CymaBay Therapeutics, Inc. (CBAY) Q2 2019 Earnings Call Transcript

CBAY earnings call for the period ending June 30, 2019.

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CymaBay Therapeutics, Inc. (NASDAQ:CBAY)
Q2 2019 Earnings Call
Aug. 7, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the CymaBay Therapeutics Second Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. 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.

Dan Menold -- Vice President of Finance

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 programs, and review upcoming milestones before we open up the call for Q&A.

Before we begin, I'd like to remind everyone that statements made during this conference call, including the Q&A session relating to CymaBay's expected future performance, business prospects, events or plans, including clinical plans and timelines and potential development 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 forecasts 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 statement 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.

Sujal Shah -- Chief Executive Officer

Good afternoon, everyone, and thank you for joining us. In the first half of this year, we have made significant progress driving seladelpar forward, and ENHANCE, a global Phase III registration study in patients with primary biliary cholangitis, or PBC. ENHANCE is currently active in 23 countries across five continents and at more than 145 study sites. We are targeting an NDA submission for seladelpar and 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 toward 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 hepato-protected effects through 52 weeks of treatment. Our enthusiasm for seladelpar is not only derived from the robust responder rate, but the composite regulatory endpoint that combines 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 two 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 one 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 two 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 cooper cells in the liver and circulating macrophages, and indirectly, by decreasing several key drivers of inflammation and liver injury, including bioacid 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 milligrams doses of seladelpar achieve mean ALT reductions of 15, 20, and 32 units per liter respectively, versus a decrease of nine 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 reduction seen in AST, GGT, and alkaline phosphatase, including an over 40% reduction in elevated GGT at 50 milligrams. 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, HSCRP, 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 study drug. There were two serious adverse events that had occurred after randomization through week 12, neither of which was deemed to be related to study drug.

While we were 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 benefiting NASH, a second population in addition to PBC with a serious inflammatory liver disease.

As a 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 fiber 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 is an orphan disease, affecting approximately 40,000 patients in the U.S., and shares some underlying pathology with PBC, although it is generally a more heterogeneous disease. 

Activities for the study are well under way, 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 one to one to one to one randomization. The primary efficacy outcome will be the relative change in alkaline phosphatase from baseline at 24 weeks. Key secondary endpoints 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 for 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, we're $241.2 million at June 30th. 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 three and six-month period ending June 30th, 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?

Questions and Answers:

Operator

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing *1. One moment, please, while we poll for questions.

Our first question today is coming from Eliana Merle from Cantor Fitzgerald. Your line is now live.

Eliana Merle -- Cantor Fitzgerald -- Analyst

Hey, guys. Thanks so much for taking the question. 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, since I guess we know that alk phos reduction is not as tightly linked to long-term outcomes and PSC as it is to 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 these endpoints. Thanks.

Sujal Shah -- Chief Executive Officer

Yeah. 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 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 a host of secondary markets, 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 endpoint 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 endpoint on markers that may in fact correlate overall to liver health.

Eliana Merle -- Cantor Fitzgerald -- Analyst

Got it. That's very helpful. Thank you.

Operator

Thank you. Our next question is coming from Yasmeen Rahimi from Roth Capital Partners. Your line is now live.

Yasmeen Rahimi -- Roth Capital Partners -- Analyst

Hi, team. Thank you for the continued updates. 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. Is 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. And thank you taking my questions.

Pol Boudes -- Chief Medical Officer

Hi, Yasmeen, it's Pol. So, I can take the first part of the question for 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're using the NRS scale. And that is going to confirm our hypothesis, our internal 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 one of the main symptoms with pruritus with PBC patients. We are using other scales, but I would -- for pruritus, you have something that is called the 5D pruritus scale, which is the five dimensions of pruritus. But the main PRO for pruritus is gonna be on NRS. And that's gonna be a key significant outcome for this study.

Charles McWherter -- Chief Scientific Officer

Yeah, hi. This is Chuck, Yasmeen. 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 biomarkers 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's an association, for example, with weight loss or other baseline psychological factors, it's a little challenging to put a very specific interpretation on it.

Yasmeen Rahimi -- Roth Capital Partners -- Analyst

Thank you, Chuck. And then, you guys have done an amazing job in getting into AASLD and EASL. Can you give us a quick glimpse into what we should be seeing at the upcoming Liver Meeting in Boston?

Sujal Shah -- Chief Executive Officer

Yes, Yasmeen, I think as you've seen from us over the past few years as we've advanced seladelpar and 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's 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 will 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.

Yasmeen Rahimi -- Roth Capital Partners -- Analyst

Thank you, team, for sharing all that additional color.

Sujal Shah -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is coming from Steven Seedhouse from Raymond James. Your line is now live.

Steven Seedhouse -- Raymond James -- Analyst

Good afternoon. Thank you. 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 two years away based on current timeline?

Sujal Shah -- Chief Executive Officer

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, in 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 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 MS sells 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 built up our efforts in the med affairs area as well.

Steven Seedhouse -- Raymond James -- Analyst

Okay. Thank you. And speaking -- just going back to that second line agent in PBC, it continues to slowly churn higher in terms of its uptake. 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 has been impediment to enrollment at all? Thanks for the questions.

Sujal Shah -- Chief Executive Officer

Yeah, 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 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 populations of patients that continue to have a need, both for what we believe seladelpar is the potential to deliver, which is improved efficacy, as well as better tolerability. 

And so, fortunately for us, on the heels of that has been very strong Phase II data that's been presented in the medical community over the past two, three years with seladelpar, the strength of that dataset is largely fueling our ability to continue to enroll ENHANCE in our overall timelines that we pre-specified 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 stand seladelpar treatment longer-term. And today, in fact, we're seeing many patients that are now out to two 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 uptake in scripts and sales overall for Ocaliva continue to increase.

Steven Seedhouse -- Raymond James -- Analyst

Thank you, Sujal.

Sujal Shah -- Chief Executive Officer

Thanks, Steve.

Operator

Thank you. Our next question today is coming from Ed Arce from H.C. Wainwright & Company. Your line is now live.

Ed Arce -- H.C. Wainwright & Company -- Analyst

Hi, everyone. Thanks for taking my questions, and appreciate the nice recap over the quarter. Just a couple of questions from 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 has something to do with the higher inflammation in fibrosis that you see a little bit earlier in the disease. Just wondering how you think about controlling all that sort of externality, if at all, or how that impacts the way you thought about the design of the trial?

Charles McWherter -- Chief Scientific Officer

Yeah. 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 just to kind of speak to the co-morbidity 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, kind of the inflammation, the recurrent pattern of infections, which is a common feature of PSC, is one likely incompletely described connection between the two diseases. And obviously, there's the underlying common autoimmune characteristics 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 has really just been able to develop a study design that had been informed by experience and the complexity of PSC study, not just population with concomitant IBD, as you've mentioned, but also study endpoints. 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 a position where the study will enroll patients who have IBD. 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 -- the physicians, the investigators involved in this study are very experienced in managing these patients. The tools that you use to evaluate their baseline IBD is very clear. There's 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, that 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, that there's gonna be any specific challenges relative to IBD in this study.

Ed Arce -- H.C. Wainwright & Company -- Analyst

Okay, great. That was very helpful background. I appreciate that. The only 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 endpoint 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 endpoints -- if perhaps maybe a composite endpoint or one or the other would most be likely for a pivotal study in PSC? Thank you.

Pol Boudes -- Chief Medical Officer

Hi, Ed, it's Pol. I think this discussion is ongoing on what is the appropriate endpoint for Phase III program. I think some people are favoring to have 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 definitive answer. The good thing I would mention is that the discussion between academia, the FDA, also the European authorities and sponsors -- so there is the liver program, 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 gonna be an interesting evolution.

Sujal Shah -- Chief Executive Officer

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 non-cirrhotic and cirrhotic PSC. And so, those subpopulations may lend themselves to different kinds of endpoints. If you're non-cirrhotic, 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, or maybe an evolution toward accepting noninvasive measures, which are clinically suspected cirrhosis, something like that, whether it be biochemical markers or a noninvasive test, whether it be a web biomarker or perhaps a measure like liver stiffness, something along those lines. So, I think that we're understanding that those two subpopulations really represent some interesting but somewhat different approaches in terms of what the endpoints might end up looking like.

Ed Arce -- H.C. Wainwright & Company -- Analyst

Great. Well, that's obviously helpful. I would think, even for rare diseases, moving away from a biopsy as a bottleneck is always gonna be helpful. Thanks for the comments.

Sujal Shah -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is coming from Joon Lee from SunTrust Robinson Humphrey. Your line is now live.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Hi. Thanks for the question. It appears that there's quite a bit controversy around liver fat reduction or lack thereof in the recently reported Phase IIb. Both of our liver specialists, 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 run phase to press the placebo effect in the pivotal study. And I have a couple of follow-ups. Thank you.

Sujal Shah -- Chief Executive Officer

Yeah, 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 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 drugs in key liver enzymes, both ELT as well as GGT, which the latter being really a very sensitive marker of oxidative stress. The magnitude, the dose order relation that we've seen, these are the things that I think are 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 the endpoints that will help define how we think about clinical development going forward.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

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 then what kind of correlation there between cT1 and histopathology?

Sujal Shah -- Chief Executive Officer

Great question. Yeah, cT1. Yeah, this is coming from the multi-parametric MRI technology from Perspectum called Liver Multiscan. 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.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Okay. And lastly, what are your plans for the end of Phase II meeting with the FDA prior to the Phase III study? 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? Thank you.

Sujal Shah -- Chief Executive Officer

No. I think ultimately, the plan given, histology forms the basis for the regulatory endpoints for Phase III. We'll wait until we read out histology and have the full 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.

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Great. Thank you so much.

Sujal Shah -- Chief Executive Officer

Sure. Thank you, Joon.

Operator

Thank you. As a reminder, it's *1 to be placed in the question queue. Our next question is coming from Mayank Mamtani from B. Riley. Your line is now live.

Mayank Mamtani -- B. Riley -- Analyst

Thanks for taking my question, and 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 that Gilead and others have 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?

Sujal Shah -- Chief Executive Officer

Yeah. 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 toward the dialogue with respect to thinking about clinical study designs and endpoints in the setting of PSC. So, it's been an ongoing effort. The group meets at least once or twice in the 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 will 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?

Mayank Mamtani -- B. Riley -- Analyst

Yeah, sure, sure. Obviously, we understand it's a heterogeneous population, but just on the cholestasis bit, my understanding is that the more advanced forms have that as the underlying disease drivers. 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, are you thinking, or other measures like liver enzymes?

Pol Boudes -- Chief Medical Officer

It's Pol. So, in terms of advanced disease, there are different ways you can approach that. I think the first dichotomy, if you want, is to have cirrhosis or non-cirrhosis. The study are going to complete will be in a non-cirrhotic patients, because the study population really -- it creates different kinds 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 are able also to look at the amount of fibrosis in the liver, and that's also a nice way to evaluate the patient 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 gonna 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.

In terms of cholestasis, we're gonna recruit the study on the AP level, so should be an elevation of the AP level. What is a little bit different from what we've done in PBC is that we are requesting patient to not have viable AP at baseline? So there will be a limit of AP that they should have during the screening period. And the last point, which is pretty similar than PBC, actually, is your level of the bilirubin. So that's also a convenient way to exclude patients who have 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.

Sujal Shah -- Chief Executive Officer

The only other thing I would add, and this is very common for contemporary studies, is the diagnosis and the staging of the patient with plan geography. So you use an imaging as one of a few available and commonly available used 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 structure, and make sure they have stable dominant structure; 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's -- as I've mentioned, Steve, and also of course, we have I think the best available input from KOLs and Ad Board. We've really, I think, focused in on the most modern and contemporary approach for appropriate selection of patients in this non-cirrhotic population.

Mayank Mamtani -- B. Riley -- Analyst

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

Pol Boudes -- Chief Medical Officer

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

Mayank Mamtani -- B. Riley -- Analyst

Okay, great. And then on PBC, and just piggybacking on the earlier conversation, and understanding your strong results earlier today, and with Janet on board, I mean, are there any work streams try to understand the under diagnosis 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?

Sujal Shah -- Chief Executive Officer

Yeah, 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.

Mayank Mamtani -- B. Riley -- Analyst

Great. Thanks for taking my questions.

Sujal Shah -- Chief Executive Officer

Thank you.

Operator

Thank you. We have 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.

Sujal Shah -- Chief Executive Officer

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 endpoint. 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 a profile of a therapeutic candidate that has a clinically meaningful effect on multiple markers of inflammation and liver injury, improved cardiovascular risk parameters, and thus far, is generally phased 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 two regulatory endpoints, NASH resolution and fibrosis. 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 medical 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.

Operator

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.

Duration: 53 minutes

Call participants:

Dan Menold -- Vice President of Finance

Sujal Shah -- Chief Executive Officer

Pol Boudes -- Chief Medical Officer

Charles McWherter -- Chief Scientific Officer

Eliana Merle -- Cantor Fitzgerald -- Analyst

Yasmeen Rahimi -- Roth Capital Partners -- Analyst

Steven Seedhouse -- Raymond James -- Analyst

Ed Arce -- H.C. Wainwright & Company -- Analyst

Joon Lee -- SunTrust Robinson Humphrey -- Analyst

Mayank Mamtani -- B. Riley -- Analyst

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