ICPT (2021 - Q2)

Good day and thank you for standing by. Welcome to the Second Quarter 2021 Intercept Pharmaceuticals Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. Lisa DeF

Thank you. Good morning and thank you for joining us on today's call. This morning, we issued a press release announcing our second quarter 2021 results and financial position, which is available on our website at www.interceptpharma.com. Before we begin our discussion, I'd 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 morning's press release and in our periodic public filings with the SEC. Today's call will begin with prepared remarks from our President and CEO, Jerry Durso. And today we'll hear from a number of new members of the Intercept leadership team including, Chief Commercial Officer, Linda Richardson; President of Research and Development and Chief Medical Officer, Michelle Berrey; Chief Financial Officer, Andrew Saik; and Dr. Gail Cawkwell, Senior Vice President of Safety and Pharmacovigilance will also be available for Q&A. Please limit yourself to one initial question in order to allow time for all questions to be addressed. Let me now turn the call over to our CEO, Jerry Durso. Jerry?

Thanks Lisa. Good morning, everyone. Thank you for joining us on our second quarter 2021 earnings conference call. We embarked on 2021 with focused set of objectives. And as we crossed the halfway point of this pivotal year for Intercept, I'm pleased with the progress that we've made. First, we told you that we would continue to drive our PBC business. In the second quarter, we delivered sales of over $96 million, and another quarter of double digit sales growth. We also work with FDA to finalize important changes for Ocaliva label in the US, and began educating the market on the new prescribing information. This clarity on the label will now allow us to return our focus to supporting the long-term growth of this important foundational franchise.

Thanks, Jerry and thank you to everyone who's making time to join us today. As you saw in our press release this morning, our foundational PBC business remained strong, posting another quarter of double digit growth and a solid performance for the first half of 2021. The performance was driven by increasing sales in the US and a significant contribution from our international business. First, let me talk about the US. You may recall, we received our updated label in late May and quickly began communicating this information to our key audiences using a multi-channel approach. Our top priority is to reach our existing prescribers first and we are making excellent progress toward that goal. As of today, we have educated almost two thirds of our existing prescribers and a market research survey of the sample prescribers indicated 85% already have awareness of our new label. Importantly, as we feel confident that we have effectively educated the majority of our existing Ocaliva writers in a given territory, we'll return to branded messaging and our prior strategy of driving growth in the community gastroenterology setting. This will be on a case by case basis, of course and we anticipate that all territories will be switched over by the end of August. In terms of prescribing trends, we are now just beginning to see the impact of our label update in the US. I would note that new writers who are largely community gastroenterologists generate a significant amount of our new business. Therefore, we would expect to see an impact on new patient starts in the third quarter of 2021.

Thank you, Linda and good morning everyone. I'm truly honored to be joining the team here today. I'll begin with the NASH regulatory update that was promised for this quarter. We are pursuing an accelerated approval pathway for OCA as the first compound to treat advanced fibrosis due to NASH, a disease with increasing prevalence and no improved therapeutic options. The accomplishments by the Intercept team to date have been groundbreaking. I believe the iterative process with the FDA this year has affected progress on three key items, one, the large safety database for OCA; two, liver biopsy interpretation methodology; and three inclusion of 500 additional month 18 liver biopsies from REGENERATE. First, we have more than doubled the safety data we have for OCA and NASH since the time of the initial interim analysis. Let me put that in perspective. For the interim analysis in 2019 approximately 1900 patients had a median of 15 months of drug exposure. We now have just under 2500 patients with a median of more than 30 months of exposure data. Approximately 650 of these patients have reached month 48 and are each contributing four years of safety data on OCA. With this significant increase in the amount of time patients have been on therapy, we are now analyzing over 6000 patient years of safety data. We've gained alignment with the FDA on the safety data cut off and other details related to the analysis plan, as well as for adjudication of specific events, including potential liver events. As we analyze data over the coming months, we will pursue active dialogue with the FDA as needed. In summary, we've made significant progress and our evaluation of OCAs safety and tolerability profile in NASH, and we're excited to see data beginning in the fall and through the early part of 2022. Second, liver biopsy methodology, with the increasing number of investigational compounds moving forward in NASH, the need for standardized slide preparation and reading methodologies has become a front and center issue. As the REGENERATE trial of OCA is the first and largest successful Phase III trial in NASH, it was critical for us to take a look at different potential methodologies for slide interpretation. We have completed our review of the methodologies and the draft guidance and have elected to move forward with a panel review.

Thanks Michelle and good morning, everyone. I am also very pleased to join the team on the call this morning. For reference, I would ask that you please refer to our press release that was issued earlier today for a summary of our financial results for the second quarter ended June 30, 2021. Beginning with sales performance this quarter, we recognized worldwide Ocaliva net sales of $96.6 million. This compares to 77.2 million in the prior year period and 81.7 million in the first quarter of this year. Our worldwide Ocaliva sales are comprised of US net sales of 68.2 million and ex US net sales of 28.4 million. This represents growth of approximately 14% and 61% respectively versus the prior year quarter. Our US business performed well as Linda discussed earlier. In our international business, growth over the last year was driven by increased demand and also had included benefit from country mix, foreign exchange rates and timing of inventory changes last year related to COVID-19. Overall results reflect the solid global business performance. GAAP operating expenses for the quarter totaled $95.8 million, which was a decrease of 33.5 million versus the second quarter last year. Non-GAAP adjusted operating expenses were 86.5 million for the second quarter, a decrease of 25.9 million versus the prior year period. Please note that we recognized an R&D tax credit of $10.7 million during the quarter, meaning that on a normalized basis adjusted operating expenses were 97.2 million. As a reminder, our non-GAAP adjusted operating expenses excludes stock based compensation and depreciation. Cost of sales for the second quarter was point $0.6 million compared to $1.9 million in the prior year period. SG&A expenses were $57.7 million for the second quarter, a decrease of 35.7 million versus the second quarter of 2020. The change was driven primarily by actions taken to reduce operating expenses relative to the prior period. Our R&D expenses in the second quarter were 37.8 million versus $34 million in the same period last year. The increase was primarily driven by the recognition of lower UK R&D tax credits in the three months ended June 30, 2021. Normalizing for R&D tax credit in both periods, R&D expenses decreased by approximately $7.5 million, reflecting lower costs related to our NASH development program. For the six months ended June 30, 2021, total R&D expenses were at $8.6 million with NASH related R&D expenses representing approximately two thirds of this cost. As a result of our strong business performance, we ended the second quarter on a higher cash position than Q1 and reported the company's first ever cash positive quarter. Our cash, cash equivalents, restricted cash and investment debt securities as of June 30, 2021 totaled approximately $422.5 million. Lastly, we are reiterating our guidance for full year 2021, including worldwide Ocaliva net sales in the range of $325 million to $340 million. While our year-to-date sales results were strong and are trending above expectations, we are just now beginning to see the impact of our label change in the US. Because the label update is still in its early stages, we are not prepared to change our guidance at this time. We are also reiterating the non-GAAP operating expenses in the range of $380 million to $410 million. This operating expense guidance factors in the incremental work in NASH that Michelle discussed earlier in the call. It is one of my top priorities to ensure that Intercept remains financially strong. We will utilize our cash prudently and ensure we have a strong balance sheet to support the growth of our foundational PBC business, execute on our regulatory milestones, and have the flexibility to look for opportunities to grow and expand our business. With that, I now like to turn it over to the operator for any questions. Operator?

Thank you. We have the first question from Michael Lee with Jefferies. Your line is open.

Hi, good morning. Thanks for the question and nice to hear Michelle. I think everybody knows Michelle. So it's great to have you at Intercept. We had two questions. One was on the reread and analysis of the pivotal study. Can you just clarify, you're going to reread everything baseline and the scans, there's more patients now at 18 months and you're just going to report out that data because technically that data could change, right. So can you just clarify how that will play out? And what happens, you're just going to put out the data and tell us if it gets better or stays the same or worse? And then the second question is on the F4 study, same type of thing. I think you made some changes to that study previously, but maybe just talk a little bit about how you're handicapping that result and how you expect that to read out. Thank you.

Okay Mike, thanks for the question. I like you are happy to have Michelle on the call today. So we'll turn your questions right to her, I think.

Yeah, so thanks, that it's nice to hear your voice, really great to be here today. So to your first question on the reread, yes, we now have disclosed what we are going forward with for our consensus reads with the pathologist. As you know, historically, really over many decades, we've relied on a single pathologist, sometimes to pathologists, and we have heard from the regulators that that raises some questions about discordance they have been recommending in their draft guidance, consensus, but really didn't give specifics on what that meant. We have gone forward and we'll be disclosing details around that hopefully at the Liver Meeting this fall on our plan, which is to use three independent pathologists. So they will all be receiving those biopsies simultaneously and then we will - as we get their reads in from first two primary pathologists if they are aligned on their read on the slide, then that's the answer. If they have two different reads, the third pathologist breaks the tie. So simply stated that's our plan to get to the consensus. It will create a new data set. So because this is a new methodology, and one that we believe increases the sensitivity, we'll go into the details, again at the Liver Meeting. We are we are excited to be implementing this new methodology. So we did want to read all of the baseline slides all the month 18s. So that's over 1700 biopsies, both at baseline in and month 18. I think on your question about REVERSE was about the patient population. So that's an F4 patient population. And again, that methodology would be used for those slides as well. We did have some changes on the timing of that biopsy that went from month 12 to month 18. And we'll again be using that same methodology, those slides are going to be read in parallel to the REGENERATE, so we expect the timing of those should come pretty close. But until we get a little line of sight on how long it takes for the pathologists to get through all these biopsies, really can't give any specific guidance, we'll certainly be updating once we see what their cadence is on reading the slides.

Okay, just want to be clear, the timing of this would all come out kind of around the same time as your base case which is by year end for both studies.

We can't really give you guidance on that until we see what the timing is. Again, with pathologist we're reliant on humans. So again, until we get some idea with their pace.

Yeah. Mike, just to clarify, as Michelle indicated, we'll be reading the two studies in parallel. The REGENERATE data set is obviously a lot larger. We do continue to expect to see the REVERSE top line by the end of the year. However, as Michelle indicated, we'll get a little more insight on the time for the totality of those REGENERATE reads as we progress through the processor.

Perfect. Thank you, guys.

Thanks Mike.

Our next question comes from Alethia Young with Cantor Fitzgerald. Your line is open.

Hey, guys, thanks for taking my questions. And welcome to all the new faces. We look forward to working with you guys. One, I guess this is a philosophical question, but just kind of as you work through this process, do you feel - like how much do you feel is an issue with being first in class versus a potential kind of long-term kind of risk benefit concerns of OCA? And then just following on the question that was asked previously like, so when we see the kind of new biopsy review, is it possible the efficacy will change that you'll see. I mean, I would doubt that it would probably be the exact same and so is that the efficacy now the FDA will be considering basically and also along with the risk? Thanks.

Yeah. Alethia, thanks for the questions. Maybe I'll start on the first one and then maybe Michelle on the second one. I mean, obviously, we're continuing to progress with the dual objective, there is an unmet need out there. So our intention to do our best to meet that unmet need on as expeditious of path as possible is one of the objectives at the same time ensuring that we're moving forward and ultimately have a data set here that will allow us to have the - be in the best position to have the strongest understanding of risk benefit as we regroup on that discussion with the agency. In terms of the question, first in class, I mean, I think we want to make sure that we're also not losing sight of the fact that we continue to believe the antifibrotic benefit that we've seen in the previous analysis is a key element of the benefit and is a potential differentiator from some other compounds that might be progressing that may not bring that benefit. So more to come here, but we stay focused again on that dual objective of yes, moving forward as quickly as we can while at the same time trying to increase the ultimate probability of success and the important quality of that dialogue with the agency once we have some additional data in hand. The second part of the question was about whether or not the new method could alter or provide new results. Michelle, maybe you can give some color there, please.

Yeah. I don't think we expect these data to be exactly the same. But remember, we did see highly statistically significant and we believe clinically significant differentiation from the placebo cohort even in the interim analysis. As you pointed out, this is a lot more data and we believe by using this panel we are getting a more consistent read across that. So we're sort of taking out some of the noise that we know you get with discordance. So we believe this will give us a stronger data set to be the basis of a potential resubmission. Just one other point on the safety, because we now have over 650 patients who've reached four years so that additional large data set also will strengthen the ability for us to assess risk benefit going forward with this submission. So we're excited to get these data and look forward to sharing out with you guys as it comes in.

Great, thank you.

Our next question comes from Yasmeen Rahimi with Piper Sandler. Your line is open.

Hi, team, so nice to hear your voices. And thank you so much for the great color. I would like to drill down on understanding a little bit more the discordance between a single reader and three readers. When we think about the two endpoints one point improvement of fibrosis and NASH evolution, can you give us a glimpse into is the discordance more prevalent when we assessed fibrosis versus NASH evolution? How does the discordance could contribute to differences in the placebo? And thank you for taking my question.

Yeah, so thanks for the questions, nice to talk to you today. So the difference between a single reader and again, we'll go into the specifics on our analyses at the Liver Meeting. We're hopeful, again, that's been submitted as an abstract. So can't go too much into the data behind that, but what we did see was that by using a panel we do increase the sensitivity. And we believe that gives us a more consistent read on these data, whether that's a binary outcome, like whether there's ballooning or not or on our fibrosis grade. So we do believe that this will give us a more consistent data set and one that we believe again, will strengthen the risk benefit assessment for us as we go forward with this accelerated approval dataset.

Thank you. And if I may just ask a clarifying question, out of the 500 additional biopsies read, can you comment on how many of those are on drug and how many are in placebo.

So the additions - all of the patients are randomized across the three arms. So that's consistent, whether that was with the initial analysis or these additional 500. So it's a one to one to one randomization, placebo 10 and 25, so that would have carried forward for these 500 as well.

Great. Thank you.

Thanks Yas.

Our next question comes from Salveen Richter with Goldman Sachs. Your line is open.

Hi, thank you so much for taking our question. This is Sonia on for Salveen. Could you just help us understand the REVERSE data coming by year end? Will that - would you fold that also into your resubmission package potentially, I guess next year? And then also, could you help us understand what your expectations are into that top line read? Thank you.

Thanks Sonia. Maybe I'll start on the first question and Michelle can maybe get to the second one. I think as we've said, previously continues to be the case, the dialogue that we've had with the agency this year has primarily been around the REGENERATE dataset. And so clearly as we get closer to read out on REVERSE, we'll be having additional discussions on that data set. I think we continue to be excited about the potential to bring data in this important high risk population. If the study is positive, I think we have some good options for what we may do with that data. But we would like to have a more contemporary discussion with the agency, which we'll have as we get to get closer to the data set. I guess the second part of the question was any additional color on our expectations? I mean, I just think as I said, we're excited. It's an important high unmet need and we'll definitely look forward to seeing the data set there.

So I think that answered your questions.

Yes. Thank you so much.

Thank you. Our next question is from Brian Skorney with Baird. Your line is open.

Hey, thank you for taking the question. Just when thinking about this consensus methodology that you're utilizing for the biopsy reading, I guess, first of all, does that - is that a protocol change in REVERSE? So is the primary analysis going to utilize this as opposed to what was protocol defined and is there any alpha hit to the statistics as a result of that? And then in terms of the baseline analysis that you're going to do for REGENERATE, can a patient wind up that was in the primary analysis being F2, F3 now wind up being F1 or F4 and how will those baseline patients be considered in the data that's one? Thanks.

Thanks Brian. Maybe we'll start on the REVERSE question first.

Yeah, so we are rereading those biopsies. And that was - so I thought that was for REGENERATE. Just make sure I want to - make sure I'm answering your question, Brian. I think the question was, as we're rereading these baselines, could those change? And again, we're not going to go into all of the details on how we selected these pathologists. But we did find that there are pathologists who are very consistent with their reads of fibrosis and other pathologists are very consistent with their reads on the NASH readings on steatosis inflammation. So we are confident that this will be a minimum number. If there are any differences there on the baseline reads, with this new methodology, it is important for us to have the same methodology across all of these analyses, so reading all of the baselines and with now 1700 biopsies at the month 18, it's important to have that same methodology. That did not require a protocol change. We are specifying that in our statistical analysis plan, and again, have been in very frequent conversations with the agency about this and have an agreement with them that we can begin reading our slides with this new methodology. It is a new data set. So it is not an alpha hit. So again, it will be a new data set that will be the basis for our potential resubmission.

Great, thanks for the answers.

Okay, thanks.

Thanks, Brian.

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

Hey, good morning. Thanks for taking my questions. Congrats on the progress and welcome to Michelle and Andrew and others. I'm curious, if you could talk a little bit more about how you anticipate the biopsy re-analysis to impact the FDAs overall assessment of benefit risk? I guess I'm curious on the interdependencies with respect to some of the other gating issues, like safety and outcomes are there - has there been any specific bar for a Delta on histological endpoints that's been discussed? And then secondarily, any reason to expect that the additional 500 patients who enrolled later in the study might differ in their characteristics or on the biopsy collection versus the original patients? Thanks.

Thanks Brian. We'll stick with Michelle on this one.

Yeah, hi. No, nice to talk to you today. So again, the important thing with us using this panel is we believe a much more consistent read across the US. So we are using two different panels, one for fibrosis, one for steatosis and we believe that that new - this new methodology with these pathologists will get us closer to truth and you can see - you might hear quotes on that. But again, as this is a surrogate endpoint, and we've long known some of the limitations of liver biopsies, we believe this methodology gets us closer to that truth of what we're seeing in that and the changes in the liver, between the baseline and the month 18. The second question?

Give a second question.

I guess I curious if there's been a bar discussed, a specific bar for the Delta that you'd need to show on the histological endpoints and then any reason the new crop of patients might be different?

Yeah. So the new patients, the additional 500 are all F2, F3, that is our primary analysis population and has then you may recall, there were some F1 patients in exploratory analyses, but they're not part of the phases of our statistical power. That was part of those original assumptions. I don't believe that the statistics have been disclosed previously. I'm happy to get back with you if that's not the case, but I would say the study is very highly powered to detect what we believe will be both a statistically and clinically significant Delta. And I think you can see that even from the original interim analysis with these additional 500 patients. Again, we believe this is a much stronger data set that'll be potentially supporting that accelerated approval.

Thanks Michelle.

Our next question comes from Ritu Baral with Cowen and Company. Your line is open.

Hi, this is Anvita on for Ritu. Congrats on the quarter. Just two questions from us. So firstly, just to confirm, have you obtained a definite alignment with the FDA for the resubmission? And secondly, what is the cut off for the safety data that will be needed for the resubmission? Thanks for taking our questions.

Okay, maybe I'll start on the question, the first one and then we can come back. It's been a considerable amount of dialogue with the FDA in the year-to-date, I think as you can - as you heard in the call today, I think we have enough insight now to move forward and generate these large data sets we're talking about. I think we feel good that we align on the details of the safety update. And as Michelle indicated that we have good agreement to start to read the biopsies with the approach that we proposed. Of course, once we generate the data, depending on what we see in the data, it's going to be an important next step, then to get together with the agency and the potential pre-submission and discuss the data in advance of a potential submission. So that's the way we think about where we are in the process. We do believe based on the work to do that that pre-submission meeting, if it happens would be in the first half of 2022. And we'll continue to provide updates as we progress through the work that we've outlined this morning. Thanks, Anvita.

Next question?

Our next question is from Matthew Luchini with BMO. Your line is open.

Hello. Hey, this is Jen on Matt, thanks for taking our questions. Could you provide more color on what drove the second quarter guide and how you expect it to reverse going forward given that you guys maintain the guidance? Is that all going to be going to like the third quarter? Or is that going to be spread over the second half? And I have a follow up after that.

Okay, thanks for the question. I mean, we do feel good about what happened in the second quarter with the $96 million, roughly that we reported on Ocaliva. Andrew, perhaps you can give some insight to how we're looking at the year to go in the context of the sales guidance at this point.

Sure. Thanks Jerry. Yeah, look, again, really happy with the 96 million. The business performance in both the US and international was terrific. I think the reason for the reiteration of the guidance is simply that the impacts of the label change have not been seen yet in the numbers, right. So the second quarter was unimpacted by the label change. We expect that to come in. I don't think we want to give specific guidance on which quarter it's going to hit and when. We expect the impact to last call it three to six months until we see it and hopefully start growing again at that point. So really, the reason for the reiteration was simply that we don't know. And it just seems not the appropriate time to change guidance. And we have such a big question mark out there.

Yeah, I guess the only additional color that I might add is we did talk last quarter, for example, about the potential size of the patient population that might be impacted by the label change, particularly the group that now falls into the contraindication with a label update. And that range of roughly 10-ish to 15% range, we still believe that's a good estimate of the patients who will be now outside of the label. So that's one of the dimensions when we look at the potential impact that we'll be looking at monitoring and again, providing updates in the future as Andrew said.

Okay, helpful. And then you've reset the biopsy of the regenerate data, are you guys implementing a sort of like prospective efficacy bar here? Or is that - are you guys analyzing data post that phase is following the reads? Provide just a little bit more details on what we can be expecting from AASLD. I believe you guys are not going to be disclosing the new data right.

Right, so what we will be going and do at the Liver Meeting again, hopefully we have submitted an abstract and we don't yet know if that's accepted, but we are hopeful we'll be able to share the analyses that we conducted. So work that we did to show why a panel as the barrier is a superior methodology. Compared to a single read, which has been our historical gold standard for decades as you know. Again, we won't - we'll go into some of the analyses that we did, looking at these different consensus methodologies that are all acceptable from the FDA. Again, as kind of a front runner, we felt it was really something that was incumbent on us to do these analyses to have a rationale for why we chose the panel approach. And we'll go into the data behind that rationale at the Liver Meeting. But we're excited about looking at those results, as those come in over the coming months. Again, going back to the earlier point that we are using this new methodology for both the baselines and the month 18s and we do believe this will strengthen our data set. We have not talked about, again, the power of this study, except to say that it is a strongly powered study to be able to detect the difference. And that we - again, we saw statistical significance even in the smaller data set that was conducted back in 2019, so excited about seeing that. We'll certainly disclose that when we have those final data.

Right and then with the new reads is going to be perspective or post type basis. Or are you guys not disclosing that yet?

Not sure I understand the question there. We are looking both at those baselines and the month 18s and as those data come in, we are adding the additional 500 patients as they have reached month 18. I think then those data will be coming in over the coming months, may not be understanding your question.

Okay, all right. Thanks for taking our question.

Sure.

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

Thank you for the update. And thank you for taking my question. Can you comment on whether or not the discordance between the single biopsy reader and the three person consensus panel is systematically biased in one direction? Or is that discordance randomly distributed? And then on the cash flow positivity, is that a goal that we should expect to see in future quarters? And can you talk about the timeline to reaching profitability and whether or not that's a priority? Thank you.

Thanks Jay. Maybe we'll take the second question first with Andrew.

Yeah, no, thanks for the question. Of course, we're delighted that we had the first ever cash positive quarter in the company. We're not guiding to that in the next couple of quarters with the label change and the potential impact on revenue and continued spending on NASH. We would expect to go negative in the next two quarters. Obviously, long-term we're going to be a profitable company and we're looking for that, but we haven't given guidance past this year. And we'll do that in the normal course when we get to year end.

And on the second question, well, I guess it was your first question on discordance with the pathologist. Again, we'll share the data that we've generated. But I think one thing that has been interesting to watch in that space over, again, many decades is even the discordance within a single pathologist. So on reread of biopsies, we do see changes in those reads and that's why - one of the many data sets that pushed us for this panel approach where we believe we can address some of the issues that are seen with a single pathologist or two pathologists. We believe that this improves the sensitivity, improves the accuracy and avoids some of the issues that we see with a single reader over time where we do see drift and how they're reading. And we don't see that with this methodology and can't really give you any more details on that until the presentation or we'll break our embargo and get to share all the data with you at the Liver Meeting.

Okay, great. Thanks for taking the questions.

Thanks Jay.

Our next question comes from Steve Seedhouse with Raymond James. Your line is open.

Great, thanks guys. Good morning. I just wanted to clarify on the biopsy rereads, if there are two primary endpoints NASH resolution and fibrosis improvement or if there will just be one fibrosis improvement. And then on the resubmission data package, you mentioned you'll - you're going to have 650 patients through month 48. Didn't hear really any mention of a role for outcomes data in a resubmission. So I just wanted to be crystal clear on whether blinded to Intercept or not outcomes data including those 48 month biopsies will be part of a resubmission or data that FDA reviews. Thank you.

Yeah, so on your first question on the primary endpoint, so it is improvement in fibrosis, with no worsening of steatosis or resolution of steatosis without worsening of fibrosis. So that's that combined primary endpoint for the US. And then there are multiple secondary endpoints that are all read in a hierarchical manner. So again, if you hit statistical significance on the primary, they then move to all of those additional secondaries. It is a large, large data set that will be generated. And of course, the largest number of patients that will be because the amount of data that we will be generating over the coming months, will be the largest package created to date in NASH and we're very excited to get that package. And we are looking through that. And again, that's the basis of our accelerated approval submission, we hope and in 2022. On the month 48 outcomes and clinical outcomes, again, that would be the basis of a full approval. So that month 48 and looking at that preservation, the longer term fibrosis benefit, that's not something that we are analyzing at this point. We're focused on an accelerated approval, which is again, the baseline month, 18 biopsies, the clinical outcomes month 48 would be analyzed as part of a full approval down the line.

Can I just follow up on the first answer, because I think it might add more confusion of is there anything based on your answers? So there was an or function in there and you mentioned resolution of steatosis and this is an endpoint that's changed over the course of regenerate. So can you just clarify other two separate primary endpoints one being improvement in fibrosis without worsening of NASH, the second being NASH resolution without worsening of fibrosis? Or if you hit one or the other, are you hitting the primary endpoint?

Correct. So the latter, it isn't an or on the primary and then with that, you can then move to those secondary endpoints. So yes, it is a very confusing set of analyses, again, working with the regulators on this to make sure that we're demonstrating all of the things that they want to see. I think we do have alignment that fibrosis is the most important aspect of that. And that's consistent across the US and Europe. It is also going to be important for us to look at these additional components of steatosis, of inflammation and they are addressed mostly in those secondary endpoints, but if you have resolution or improvement of fibrosis, without impacting steatosis that wouldn't surprise, so that's why we have those or in that primary endpoint.

Thanks so much.

And our next question comes from Thomas Smith with SVB Leerink. Your line is open.

Hey, guys, good morning. Thanks for taking the questions. Just wondering you expanded safety data set and analyses. Michelle, I think you mentioned you've reached the lineup with FDA on the adjudication of safety events, including the liver events. Can you just give us a little more color on how these are being evaluated, is it a similar consensus methodology, is it using for the histology endpoints and I guess what was the genesis for coming to alignment on the adjudication. Thanks.

Yeah. No. Hi, Tom. So it's a good question. The adjudication was really about having an independent group of blinded clinicians who are reviewing these cases for us. There are three different panels for this. I don't think it's anything out of the ordinary have certainly used adjudication groups and other large studies. And in particular, where you have the organ of interest is one that is of high interest to the FDA, right. So the liver - the progression of liver disease is of increased interest in all of our therapeutic areas. Not just is it the liver so that's why it was particularly important to have an independent group of clinician to reviewing these narratives or for the liver, for renal disease, et cetera. So this is a pretty standard adjudication group and it was just about getting the alignment with them on which cases would be sent to this independent group.

Got it. Okay. And just the follow up on that Michelle, you mentioned I guess, liver, renal and what's the third panel?

In cardiovascular.

In cardiovascular. Okay, great. Thanks for taking the questions.

Absolutely.

Thanks Tom.

Thank you. Our next question is from Jon Wolleben with JMP Securities. Your line is open.

Hey, good morning, and thanks for taking the question. Just wondering part of the conversation previously was about identifying the right patients and making sure you're able to get Ocaliva in the right NASH segment. I'm wondering if that conversation has changed with the recent interactions. Or if that's something that's going to be revisited when we have the reanalysis of these biopsies?

Yeah. Jon, I think that with the data in hand we'll be in the best position to regroup on that important discussion about the right population, thinking about some of the considerations potentially in markets. So I think again, the next step is the data generation then all those important questions you outlined will be in a better position to have.

Got it. Thanks.

Thank you. And this ends our Q&A session. I would like to turn it back to management for their final remarks.

Thanks. And thanks for everybody for joining us today. From my perspective, our perspective, great progress so far this year. I think, importantly, new leadership team in place, which definitely is going to help us we do the important work moving ahead. Secondly, our global PBC business delivered another strong quarter. We completed the label update in the US and definitely now focusing on our - back to our long-term strategy. As you heard, we've had productive interactions with the FDA on the NASH side. We have the insight that we needed now to move forward to execution and to generate what will be the largest data package in the field of NASH and this data will be key to drive the decision making as we move ahead. And certainly can't forget the fact that we stay focused on the pipeline. We'll read out REVERSE by the end of the year. And we're making progress on the other products in our internal pipeline. So definitely look forward to continuing to work, providing you the updates we're going to go through, what will be another important busy period on the clinical side, on the regulatory side and on the commercial side during the second half of the year. And last and certainly not least, I want to thank the team at Intercept for all that they have done and continue to do with complete dedication to the patients that we serve in this area. So thanks and hope we'll talk along the way.

And this concludes today's conference call. Thank you for your participation and you may now disconnect.