Intercept Pharmaceuticals' (ICPT) CEO Jerry Durso on Q1 2021 Results - Earnings Call Transcript

Intercept Pharmaceuticals, Inc. (NASDAQ:ICPT) Q1 2021 Earnings Conference Call May 6, 2021 8:30 AM ET

Company Participants

Lisa DeFrancesco - SVP, Corporate Affairs & IR

Jerry Durso - President & CEO

Rocco Venezia - CAO, Acting CFO & Treasurer

Gail Cawkwell - Interim CMO

Linda Richardson - CCO

Conference Call Participants

Ritu Baral - Cowen

Aryeh Gold - Jefferies

Emily Bodnar - Cantor Fitzgerald

Ryan Deschner - Raymond James

Jessica Vo - Piper Sandler

Luke Herrmann - R.W. Baird

Thomas Yip - H.C. Wainwright

Jon Lim - UBS

Jay Olson - Oppenheimer

Aspen Mori - Bank of America

Operator

Welcome to the Q1 2021 Intercept Pharmaceuticals Earnings Call. My name is Janet and I'll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions].

I will now turn the call over to Lisa DeFrancesco. Lisa, you may begin.

Lisa DeFrancesco

Thank you. Good morning and thank you for joining us on today's call. This morning, we issued a press release announcing our first 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; our Chief Accounting Officer, Acting Chief Financial Officer, and Treasurer, Rocco Venezia; and our Acting Chief Medical Officer, Dr. Gail Cawkwell. We'll then open the call up to take your questions and Linda Richardson, Chief Commercial Officer will join us 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?

Jerry Durso

Thanks, Lisa and good morning, everyone. Thank you for joining us on our first quarter 2021 earnings conference call.

We've been focused on our priorities in the first quarter this year, and have made progress across all key fronts, including first finalizing our Ocaliva label update in the U.S., which is now nearly complete. We anticipated announcing our updated label in the coming days.

Second, advancing our NASH development program, where we've had multiple interactions with FDA and we're in the process of generating a significant amount of additional data in support of our dialogue with the agency.

And third, continuing to make progress on our pipeline.

I'm going to begin today by discussing our PBC business, including our solid performance in the first quarter. I'll then turn it over to Gail to provide an update on our labeling discussion with FDA, our NASH development program, and our other pipeline activities. Rocco will conclude with an overview of our financial performance and update to our guidance before we take your questions.

Let's start with our PBC business where we had another quarter of double-digit growth. Worldwide Ocaliva net sales in the first quarter of 2021 were $81.7 million, representing about 12% growth over the prior-year quarter. We had solid performance in the U.S. with sales of $57.3 million, representing 13% growth over the prior-year quarter. Nearly half of our new prescriptions were generated by new prescribers demonstrating the success of our efforts to reach community-based gastroenterologists.

Importantly, we continue to educate healthcare provider audiences through our rethink PBC disease education campaign, which highlights important data from the global PBC study group, supporting more ambitious treatment goals for lowering ALP. We believe broader awareness of these data will impact the way healthcare professionals manage PBC and encourage earlier consideration of second line therapy within the large group of eligible patients who are not achieving ALP goals with Ocaliva. In our international markets, we recorded $24.4 million, which was 11% growth over the same quarter last year. We saw continued strengthening of new patient starts versus the previous quarter, driven by our digital education activities.

I would now like to turn the call over to Dr. Gail Cawkwell to provide an update on our regulatory progress and our pipeline. Gail?

Gail Cawkwell

Thank you, Jerry, and good morning, everybody.

I'll begin by discussing our Ocaliva label update. The process is nearly complete, and we plan to communicate the final label shortly. We expect the final label will restrict to use in patients with decompensated cirrhosis, as well as in those patients with compensated cirrhosis, who have evidence of Portal hypertension.

As you know from our previous discussions, the Ocaliva label update process began as a result of NISS, or newly identified safety signal of liver disorder. This was identified during routine post-marketing safety monitoring from FDA in 2020. We shared findings from a comprehensive safety assessment with FDA earlier this year, and have been working with the agency to translate the implications of the NISS into updates to the Ocaliva label. These label updates focus on patients who reach the most advanced stages of PBC and not on the broader PBC population. Patients with PBC and cirrhosis demonstrate a wide spectrum of disease severity from clinically stable compensated cirrhosis, to end-stage decompensated disease.

The development of Portal hypertension in these patients is a key pathophysiologic event along this natural disease progression and is often associated with serious consequences of advanced liver disease. From a patient identification perspective, we believe this approach is clear and will enable prescribers to delineate those who are eligible for Ocaliva; the only approved second line medicine for patients with PBC.

Regarding our post-approval study, COBALT and 401, we continue to discuss potential modifications to these studies with FDA and EMA. The final Ocaliva label updates will play a role in the discussions about our post-marketing study requirements. But we expect that the process of defining a path forward for the studies will continue beyond the label update given the need to align with both FDA and EMA.

Now let's turn to our NASH development program. As we've previously stated, alignment with FDA on the right data, and the subsequent interpretation of that data, a key dependencies prior to a potential resubmission. We're working towards that alignment in a step-by-step process, including multiple recent and upcoming formal interactions with the agency, each of which require significant preparation.

As a reminder, we believe there are three key items that we need to align with FDA on prior to a potential resubmission of our NDA through the accelerated approval pathway.

First, a shared understanding of OCA safety profile in the NASH fibrosis population, which will be supported by a comprehensive safety update to refresh and increase the amount of safety data to discuss with FDA.

Second, biopsy reading methodology, an important topic for the field as regulators, thought leaders and industry, work to establish new approaches to reduce variability and improve accuracy.

And lastly, and importantly, what if any additional efficacy data will be beneficial to better support the benefit risk profile of OCA in NASH fibrosis.

Let me provide an update on where we're with each of these three items. We've had recent FDA interactions primarily focused on safety. While these have provided deeper insight on key focus areas for the agency, including liver safety and other elements of the OCA safety profile, there's additional work underway. We're also advancing our preparations for safety updates that will double the safety exposure from our first submissions.

Regarding biopsy methodology, FDA's public statements on biopsy methodology, and our own learnings from REGENERATE has led us to a proposed approach that we believe is both scientifically rigorous and grounded in the latest thinking in the field.

We're looking forward to furthering the discussions with FDA on biopsy methodology in the coming months and subsequently applying that approach to new data. We have also made progress regarding the potential generation of additional datasets to assess efficacy of OCA for the treatment of patients with NASH fibrosis. Again, FDA meetings on this topic are planned.

For example, as a result of the REGENERATE study design, following the 18-month interim analysis, which included 931 patients in the intensive treat population approximately 500 additional biopsies, were gathered from a group of later enrolling patients once they reach the 18-month time point. We now expect to include these additional 18-month biopsies as a part of any potential resubmission. Given that REGENERATE is an ongoing study; we continue to accrue data and assess other relevant datasets for inclusion and analysis. To put this in context, by the middle of this year, the patients who were part of the 18-month interim analysis will have all reached to their 48-month time points. Importantly, the REGENERATE outcomes trial is an event-driven study, meaning that the study completes when a pre-specified number of events occur. As such the exact timing of completion is difficult to predict. As we've previously stated, our completion date is likely some years away and our latest estimates point to a potential completion date in 2025.

We also have our second large pivotal NASH Phase 3 study REVERSE underway in patients with compensated cirrhosis due to NASH. We believe the data from REVERSE will provide important learnings in the NASH compensated cirrhosis population, a group of patients with very high unmet need. We plan to take advantage of our work with FDA to align on biopsy methodology as we prepare for a top-line readout at the end of this year.

We also continue to make progress on our pipeline. Our Phase 2 OCA plus bezafibrate trial is still currently enrolling outside the U.S. and we now have an open IND for the combination in the U.S. Enrollment in a rare disease clinical trial does not require a high number of patients, but may take more time due to COVID-19. We'll provide an estimated timeline when trial enrollment is complete. Recently published data supporting the benefit of bezafibrate and PBC are encouraging and reinforce the potential for synergistic profile in the combination approach with OCA.

Finally, turning to our next-generation FXR agonist, INT-787, we plan to initiate a first-in-human study later this year. We'll provide additional updates once this process is underway.

I'll now turn the call back over to Jerry for further remarks. Jerry?

Jerry Durso

Thanks Gail.

As we look to the remainder of the year, our most immediate focus is on finalizing the Ocaliva label update in the U.S. It's important to note that the significant majority of patients eligible for Ocaliva will not be impacted by the label change.

In terms of the population that will potentially be impacted, we're in the process of finalizing the label that would restrict Ocaliva's use in patients with decompensated cirrhosis, those with the prior decompensation event and those of compensated cirrhosis with evidence of port live retention. We estimate that roughly 20% to 25% of the current Ocaliva patients that have cirrhosis. The portion of Ocaliva patients that we expect to be impacted by the final label changes would be a subset of this overall cirrhotic group. As you would imagine the rate of cirrhosis in PBC can vary by treatment setting. For example, the rate tends to be higher at hematology centers and lower in the community setting. We're fully prepared to support and educate patients and providers through this upcoming label update and that process will be implemented as soon as the label is final.

Following the label update, a significant majority of PBC patients who can benefit from second line treatment will remain eligible for Ocaliva. Our long-term focus and commitment to supporting those patients will continue to be a high priority.

Turning now to NASH. Our continued objective is to align with FDA on a resubmission package for NDA that increases the probability of success. This is a multifaceted process that will require additional work and additional interactions with the agency and therefore we can no longer reiterate a potential submission by the end of this year. We look forward to narrowing and refining our plans for potential resubmission in the third quarter of this year.

Now turning to the EU. Since our last update, we've been formally granted a six-month clock stop in the review of OCA for the treatment of NASH fibrosis. This additional time allows us to focus on executing on the feedback we've received from both FDA and the EMA, and provides us with the ability to potentially include some of the new data we're generating as part of the review process in Europe.

Before we turn to our financial results, I wanted to announce that Chris Weyer, our Executive Vice President of Research and Development has decided to leave Intercept to pursue a new opportunity. I want to thank Chris for his contributions to the company and wish him well in his future endeavors.

As we previously discussed our work towards potential resubmission in NASH fibrosis is led by a strong dedicated team of both internal experts and external advisors. Mark Pruzanski, as part of his ongoing advisory role with Intercept will continue to support our R&D team from a science and strategy perspective. This will ensure business continuity and a smooth transition until the new permanent Head of R&D is named.

I want to say a few final words about Intercept's progress navigating our regulatory dialogue in both PBC and NASH. I'm pleased that we're nearing the conclusion of our work with FDA on updates to the Ocaliva label, which will provide important new guidance for healthcare providers and patients with PBC. This clarity on the label will allow us to focus on the future and continue to support the significant majority of patients who will remain eligible for treatment. As we continue our work with the FDA and EMA on our NASH program, we remain committed to taking the necessary actions to arrive at the right informed decisions regarding our path forward.

In parallel with our near-term focus on the regulatory dialogue in PBC and NASH, we've continued to advance key pipeline activities that position Intercept for future success and build on our leadership position in the liver space. We expect to communicate more on our pipeline later this year and now that we have clarity on our label updates to our foundational PBC franchise, we can increase our focus on identifying additional opportunities to leverage our strengths and our expertise.

And now I'll turn the call over to Rocco Venezia for financial updates. Rocco?

Rocco Venezia

Thank you, Jerry, and good morning, everyone.

Please refer to our press release issued earlier today for a summary of our financial results for the first quarter ended March 31, 2021.

In the first quarter we recognized $81.7 million in worldwide Ocaliva net sales. This was an increase of $9 million versus prior-year quarter. Our worldwide Ocaliva net sales were comprised of U.S. net sales of $57.3 million, and ex-U.S. net sales of $24.4 million. This represents a growth of approximately 13% and 11%, respectively versus the prior-year quarter.

As Jerry mentioned earlier, our solid first quarter results in the U.S. were driven primarily by continued demand growth. Although as anticipated, we have seen slower growth in the patient startup as a result of COVID-19. During the first quarter, half of all scripts were generated by new prescribers. We also experienced the typical seasonality in Q1 as patients were impacted by the resetting of insurance plans and Medicare coverage gap. This led to a higher gross to net percentage for the quarter.

Our GAAP operating expenses and non-GAAP adjusted operating expenses for the quarter were $111.0 million and $101.7 million respectively. This was a decrease of $45.1 million and $41.2 million versus the prior-year quarter. As a reminder, our non-GAAP adjusted operating expenses excludes stock-based compensation and depreciation. Non-GAAP adjusted operating expenses is a non-GAAP financial measure under SEC regulation. Please refer to our press releases issued earlier this morning, for a full explanation and reconciliation of this measure.

Our cost of sales was $0.8 million in the first quarter as compared to $0.9 million in the prior-year quarter.

Selling general and administrative expenses for the quarter were $69.3 million. This was a decrease of $39.3 million over the prior-year quarter and was driven by our efforts to lower operating expenses in order to provide a strong financial foundation for the company going forward.

Research and development expenses for the quarter were $50.8 million. This was a decrease of $5.9 million over the prior-year quarter and was primarily driven by lower NASH and Ocaliva API development costs.

As of March 31, 2021, we were well positioned with cash, cash equivalents, restricted cash and investment debt securities available for sale of approximately $418.6 million.

And now turning to our financial guidance for the year. As a reminder, last quarter we issued full-year 2021 worldwide Ocaliva net sales guidance between $325 million and $355 million. As a result of the latest dialogue with the FDA, which we expect to result in a label update restricting the use of Ocaliva in patients with decompensated cirrhosis and then a subset of patients with compensated cirrhosis, we're narrowing our Ocaliva net sales guidance range. We now expect full-year 2021 worldwide Ocaliva net sales to be between $325 million and $340 million. Once the label is finalized, as we monitor post-label update market dynamics, we'll plan to refine this range throughout the year as necessary. We're reiterating our full year 2021 non-GAAP adjusted operating expenses to be between $380 million to $410 million.

In summary, I'm pleased with the strong commercial performance and our ability to manage expenses in the first quarter. We remain well positioned to continue investing in the growth of our Ocaliva franchise, supporting our national regulatory processes with FDA and EMA, and furthering our pipeline by building on our strong foundation.

With that, I'd now like to turn it over to the operator for any questions. Operator?

Question-and-Answer Session

Operator

Thank you. We will now begin the Q&A session. [Operator Instructions].

Okay. Hello, technical difficulties here, let's see. Okay, I'm so sorry. Little technical difficulties, give me a second here. All right. Here we go. Okay and our first call is from and please excuse if I'm mispronounce your name, I'm sorry. Ritu Baral from Cowen. Go ahead, please.

Ritu Baral

Hi, guys, thanks for taking the question this morning. So, Jerry, I wanted to just drill down further on the percentage of patients, PBC patients with compensated portal hypertension that we could be expecting, I know you have the revised guidance, but can you -- could you let us know if like the definition of portal hypertension, whether it's like the ranges of millimeters of Mercury or any point within the workup for portal hypertension is different for PBC patients than I guess the standard portal hypertension, yes, standard portal hypertension workup like should we be thinking about that 15 millimeters of Mercury or more?

Jerry Durso

Okay, thanks for the question. I think it would be good; I'll have Gail give you an overview on what we're expecting from the label. Again, we're at the end of the process. We would anticipate based on the interactions that we have had to-date that the process will end shortly but perhaps Gail can give you an overview of what we're expecting to see, what we anticipate and then I can comment a little bit on the front-end of your question in terms of some of the ranges. Gail?

Gail Cawkwell

Thanks, Jerry. So to give a little clarity, let me take one step back for just a second. And just again define what we said is where the label will change, will apply to different patients.

First, patients with decompensated cirrhosis, the most severe group of patients will be excluded from the label. This is a population that can be quite sick and setting a medicine in that setting can be very, very challenging, particularly when for chronic use.

Your question focused on this population with portal hypertension, so just to clarify again, for a second before we stuck right to your question, cirrhosis on a compensated side can be divided into two subsets. There's those who are early on in the spectrum of cirrhosis, and who are really somewhat indistinguishable from patients without cirrhosis until they develop portal hypertension. Now, the way portal hypertension is described here is clinical evidence of portal hypertension or evidence of portal hypertension. So we're not looking for an invasive procedure, or something else to assess portal hypertension, but rather the clinical evidence that doctors use in their practice really every day to say recognize that once patients with cirrhosis progress to having portal hypertension, their risk for adverse liver outcomes really increases. Again, once you have cirrhosis and progressed to portal hypertension, we then will have a contra indication at that point.

Jerry Durso

So if we think then in the context of the overall cirrhotic groups, so we do estimate based on a variety of sources, both from the U.S. and ex-U.S., the proportion of Ocaliva patients overall that have evidence of cirrhosis is in that range of 20% to 25%. Again, the decompensated group, as Gail mentioned will -- we anticipate will be restricted by the new label, that's in the mid-single-digits. And then you have the compensated group were somewhere in the range of about half of the compensated group might fall into this evidence of portal hypertension. So that that's how we think about the picture at this point. Of course, as the label is finalized, we'll monitor the dynamics in the market and continue to update.

Ritu Baral

Got it. And then a very quick follow-up on the NASH side. You noted like the three topics of discussion with FDA safety, biopsy methodology and risk benefit analysis. On the safety side, you guys highlighted liver toxicity. Is it fair to assume that the conversations on that safety topic focus more on liver safety at this point than any lipid changes? Or lipid changes still a topic of discussion?

Jerry Durso

Gail?

Gail Cawkwell

Sure. So it's important to recognize that FDA has really been interested in the full spectrum of the Ocaliva or the OCA excuse me safety profile. And I note that there's really a lot of published material in the public domain, about the safety profile. And we're continuing to generate more as the REGENERATE study continues.

Operator

Okay. And our next question comes from Brian Abrahams from RBC. Brian, go ahead.

Unidentified Analyst

Hi, thanks so much for taking my question. This is actually David [indiscernible] on for Brian. I guess just thinking about the NASH study and building off of Ritu's question, maybe. Could you just help us understand maybe what exactly changed instead of your understanding of the cadence of interactions maybe or what needed to be aligned when we think about these three buckets that led to maybe less clarity on potential timelines of refiling here?

Jerry Durso

Thank you for the question, David. As we mentioned in the prepared remarks, we have had multiple interactions, we have more planned. I think we continue to work overall on the question of risk benefit, as you could imagine. And then in that context, the three areas that we've outlined the comprehensive safety update, the biopsy approach and ultimately the potential for additional efficacy. So I think we've gotten as we've indicated some better clarity on some of the specifics around the data we need to generate as we prepare for the comprehensive safety update, which we anticipate that that data will be significant increase in the level of exposure, which we think could be important.

We've been encouraged by the level of engagement from the agency, we have had interactions, we have more planned coming. I think our focus continues to be on getting clarity, sometimes that clarity creates some better insight on the work we have to do, as well as a better idea of the sequencing of the interactions to come. And so as we work on this thing holistically on the overall picture, it's all of those elements that in the context of this step-by-step approach, and us wanting to avoid unknowns later on that we continue to work on the plan moving forward, and do anticipate we'll come back in quarter three, with refinement on that.

Unidentified Analyst

Got it. Helpful and a quick follow-up on the PBC side, if I may. I'm just thinking more about the, I guess the ex-U.S. side, it was a strong quarter. And I think you noted driven by both mutations and also digital education activities. I guess, could you just help us better understand the dynamics on each side, I know quarter-over-quarter is a little bit more, maybe volatile on the outside? But how are you thinking about the rest of the year as you may be continue the digital education activities, and I guess want to try to understand how much of a run rate here we might see and how much this contributes maybe to guidance?

Jerry Durso

So I can start on that, and perhaps Rocco would want to add on. We do continue to execute our Ocaliva plan in the markets. In different situations, depending on where COVID is. So in the ex-U.S. context, obviously, we have different progress occurring in terms of the activities in the market. So, when we think about quarter one, and the previous quarters, there has been a specific, I think opportunity to enhance the digital approach, which is we signaled that in the prepared remarks, and the impact that that has had ex-U.S. obviously again different countries are in different situations. Now, in context of the guidance Rocco, perhaps you want to give a little more color around how we're seeing the guidance with the label change and looking at the regions?

Rocco Venezia

Yes, sure. Thanks for the question. As we had mentioned earlier in our prepared remarks, we've narrowed our sales guidance. With respect to our ex-U.S. despite all of the challenges, as many of us know, and the repeated closures in many of those markets, we've continued to do well. So that is all factored in our latest guidance.

And with respect to the approach that we're taking, I could turn it over to Linda, perhaps, add little additional color on that.

Linda Richardson

Sure, I'm happy to take that. I think there's been a real focus on non-personal promotion right, we need to get into those centers, and many in the, unlike the U.S., in Europe, many of the practitioners are in institutions, healthcare settings that were closed to sales representatives, and to pharma in general, because of the need to take care of COVID patients. There's a serious restriction on that. Our team quickly pivoted to many innovative programs, using telenet to agents, telecall, reaching out using Internet programs, et cetera to keep awareness up. And that went very well for us. And we followed those same tactics in the U.S.

Operator

Okay. And our next question comes from Mike Yee with Jefferies. Go ahead, Michael.

Aryeh Gold

Hi, thanks. This is Aryeh Gold on for Michael Yee. Yes, just couple of quick questions. And can you talk a little bit more about the recent dialogue with the FDA and then when you give that update in the third quarter, are you just going to come out and sort of say that you have alignment now, you're going to give more color around that? And then, secondly, can you just sort of set expectations for the Phase 3 data that we should be getting around the year -- end of the year? Thank you.

Jerry Durso

Thanks, Aryeh. I'll start. So I think as we've outlined on NASH, the interactions we have had multiple formal interactions. And I think importantly, a good view forward for some steps to come. I think that within the context of the quarter three update, we anticipate to have feedback from some of these key discussion on some of the key topics, again coming back to progress on clarity on what the safety updates should look like, some of the details that we'll have to work through yet with the agency for example, on the analysis plan on safety biopsy, we will anticipate making some progress.

So the update that I referred to in quarter three, we should think about that, both update on our work and our planning, as well, as an update on some of the key elements coming from the regulatory dialogue.

I think your second question was about REVERSE. So we are continuing to view REVERSE as an important data set in an important population. As a reminder, this is a group of NASH patients with compensated cirrhosis; it's our second major Phase 3 that we're working towards the top-line readout by the end of the year, where we're going to learn more about the role of OCA in a different incremental patient population. So we're working towards that.

Operator

Okay. And the next question is from Alethia from Cantor Fitzgerald. Alethia, go ahead.

Emily Bodnar

Hi, this is Emily on for Alethia. Just a quick question. Do you still expect the REGENERATE trial results to be enough to refile an efficacy for NASH, it kind of sounded like you may need additional data besides the study? So I'm just wondering what the base cases still and if there's been any updates on that. Thank you.

Jerry Durso

Thanks, Emily. Our approach has been focused on defining a path forward and alignment on a potential resubmission package that would support accelerated review. We did reference in the prepared remarks, that there is this additional group of patients that were not part of the interim cohort that we do have an opportunity on the 18-month biopsies, include that efficacy element in any potential resubmission. And as I indicated, we're also interested in what if any additional efficacy items might be relevant to the agencies thinking, and that topic will be one of the topics discussed in the future interactions that I described.

Operator

Okay. And next question is from Steve with Raymond James.

Ryan Deschner

Good morning. This is Ryan Deschner on for Steve Seedhouse. Can you elaborate a little more on the difference between the additional datasets to assess efficacy and the actual 48-month efficacy on the interim patient population coming in mid-2021?

Jerry Durso

So I'll start and then I'll ask Gail to comment. So, what I did indicate is that that we're open to the discussion on potential additional efficacy beyond the interim data that we've already generated. And we did reference the additional 500 of biopsies as another data item that we would anticipate could be part. Gail, maybe you want to give some additional color on the efficacy side?

Gail Cawkwell

Sure, I'm happy to do so. So by the middle of the year, the study is ongoing. That means that we're just progressing through the protocol. And by the middle of the year, the original patients who were part of the interim analysis will have all reached the 48-month time point is a point also where there's an additional seminal biopsy, but it also means our exposure is really greatly increased. So both on the safety and the efficacy side, we really have a large and robust database that this continues to get bigger. And we're looking to those FDA interactions to define exactly how we can provide the most compelling data.

Ryan Deschner

Okay, thank you. And then also the additional datasets to assess the efficacy well that entail a reread of biopsies in a pooled manner and then a read of all post treatment biopsies sort of scramble together?

Gail Cawkwell

Yes. So I think that we're looking at the way of rereading the biopsies and discussing this with FDA really right now and in the short-term. It's important to recognize that FDA has publicly said that they believe a consensus approach to reading biopsies is an important next step. And that's something that we will be discussing with FDA to assure that we have an approach that will have the objective of really decreasing variability and improving accuracy. So we get the best reading. FDA has not asked us at present to go back and reread earlier biopsies, but we're looking forward to having those discussions and aligning on an approach in the near future.

Operator

All right. Our next question comes from Yasmeen with Piper Sandler.

Jessica Vo

Hi guys, this is Jessi on for Yas. I was wondering, was there a reason why that an IND was not filed for the OCA and bezafibrate in the U.S. when the study began.

Jerry Durso

I'm sorry, Jessi, can you repeat the question? It was a little low on this end?

Jessica Vo

Yes, no problem. I was wondering why an IND was not filed for OCA and bezafibrate in the U.S. when the study began and as opposed to why the IND is being filed right now?

Gail Cawkwell

Hey, it's Gail. So we do have an open IND right now. It's not just filed, but it's open and ready to start a study later this year. We took advantage of the approval of bezafibrate in Europe to get things going earlier ex-U.S. And our Phase 2, OCA plus bezafibrate trial is currently enrolling and progressing outside of the U.S. We believe this provided a way to move our development programs along expeditiously.

Jessica Vo

Great, thank you. And then one more, maybe I missed it. But is the NISS for OCA, is that cleared or when should we expect the decision on it?

Jerry Durso

I'm sorry, Jessi. It's difficult, can you just repeat?

Jessica Vo

Yes, sorry. Is NISS -- NISS for OCA, is that cleared, I might have missed it earlier in the discussion. And if it's not cleared, when can we expect the decision?

Gail Cawkwell

Yes, I can take that one. So the NISS process, as we said, it's a relatively new process. So there's very few drugs that have gone through the totality of the process. But based on the communications we've had with FDA, the new label change is really the output and the actions that FDA has taken based on their assessment in the NISS process. So I think you can look at that as the totality of the process.

Jerry Durso

And again from our end based on this most recent interactions, we do anticipate that we're nearing the very end of the process and we would anticipate that the new label happens shortly.

Operator

All right. And our next question is from Brian from R.W. Baird.

Luke Herrmann

Hi, this is Luke on for Brian. For PBC, could you provide some color where your dialogue is on subpart post-approval studies and requirements to maintain labeling? So in the midst of labeling updates taking place, do you see a path to converting to approval at this point?

Jerry Durso

So important topic, Gail, can you can give the update on the post-marketing conversations with both agencies?

Gail Cawkwell

Sure. So as we mentioned in the prepared remarks, we're continuing to discuss potential modifications to our post-approval requirements the COBALT study and the 401 study, with both FDA and EMA to say our commitment in both parts of the world. The final Ocaliva label update that we anticipate, as Jerry said just in the next short period of time will play an important role in the discussions about our post-marketing study commitments. But we do expect that the process and defining a path forward for the studies will continue beyond the label updates given the need for that alignment.

Operator

Okay. Next question, excuse me is Ed Arce. Please go ahead.

Thomas Yip

All right, good morning everyone. This is Thomas Yip, asking a couple of questions for Ed. So first question perhaps on the financial side. You guys mentioned about 20% to 25% of PBC patients have cirrhosis. Can you tell us the financial impacts of this proposed updated PBC label has passed that and fully baked into the $15 million revised sales guidance for full-year 2021?

Jerry Durso

Yes, maybe I'll start and then Rocco can comment. Just to clarify, so the estimate of the 20% to 25% is where we're estimating the overall rate of cirrhosis. The impact of the label is with a subset of that population. We've tried to factor that dynamic into the sales guidance as we look at the rest of this year. Rocco, some additional color might be helpful for Thomas's question?

Rocco Venezia

Yes, sure. Absolutely. As we had indicated, we have narrowed our sales guidance for the year to $325 million to $340 million. Obviously, this contemplates the various scenarios that we've discussed and we'll continue to refine the sales forecast as we work through that process and implement the new label.

Thomas Yip

Got it, thanks, thanks for the clarification. Perhaps one more question regarding NASH, with the six-month clock stop with the EMA. Is it safe to assume that any dialogue in that market will come after your comparisons with the FDA perhaps sometime later this year in the third quarter, fourth quarter of this year?

Jerry Durso

Yes, so as we did announce, we received the six months of clock stoppage. It allows us to execute and work in parallel on the work with FDA and EMA and potentially includes some of the additional data on responses in the process in Europe later this year.

Thomas Yip

Okay, got it. Thank you so much for taking the questions and we look forward to the updates this year.

Jerry Durso

Thank you, Thomas.

Operator

Okay. Next question comes from Navin Jacob with UBS.

Jon Lim

Hi, everyone, Jon Lim on for Navin Jacob this morning. I'll keep it to one question. And I'll keep it broad. But if possible, could you give us an overview of the status of your conversations with EMA for Ocaliva across PBC and NASH. Understand at the last call, we were talking about day 120 responses, any updates from there?

Jerry Durso

Yes, so maybe Gail can start on the PBC view with Europe and then we can come back to NASH?

Gail Cawkwell

Sure. So on the PBC side, our focus of our discussions has been on the post-marketing commitment studies COBALT and 401. And assuring we find a path forward to meet commitments, particularly those around our conditional approval. We also given that label update in the U.S. we will plan to file a Type 2 variation. And I would say that EMA has had a somewhat different approach to thinking about things as they want to do. For example, after our periodic benefit risk annual update this past year, perhaps the EMA regulatory authority that looks at safety did note that the benefit risk was unchanged given the current label. Nonetheless, we'll be doing a Type 2 variation on the PBC side.

Jerry Durso

And to reiterate on the NASH side. So we did talked last quarter about submitting our responses to the day 120 questions. And then after the response from the agency, we did receive the six-month clock stoppage. And so that's where the process is currently, again, it gives us an opportunity to work in parallel to potentially use some of the additional data as we work on the approach with Europe importantly working towards a definition of responses that highlight the risk benefit in the right population in that context. So more to come later, later this year.

Operator

Okay. Next question is from Matthew with BMO.

Unidentified Analyst

Hey, this is Jen [ph] on for Matthew. Yes, thanks for taking our questions and two for me. So you guys read through guidance for the resubmission timing, where is the gating stuff with the re-filing, are you guys just waiting for the 48-months data to mature? Or is there anything else that you guys are waiting on? And I have a follow-up after that.

Jerry Durso

Thanks for the question. As we work on the overall risk benefit dialogue with the agency, I think we're again; we're looking at this combination of the feedback that we will continue to get as we get clarity on some of these items, the operational impact of some of those requirements. And it's really that full picture that we have in mind, as we come back and clarify that, at this point, we're unable to reiterate the guidance of a potential resubmission by the end of this year. So it's a holistic view on the dialogue. I think importantly, we have upcoming planned interactions with them, where we'll continue to advance the conversation on some of these key topics, get further clarity and be in a position at each step to define what's the right path ahead. And as I said before, I look forward to coming back in quarter three, as we've continued our work, as we've continued the dialogue and provide refinements to the plan.

Unidentified Analyst

Got it. And then and it looks like the new guidance doesn't reflect the label update. Is it fair to assume that addressable patients for PBC may come down to say like 80% -- like 80% of the initial market? And what are your potential like -- what are your expectations for the potential outcomes of the FDA discussion on the COBALT post-marketing trial?

Jerry Durso

So maybe we'll start with COBALT, which as Gail indicated is an ongoing discussion, which will be where we'll be able to, which will be -- where we'll be able to -- which will be impacted by the finalization of the label. Gail, maybe you want to start on that, and then we can come back to the first question.

Gail Cawkwell

Sure, so on the COBALT side, it's important to recognize this is a commitment, we have a subpart H approval; we will find a path ahead. It's a question of working through the process with both FDA and EMA and the time it takes to align on that path forward.

Jerry Durso

And then Rocco, maybe on the second part?

Rocco Venezia

Yes, sure. Just to clarify, the narrowing of our guidance does include all of the scenarios, which we've contemplated with a label update. So just wanted to make sure that was clear, because I think your question was, did it or did it not?

Operator

Okay. Next question is from Jay of Oppenheimer.

Jay Olson

Hey, it's Jay Olson from Oppenheimer. Thanks for taking the questions.

Jerry Durso

Hi, Jay.

Jay Olson

Hey. I was curious; can you talk about what percent of your operating expenses are dedicated to NASH versus PBC? And what would the financial profile of the company look like if Intercept chose to become a PBC-only company? And have you contemplated that scenario internally and if so, when might the company be willing to make a decision like that? Thank you.

Rocco Venezia

Sure. So thank you for the question. With respect to our R&D costs, as a reminder, we have two large Phase 3 trials that are ongoing. So specifically, two-thirds of I would say are R&D costs are NASH specific. And I guess I'll throw it over to Jerry, perhaps to answer your question on some of the strategy.

Jerry Durso

Yes. So as Rocco indicated, the cost structure around NASH at the same time, if you can, we're intensely engaged on the process that we've outlined on NASH and ensuring that, we're working towards alignment and making sure at each step along the way, we're advancing and making the right decision on the path ahead.

I think the -- that work we'll continue to get more insights from some of the important interactions which are common, which are our plan. We have talked about in the past, if you viewed the standalone PBC franchise, it would be a profitable franchise which plays on some of our core capabilities and our strengths. And I think as we move forward now and implement the label change, that's an important short-term focus that also gives us a better ability to be able to work on some of the future opportunities that still exist in the PBC market.

Operator

Okay. Our next question is from Jeff with Bank of America. Jeff, go ahead.

Aspen Mori

Hey, guys, this is Aspen on for Jeff. Thanks for taking our questions. Just two kind of quick ones. First off, maybe you can walk us through how you're thinking about the NISS update and your expectations for the label as it specifically pertains to your development pathway for OCA as a combo? I guess, are there any specific learnings to apply there in terms of the development or the design of some of those studies? And then secondly, maybe could you talk through what the contingency plans are, if any for REVERSE trying to incorporate the feedback from the FDA workshop a few weeks, I guess a month or so ago? Thank you.

Gail Cawkwell

So with regard to the OCA bezafibrate program, you always learn over the course of a development program, one of the objective of a Phase 2 study is of course to find the right dose. And in a combination product, it's that extra step of finding the right synergistic dose, ideally between two different medicines. Our hope is that that can be a relatively low dose for both, so that we can really look for opportunities to have the sort of an optimized bezafibrate profile.

That said, there's always a component of looking at a new medicine, learning as you go. But we have been very encouraged by the data that exists a really wide array of data that exists on bezafibrate and PBC, OCA and PBC or Ocaliva and PBC and even some data that independently exists and has been published where both medicines are on the market on the two together.

Jerry Durso

And I guess just on the question on REVERSE. So the importance of the REVERSE data is something that we continue to stress. Again, it's an incremental data set and an incremental of population. So we have had historical conversations with the FDA on the potential path forward based on a successful REVERSE readout. However, in the context of our overall approach and really stressing alignment at each stage, I think we would look forward to regrouping with the agency with a positive dataset in hand if we're in that scenario and discussing the path ahead.

Operator

Okay. And that concludes our Q&A session. Now, let me turn the call over to Jerry Durso for closing remarks.

Jerry Durso

So thanks everyone, for joining us today. We were able to bring forth another quarter of double-digit revenue growth while working to finalize our updated Ocaliva prescribing information with FDA and advance our NASH regulatory process and our pipeline. We remain as committed as ever to serving patients with progressive non-viral liver disease, as well as the healthcare providers who care for them. And we definitely look forward to updating you on our progress on the future calls. Thanks for the time today.

Operator

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.