Everyone, for those of you who do not know me, I'm Brian Skorney. I'm one of the senior biotech analysts here at Baird. Next company we have participating in our fireside chat is Intercept Pharmaceuticals. Management here, Jerry Durso, CEO, and Andrew Saik, the Chief Financial Officer. Intercept's in a period of transition, I think very good transition, of one that's primarily been an R&D-focused company now to starting to towards transition to profitability. So maybe, Jerry, to kind of start, you could give us a little bit of the background on the company, the commercial experience with your drug, Ocaliva, so far, and what you're doing to kind of further develop this drug and enhance sort of the commercial opportunity. Great, Brian, and thanks for having us here. Definitely glad to be with you here in New York. We are, as you say, a company that's in the middle of an exciting transformation. We are a company focused exclusively on rare and serious liver diseases, and it's really with that focus the mission of all of the team working on behalf of Intercept to support these patients. Where I think we have a particularly interesting and unique understanding of these conditions and clearly some core capabilities that we look forward to expanding on leadership position that we have. As you mentioned, we've been in market for about seven years now with Ocaliva, which is indicated for PBC patients with primary biliary cholangitis. It's the only second-line therapy, and it was actually the first new drug in this area introduced in about 20 years when we launched, and clearly, there's still a large unmet need there. We've been able to have good, strong, solid growth in spite of the fact that we're seven years into the market, and I think that growth is an indicator that there's still work to do. Importantly, we're supporting the PBC patients, not just in the short term with Ocaliva, but also looking at a next-generation opportunity in development, where we're in a phase II with a fixed-dose combination of obeticholic acid and bezafibrate, which hopefully we'll have some time to talk about. And underlying that focus, both commercially and on the development side with a nice focus in PBC, is this move to profitability that you mentioned. And so early in the year, we took a definitive step to move and close down our NASH program, a significant cost savings plan that we outlined, which is on track and really anticipate meaningful profitability next year. As we look for the long term, importantly, a good long IP runways, both behind Ocaliva and the fixed-dose combination, that if you like, we can talk in more detail on. Hey, that'd be great, but maybe we could kind of start with an overview of PBC itself and Ocaliva's role in treating the disease. Yeah, so PBC is an autoimmune condition that affects nearly 100,000 people in the U.S. It's primarily a disease that affects women. Roughly 90% of those that suffer with PBC are women. Ocaliva is indicated for second-line treatment, so the first line therapy, Urso, is used in about two-thirds of those, you know, almost 100,000 patients that are diagnosed. But you know, a significant portion of those patients need more therapy, either because they're intolerant to Urso or because they are uncontrolled in terms of their alkaline phosphatase levels. And that's where Ocaliva fits. That's where it's indicated. You know, there are over 20,000 patients that are eligible for Ocaliva. That has been the focus of really a lot of education over the years, and in spite of good, solid work and the growth that we talked about, there's still more patients not on therapy than are eligible for Ocaliva. So that's where, again, we think there's further opportunity for us to continue to work towards right education for the physician base, good support for the patients. And, you know, based on some of the data we've been able to generate, we know that the long-term impact of Ocaliva and the benefit on transplant-free survival as outlined, based on several datasets that we've put out, really an opportunity to do more for these patients. Great. So, since you're only partially penetrated into the addressable market, about 20,000 patients, I mean, I guess, I guess how far along do you kind of see penetration so far, and what's sort of the drivers that you have in mind to kind of grow the commercial opportunity beyond where you're currently at in this? Yeah. So the number that we give around penetration has been that less than 40% of the patients eligible for Ocaliva have received it at any time since the launch, and obviously, like any chronic drug, not all of those patients are on today. So there is quite a bit of patients who have never had the opportunity for second-line treatment. We do know that continuing to educate, particularly the community-based gastroenterologists, who might have a small number of PBC patients who need to understand when best to initiate second-line therapy, has been a big source of our efforts that need to continue. I think also based on the deep customer insights that we continue to generate, as we've advanced and started to outline the long-term benefit on transplant-free survival of Ocaliva, it's also important to appropriately get that information out because the physicians' understanding what they can actually provide is a motivator, both for the treaters, but importantly for the patients as well, because both the physicians and the patients do identify that impact on the long-term negative outcomes of liver outcomes of PBC as the most important element when considering whether to take a drug or not. So again, good work to do as we continue as the only second-line therapy, and ultimately prepare for a potential new competition to come into the marketplace. So you're working on generating a lot of real-world evidence out there to drive prescriber and patient awareness, and you've generated this from a number of studies. Can you kind of talk about what are the most important data points that you've taken away from these experiences and sort of the benefit they've provided as far as Ocaliva's commercial performance? Yeah, sure. So we have had. It's one of the advantages of, you know, the time that we've been in market, as I mentioned, with a launch in 2016. We had a chance to look at a number of different datasets in different parts of the world. We published some external control data in Gastroenterology last year, which looked at, you know, a comparator group of patients in the real world. We also had an analysis that was presented at AASLD last year called HEROES, which is a full US real-world dataset. You also saw some data that we haven't been involved with, all pointing towards roughly in the range of 60%-70% relative risk reduction on transplant and decompensation-free survival, again, for patients taking Ocaliva in the real world over time. And as I mentioned, ALP, which is the surrogate that has been the basis of the initial approval for Ocaliva, is clearly a useful marker. But we also understand from all of this data that we're generating that the story is not ALP alone. And so the unique way that Ocaliva impacts not just ALP, but several of the important other biochemical predictors of risk, including total bilirubin, including GGT, including AST. Again, ALP is important, but it's not that alone, and we continue to accumulate our own data and others' published data, showing that it's really beyond ALP. And, and I think that's... As we continue not only to look at additional real-world opportunities with Ocaliva, but also, as we advance on the fixed-dose combination program, we'll clearly be assessing the impact beyond ALP. Great. I think in the second quarter, I think you announced $84 million in sales, which I believe is about 17% year-over-year growth. Very impressive for this stage of the life cycle. I guess, how do you kind of consider the medium and long-term growth here? It's been pretty steady over time. Would you expect that that continues to be the case, or do you see any sort of speed bumps or reasons for it to accelerate? Well, I think, you know, you mentioned what we reported out so far in the first half, which is in that 16%-ish year-over-year growth. We gave guidance, in essence, for the rest of the year, and the what's sitting out there in terms of the $320 million-$340 million range. If you look at the middle of that, I think it's 15% year-over-year growth. So we anticipate what we saw in the first half of the year to continue. We also do, as I said, understand the number of patients that are out there, that there still is a need and a clear opportunity to be helping more patients get on therapy and keeping the patients that are on Ocaliva. We think that the real-world data and the important impact on outcomes is important to mention. And we do anticipate, if and when new competitors come into the market, that there will be, importantly, additional education in the marketplace. And as we typically see, we do anticipate that the treatment rate in second line will increase- Mm-hmm ... with more education in the market. And so we'll be talking over time, I'm sure, as we get to the back of the year and into next year, how we see things progressing beyond this year. But it is important that we do look at the opportunity as short, medium, and long term. And again, for us, the leadership is gonna be around Ocaliva, with the opportunity potentially to have a real change in the definition of efficacy with the fixed-dose combination, as we anticipate more data to come, as we get into the latter part of this year. Great. And I think on the slide, you had said that you anticipate exclusivity to go out to about 2031. Can you just give us any update on progress towards concluding ANDA litigation? I think there may be one still outstanding. Yeah, sure, Andrew. And maybe you comment on the- Yeah ... the situation there. No problem. Sure, Brian. So we initially had seven different filers against Ocaliva. Same patent, same type of litigation. We were able to consolidate six of those into an initial settlement, which is where we get the September 2031 date. There was one filer that came late, so it wasn't consolidated in the same trial, but it was assigned to the same judge, same jurisdiction. The trial date for that has been put out to the middle of 2035. So- 2025. What's that? 2025. 2025. That'll be a long trial. Thank you. So, you know, we're engaged with the litigant. You know, again, same fact set, same, same data. We were trial ready, right, as you recall. Mm-hmm. I mean, we settled with the initial 6, the day before the trial was start to set. So this litigant has to start from, scratch. They don't have a huge history of litigation, so we, we feel pretty comfortable that the 2031 date is gonna be solid. Great. Maybe now we can shift the discussion a little bit to the efforts to sort of broaden, potentially beyond that 2031 date, which I think you could potentially do with bezafibrate. So, you know, you had mentioned previously your intention to submit for an end-of-phase II meeting with the FDA sometime in 2023. Can you talk a little bit about the phase II data, and what gives you so much confidence in terms of moving forward in phase III? ... Sure. So we are encouraged with the opportunity. You know, that, the program with the fixed-dose combination was always a two-sided opportunity for us. One was the potential synergy in the mechanisms of obeticholic acid and bezafibrate, and so, you know, we thought there could be potential synergy there. The other opportunity was on a lifecycle management standpoint. So obeticholic, I'm sorry, bezafibrate is not available, has never been registered in the U.S., so it is an NCE in the U.S. And so the opportunity for additional IP, additional lifecycle, which we've already started to pull through with the first patent being issued out to 2036, with some potential beyond. So it always is about the therapeutic opportunity for potential best-in-class and lifecycle management opportunity. So, with that, we embarked this year and are moving towards, you know, readouts on two phase II trials that are ongoing. So you saw the first data set of the 213 trial at the EASL meeting back in June. That was for an interim initial readout. You'll see more data from that study as part of that end of phase II package that I mentioned. There's also a second study, which is 214, which is primarily in U.S. sites, looking at some different doses than the first study. But we anticipate those two datasets coming together, along with a robust phase I program, and that will be the basis of what we'll use to ask for the end of phase II meeting later in the year. As I mentioned, you did see the initial data at EASL, which for us was very encouraging. First group of patients, importantly showing large impact for the fixed combination arm, including OCA at 5 mg, titrated up to 10 mg, and the 400 mg of bezafibrate. Again, as I mentioned, importantly, we read out not just on ALP, but on the other biochemistries, and really for that initial patient group, saw a significant decrease, a large level of normalization. And the presenter, Dr. Nevens, did show, for that patient population, almost 60% of the patients reaching normalization across all five. This is a dataset that really hasn't been accumulated before in quite this way. So again, we look forward to more data coming from both trials. And, you know, we've said before, based on the initial data, we'll look at the package, but really a potential opportunity to redefine efficacy for PBC patients, which is particularly important in this context of what we've learned with Ocaliva, that the long-term, what predicts the long-term impact on outcomes is not just about ALP, but also these other elements are playing a role. So having a combination that can have that level of effect potentially, on, again, five of these important biochemical parameters, is a really interesting potential synergy that we definitely look forward to learning more about. Great. And then when you kind of look at the biochemical normalization rates that you're seeing in some of the doses of the combination, how do you kind of compare and contrast that to what you would expect for Ocaliva monotherapy? Yeah. So I think it's safe to say that what we're seeing, again, in this initial dataset, we'll have to see as things progress, is data that hasn't really been illustrated by any monotherapy. And so a real opportunity that exists on broad efficacy with the combination. That again we'll have some more data this year. We'll look forward to giving the world further insight on this program as we progress towards the end of the year. And we'll clearly be looking at what are we seeing, again, not just on ALP, which is important, but across the board here. Although it's not approved in the U.S., I guess there's substantial clinical experience with bezafibrate outside of the U.S. But, can you just kind of contextualize the safety profile of the drug and anything that one should be looking for in the combination of concern or, you know, to de-risk it? Yeah. So as you said, there is the bezafibrate has been available outside of the U.S. and has been used, particularly in Europe, in PBC, for quite a bit of a bit of time, and there has been some data presented over the last couple of years, even looking at some patient cohorts who are receiving, in essence, baseline UDCA plus obeticholic acid plus bezafibrate. It is important that... And we're in the middle of doing all the right reviews on safety at the different doses, and so I think we'll end phase II and be able to design phase III, with also the ability to continue watching and monitoring and keeping patients on therapy from phase II. So those will roll over- Mm-hmm. -into the long-term extension, and we think we'll be in a good place to have the right kind of conversation around the long-term safety element. And of course, the dose, the importance of getting the right dose and the opportunity to dial in the dose that makes sense, both from a tolerability, efficacy, and safety standpoint, is another one of the key opportunities with the program here. Got it. And you hinted a little bit about sort of the lifecycle extension that the bezafibrate combination adds. Obviously, you would have five years of NCE in a fixed dose due to bezafibrate. Where are you in sort of IP prosecution beyond that? I mean, obviously, there's precedent for a fixed-dose combination path. Yep. Andrew? Yeah, sure. So our first patents have been filed and accepted, right? So 2036 is the base combination patent. Again, because of its NCE status, it's eligible for up to 5 years of PTE. ... Our lawyers are pretty comfortable with three, so we're looking for 2039 as kind of the base protection for fixed dose. You know, as we develop this, as we, you know, understand more about it, we'll likely file additional patents as we go. But the 2039 date is a good base date for fixed dose, which gives us good security, you know, well into the future. Great. Let's talk a little bit about the competitive landscape. There's recent data from other PPAR deltas out there, notably probably seladelpar. Maybe I'll discount elafibranor, but maybe I shouldn't. I don't know. Let me know if I shouldn't discount elafibranor. But just what do you sort of see in those data sets, and how would you kind of contrast the biochemical responses that are occurring on PPAR to that of Ocaliva? Yeah, look, I guess I'd just start with the fact that, you know, it's good to see research continuing in PBC. It's been an area, obviously, we've been committed to for a long time. We did see the top-line data like everyone else. Definitely look forward to seeing some more as we progress. You know, I think about the context of what we saw in phase III with POISE, which is the same endpoint, primary endpoint that we've seen with the two trials that you mentioned. In POISE, we had a 10% placebo response rate, 47% response rate for Ocaliva, about a five times delta. We know what was reported out this week. It will be interesting to understand a different placebo response rate in some of these studies. I think, importantly, as I mentioned before, we know the story is not about ALP alone, and that in all of the work that we're doing in market, as we prepare and expect that the data sets they've generated will lead to these products eventually coming to market in the future. We know that the physicians tell us the number one priority for them is impacting the long-term negative liver consequences of PBC. The transplant-free survival data that we've been able to generate is a real differentiator. And so the biochemical data is important, but we also appropriately will continue to not only generate data but also to appropriately disseminate. Because we wanna make sure that those treating and those potentially receiving treatment understand the opportunity, and we think the unique opportunity that Ocaliva gives them in terms of impacting the long-term outcomes. Great. So we'll learn more. I think we'll learn more about our fixed dose combination as we progress through the year. I think we'll learn more about the data sets from the PPARs. I think a couple of the other elements that we have in mind as we look to the future in terms of the competitive dynamics. You know, we've been in this market for a long time, and so I think our understanding, not just at a high level, but importantly, in the commercial and medical setting, the local situations, what's happening in terms of some of the treatment dynamics, the individual practices and that leadership over time, we feel is gonna be an important dimension. We also have talked quite a bit at the last couple of quarters about the stability of the patients receiving Ocaliva today. We know from the market research we continue to do that physicians aren't looking necessarily to switch patients that are stable. And you know, up to about two-thirds of our patients have been on Ocaliva two years or more. So those are the patients, again, that we want to encourage to stay on therapy because that's what allows them to get the long-term benefit that we've started to outline with this outcomes data that I described. One of the, one of the endpoints that I, I guess, sort of, I discounted elafibranor, but, in favor of seladelpar was on pruritus, that seladelpar hit in phase III in pruritus, which is obviously one of the symptomatic issues in PBC. I think in your bezafibrate combo, too, you've shown lower pruritus rates in combo than in the single agent. So I guess how do you kind of think about those disparate elafibranor, seladelpar data sets and teasing out any sort of pruritus effect that you may be able to pull through with bezafibrate? Yeah, look, I mean, I think that it's one of the areas that will be interesting to see more data on the competitors on this topic. I think we saw a little bit of signals in the top line. I think we're also continuing to understand what happens in the real world around pruritus when patients get second-line therapy with Ocaliva. There are some patients that... We know it's an effect for some patients with Ocaliva. We know that the incidence in the real world is significantly less than what we've seen in the clinical trials. We also know that if patients have pruritus with OCA, it tends to be in the first three to six months. So most of those patients are able to stay on. Through that, we estimate less than 10% of the patients that start on Ocaliva drop off for pruritus. Nonetheless, we do everything we can to set the right expectations and support. So, look, I think that we'll continue to understand the relative weight of some of these issues against what we think is the most important priority of treaters, which is the opportunity to have an impact on long-term outcomes. And I think these are some of the dimensions as we look forward. I think the last point is that, you know, we talked about the indications being second line. We also know that none of these drugs are going to be appropriate for every patient, so we will see a third-line market. And so as people look to the future, it's not at all a zero-sum game. There are patients that have fallen off of Ocaliva, who might be the best first candidates for an alternative therapy. We also know that patients that start on an alternative therapy won't always get the effect, and so this third-line marketplace will be a reality of what we see in the future. So that's why I think we're in a relatively unique place to think about and understand some of these nuances and how they may look in terms of the overall trajectory of PBC over time. Great. So, you've announced that you're working on a $140 million savings plan, off of a OpEx of $360-ish million per year. I guess, where are you in sort of that process? When do we kind of see sort of the fully backed out OpEx hitting the P&L for Intercept? Yeah, Brian, it really aligns well to the end of the year, right? So, when we started the initiation of the shutdown of the REGENERATE study, and we said it would take 6-9 months, we're now kind of well into that. It looks like we're gonna be materially shut down by year-end, and I use the word materially, meaning we should, you know, have all the sites shut down this year. Should have almost all of the shutdown costs captured this year. Certainly, with the restructuring internally, that will be done this year. Notifications have gone out. All of our colleagues who will be leaving have been notified. They all have dates. Those dates kind of scattered between now and year-end. So, the good news for us is that we should be done year-end and have a relatively clean slate next year. So, you know, we haven't issued guidance, as you know, right? But we gave an estimated cost reduction off of our current run rate of $140 million. That was off of our current guidance of $350 million-$370 million. So it should give you a pretty good idea where we can run the company. With that and the current growth rate of Ocaliva, we're hoping to pivot to significant profitability next year. Great! Well, I think that's it. I've gone through all of my questions. So, it's great having you here again. Thank you. As always, exciting story to see, particularly as we're streamlining the operations towards profitability. Thanks for being here. Thanks, Brian. Appreciate it.