Intercept Pharmaceuticals, inc (ICPT) Q3 2021 Earnings Call Transcript

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Intercept Pharmaceuticals, inc (ICPT)
Q3 2021 Earnings Call
Nov 3, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2021 Intercept Pharmaceuticals Earnings Call. [Operator Instructions] I would now like to turn the call over to your host, Lisa De Fracesco, SVP, Investor Relations and Corporate Affairs. You may begin.

Lisa DeFrancesco -- Senior Vice President of Corporate Affairs & Investor Relations

Thank you. Good morning, and thank you for joining us on todays call. This morning, we issued a press release announcing our third quarter 2021 results and financial position, which is available on our website at www.interceptpharma.com. Before we begin our discussion, Id like to note that during our call, we will be making forward-looking statements, including statements regarding our approved product and clinical development program; certain regulatory matters; and our strategy prospects, financial guidance and future commercial and financial performance. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this call, and we undertake no obligation to update such statements, except as required by law. These forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties.

Some but not necessarily all of the risk factors that could cause our actual results to differ materially from our historical results or those anticipated or predicted by our forward-looking statements are discussed in this mornings press release and in our periodic public filings with the SEC. Todays call will begin with prerecorded prepared remarks from our President and CEO, Jerry Durso; our Chief Commercial Officer, Linda Richardson; President of Research and Development and Chief Medical Officer, Dr. Michelle Berrey; and Chief Financial Officer, Andrew Saik. Additionally, available today for Q&A purposes are Dr. Gail Cawkwell, Senior Vice President, Medical Affairs, Safety and Pharmacovigilance; and Dr. Paul Nitschmann, Senior Vice President, Regulatory Affairs. [Operator Instructions] Let me now turn the call over to our CEO, Jerry Durso. Jerry?

Jerome Durso -- President, Chief Executive Officer & Director

Thanks, Lisa, and good morning, everyone. Thank you for joining us on our third quarter 2021 earnings conference call. As we near the close of 2021 and my first year as CEO of INTERCEPT, I would like to start by reflecting on the great progress that weve made against the main objectives that we set out to achieve at the start of this year. First, to continue growing our foundational PBC business with Ocaliva. Second, to execute on our clinical and regulatory goals, including progressing our clinical development program in advanced fibrosis due to NASH. Third, to expand our portfolio and advance our internal pipeline. And finally, to improve our operational and our financial foundation to support our path forward. Regarding our first objective, driving growth in our PBC business, we continue to see the strength and resilience of Ocaliva. As a reminder, the third quarter was the first full quarter since updates to the U.S. label were finalized at the end of May.

We reported third quarter sales growth of 17% over third quarter last year, and as a result, have increased our sales guidance for the year. In a few minutes, Linda and Andrew will share additional details about our commercial performance and our outlook for the remainder of the year. Now that weve worked through our label update in the U.S., I have strong conviction in our ability to continue to expand and grow this business long term. Weve also made great progress executing on our clinical and regulatory goals. In our NASH program, we remain on target to generate the largest data package in the field to support a potential resubmission of our NDA for OCA for the treatment of advanced fibrosis due to NASH. These important data will determine our path forward in NASH. We anticipate the data generation process could continue into the early part of next year. And if we believe the data support accelerated approval, our goal would be to have a pre-submission meeting with FDA during the first half of 2022.

We also anticipate top line data from our Phase III REVERSE trial, which is assessing OCA in patients with compensated cirrhosis due to NASH near the end of this year. Weve also been working to expand our portfolio by advancing our pipeline and looking for opportunities to leverage our strengths. As we announced last quarter, weve initiated the first-in-human study for our next-generation FXR agonist, INT-787, and continue to advance our Phase II work for the OCA bezafibrate combination program in PBC. Michelle will share more details on our progress across these programs. Importantly, in addition to making great progress on this years objectives, weve also significantly strengthened our operational and financial foundation. We remain prudent with our expenses and reduced our cost structure, resulting in a narrowed operating expense guidance that we announced this morning.

We also successfully exchanged the majority of our near-term debt to address the maturity of 2023 convertible notes. Furthermore, we significantly reduced our burn rate, and were in a strong cash position with another cash-positive quarter. These are critical steps as we enter the next phase of Intercepts journey, where, as we previously said, we will be making data-driven decisions in defining the strategic path for the companys future. This path could be supportive of either the pursuit of accelerated approval in NASH; or if the data do not support it, a focus on a profitable and growing rare disease business. Our solid foundation will allow us to focus on becoming a strong, successful company over the long term. With that, Im going to turn it over to Linda, who will talk about our commercial performance this quarter. Michelle will then provide an update on our regulatory and R&D activities, and Andrew will conclude with a review of our financial performance. Linda?

Linda Richardson -- Executive Vice President & Chief Commercial Officer

Thanks, Jerry, and thank you to everyone whos making time to join us today. As you saw in our press release this morning, our foundational PBC business once again demonstrated solid performance in both the U.S. and international markets in the third quarter and year-to-date periods. During our last earnings call, we indicated that we expected to see the impact of our label change in the U.S. business in the third quarter, and Ill be providing some commentary on this now. First, the U.S. commercial and medical affairs teams did a great job as they work to educate healthcare professionals on the new label. We effectively reached our prescribing targets within the first three months following our receipt of the revised label, and now our sales team has fully pivoted back to promoting Ocaliva for eligible patients. Second, our data show that many of the patients who are discontinuing Ocaliva are on a treatment regimen of once or twice weekly dosing, which has a lower volume impact.

These are the patients who should discontinue given our revised labeling. Third, we have not seen a significant impact beyond the label population, which you can sometimes encounter with implementing a label update. Weve undertaken market research to assess healthcare provider reactions to our revised label, and the feedback has been consistent. Physicians report that they are aware of the new label and understand who the appropriate patients are for treatment with Ocaliva. Furthermore, through discussions with our sales team, community gastroenterologists, in particular, noted that they were not typically treating patients who had decompensated cirrhosis before the label change. Therefore, there is less impact on their patient selection post label change. At the time the label was updated earlier this year, we had estimated that 10% to 15% of our Ocaliva population could be impacted. We anticipate that this ultimately will be at the lower end of that projected range.

Furthermore, based on current trends, we believe that the impact of the label update on existing Ocaliva patients will be largely realized by the end of this year. Moving forward, we are now focused on new patient starts, which we have seen weakened since the beginning of COVID and through the label change. We continue to see significant opportunity in our core PBC business given the vast majority of patients requiring second-line therapy remain eligible for treatment with Ocaliva. The ability to share compelling new data with our PBC prescriber community is fundamental to our beyond ALP messaging. In September, we began sharing educational materials that highlight new data from our cohort of Ocaliva patients who remained in the open-label extension phase of the POISE trial. These data show a stabilization of fibrosis over five years.

In a progressive disease like PBC, stabilization is resonating with our healthcare providers and feedback has been very positive. Just a quick word on our compelling international business performance as we had another solid quarter with sales up 25% over last year. We continue to experience increasing growth in new patient starts and adoption of Ocaliva as compared to last year. Multichannel execution has been a strong focus for us, and we see excellent engagement with our customers across regions. We do anticipate a label change in our international markets in late 2021, with implementation to follow in 2022. The overall strong performance of the commercial teams through the third quarter has led us to increase our sales guidance for the year, which Andrew will discuss in his section of this call. At this time, Ill turn the call over to Dr. Michelle Berrey. Michelle?

M. Michelle Berrey -- President of Research & Development and Chief Medical Officer

Thank you, Linda, and good morning, everyone. Id like to provide a few key updates today. First, Ill provide you with an update on our NASH data generation and regulatory interactions, which remain on track. Second, Ill share some important progress regarding our post-marketing requirements in PBC. And lastly, Ill preview some exciting data we will be sharing at the upcoming Liver Meeting and update you on where we are with some of our other pipeline activities. Ill begin with NASH. Im pleased to say were currently on track with the important data generation we outlined last quarter. Our safety database for OCA and NASH will now include more than double the patient exposure of our initial interim analysis with more than 6,000 patient years. On the efficacy front, we are currently reading all baseline and month 18 liver biopsies using our new consensus panel rating methodology that we outlined last quarter. We are in the midst of generating the largest data package ever created in the NASH field to support a potential resubmission of our NDA in NASH fibrosis, and we expect this process to continue into the early part of 2022.

As a reminder, we are generating these data from the REGENERATE study in pursuit of an accelerated approval for OCA in the U.S. as the first compound to treat advanced fibrosis due to NASH. We have also begun reading liver biopsies for our second large Phase III NASH study, REVERSE, studying OCA in patients with compensated cirrhosis. We expect that process to be complete and top line data from REVERSE to be available around the end of this year. As long as the data support it, we expect we will be able to hold a pre-submission meeting with FDA in the first half of 2022. While our top priority remains generating important data to support a potential resubmission in the U.S., our MAA in Europe for NASH fibrosis also remains on file. We had requested and were subsequently granted a clock stop for our EMA application. We requested this in order to advantage of the data generation we were conducting for our NDA. We are now planning to respond to our day 180 questions this month. While weve made progress and attempted to align these processes, our day 180 responses will not include all the data were generating in the U.S. given that this data generation will continue into 2022.

And as a reminder, EMA has outlined a high bar for efficacy. Per the initial and overall NASH development guidance in their draft reflection paper from 2018, EMA expressed a preference for seeing statistically significant and clinically relevant efficacy in both reversal of fibrosis and NASH resolution or a 2-stage fibrosis improvement. But they also clearly stated that they will be looking at the totality of the clinical dossier submitted and that their final position would be data-driven following review of regulatory filings. The unmet need for antifibrotic therapy in NASH has never been clearer. The NIHs NASH Clinical Research Network, or CRN, recently published results from a prospective study in The New England Journal of Medicine that again reinforces the strong association between advanced fibrosis and an increased risk of liver-related complications and death in patients with NASH. And now Id like to provide an update on our PBC post-marketing commitments. Discussions regarding our two post-marketing clinical outcome studies remain ongoing with both the FDA and EMA, and weve made some important progress.

As a reminder, since the time of the Ocaliva approval for PBC in 2016, we have acknowledged the potential difficulties in recruiting and retaining patients in these blinded placebo-controlled studies when Ocaliva is commercially available. After gathering feedback from regulators, our next step in that process is to close out the COBALT study. We will collect available placebo-controlled data from COBALT and include it as one element of a broader evidence package that will also include real-world data and outcomes data from the POISE long-term extension study. This evidence package will inform our dialogue with FDA and EMA as we work to fulfill our post-marketing commitments and obligations. We expect the data generation process to take several quarters and plan to submit this data package in 2022. And on that note, were proud to share today that one of our abstracts have been selected not only for a late-breaker podium presentation at The Liver Meeting, but as a best of AASLD 2021 abstract.

The abstract is entitled "Patients with primary biliary cholangitis treated with long-term obeticholic acid in a trial setting demonstrate better transplant-free survival than external controls from the global PBC and U.K. PBC study groups". We are all excited about sharing these data with you on November 15. Ocaliva remains the only second-line agent approved for use in PBC and continues to demonstrate benefit to patients with this devastating disease. We are committed to working closely with regulators to come to a resolution regarding our post-marketing commitments, and Im encouraged by the progress thus far. Turning to our pipeline. Our Phase II OCA plus bezafibrate trial is continuing to enroll outside the U.S. As weve shared previously, published data supporting the benefit of bezafibrate in PBC are encouraging and reinforce the potential for this novel combination to reduce elevated [Indecipherable] and bilirubin associated with improved survival. We plan to study a broader range of doses of the combination in an additional Phase II trial that will be initiated in the U.S.

We remain committed to progressing therapies for individuals living with PBC. Additionally, our Phase I study of our next-generation FXR agonist, INT-787, is ongoing. We plan to select a target indication for INT-787 in early 2022. Overall, Im pleased with the progress our R&D team has made, and I look forward to sharing updates on our pipeline programs as we kick off 2022. Before I turn the call over to Andrew, I would like to let you all know that unfortunately, I will not be able to join the Q&A session today due to an unavoidable personal matter. I have asked Dr. Gail Cawkwell, Senior Vice President, Medical Affairs, Safety and Pharmacovigilance; and Dr. Paul Nitschmann, Senior Vice President, Regulatory Affairs, from my team to help answer your questions. I look forward to following up with you next week when Im back in the office. Now Ill turn the call over to Andrew for a financial update. Andrew?

Andrew Saik -- Chief Financial Officer

Thanks, Michelle, and good morning, everyone. I would ask to please refer to our press release that was issued earlier today for a summary of our financial results for the third quarter ended September 30, 2021. Beginning with sales performance this quarter, we recognized worldwide Ocaliva net sales of $92.8 million. This compares to $79.5 million in the prior year period and $96.6 million in the second quarter of this year. As a reminder, the third quarter of 2021 is the first quarter following the implementation of our new Ocaliva label, which was finalized in May of this year. Our worldwide Ocaliva sales are comprised of U.S. net sales of $66.6 million and ex U.S. net sales of $26.2 million. This represents growth of approximately 14% and 25%, respectively, versus the prior year quarter. Our U.S. business performed well, as Linda discussed earlier. In our international business, growth over the last year was driven by increased demand and a benefit from country mix relative to prior year. Overall, results reflect a solid global business performance. GAAP operating expenses for the quarter totaled $99 million, which was a decrease of $35.7 million versus the third quarter last year.

Non-GAAP adjusted operating expenses were $89.6 million for the third quarter, a decrease of $28.5 million versus the prior year period. As a reminder, our non-GAAP adjusted operating expenses excludes stock-based compensation and depreciation. Cost of sales for the third quarter were $0.7 million compared to $1.8 million in the prior year period. This decrease reflects the timing of purchases of API, packaging, labeling and other related expenses during the period compared to the prior year. SG&A expenses were $53.3 million for the third quarter, a decrease of $4.4 million from the second quarter of this year and a decrease of $17.3 million versus the third quarter of 2020. Our R&D expenses in the third quarter were $45 million, a decrease of $3.8 million from the same period last year. We expect operating expenses will be higher in the fourth quarter of 2021 relative to Q3 and relative to what we anticipate for next year.

This is due to a higher-than-normal spend in R&D as we prepare the data sets for release later this year and early next year, as discussed by Michelle. For the nine months ended September 30, 2021, total R&D expenses were $133.6 million, with NASH-related R&D expenses representing approximately 2/3 of this cost. We ended Q3 in a higher cash position than Q2, adding $3 million in cash from operations, which excludes the net impact of the debt exchange, new debt issuance and stock repurchase during the quarter. This increase was driven by our strong sales performance in both U.S. and international and our continued focus on managing operating expenses. [Technical Issues] We are also narrowing our operating expense guidance and now expect operating expenses to be between $380 million and $395 million as compared to our previous guidance of $380 million to $410 million.

Lastly, we were able to successfully execute a convertible note exchange to manage the near-term maturity of our debt. Between the debt exchange, a subsequent repurchase of $38 million in notes in private transactions, we lowered our 2023 maturity to $114 million, which allows us to manage our near-term debt with cash on hand. This gives us the ability to focus on growing our PBC business and generating important data in NASH to define our path forward. Since joining INTERCEPT earlier this year, it has been one of my top priorities to ensure that we remain financially strong and well positioned for growth. We have derisked our balance sheet significantly this year, and we will continue to utilize our cash prudently and ensure that we have a strong balance sheet to support our foundational PBC franchise, execute on our clinical and regulatory milestones and have the flexibility to expand our portfolio and pipeline. Now Ill turn it back over to the operator to start the Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Ritu Baral with Cowen.

Anvita Gupta -- Cowen -- Analyst

Good morning, team.This is Anvita on for Ritu this morning. Congrats on the great quarter. We wanted to get some details on the progress of the reading of biopsies from the REGENERATE trial. Could you comment on how many biopsies have you reevaluated thus far? And how many patients do you have the 48-month follow-up safety data to date? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Yes. Thanks for the question. And thanks to the team at Intercept here who is doing a lot of work in the areas that you mentioned. So the work is ongoing as we stated in the preprepared remarks and as we outlined last quarter. The biopsy reads are ongoing. The focus of the ongoing work as we really stay toward the discussion on potential accelerated approval has been reads on baseline and 18-month biopsies. So thats been the work. Again, that is ongoing. At the same time, the safety data, again, that we outlined last quarter is for the population, and the accumulation of that is more than twice the database that was in the initial analysis back in 2019. So all of that work is ongoing. We are, as you would expect, monitoring that on an ongoing basis on a weekly basis. And as we sit here today, the work continues, and we do expect that work will continue and ultimately result in this data package that weve outlined being completed into the early part of 2022.

Anvita Gupta -- Cowen -- Analyst

Great. Thank you.

Operator

Our next question comes from Yasmeen Rahimi with Piper Sandler.

Swapnil -- Piper Sandler -- Analyst

Great. Thanks. This is Swapnil on for Yas. Just and question for us. In your AASLD late-breaking abstract, you show that the event rates are significantly lower for the PBC patients. On OCA treatment, I think its like 50fold lower than the global PBC and U.K. PBC patients. So can you tell us how many of these patients were cirrhotic? And what kind of a read-through can we -- or parallels can we draw to the ongoing NASH trial from this database?

Jerome Durso -- President, Chief Executive Officer & Director

So thanks for the question. Ill turn that over to Gail as, of course, we look forward to the important discussions coming at AASLD.

Gail Cawkwell -- Senior Vice President of Medical Affairs, Safety & Pharmacovigilance and Acting Chief Medical Office

Yes. And thanks for the question. So in that study, the -- we looked at both an internal database, the POISE long-term safety extension study. That study was largely an earlier PBC population. And so at baseline in that study, there were a few but some cirrhotic patients. Over the course of following the study, there were more, but still the numbers of cirrhotic patients were relatively low in that study overall. When we match to the external controls, we were very careful to both use the inclusion and the exclusion criteria from the POISE study, so we were comparing like-to-like; and to propensity score match to again provide an element of sort of pseudo randomization, as you can, in that setting. So we feel like the results are interesting, and we look forward to sharing them in more detail in just over a week at AASLD.

Swapnil -- Piper Sandler -- Analyst

Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks.

Operator

Our next question comes from Michael Yee with Jefferies.

Michael Yee -- Jefferies -- Analyst

Hi. Thanks. Good morning. My question is -- can you hear me?

Jerome Durso -- President, Chief Executive Officer & Director

Hi. Mike. Yes. Thank you.

Lisa DeFrancesco -- Senior Vice President of Corporate Affairs & Investor Relations

Yes.

Michael Yee -- Jefferies -- Analyst

Okay Great. My question is on the F2, three analysis you guys are doing and continuing that work to early 22. My question is, with all of that reassessment and the inclusion of more patients, can you remind us, you would expect that the data could be the same, the effect could be better or greater if that could be less efficacious? Can you just remind us of how that could play out? And do you just expect to put out a press release on that information and well digest the data at that time and thats what you would be submitting to the FDA? Could you just maybe put some color around that and contextualize that? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Yes, Mike, thanks for the question. So I can start on that one. I think, importantly, the new analysis, again, as the work is ongoing, is going to build on the prior interim analysis, which we think was a robust result with a robust methodology. Nonetheless, we are rereading with the new methodology of interpretation of those biopsies. We do believe this is a robust method as weve outlined, and it is a method thats consistent with the FDAs direction for a consensus approach. Of course, we wont have the complete picture until that work is completed into 2022. And of course, well share the appropriate information at the appropriate time once that work is completed. Importantly, we look forward to seeing the data set when its complete.

Operator

Thank you. Our next question comes from Brian Abrahams with RBC Capital Markets.

Brian Abrahams -- RBC Capital Markets -- Analyst

Thank you for taking my questions.

Jerome Durso -- President, Chief Executive Officer & Director

Good morning.

Brian Abrahams -- RBC Capital Markets -- Analyst

Good morning. If you could give us any update on this -- on the ongoing safety analysis. Our understanding is that some of the cardiovascular renal and hepatic adjudication of AEs were going to start to -- that was going to start to roll in around now. So just wondering your level of confidence on the safety side. And as you look at the totality of efficacy and safety, whats going to be guiding your decision as to whether or not to go back to the FDA? Is there any situation where you would not approach the FDA for a pre-submission meeting?

Jerome Durso -- President, Chief Executive Officer & Director

So thanks, Brian. Ill start on that and, and then perhaps Paul can remind everyone of the ongoing work in the areas on adjudication. As a reminder, the overall question that was posed by the FDA at the time of the complete response letter was around overall risk benefit. And so its really been against that context that we first had the series of interactions with FDA that we outlined earlier in the year. And I think that put us in a position to make good decisions about which data we were going to generate, and now were in that data generation process. And obviously, its going to be the comprehensive picture that well need to complete and then assess based on what we see in the data. Obviously, the step after that, which would be an important step with data in hand, we would interpret the data and the potential discussion of interpretation with the agency would be in a potential pre submission that we would expect if were in that path in the first half of 2022. So importantly, understanding and digesting the picture that we believe this data set will give us will be the important next move for us. Paul, maybe you want to remind on the areas of adjudication, which continue to be part of the ongoing work here.

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Yes. Thank you, Jerry. So you are right. We will have and are having adjudication ongoing in the cardiovascular and the hepatic and the renal arena. Really, at this point, there is nothing we can share about that. Its work ongoing. And as Jerry has highlighted a couple of times now, its all about the benefit risk that we will be able to assess early next year.

Brian Abrahams -- RBC Capital Markets -- Analyst

Fair enough. Thanks so much.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks, Brian.

Operator

Our next question comes from Alethia Young with Cantor Fitzgerald.

Emily Bodnar -- Cantor Fitzgerald -- Analyst

This is Emily on for Alethia. Im just curious about your latest thoughts on the REVERSE study and what data youre looking to see there given the new consensus approach. Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

So thanks for the question, Emily. And maybe just a couple of words from me, and then maybe Paul can remind of the study. We look at REVERSE, obviously, as an important data set. Its an important high-risk population. These are patients with cirrhosis that are well compensated. That work is ongoing in parallel. So the reads are happening as weve outlined. We are utilizing a consensus approach, again, consistent with what we talked about in the REGENERATE context. I think that the last point for me is just that this is, again, ongoing work. Were monitoring closely. We do look forward to this important data set. If the data is positive, we think it gives us some real options. And again, importantly, this is a patient where the risk is high and the unmet need is clear and evident. So we look forward to understanding the potential role of OCA in this population. Paul, perhaps you can give a thumbnail on the design as we look forward to the readout to come, and I believe there is additional information at AASLD on the REVERSE study design.

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Yes. Jerry, thank you. So as you said already, REVERSE is a study -- its a Phase III study in 919 patients with NASH with well-compensated cirrhosis. The primary endpoint is histology at 18 months and looks for a greater or equal than one-stage fibrosis improvement. And as you said, Dr. Rocio will have a poster at AASLD to describe the study. The study uses three dose groups. One is a straight 10 milligram. One is a titration arm of 10 going to 25, and its placebo-controlled.

Jerome Durso -- President, Chief Executive Officer & Director

Thank you, Emily.

Operator

Our next question comes from Joseph Stringer with Needham & Company.

Joseph Stringer -- Needham & Company -- Analyst

Good morning. Thanks for taking our questions. Question on PBC here. Just curious if you can give us a sense for what your current operating margins are, specifically for OCA and PBC. And maybe do you have an idea of what those could be sort of going forward? Do you see you could improve those over the next couple of quarters or a couple of years? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks for the question. We obviously feel good about the performance in PBC in the quarter. We have also described the fact that on a stand-alone basis, the PBC franchise is a profitable one. Andrew, maybe you can give some additional color on that front.

Andrew Saik -- Chief Financial Officer

Yes, certainly, and thanks for the question. So we dont break out the PBC business as a business per se. You can obviously see the sales and the cost of sales on our P&L because thats our only product. So those are clean numbers. Weve also stated before that the majority of our R&D expenses are related to NASH. As of Q3 year-to-date, R&D expenses were $133.6 million. Approximately 2/3 of those are NASH related. So that should give you sufficient information to break out what the business would look like without the NASH significant Phase III trials that were currently in the process of providing data for at the end of the quarter. Hopefully, that helps.

Joseph Stringer -- Needham & Company -- Analyst

Yes. Thanks for taking our question.

Andrew Saik -- Chief Financial Officer

Ofcourse.

Operator

Our next question comes from Salveen Richter with Goldman Sachs.

Salveen Richter -- Goldman Sachs -- Analyst

Good morning. Thank you for taking my question. Could you just help us understand what might be presented at the upcoming Liver Meeting and whether there could be any read-through here to the reevaluation data?

Jerome Durso -- President, Chief Executive Officer & Director

So Gail -- Ill turn that to Gail.

Gail Cawkwell -- Senior Vice President of Medical Affairs, Safety & Pharmacovigilance and Acting Chief Medical Office

Sure. Im happy there -- Im happy to take that question. So I think, as Michelle said initially, were certainly excited that some of our data will be at AASLD, specifically the first PBC outcomes data with obeticholic acid. And as Michelle said earlier, accepted as an oral presentation, late breaker and thats for the Liver Meeting abstract. Well have important new data on the biopsy reading methodology used in NASH. This is not data showing outcomes, but showing how the biopsy reading methodology works, and well provide some transparency there. And finally, we will also have some data on REVERSE methodology and baseline data, which will be in advance, of course, of REVERSE data release coming later.

Its also gratifying that we saw several independent abstracts on obeticholic acid. This is notable once medicine is well established that people start doing independent research. And there were some interesting things there, for example, a Stanford University abstract that notes that liver transplant waitlist mortality among patients with PBC and decompensated cirrhosis is lower since Ocaliva approval compared to before Ocaliva approval. But this is, of course, encouraging, while not definitive. But if we [Indecipherable] a nice pairing with our own work on the POISE long-term safety extension and external control data. And I think well have to just see what else comes up at the meeting. But I think on the NASH side, theres a little of notable excitement and mainly work that emphasizes that NASH is certainly a hard field to be successful in the clinical trial setting.

Salveen Richter -- Goldman Sachs -- Analyst

Thank you.

Operator

Our next question comes from Eliana Merle with UBS.

Eliana Merle -- UBS -- Analyst

Thanks for taking my question. Just on the NASH biopsy rereads as well as the additional patients, can you remind us what your plans from a statistical perspective are to analyze this data, I guess, on NASH resolution and fibrosis? Thanks.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks for the question. Paul, perhaps you can give a little reminder of the approach there or the primary endpoint?

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Yes. Thank you, Jerry. Yes, were really viewing this as a new analysis. It is a much more robust data set, longer patient follow-up, more patient numbers. As Michelle said, its more than twice the patient exposure. And were actually looking at over 600 subjects who have been on treatment for four years or more by now. So well -- and same with the liver biopsy, the efficacy analysis, were really seeing this as a new fresh look at these data. I hope that helps.

Eliana Merle -- UBS -- Analyst

Yes. Just, I guess, any commentary on the powering or the statistical sort of analysis in particular, if you can?

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Well completely replicate the analyses that went into the original interim analysis.

Eliana Merle -- UBS -- Analyst

Got it. Okay. Thanks.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks, Eliana.

Operator

Our next question comes from Geoff Meacham with Bank of America.

Aspen Mori -- Bank of America -- Analyst

Its Aspen on for Jeff. Thanks for the questions. Just a couple on the pipeline actually. Can you talk about the decision to study a broader dose range for the OCA/beza combo? Is that to look at higher doses, lower doses, both? Is there any data that youve seen so far thats kind of informing that decision? Or is that maybe just part of the inherent protocol. And then for INT-787, can you talk about some of the target indications youre considering that asset that youre looking to communicate next year? Is that going to be dependent on the FDA feedback in NASH? Or do you already have like a set list that youre thinking about? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

So Gail, perhaps you can start on the bezafibrate, and then I can comment on 787 afterwards. Thanks for the question.

Gail Cawkwell -- Senior Vice President of Medical Affairs, Safety & Pharmacovigilance and Acting Chief Medical Office

Sure. Happy to do so. So on the OCA/bezafibrate combination and dose-ranging, its always important in Phase II to do thorough dose ranging. Its something FDA and other regulators absolutely expects, going from doses that show no efficacy that are that low to doses that are higher than you may intend when you do a combination product that adds a level of complexity, of course, because youre managing two doses. So our study is designed to meet regulatory requirements and regulatory needs and to ensure we have what we need to progress our program. And so it includes a full range of dose ranging.

Jerome Durso -- President, Chief Executive Officer & Director

So on 787, so the Phase I work is ongoing. Were progressing through the dose escalation work. We are looking with interest at several areas of unmet need, and I think doing the right work now to be in a position, as Michelle indicated in the prepared, prerecorded remarks, that we would expect to select that target indication in the first part of 2022. Again, focus for us is some interesting areas of unmet need that we feel that this compound may have an interesting role in. But some more work to do, and well come back next year as weve outlined.

Aspen Mori -- Bank of America -- Analyst

Thank you.

Operator

Our next question comes from Matthew Luchini with BMO.

Matthew Luchini -- BMO -- Analyst

Thanks for taking the question and for the comprehensive update. I just wanted to ask, I guess, about how to think about REVERSE in the context of REGENERATE. And I guess what I mean specifically is if, for some reason, REVERSE were to be successful, but the reanalysis didnt pan out or give you the result that youre hoping for to move to support resubmission, would you consider moving forward with a more narrow label? How do we -- how should we be thinking about that type of potential scenario? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Yes. Thanks for the question. As I said earlier, REVERSE for us is an important data set for OCA, I think also for the field and clearly for the patients that are suffering. Our dialogue with the FDA this year that weve outlined in previous calls has been primarily focused on REGENERATE and getting ourselves to a point where we were able to outline the kind of data we felt appropriate to generate on REGENERATE, and now were in that process now. I think as we get closer and work toward having the REVERSE data in hand, and once we have that data, well clearly be regrouping with the agency. I think if the data is positive, it provides us good options in several different scenarios, and thats the way that we look at the data. Again, its an important population. Theres high unmet need. This is a patient group that in all of the customer work weve done over the years in NASH is one that tends to be of high concern, obviously, to the patients themselves, but also to the healthcare practitioners. So we do feel if the REVERSE data is positive, wed have some good optionality. Well see how all the pieces fit together with data in hand.

Operator

Thank you. Our next question comes from Thomas Smith with SVB Leerink.

Thomas Smith -- SVB Leerink -- Analyst

Thanks for taking the questions. Maybe just a follow-up there. As we think about the upcoming REVERSE trial readout, weve seen a pretty wide range of placebo response rates in the compensated cirrhotic NASH population. Can you provide any color on the trial powering and what youve assumed for placebo response on the one stage improvement in fibrosis with no [Indecipherable] NASH primary endpoint?

Jerome Durso -- President, Chief Executive Officer & Director

Paul, perhaps you can pick up that one.

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Yes. Thank you. The powering has been the standard alpha. [Indecipherable], and I believe this one was with 90% power to read significance. I do not have the details of what the expected placebo response was on hand.

Jerome Durso -- President, Chief Executive Officer & Director

Thomas, we can follow back up with you on that one, OK?

Thomas Smith -- SVB Leerink -- Analyst

Okay. Yes, that would be great. And then maybe just one follow-up question. As we think about the MAA in Europe, I guess any additional color you can provide on the decision to respond to the day 180 questions rather than wait for the outcome of the U.S. data generation and the REGENERATE reanalysis would be helpful. Thanks, guys.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks. As Michelle said in the prepared remarks, we are -- current plan, were working toward the response to the day 180 questions this month. Maybe, Paul, you can give a summary of kind of the process as we move forward there. And again, for us, well work through the process as it unfolds here.

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Yes. Thank you, Jerry. So purely hypothetically, obviously, CHMP at this juncture could choose to give an opinion based on our day 180 responses, plus or minus an oral explanation. They could -- although that is not very frequent, they could push us into another day 180 round of questions, which would allow us the ability to even further align our data sets between U.S. and Europe. And obviously, as always, applicants have the ability to withdraw at any point in time. Does that help?

Thomas Smith -- SVB Leerink -- Analyst

Yes. No, thats helpful. Thanks, guys.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks, Tom.

Operator

Our next question comes from Mayank Mamtani with B. Riley Securities.

Mayank Mamtani -- B. Riley Securities -- Analyst

Good morning. Congrats team on tracking nicely on both top and bottom line and especially faring ahead of expectations relative to the reset last year. Just a quick question for Linda on the PVC dynamics. How should we think about the 2022 outlook here as we are nearing the end of impacting U.S but maybe not too much on the U.N and maybe help us think about the new patient dynamics. Where sort of now that youre in the role and we understand market penetration and also impact from other clinical trials that are ongoing and Andrew if you can bring the picture together on this cash flow positive. Can we see that kind of sustain over the next few quarters?

Linda Richardson -- Executive Vice President & Chief Commercial Officer

Okay, thank you for the questions. Obviously were very pleased with how the messaging and the education went on the label changing communication there and I think that being able to do that in person was representative. It was familiar with our precision prescribing base and going out was very helpful and communicating. And the label also gave clarity in who was in and who was out. And as we stated, we believe that were near the end of the transition by year end on existing patients. So, we say that thats pretty much through. And there shouldnt be -- as we look at the label impact in Europe in 2022, we dont have that label in hand, of course, but we would perceive that decompensated patients would also likely be not indicated further in that population. And when we look at the impact, we have estimated 10% to 15% of our -- the population available, the OCA population.

And what were finding is it was really down on the lower end. And some of the discontinuations which we expected to see given we had a change in population were taking fewer doses, and that fewer doses are usually associated with decompensated patients. But what we realized in talking to our customers was that many of our customers were taking a cautious approach to patients who were compensated cirrhotics, and they too were -- some of them were on a once or twice weekly dosing. So we do feel confident that the right patients are coming off. Now as I said in my previous comments, the focus now is very much on getting back to business and new patient starts. And weve seen some depression with that over the COVID period. And I think frankly, as people waited, they were aware of our upcoming label change as they waited to see what the clarity of the patient population would be. And thats very clear, no change in dosing, just one regimen and you can go from there.

But the new data that were sharing, new data drives, I think, conviction in a product. And how can I use this product to help my patients when, frankly, we only have one second-line product, and thats Ocaliva. So you look at the fibrosis data, and that came again from our POISE extended open-label extension, and you see in those patients, a stabilization of fibrosis. When you have a progressive liver disease, this is an important element. When we talk to physicians, underlying -- its not just about ALP, it is the underlying health of the liver and preserving that for as long as possible that resonates at the higher laddered up goal. So you take that data.

And now with this podium presentation data coming out, comparing a cohort of POISE-like patients, these arent COBALT-like patients, these were POISE-like patients, who are earlier on in the progression of their disease and start to get that information out at AASLD as a best of abstract, I think that you can see theres a fair amount of new communications that can go out to support the Ocaliva business. And we are very much looking at growth in the market and a return to growth beginning in 2022. Andrew?

Andrew Saik -- Chief Financial Officer

Yes. Thanks, Linda. So Ill try to answer your question as best as I can. So first off, Ill just say, look, were really happy with the sales performance, both in the U.S. and international and with our ability to manage expenses. Two consecutive quarters of cash growth/neutrality is a terrific win for the company. And I think, again, just highlights the profitability of our underlying PBC franchise. Were not prepared to give guidance for next year, but I will make some comments. So in my prepared remarks, I mentioned that in the fourth quarter, were going to be increasing expenses to help prepare the data sets that Michelle and various others have discussed on this call. But I also indicated that, that will be higher than what weve had this year and higher than what we expect next year. So what you can expect is us to continue to manage our expenses into next year prudently. Regardless of which direction we go with the NASH application to the FDA, we are not expecting an increase in expenses next year relative to this year. We also expect that our PBC business will continue to grow. So with those, were very happy with where we are, and well likely give -- well, we will give guidance next year at the end of our conference call at the year-end. I hope that helps.

Mayank Mamtani -- B. Riley Securities -- Analyst

Very helpful. Thank you

Andrew Saik -- Chief Financial Officer

Thanks.

Operator

Our next question comes from Jay Olson with Oppenheimer.

Jay Olson -- Oppenheimer -- Analyst

Congrats on the quarter and thank you for taking the questions.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks, Jay.

Jay Olson -- Oppenheimer -- Analyst

Youve spoken about running a profitable rare disease business in the event that NASH doesnt work out. Can you talk about the time line and gating factors that would lead you to exercise that option? And then maybe related to that, is there any color on when and under what circumstances you would consider pursuing a PSC indication for OCA? Or is that an opportunity youre saving for 787 or the OCA/bezafibrate combo? Thank you.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks for the question, Jay. As weve said a couple of times, which I think is the -- at the center of all this is that the dictated -- Im sorry, the data is going to dictate our path forward, and our path forward in NASH ultimately be an important driver in the strategic decisions. As you can imagine with any company, its important as you look at major milestones that contingency planning is ongoing. I think importantly, as weve tried to remind this morning, weve been trying to take the right steps along the way this year to solidify the foundation with what were doing from a cost management standpoint. Andrew outlined how we looked at the convertible debt and making sure that were solidifying the PBC business. So all of this work is to ensure the right strong foundation for the future as we importantly get the data in hand to make the right decisions. And I think Im always encouraged by the fact that we have strength in this company to leverage. We are deep in the liver community. We know the players. I think another quarter of illustration of our commercial capability the R&D expertise around liver and the success. So again, I think, for me, its about ensuring that were focused on the readouts. Were going to use the data to make the right decisions moving forward on behalf of our company and our shareholders, and thats really the way that we look at the next phase in the company. [Indecipherable] question was on PSC. Maybe you can...

M. Michelle Berrey -- President of Research & Development and Chief Medical Officer

Sure. Im happy to take this. So with regards to PSC, let me start with your second part, which was about 787. As we said earlier, were looking at a number of high unmet need areas. And I would certainly agree PSC is one of many high unmet need areas. But its still ongoing work, and we will tell more about that next year after weve completed our work there. PSC, we were pleased. We ran a positive Phase II study with PSC with obeticholic acid, which was based on alkaline phosphatase reduction and we saw nice alkaline phosphatase production. Unfortunately, PSC is an area where biomarkers are not as straightforward as they are in PBC or some other areas, which adds a degree of complexity in studying this area.

Jay Olson -- Oppenheimer -- Analyst

Great. Thank you very much.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks.

Operator

Our next question comes from Brian Skorney with Baird.

Brian Skorney -- Baird -- Analyst

Good morning, everyone. Thanks for sitting me in. I didnt hear any questions on the REGENERATE reroute. So a question on that. So I understand the focus on sort of the fibrotic endpoint, but my question is more on the reread and whether or not youre looking at the NASH resolution endpoint in addition to the fibrotic endpoint. Im just wondering if given RECONNECT the additional patients that are being evaluated, if even the absolute difference remains the same that we saw in the initial cut of REGENERATE, if that wouldnt power to statistical significance, I think the original p-value was 0.13 and then of [Indecipherable]. And just based on statistical protocol, are you able to evaluate NASH resolution for statistical significance? Or is any p-value on resolution nominal at this point? Thanks.

Jerome Durso -- President, Chief Executive Officer & Director

Yes. So as Paul indicated earlier. The read out will be on the same two primary end points that the initial analysis was read on which is improve the improvement on the fibrosis with no worsening of NASH and the NASH revolution end point. Paul, anything further on that. Obviously, as we said its a larger number of patients in this analysis than the original being read with the new methadology.. Paul, anything you wanna add into that.

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Thanks Jerry. Not really. As we said the study didnt change so the powering is identical to what it was. It is a larger patient population, a larger stem size. And therefore you can draw conclusions from that as you will. But its too early to speculate. We really need to wait until we see the data.

Operator

Thank you. This concludes the Q&A session of the conference. Id like to turn the call back over to our host for any closing remarks.

Jerome Durso -- President, Chief Executive Officer & Director

Thanks everybody for the conversation today. Maybe get to summarize what we shared today. Feel good about the fact weve executed well against the objectives that we set out in the beginning of the year. Our global PBC business with Ocaliva continues to deliver, remain strong under the new label, and Im confident in our ability to grow this business in the long term. Second, were on track with the important data generation in NASH, which I believe will allow us the ability to make the critical decisions regarding our path forward. The pipeline programs continue to advance. And importantly, weve made great progress strengthening our financial foundation, which will support a successful intercept and allow us to focus on creating shareholder value over the long term. Definitely look forward to providing further updates as we continue whats a busy period across the clinical, commercial and regulatory activity. And last and certainly not least, I want to thank the team at INTERCEPT for their strong execution their commitment and for all the work theyre doing in their dedication to the patients we serve. So thanks a lot, and we look forward to more conversations along the way. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 61 minutes

Call participants:

Lisa DeFrancesco -- Senior Vice President of Corporate Affairs & Investor Relations

Jerome Durso -- President, Chief Executive Officer & Director

Linda Richardson -- Executive Vice President & Chief Commercial Officer

M. Michelle Berrey -- President of Research & Development and Chief Medical Officer

Andrew Saik -- Chief Financial Officer

Gail Cawkwell -- Senior Vice President of Medical Affairs, Safety & Pharmacovigilance and Acting Chief Medical Office

Paul Nitschmann -- Senior Vice President of Regulatory Affairs

Anvita Gupta -- Cowen -- Analyst

Swapnil -- Piper Sandler -- Analyst

Michael Yee -- Jefferies -- Analyst

Brian Abrahams -- RBC Capital Markets -- Analyst

Emily Bodnar -- Cantor Fitzgerald -- Analyst

Joseph Stringer -- Needham & Company -- Analyst

Salveen Richter -- Goldman Sachs -- Analyst

Eliana Merle -- UBS -- Analyst

Aspen Mori -- Bank of America -- Analyst

Matthew Luchini -- BMO -- Analyst

Thomas Smith -- SVB Leerink -- Analyst

Mayank Mamtani -- B. Riley Securities -- Analyst

Jay Olson -- Oppenheimer -- Analyst

Brian Skorney -- Baird -- Analyst

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