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Intercept Pharmaceuticals Inc. (NASDAQ:ICPT)

Q1 2014 Earnings Conference Call

May 7, 2014 4:30 PM ET

Executives

Senthil Sundaram – Senior Director, Corporate Development

Mark Pruzanski – CEO and President

Barbara Duncan – CFO and Secretary

Analysts

Jonathan Eckard – Citi

Jim Birchenough – BMO Capital

Alan Carr – Needham & Company

Akiva Felt – Oppenheimer

Liana Moussatos – Wedbush Securities

Jim Molloy – Summer Street

Operator

Thank you for joining the Intercept Pharmaceuticals’ First Quarter 2014 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. Following the formal report, Intercept management will open the lines for a question-and-answer period. Please be advised that this call is being taped at the company’s request and a webcast of this call will be archived on the company’s website for two weeks from today’s date.

At this time, I’d like to introduce Mr. Senthil Sundaram, Intercept’s Senior Director of Corporate Development. Please go ahead.

Senthil Sundaram

Good morning or actually I have to say good afternoon and thanks for joining us on today’s call. We are reporting on financial results for the quarter ended March 30, 2014, and we are also providing an update on our development programs.

Before we begin, please remember we will be making certain forward-looking statements on today’s call including statements and forecasts regarding our future, financial, and operating performance, our POISE and FLINT trials, anticipated time lines for the potential approval and commercial launch of obeticholic acid in our regulatory, clinical and commercial plans, goals and estimates as well as other statements which relate to future events. These statements are based on the beliefs and expectations of management as of today.

Our actual results may differ materially from our expectations. Investors should read carefully the risks and uncertainties described in our reports filed with the SEC, including the Risk Factors section of our most recent Annual Report on Form 10-K and Intercept’s other filings with the SEC. We assume no obligation to revise or update forward-looking statements whether as a result of new information, future events or otherwise. The format for today’s call will include opening remarks from Intercept’s management team and then we’ll open up the call to take your questions.

At this time, it’s my pleasure to turn the call over to our CEO, Dr. Mark Pruzanski.

Mark Pruzanski

Thank you, Senthil. And thanks to everyone for joining us on our conference call and webcast. I’m going to provide you with an update on the development of our lead product candidate, obeticholic acid or OCA. Barbara Duncan, our Chief Financial Officer, will then discuss our financial results, and cash run rate.

Let me start up by saying that we are very excited about the progress and direction of Intercept. Our core objectives anticipated over the next 12 months are as follows; one, complete the work required to submit global regulatory marketing applications for OCA and our lead indication primary biliary cirrhosis or PBC. Two, process are upcoming Phase 2b NASH data from the FLINT Trial and advanced OCA into international Phase 2 development program in NASH. And three build on OCA’s initial promise in these indications by advancing the product in additional cholestatic liver diseases such as primary sclerosing cholangitis or PSC where we believe we have a relatively high probability of success.

By the process of building out all areas of the company to achieve these goals, while also continuing to build the commercial infrastructure needed to support OTA’s successful launch in the U.S. and Europe. I also wanted to highlight the most recent addition to the senior management team Rachel McMinn, as our new Chief Strategy Officer. I’m sure many of you on the call today know her from her prior position as a leading biotechnology analyst. And we’re very happy to have her on the Board. I know that she will be an important asset for the team as we build Intercept for continued future success.

Then I talk about the Phase 3 POISE trial. We had the opportunity to present detailed results of POISE Phase 3 trial you see at the Annual Meeting at EASL, the European Association for the Study of the Liver in April last month. We had three main objectives for POISE. Number one, to reproduce the robust efficacy we observed in Phase 2. Number two, confirm that efficacy could be maximized and maintained over 12 months, as we’ve observed previously in our Phase 2 long-term extension studies. And number three, optimize OCA’s tolerability profile.

We are extremely pleased that the POISE results achieved all three objectives. POISE met the primary efficacy endpoint with response rates that exceeded those in our shorter duration Phase 2 trials. OCA confirmed a rapid therapeutic benefit in PBC patients receiving either 5 milligrams or 10 milligrams once daily doses. The majority of the benefit was observed at the three month mark and thereafter sustain for the duration of the 12 month trial.

We are also very pleased to see that our decision to study the lower 5 milligram OCA starting dose and titration scheme in POISE resulted in substantially improved tolerability with respect to provide us influence and severity as compared to the 10 milligram dose group without any meaningful sacrifice in efficacy.

As a reminder, provided with a common symptom in PBC and other cholestatic liver diseases and it can be used in acceptable patients upon initiation of the standard frontline PBC treatment or so as well as by OCA. The mechanism of this drug induced provide us the start could be related to the therapeutic benefit associated with the stimulation of bowel flow or what’s called choloresis.

Provide us with the only notable side effect in our previous two Phase 2 trials in PBC which showed OCA to be associated with the dose dependant increase in the frequency and severity of pruritus. The POISE result demonstrated that pruritus can be very well managed when patient started a 5 milligram OCA dose and are then activated up to 10 milligrams and importantly these patients essentially caught up to the non-titrated 10 milligram dose group and efficacy by the end of the trial.

More compelling still is that patient reported pruritus score is using a standard visual analog scale instrument ended to normalize after about six month with pruritus scores and both OCA treatment groups no different than dosing the placebo group in the latter part of the trial. These new data suggesting an adaptive response over several months with respect to OCA related pruritus. Physicians often implied dose titration when initiating urso-therapy a newly diagnosed PBC patients. So we believe that OCA dose titration will be relatively straight-forward from a commercial stand point.

Another highly encouraging detail that we previously reported is that virtually all of the PBC patients who completed the 12 month double blind phase of POISE opted to continue in the five year long term extension phase, which tells us those who had and taking OCA were generally tolerating therapy well.

Overall following regulatory approvals of OCA and PBC, we believe these Phase 3 data will position our drug to be the first new affected medicine in close to 20 years to be made available to PBC patients with an inadequate response to or unable to tolerate first line Urso treatment. We estimate that this population represents half of our PBC patients.

Let me tell you about our plans for regulatory filings for PBC. We believe that our POISE results together with our previously completed Phase 2 trials support our proceeding to file from marketing approvals of OCA a second line therapy in PBC. We are excited to continue working closely with FDA and EMA and are procuring for pre-NDA and pre-MAA meetings with both agencies respectively, anticipated in the second half of this year.

After a recent internal sensitivity analysis of time to completion for certain routine supporting Phase 1 studies, we now anticipate completing the NDA and MAA filings in the first half of 2015, which takes us past the year end 2014 guidance we previously issued. As you may recall our POISE Phase 3 results were available ahead of schedule and together with the final results from the global PBC study group that support our endpoint. These are not gating for our regulatory filings. We had previously anticipated various supported Phase 1 studies to the gating items and most of them have been completed or on track to be completed this year.

However, we recently determined that two additional Phase 1 study should be conducted in support of the NDA and MAA filings to ensure they are complete and to maximize our chances of the first cycle review approval.

With that said, the studies themselves are routine and should be straight-forward to execute. Specifically, we planned to proceed with a Phase 1 bioequivalent study to bridge our commercial and clinical trial materials. Given the unique pharmacokinetic properties of OCA as the metabolic stable bile acid derivative that’s extensively re-circulated and prophetically in the bile flow, we are seeking regulatory input on the study design prior to initiating it.

Another Phase 1 study we will conduct is a regular label NASH balance study, well they to initiate the study attending finalization of the study protocol with regulators. We expect to initiate both of these Phase 1 studies in the second half of this year and they are both gating for the completion of our NDA and MAA filings since we currently project them to complete in the first quarter of 2015.

A few words on our PBC confirmatory outcomes Phase 3 trial. We believe we are well on the way to finalizing the protocol with FDA forward looking inflammatory Phase 3 clinical outcomes trial in PBC in the third quarter of this year. Our interactions with FDA have been very positive on the design of the trial and recent KOL feedback from our meetings in usual did not reveal any new design considerations.

We believe we have all the necessary study design aspects in hand to work with FDA to finalize the confirmatory protocol. In the meantime, we’re moving full speed ahead on all other aspects of trial preparation in our – in the process now of identifying clinical trial sites around the world to be in position to initiate the trial by around the end of 2014. We project enrollment in the trial to be well underway at the time of OCA’s anticipated accelerated approval with completion of the trial to occur thereafter in support of eventual full approval in accordance with [indiscernible] guidelines.

Let me change gears now and talk about our FLINT trial in NASH program. Based on our most recent interactions with the NIDDK, we continue to expect to receive the unblinded results from the FLINT trial in July. Of course the exact timing will be dependent on variable such as the timing of the last patient visit, the time needed to go and get the database lot and then coordinating data exchange with NIDKK and the investigators.

We recognize there is keen investor interest in seeing the FLINT trial results and we’ll do our absolute best to communicate top-line material and new findings in the timely fashion in close coordination with NIDKK after having received the data. After we are able to review the detailed FLINT results, we planned to formulate a detailed registration strategy and initiate formal interactions with FDA and EMA.

While we realize many investors are eager to understand more about our plans for potential Phase 3 design including with specifics of regulatory endpoints and patient population. We can’t provide more detailed guidance until we have the FLINT trial results in hand and received feedback from the regulatory authorities.

Our current assumptions however, remained that our Phase 3 program would be designed to meet accelerated approval criteria based on interim efficacy results of at least one year in duration.

And now few words on our other programs with OCA. We’re on track to launch our first clinical trial of OCA in PSC primary sclerosing cholangitis by the end of this year. Like PBC, PSC is a cholestatic liver disease dealt with distinct characteristics. PSC is an orphan indication with the prevalence about one third that of PBC and no approved therapies available, therefore representing a very significant unmet medical need.

Next our collaborators at the Imperial College, London presented the final set of data from the OBADIAH trial of the OCA and bile acid diarrhea at the DDW conference earlier this week, which confirms our prior understanding that OCA represents the potential therapeutic option for patients that both binary and secondary bile acid diarrhea.

Given our current OCA development priorities in PBC NASH and other chronic liver diseases, our development strategy and timing to pursue bile acid diarrhea are currently under review. For portal hypertension single center data for OCA were presented at the EASL meeting in April, suggesting that OCA can reduce portal pressure in cirrhotic patients without negatively impacting systemic blood pressure.

In addition, pre-clinical data presented by two different groups in EASL suggest a potential OCA therapeutic benefit in the prevention of serious bacterial infections in cirrhotic patients, an exciting finding given that such patients are at significant risk in developing sepsis often resulting in death.

Taking together we believe that recent clinical and pre-clinical study results significantly strengthen our conviction that OCA has the potential to be the first of an important new class of drug spectrum hepatic protective drugs with therapeutic application across a range of chronic liver diseases in early to late stage patients.

With that, I’ll now turn over the call to Barbara Duncan, our Chief Financial Officer for a discussion of our financial position.

Barbara Duncan

Thank you, Mark. Good afternoon everyone. Please refer to our press release issued earlier today, for a summary of our financial results for the three month period ended March 30, 2014. We ended the first quarter with a $134 million of cash, cash equivalents and investment securities available for sale in our balance sheet. This sales does not include a $183 million of net proceeds, we received from our following offering in April.

Our cumulative cash, cash equivalents and investment securities includes of these proceeds from the April public offering are expected to fund our operations through 2016. This expected level of the expenditures include all the studies and work necessary for the PBC regulatory filings as well as the initiation of the Phase 2 trial in PSC Mark just discussed, the lipid trial in NASH patients, and our Phase 3 NASH program, as well as certain pre-commercialization expenses.

While I won’t review all the quarterly results we shared in our press release earlier today, you will note that we had a fairly significant net operating loss totaling $257.7 million. However, please note that included in this net loss, our non-cash charges totaling $245.7 million plus comprised primarily of warrant revaluation expense of $226 million and stock compensation expense of $19 million.

In relation to the warrant revaluation, we got that in connection with some of our pre-IPO equity financing we issued warrants that are classified as liabilities and are adjusted to fair value on a quarterly basis with a change in the fair value being included in our net loss.

The amount included in net loss is a non-cash item as Intercept does not required to expend any cash to settle the warrant liability. The warrant liability is primarily affected by changes in Intercept’s stock price during each financial reporting period, which causes the warrant liability to fluctuate as a market price of Intercept stock fluctuates as well as remaining terminal warrants and the underlying volatility utilized in the fair value calculation.

In general, the warrant liability for the first quarter increased significantly primarily due to the increase in our stock price. As of the end of the quarter there was only one tranche of the warrant outstanding representing approximately 865,000 shares, which were exercised on a cashless basis in early April and converted into 835,000 shares of our common stock.

As such, we reported final adjustment of approximately $56 million in non-cash other income in the second quarter of 2014. In relation to the stock compensation charge in the past we have issued options to certain of our consultants. Each quarter we are required to remeasure stock option value for not only newly vested amount during the quarter, but also to invested options that remain outstanding that were issued to these consultants.

Under $19.1 million of stock compensation expense recorded for the quarter, $16 million related to this revaluation for these consultants. Primarily as a result of this significant increase in our common stock during the first quarter.

Let me now turn the call back over to Mark.

Mark Pruzanski

Thanks, Barbara. And I think we can turn it over to question now. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Jonathan Eckard from Citi. Your question please.

Jonathan Eckard – Citi

Thank you very much for taking the question. I just had one on the FLINT trial and then one also on the this lipid trial. For FLINT recognizing at the NIDDK doesn’t want to jeopardize of the potential presentation AASLD or publication of the FLINT data, is there any idea or any color about what aspects of the data the NIDDK is most concerned about releasing that could – for those in jeopardy? And then with the lipid trail I think this trial it’s on the press release is only NASH patients by understanding it, I think there is also another trial is been ongoing that’s been mostly on clinicaltrials.gov, will any data some that trial be released over the course of the year that could shed any light on some of OCA’s effects on lipids? Thank you very much.

Mark Pruzanski

Thank you very much Jon, good questions. So I’ll take them in sequence. We’ll be very closely coordinating with NIDDK and the investigators once we receive the unguided FLINT trial results on a top-line statement that we will make. And obviously anything new and material with respect to efficacy, safety, tolerability, I think you would be looking to put out there without a course jeopardizing anyway the presentation anticipated at AASLD and NIDDK has confirmed that the intention is to let the investigators submit a late breaker abstract for this year’s AASLD more of course for publication in a peer reviewed journal. So we will just have to wait until we get the results and then coordinate closely with them and come out then with top-line statement.

With respect to the lipid studies, and you’re right, just to clarify there are two different lipid studies in two different patient population. So one is currently ongoing, the one on clinicaltrials.gov and that is mainly PBC patients. The completion of that study and, sorry, the study results will be included in our NDA and MAA filings. So we will have those and we anticipate that sort of completing therefore around year end to get into the filings. And, after that we’ll be able to probably say something about those results.

With that said, I just want to make it clear again that the lipid profile in PBC patients is potentially quite unique to them and as we recently demonstrated in the POISE results on lipid there are slightly different OCA effects on lipid in PBC patients as compared to what we’ve seen in NASH patients. With respect to the NASH trial, we the NASH lipid trial done at the asthma that believe, we do anticipate starting that in the second half of this year. I’m sorry just want to be a little bit more conservative on the lipid PBC study and suggest early 2015 or sort of the year end for the results of that topic.

Jonathan Eckard – Citi

Is there any reason why you’re starting the NASH lipid trial in the fourth quarter and not sooner, is it sort of you can get a regulatory feedback if necessary on that, or is it what really read the timing is there any reason why you’re waiting for the fourth quarter to start?

Mark Pruzanski

We’d saw its just the blocking and tackling from that clean out standpoint KOL feedback on the study appropriate study design. We want to make sure that this is an absolutely comprehensive study, I think I said before that, given that a good proportion of these patients are taking statins or might consider statins in the future we want to be able to answer questions like, what happens in patients taking OCA alone, when you add OCA to the statin when you or when you add a statin to OCA things like that we want. So we will want to make sure we get the study right, but there is no – no other reason other than the time is going to take to step up the study for the Q4 starting.

Jonathan Eckard – Citi

Thank you very much again, back in queue.

Operator

Thank you. Our next question comes from the line of Jim Birchenough from BMO Capital. Your question please. You might have your phone on mute.

Jim Birchenough – BMO Capital

Hi guys can you hear me?

Mark Pruzanski

Yeah now we can Jim.

Jim Birchenough – BMO Capital

Yeah sorry, so just first question on the Phase 1 study on bio-equivalents, could you maybe go through the technical challenges demonstrating that with the – the recirculation in hepatic system and what, how you know address that issue if FDA really wants you to show bio-equivalents, I just want to understand the issue a bit better?

Mark Pruzanski

Yeah and again I mean we consider this reasonably routine. We’re comparing our, we’re establishing equivalents of our Phase 3 and commercial tablet formulated OCA, which is, which we believe to be from substantially equivalent. On the PK on challenge relates to the duration of dosing and the number of patients we’re going to require and we really wanted to give FDA the chance to input on the study design. We have a – there is a president protocol for clinical bio-equivalents in Urso that we are relying for the study design.

It’s going to be a parallel or a crossover design study and fairly extensive with a robust number of subjects in it. I don’t want to pend our regulatory feedback on the design, I can’t really provide additional details Jim, but again I want to stress that we think, we’ve got – we got a good president for it, we spent sometime thinking about it and are going to be getting regulatory feedback very shortly.

Jim Birchenough – BMO Capital

And then Mark maybe just as we get ready for the detail from the FLINT study, maybe you could help us frame how we should think about, the data you are going to generate versus what we’ve seen from the Piven study as an example, will we get the detail of each of the components of the nap of the activity score, will we get things like the number of patients improving on fibrosis just trying to get a sense of the detail? And then what’s the appropriate expectation, should we expect to see results better than Vitamin E and Pioglitazone?

Mark Pruzanski

Thanks Jim. What I can say definitively is that the AASLD presentation of course the publication – eventual publication will contain all of the information you just referenced. I cannot commit right now pending received the data in July and then coordination with NIDDK and the investigators up to, the specific details that will be top-lined soon thereafter ahead of AASLD and publication.

So, I wish that could be a little bit more helpful, but obviously anything material with respect to performance on that the activity score reduction on the primary endpoint, performance on fibrosis indication of any effect on reversal of fibrosis. And then safety, tolerability those are the key aspects at a high level that will certainly be material and need to be put out there. But I can’t comment further with respect to the detail.

In terms of the efficacy, what I’ve said before is that, conservatively it’s what we see here is, not just similar to Vitamin E and we already know at the very least that we have non-progression of fibrosis. I think that’s a very good clinical outcome with the drug that hope we will demonstrate over the longer term very nice safety and is well tolerated in these patients.

Vitamin E is, the results of Vitamin E and Pioglitazone in the Piven were, are suppose encouraging but not adequate and the both drugs have their liabilities and a lot of physicians who see these patients are not currently using them. And there is certainly a need for another effective new therapy. It’s difficult for me to comment in more detail than that until we see the results.

Jim Birchenough – BMO Capital

Maybe just one last question Mark on PSC could you maybe go through the endpoints you look at and how quickly we could see data from that study?

Mark Pruzanski

Sure, and as a primary endpoint what we will be looking for is change in outline positives very similar to PBC and there is literature now suggesting that al phos on similar to PBC is a risk market for long term outcomes, to be more specific it’s been shown that patients who get down below 1.5 times upper limit normal have improved longer term outcomes.

So, we’re definitely looking al phos. And then given that in a number of secondary liver function parameters and then given that certainly approximately 75% of these patients had overlapping ulcerative colitis will also be looking at UC symptomatology as well and then we have reason to believe based on pre-clinical data that OCA is an FXR agonist could have an effect, protective effect in the intestine as well as in the liver.

As far as when we can expect to get results, it’s too early to project that right now. We are all I can say really is that we anticipate beginning the study prior to by around year end.

Jim Birchenough – BMO Capital

Thanks Mark.

Mark Pruzanski

Thanks Jim.

Operator

Thank you. Our next question comes from the line of Alan Carr from Needham & Company. Your question please.

Alan Carr – Needham & Company

Hi thanks for taking my questions. One thing, couple of – comment on a couple of things one of them is where things stands from commercial perspective, the commercial preparation here for PBC both I guess qualitatively and then also how that might impact during this year? And then also brand that you still need, there is still lot of unknown to this point, but I was just wondering if anything changed in terms of your current thinking about design for the Phase 3 NASH trial as we’re thinking of couple of them 500 patients each and one with more severe fibrosis, one with less severe. Can you just comment on that too, where were your currently thinking is on it? Thank you.

Mark Pruzanski

Thank you, Alan. With respect to commercial preparations as I mentioned in my remarks, we are aggressively moving forward to prepare for anticipated launch in the U.S. and Europe for PCB initially, Dan Regan is not here right now Chief Commercial Officer has been leading that effort for over a year now and things are going a pace, I’m quite happy with the progress we’re making there and we’re very much anticipate being in good position to for a successful launch in both – in both regions.

And you also asked about impact on burn rate, as Barbara mentioned, we’re in a very good cash position right now based on current projections, cash runway through 2016 and that hasn’t changed. And that is sufficient, the pursuits that recently rose certainly give us sufficient capital to do, what we need to do from a commercial standpoint, prepared in a standpoint.

With respect to the Phase 3 NASH design, you’re right that in previous comments we talked about place – to place holder at least the idea of large international outcomes studies in these patients looking primarily to the more advanced updations with for example later stage fibrosis and then cirrhosis where the greatest unmet need occurs. You also mentioned the number of patients and again, please realize that these are place holders we have not yet had formal interactions with FDA or EMA and we need to do so.

And as well as getting the FLINT trial results to be able to have more clarity on the design of these trials, but these will need to be large in power to get to outcomes and confirmation of clinical benefit past the interim look that we hopefully result in accelerated approvals.

I don’t think I could say anything more than that, it would be more speculation than anything else and again we just need to – unfortunately I know everyone is eager to get these details, but as I said in my remarks we just need to get the results in July from FLINT and go from there to meet with the regulators and have informed discussions with them and continue to have discussions with KOLs as we be doing all along.

Alan Carr – Needham & Company

That’s helpful, thanks very much.

Mark Pruzanski

Thanks Alan.

Operator

Thank you. Our next question comes from the line of Akiva Felt from Oppenheimer. Your question please.

Akiva Felt – Oppenheimer

Hi Mark, two questions, first in PBC, can you walk us through the origin for on these two additional Phase 1 studies, what why do the decision to start those now? And then second question in portal hypertension are there any plans for future clinical studies at the moment?

Mark Pruzanski

Yeah let me take the second one first, it’s a short answer. I mean the portal hypertension what I have been saying is that, has been sort of interchangeably using – referring to portal hypertension and cirrhosis, because, patients with cirrhosis who have portal hypertension and portal hypertension is an important pathologic feature in their disease that pre-exposes these patients to adverse outcomes. And that was the basis our proof of – previous proof-of-concept study that recently read out, where we are looking for improvement in hepatic venous pressure gradient HVPG and I could very much see and the FDA has commented or the FDA works off rather last September looking at NASH and points HVPG was one of the featured target endpoints that look potentially promising in patients with cirrhosis.

And so, I sort of view that part and parcel the context of our future plans in NASH plus/minus cirrhotic patients with diseases resulting from other radiology kind of all come at cirrhosis type trial if you will. With respect to, I hope that answers the portal hypertension plans. With respect to the origin of the Phase 1, there are two of them of course the bio-equivalents and the NASH down study.

In our prior view was that we wouldn’t necessarily lead to a formal clinical bio-equivalent study and only recently, earlier this year realized that a bio-equivalent study should be done to bridge make sure that we’re adequately bridging clinical trial material into Phase 3 to our commercial material.

And then Jim had asked this question before, I mean, how are we dealing with the PK characteristics of our drug as a sort of stable and prophetically re-circulating bile acid, well to very carefully to improve this design and then making sure that we get regulatory endpoint on the design. And that’s really why this is being gaining and of course the timing of that regulatory and finalization of the portal and then time to enroll, the BE study will determine ultimately how long it takes. And it’s the reason we think that it could be expected to spill over into and complete in the Q1 next year.

For the NASH balance, we again we there are a number of steps that simply takes a long time to set up, we had to simplify it regular label material within the context of our compound obeticholic acid which is actually a fair complex thing, but we achieved this and then had to do animal study to establish appropriate dosing. And then again are getting expert regulatory feedback on the design of the study and the conduct of the study.

Anyway and this just takes time, but we’re aggressively pursuing it and expect this product in the relative near future. I want to stress again that these two studies we view them as pretty routine supporting studies. They are two of quite a number of Phase 1 studies that will go in support of the marketing applications in the U.S. and Europe and most of these as I mentioned before have already been completed or well underway and will be completing this year. So, we don’t see anything, we don’t see really an execution risk and it’s really just a question of the timing being getting.

Akiva Felt – Oppenheimer

Okay thank you that’s helpful.

Operator

Thank you. Our next question comes from the line of Liana Moussatos from Wedbush Securities. Your question please.

Liana Moussatos – Wedbush Securities

Thank you. Given the timing of submitting the NDA and MAA for PBC when do you anticipate a PDUFA date would be, and do you runway through 2016 does that include launch in U.S. and Europe or PBC?

Mark Pruzanski

Let me so, Liana I appreciate the first question. But I think it’s pretty mature for me to comment on one we could expect PDUFA date at this point. I mean its – we just don’t have enough clarity yet. With respect to the proceeds raised and whether they include launch, the answer is yes and Barbara if you have anything additional?

Barbara Duncan

No it includes the pre-commercialization activities as well as those out of the team in support of that launch as well.

Liana Moussatos – Wedbush Securities

And will it include the actual launch?

Barbara Duncan

The actual launch we’re still working on the metric of what that would entail, but we have included some dates, numbers in there. So at this point we think that it would include those numbers.

Liana Moussatos – Wedbush Securities

Thank you.

Operator

Thank you. Our next question comes from the line of Jim Molloy from Summer Street. Your question please.

Jim Molloy – Summer Street

Hey guys thanks for taking the questions. I share a quick question, I know the over diarrhea you put out the bile acid diarrhea today, 25 milligram and the SAE proof are very benign what leaves there if any can one make me outside looking in from that trial to, the CV side effects and the issues that came up in the 10 patients in the NASH trial?

Mark Pruzanski

Well thank you Jim. Thanks for remarking on the bile acid diarrhea data, I do think that this was a significant and exciting finding in these patients who really do have a high unmet need and of course this is the first kind of ex-liver indication that we’d untried OCA in. So it’s good to see efficacy or a signal in these patients. I think and the safety, its tolerability profile of course is also quite encouraging. I don’t think we can really read to other patient populations here not at least because, these are different patients. But more importantly this is a two week exposure.

And I – you reference the 10, I believe you’re referencing the 10 NASH patients in, if not really the not 10 patients rather but the 10 cardiovascular events that we disclosed earlier this year and have discussed extensively. With these 10 events in 70 fluid patients about 2.5% of that population and of course that population very much more at risk of cardiovascular events than your – your average bile acid diarrhea patients. So, and of course the exposure there was much longer, much different.

So, I don’t know – the bottom-line is we’re encouraged by the results in bile acid diarrhea, but we didn’t draw any conclusions reading on other patient population.

Jim Molloy – Summer Street

I guess here the 72 weeks risk that the 2 weeks maybe a thing, but you’ve marked on the BMI index on the NASH patients being dramatically higher than even the PBC patients and obviously NASH, well obviously been outstanding the NASH indicator of CV side effects is there any BMI kind of that scores on the over higher patients that we could look at say, here is again a much more healthy relationship?

Mark Pruzanski

It’s a good question, the short answer is no, I’m not aware that I beside seen BMIs on these patients. I would, I don’t want to guess and talk of our school. This was a UK-based study in these patients. And I don’t know what their BMIs are, I getting that they have chronic diarrhea and bile acid related malabsorption. And then they are of course the secondary that patients with Crohn’s disease. Many of them are had to have some length of their ileal resected previously. So, we’re talking very different patients, I wouldn’t be surprised if the answer is given the patient characteristics there was a significant difference in BMI, but if again I hesitate there apples and oranges a little bit in my estimation as compared.

I do want to say though, and things looking at up that, it’s the point I concluded with that that the more clinical data we generate in diversification populations, the more confident we become in the overall safety and efficacy of our drug as a novel therapeutic option that we hope will make to the market first for PBC and then for and expanding a number of indications both with respect to chronic liver disease and hopefully ex-liver intestinal diseases. So we’re very excited about where we are right now.

Jim Molloy – Summer Street

And just a final question and thank you for the answer. The – speaking of bringing it to market hopefully something all goes well and it gets approved, pricing is always an issue or question that comes up early to the thinking pricing, but is there any – any light you could shed is the thing about this might be priced?

Mark Pruzanski

Our thinking on this, its evolving we’re doing more work quantitative market research work and its very pre-mature for us to give any kind of guidance ourselves on price. I would like to say and I know this is a bit of good remark, but we are going in the right order here starting off with the orphan indication where we’re going to be pricing appropriately for the PBC indication. And then hopefully if thereafter we get on the expanded label through an indication like that which is obviously a much bigger market. Yes we’ll be facing price erosion, but I think again if you look at the yourself included the analyst covering some of the general range that they are modeling for price starting PBC and sort of the higher price figures to try the 100. And then there is a thought about NASH sort of range down lower, but still mainly in the sort of lower five figures. And there are analogs out there as other drugs and other comparable indications that could give confidence about that kind of those kinds of pricing assumptions.

Jim Molloy – Summer Street

Thank you very much for taking the questions.

Operator

Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand the program back to Mark for any further remarks.

Mark Pruzanski

Thank you very much operator and I thank you all for listening in and paying attention via webcast and have a good night.

Operator

Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.

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