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CymaBay Therapeutics Inc. (CBAY) Q4 2020 Earnings Call Transcript | The Motley Fool

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CymaBay Therapeutics Inc. (NASDAQ:CBAY)
Q4 2020 Earnings Call
Mar 25, 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 fourth-quarter and full-year 2020 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 would like to turn the call over to Mr.

Dan Menold, vice president of finance at CymaBay. Mr. Menold, you may proceed.

Dan MenoldVice 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 fourth-quarter and full-year 2020 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 Klara Dickinson, chief regulatory officer. Sujal will provide an update on recent progress and plans on the development program for Seladelpar, Chuck will discuss updates to other pipeline opportunities, and I will provide a brief summary of our financials. Following our prepared remarks, we will all be available 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, and anticipated time lines and data release dates and cash runway are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those forecast 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, the risk factors set forth in CymaBay’s quarterly and annual reports filed with the SEC for factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. This conference call is the property of CymaBay and any recording or rebroadcast is expressly prohibited without the written consent of CymaBay.

At this time, I’d like to turn the call over to Sujal.

Sujal ShahChief Executive Officer

Good afternoon, and thank you for joining us. We will spend the majority of our time today discussing the significant progress we are making with Seladelpar, our lead Phase 3 candidate for patients with the rare autoimmune liver disease, Primary Biliary Cholangitis or PBC, as well as, the other promising opportunities we are actively advancing in our pipeline. It is, first, important to reflect on all that we have accomplished in 2020 and how those efforts position us for success in the coming year and beyond. After reducing our workforce by 60% at the end of 2019, we started 2020 actively closing down all of our clinical studies and winding down all nonessential activities.

We did this to aggressively conserve capital and maximize our ability to execute any number of strategic alternatives we evaluated, including potential in-licensing of assets, mergers, and even liquidation. Importantly, we also launched a rigorous independent evaluation of the potential safety concerns in our Phase 2 study of Seladelpar in patients with Nonalcoholic Steatohepatitis or NASH. By the second quarter, the independent safety review conducted at arm’s length by a panel of world-renowned liver experts, found no evidence of Seladelpar-related injury in our NASH study and we quickly submitted complete responses to the FDA clinical holds. In the third quarter, the FDA lifted all clinical holds across the Seladelpar program and one week later, we announced positive top-line results from our ENHANCE Phase 3 study of Seladelpar in PBC.

Even though ENHANCE was halted prior to completing its planned 52-week treatment period, results were available for 167 patients who completed at least 12 weeks of treatment. These results, we believe, demonstrated that Seladelpar 10 milligram provided patients with a statistically significant benefit on the primary and two key secondary endpoints in the trial. The results for the 55 patients on Seladelpar 10 milligrams at week 12 revealed a nearly 80% response on the primary composite endpoint and accepted regulatory approval endpoint when measured at 52 weeks versus 12.5% for the 56 patients on placebo. Further, there was an almost 30% response on ALP normalization versus none on placebo and a meaningful and statistically significant placebo-controlled effect on reducing pruritus in patients with moderate to severe pruritus at baseline as measured by the Numerical Rating Scale or NRS.

As you may know, pruritus is a significant and often debilitating clinical symptom of PBC reported to affect up to 70% of patients. As we closed out the year, these results were highlighted in a late-breaking presentation at The Liver Meeting, sponsored by the American Association for the Study of Liver Diseases in November. They were also instrumental in the design for RESPONSE, our global Phase 3 registration study that mirrors ENHANCE. RESPONSE will study the same optimal 10-milligram dose of Seladelpar versus placebo in the same patient population with the same primary and two key secondary endpoints.

Since our last quarterly update in November, we have been focused on the restart of our global development program for Seladelpar in PBC. It is important to highlight that every element of our program had been, either shut down or paused in an effort to conserve capital, including clinical studies and drug manufacturing. The restart of the Seladelpar program is a result of the extraordinary efforts our teams made in many behind-the-scenes activities in regulatory, CMC and quality assurance. In parallel, our clinical operations group has been working tirelessly to enable the initiation of RESPONSE and our open-label long-term study, ASSURE.

It is with great pleasure and excitement that I can announce today that both of these studies are actively recruiting patients. I look forward to providing regular updates on these studies as we progress in the months ahead. For the remainder of our call today, we will outline our plans for the remainder of 2021, including, first, our primary focus on execution of RESPONSE, ASSURE, and other NDA-enabling clinical and CMC activities for Seladelpar and PBC; second, pre-commercial planning and market research to support investments for launch and life cycle management for Seladelpar in PBC; third, advancement of our early stage pipeline and business development opportunities, and finally; fourth, continued management of our capital and human resources. Completing the development of Seladelpar for patients with PBC is our top priority.

Although ENHANCE was halted early, its results allowed us to optimize the design and size of RESPONSE, and to leverage our prior experience with clinical sites in more than 20 countries around the world. Our goal is to complete enrollment by the end of this year despite challenges we are facing with the ongoing COVID-19 pandemic and increased competition for patients. We will have a better indication of enrollment time lines as we move past the middle of this year. In the first quarter, we held investigator meetings in North America, Europe, Latin America, and Asia, where we continue to see enthusiasm and support for Seladelpar’s return to clinical development.

The study is now actively recruiting patients and with increasing numbers of site activations, we expect screenings and randomizations to accelerate in the coming months. For those not familiar with the design, RESPONSE is a 52-week, placebo-controlled randomized global Phase 3 registration study, evaluating the safety and efficacy of Seladelpar in patients with PBC. It is intended to enroll 180 patients with an inadequate response or intolerance to ursodeoxycholic acid in a two-to-one randomization to oral once-daily Seladelpar 10 milligrams or placebo. The primary outcome measure is the composite responder rate after 52 weeks in which a responder is defined as a patient who achieves an alkaline phosphatase level less than 1.67 times the upper limit of normal with at least a 15% decrease from baseline and has a normal level of total bilirubin.

Additional key outcomes of efficacy will compare the rate of normalization of alkaline phosphatate at 52 weeks and the change in pruritus from baseline to six months for patients with a baseline NRS of four or greater for moderate to severe pruritus. Pruritus will be assessed using the same numerical rating scale and daily electronic diary as we used successfully in ENHANCE. I can’t overstate the value of ENHANCE in determining the size and design of RESPONSE, which as I mentioned, once again, we’ll evaluate the same patient population, the same 10-milligram optimal dose of Seladelpar and the same primary and two key secondary endpoints. In addition to RESPONSE, we have also initiated ASSURE an open-label, long-term study of Seladelpar in patients with PBC in order to collect additional safety data to support registration.

The study will first enroll patients who have participated in our prior studies of Seladelpar and PBC, including the patients who completed the open-label Phase 2 study and enrolled into our previous long-term study and ENHANCE. As patients complete RESPONSE and potentially other future PBC studies with Seladelpar, they will also have the opportunity to enroll in ASSURE. We expect Seladelpar to have one of the most robust safety databases in PBC patients ever submitted for an NDA. In the background of these two significant global clinical studies, our teams have also been executing on regulatory and clinical activities for numerous NDA-enabling studies and CMC efforts required to meet our filing and launch time lines.

These efforts are often overlooked outside of the company, but are highly valued and resourced to succeed as they play a vital role in ultimately enabling the broadest use of Seladelpar to benefit as many patients as possible. On the topic of bringing Seladelpar to patients, I want to highlight some of the important pre-commercial planning and market research work, we have been and will continue to conduct through the course of this year. We have been studying Seladelpar in PBC since 2015, having completed four clinical trials, studying five doses of Seladelpar in over 300 patients, including in both cirrhotic and non cirrhotic patients, and with a subset of these having been treated for two years or longer. The 10-milligram dose has consistently shown anti-cholestatic, anti-inflammatory and anti-pruritic activity, and good overall safety to date and suggest the potential of Seladelpar to provide patients with improvements in biochemical markers of disease and to reduce symptom burden.

Our aspiration is to help as many patients as possible achieve the ideal response of normalizing their alkaline phosphatase. We aim to demonstrate that the potential benefits of Seladelpar can translate into improved outcomes and quality of life for many patients with PBC. In the U.S. alone, there are approximately 130,000 patients with PBC, with as many as 20,000 to 30,000 inadequately controlled by or intolerant to first-line treatment with UDCA.

There are many more who are not currently considered eligible for second-line treatment, even though they have elevated alkaline phosphatase and may also be at risk of disease progression. There are also many patients who suffer from the symptoms such as pruritus, with its significant negative impact to their quality of life. Based on current pricing for second-line PBC therapy, and the potential to deliver even greater benefit, our early market research with healthcare providers and payers, points to the potential for Seladelpar to be the preferred treatment choice for patients, and thus, an opportunity that may generate significantly greater long-term revenues than Ocaliva, which according to recent guidance from Intercept, is currently projected to have $325 million to $355 million in annual worldwide net sales in 2021. As we mature our market research, we will be providing updates on specific details of our projections.

While our core focus remains on completing development of Seladelpar in PBC, we continue to evaluate Seladelpar and our other early stage clinical assets for other indications and development opportunities. Let me turn the call over to our chief scientific officer, Dr. Chuck McWherter, to discuss more. Chuck?

Chuck McWherterChief Scientific Officer

Thank you, Sujal. Last November, we announced plans to conduct a study to evaluate MBX-2982, our GPR119 agonist, as an agent to potentially prevent hypoglycemia in patients with Type 1 diabetes. Insulin-induced hypoglycemia in diabetes is a significant cause of morbidity and an important factor that causes many patients to underutilize insulin to control their blood glucose levels. Glucagon is the counter regulatory hormone secreted from pancreatic alpha cells under conditions of low, but not normal or high, blood glucose.

Glucagon serves to raise low glucose levels caused by insulin back into the normal range. In recently published studies with isolated human pancreatic islets, GPR119 agonists were shown to enhance glucagon secretion in response to low, but not high, glucose levels. And further, they were able to prevent insulin-induced hypoglycemia by increasing glucagon secretion in a rat model. The translation of these findings to the clinic will be evaluated in a Phase 2 proof of pharmacology study, examining whether MBX-2982 can enhance glucagon secretion during insulin-induced hypoglycemia in subjects with Type 1 diabetes.

While CymaBay retains full rights to MBX-2982, the study will be led by AdventHealth Translational Research Institute in Orlando, Florida, and will be fully funded by The Leona M. and Harry B. Helmsley Charitable Trust. We appreciate the opportunity to contribute to this effort to evaluate MBX-2982 for its potential to treat individuals at risk for insulin-induced hypoglycemia, one of the most challenging and potentially life-threatening complications of insulin therapy in diabetes.

Our collaborators, who are funding and running the study, expect it to be completed this year. Although since we are not conducting the study ourselves, we cannot be certain of the timing. Positive results in this study would provide the option to explore monetizing rights of the program through licensing or to advance the compound further into development on our own or with a partner. In 2020, we also began to evaluate CB-0406, the active metabolite of the prodrug, arhalofenate, that had previously been studied in diabetes and gout.

We initiated a single and multiple ascending dose study of CB-0406 in healthy subjects to establish its pharmacokinetics safety and maximum-tolerated dose. CB-0406 is a PPAR gamma non-agonist ligand that attenuates the expression of inflammatory genes. It has been shown to block innate immune responses through the NF-κB and NLRP3 inflammasome pathways. In published studies and LRP 3, Caspase-1 and IL-1 beta were all decreased by CB-0406 in response to inflammatory triggers in macrophages.

It was also shown to attenuate the known NLRP3-dependent pathophysiology of gouty inflammation when dosed as a prodrug in a mouse model and also in a Phase 2 clinical study in gout patients. Based on pharmacokinetic studies in monkeys, we believe that CB-0406 may have greater exposure and potentially greater efficacy than does the prodrug arhalofenate. Decisions on any future development are contingent on its achieving a favorable profile with respect to safety and exposure. The innate immune system plays a pivotal role in many diseases besides gout, and thus, we believe CB-0406 may have utility in various inflammatory diseases and are currently exploring potential opportunities to advance this development pending the results of the ongoing Phase 1 study.

Finally, we continue to explore via business development discussions, interest in evaluating Seladelpar in combination with other promising agents in NASH. The impact of Seladelpar on fibrosis and NASH pathology in our Phase 2b clinical study, together with promising preclinical studies in combinations, suggests the potential for Seladelpar to be combined with agents that have effects on weight, liver fat, and insulin sensitivity, and also with other anti-fibrotic agents. Discussions of this type often take time to mature as other parties evaluate not only Seladelpar, but their own portfolio and business interests. We will provide updates when there is significant new information that we are able to share.

Sujal?

Sujal ShahChief Executive Officer

Thank you, Chuck. In addition to the significant momentum behind our efforts to restart and complete development of Seladelpar for PBC and the advancement of other opportunities in our pipeline, a key highlight of the quarter is the successful management of our overall costs for yet another quarter and throughout 2020, allowing us to start this year with well over a year of cash on our balance sheet. On that note, I’ll ask Dan to provide a brief summary of our key financial highlights. Dan?

Dan MenoldVice President of Finance

Thank you, Sujal. Over the course of 2020, we successfully managed our overall cash expenditures, while we completed our NASH study investigation, obtained the FDA’s clearance to restart development of the Seladelpar program, and commenced our RESPONSE and ASSURE clinical studies and other NDA-enabling studies necessary to complete our late-stage development of Seladelpar in PBC. Overall, our expense management efforts led to cash, cash equivalents, and short-term investments totaling $146.3 million at December 31st, 2020. We believe our cash is sufficient to fund our current operating plan, including the reinitiation of the full development program for Seladelpar in PBC into mid-2022.

Turning now to a brief review of our operating results. Net loss for the three months ended December 31st, 2020, was $15.8 million or $0.23 per share, compared to a net loss of $29.4 million or $0.43 per share in the three months ended December 31st, 2019. Net loss for the year ended December 31st, 2020, was $51 million or $0.74 per share, compared to a net loss of $102.8 million or $1.53 per share in the year ended December 31st, 2019. Net loss was lower in the three months and year ended December 31st, 2020, compared to the corresponding periods in 2019, primarily due to a decrease in operating expenses, including clinical trial and labor-related expenses as a result of the termination of our Seladelpar studies and our cost reduction efforts undertaken in response to the FDA’s clinical holds that were placed on the Seladelpar program in the fourth quarter of 2019.

Given the FDA’s subsequent lifting of the clinical hold and our restart of the Seladelpar program and further exploration of other clinical development opportunities, our cash expenditures and losses are expected to increase in the future as we advance our restarted clinical development programs and activities. 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. We will continue to closely monitor pandemic developments and their associated risks to our business, including our restarted clinical development of Seladelpar and PBC, and we will continue to take actions available to mitigate these risks where possible.

Further, all our actions will continue to be guided by commitment to ensuring the health and safety of our employees, as well as, patients enrolled in our clinical studies. Sujal?

Sujal ShahChief Executive Officer

Thank you, Dan. We’re now happy to take questions. Operator?

Questions & Answers:

Operator

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

Yasmeen RahimiPiper Sandler — Analyst

Hi, team. Thank you so much for sharing all your great progress. A number of questions across various topics. The first one is, if you could comment on whether the agency has maybe modified their view on cirrhotic studies? I recently saw that a label revision would be required for OCA, potentially.

So we wanted to understand, is the agency changing its perspective on the way we’re treating cirrhotic PBC patients? And then the second question is if you could provide some color on maybe how many patients that were in previous studies have enrolled so far into ASSURE? And then I have a quick follow-up.

Sujal ShahChief Executive Officer

Sure. Thanks for the question, Yas. I’ll start it off and perhaps invite others to join me here, particularly, on the regulatory side. If I miss anything, Klara can chime in.

You know, I think, first, it’s important for us to highlight that RESPONSE, as was the case for ENHANCE and even Intercept’s Phase 3 POISE study is really targeting a large proportion of PBC patients that have, either early or mild stage disease, which is actually the case for as many as 80% of the population, approximately. And so in that study, we’re largely enrolling patients that are non-cirrhotics, although it is possible with patients who are well compensated cirrhotics to enroll, particularly, Child-Pugh A patients. And that is a population, in fact, we’ve studied, both in our Phase 2 clinical studies, as well as, ENHANCE. And in fact, I think it’s a key differentiator for us that we have as many as 50 patients, roughly, worth-of data in well compensated cirrhotics and to date, see very good efficacy, as well as, safety, in the same doses we’re studying in the non — in the noncirrhotic patient population.

As it pertains to those patients with more advanced disease, I think one of the advantages we have clearly as Ocaliva has been in the market and as we are able to assess the safety, risk, and concerns for those advanced patients, we have the opportunity, in fact, in studies for patients with hepatic impairment in our studies potentially alongside RESPONSE and even thereafter to have a better overall safety database and even more advanced patients. So we have a more clear understanding of the potential risks, as well as, benefits in that population. So I don’t believe, at least from a regulatory perspective, there’s any change from the agency’s perception at getting a label very similar to what you see with Ocaliva, which is the aim of our study in RESPONSE to effectively get a label for second-line treatment, treatment for patients that are, either non-responders or inadequate responders to UDCA, I should say, or intolerant. That stance has really not changed.

But I think we have a greater view and opportunity, again, to better understand Seladelpar’s overall profile in more advanced patients and cirrhotics.

Yasmeen RahimiPiper Sandler — Analyst

Thank you, Sujal.

Sujal ShahChief Executive Officer

And then, Yasmeen, I think you also asked about progress specifically in ASSURE. And, you know, again, here, I’ll just say, we’re incredibly excited that both RESPONSE and ASSURE are now actively recruiting patients. Specifically with ASSURE, we have, of course, opened up the possibility and opportunity for patients that were in our previous Phase 2. Most of which, in fact, had enrolled into our prior long-term study, as well as, patients from ENHANCE.

And so I think as we continue to offer that to site and to patients we’re seeing, obviously, a tremendous amount of excitement, particularly on behalf of patients that were previously on Seladelpar. That’s a process similar to RESPONSE that’s going to take time to get out to the 20-plus countries that we are enrolling patients, particularly in ENHANCE. But we continue to do that work, the investigator meetings, as I mentioned in the prepared remarks that have now covered, really all geographies are a key step in getting sites informed, as well as, ultimately activated. So we’ll see progress in ASSURE enrollment as we see similarly progress and RESPONSE enrollment, really mirroring site activations and really accelerating as those sites get on board.

Yasmeen RahimiPiper Sandler — Analyst

Thank you and then a quick one for Chuck. Chuck, can you elaborate a little bit more on CB-0406? Like what — in regards to the mechanism of non — what are the potentials of being a nonagonist ligand of PPAR gamma? And then also, what are the indications? You don’t have to give me the exact one, but what is — what are all the possibilities of areas that you could be potentially interested in? So that would be helpful for us.

Chuck McWherterChief Scientific Officer

Yeah. Thank you, Yasmeen. Well, we’re really very excited about CB-0406. To start with, just for the audience to understand, it’s extremely derisked.

It’s been — the prodrug has been studied in a significant number of patients and a significant number of studies, and it’s clinically validated. So as you may or may not know, gout — gouty inflammation or gout flares are a strong inflammatory response. It’s driven by the NLRP3 inflammasome, which is a very exciting area of research and sterile inflammation with many start-up companies working actively on this and it’s known because neutralizing biologics to IL-1 to block gout flares. So our preclinical work with macrophages and mouse models of the inflammation showed that we blocked that pathway and we did that also in gout patients.

So I guess I would just invite you to consider the broad landscape that’s being described in the literature. If you were to do a PubMed on NLRP3, you’re going to return a really large number of indications of interest. With a lot of unserved or unmet need that I think interdicting in these pathways could make sense for 0406. So just to recap, it’s a known pathway.

We published a paper in 2018. It’s on our website that describes the mechanism, as well as, we published a paper on the gout study. If you put those two together, with the fact that we believe 0406 will have greater exposure and efficacy, I think it really sets us up with a lot of very delicious menu of opportunities from which to select one of these disease — disorders that you’ll find in the literature surrounding NLRP3. And I think the other advantage, just to touch on you asked what about the non-agonist aspect.

PPAR gamma is the target of insulin sensitizers, which of course, have their own beneficial pharmacology. But they come with a lot of downside with respect to weight gain, increase in adiposity, electrolyte imbalance, edema from action in the kidney, and bone effects. So based upon an extensive clinical program, the fact that we don’t activate genes like the insulin sensitizer does, keeps the drug, so to speak, out of harm’s way with the side effects or the untoward actions of the insulin sensitizer. So that’s where the — another degree of excitement comes from because it’s already been derisked for this, clinically.

Yasmeen RahimiPiper Sandler — Analyst

Thank you.

Operator

Thank you. Our next question comes from Steve Seedhouse with Raymond James. Please proceed with your question.

Steve SeedhouseRaymond James — Analyst

Good afternoon. Thanks for taking the question. The first one, just regarding ASSURE long-term safety data you’re collecting. What is the target enrollment of that study? And do you need a certain number of patients with longer than 52 weeks’ follow up before you submit for approval? Or will you essentially just submit what you have when RESPONSE concludes?

Klara DickinsonChief Regulatory Officer

Hi, this is Klara. We don’t have a specific target required by the FDA. Obviously, the more we have, the better to give FDA an assurance of the overall safety and side effects of the drug. So we’re trying to just allow as many patients to come back into ASSURE that were previously enrolled in the trial, as well as, those who can participate once they complete the RESPONSE study.

Sujal ShahChief Executive Officer

I think the only other thing I’d add, Steve, is, yeah, this is a study that was, in fact, ongoing in parallel, a long-term study when we were enrolling and conducting ENHANCE. So we’re really just rinse and repeat of the clinical development strategy that we had prior. This long-term study, of course, given ENHANCE enrolled and randomized 265 patients is open for those patients in addition to those in our prior long-term study. And I think, as we mentioned again in our prepared remarks, it’s what really sets us up even if we get, say, half of those patients to enroll in the study to have one of the most robust safety databases at time of anticipated NDA in the setting of PBC that any sponsor has actually had at the time of registration.

So we’re quite confident that this really positions us to have another significant advantage relative to others in the field.

Steve SeedhouseRaymond James — Analyst

Yeah. It makes sense. Although the one thing, I guess, that’s not clear is will — assuming that you will apply for accelerated approval on the basis of RESPONSE, is ASSURE serving as the long-term outcome study here for full licensure? Or is there sort of an extension protocol that’s blinded and randomized? Because, of course, as you know, Intercept is communicating some issues with their long-term PBC outcome study COBALT and maintaining the blinding and just completing that study in general?

Klara DickinsonChief Regulatory Officer

Yeah. The ASSURE study is not intended to be the study to confirm the benefit of Seladelpar as part of our required Phase 4 study. We are in a continued dialogue with the FDA around the design of that study that we’re going to propose. So it’s not specific to the ASSURE study.

Steve SeedhouseRaymond James — Analyst

OK. So that would — so that study is also separate from RESPONSE. It would be a 2b-initiated study?

Klara DickinsonChief Regulatory Officer

Yes.

Sujal ShahChief Executive Officer

That’s exactly correct, Steve. And this is, in fact, the dialogue we’ve had with the agency for the last couple of years. I think, as you know, the pathway to Subpart H approval through the accelerated approval pathway requires us, at least at the time of NDA submission, to have that Phase 4 outcome study agreed upon and initiated, effectively, at the time of NDA submission. So we’re confident, again, at progress we’ve made in that dialogue.

You touched upon some of the challenges that Intercept is facing in enrolling their Phase 4 outcome study. I’ll just say here once again, although nothing here is finalized, we, once again, have the advantage of learning from Intercept some of the challenges they’ve had and discussing with the agency, a study that we would propose to have a best effort of actually enrolling and completing. So it’s a challenge in this setting, a slowly progressing chronic disease. But again, we have the benefit of learning from some of the challenges they’ve faced and approaching it with some potential advantages as we get there, ultimately.

Steve SeedhouseRaymond James — Analyst

Very helpful. I appreciate that color. Last question for me, just regarding the market research and aspiration, I guess, you communicated for greater long-term revenue than what’s even indicated by the OCA guidance. How are you thinking about competition like from Elafibranor or generic OCA or even combo OCA plus Bezafibrate? And what impact from those are you assuming in that optimistic, long-term outlook that you communicated? Thank you.

Sujal ShahChief Executive Officer

Yeah. It’s a great question. So you know, we’ve initiated some work, and there’s much more for us to do here as we set ourselves up for potential success. And we certainly believe in that.

And so, you know, when you look at it fundamentally, Steve, I think it all starts with the profile and the data set. And at least to date, we’re seeing a profile of greater efficacy on the composite primary end point. Again, I’ll simply caution as I make these comparisons, they’re not coming from head-to-head data, but just respectively, in the development of these various different targets that you had mentioned. But we’re seeing very robust efficacy and biochemical markers of disease that have, in fact, been correlated to improvements in outcomes, based on rich historical data sets.

As you know, the global PBC study group data, for example. We’re seeing significant effects on inflammation, some of the effects that we’re seeing certainly could lead to improvements, overall, in liver health, potentially liver stiffness and fibrosis. Things, again, that long-term have the potential to impact outcomes for patients. We’re also seeing not just significant effects on biochemical markers of disease.

We’re actually seeing a good proportion of patients, up to 30% in our Phase 2 and our prior Phase 3 work, actually normalize their alkaline phosphatase and this is something in the medical community that is becoming ever more important. I think there’s a stronger desire in the medical community in PBC to treat patients to normalization. That’s not yet something we’ve seen certainly to the degree we have thus far in our studies with Seladelpar necessarily with other agents like Ocaliva. Of course, the BEZURSO study has shown some promising data Bezafibrate on top of UDCA.

Bezafibrate, of course, is not available in the U.S., it is a generic elsewhere. I think fundamentally, the BEZURSO data once again validates the PPAR mechanism in fact, as a preferred second-line mechanism. And really only for those patients potentially that need additional biochemical normalization or lowering to reduce risk of disease progression, you might consider adding an FXR for those subset of patients. But we believe, again, based on our data set, that a fair proportion of patients can get to goal and reduce risk of disease progression in a meaningful way, perhaps with Seladelpar really as a preferred choice.

So as these other competitors really come online, once again, I think it’s the overall profile and I’ll add two other elements to the profile. Obviously, we’ve seen benefits on reducing the key clinical symptom burden of the disease itself on pruritus. We’ve shown it in a statistically significant fashion versus placebo in the enhanced data set. Once again, I think that’s a differentiated data set relative to the many competitors that you highlighted.

Even some of those other PPARs that have shown some potential benefit on reducing pruritus, we have no reason to believe they wouldn’t. But once again, I think the strength of our data set, largely, I think, solidifies Seladelpar as having this effect. If we’re able to show this once again in response, in a meaningful fashion, we think, again, it’s a differentiator versus these other data sets, and then finally, overall safety. I mentioned that we’ve studied not just early stage in patients with mild PBC, if you will, based on biochemical markers of disease in the stage where we see very good overall efficacy and good safety.

We’ve, of course, also studied patients with compensated cirrhosis, those Child-Pugh A’s, as I mentioned. That’s a patient population where, for example, with Elafibranor, we’re not aware of any data existing in that patient population. And so when you think about overall safety, we believe that’s another key differentiator in potentially positioning Seladelpar as a preferred treatment alternative. I think these things matter.

Of course, it is true that how the ultimate competitive environment plays out with respect to pricing and generics will also impact future decisions. But we think once again, Seladelpar is incredibly well-positioned based on this data set and really the opportunity for us to continue investing in life cycle management and additional data sets that may highlight an advantage of Seladelpar on efficacy, on tolerability, as well as, potentially, in safety.

Steve SeedhouseRaymond James — Analyst

Well, kudos on a remarkable turnaround in 2020 and getting back to Phase 3. Really, really remarkable. Thanks for taking the questions.

Sujal ShahChief Executive Officer

Thank you, Steve.

Operator

Thank you. Our next question comes from Alethia Young with Cantor Fitzgerald. Please proceed with your question.

Unknown speakerCantor Fitzgerald — Analyst

This is Nina on for Alethia. Thanks for taking our questions. We wanted to know a little bit more about the CB-0406 program and had a few questions there. We were wondering if this program was discovered in-house or was it in licensed? Also how selective is 0406 for gamma versus other [Inaudible]? And last question, what does 0406 need to show in the multiple ascending dose studies for you guys to be comfortable with this profile? Thanks.

Chuck McWherterChief Scientific Officer

Yeah. Those are three great questions. So I think with respect, first of all, to the selectivity, we’ve extensively profiled it, for example, using receptor assays and it’s very specific for PPAR gamma. There is no off-target effects with respect to isotype effects with respect to PPAR alpha or PPAR delta.

So it’s very — it’s a very narrow range with respect to that. You asked about the — what the success factor is. I think if you look at the publication, we had a good effect on gout flares that was a little bit less than the standard of care-Colchicine. So call it, maybe 80%.

We think that if we could get a significant improvement in exposure based upon what we understand, we should be able to maximize that effect. And Colchicine, in the setting of gout flares, which as I mentioned, is an NLRP3-driven process, although Colchicine x downstream be a different mechanism, essentially represents the maximal effect that you’ll see in the pathway. So we think if we could get a significant increase in exposure, and I don’t want to provide a specific guidance about what that increase in exposure needs to be, but I can say that in the monkey studies where we did — we compared 0406 directly to the prodrug, we saw significantly higher exposure for 0406. So we’re just really seeking to confirm that we’ll hit that target.

And if we do, then we have some very good confidence that that’ll give us the best chance moving forward. I’m sorry, I missed the — I’ve already lost track of the first part of your question. Someone can remind me.

Unknown speakerCantor Fitzgerald — Analyst

Yeah. So was this program discovered in-house, or was it —

Chuck McWherterChief Scientific Officer

Ah, yes, this is an in-house program.

Unknown speakerCantor Fitzgerald — Analyst

OK.

Sujal ShahChief Executive Officer

And I think, Nina, the one other thing I just wanted to add to Chuck’s comments, as we think about potential indications, as Chuck mentioned, there are many that are impacted by this pathway. I think fundamentally, our focus and priority is in identifying rare diseases and potentially even diseases in which you could gain orphan drug designation. So really fitting into our current strategic focus overall.

Unknown speakerCantor Fitzgerald — Analyst

Perfect. Thank you. This is really helpful.

Sujal ShahChief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Patrick Dolezal with LifeSci Capital. Please proceed with your question.

Patrick DolezalLifeSci Capital — Analyst

Hi, thanks for taking the questions and congrats on all the progress. Just a couple more on 0406, if I may. You mentioned some of the safety effects of insulin sensitization might be averted considering the non-agonist nature of this compound. And I’m just curious, at the same time, does that mean that some of the beneficial effects we’ve seen with PPAR gamma agonist would be lacking? Or do you anticipate some translatability on the efficacy side of things via the NLRP3 pathway? And I obviously, totally understand that it’s early and you know, without an indication selected, this might be a less relevant question, but just curious as we think about potential liver indications.

Thanks.

Chuck McWherterChief Scientific Officer

No. Thank you, Patrick. No, it’s a question that makes a lot of sense and so you can find — we had studied Arhalofenate, the prodrug for diabetes and we were always interested in both the insulin sensitization, as well as the anti-inflammatory effects. So I think what we found in diabetes is that the drug was safe.

We’ve completed 17 clinical studies, more than 1,700 subjects were exposed to the prodrug and we did see some benefits on insulin sensitization, but they weren’t competitive commercially. We didn’t see the edema, we didn’t see weight gain, we don’t see effects on bone fracture biomarkers that you see with TZDs. And so for that reason, it just didn’t make sense to continue development for diabetes. About that time, we learned about the anti-inflammatory effects.

And at some point, if we have an R&D Day, it’ll be really nice to be able to explain the trajectory of the program and how we moved into inflammation. But that’s driven by the nonagonist transfer pression of genes. So a transfer press is NF-κB, as well as, AP-1 inflammatory genes. And of course, NF-κB drives NLRP3.

So it’s basically one step upstream from NLRP3 and that also gives, in our mind, an additional degree of selectivity and potential safety. One thing that I didn’t mention is that anti-IL-1 beta biologics are effective and they’re registered for a number of indications, including recently, just this last week, Rilonacept was — which is an IL-1 beta decoy receptor was registered for carditis, recurrent pericarditis. They come with an infection risk. In fact, even serious and occasionally fatal infections, they depress through the mechanism neutrophil.

So you can get occasional Grade 3 and Grade 4 neutrophilia — or neutropenia, sorry, and we don’t see that in any of our studies with the prodrug. So I think being one step upstream gives you a kind of tissue selectivity, but still allows you to get to the anti-inflammatory effect that you’d like to have without having basically a systemic suppression. So hopefully, that helps you give some of the insights around additional excitement we have harnessing this transfer pression in a tissue-specific way.

Patrick DolezalLifeSci Capital — Analyst

Absolutely. Thank you.

Chuck McWherterChief Scientific Officer

Thanks, Patrick.

Operator

Thank you. Our next question comes from Jay Olson with Oppenheimer. Please proceed with your question.

Jay OlsonOppenheimer & Company — Analyst

Oh, hey, congrats on all the progress, including getting those two PBC studies up and running. Can you just talk about what impact you expect, if any, from the pandemic on enrolling the RESPONSE trial and when we should expect to see data from that study? And then separately, if you could comment on how we might extrapolate the shortened ENHANCE results out to 12 months of treatment for response?

Sujal ShahChief Executive Officer

Yeah. Sure, Jay. I’ll start off and answer the first part of your question. I appreciate it.

You know, there’s no question that the pandemic presents challenges, not just for us, but I think many enrolling patients in other studies globally. And so fundamentally, it presents challenges, often in getting patients to screening and patients that might otherwise enroll in studies. The good thing for us here is, during the height of the pandemic, in fact, we are largely in planning stages, getting the protocol approved by regulatory agencies, IRBs, and ethics committees in the various countries in which we are targeting, initiating site and then even getting site contracts in place. That’s really been the crux of the work at the end of last year and early this year.

So it’s a heavy lift and so many — I don’t quite appreciate the fact that when you finally have a protocol for a global study, there’s a lot of leg work before you start getting patients into screening, and ultimately, to randomization and that’s really been the effort that we haven’t faced necessarily challenge with for the most part. There are some times in which regulatory bodies and agencies may have delays. Those are some of the things that we absolutely have faced, will face, and will continue to face, hopefully with less severity as things potentially improve as vaccinations themselves are rolled out globally as well. Now fundamentally, what we’re doing in response, although the study is targeting 80 fewer patients than we had randomized in ENHANCE.

ENHANCE, we had randomized 265 patients, as you recall, in just under a year, given we’re targeting 80 fewer patients, the scope of our effort mirrors the scope of the effort that we had in ENHANCE, if not potentially larger. When I refer to the number of countries and number of sites that we’ll target, it’ll be a similar, if not larger, number of countries and sites than we targeted in ENHANCE, with an effort, as we discussed in our prepared remarks, to get RESPONSE enrolled by the end of this year. That would allow us to have top-line data by the end of 2022 or very early 2023. That remains our objective, Jay.

And I think even regardless of, or I should say, irrespective of the pandemic, in any study of this size and magnitude globally, it would take a couple of quarters for us to really assess how we’re tracking on that timeline. It’s a hockey stick pattern. In clinical studies, as more and more sites come on board, you see an acceleration. That’s what we observed in ENHANCE.

That’s what we expect to observe in RESPONSE. And again, we’re excited that we’ve been able to kick this off and the study, in fact, is actively recruiting. So we’re going to hope clearly to hit those time lines, ultimately.

Jay OlsonOppenheimer & Company — Analyst

Excellent. Thank you for that.

Sujal ShahChief Executive Officer

Thank you.

Jay OlsonOppenheimer & Company — Analyst

And then maybe if I could, just on MBX-2982. Can you talk about the registrational pathway there? Is a hypo-prevention claim going to require an event-driven trial?

Chuck McWherterChief Scientific Officer

Well, thanks for that. It’s a little early. We — I think we haven’t even had a regulatory discussion yet. So I don’t think we — maybe Klara would want to help me answer the question.

Where we are really, Jay, is really establishing proof of pharmacology. Does the — do the results that we’re seeing with human islets in rats, can we recapitulate that in basically a mechanistic study? Then, of course, we would begin to have some dialogue with regulators and would move to a Phase 2b, which currently, you may know that there was just another glucagon approved for a rescue therapy. So that’s all that’s available right now. A safe oral preventative would really be helpful, I think, for a lot of patients who are concerned about how aggressively to use their insulin because of hypoglycemia.

There are many patients who are adolescents or teenagers and their parents worry because a lot of these hypoglycemic episodes occur nocturnally. So having something that they could safely and confidently use and then use insulin appropriately to manage their glucose levels, I think, would be a significant step forward. But we’re a little early in terms of assessing what endpoints would be. That Phase 2b would probably use continuous glucose monitoring, so it would probably be events of moderate to severe hypoglycemia, I’m speculating here.

And then, again, to speculate even a little further, then of course, I think Phase 3 would probably seek just to confirm what you learn in Phase 2b. But you know, it’s a pretty intriguing opportunity, we feel and 2982, which was a homegrown compound really came out of our efforts through medicinal chemistry and the like, I think, is one of the best GPR119s that has been studied. We have five clinical studies, more than 200 subjects have been exposed to the drug in a pretty good nonclinical package. So getting some data here should allow us to move forward more quickly.

Jay OlsonOppenheimer & Company — Analyst

Great. Thank you very much for taking the questions.

Operator

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

Thomas SmithSVB Leerink — Analyst

Hey, guys. Good afternoon. Thanks for taking the questions and let me add my congratulations on the progress. First, just a question on the Phase 3 RESPONSE study.

Can you just clarify the number of study sites you’re targeting and how many are activated at this point? And then can you also talk a little bit about your current thinking on Seladelpar indication expansion? I appreciate the comments on NASH DD, but also wondering whether you can speak to how you’re thinking about potential plans in other rare cholestatic liver diseases like PSC? Thanks.

Sujal ShahChief Executive Officer

Yeah. Sure. Thanks for the question, Thomas. As it pertains to the progress in the study, it’s obviously very fluid.

So every day, there’s progress. Every week, we’re making progress. I think there are a number of sites that you can see on clin trials. I want to say just under half a dozen thus far.

But once again, there’s not a seamless time line as sites get up and running and the information necessarily getting uploaded there. So we’ve made really good progress in terms of overall sites as we continue to get things up and running. When we talk about a scope as large as we had in ENHANCE, you know, ENHANCE, we had activated nearly 150 sites, not all of those enrolled patients. In a setting like PBC, we typically see between one to two patients per site.

There are some sites we consider super enrollers with four or five patients. Of course, there are some sites that ultimately are not able to enroll patients. These just don’t meet the enrollment criteria for this type of study. So we feel we’ve got vast experience now.

Yoiiu know, of those sites we had enrolled in ENHANCE, we know those that likely won’t have patients, so it’ll give us some efficiency in not going back to some of those regions and sites specifically, where there weren’t patients that met the criteria. There were sites that we learned of, at the last stages of randomizing ENHANCE and completing that enrollment that, in fact, had interest. And unfortunately, we couldn’t get them in, in that time. And I think that also gives us a little bit of advantage to just know some of the additional centers that we want to ultimately target.

But you know, I think this is going to be, once again, as it was in ENHANCE9, north of 100 sites that we hope to even be activated into this study and contribute to getting us to this goal, again, hopefully, by the end of this year.

Thomas SmithSVB Leerink — Analyst

OK. Great. No, I appreciate that color, Sujal. And then maybe if you could just talk a little bit about the business development and I guess, how you’re thinking about plans in PSC at this point.

Sujal ShahChief Executive Officer

Yeah. No, sorry, good follow-on question. So as we had discussed, we continue to have dialogue around opportunities to potentially study Seladelpar in combination with other treatments for NASH. As Chuck mentioned in our prepared remarks, once again, very challenging for us to really pinpoint a timeline on this.

It does involve third parties evaluating not just Seladelpar, but also their own programs and their own strategy. But to give you an example there really quickly and then move on to other opportunities that we remain excited about. When you look at what Novo and Gilead are doing, for example, combining GLP-1 plus FXR, a collaboration which they’ve, in fact, expanded, recently announced an expansion of that collaboration. I think in many ways, we look at Seladelpar’s profile and I would argue, an even better combination with GLP-1 than FXR could in fact be Seladelpar.

So there’s much to dig through and discuss there and we’re committed to that ongoing dialogue and potential additional opportunities. Outside of those that we have specifically decided would only advance with a partner with significant resources on board are, in fact, opportunities you alluded to. Other potential indications in rare disease, PSC, clearly, potentially one of the most obvious ones with Seladelpar. There are others that Chuck and his team have continued to evaluate preclinically as well.

We do think this mechanism may lend itself to inflammatory diseases within liver, rare diseases, as well as, potentially outside of liver. So those things are early, too early for me to be able to comment on. You know, I can tell you with respect to PSC, obviously, this is high unmet need patient population, a smaller patient population than PBC, but a patient population for which there are no approved treatment alternatives. Those patients are more heterogeneous than you see overall in the PBC population.

So we continue to have dialogue with experts, with advisors as we think about the right timeline, the right types of study designs to potentially explore PSC. But certainly, that’s an area of high interest. The real question right now is timing. And right now, we’re committed to making sure that we, not only get back into the clinic in PBC as we have this quarter, but really drive to a completion there because we think there’s real near-term opportunity to advance care and significantly even grow the patient population, as we’ve discussed.

Thomas SmithSVB Leerink — Analyst

Got it. Got it. OK. Great.

Thank you. I appreciate the color.

Sujal ShahChief Executive Officer

Thank you, Thomas.

Operator

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

Mayank MamtaniB. Riley Securities — Analyst

Good afternoon. Thanks for taking my questions and congrats on, I think, a good turnaround. So just maybe, Sujal, if you could comment on what you said in your prepared remarks. You know, the overlooked NDA-enabling activities in PBC.

I mean are there any drug-drug interaction studies that you may have to do? And maybe just thinking about combinations there, if you could comment also to summarize your work you may have done in NASH to date from a combination standpoint with Seladelpar, I think that could be really helpful.

Sujal ShahChief Executive Officer

Yeah. Certainly. So I’ll start off with the first part and then I’ll invite Chuck to more specifically talk about potential NASH combinations. You know, the NDA-enabling studies that Klara and all the teams here internally are really spearheading are really the standard ones.

So looking across PBC at the treatments that patients are typically on and ensuring that we look at drug-drug interaction studies for those commonly prescribed medications that this patient population can be on as well. They include renal impairment, hepatic impairment study. So just a lot of blocking and tackling, Mayank. Nothing outside of the norm fundamentally than what would be expected in this setting.

So those are just ongoing activities as we drive toward. You know, looking forward, if we’re able to meet the timelines that we’ve set forth, we would anticipate being in a position to file an NDA, potentially in mid-2023. And so making sure that we have these things completed by the time of that NDA submission is also a priority, of course, alongside the Phase 3 study and the long-term study as well. Maybe, Chuck, do you want to talk more specifically about the second part of Mayank’s question?

Chuck McWherterChief Scientific Officer

Yeah. Sure. Happy to do that. So if you have an opportunity, you can look on our website.

We have some posters that we presented, looking at some combinations in a pretty aggressive fibrotic model in mice and we’ve looked at a variety of agents. We’ve looked at GLP-1 receptor agonists. We looked at selonsertib because it was in Phase 3. We’ve looked at some antidiabetic agents and the like.

I think what’s really emerged for us is, so far, the agents that have effects on metabolic features. So for example, if you look, you’ll see that we looked at Liraglutide, which has its own human data, where there’s some good effects on NASH pathology, but limited to no effects on fibrosis. You probably know that Semaglutide also has recently released some NASH data as well which has pretty much a similar pattern. Some very, very convincing data on NASH pathology, but really nothing available on fibrosis, at least, for the duration of the studies that have been examined to date.

In mice, at least, with the caveat, the difficulties of translation, we see a very strong complementarity. So Seladelpar has some metabolic effects, but it has some strong antifibrotic effects. Those metabolic effects of Seladelpar added very nicely to the effects of the GLP-1 receptor agonist while maintaining the antifibrotic effects. So the thinking is that you have two agents, you put it together, you take away some of the disease deriving from the metabolic side and you supplement that with the known histological feature that drives liver-related outcome.

You basically stop that in its tracks. You’ll have an early effect on events. Those two together could be quite intriguing to study and I think that’s probably the similar concept that Gilead and Novo are looking at. We just think that if you look at the — our NASH clinical data where we had 26% NASH resolution and 37% 1-stage fibrosis improvement in NASH patients, we believe Seladelpar would be a very strong player in that kind of combination and with the caveat, it’s not head-to-head.

I think it really suggests at least one should think about that combination with the GLP-1 receptor agonist.

Mayank MamtaniB. Riley Securities — Analyst

Thank you. A very helpful overview on both those topics. And quickly on — Chuck, on 0406, I understand the mechanism very well. But on the attributes on the specific molecule, it seems like a lot of those, like almost you’re going up to 1 kilo.

Can you just maybe comment on why is that? And when you think about your next study, is your mid-2022 cash runway include whatever you may do next in — with this molecule? Just curious.

Chuck McWherterChief Scientific Officer

I’ll handle the first part and then Sujal can help you understand the balance and the capital allocation. So in gout, we studied an 800-milligram dose and in — and of course, I’ve already mentioned that we expect that 0406 would be a lower dose because of its higher exposure. The other thing to appreciate is that 0406 is basically the intermediate right before the synthesis of the prodrug. So all of the CMC has been worked out under GMP at the half metric ton scale and the molecular mass of 0406, of course, is smaller than arhalofenate.

So the total overall dose could well be less. And of course, there’ll be some cost of goods advantages because there’s one less step in the process.

Sujal ShahChief Executive Officer

And Mayank, as it pertains to the forecast on the cash runway, it includes completing the Phase 1. It does not yet include thinking through any number of potential Phase 2 studies that we would look to execute. I think again, here we want to make sure and understand the indication that we think merits further investment. You know, I will say one thing as it pertains to, obviously, the balance sheet, we’re quite pleased with the fact that we’ve 9been very cost efficient.

Through the last year and a half, continue to have, as I mentioned, well over a year’s worth of cash on the balance sheet. We feel that there’s nothing we’re restricted from accomplishing throughout the rest of this year. We also firmly believe that we have access to capital through various means and we’ve been evaluating these periodically, as we always do, even in years past. Continue to see a lot of support from investors, again, through various different vehicles.

And fundamentally, we’ll make the right decision at the right time around ensuring, not only our ability to get Seladelpar through Phase 3, but to NDA filing and subsequently prepare ourselves for at least a U.S. commercial launch. We continue to evaluate potentially other geographies and whether or not we may out-license rights to other geographies and that may come down the road in the future. But of course, again, we’ll make sure that we have the balance sheet necessary not just to move Seladelpar through to completion, but obviously, these other programs, should we see real opportunity to create significant value there.

And again, near-term, at least with 2982, as you know, the Phase 2a study that’s ongoing is being funded fully, as we mentioned, by the Helmsley Charitable Foundation and so that’s not actually taking capital from our balance sheet today.

Mayank MamtaniB. Riley Securities — Analyst

Thank you. It’s, again, incredible what you’ve been able to do with what you had a year ago. Thanks for taking my questions.

Sujal ShahChief Executive Officer

I appreciate it. Thanks, Mayank.

Operator

Thank you. Our last question comes from Ed Arce with H.C. Wainwright & Co. Please proceed with your question.

Ed ArceH.C. Wainwright & Co. — Analyst

Hi, everyone. Thanks for taking my questions and let me add my congratulations on a remarkable turnaround throughout all of last year with Seladelpar across your programs. Some of the questions I had have already been answered, but I do have a couple. One is with regard to RESPONSE, your pivotal study.

Clearly, you’re leveraging many of the sites that you had previously used for ENHANCE, as well as, optimizing the study design and everything from the ENHANCE data. But I’m just wondering if perhaps just qualitatively, you could discuss, in addition to the ongoing pandemic. What potential obstacles or challenges do you see with enrollment? And I’m just wondering, although this may be unlikely to really affect anything. But I’m just wondering if perhaps, while there were a lot of patients that had good experiences in prior studies, if there was any sense that you’re hearing of hesitancy from, either patients or physicians, given the clinical hold and everything during that episode? And then I have a follow-up.

Thank you.

Chuck McWherterChief Scientific Officer

Yeah. Thank you for that, Ed. Well, let me first just start out, and I think just to say that in terms of mitigation for COVID, we’re able to kind of leverage a lot of experience that has emerged for other sponsors and with our partner CRO as we’ve gone through various waves and surges around the world. So there have been a lot of experiences developed that allowed us to put in place various things that you can do to mitigate things like home health visits where needed.

Things like being able to dispense drug directly to patients in their home so they don’t have to travel to the site. Things like offering transportation if patients were uncomfortable using public transport. Things of that nature, so there’s a lot that we’ve learned and we put in place and we’re able to incorporate this into the protocol. So if we need it as an option, we can use it.

It’s not to say we are going to use it. It’s just there and all territories. So that’s kind of one question. The second you’re asking about is, you know, is there some kind of lingering concerns, some trailing concern about the experience? And I can just say unreservedly, no.

Our approach really has been to be in close contact, not only with key opinion leaders, but really with investigators who’ve been in all of our studies. There’s not a week that goes by that I’m not speaking with them, talking about them. You know, I think our best tool really for enrolling the study is the data and — from ENHANCE. And the enthusiasm that I received, the comments that I received, the discussion that we’ve had with KOLs around what we found, as a result of the investigation had really been heartening.

And from the patient perspective, for example, I just had an email last night, a site that really has many patients that are just really excited, hopeful that they can come back into treatment with Seladelpar. So I think I really have no reservations about a concern that we moved through with respect to what happened in NASH.

Ed ArceH.C. Wainwright & Co. — Analyst

OK. Great. Fantastic. Glad to hear that.

Second question is with regard to the two key secondary endpoints. You’ve talked before in the past. Certainly, about what you would like to see in terms of potential labeling, were you to see significant reductions in pruritus, but also wondering about ALP normalization. Given that there is data to certainly support the idea that you could see significant normalization, how should we think about the options that you may pursue in terms of labeling, especially from a differentiation or marketing perspective there?

Sujal ShahChief Executive Officer

Yeah. Ed, thanks for the question, really thoughtful. I’ll start it off and invite Klara and Chuck, perhaps, to chime in. I think fundamentally, with respect to AlPhos normalization, there really isn’t necessarily a regulatory pathway to recognize the AlPhos normalization from a labeling claim perspective.

We do think that the data set itself and having the ability to have data sets from ENHANCE and even RESPONSE demonstrating a good proportion of patients that actually experience normalization, nevertheless, is a key differentiating feature, certainly, from the only existing second-line treatment alternative, Ocaliva, and potentially even others that are being evaluated. So it’s of prime interest not only to us, but really the entire medical community and we think could be a key factor in driving potential use should we be successful in getting Seladelpar registered, of course. With pruritis, I think it’s a bit more straightforward than even AlPhos normalization. You kow, this is a known clinical symptom of the disease.

It affects quality of life quite significantly. I think in many ways, you might consider symptom burden to be an outcome of the disease itself. And so here, of course, we have aspirations. We think there are various ways to win here.

Clearly, having a data set strong enough that the regulators would view as being able to provide some indication on the label of treating patients with PBC, treating pruritus for patients with PBC is probably at the top of that win list, but there are others. Having the data set itself in the label, a strong data set, continuing to be able to invest in evaluating patient-reported outcomes, be it pruritus or even fatigue, is just something we’ve done consistently in our clinical studies. All of these data sets, we think, as we look to publish and continue to invest in life cycle management to really have data to support broader use of Seladelpar, I think can be quite valuable overall, as we continue to progress, even in the absence of a specific label claim. Of course, we continue to be hopeful that we’ll be successful here and show a kind of effect as we’ve shown in ENHANCE and continue to think about opportunities even beyond the Phase 3 study to invest in these types of data sets.

Ed ArceH.C. Wainwright & Co. — Analyst

OK. Great. Final question then for me is, if you could — perhaps this is a question for Dan. But if you could help us think through the potential trajectory or cadence of opex spending throughout this year and perhaps, into early next year.

Both G&A and R&D, especially perhaps, later this year as you look to get readouts from your early stage pipeline and think about pursuing further development with those compounds.

Dan MenoldVice President of Finance

Yeah. Thanks for the question, Ed. You know, certainly, as we highlighted in the remarks, we are seeing an uptick in our spending as you would clearly expect as we reactivate these programs across a number of trial fronts and initiatives. And so we’re projecting a $20 million and growing to sort of $25 million per quarter sort of run rate and a little bit more toward the back half of this year and less so toward the first half.

So that’s sort of the progression. And as we discussed a little bit earlier on this particular call here, if you consider some of these other programs, they are — the CB-0406, for example, or — we’ve got funding in the budget for those. But we’ll take a look at where the data leads us there and consider the capital needs beyond that. And I think I’ll just turn it over to Sujal as well for any other color.

Sujal ShahChief Executive Officer

Yeah. No, I think, Ed, as Dan mentioned, if you look back at historical opex when we were enrolling ENHANCE, I think it mirrors what we’re projecting here with respect to $20 million to $25 million per quarter. And it won’t get to the high end of that range until we get much deeper into enrollment and that’s what really provides the cash runway guidance to mid-2022 and the strength of the balance sheet that we have here today. Obviously, we’ll evaluate opportunities to continue advancing the pipeline programs as we progress and certainly look to do so in the future.

Ed ArceH.C. Wainwright & Co. — Analyst

Great. That’s helpful and congrats again.

Sujal ShahChief Executive Officer

Thank you, Ed.

Operator

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Sujal ShahChief Executive Officer

Thank you, operator. You know, I’ll just leave everyone here with one sentiment. One year ago today, we had shut down all clinical activities while we took on the important work of ensuring patient safety before dosing another patient with Seladelpar. Today, we have four active clinical studies ongoing across three different programs and multiple significant opportunities to create value for patients and our shareholders.

We would not have accomplished what we accomplished in the past year without the grit, resolve, hard work, and dedication really by everyone at CymaBay, by our partners, our expert advisors, and of course, the patients that continue to inspire us in our most challenging days. I thank all of them. I thank you for joining us today, and I look forward to providing you with many more updates in the months ahead. Thank you.

Duration: 81 minutes

Call participants:

Dan MenoldVice President of Finance

Sujal ShahChief Executive Officer

Chuck McWherterChief Scientific Officer

Yasmeen RahimiPiper Sandler — Analyst

Steve SeedhouseRaymond James — Analyst

Klara DickinsonChief Regulatory Officer

Unknown speakerCantor Fitzgerald — Analyst

Patrick DolezalLifeSci Capital — Analyst

Jay OlsonOppenheimer & Company — Analyst

Thomas SmithSVB Leerink — Analyst

Mayank MamtaniB. Riley Securities — Analyst

Ed ArceH.C. Wainwright & Co. — Analyst

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