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CymaBay Therapeutics Inc. (CBAY) Q2 2021 Earnings Call Transcript

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CBAY earnings call for the period ending June 30, 2021.

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CymaBay Therapeutics Inc. (CBAY)
Q2 2021 Earnings Call
Aug 12, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, ladies and gentlemen, and welcome to CymaBay's second-quarter 2021 financial results and business update conference call. [Operator instructions] Please be advised that the call will be recorded at the company's request. It is also being webcast live on the Investors section at the CymaBay website at www.cymabay.com. Now I'd like to turn the call over to Mr.

Dan Menold, vice president of finance at CymaBay. You may begin.

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 our second-quarter 2021 financial results and business updates. 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.

Chuck McWherter, chief scientific officer; and Dr. Dennis Kim, chief medical officer. Following our prepared remarks, we will 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, regulatory approvals, funding and repayment schedules, anticipated time lines and trial enrollment dates, cash runway and planning for commercialization of any future products are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

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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 statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Participants are directed to the cautionary statements set forth in today's press release as well as risk factors set forth in the company'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

Thank you, Dan. Good afternoon, and thank you for joining us today. One year ago, we successfully gained regulatory clearance to restart clinical development of seladelpar. We did this with the staff of approximately 20 employees in the midst of the global pandemic that continues even to this day.

The second quarter saw us achieve significant milestones that have positioned us once again to attain our core objective of delivering innovative treatments to patients in need while also providing value to our shareholders. We added experienced talent across the functional areas vital to getting seladelpar to patients with primary biliary cholangitis, or PBC. This includes those executing all the necessary studies for global regulatory submissions, including RESPONSE, our global phase 3 study, and the many who are preparing us for regulatory filings, manufacturing product and commercial launch. Paramount to our plan, we have now also secured the funding needed to complete seladelpar's development through a nondilutive risk-sharing development funding agreement with Abingworth.

In this agreement, we have a partner with a long history of funding innovative and successful life sciences companies and who importantly shares our belief that seladelpar has the potential to meaningfully improve the treatment of patients with PBC. Underscoring this potential are the results in our latest presentation featured at the International Liver Congress in June, in those patients with cirrhosis, a more advanced stage of this rare life-threatening disease. On today's call, I will begin by summarizing key aspects of the development financing agreement with Abingworth and then ask Dennis to discuss the progress in RESPONSE and our most recent presentations at the International Liver Congress sponsored by the European Association for the Study of Liver Disease. Chuck will provide a brief update on our early stage pipeline programs, followed by Dan's summary of key financial highlights in the second quarter and first six months of the year.

We will have Q&A following our presentations. Our announcement of a nondilutive risk-sharing funding agreement with Abingworth highlights our commitment to find innovative means to support our mission of improved treatment alternatives to patients with chronic inflammatory liver diseases like PBC. Proceeds from this transaction are expected to support the completion of our development program for seladelpar in PBC, including the ongoing global phase 3 RESPONSE study and the long-term open-label ASSURE study up to the time of regulatory filings and various NDA-enabling studies as well. By securing this capital and strengthening our balance sheet, we are well-positioned to deliver on the promising opportunity ahead of us to deliver value to patients and shareholders.

Under the terms of the strategic development funding transaction, we will receive from Abingworth up to $100 million to fund the development of seladelpar for PBC, of which $75 million will be received in three installments over approximately the next six months. We have the option to receive an additional $25 million within approximately two months of the completion of enrollment of RESPONSE. In exchange, we will make fixed payments equal to two times the funded amount spread over a six-year period following the first regulatory approval in either the U.S. or the EU.

And in addition, sales milestone payments capped at 1.1 the funded amount based on U.S. product sales. Specific payment schedules for the regulatory and sales milestones are outlined in the 8-K filed with the SEC last week. We believe the terms including the repayment caps and back-end weighted repayment schedule in this agreement are some of the most favorable found in recent precedent transactions of this kind.

We also retain the ability to accelerate payment at a reduced amount upon regulatory approval. CymaBay retains upside potential for seladelpar in the U.S., along with full worldwide commercial rights. We examined a wide variety of funding vehicles and worked closely with outside financial and legal advisors in a competitive process before making a final selection. Commonly, risk-sharing funding agreements in biotech are for programs that are commercial or at least have regulatory approval.

We believe the level of interest from multiple parties reflects the significant efficacy and safety data generated to date for seladelpar in PBC. Finding a financial partner in Abingworth with the background to conduct significant diligence and come to a shared view of the long-term potential for seladelpar was key to consummating the deal. We are excited to have Abingworth's support as they have deep scientific operating and financial experience in biotech. Moving on to our key business updates.

Let me begin by reviewing RESPONSE before turning the call over to Dennis to discuss key milestones achieved to date and our focus going forward. Completing the development of seladelpar for patients with PBC remains our top priority. As a reminder, RESPONSE is a 52-week placebo-controlled randomized global phase 3 registration study, evaluating the safety and efficacy of seladelpar in patients with PBC. The study is intended to enroll 180 patients in a two-to-one randomization to oral once-daily seladelpar 10 milligrams or placebo as an add-on therapy to patients with an inadequate response or intolerance to first-line ursodeoxycholic acid therapy.

The primary outcome measure is the composite biochemical responder rate after 52 weeks for alkaline phosphatase and bilirubin, the same endpoint used to register Ocaliva, the only approved second-line treatment alternative for PBC. Two key secondary endpoints include the rate of normalization of alkaline phosphatase at 52 weeks and the change in pruritus from baseline to six months in patients with moderate-to-severe pruritus as reflected in a baseline pruritus numerical rating scale value of four or greater. As many of you know, the design for RESPONSE is based off our ENHANCE phase 3 study in which after only three months of dosing, seladelpar 10 milligrams demonstrated meaningful, statistically significant improvements in biochemical markers of disease and reductions in symptom burden in patients with PBC. In addition to enrolling the same patient population evaluating the same primary and key secondary endpoints and studying the same optimal 10-milligram dose of seladelpar as we did in ENHANCE, our plan is to leverage our prior experience and success by taking RESPONSE to over 20 countries and over 100 sites around the world.

In 2019, we randomized 265 patients in ENHANCE from first patient into last patient enrolled in approximately 11 months. Screening in RESPONSE, where we are intending, as mentioned, to enroll 180 patients was initiated at the end of the first quarter this year with our first patient randomization occurring in April. We set an aggressive goal for RESPONSE. And although our priority remains to complete enrollment in RESPONSE as quickly as possible with a continued focus on year end.

We were always aware that we would have to work through challenges presented by the global pandemic. As with any global study of this size in a rare disease such as PBC, enrollment begins slowly and accelerates as site activations and screenings begin to accelerate. Study start-up activities, including IRB and ethics committee approvals and site activations have been affected by the pandemic, even as effective vaccines have recently become available. Lately, the spread and evolving risks related to the Delta variant have added uncertainty and complexity to clinical research.

As we assess the impact of these developments, we have to be prepared to keep sites active and enrolling patients into the first half of 2022. We will provide additional guidance around enrollment time lines on a quarterly basis as we progress and as we gain greater clarity into the impacts of the pandemic and the effectiveness of initiatives we are implementing to address these challenges. I'll now turn the call over to Dennis to review our progress to date and our strategies to complete our phase 3 program. Dennis?

Dennis Kim -- Chief Medical Officer

Thank you, Sujal, and thanks also for the opportunity to participate in the first of what should be many CymaBay earnings calls to come. Before detailing the status of our pivotal phase 3 study, RESPONSE, I'll remind you, as Sujal did, that we enrolled 265 patients in ENHANCE in just under a year. Our goal has been to enroll RESPONSE targeting 180 patients by the end of this year. We, as a company, have a greater -- great deal of experience in PBC having conducted ENHANCE.

Even though we are targeting 80 fewer patients in RESPONSE, our intention is to put even greater effort into patient recruitment for RESPONSE to mitigate the challenges that COVID-19 is having on clinical studies, as well as having greater competition for patients. We're still in the earlier stages of this process and because patient enrollment typically increases quickly as more sites are activated, we expect to see meaningful growth in the number of patients screened and enrolled in the coming months, especially as study site personnel and potential study volunteers returned from their summer breaks. Due at least in part to these headwinds, it has taken longer than anticipated to get study sites activated. And if you look at clinicaltrials.gov, there are approximately 60 study sites in 15 countries activated to begin patient screening enrollment.

As we accelerate site activations in the coming months, we expect to see a commensurate increase in patient screening activities and enrollment numbers to follow. To overcome the challenges related to the pandemic compounded by intensified competition for patients, we are actively engaged in increasing the number of participating study sites across additional countries as well as efforts and programs to maximize the patient enrollment potential of study sites already identified and/or activated. As we come to these inflection points in site activation and patient screening numbers, in the near future, we will have a better grasp of our patient recruitment rate and be better able to project the study enrollment completion date. Before I hand things over to Chuck to discuss our pipeline updates, I'd like to quickly remind you of the recent seladelpar clinical abstracts and presentations made at the 2021 European Association for the study of liver diseases.

Increasingly, PBC patients with cirrhosis is an important substage of disease, as you may have been made aware of because of the recent label changes for Ocaliva in which patients with compensated cirrhosis and portal hypertension are now contraindicated. We have, for several years, been studying seladelpar as a potential treatment option across a spectrum of disease stages and severity of PBC, including in those patients with compensated cirrhosis. We recently presented an analysis of more than 50 PBC patients with compensated cirrhosis in a poster titled efficacy, safety, and tolerability of seladelpar in patients with compensated liver cirrhosis due to primary biliary cholangitis, a pooled analysis of phase 2 and phase 3 studies. And you can find this presentation on our website.

This pooled analysis of cirrhotic patients from the open-label phase 2 study and placebo-controlled ENHANCE study reported on three-month efficacy and safety of 5 or 10 milligrams of seladelpar. After three months, the efficacy, tolerability, and safety in patients with compensated cirrhosis had a consistent pattern and magnitude of biochemical response and liver biochemistry to that of noncirrhotic patients and importantly, was accompanied by a similar safety profile. These results are consistent with our previously reported seladelpar exposure data in PBC patients with cirrhosis, which showed no significant drug accumulation and more importantly, only nominal increases in PK parameters at the 10-milligram dose. A second clinical presentation demonstrated that in PBC patients with prior treatment with obeticholic acid or fibrates, seladelpar appear to be safe, well-tolerated and showed meaningful and dose-dependent improvement in biochemical markers of cholestasis.

In addition, PBC patients with prior treatment with OCA or obeticholic acid or fibrates, were as responsive to seladelpar as those who did not have prior exposure to these therapies. We are leveraging these exciting study results to educate and communicate with our study sites with an eye toward highlighting the overall efficacy and safety profile of the seladelpar and the potential benefits to be gleaned by RESPONSE study patients. Chuck?

Chuck McWherter -- Chief Scientific Officer

Thank you, Dennis. I'll be providing two updates today, one for MBX-2982 and internally discovered GPR119 agonist currently being studied in an ongoing phase 2 proof of pharmacology study in patients with type 1 diabetes and the other for CB-0406 which has just completed a phase 1 single and multiple-dose PK and safety study in healthy volunteers. Last quarter, we announced initiation of patient dosing of MBX-2982 in a two-period crossover pharmacology study using hypoglycemic insulin clamps to evaluate stimulation of glucagon release under conditions of low blood sugar. As a brief reminder, MBX-2982 is a GPR119 agonist discovered and developed by CymaBay.

It has completed five previous clinical studies, including in prediabetic and diabetic subjects. The product concept being investigated for MBX-2982 is an agent to potentially prevent hypoglycemia in patients with type 1 diabetes. The study is being conducted at AdventHealth Translational Research Institute in Orlando, Florida, and it's fully funded by the Leona M. and Harry B.

Helmsley Charitable Trust. CymaBay retains all rights to MBX-2982. This last quarter, patient recruitment has continued and is moving forward with the goal of completing recruitment for the approximately 30 subjects planned for the study. In addition to safety and tolerability, the primary endpoints are maximal glucagon release and glucagon area under the curve for MBX-2982 versus placebo treatment periods.

These results will guide our decision on whether to pursue further development for diabetic hypoglycemia. Moving now to CB-0406. This is the active metabolite of the prodrug arhalofenate that we had previously studied in diabetes and gout. CB-0406 is a PPAR gamma nonagonist ligand that attenuates the expression of inflammatory genes.

It has been shown to block innate immune sponsors through the NF-Kappa B and NLRP3 inflammasome pathways. In PK studies in monkeys, it was found to give greater exposure of CB-0406 than does the dosing of the prodrug, raising the possibility that it could be even more effective form of the drug for a wide variety of high unmet need disorders involving NLRP3. With this in mind, we have now completed a phase 1 single and multiple ascending dose study in healthy subjects examining its PK and safety. We were able to confirm that CB-0406 gave approximately dose-proportional increases in exposure for single doses from 100 to 1,000 milligrams and that its exposure were greater than those historically achieved with the prodrug arhalofenate.

The single doses had good safety and tolerability. The multiple ascending dose portion of the study explore daily dosing for 14 days of cohorts from 100 to 800 milligrams. It too confirmed a pattern of greater exposure for CB-0406 up to 800 milligrams, and it was well-tolerated and safe at up to 400 milligrams. However, and unexpectedly, dosing of 600 and 800-milligram cohorts led to one case each of moderate and severe thrombocytopenia, respectively.

Both subjects fully recovered without additional sequelae. It is worth noting that these findings were unexpected based on dosing of more than 1,700 subjects with the prodrug arhalofenate. Nonetheless, after consultation with experts and given the serious nature of the events, we have concluded that this is a development challenge that cannot be easily overcome. Accordingly, we have decided to stop further development of CB-0406.

We believe the program was well-conceived and achieved its goal of understanding the exposure and safety in a capital-efficient manner. Of course, we are disappointed because of the promise we believe the compound held, and we hope to be able to publish some of our preclinical research. Dan?

Dan Menold -- Vice President of Finance

Thank you, Chuck. As other members of the management team have highlighted in the first half of 2021, the company continued to accelerate efforts to execute its late-stage PBC development program for seladelpar and to advance other early stage programs in development. Our primary focus and most of our resources were directed toward PBC, where we continued to enroll patients in RESPONSE and ASSURE as well as other NDA-enabling phase 1 studies. As of June 30, the company's headcount grew to 50 employees as we successfully recruited key new clinical, regulatory and commercial talent.

Our recruiting efforts will continue in the second half of 2021 as we look to further augment our growing strategic and operational knowledge and capabilities, both of which will enable us to appropriately plan and prepare for critical future clinical, regulatory and commercial development milestones for seladelpar in PBC. Overall, we completed the quarter ended June 30, 2021, with cash, cash equivalents and short-term investments totaling $106.1 million. We believe our existing cash and investments, together with the initial $75 million in proceeds now available to us from the development financing agreement with Abingworth will provide sufficient capital to fund our current operating plan into 2023. Furthermore, the additional $25 million of development financing available to us at our option upon the completion of enrollment in RESPONSE would further extend our runway.

Turning now to a brief review of our operating results. Net loss for the three months ended June 30, 2021, and 2020 was $23.2 million and $10.7 million or minus $0.34 and minus $0.16 per diluted share, respectively. Net loss for the 6 months ended June 30, 2021, and 2020 was $40.8 million and $23.8 million or minus $0.59 and minus $0.35 per diluted share, respectively. Net loss during the three and six months ended June 30, 2021, was higher than the comparable period in 2020, largely due to increases in clinical operating expenses, which were incurred following the resumption of our clinical development of seladelpar in PBC during the second half of 2020.

In particular, cost increases were primarily driven by enrollment activities associated with RESPONSE and ASSURE, our two active global late-stage clinical trials in PBC. We expect our operating expenses to increase in 2021 as we continue to execute on our clinical development plans in PBC and as we further exploration of other clinical development opportunities. Finally, I'd like to provide you with a brief update on our current operating environment. Due to the ongoing impact of the global coronavirus pandemic, we continue to conduct operations remotely for all employees, which has allowed business activity to continue as seamlessly as possible.

While vaccination progressed worldwide through the second quarter of 2021 was encouraging, it is still ongoing, and the recent surge in COVID cases due to the Delta variant has led to uncertainty regarding the duration and effects that the pandemic will have on future operating milestones. Therefore, we will continue to closely monitor pandemic developments and their associated risks to our business, including our ongoing clinical development of seladelpar in PBC, and we will continue to take actions available to mitigate these risks where possible. As always, all our actions will continue to be guided by a commitment to ensuring the health and safety of our employees as well as patients enrolled in our clinical studies. Sujal?

Sujal Shah -- Chief Executive Officer

Thank you, Dan. As we have discussed today, all of us at CymaBay remain centrally focused on our opportunity to bring seladelpar to patients with PBC. The development funding agreement with Abingworth enables us to execute on the necessary tasks required for us to complete phase 3 development and position the company for future success. Our prior experience and the rich data sets we have generated to date, highlight what we believe to be a significant opportunity to improve upon the very limited treatment alternatives that exist for PBC patients today.

We remain steadfast in our commitment to patients, and we are confident in our team's ability to meet the global challenges we are facing today. We're now happy to take questions. Operator?

Questions & Answers:


Operator

Thank you. [Operator instructions] Our first question comes from Yasmeen Rahimi with Piper Sandler. Please proceed with your question.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Thank you so much, team, for all the updates. Maybe the first question I had for you, you commented, Dennis, on that additional sites. You're interested in opening additional sites beyond the 60 that are listed on clinicaltrial.gov. Can you maybe give us a perspective on sort of the totality of new sites that you hope to initiate? And then the second question I have for you is -- and this is maybe directed to Sujal.

Can you maybe provide us with some color on all the work that's being done on sort of commercial preparedness and market research and payer discussions? What type of activities are ongoing and to the extent you can share some of those findings. So that would be very helpful.

Sujal Shah -- Chief Executive Officer

Yes. Thank you, Yas. I appreciate the questions. Generally speaking, as we've discussed, in ENHANCE, as we've had an opportunity to initiate a study and randomized a full phase 3 study previously with 265 patients, we did so in over 20 countries with over 100 sites.

And so although in RESPONSE, we're targeting 80 fewer patients, we recognized at the outset, the challenges that the global pandemic would present and we do have greater competition for patients today. So our approach has always been to have a study size with country mix as well as number of sites on par with what we had with RESPONSE. We're dedicated to this effort. The capital that has come into the company through the Abingworth funding agreement allows us to execute on a strategy at the same scale as we had for ENHANCE.

So ultimately, in RESPONSE, we fully expect to have north of 100 sites activated and screening patients in this trial. I think you also had some questions around just thinking through the future opportunity for us to share some of the insights around the market opportunity for seladelpar. I think we've been very focused with our clinical studies in an approach to get seladelpar to as many patients that we fundamentally believe can benefit from the drug. Clearly, we think that seladelpar has the opportunity to be the preferred second-line treatment alternative of choice.

But we've been doing a significant amount of work around thinking about expanding the addressable patient population, additional data sets that would continue to support, a broadening of that addressable patient population. Some of that, in fact, we had an opportunity to present at EASL, now albeit relatively early data, the significance of having had 50 patients with cirrhosis in prior clinical experience, albeit a relatively smaller patient population with PBC is a meaningful and promising data set that we continue to expect to expand and have an opportunity to speak more about in the future. Yasmeen, we will look toward the end of this year in and around AASLD in November to actually hold a PBC Analyst Day. That would give us an opportunity to share with the Street and with all of our constituents how we view the overall market, how we view patient populations in PBC and how we think about positioning seladelpar long term.

So we'll look forward to having that opportunity to share much more with you toward the second half of this year.

Yasmeen Rahimi -- Piper Sandler -- Analyst

That's great. Thank you so much for sharing that, and we very much look forward to it.

Sujal Shah -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Steven Seedhouse with Raymond James. Please proceed with your question.

Steven Seedhouse -- Raymond James -- Analyst

Good afternoon. Thank you. It looks like there's a new executive review committee comprising CymaBay and Abingworth that extends from the recent financing. I was hoping if you could just comment on how that's structured? What role that committee will have in the current phase 3, but also any future development or commercialization decisions related to seladelpar in PBC or beyond PBC?

Sujal Shah -- Chief Executive Officer

Yes. It's a great question, Steve. So importantly, the agreement was struck to really fund the remaining development of seladelpar. And as we know, the phase 3 study RESPONSE is really built off of our prior clinical experience in ENHANCE.

We're studying the same patient population, the same optimal dose of seladelpar and the same primary and same two key secondary endpoints. So the executive committee is really there to continue to have discussions around any meaningful changes to the existing clinical development strategy. I think we're well set on what we believe we need to execute to get seladelpar approved. So fundamentally, it's really a joint committee for us to continue to have the discussions around the progress of the study and any different decisions we would make from here toward the path of filing an NDA.

I think as we've disclosed, this risk-sharing agreement is such that Abingworth carries the risk of clinical and regulatory success. And so that's really where both groups are focused with this executive committee. I think I'd also want to point out, Steve, that Abingworth is a group that has rich technical and scientific experience as an investor. A number of folks within the organization there, in fact, have also diligenced the space and various targets in this space.

And our opportunity to leverage that experience, that broad set of experience across the industry is something that we think is valuable even through this committee.

Steven Seedhouse -- Raymond James -- Analyst

OK. That's great. And a multipart question just on phase 3 PBC study. As you're monitoring patients coming in, I'm curious if the number of patients volunteering or electing for biopsies at baseline, has sort of met your expectations to accrue the type of data you'd want to accrue in that study from biopsies.

And similar question just on enrollment of cirrhotic patients. And if the label change for Ocaliva is having an influence on patients maybe funneling in that are cirrhotic looking for alternatives.

Sujal Shah -- Chief Executive Officer

Yes. Good questions, Steve. I think I'll let Dennis talk a little bit about where we are with the study and how we continue to progress. And perhaps Chuck can provide some commentary around the cirrhotic data that we have and some of the recent updates with respect to Ocaliva.

Dennis Kim -- Chief Medical Officer

Yes. With respect to the number of biopsy that we would have in the RESPONSE study, I think it's a little too early to be able to predict just how many patients we would have in that category. Suffice to say that we're going to monitor that number closely so that we can come close to what the FDA would expect to see. So we'll be able to tell you more about it in a later date.

Chuck McWherter -- Chief Scientific Officer

Steve, thanks for the question on the cirrhotic patients. Patients with compensated cirrhotics according to our estimates, which are based on our clinical studies as well as access to information coming out of the global PBC study group as well as U.K. PBC cohort, it's about 25% of patients. And so that's a stage of disease, which is more advanced and for which patients do need treatments to respond to agents that could improve bile acid homeostasis, the anti-inflammatory and importantly, affect patient symptoms.

So this is an area that we've been fortunate now as having dosed over 315 patients with seladelpar who have PBC with a good body of cirrhotic experience. More than 50 of those have been dosed many past a year and some even out to two years. We continue to look at both the efficacy side as well as safety. In terms of -- now to your question, is that influencing patient interest in the study? I think that's hard -- something hard to really gauge.

I do believe that this is an area that we'll continue to collect data sets on. And we're really committed to understanding seladelpar across those stages. And if we're able to confirm what we've seen thus far, I think that's something that will be interesting in terms of the treatment alternative for patients with that more advanced stage of disease.

Steven Seedhouse -- Raymond James -- Analyst

All right. Thank you.

Operator

Our next question is from Patrick Dolezal with LifeSci Capital. Please proceed with your question.

Patrick Dolezal -- LifeSci Capital -- Analyst

Hi. Thanks for taking the questions. So as it relates to the nondilutive financing transaction, could you just provide us with some background surrounding the decision-making process and selecting this type of financing versus other options? And then speak to whether it was a competitive process that enabled the terms that were attained. And then with respect to the MBX-2982 program, can you just remind us of the timing of initial data and perhaps characterize what a successful readout would look like in this initial phase 2a?

Sujal Shah -- Chief Executive Officer

Yes. Thanks for the questions, Patrick. So we've always been focused on continuing to surround the seladelpar story and the company fundamentally with long-term oriented investors. And I think we've been quite successful at it.

We're quite proud of the shareholders we've had over the years and that we have today. As we turn the corner into the beginning part of this year and initiated our new phase 3 study RESPONSE, we always had it as our objective to make sure that we had capital to complete the entirety of the study and really position the company to file an NDA upon success. So as we evaluated throughout the year, various sources of capital, I'm happy to say that we do believe we had multiple different alternatives that we could have triggered. We did an analysis fundamentally on cost of capital as we explored the structured financing alternatives relative to many of the traditional pads to raising capital as even we've followed in the past.

I think based on our own valuation and the disconnect between our valuation and what we believe the long-term potential value opportunity is for seladelpar, we ended up running a process, given we had multiple inbound interest around these risk-sharing funding agreements. So the process, in fact, was quite competitive. As we mentioned in our press release last week, we had hired financial advisors to run a full process. And actually put us in a position to evaluate and finalize an agreement that I think for our shareholders provides capital at the lowest cost of capital available to the company today while also bringing in significant expertise.

When you look at risk-sharing funding agreements, as I mentioned in the prepared remarks, typically, even these are done for companies that already have commercial products or at least already have drug approval and are about to launch. In our case, of course, Abingworth is willing to take some risk in terms of crossing those hurdles, clinical, and regulatory success. And fundamentally, we think that the capital here provided in this funding agreement, in fact, again, in the backdrop of multiple recent agreements that have been struck is perhaps some of the best terms than we've seen in this market. We talked in the remarks about a total cap return of 3.1, inclusive of regulatory milestone repayments as well as sales milestone repayments.

That's approximately 1 to 1.5 turns lower than many of the recent comparable transactions that have been done. So we felt that this was really a transaction that provided the best terms to the company relative to many other transactions that have been done of this style and was in the best interest of our own shareholders going forward.

Chuck McWherter -- Chief Scientific Officer

Yes. So maybe I'll answer the question about MBX-2982. I think there's three points to bring up. Just to give you a little bit of background on the nature of the agreement.

Secondly, to talk about the timing, which you asked about. And third, just to speak a little bit to what we could think of success factors would look like. So we were approached by the Helmsley Trust who has an interest in type 1 diabetes from a philanthropic point of view. And really their only needs are to advance knowledge in the space and potentially to advance patient care.

And together, we concluded an agreement where we provide expertise and clinical trial material as well as regulatory expertise, and we're compensated for that. So there's no capital from us on that. And they engaged TRI, which is a clinical CRO that has deep expertise in metabolism and diabetes to conduct the study. So what that means is we're a collaborator, but we're not actually running the study.

And so this CRO is responsible for recruiting patients, executing the study and meeting all the needs to conduct and get to a quality data set. And so from that perspective, that kind of plays into your question around timing. There's about 30 subjects in this two-period crossover study, and we still continue to believe that the goal is to recruit the study this year, but which would mean that the data would be available toward the end of this year or early next year. That's a little bit outside our control, but we do have confidence that the TRI is really committed to doing this, and we hope that we'll be able to give you an update as we proceed into the fourth quarter.

So what does success look like? I think the design of the study, which is designed to replicate the effects of 119 agonist seen with isolated human islets as well as in rodent studies is really to understand that their low blood glucose conditions, can we elaborate compared to placebo, levels of glucagon that say are in the regimen of what you would see in a healthy volunteer. And so I think that's really kind of the benchmark. We don't have a specific number. We would let the data and the quality of the data really inform a decision.

Ultimately, what matters is the ability of the glucagon release to increase blood glucose levels when you're under conditions of hypoglycemia. So I think that's -- I would direct you to think about glucagon levels and the response of glucose as being the key success factors that we would look together with experts in the area to make a decision about whether this would make sense to explore in further studies for diabetic hypoglycemia.

Patrick Dolezal -- LifeSci Capital -- Analyst

Great. Thanks for taking the questions.

Operator

Our next question comes from Jay Olson with Oppenheimer and Company. Please proceed with your question.

Matt Hershenhorn -- Oppenheimer & Co. Inc. -- Analyst

Hey. This is Matt Hershenhorn on for Jay Olson. Thanks for taking our questions. We were just curious what physician feedback you might have gotten from the recent analyses presented at EASL? And how that might inform your current thinking about the potential market opportunity for seladelpar.

And I think you mentioned in cirrhotic patients as well. And then we had a follow-up as well to that. I really appreciate it.

Chuck McWherter -- Chief Scientific Officer

Well, thanks for that question, Matt. I think as I've tried to highlight in my earlier answer, I think you're on to something -- I think there's of course, an obvious high unmet need for patients with PBC, especially those with cirrhosis. Given the recent alterations to the adjustments to the label for Ocaliva, no doubt there is a heightened interest in having an agent that might be able to be used in patients with cirrhosis. I'd also mention that, of course, these are fibrate as well as fenofibrate are used off label in that population.

And the labels do include language around concerns around patients with advanced liver disease. So that remains an area that those particular agents have not been in randomized controlled trials has been systematically de-risked in terms of their use in cirrhotic patients. So that's kind of the feedback. I think we've had advisory boards.

We've had discussions with our experts. And I think they're encouraging us to continue our studies to confirm and expand the profile that we've been able to see so far. So I think that's really where our focus is going forward is to make sure we understand seladelpar across the spectrum of disease.

Sujal Shah -- Chief Executive Officer

Yes. And I think the only thing I'd add here, Matt, is the sentiment from those in the medical community, as we've been developing seladelpar in PBC since 2015, it has continued to be consistent. I think they appreciate the fact that we've run multiple studies in PBC, continue to generate data sets that we share at multiple medical meetings really in full transparency with the interest of trying to meet the needs of patients. So as we continue to have these presentations and as we will look to have more through the rest of this year from the very rich data sets that we continue to mine, the relationship that we have with those in the medical community is very close.

We seek their input as Chuck mentioned, at advisory committee panel meetings frequently. And much of the discussion continues to turn around how we can think about addressing the needs of broader sets of the patient population. This is something of significant interest among many of the experts as well. So we're going to continue to work closely with them so that we can, in fact, continue to generate data sets that broaden that opportunity for seladelpar.

Matt Hershenhorn -- Oppenheimer & Co. Inc. -- Analyst

OK. Got it. Makes perfect sense. And the other question I had was just what your current thinking is on partnership opportunities potentially in PBC, ex U.S.? And also for NASH and PSC, you're current thinking there, that would be great.

I appreciate it.

Sujal Shah -- Chief Executive Officer

Yes. I think with respect to PBC, in fact, we are now entrenched in a significant amount of work. As I mentioned, we'll look to doing a PBC Analyst Day later this year and just evaluating the market opportunities for seladelpar outside the U.S., not just in Europe, but more broadly outside the U.S. as well.

Fundamentally, we believe RESPONSE positions us for regulatory approval in both the U.S. and in Europe. And so on the basis of that, we're going to continue to march forward with the strategy of taking seladelpar at least to patients in the U.S. ourselves.

and also continue to assess the level of interest and strategies to get seladelpar in the hands of as many patients outside the U.S. as possible. And some of that will very likely come from potential partnerships. So those continue to be explored.

We recognize that this is something that we'll continue to speak to you about at upcoming calls and as we do more work here as well.

Matt Hershenhorn -- Oppenheimer & Co. Inc. -- Analyst

OK. Got it. Thanks again for taking the questions. Congrats on all the progress.

Operator

Our next question is from Alethia Young with Cantor Fitzgerald. Please proceed with your question.

Emily Bodnar -- Cantor Fitzgerald -- Analyst

Hi. This is Emily on for Alethia. Thanks for taking our questions. I'm curious what a long-term safety data are you specifically looking for in the ASSURE study? And has the FDA asked you to focus on anything there since you mentioned that it's needed to file with the NDA?

Sujal Shah -- Chief Executive Officer

Yes. Happy to answer the question, and I may ask Dennis and Chuck to jump in if I miss anything. Fundamentally, as we think about NDA filing, of course, the RESPONSE is our key phase 3 registration study. But as is required, we need to have as robust of a safety database as we can as well.

We think we're advantaged here with ASSURE. We've, in fact, collected significant amount of patient data with patients taking seladelpar longer than even one full year out to two and three years. And ASSURE gives us the opportunity to collect that longer-term safety data as well as collect efficacy data even in this open-label study. There's nothing special that the agency has asked us to monitor in ASSURE.

This is a standard open-label study just to continue to collect patient experience and patient safety long term commensurate with the timing of our phase 3 study in alignment with that timing, so that we're prepared to file an NDA with as large and robust of a safety database as possible. We actually think relative to others in the field that we're likely to have as large, if not larger safety database that's ever been assembled at the time of NDA filing. So fundamentally, we think it's just an advantage for us. But nothing special or in particular, the agency has called out in ASSURE.

Operator

Our next question comes from Thomas Smith with SVB Leerink. Please proceed with your question.

Unknown speaker

Hi, everyone. This is Mike on for Tom. Just on the subject of enrollment for the RESPONSE study. To what extent are you seeing drag on enrollment from the other ongoing phase 3 and confirmatory PBC studies competing for these second-line patients? And more specifically, at this point, do you feel that the impact of competing for patients against these other ongoing studies is actually outweighing the impact from COVID?

Sujal Shah -- Chief Executive Officer

That's a great question. I think at the outset, we've been very clear that we recognize that as we initiate and execute RESPONSE, we're really facing two key headwinds. And really, the first is, in fact, the global pandemic. And the second is more competition for patients than we had previously.

I would fundamentally say that really the No. 1 headwind, of course, is the global pandemic. We see slowdowns in IRB and ethics committee approvals that ultimately impacts our ability to get sites activated. Some of the challenges that I think many others in the space have been experiencing as well in terms of staffing at various clinical sites impacting time lines.

I think these are, in fact, the most robust challenges we're facing. With respect to competition, I think here, we have an advantage. Of course, competing for patients is also something that we're working through. But one of the things I think we're advantaged around, again, is the significant data set with seladelpar.

There's great experience in the medical community using seladelpar in PBC patients. There's very significant patient experience, particularly relative to other phase 3 study that's ongoing. And that, I think, again, is a significant advantage for CymaBay and for seladelpar and for the execution of our study. Having said all that, we recognize this is a rare disease and there are fewer patients.

And so it's important for us to leverage those relationships to route leverage the experience we've specifically had. I think you'll see us go, in fact, to countries where some of these other studies actually are not initiated or enrolling. And some of that actually comes from our prior experience as well. So fundamentally, I can't say it's a quantitative answer to your question.

But I think the challenges of the global pandemic are more broad and more significant perhaps.

Unknown speaker

Got it. Thanks very much, and appreciate you taking our questions.

Operator

Our next question comes from Mayank Mamtani with B. Riley. Please proceed with your question.

William Wood -- B. Riley FBR -- Analyst

Hi. Yes. This is William Wood on for Mayank Mamtani. I was just thinking broadly, you're going after -- in your RESPONSE study, you're going after an intolerance group to the UDCA.

Do you think you can make a case for first-line therapy?

Sujal Shah -- Chief Executive Officer

That's a good question. I think first important for me to point out that the vast majority of patients that take UDCA and require second-line treatment are, in fact, patients that have an inadequate RESPONSE. The relative proportions or estimated proportions of patients that are intolerant to UDCA may be as small as 5% to 10%. So it's not nearly the majority of the patient population.

In order to actually -- and so the label, of course, in this setting, nevertheless, would allow for the use of seladelpar in patients intolerant to UDCA in addition to on top of UDCA for those that are inadequate responders. That is how the study population is set and how we would envision ultimately the label and use. To really be first-line treatment ahead of UDCA. UDCA, I'll remind you, has actually been approved on outcomes.

The approval pathway here for seladelpar in what is a very slowly progressing disease is accelerated subpart H approval. And so when we think about expanding the use case and the patient population for seladelpar, it's really thinking about patients that still have elevated alkaline phosphatase, even if it's not above 1.5 or 1.67 times the upper limit of normal, where we know that additional decreases in biochemical markers of disease can translate into improvements in long-term outcomes for patients. Those are segments of patients that are not classically defined as second line that we think can potentially benefit from seladelpar. And so those are some of the areas we think about in the future of generating data sets to support that potential use case.

William Wood -- B. Riley FBR -- Analyst

Excellent. And then how are you evaluating NRS in your RESPONSE study? And how might an itching specification or specific differentiation possibly make it to the label?

Sujal Shah -- Chief Executive Officer

Yes. So I think here, we're using an electronic diary and having patients record their worst itch in a 24-hour period by using the numerical rating scale, a scale of zero to 10. That's ultimately how we're actually collecting the data and we're collecting it over six months. And so the key secondary endpoint in the study is to compare the change in itch from that six-month period to baseline in these patients.

So similar experience, similar -- the same endpoint as we had, of course, in our ENHANCE study as well. So we've got -- we've had good experience, good compliance from patients in collecting the NRS. I will point out that although that endpoint is of key importance to regulators, we're also collecting additional PROs, the 5D itch scale, the PBC 40 questionnaire, these are validated itch scales in the setting of PBC. I think all of this upon potentially successfully once again hitting the pruritus endpoint as we did at 10 milligrams versus placebo and ENHANCE, I think, really positions us well to have a key differentiator in the setting of PBC.

There are no drugs approved for pruritus in PBC patients. UDCA has not shown a benefit, first-line treatment here is not necessarily shown a benefit on itch. And we also know that second-line treatment with Ocaliva can cause or worsen itch. So we think if we're able to once again, as we did in three months in the ENHANCE study show a statistically significant benefit on itch and RESPONSE that it really could be a game changer for patients and really meaningfully impact and improve the quality of their life beyond any treatment alternatives that they have access to today.

Dennis Kim -- Chief Medical Officer

And if I might add, because this is an important endpoint for us and for the patients, especially, we've gone a little bit beyond what we need to in terms of powering for the study such that we're powered adequately for pruritus outcomes as well as well as the primary efficacy outcome of the composite response. So we're hopeful and encouraged that we'll see a real change benefit on this endpoint at the end of RESPONSE.

William Wood -- B. Riley FBR -- Analyst

Excellent. Really appreciate that. And then last question, you just received, obviously, a large amount of nondilutive funding. Do you think that can allow you to be more creative in building a pipeline? And then, if yes, what sort of external programs might make strategic sense given the company's mission and vision.

Sujal Shah -- Chief Executive Officer

Yes. Good question. So to be very clear, this funding agreement is specifically for seladelpar in PBC. So the proceeds of the non-dilutive transaction with Abingworth are all centered around this capital being dedicated to get seladelpar across the finish line in PBC.

It does, however, to your point, open us up to other sources of capital and future sources of capital to, in fact, continue to expand our pipeline. First and foremost, I want to say that we all here at this company believe we should be centrally focused on seladelpar in PBC, first and foremost. From that, we firmly believe we can continue to build upon success. You've seen us creatively find ways to move other programs, the MBX-2982 phase 2a study being fully funded by the Helmsley Charitable Trust is an example of exactly that.

I think all of this continues to allow us to focus other potential future sources of capital as we look for other assets. We've built a long history and success here and focusing on inflammation and fibrosis, particularly in liver disease. But that expertise really broadens even beyond that. I think fundamentally, we'd like to continue to stay focused on rare disease settings with high unmet need, but these will be things that we continue to explore in the future.

William Wood -- B. Riley FBR -- Analyst

Thank you so much, and thank you for taking our questions today. Appreciate it.

Sujal Shah -- Chief Executive Officer

Thank you.

Operator

Our next question comes from Ed Arce with H.C. Wainwright. Please proceed with your question.

Thomas Yip -- H.C. Wainwright & Co. -- Analyst

Hi. Good afternoon. This is Thomas Yip calling in for Ed. Good to see the progress with PBC studies.

With RESPONSE, enrollment impeded by COVID, it sounds like full enrollment by year-end 2021, is it still possible but can kick over some pressure points where renew COVID restrictions could impact time lines?

Sujal Shah -- Chief Executive Officer

Yes. Thank you for the question. Look, I think important here, as we've discussed in the past, it's not atypical to experience exponential growth in enrollment in clinical studies of this kind. This is a global clinical study ENHANCE to give you some idea in the first four months of approximately 12 months that we took to randomize 265 patients, we had about 5% to 10% of the total patients enrolled in the first four months.

It gives you some idea that it's not atypical to see a lower start because, of course, you have only a few activated sites when you begin. If you've looked closely over the last couple of months, we've actually added a meaningful number of sites and continue to be very encouraged. That's an area that we're focusing today. So when you talk about pressure points, some of those we're trying to alleviate are slow turnaround times in contracts and getting sites fully activated.

So those are some of the areas in which we know that with our concerted effort and our prior experience, we can be successful at really seeing a further acceleration in site activations, which ultimately leads to an increase in screening and then randomization. So as you pointed out, we're very focused on completing the enrollment in this study as quickly as possible. We continue to keep our eyes toward progress through the end of the year. But I think importantly, because there are unknowns, particularly as the Delta variant continues to spread.

Given those unknowns, we also know it's important for us to make sure we message to our sites that we may, in fact, have to keep sites active and enrolling patients into the first half of next year. So that's our mindset. We want to get this study enrolled as quickly as possible. For now, we're focused toward year-end, but recognizing that some of the uncertainty with respect to the pandemic, additional restrictions in various countries.

Of course, we're very likely to have some impact as we continue to progress further. So we'll look to future quarterly updates to provide more clarity as we gain it as well.

Thomas Yip -- H.C. Wainwright & Co. -- Analyst

That makes a lot of sense. Speaking of clinical sites, you mentioned there are over 60 open today. Are there any plans to open sites in China and Japan?

Dennis Kim -- Chief Medical Officer

As you can see in clinicaltrials.gov, those two countries are not on the list of activated countries. So we will give you more updates as we see them.

Thomas Yip -- H.C. Wainwright & Co. -- Analyst

Understood. Thank you so much. Thank you again for taking our questions and look forward to [Inaudible] this year.

Operator

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Mr. Shah for closing comments.

Sujal Shah -- Chief Executive Officer

Thank you, operator. We appreciate all of you joining us today. As we move into the second half of the year, I'm confident in our team's experience and focus and in our ability to leverage relationships we have built over years with investigators and patient advocacy groups in PBC. As I mentioned, we will also be mining the rich data sets we have gathered through our prior phase 2 and phase 3 studies and look to share any meaningful updates at future medical meetings later this year.

And as we approach AASLD, we will also look to hold a PBC Analyst Day, where we will highlight how we have sized and evaluated the potential market opportunity for seladelpar. We look forward to providing these further updates to you as we progress through the year. Thank you.

Operator

[Operator signoff]

Duration: 70 minutes

Call participants:

Dan Menold -- Vice President of Finance

Sujal Shah -- Chief Executive Officer

Dennis Kim -- Chief Medical Officer

Chuck McWherter -- Chief Scientific Officer

Yasmeen Rahimi -- Piper Sandler -- Analyst

Steven Seedhouse -- Raymond James -- Analyst

Patrick Dolezal -- LifeSci Capital -- Analyst

Matt Hershenhorn -- Oppenheimer & Co. Inc. -- Analyst

Emily Bodnar -- Cantor Fitzgerald -- Analyst

Unknown speaker

William Wood -- B. Riley FBR -- Analyst

Thomas Yip -- H.C. Wainwright & Co. -- Analyst

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