Galmed Pharmaceuticals Ltd. Q1 FY2021 Earnings Call

Good day. Welcome to the Galmed Conference Call to discuss Financial Results for the First Quarter 2021. Today's conference is being recorded. Before we begin, please note that we'll be making certain forward-looking statements on today's call, including those regarding financial results, statements and forecasts regarding anticipated timelines and expectations with respect to our regulatory and clinical development programs as well as other statements that relate to future events. These statements are based on the beliefs and expectations of management as of today and actual results, trends, timelines, and projections relating to our financial position and projected development programs and pipeline could differ materially.

Thank you, Dona. Good morning and thank you for joining us on today's conference call. I'm pleased to be here today with our Chief Scientific Officer, Dr. Liat Hayardeny; and our Chief Financial Officer, Yohai Stenzler, to provide you with an update on our clinical development programs as we report to you on our financial results for the first quarter of 2021. As always, we would be happy to take any questions you may have at the conclusion of our prepared remarks. As we have had our investor year end KOL only a few weeks ago, my report this time will be very short. Starting with Globe, with our Global Phase 3 registrational ARMOR study and as previously reported the additional, the open label part was approved in the U.S., Canada, Australia, UK, France, Belgium, Spain, Israel, Chile and Turkey and is expected to be approved in the coming weeks in Korea and Mexico. Based on our plans and the rapid regulatory approvals, I can confirm that the results from the approximately one-third of the study population, about 50 subjects, that has completed the post-baseline liver biopsy are expected to be available in Q4 2021 as planned. That being said, in Q4, we expect to have results on the efficacy of Aramchol with higher exposure on fibrosis and liver that's confirmed by liver biopsy. Also reported earlier this month, Aramchol received an IND approval in China. We view the approval of the ARMOR study in China as a significant milestone in the development of Aramchol for NASH & fibrosis, which may accelerate the pace of randomization of patients with the double-blind placebo part of the ARMOR study and also position Aramchol as one of the foremost therapeutic candidates for national fibrosis in this large and emerging market. We look forward to rapidly initiating enrollment in China as soon as possible. As previously reported, the ARMOR double-blind placebo control registration part is expected to initiate by the end of Q1 2022. It is expected to be based on Aramchol meglumine, which is a short-form of Aramchol free acid with an improved target product profile.

Thank you, Allen. Good morning. Joining today this morning, I will be providing you with our financial results for the quarter ended March 31st, 2021. For more information, please refer to our Form 6-K primarily filed with the SEC, which among other things provides a summary of such financial results.

Thank you. The floor is now open for questions. Our first question is coming from Steve Seedhouse of Raymond James, please go ahead.

Great. Thank you. Can you just talk about what you're seeing in the single ascending dose study for the Amilo-5MER? I mean, you're doubling the highest dose obviously that you tested in the initial escalation. Just curious if that's based on PK alone, or if that's based on some of the inflammatory biomarker data that you indicated you're collecting.

Thank you, Steve. No PK and safety into the ability you have to that line of action of Amilo-5MER is serum regulation of Serum Amyloid A, obligation and full utilization. It only happens at times of inflammation, that healthy volunteers do not have hyper production and polymerization and aggregation of Serum Amyloid A. So there's no use in looking into a downregulation of Serum Amyloid A, which is not elevated in volunteers.

Got it. Perfect. And then just regarding Aramchol meglumine, can you just clarify if you've had a type C meeting with the FDA and if the feedback you're expecting is subsequent to that, or are you still planning on having a type C meeting or are you just awaiting written feedback in the third quarter? Thank you.

We are waiting for a written response. We submitted the request for a meeting. I mean, due to COVID-19, we obviously cannot travel to Washington now. So we applied for a meeting and also sent the package. We expect to have a written response from the FDA in June 2021 regarding our full plan. They also received all of their bio-equivalence study results that we had together with co-lead methylamine compared to...

But the FDA has confirmed the DC's done under meeting timetable which is a mandatory timetable for a response.

Sorry. Our next question is coming from Ed Arce of H.C. Wainwright, please go ahead.

This is Thomas. You asked me a couple of questions for congrats on the other progress made this quarter. Just wondering about the histology data from patients in 2021. How many patients will be? What's the percentage of patients that have been treated for 24 weeks or 48 weeks or 72?

Okay, thank you. So the majority, if not all patients are going to be F2, H3; these are patients who have transitioned from the double-blind placebo. As you know, we have recruited F2, F3 patients for this double-blind placebo part. Off the top of my head, we're talking about 25 patients who are going to be on the 48 and 72 weeks on biopsy and about 25 would go for 24 weeks.

Okay, thanks for the additional amount for the study. And then for the new China, we'll get started with the new Aramchol meglumine formulation?

So, the IMD that was approved was the existing protocol IE protocol 3 of the ARMOR study, which is the twice daily, the DID RM coated with the enhanced exposure, the 50% higher exposure. This is the data that we will see also from the open label study. We have protocol 4, the open label study and this is now in process. We are now in discussion to approve these amendment protocol; amendment, and protocol 5 is going to be meglumine which has to be first approved, of course, by the FDA. Then we will amend it globally, including China. So we are starting with Aramchol acid but hopefully moving swiftly to our meglumine when allowed all over, not only for China but all over the world.

Okay. So sounds good. Perhaps one final question from the Amyloid Phase 1b study, can you think over it the rationale of going ahead with but the thing is our phase 1b?

Yeah, definitely. We are developing Amilo-5MER in two formulations. One of the formulations is going to be well directed to ulcerative colitis. That means that it's going to be opened in a certain pH. Parallel we do want to see an exposure of subcutaneous use. So we will proceed with both formulations into Phase 1b.

Okay, sounds good.

That kind of development will allow us to go through multiple indications because indications like RA for instance require the applied injectable administration, while others require local oral, like for instance, for the GI tract. So, we are working in parallel with two formulations to allow us to expand the development program to other indications. Once we start to fix one disease, the one that we described of course, for IBD for ulcerative colitis.

Yeah. So, that's for the additional indication. Thank you so much. And we look forward.

Our next question is coming from Kristen Kluska - Cantor Fitzgerald. Please go ahead.

Hi team. This is Rick on for Kristen today. Congrats on the quarter. I just wanted to ask a couple of questions. In light of the ongoing pandemic, I wanted to ask about the team's confidence in being able to have a comprehensive data set for this first 50 patients in histology results to Aramchol. Do you believe these results could tailor your inclusion-exclusion criteria for reinitiating the study by the end of the first quarter 22?

So as our VP of clinical affairs Shai Feinsod just returned from a treatment in the U.S. visiting some of our U.S. sites. As you may recall, we've carefully selected out of the 215 sites, which are active in the ARMOR study about 55 sites, which were less affected by COVID-19. Israel, fortunately, in terms of working here from Israel, we are almost back to normal. We have other problems, but nothing to do with COVID-19. In Europe, we see some delays but we are not many patients coming from Europe at that time. In our forecast, the majority of patients would come from the U.S. We have selected areas in the U.S. sites which were less affected by COVID-19, and meeting with the CIS just recently we confirmed the timelines and this all is going well. Expand for the re-initiation of the double-blind spot of Aramchol by Q1 2022.

Understood, thank you. Maybe just one more given the complexity of the IBD markets. I know you kind of maybe alluded to this earlier but there's certainly a large and diverse patient population to serve as far as knowing the best segment of the market to target with the Amilo-5MER. What specific signals are you looking for? A proof of concept data in order to better inform what kind of patient populations subset of the market you would really target for the trials?

Thanks for that. We are targeting colitis patients, mild to moderate, and the tolerability and efficacy of Amilo-5MER would be superior as we see it in animal models. So the ability in healthy volunteers to compare with other currently available compounds in the market is very challenging. The other compounds are extremely efficacious, so the competition in the market is intense. You have to understand that the immune system response is different. If these other compounds are harming the ability of the patients to form a good immune response and/or to mount a proper immune response, Amilo-5MER, which is very safe, very focused with a mechanism of action that acts upstream of all the sites of pain produced in highly inflammatory states, could provide the best benefit-risk ratio for treating the long-term disease. The safety margin is expected to be much better.

One of the things that COVID-19 has taught us is that there isn't room for immune system modulators and immune system suppressors. We see that many patients treated with biologics and those very effective drugs, unfortunately, were exposed to COVID-19. We believe that the lessons learned from COVID-19 will favor drugs that possess profiles such as Amilo-5MER, and we are looking forward to demonstrating all these superior safety, tolerability, and efficacy data in our Phase 1 and Phase 2 studies. Thank you for that.

Thank you. At this time, I would like to turn the floor back over to Mr. Baharaff for closing comments.

So thank you all for joining our call. As always, you are very welcome to contact us within the next 40 days before our next quarterly call, and we are looking forward to finally seeing you in person. I hope that travel restrictions will be lifted soon and we will be able to come and visit you very soon, both in the U.S. and Europe. Thank you all for joining the call.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and have a wonderful day.