Galmed Pharmaceuticals Ltd. Q3 FY2021 Earnings Call

Good day and welcome to the Galmed Conference Call to discuss Financial Results for the Third Quarter 2021. Today’s conference is being recorded. Before we begin, please note that we will 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. We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the SEC, including, without limitation, the risks under the heading Risk Factors described in our Annual Report on Form 20-F filed with the SEC and the risks and uncertainties included in the Form 6-K filed with the SEC earlier today. Galmed assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates only. I would now like to turn the conference over to Allen Baharaff, President and Chief Executive Officer. Allen, please go ahead.

Thank you, Shamali. Good morning and thank you for joining us on today’s conference call. I am pleased to be here today with our Chief Scientific Officer, Dr. Liat Hayardeny and our Chief Financial Officer, Yohai Stenzler. We are also grateful to have with us today our guest KOL Professor Vlad Ratziu from the Sorbonne Université and ARMOR study Co-Principal Investigator. Professor Ratziu will present the results from the first dataset of the open label part of our Phase 3 ARMOR study also referred as the ARCON cohort. Professor Ratziu will be happy to take questions following his presentation. At the second part of our today’s call, we will report to you on our financial results for the third quarter of 2021 and we will be happy to take questions addressed to management. As you know, early this year, an open label product was added to the Phase 3 ARMOR study designed to provide effect size on a higher dose of Aramchol 300 milligrams b.i.d., with 153% elevation in exposure and optimal treatment duration for Aramchol. Galmed also added to the study a rigorous and robust pathology reading process, confirmed and designed in consultation with the FDA, including a committee of three independent experienced liver pathologists. Biopsies are read by each pathologist individually, followed by a consensus reading. The data which will be soon presented by Professor Ratziu is aligned with the hypothesis that higher Aramchol dose results in an improved efficacy profile and that a direct anti-fibrotic effect of Aramchol may occur as early as 24 weeks. It is demonstrated by histology and corroborated by fibrosis biomarkers. Analysis of biomarkers in the larger ARCON cohorts support anticipation that further biopsy analysis will continue to show that Aramchol treatment provides a highly meaningful effect on fibrosis. Importantly, Aramchol continues to show an excellent safety and tolerability profile. Now, let me transfer the call to Professor Ratziu. Professor Ratziu, please.

Thank you, Allen. I am always honored and very happy when I can get to present positive results. So, thank you for inviting me to do so today. So, hello, everyone. I hope you can see the slides we have prepared for you here. I would like to start by reiterating what Allen Baharaff explained very well, which is that this is an innovative study, designed within the randomized controlled trial, the Phase 3 trial of the ARMOR study and this is an open label part, which tests three different durations of exposure to Aramchol as explained, a 6-month duration, a 12-month duration, and an 18-month duration in three groups of patients of 50 patients each. It is an open label study. We know basically the rate of response in terms of fibrosis reduction of the placebo arm from the many studies that have been conducted and reported so far. So, the interest of the study is not the comparison with placebo, but rather to understand whether changing the pharmacopresentation of the drug by delivering it twice a day, which increases, as you were told, considerably, the exposure in blood, results in a higher level of histological effect than what was previously tested and published in the Phase 2b trial. Moreover, this study will try to understand what would be the optimal period of treatment that results in a strong anti-fibrotic effect. And for that reason, the three periods – lengths of the three durations are being compared simultaneously. Now, the study will continue after the respective 6, 12, or 18 months time where a controlled liver biopsy is being performed. It will continue in the same open-label fashion and it is scheduled to end around the same time as the randomized controlled Phase 3 trial ARMOR. The only difference here being that only patients who were non-responders will have a third biopsy in order to understand whether prolonged exposure beyond the initial timelines will result in a delayed anti-fibrotic response in people who are initially non-responders. So, this is a very exciting design because it tests several things at the same time. And usually, things that are not being tested in traditional Phase 2b or Phase 3 trials, because, like always, everybody wants to rush to take the shorter route to success, but here, it is important to understand very well how to use this drug. Now, another thing that Mr. Baharaff explained is that nowadays, a single pathologist is no longer sufficient. Therefore, it is important to have a very strong histological adjudication process. In agreement with the FDA, what was decided and what is being implemented for this trial is to have a committee of three pathologists, so it’s not for just one deciding whether it works or not, but all three of them need to agree and provide total consensus on the staging and the grading of the disease. And that is of course done blindly, not to the allocation, because this is an open label, but to the sequence of the biopsies. So, the pathologists do not know whether they are reading the first or the controlled biopsy. All this is explained here on the slide. I am going to move on now to present to you the preliminary results on the first patients that have been completed – they are assigned a lot of time of exposure and we are very happy to tell you that part of the results that we will present here have been accepted for presentation as a late breaker at the liver meeting, the American Association for Study of the Liver Disease meeting that will be held later this week. So, the part that has been submitted and accepted as a late breaker concerns 20 patients and is labeled here late-breaker ASLD. But then we will also present the data was available today of the larger cohort of patients that participate in this open-label study, which by the way is called ARCON, Aramchol open-label study and this is the ARCON cohort and this concerns 139 patients. So, the 20 patients that are being presented solely are part of this 139. So, you can see here on this slide that basically the epidemiology and the demographics are pretty much the same between the first 20 and the subsequent 119. You can see here that females are a majority of the patients. Mean age is around 58 years. BMI is rather high, ranging from 32 to 33, and there is a majority of Caucasians. Most patients have advanced bridging fibrosis with Stage 3 between 57% and 65% and then there are some patients who are F2 and others at Stage 1. So, this is as far as the baseline characteristics. And now is the main result. You can see here the proportion of patients that had an improvement by 1 stage or more after exposure to Aramchol. The good news is that actually out of 20 patients that had a controlled liver biopsy, 12 of them had fibrosis reduction by 1 stage or more and actually 7 by 1 stage and 5 by 2 stages, which is a quite remarkable result, as that places the level of response in terms of fibrosis improvement at 60%. And of course, this is very impressive compared to the figures that are available in the literature, because by all accounts, the placebo rate in the different studies is between 15% or even 13% in the Phase 3 trial and I would say 30% maximum. So, 60% goes way beyond that. Of course, these are preliminary results on a small number of patients, but this high level of fibrosis reduction has not been seen so far in other studies. What is interesting here, you can see on the right part of the diagram, how these biopsies are distributed in regards to the length of exposure? So basically, half of the patients – at least an equal number, 9 of them have been biopsied after 1 year and the other 9 have been biopsied after 6 months and 2 of them only have been biopsied at week 72. And so you can see that – and there is – for the moment, numbers are too small to see a trend, but it looks like 48 weeks would have the best response rate in terms of fibrosis, with 67% of them improving fibrosis by 1 stage or more, but this, of course, needs to be confirmed as the trial continues. So, these are the very exciting histological results. A more visual way to see the changes in the liver of patients treated with Aramchol are these pie charts. So, on the left side before, at baseline and on the right side, after treatment, there are two things that are quite striking here. If you look at the proportion of patients with bridging fibrosis, those in orange, you go from 65% to 25%. So, that’s what the numbers indicate, 13 here and 5 there. Now conversely, if you look at the number of patients with very early fibrosis stages, so the blue ones, F1s, this goes from 15% to 45% when you put together F0 and F1. So clearly, there is a shift here in terms of fibrotic severity that is being induced by exposure to Aramchol. Now, if we are looking at converging evidence from biomarkers, which is always very important, because we would like to see all needles moving in the same direction. Now, what you can see on this slide here is the response on aminotransferase levels. So on ALT on the left side, AST on the right side, the top of the graph is from the late breaker cohort, 20 patients and the bottom part, and this is interesting, is all patients included so far. So – which have been now looked at, at different lengths of exposure, not all of them completed the study, but the results are cumulative of the different kinds of exposure. And the important part here is that both enzymes, both aminotransferases go down, as you can see here, clearly significantly. This is true whether you are looking at the first 20 patients or at the subsequent 139 patients that were included and analyzed in total so far, so quite robust reduction, which is confirmed beyond the initial 20 patients, which are reported at the liver meeting. Now, if we specifically look at some very popular fibrosis markers. Let’s look at before. Here again, the results are very encouraging in the sense that they go in the same direction as the results observed by histology. If you look at it on the left side, you have the AASLD late breaker cohort, the 20 patients, a clear drop in FIB-4 and this is replicated in the larger cohort of 139 patients. Their behavior is the same. So, one can surmise from that, that the histological result when this will be available from the entire cohort will be quite similar to the one obtained in the small earlier cohort of 20 patients. Of course, this needs to be seen, but the fact that FIB-4 goes down in all the patients, if this is an indicator of fibrosis reduction, the histological results should be the same on the larger number of patients, which is of course the final result that we are looking for in this study. Now, looking at another very emerging biomarker of fibrosis, which is PRO-C3. It is a marker of not only of established fibrosis, but also of active fibrogenesis, because it is a fragment of procollagen that is being released as collagen is being deposited in the tissue. So, PRO-C3 now, every trial measures PRO-C3 and what is here also reassuring is that in the 20 late-breaker cohort 20 patients, where histological regression of fibrosis has been documented by liver biopsy, we can see a strong reduction in PRO-C3. But that is also replicated as for FIB-4 in the larger cohort of 139 patients for which not everyone has a liver biopsy yet, but the fact that this biomarker of fibrogenesis goes down, makes us think that the histological trend will be the same in the larger cohort. Whether you look at absolute change or relative change, the results are quite consistent. What is interesting here is that PRO-C3 was measured by Nordic Bioscience, which is the biotech company that initially invented and created this biomarker. However, they did change the methodology for measuring it, the assay precisely and that results in a more robust and more reproducible assay according to Nordic Bioscience and also to a higher baseline level, which is explained here, 48.8 micrograms per liter. Now, if we look at the statistical significance of the results that I have just shown you, whether you’re looking at aminotransferases and the two most popular fibrosis markers, you can see that there is a significant drop from baseline, which is shown here on this slide. This is true at Week 24 and it is maintained at Week 48 with a high level of significance for all of the biomarkers that are being presented on the slide, so again, aminotransferases, FIB-4 and PRO-C3. As a reminder, the AASLD late breaker cohort, the documented proportion of patients who had a reversal of fibrosis was 60%. So why are these results important? It is because they confirm and actually go beyond what was demonstrated in the Phase 2b trial, the ARREST study, and the results of which has been published in a very prestigious medical journal, Nature of Medicine, less than 1 month ago. So, the results that were represented currently today reinforce the optimism in the ability of this molecule to induce histological improvement and in particular, fibrosis reversal. That’s why it is always good to have the results coming from a different cohort. This study is important to conduct. They support the effect of a higher dose of Aramchol, which is the one actually that will be used in the Phase 3 ARMOR study. So the practical implication of these results, if they are confirmed on a larger cohort of the open-label trial is that they will enable us to conduct discussions with the FDA so that the interim analysis of the Phase 3 trial, the analysis that, if positive, allows for conditional marketing authorization, can be negotiated earlier. This interim analysis can be performed on a smaller number of patients and maybe after a shorter period of exposure, say, for instance, instead of 72 – 48 weeks, which would help bring the drug earlier to the market. So very positive initial results so far from this open-label trial. I’ll pass it over to you, Allen, for the question-and-answer session.

Thank you for Professor Ratziu, and we will open the floor now for Q&A for Professor Ratziu, and then we will continue with our regular call.

Thank you. Our first question that we have is from the line of Steve Seedhouse with Raymond James. Please proceed with your question.

Hi, this is Ryan Deschner on for Steve Seedhouse. I wanted to see if any of the patients in these cohorts are receiving any other therapies like vitamin E, pioglitazone, fibrates, anything like that? And then also, were the patients consulted on lifestyle management eating well, exercising more, etcetera? Thank you.

Yes. Thanks. So this is akin to all the other studies being conducted in the field. Patients are allowed to be on other medications, particularly the ones you specified, if they have been on that medication for an extended period of time before the biopsy that was taken. The initial biopsy was used for randomization. So, the assumption, like in all the other trials, is that if you have taken Vitamin E or pioglitazone for a number of months or years and then you have a liver biopsy that shows active NASH with fibrosis, that means you’re not a responder to that medication. If the patient started that medication only a few weeks before the selection, then, of course, they were not allowed in the study. So all these patients can be considered as non-responders to pioglitazone or vitamin E. Now, regarding lifestyle measurements, like in all other trials in NASH, people are given the information; they are educated about what they need to change in their lifestyle and their diet and the exercise they are doing or not doing, and they are constantly being reminded at each study visit, but there is no systematic ancillary program of lifestyle implementation. I’m not aware of any pharmacological trial that does that. So it’s active reinforcement, but it’s no more than that. Of course, any changes in weight, alcohol consumption, and activity level are captured at each visit, and this will be one of the components taken into consideration when analyzing the final results on the effects on histology.

Got it. Thank you very much.

Our next question comes from the line of Ed Arce with H.C. Wainwright. Please proceed with your question.

Hello, everyone. This is Thomas Yip asking a couple of questions for Ed. Congratulations on the very exciting open-label data so far. There are a couple of questions. First, among the five patients who achieved a two-point reduction in fibrosis as we’ve seen in other slides, at approximately what time point was that achieved? And when should we expect the next set of biopsy data from ARCON cohort?

So thanks, Thomas. I don’t have the exact detail of these five patients. Maybe Galmed has it, whether that was week 24 or 48. I think it’s quite equal between the groups. But with the small numbers, I’m not sure if we can be confident about that. Now for the next – so the study is ongoing. Each week, there are people who have their second biopsy taken. This will continue. We hope that the next time we report filings on this cohort, it will be when the first 50 patients instead of the current 20 will reach the end-of-treatment biopsy. We hope that we can show you more data at that time.

Okay. Got it. Next year. And I just want to confirm, for the biomarker data analysis presented today, is the ASLD cohort of 20 patients a part of the overall open-label ARCON cohort of 139 patients or are they separate cohorts?

The 20 patients are part of the 139 cohort that I presented. They are in there.

Okay. So the data of approximately 50 patients of the open label overall does contain the AASLD cohort?

And it contains additional patients that have been followed for variable periods of time. Some of them only 4 weeks, others 8 weeks out of 12 weeks. The repeated measurements methodology used takes into account the individual period of exposure for each of these 139 patients, and the graph was built using these data.

Right. Got it. And then perhaps one last point about the study about the demographics so far; we see that over 77% of patients enrolled in the open label are female patients? Is this by design? And do you expect any potential impact?

No, it’s absolutely not by design. It happens to be that way. Actually, if you look at most studies, at least most trials published so far, there is a majority of women. Maybe not 77%, it’s more like 60% or 65%, but that is, in fact, the majority of women is always something we see in these series.

Okay, understood. Thank you so much for taking our questions.

Thank you.

Our next question comes from the line of Kristen Kluska with Cantor. Please proceed with your question.

This is Rick on for Kristen. Could you please discuss how you look at the importance of time to onset in these results, particularly in comparison to other announcements in the NASH space? What importance do you believe the time to onset could ultimately have for physicians and patients?

Thanks, Rick. So you’re saying time to onset, you mean the duration of exposure in the trial? 24%, 48% to…

Yes, that’s correct. Yes.

So we’re just trying to understand the dynamics of the antifibrotic potency of the drug, because it can well happen. You know that you have people who are for one particular drug that responds much earlier than, let’s say, no – you can have one particular drug which has a much earlier response and other drugs that you need to use for a longer period of time to obtain the same results. So, that’s one thing. Some drugs act very fast, others act slowly. That’s one thing. The other thing – and we don’t know which one is Aramchol, because all these studies that have been performed so far for all the drugs, including Aramchol, the Phase 2b trial, they only have one fixed period of time. The only trial where we tested two – we did serial biopsies to understand the dynamics and whether there is an early or a late response was the trial, where biopsies were performed at 1 year and 2 years. But in all the other trials, it’s just one fixed time period. So you don’t know whether you’re at the maximum of the effect or if you’re at a time point we’re just starting to see the effect. So, in order to get a better understanding of how this drug acts on fibrosis and the other aspects of liver injury, it is good to have more than one time point to understand the kinetics of the response. That’s all. And of course, if the results are clear enough, if we see that, for instance, you already reach the maximum response level at 48 weeks and prolonging by 6 months does not reduce or add to the response, that's a very good indication for the interim analysis for the Phase 3 trial at an earlier time point rather than waiting 6 more months, which adds complications to the trial and cost. You’re familiar with that. So, that’s the third thing that it would be interesting to understand from this design comparing three different time periods of exposure to the drug. That’s all there is to it. Now how this will translate to treating patients in clinical practice once you have a drug available, that’s different; and it will depend on other considerations, such as the effect on clinical outcomes. Most probably, what everybody says today is that treatment for NASH will have to be for a very long period. So it’s not something that you will stop once you get a response. But it is important to understand whether that response occurs earlier or later to help ensure patients remain compliant and continue medication for the appropriate period.

Alright. That’s helpful, thank you.

Our next question comes from the line of Justin Zelin with BTIG. Please proceed with your question.

Hi, thanks for taking the question. Just curious if you could help us put into context how you view these results on fibrosis improvement as compared to some of the other data sets available in the field currently?

So as an academic, I have to be very careful the way I answer your question because it is very hard to compare studies between that are not head-to-head, as you know, and which can differ in duration of treatment, in population trends and so on and so forth. Nonetheless, for the moment, practically speaking, there aren’t many studies out there that have shown a clear effect on fibrosis regression, even drugs such as the GLP-1 receptor agonist semaglutide, has not shown in an intention to treat an effect on fibrosis. Madrigal has not shown yet – I mean, Madrigal has not shown yet convincingly that effect; we will see the results of the Phase 3 trial. The only exception is actually obeticholic acid over a period of time, on an extended period of time of 72 weeks in a large Phase 3 trial. So there aren’t many examples of drugs that were successful in reducing fibrosis. In that sense, Aramchol is positioned in a particularly good position here with the results presented in the Phase 2b trial and those shown today. Obviously, this is not sufficient; a Phase 3 trial is necessary to prove beyond doubt that there is an antifibrotic effect. This will be done, hopefully, with everyone’s efforts. For the moment, if you simply consider the level of response in the patients I have shown you today, and if you consider the historical placebo response rate, the magnitude of effect is higher than what has been shown with OCA. All other things considered, the fact there is no direct comparison, and this is not a placebo-controlled trial, but even if it were, I don’t think that especially with three pathologists, the level of response of a placebo arm would be as high as 60%. No way that could happen. So, I think there is a clear difference here. There is something quite clear, although it is very difficult to compare with the other studies. The only other comparison could be with OCA because that’s the only other positive trial on fibrosis. The comparison just between us – because you cannot say that in a scientific meeting, is in favor of this drug in the sense that the effect size versus placebo appears to be much higher. But that’s about as optimistic as I can get given the trial design of this trial and the REGENERATE trial.

Great. Thanks for the question.

Sure. It’s very encouraging that because we really need drugs that work on fibrosis. The disappointment lately based on the results reported so far is that actually very few drugs have clearly shown an antifibrotic effect. So, it’s very good news that we have some strong candidates.

Absolutely. Thanks again.

And our next question is from the line of Steve Seedhouse with Raymond James. Please proceed with your question.

It’s Ryan Deschner, again, for Steve Seedhouse. I wanted to ask, can you give us any more detail on NASH resolution or how the individual components such as ballooning and steatosis and the ASLD cohort compared to the rest? And also what you are seeing in terms of weight loss across these cohorts? Thank you.

So, the other histological effects are being studied underway, and we haven’t presented them. We did not stress these results. We do not analyze fully these results for the moment. So, we keep that for the next scientific meeting because, obviously, this is particularly important. Thus far, I cannot give you more detail. I give you everything we have so far. So, there is nothing that’s hidden here. So, you have got all the information that has been rigorously analyzed on a cleaned-up database. You have got it all. So, there is nothing else that can be shown so far. But it will come, stay tuned, and I am sure that each one of the two major meetings in the year, you will have additional information. And hopefully, when we get to the 50 patients, fully analyzed logically, we will also get additional details on the histological impact of the drug. But for the moment, that’s all we have so far.

Thank you. And then in terms of weight loss?

In terms of weight loss for the moment, there is no weight loss induced specifically by this drug. We will see whether there’s a change in that with a larger number of patients, but for the moment, there is no clear effect; essentially, it’s weight neutral.

Got it. Thank you. And then maybe one quick question, one last question. The ProC-3 data from these cohorts looks like it’s – I mean, definitely wide air bars, but it looks like it’s continuing possibly to improve from week 24 to week 48 where that doesn’t appear to be the case for ALT, AST, Fib-4, etcetera. How are you taking this into account in terms of how you are looking at this in terms of will you continue – do you think that you will continue to see ProC-3 improve? And what would the relationship theoretically be to further improvements in fibrosis?

Yes. I don’t know how much we can over-interpret that. As you say, the confidence intervals are wider than for aminotransferase and so on. It’s still a biomarker that we are investigating all of us. We’re learning what it is worth and how it changes concerning pharmacotherapy or other lifestyle changes. For the moment, I would not elaborate too much on a continuous reduction. Obviously, it’s good; it doesn’t shoot up after week 24, so it’s sort of reassuring. I am very prudent in interpreting the biomarkers of fibrosis. What will be really important is as a first step to document the histological effect and then see whether the biomarkers reflect those histological changes or not. If that is the case, then we will use those biomarkers based on that. I would not, today, use them primarily as an indication of the antifibrotic effect, but rather as supporting evidence because we simply don’t know enough about that, plus there might be individual variability in how this particular biomarker responds, which can be, to some extent, uncoupled from the individual variability in fibrosis itself. So, there are too many unknowns to be extrapolating too much from this continuous reduction in ProC-3. But obviously, it is probably a good sign that it continues to drop. But we will see with a larger number of patients if this holds true.

Got it. Thank you.

And we have reached the end of the first question-and-answer session. I will now turn the call back over to Allen Baharaff to continue.

Thank you very much, Professor Ratziu. And let me continue now. So, obviously, things are moving fast at Galmed. Given the excitement and energy in the company from the data, we view the results we presented today as a game changer for both the company and, more importantly, for the treatment of liver fibrosis. Nonetheless, we hear the skepticism regarding the NASH space over the last years. As a result, we are making enormous efforts in optimizing our NASH program. We focus on fibrosis improvement, which is the most important endpoint. We increased the magnitude of the effect by over 50% thus far, by elevating the dose. We employed a robust pathology reading process of three readers to minimize the primary endpoint discrepancies, and we designed a specific study to address the open question of optimal treatment duration. The data we are presenting today reinforces three main facts. First, down-regulation of SCD1 results in significant improvement in liver fibrosis. Aramchol’s mechanism of action directly targeting collagen production and fibrosis is translated into the results we are seeing today. 60% of patients experienced a one-point or more improvement in fibrosis with only one patient experiencing a worsening. Second, the hypothesis that the higher dose results in significant clinical efficacy has been confirmed to date. We have so far doubled our Aramchol's effect on fibrosis and may end up with a shorter and smaller conditional approval Phase 3 study. The data we are generating will allow us to have an evidence-based discussion with the FDA on these points. Third, data is corroborated by small and large cohorts. The totality of the data at this point is highly encouraging for the next milestones. With our open dialogue with the FDA, we look forward to continuing our updates as the study proceeds. Now let me transfer the call to our CFO, Yohai Stenzler.

Thank you, Allen. This morning, I will be providing you with our financial results for the third quarter ended September 30, 2021. For more information, please refer to our Form 6-K filed earlier today with the SEC which, among other things, provides a summary of such financial results. For the third quarter of 2021, our net loss totaled $7.7 million or $0.31 per share compared with a net loss of $6.9 million or $0.32 per share for the corresponding quarter in 2020. Research and development expenses totaled $6.5 million for the third quarter of 2021, the same as for the corresponding quarter in 2020. General and administrative expenses for the quarter totaled $1.3 million compared with $1.1 million for the corresponding period in 2020. Our cash balance as of September 30, 2021, which includes cash, cash equivalents, restricted cash and marketable securities totaled $42 million compared with $51 million on December 31, 2020. With that said, operator, please provide instructions for the second Q&A portion of the call.

Operator?

Our first question would be from the line of Ed Arce with H.C. Wainwright. Please proceed with your question.

Hello again, everyone. This is Thomas Yip asking a couple of questions for Ed. First question, can you tell us when we should expect the double-blind portion of ARMOR to begin enrollment? And can you also discuss preparations for manufacturing of the new Aramchol meglumine formulation for a clinical trial?

Thank you, Thomas. As we have previously announced, we are planning to reinitiate the double-blind part of the study in the second half of next year, 2022. There is no need, in fact, to meet new protocols because the existing protocols allow us to shift from the open-label part to the double-blind part without the need for a protocol update. We will do that when we have sufficient data to discuss with the FDA the new designs that we are anticipating, which we believe will be shorter. To remind you, at the moment, the design of the double-blind part is 72 weeks. I can almost certainly tell you that at this stage, we believe this is going to be shorter; we will discuss with the FDA how short it will be and the effect size. Clearly, the initial design was based on the Phase 2 study, the ARREST study. We have doubled the effect on fibrosis. Hence, the effect size has changed, and we need to discuss with the FDA the new number of patients needed for significant e-value. We are continuing in full force with the manufacturing of Aramchol meglumine clinical batches. We are preparing for the beginning of next year for the bioequivalent study between Aramchol twice daily, the BID, the current BID, and Aramchol meglumine regulatory bioequivalence study. Once this is confirmed, we can initiate the double-blind study.

Okay. Got it. And perhaps a follow-up on that. When should we see the power equipment stay there, I suppose, as you said, ahead of the second half of 2022 when the randomized portion begins?

So, that will be in parallel. I mean, these are the same clinical batches that will be used. We are working with the clinical batches that, first, of course, we will have to demonstrate the bioequivalence and then we can move to the double-blind but are preparing the manufacturing and packaging, supply and etcetera, of the drugs for the second part of the double-blind part.

Right. Okay. Got it. And then perhaps one final question. When should we expect to see the next update for Aramchol? I know you guys have made a lot of progress with it.

Here, we are struggling between two forces. We have the scientific conferences, NASH-TAG, HEP DART, EASL, we just presented the data recently in the fibrosis conference. We have to juggle between the financial community and the scientific community, and we will do our utmost to satisfy both. We are restricted with embargo data, embargoed, of course, by scientific committees that we would like very much to have the data presented there. At the same time, we try to synchronize that as we did this time with AASLD. Around EASL, I would expect that we will release another set of data.

Okay. Understood. Thank you again for taking our questions, and we look forward to a very exciting upcoming program.

Thank you for joining our call.

Our next question comes from the line of Kristen Kluska with Cantor. Please proceed with your question.

Hello. This is Rick on again for Kristen. Congrats on the data again, and we look to the new Galmed website. One thing in particular, you have always emphasized is the greater attention you have taken to individual sites and the number of countries you are enrolling in even despite looking at the speed of U.S. trial site enrollments. We wanted to ask based off this recent Nature Medicine publication, if you could speak to the diversity of this patient population and any key findings observed there?

We still envisage very much that the population for the double-blind part would be about 50% from the U.S. and the rest from the rest of the world. With that said, we have of course Europe, Latin America, Korea, China, and Australia. We have not changed the demographics because we are looking at potentially different partnering deals in different geographical areas. We need to satisfy the number of patients needed for approval in every jurisdiction. This has not changed. We are working with a selective number of sites in the U.S., partnered with a group called OG Health; the majority of the U.S. patients come from OG Health as well as leading universities that usually participate in our studies. Same for Europe, we have London, France, Germany, Italy, Spain, and Belgium. All leading university sites that you would find in other NASH studies are also participating and will participate in the double-blind part.

Okay. And maybe just one more quick one. Could you please discuss the Phase 1 data readout for Amilo-5MER? And perhaps how you are thinking about gating steps in initiating a Phase 1b proof-of-concept study?

We are in the process of finalizing the data; in life as we completed, in fact, the three phases. There is one additional phase that we have added. We are really in the process. This is not public information yet, so of course, we cannot give any data. However, we are proceeding, as you have alluded to, quickly and embarking on a 1b and potentially 2a study early next year.

Great. Thank you very much.

Thank you.

And our last question comes from the line of Steve Seedhouse of Raymond James.

Hi. This is Ryan Deschner, again, on for Steve Seedhouse. In the recent data set, the ALT reduction looks like it could be a little more pronounced in the ASLD cohort? Are you seeing a correlation between ALT reduction and baseline ALT or fibrosis state? And can you tell us what the baseline ALT levels for cohorts were? Thank you.

As Professor Ratziu alluded, we presented all the data that we have. We did not run any correlations or analyze any other data apart from the ones that we have provided.

Okay. Got it. Thank you.

We have reached the end of the question-and-answer session. I will now turn the call back over to Allen Baharaff for closing remarks.

Thank you all for joining our conference call today. Thank you again to Professor Ratziu for your presentation. Today’s presentation will be uploaded on our website under the Events and Presentations section and you will have a great opportunity also to view our new website, which very soon will include additional information about the ARMOR study. As always, we welcome any questions that come during the quarter. You can communicate directly with me or any member of the team, and we are very happy to correspond. Thank you very much, and have a nice day.

This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.