASH space, familiarity with obetacolic acid through PBC prescribing, projected patient loads, and proximity to FibroScan machines to facilitate inclusion of a second NIT when staging NASH patients. We understand the gastro group affiliations and networks and the roles that internal staff play in handling reimbursement paperwork. We believe this gives us a significant advantage when it comes to being the potential first to market mover in NASH. Additionally, we are sharing research results that show our reps are highly regarded in gastro and HEP offices and our corporate reputation is equally strong in the NASH field. We believe that it is not just the educational messages that we will deliver regarding OCA and NASH, but who is delivering that information. We are already underway with prelaunch activities to prepare the market, as slide 22 highlights. We are engaging with key audiences at major congresses, using peer-to-peer dinner programs to educate HCPs on NASH, and our disease awareness website is up and running as well. We are already training our reps to deliver NASH education in the field, which we plan to start in May. Our medical affairs teams are also engaging in appropriate educational efforts. Now I'd like to discuss what we are hearing from our payer communities, as access and reimbursement are critical drivers of launch success. First, I can share that we plan to expand our field reimbursement manager team to help facilitate reimbursement processes at launch, We are committed to providing assistance on this front, including the use of a hub for additional patient support. As this slide highlights, payers share many of the same sentiments that HEPS and GI stated regarding the significance of treating patients with advanced fibrosis and a willingness to use NITs, especially if they are supported by KOLs and guidelines. There is an overarching recognition of the unmet need in NASH, and an acknowledgment that different pathways and corresponding therapeutics may be needed. We see all of these as positive indicators for productive reimbursement conversations following a potential approval and access to a final label. In our discussions, we are focused on the advanced fibrosis without cirrhosis segment of NASH patients. We believe this focus helps players understand exactly the segment where an FXR agonist like Oka has the potential to yield the greatest benefit for appropriate patients. Regarding pricing for OCA and NASH, the value proposition for OCA will be tied to the final label that we would receive upon a potential approval. We'll make a final decision about our pricing with full insight from our label, along with the most up-to-date insights from our key payers. At that time, we'll be able to provide our pricing decision. Slide 24 depicts the range of prices Within a continuum of categories, we believe that OCA falls into the chronic specialty drug segment and are assessing our pricing options within that context. As this is a separate NDA with a 25-milligram tablet and a unique trade name and NDC code, we will have the opportunity to consider differential pricing from Ocalavan PBC, which is an orphan disease with a distinct value proposition for PBC patients. especially as Ocaliba is the only approved second-line treatment and has demonstrated real-world evidence that shows improved transplant-free survival. Our strategy remains to have optionality and make the best decision with full insight in hand. In closing, we are excited about the opportunity to potentially bring OCA to market as the first treatment for NASH in the patient segment that most urgently needs it. The approximately 700,000 patients with advanced fibrosis without cirrhosis due to NASH who are under the care of a hepatologist or gastroenterologist. The NASH landscape in 2023 shows a greater understanding of the real risks caused by advanced fibrosis and the endorsement and growing acceptance of NITs to diagnose and stage NASH patients. Much has changed over the past three years, including a better understanding of the safety and efficacy profile of OCA and NASH from a Regenerate trial. Paired with our commercial expertise in liver space and deep knowledge of our HEP, GI, and APP customers, we stand poised to successfully launch OCA and NASH later this year. I'll now turn the call back over to Jerry.

Thank you, Linda. In summary, I'm proud of the progress we've made in the first quarter of the year and believe we're in a strong financial position as we manage our upcoming milestones. including our advisory committee meeting for OCA and NASH and planning for a potential launch.

I'll now open the call for questions for the team.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press star 1-1 again. Please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from Yasmeen Rahimi with Piper Sandler.

Your line is open. Yasmeen, please check your mute button.

Oh, I am so sorry. Thank you so much for allowing me to ask my question and congrats on the great updates that you provided for us this morning. You noted that the paired discussions really recognizes the need of patients with advanced fibrosis, and I think the slide says F3 and above. Could you maybe help us understand how one could identify with the current available NITs, that particular patient population, and therefore, and then secondly, if you have any flexibility in pricing, if you chose to go very specifically into F3 instead of F2, and I'll jump back into the queue.

Yeah, Yasmeen, thank you very much for the question. As Linda indicated, obviously we're doing deep work with the payers as we progress here. Importantly, just for clarity, so the patient group that we outlined and is clear on the slide, which is available and people can pull it if they don't have access to it currently, that 700,000 we're defining as the launch target for OCA you can describe as F3-like population. This is a group that can be found in the real world, again, utilizing usually two NITs. We've done quite a bit of work using both of the published information and the cutoffs that are out there. We've also, and we'll in the future put some of the additional analysis of our own data from Regenerate and some of the work we've done specific to the NITs. Also, importantly, in that algorithm, we're also trying to make sure that we're opting out patients that might have a high probability to be patients with cirrhosis, since we expect those to be outside of our indication. So, the 700,000 is F3-like, found, we think, by noninvasives. It is a little, and we did note this, it is growth from the number we put out in the past, but it's essentially a similar population. As you can imagine, over the last two to three years, both based on the epidemiology and the growth in NASH, as well as a greater understanding of the disease, we've seen that population grow. But it's a similar, it is F3, and that's when we talk with payers currently about our value proposition. We're focusing on this group. The fact that it is a subset of our potential indication is a productive place for the discussion with payers.

Thank you so much, Sherry, and best of luck as you're headed into the outcome.

Thank you.

One moment for our next question. It comes from Mayank Mamthani with B. Riley. Your line is open.

Good morning, team. Thanks for taking our questions and congrats also on the progress. So on the OCA-BEZA combination plan and term analysis at Easel, we would love to hear what specific efficacy endpoints that you know, we should focus on and also maybe if you could put in context the solid paper from two years ago, which did use a more stringent biochemical response definition and any other population or sequencing differences that we have from that real world study versus what you did in a clinical trial setting.

Thanks for the question, Michael. I'll turn it to Michelle, of course, with our caveat that we're under embargo in terms of the information and the data that we're going to present at EASL coming, but a program that we're really excited about. Michelle?

Yeah, thanks for the question. We are looking forward to the podium presentation at EASL. As Jerry mentioned, we are under embargo, but with regard to the endpoints, we are looking at all relevant biochemical parameters the similar population to the paper that you referenced and similar also to POIS, maybe a little more advanced than that patient population, a little higher ALP at baseline. So we can really see the improvements. We will be sharing some additional information too, both at EASL and in some upcoming publications about the importance of driving multiple parameters well into the normal range and some data that we have there on how predictive that is from outcomes with our large data set now that we have both from clinical trials and PBC, but also in the real-world evidence, we've now been able to take a really great look at the multiple parameters that are predictive of the good outcomes that we've been able to see for patients on Ocalibut, the improvements in transplant-free survival. So we look forward to sharing the data in a couple of months.

Great. And if I could just quickly squeeze in a follow-up, it's kind of related. The NASH adcom preparation, if there's any implication, you know, of the PBC data set to that, you know, briefing documents that we expect to see in a month's time, And also clarify if the biopsy efficacy definition, you know, fibrosis improvement and NASH resolution, which I think you reported in your Lancet publication, but curious if that definition is also required as part of the reanalysis, if you could clarify that. And I'll hop back in the queue. Thanks for taking the question.

So with regard to the NASH briefing document, we did include in our pooled safety database at the FDA's request, all the post-marketing data from PBC. So that includes 30,000 patient years of data. So that's clearly relevant for our large safety database and ability to support the potential chronic dosing for OCA for NASH. So yes, that will be included in the briefing book. And just to clarify then on the primary endpoint, So the current draft guidance for NASH for an accelerated approval is one of two potential histologic endpoints at month 18, either resolution of NASH without worsening of fibrosis or at least one stage improvement in fibrosis without worsening of NASH defined as any of the three parameters, steatosis, inflammation, or ballooning. So that's the same endpoint with just a different methodologic reading procedure. So we used instead of one central reader, two central readers on glass slides, we had a panel to achieve consensus. So that follows the new draft guidance that was issued by the FDA in late 2020, early 2021.

Thanks for taking our questions and look forward to the panel next month.

Thank you very much.

Thank you.

Our next question comes from Ritu Barel from Cowan. Your line is open.

Good morning, guys. Thanks for taking the question. I wanted to ask, I wanted to revert back to slide 14 and that 700,000 target patient population. Jerry, you mentioned that these were sort of S3-like patients. um and could be defined by nit but some of the ongoing conversations we've had with nash kol has did this sort of further slicing up of the f3 population as as they see it um and you know maybe this is them thinking out loud but we've heard about high risk versus low risk f3 and we've started hearing about f3a f3c f3c um could you maybe frame the conversations that I had with KOLs around those terms with that 700,000? Thanks, and I'll get back in the queue.

Yes, so there's a little bit of overlap, as you say, in some of these populations because we're always talking sometimes with Some of the data which has been built historically in small data sets and histology with obviously everything that's emerging more population-based on NITs. The group of 700 that we describe, we keep saying is F3-like again. Of course, there are patients that are straddling. Sometimes they laid F2 by one pathologist or by certain NITs, might be an early pathologist. F3 by others, but we think we do a good job of identifying patients who are in that category who are most likely to be progressing to cirrhosis. Of course, in any category of patients, and it's true in F3, there are other things going on besides their liver in terms of other risk that is ongoing. So physicians are continually looking at different shades in these subpopulations, but based on all the data around fibrosis, and the risk of an F3, a broad F3 population, and the data we've generated, we feel it's in a very appropriate place for us to focus the launch. Again, a subset of the indication that we're pursuing, which would be mirroring the F2 and F3 patients we studied in Regenerate. But again, I think as always, there will be different physicians who are assessing risk differently, but we think this is a category that definitely, from all the work that we've done, meets a greater urgency to treat than some of the earlier segments.

Yeah, and I would say, too, that KOLs are looking at certain patient population factors. What can we do? Can we predict who's more likely to tip over? We know the one in five within two and a half years may progress to cirrhosis. Right now, we don't know. So the 700,000 is really a good place for us because we know they are in an urgent bucket, and that's where the risk is. And there may be ways to refine later, but I think the, you know, if you're talking about going into the gastroenterology community and the APPs associated with them as well as HAPS, you do, right now, I think, simplifying it and making it practical and ensuring the right patients are involved is probably the way to go where we are in the field right now.

Got it. Thanks for taking that. And if I could just squeeze one last angle of this question, and do you think that this is a topic that will be brought up at the ad comm? Thanks.

So, you know, we do anticipate the discussion to be about around risk-benefit given the history and the initial CRL. Of course, we're preparing for questions about the appropriate population, how to find the appropriate population. We'll get more detail on the specific questions from the agency when we get closer, but we're certainly prepared to discuss appropriate populations and what we've learned from our data and our work in the real world.

Thank you.

Thanks, Ritu.

Thank you. One moment. We have a question from Steve Seedhouse with Raymond James. Your line is open.

Good morning. This is Ryan Deschner on for Steve Seedhouse. Good morning. We have your own suggested NIT protocol threshold to guide Epsom gastros, particularly to facilitate reimbursement. And are there any specific subgroups in this advanced fibrosis without cirrhosis population that you plan to target earlier in the launch?

So I would say that we're looking at certainly the general guidelines that exist. on what the appropriate ranges are, you know, that stand now. But we have the benefit of biopsy-confirmed patients and screened patients for our clinical trials, so we can take some of the learnings that we have there, knowing how the patients were kind of scored and graded, and then look at the NIT data that we have to, you know, run that against the appropriate patient type. So we may tweak what we've learned, considering tweaking that guidance in that range to ensure that we have the right patient population. We certainly are wanting to make sure that we don't have a four population within, that our study was not positive there. So I think as we learn and can go through the data and compare all of these data points that we have from NITs, as well as our biopsy data, we will get more refined at identifying our patient. And I think that's to everyone's benefit.

Sure.

And then in terms of NIT protocol thresholds or guidance for Hatch and Gastro, I mean, how far are you planning to delve into that? Or will they just be relying on roughly the NIT guidance from the different consortiums?

So, you know, we're using the published cutoffs, but we're also informing it with our own data, and that's the data that you'll see in the future where we've looked at the robust learnings from Regenerate. And, of course, we're also, it's not always the case in the guidelines, we're also being sure that we're identifying the patients on the upper end who might be at risk. So, again, it's a combination of what's out there and what we've learned from And we'll communicate more specifically on that as we get closer to launch. But it really is both the published cutoffs and what we've learned from our own dataset.

Okay, thanks a lot. One moment.

We have a question from Joseph Stringer from Needham & Company. Your line is open.

Hi, good morning. Thanks for taking our question. Question on pricing. You're guiding for chronic specialty drug pricing with a pretty wide range of $20,000 to $110,000 per year. Just curious, what types of label scenarios or potential internal research would put the price near the low end around that $20,000? end or would, you know, going the other way, what type of scenario would put it towards the higher end or around the 110K range?

Yeah, look, obviously there's quite a bit of work that we've done and work that's ongoing. I think we've continued importantly to focus on this subset of our indication, which is an important part of the value proposition and the discussion. with payers, also a focus on those patients that are already with specialists. So we're not looking at efforts in the launch phase to be pushing patients in to specialists. And of course, look, we'll get more information and, you know, the pricing decision is going to be as important a decision as we take for the launch. We're going to do that with the full information on hand. So while I fully understand all the interests here, you know, we'll communicate that when we have the right information in hand as we move forward. And importantly, all of the discussions that we're currently having with payers are an input, are part of that input as well, and obviously you can understand we need to make sure that we're containing those discussions with the payers directly with them at this point.

Great. Thank you for taking our questions. Thanks, Joe.

We have a question from Brian Scorney with RW Baird. Your line is open.

Good morning, everyone. Thank you for taking my questions. I guess real quickly, the first question I have is I know it's a little early for the statutory requirement for the FDA to send them. They're just wondering have they sent you the briefing documents yet? And then on the upcoming OCA-bezofibrate combo results, maybe you can just give us some insight into what you may ask the FDA at the end of phase two meeting in terms of registrational pathway requests. I know that the hope would be that PPAR would have a role in treating the underlying disease and ultimately leading to reductions in long-term liver-related outcomes, but I also know that some PPAR data has indicated reductions in pruritus. So when you sit down with the FDA with the data you've generated, would you be thinking that the registrational pathway would be potentially through sort of clinical symptom reduction in varitis, or do you see this as another biomarker-based approach? Thanks.

So, Brian, on the first one, we do not have the briefing book from the agency. As you said, it is early according to the normal timetable. Michelle, can you answer the question on the FDC, please?

Yeah, absolutely. So the endpoints we suspect will still be the important ones about the biochemical changes that have been correlated with long-term outcomes. The pathway currently is accelerated approval on that basis with a longer-term outcomes follow-up for confirmation. Although it certainly is important to look at the ability for individuals to remain on drugs. And we think overall symptom improvement would be really critical for that. We're looking forward to sharing the data at EASL and a lot more conversations to come in the second half of this year.

Great. Thank you.

Thanks, Brian.

Our next question comes from Thomas Smith with SVB. Securities, your line is open.

Hey, guys. Good morning. Thanks for taking the questions. Just on the national regulatory front, I was wondering if you could clarify whether there's been any kind of mid-cycle review meeting at this point and whether there's been any requests from the agency for data from the Phase 3 reverse trial, either safety or efficacy? Michelle?

So, we have been in communications with the agency since the submission in December. and can't really comment on the topics there, but a lot of clarifications on data that were submitted with the package December 22nd. And then with regard to reverse, so that study was under a separate IND, and we did have top line, but had not completed all of our analyses. So for those two reasons, we didn't include it in the in the NDA for Regenerate. However, I think it is important that we didn't see differential safety in that patient population with cirrhosis, even though we didn't hit the primary regulatory endpoint. There'll certainly be some more analyses that are forthcoming for that patient population, but we are excluding patients with cirrhosis in our proposed population as Linda walked through earlier.

Okay, got it. Thanks. That's very helpful.

Thanks, Thomas.

Our next question comes from John Wolleman with JMP Securities. Your line is open.

Hey, good morning, and thanks for taking the question. You spent a fair bit of time, and it's been super helpful hearing about identifying patients using non-invasive tests, but are you also proposing a strategy for monitoring response on drug, and is that something payers or FDA are focused on as well in your early discussions on how to tell who's responding and what that looks like over time?

Hi, this is Linda. Thanks for the question. I think really what we're seeing is the use of NITs can help in the staging. But when we look at the regulatory requirements for approval, which were very straightforward and talking about one or the other, and we hit the fibrosis reversal, what we know is also clinically very meaningful is to look at reversal, stopping progression. So if they don't move forward, this is a great thing in clinicians' eyes. and preventing getting to cirrhosis. The cost, the trouble, the impact on the patient is such a flip over when you get to cirrhosis. Efficacy and regulatory standards versus real world can be a bit different. So obviously, NITs can be used to monitor that as well. And it will be up to payers and physicians as part of the routine monitoring of their patients to see how they're doing. They'll continue to use these tests. That's kind of how we're looking at it right now.

I think for our recommendations on the safety side, it is really following the same clinical standards that they're already using for monitoring their patients with NASH. Because if someone does progress, if they are more advanced than they thought they were at the time that they started drug and they see evidence that they have had a decompensation event or biochemical changes that would indicate that they've progressed to cirrhosis, then those patients would also discontinue drugs. So that, it's really more of the clinical monitoring that we would be recommending as part of our education during the launch.

That's helpful. Thank you.

Sure. Thanks, John.

We have a question from Ellie Merrill from UBS. Your line is open.

Hey, guys. Thanks for taking the question. Just on PBC with the four out of 10 prescribers were new prescribers. Can you elaborate a little bit on that and sort of what you're seeing in terms of the new prescriber growth, what's driving it, and how you expect this to continue going forward? And just overall, I'm thinking about the PBC penetration, sort of where you are versus the total potential prescriber pool. Thanks.

Yeah, so maybe I'll take a quick one on that, and then Linda can comment if she likes it. So, yes, the fact that this far into the life cycle of Ocalava, we still have 40% this quarter of the prescribers being new prescribers for the first time is a really good sign that our strategy to expand to a larger number of gastroenterologists is, in fact, having the desired effect. We still see less than 40% of the potential eligible patients have received Ocalibus. So again, there's still quite a bit to go. The challenge in PBC is that the patients are spread across a very large number of these gastroenterologists. They tend to have a small number. So in order to continue to source gross, we have to get new prescribers. And it's been good to see the cause and effect as intended to the plan that Linda and the team are executing.

Our next question comes from Michael Yee with Jefferies. Your line is open.

Hey, guys. Good morning. Thanks for letting me ask a question. I have two. One was around your visibility on launch and

What does your work in the field suggest around any bolus of patients or recently biopsied patients in the last 6 or 12 months that'd be ready to go and appreciating there needs to be para coverage? How does that visibility look for you in terms of any sort of bolus? And the second question is related to your view of how does spend go up in the base case of an approval versus what I think you said was pivoting to profitability in the case that it was not approved, and maybe you could clarify a bit about that. Thanks.

Okay. Thanks, Mike, for the questions. I'll take the first, and then Andrew can take the second. So there are patients that are with the specialists who understand that they have NASH. and who have been previously counseled that their risk is going up. Nonetheless, I think while that urgency is there, all the work that we do might continue to indicate that those patients will probably present according to their normally scheduled visit pattern. So while there's a willingness to act, we're not anticipating to expect a, quote, bolus in that upfront period. I think the other Normal element is the one that you mentioned, of course, that the payer decisions happen over time depending on which payer. So, again, I think we're anticipating if we get approved, we'll be ready to launch quickly. We'll go to the most important and highest potential prescribers first. But we don't anticipate a warehousing effect like you might have seen in some other categories.

Yeah, so Mike, thanks for the question. With regard to the expenses, you know, we obviously guided the 360 to 390 at year end. We're spending to that level. As you can see, the spend this quarter was well within the guidance range, if you extrapolate that out. We don't expect a big change this year. We're holding steady, and as we said before, we've been very careful to manage our expenses. So we're obviously spending everything we need to to be ready, right? So the Launch prep is going. We're working with payers. We're doing, you know, Linda's team is doing all the hard work to get us ready to launch. What we haven't done is commit to an infrastructure build. We're going to wait and see how the regulatory agency responds. And if we choose to increase our footprint for field force, we'll let everybody know at that point and we'll revise guidance. But at this point, we're holding where we are. We feel very comfortable with our spend. You know, you asked what happens if we pivot to profitability. So, obviously, the first thing to do would be to stop the NASH trials if we don't get regulatory approval. That would take a lot of our expense down right away. We obviously then look at the organization to make sure we're right-sized. But those are things that we'll deal with later if we're not able to achieve regulatory approval. We are full speed ahead with our ADCOM and getting ready for PDUSA, and we're hopeful that we get an approval here next quarter.

Okay, that was super helpful. I appreciate that. If I may ask one quick follow-up, I would love to hear either Michelle or Jerry's view on this, which is, I mean, I think your base case would be that there could be another oral competitor on the market by next year. Is your view that two drugs on the market is a good thing, or what is your view of how that impacts the landscape in the short and medium term? Thank you.

Hey, it's Linda. I'm happy to take that. I think for us, really, Because of the way this market exists and is very, you know, mile-wide, inch-deep with patients and PBC, I think that... Oh, and Nash?

Yeah, Mike, maybe I'll jump in there. Look, I think that one of the things... Yeah, Linda is preparing for both, but I'll jump in on NASH and then we can clearly take the PBC. But there is a common factor here, which is, look, both PBC and NASH, they're still high on med need. And I think one thing we know about chronic classes, and this will, I believe, apply to NASH, It won't be satisfied by one or two or three drugs or mechanisms here. And there is an effort, as we have talked about a lot, multiple companies have talked about a lot, to educate, to ensure that the right information is out there, to start to organize the treatment continuum in a way that gets patients treated. So we prepare as if, you know, we like... the opportunity we have to potentially be the first, but of course we see a future where there's multiple therapies for patients, and there is clearly some commonality in some of the objective of helping patients get the right treatment in terms of the right utilization of NITs, where you can imagine some common messages out there that would be important for the development of a large chronic class where there's a lot of unmet need here.

Thanks, Mike.

Our next question comes from Brian Abrahams from RBC. Your line is open.

Hey, good morning, guys. Thanks for taking my question and appreciate the very clear and comprehensive overview. On the non-invasive diagnostics, can you give us a sense as to what the comfort out there is discerning the OCA target population from an F4 from F4 patients using NITs. And then I guess I'm curious if you have a sense of the percent of that 700,000 patients you mentioned who have biopsy-confirmed NASH at this point. Is it right around that 14% that you mentioned for the fuller population, or do you have more specific metrics for that 700,000? Thanks.

So I think for that, it's probably not that much different. It's a low number. These patients are typically not getting biopsied. And then some that do get biopsied don't always get the formal ICD-10 code. So it's a low number, and we know that biopsies tend to be avoided except for clinical studies or some complicated patients where they're trying to do something else. Michelle, maybe you can comment on Brian's first question around the identification of those patients that might be on the upper end around cirrhosis that we would be looking to identify to opt out.

Yeah, yeah. So what we've recommended using is more of the upper bounds criteria, more so than the noninvasive test. They're really good at identifying and excluding the patients who've not yet progressed. to preserotic fibrosis, so excluding the F0s, F1s, and concentrating on kind of F2 and up. You can use FibroScan, so a combination of some of the wet biomarkers plus FibroScan can help delineate some of the F4s, but really using sort of what we call upper-bounce criteria, looking at platelets, albumin, and other markers that the patient may have progressed even prior to decompensation events. And physicians in the data that we've looked at, in particular the screening data for a reverse study, are pretty good. So these GIs and HAPs are pretty good at delineating exactly who has cirrhosis. So that's why it's gonna be important for patient identification at baseline, but also for monitoring patients using standard clinical practice You know, they will be seen every three to six months typically for a battery of a blood test and maybe a fiber scan. And that should be sufficient for them to be monitored both for safety, but also to make sure they haven't progressed to cirrhosis.

Got it. Thanks so much.

Sure.

Thanks, Gwen.

One moment. Our next question comes from Jay Olson with Oppenheimer. Your line is open.

Oh, great. Thank you for providing this update. Can you talk about the key questions that you expect to come up at the FDA ad comm and how you plan to address them? And then I have a follow-up, if I could, please. Michelle?

Yeah, so as we've discussed, the issues around the CRL were about overall benefit-risk. So what's changed between our prior submission and this NDA that was submitted in December, that'll be the topic of the advisory committee meeting, is really looking at the efficacy, the confirmation of anti-fibrotic benefit that we've shown with this second validated endpoint. Again, showing very consistent anti-fibrotic benefit double what's seen in the placebo to estimates for our treatment effect. The second element is safety. With the initial submission, there were some safety questions that couldn't be addressed with the data that had been submitted. At that time, the median exposure for patients was about 15 months, and we didn't have any patients who had yet reached month 36. We now have patients three and a half times more exposure So our safety database of almost 2,500 patients in the phase three study alone, another three or 400 patients from the phase two studies. So 2,800 patients, a median of 39 months of exposure, 1,000 patients with four years or more of exposure. So really focusing on the overall benefit risk, but specifically being able to review those adjudicated AEs of special interest, so the hepatic safety, cardiovascular safety, and AKI. And we now have all of those events fully adjudicated by panels of experts and have shown that there is no excess cardiovascular risk, that we have a low and balanced AKI. And that's important in a patient population that is at increased risk for both cardiovascular and renal disease. and very specific guidance on hepatic safety in a disease that is progressive. So it will be important, as we've talked about, to have those patients continue to be monitored using that regular cadence of clinical visits and non-invasive tests to make sure those patients haven't progressed to cirrhosis, at which time the drug should be discontinued, but also looking for any short-term excursions in biochemistries that would indicate the need to have a short-term discontinuation for intercurrent illness, hospitalizations, things like that. So, I think that'll be predominantly what is focused on, and that's what we're fully prepared to address in just a couple of weeks.

Great. That's helpful. Thank you. And thanks also for sharing your market research. Could you comment on any feedback on the competitive positioning of OCA in NASH as it compares to other drugs in development that have demonstrated efficacy in both NASH resolution and fibrosis improvement and how physicians might perceive OCA's position in the NASH competitive landscape. Thank you.

Yes, absolutely. So I think, you know, when we look at our strong data in the more advanced patient population, that really resonates with the physicians who are, it's really a nice intersection of high unmet need in that particular patient population, the urgency to treat and risk of progression, and then our data fit. And the FXR pathway and what we're talking about in terms of what happens there and how our FXR agonism addresses this very strongly in fibrosis is resonating. I think it's really make sense to them and in the patient population that they're most concerned about. So as we look at that, the reception to that is very strong and there has been historically a lot of data on fibrosis. So the mechanism ties, we believe, to the efficacy that we've shown there. And, you know, frankly speaking, we've even seen control of fibrosis in our Ocalibus study. So, in multiple areas, we are clearly very strongly an anti-fibrotic drug.

Great. Thank you very much for taking the questions.

You're welcome.

Thanks.

One moment for our next question. Our next question comes from Ed R. with HC Rainwright. Your line is open.

Hi, everyone. Thank you for taking my questions. Two for me. Firstly, I just wanted to ask, Jerry, I know you mentioned earlier on that you've been doing a lot of deep work with the payers. And so wondering, in those discussions, if you had any payers confirm that a NIT-only diagnosis would be sufficient to support a reimbursement coverage and if there's any differential there in terms of restricted or unrestricted coverage. And secondly, I know there's a lot of different algorithms and combinations of NITs out there that are used. Wondering if in your discussions with those payers there's any sort of differential preference for specific algorithm with perhaps, you know, strongest accumulation of data that could support that. Thank you so much.

Thanks, Ed. Maybe, Linda, you can comment on the ongoing discussions, which, of course, will continue as we get more information on the regulatory front. But maybe start with what we've heard.

Sure. I think, first of all, the receptivity to the advanced fibrosis story and the use of NITs to get there versus biopsy has resounded with payers as it has with our physician, you know, treating community. What they've said is if there's a willingness to use the NITs, if they're endorsed by guidelines and KOLs. And I think we certainly showed that in my opening remarks that numerous guidelines from, you know, groups that are very involved in the treatment of NASH and identification of that They have already incorporated these guidelines, the NITs, into the guidelines. The impracticality of really performing biopsies on every patient who may or may not have NASH coming into the market space, I think, is a little bit prohibitive in and of itself. They're not inexpensive. There would be a delay, potentially, in getting them, et cetera, et cetera. What they want is a reasonable way to ensure that the right patients are getting on drug. And that, I think, is something that in this whole healthcare continuum is aligned between all of the audiences. So we haven't heard, honestly, a preferred use or algorithm right now. There are slight differences between the guidelines, which is why I think it's incumbent upon us to understand our data and look at the NITs and how that crosses over with our biopsy data to ensure that we know how to recommend the right patients for us. So we continue to do deep work there.

So more to come on the payer front. I think we're doing the important things on an ongoing basis. And just to underline, of course, we sometimes in these sessions talk about the payers as if they're one group, and you obviously, you know, are meeting and having discussions along the way with the individual payers who sometimes have a different perspective on one part of the equipment or another. So we'll do the deep work and continue to update appropriately as we progress here.

Great. Thanks so much.

Thanks, Ed. One moment for our next question.

It comes from Salveen Richter with Goldman Sachs. Your line is open.

Hi, thanks. This is Matt Alm for Salveen. Could you share any feedback you're getting from docs or payers on how OCA will coexist with resmedirone within this target population? And then also, how are you thinking about the use of Ocaliva in NASH patients that have morbid obesity or diabetes? In particular, do you have any feedback on how that could be used in combination approaches with other agents like GLP-1s? Thanks.

So certainly we don't have, I'll take the last one first, we really don't have outside of our own patient population where we did have patients on SGLT2s and GLP1s, there was carryover there. I can say from a practical standpoint, given that the different mechanisms of actions that are working there, where you see the GLP1s really used for weight reduction, clearing fat out of the liver, in that manner. That is an interesting proposition paired with an antifibrotic agent like ourselves. In terms of where they see, you know, RESMA and OCA being used in the NASH patient population, I think that there are no, you know, there's going to be patient profiles that perhaps people feel more comfortable with. We'll see how they go about it, but for advanced fibrosis, I think we're positioned very, very well there with the strength of our data. It is perceived to be not just about our data and efficacy that we've shown on fibrosis, but also understanding the safety profile of this drug, the use that they've had with the beta-cholic acid in this population, managing side effects, understanding how to use our drug, the patient support services that we offer. That's a whole package of looking at where you would use OPA in your patients. It's not just one bit of it. Can't really speak to, haven't seen, I think, all of the data on RESMA and safety and efficacy to this point and how that holds up, but we're really focused on running our race and understanding our patient population and where we have the greatest benefit.

Thanks.

Thanks, Min. One moment.

We have a follow-up from Ritu Barrel from Cowan. Your line is open. Hi, guys.

Thanks for taking the follow-up. I guess the question is for Linda and Michelle. You know, as you talk to the payers, Linda, you mentioned, you know, cost savings in preventing progression. to cirrhosis and how that resonates. Is there data that you can be generating from that 1,004 plus year treatment experience that you can bring to the table for payer discussions? You know, even though it's interim, even though it may not be published, are there cost savings analysis that you can start extracting from this to have those discussions? Thanks.

One of the things I can tell you, you can start and then I've got some other practical numbers to share. Okay. You still there?

I don't know what that was. Yeah. So there, as you know, we're focused on the month 18 histologic data, which is focused only on improvement in fibrosis. But one of the key things that has changed between the prior submission and this submission is the strengthening of the data that shows that fibrosis is really the only of the NASH parameters that has been associated with improved outcomes with clinical benefit. We now have data not just on a single measure and staging and risk of all-cause and liver-specific mortality, but have shown that improvements in liver stage that have shown improvements in those risks, improved risk of progression to liver transplant and death. So I think the strength of that data is improved. We are not yet looking at our outcomes data, so we can't go into the specifics on there. But as I think Linda is going to share with you, there's a lot of data there that does show the importance of fibrosis and certainly fibrosis over any improvement in steatohepatitis alone without improvements in fibrosis. Linda?

Yeah, I think, you know, if you, let's take it at a high level first. Estimates are that the distribution of NASH population in the U.S. has about 10% of patients with cirrhosis. Those 10% have a total annual predicted direct medical cost in NASH of $8.3 billion. So once they tip over into cirrhosis, you're seeing a lot of expense dedicated to those patients versus maybe 90% of the population with $1.9 billion. So it's not inexpensive, but when you think about it in those numbers, the obvious benefits of preventing the progression to cirrhosis, not only from a cost management kind of perspective, but also from the health and the terrible consequences to patients, both tie in. When you go back to it, there's a two-year kind of follow-up study that was done looking at the costs related to NASH without cirrhosis baseline and then with cirrhosis baseline over time. And you see three times the cost difference. You see cost per member per month going up. So just in terms of payer lens on what it's costing them, whether they're tracking it currently that way or not, is very important. And then we'll pair it with what we can get out of our other trials and doing the work. But I think that there's a recognition and that the payer community sees what's ahead. So the benefits of preventing that are pretty strong. Thanks.

Thank you, Gibson.

Thank you. And there are no other questions in the queue. This does conclude today's conference call. Thank you for participating and you may disconnect.