NASDAQ:DRRX DURECT Q3 2023 Earnings Report $0.67 -0.03 (-4.34%) As of 04/25/2025 04:00 PM Eastern Earnings HistoryForecast DURECT EPS ResultsActual EPS-$0.40Consensus EPS -$0.41Beat/MissBeat by +$0.01One Year Ago EPSN/ADURECT Revenue ResultsActual Revenue$1.74 millionExpected Revenue$2.52 millionBeat/MissMissed by -$780.00 thousandYoY Revenue GrowthN/ADURECT Announcement DetailsQuarterQ3 2023Date11/13/2023TimeN/AConference Call DateMonday, November 13, 2023Conference Call Time4:30PM ETUpcoming EarningsDURECT's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by DURECT Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 13, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Afternoon, everyone, and welcome to the Direct Corporation Third Quarter Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Tim Papp, Chief Financial Officer. Please go ahead. Speaker 100:00:37Thank you. Good afternoon, and welcome to DURECT Corporation's Q3 2023 earnings conference call. Before we begin, I would like to remind everyone of our forward looking statement. During the course of this call, we will make forward looking statements regarding the results and clinical data from the AFFIRM trial, development plans for larsukosterol, expected product benefits, market potential, regulatory plans, potential regulatory approval and the company's financial projections. These forward looking statements involve risks and uncertainties that can cause Results to differ materially from those in such forward looking statements, including the risk that future trials of larsubosterol do not confirm the results from the AFFIRM trial. Speaker 100:01:21Further information regarding these and other risks can be found in our SEC filings, including our 10 ks and 10 Qs under the heading Risk Factors. To begin, I would like to review our Q3 2023 financial results. Our total revenues in the second quarter Q3 were $1,700,000 compared with $12,000,000 for the Q3 of 2022. This difference was largely due to the recognition of $10,000,000 of milestone revenue related to our licensing deal with InaCall that we recognized in 2022. R and D expenses $7,200,000 compared with $9,900,000 for the prior year. Speaker 100:01:58The decrease was primarily due to lower clinical trial and contract manufacturing expenses for larsukosterol and the elimination of feasibility programs offset partially by an increase in spending on other R and D projects. SG and A expenses were $3,800,000 compared with $3,900,000 for the prior year, so essentially unchanged year over year. As of September 30, 2023, we had cash and investments of $39,100,000 compared with cash and investments of 40 $3,600,000 at December 31, 2022. During the Q3, we completed a registered direct offering raising $13,900,000 in net proceeds. Our cash burn in the Q3 was approximately $9,700,000 excluding proceeds from the offering. Speaker 100:02:44We believe our cash on hand is sufficient to fund operations at least the middle of 2024. Now I would like to turn the call over to our CEO, Doctor. Jim Brown, for an update on our programs. Speaker 200:02:58Thank you, Tim. Hello, everyone. Thank you for joining us today for our Q3 2023 update. Last week, we announced the unprecedented top line results from our AFFIRM Phase 2b clinical trial, which evaluated their sucosterol and alcohol associated hepatitis. The Affirm results showed a clinically meaningful reduction in the key secondary endpoint of 90 day mortality for marsucosterol compared with standard of care. Speaker 200:03:31To my knowledge, no previously controlled trial has demonstrated an improvement in mortality of this magnitude in this devastating disease. We also saw an encouraging safety profile for larsukastral with a low number of adverse events for the active arms as compared with the standard of care. We have reviewed the AFFIRM data with many renowned hepatologists and Ah thought leaders. These physicians are excited by the compelling reduction in mortality at 90 days in the Larcico sterile arms. They were especially impressed with the data from the U. Speaker 200:04:06S. Patients and the safety data from the trial. Our Phase 2bAFFIRM trial was a placebo controlled double blind multinational study with 2 active arms dosing 30 milligrams 90 milligrams of larsukosterol and a standard of care arm of approximately 100 patients each. By comparing against the standard of care, we allowed the physicians to utilize their standard practice for treating Ah patients, which allowed for the use of corticosteroids in addition to supportive care such as fluids, nutritional support and antibiotics for infection. In total, we randomized 307 patients with severe alcohol associated hepatitis. Speaker 200:04:53These were patients with MELD scores ranging from 21 to 30 and MADRI discriminated function scores greater than or equal to 32. We enroll patients in Affirm through a global network of clinical sites, including leading hospitals in the United States, Australia, EU and the UK. Our sites included renowned liver centers and we had the honor of working with some of the world's preeminent thought leaders in Ah. The top line results in the key secondary endpoint of mortality at 90 days showed a 41% reduction with a 30 milligram dose of Larcicosterol and a 35% reduction with a 90 milligram dose of Larcicosterol as compared with the standard of care. We also reported a numerical improvement in the primary endpoint, a reduction in mortality or liver transplant at 90 days. Speaker 200:05:49So neither the primary or secondary key secondary endpoint achieve results that were statistically significant. Impressive results were found in the U. S. Population which comprised In the United States in the U. S. Speaker 200:06:12Patients, we saw reductions of mortality at 57% 58% for the 30 90 milligram arms respectively compared with the standard of care. Although not a part of the original trial statistical analysis plan, the P values for these results were both approximately 0.01. Very importantly, larcuchosterol exhibited an excellent safety profile with no serious adverse events in either arm and greater than 20% reductions in the number of treatment emergent adverse events for both active arms of these severely ill patients when compared with the standards of care. Ultimately, these clinically meaningful reductions Coupled with the reduction in adverse events in these severely ill patients reinforce the compelling risk reward proposition for the continued advancement of larsikosterol as the first approved treatment for Ah. We look forward to meeting with the FDA in the Q1 of 2024 to discuss the AFFIRM data and the path forward to seek approval of eloxigosterol in Ah, including design for a potential registrational Phase 3 trial using mortality as the primary endpoint. Speaker 200:07:36As a reminder, the FDA has granted our lachukosterol Ah program fast track designation. Ah is a cause of more than 158,000 hospitalizations each year in the United States with a 90 day mortality rate of approximately 30% and is responsible for tens of thousands of deaths each year. There are no effective treatments for Ah. If we were able to gain approval for larcugosterol, It would likely be the 1st FDA approved treatment for this disease. In addition to its high mortality rate, Ah represents a significant cost to the U. Speaker 200:08:17S. Healthcare system. Hospitalizations attributed to Ah incur costs of 62 to 167,000 each, a total cost to hospitals of approximately $10,000,000,000 annually in the United States. As a result, Larcucosterol represents a potential multibillion dollar opportunity in the U. S. Speaker 200:08:38Alone and could simultaneously provide overall cost savings to the healthcare system. We look forward to the possibility of bringing this potential life saving therapeutic patients with no effective therapies available today. We attended the AASLD Conference in Boston, this is the U. S. Liver meeting, over the weekend and had the opportunity to discuss the top line results with many of our investigators from Affirm and with more than a dozen influential KOLs. Speaker 200:09:07The reaction of this physician community has been overwhelmingly positive and enthusiastic about LARSUKO Sterile's prospects. These physicians expressed their frustration with the lack of effective treatment. They recognize that the type of mortality benefit and We'd now like to take any questions you might have. Operator00:09:35Ladies and gentlemen, at this time, we'll begin the question and answer session. Our first question today comes from Francois Brisebois from Oppenheimer. Please go ahead with your question. Speaker 300:10:16All right. Thanks for taking the question. Just a couple here. So in terms of the mortality, can you remind us what it was, the mortality that was seen in I know there was a fear that maybe the trial would not or Ah patients did not have quite the mortality that people expected. Can you just maybe remind us what you saw in the trial and was it in line with what you thought? Speaker 200:10:39Absolutely. Yes, for the overall The global trial we saw about a 25% mortality and we had powered it for about 30% Mortality. So it was a little bit lower than we had expected. And that was in all likelihood the primary reasons why we slightly missed that endpoint. Our biostatisticians tell me if we'd had X number of 15 plus more patients or something, we would have been able to possibly hit that endpoint. Speaker 200:11:09It's interesting when we look at the subset of the data, which is 3 quarters of the data from the United States, we see a mortality endpoint rate of 28% in the United States as compared to 12% in the 2 active arms. So that certainly was almost 60%. So that was highly Significant. So in the U. S, it hit right. Speaker 200:11:31When we look globally, it didn't. And that's unfortunately, it's We moved from this small four patient per group study to 100 patient per group in the 2b, but it gained so much information. And To have a trial that had this kind of signal and when we spent the weekend, as you know Frank in Boston with these investigators, they were quite excited about the data we have. Speaker 300:11:56Okay, great. No, that's great. And then in terms of the speaking to a lot of physicians over the weekend and whatnot, was there What are the thoughts in terms of their hypothesis and maybe there were differences in the U. S. Versus the ex U. Speaker 300:12:10S. Population? Is it too early to see? Anything you can share there or should we wait for more information about the potential differences there? Thank you. Speaker 200:12:20Yes, certainly. There certainly were some things that they focused on and we are investigating more thoroughly. And the first thing that they focused on was the differences in age. We saw the age of the U. S. Speaker 200:12:31Population of 43 and to a person they were saying, yes, these are the patients we're seeing. They're younger. I had a number of them Quote back the kind of numbers we've been talking about, 20 some odd percent of their patients are young women in their 20s 30s without cirrhosis and we certainly saw that in our trials. We saw younger people 43% excuse me, 43% With the mean age in the United States and ex U. S. Speaker 200:12:54It was 50. Even higher in Europe, I think it was 52. So, and there was a physician from Southern California from USC who we spoke to who talked about some papers that he had written showing that if you were over the age of 44, you Much greater chance of dying from this disease. So we know in a lot of diseases, the older you are, the more susceptible you are to dying. And certainly in this population that's the case. Speaker 200:13:19And so that was one component that we learned. The other thing that they focused on was the amount of cirrhosis. The U. S. Population had 76% cirrhosis, which means it fits with being younger, you would have left cirrhosis. Speaker 200:13:32But the ex U. S. Population was Especially for the EU with biopsy confirmed 90% cirrhosis, which means much basically means much less liver available to respond to the drug Fortunately. But we're still peaking out the differences because the other differences there were a much smaller population of patients and they were divided and randomized across Australia, the UK and the EU. And so you can also get into Mismatching of balancing of that as well, which can lead to greater variability. Operator00:14:11Thank you. Sure. And our next question comes from Carl Kerns from Northland Capital Markets. Please go ahead with your question. Speaker 400:14:23Thanks for the question. I'm wondering if there's any rationale for the FDA to not allow mortality as a primary endpoint in the Phase 3 trial, considering the limited number of liver organs available for transplantation, the mortality benefits that you saw, particularly in the U. S. Population And then the safety profile, which was clearly better than the standard of care, which is something we simply don't Speaker 200:14:52see. Thanks. Yes, I think first of all the FDA is happy to from the response that I've been associated with them, they would prefer mortality over anything else Quite frankly. And that will be if another trial is required for approval, we will do a trial looking at survival. So if you look at the secondary endpoint, if you look at the U. Speaker 200:15:13S. Population, those would be good surrogate Populations and analyses that we would do if we were required to do another Phase 3 or a Phase 3 trial for this drug because you're right, the mortality is horrific. And transplant, there's only there's less than 2% of these patients are going to be transplant in the U. A quarter liver transplants, but that's about 2,000 livers and there are 158,000 of these hospitalizations as of a couple of years ago, probably growing at about 4%, 5% a year. They always lag behind the actual data with what we can get from the government literature. Speaker 200:15:50So There are probably 98% of these patients in the United States never have a chance to deliver. And their only option then is what is out there today. So their only option is to potentially die at a rate of what we saw in this trial in the U. S. 28% or 30% How you look historically. Speaker 200:16:08So it's a horrible circumstance. And these physicians were so excited about the data we have and the ones who are involved with the trial were telling us stories about patients that they just really after having the week Where we had to talk about the data that we had, it was really heartening and really lifted up the spirits of everyone who's there, really good. Speaker 400:16:32Great. So on that thought, Fred, then I'm wondering is there any possibility or do you think there's any possibility That was luciferaero could be used on a compassionate basis given the safety profile in the meantime? Speaker 200:16:45I don't Compassionate use is a possibility, but what we'll do is we'll go have a conversation with them. We'll talk about the potential for an accelerated review as a possibility as well. So we're just going to have a conversation with the FDA about what we have. This is certainly a highly lethal condition with no therapy. As you said, it's got Very clean profile. Speaker 200:17:05If not, I would just say it at that, leave it at that from just a very nice profile from an adverse event standpoint. So we'll have that conversation with the FDA in the Q1 and find out what the next steps will be. Speaker 400:17:19Got it. Thanks. And then just one last question. There's been some concern about not seeing a dose response. But if we look at the U. Speaker 400:17:27S. Only population, again, you explained some of the nuances with respect to mismatching. But clearly, you did see a dose response. I think it was like 58% of the 90 mg dose versus 57.1% in the 30 mg dose. So is that correct? Speaker 400:17:43And I mean, what's your thought on some of the comments that are out there in terms of not seeing dose response? And that's my final question. Speaker 200:17:50Yes. Thank you, Karl. I think what we can glean first from the fact that both doses showed very well is first off Both doses showed very well, right? So that means you grab the population of 100 people, dosing with the drug, phenomenal result, almost 60%. Grabbing another 100 people, check them against standard of care. Speaker 200:18:07Once again, another phenomenal response, almost 60%. You can't really tease out the difference between 57 and 58, nor can you really between 3541. These are what they're showing is the drug is having an effect and that and so Most likely biologically, we're probably if you think about a curve, we're probably at the asymptotic component of the curve where we're just near the top of it. So One dose versus another dose is not going to make an appreciable difference there. And so that will be a conversation with the FDA. Speaker 200:18:38We certainly know a lot more about How the drug works in various animal models and other studies we've done. We know it's an inhibitor of DNMTs, DNA methyltransferases. We know it reduces hypermethylation. We know these patients have elevated levels of these enzymes. And so all that is well understood from a scientific standpoint and that The finer points of which dose to be selected will be a conversation we have with the agency at the end of the day and we're prepared to use either dose going forward. Speaker 500:19:10Great. Thanks again. You're welcome. Thank you. Operator00:19:23Our next question comes from Ed Arce from H. C. Wainwright. Please go ahead with your question. Speaker 500:19:30Hi, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. Perf's first question, Based on what you've learned from Affirm so far, can you discuss what are some inherent variability of the liver transplant endpoint in Speaker 200:19:55When you look at transplant, it's just inherently variable. That's the reality of it. It's Available as I said earlier to less than 2% of the patients who have this disease and the administration of the transplant It's very variable as well. It depends on which center you're at. It depends on what is your level of insurance coverage, whether or not you have a match, How aggressive your surgical team is and it also depends on how sick you are. Speaker 200:20:27There are a number of patients who are too sick when they first come in to get a transplant. So we think about the use of larsuchosterol in this setting. Certainly in a survival trial, a trial where you're looking at mortality, there are a certain number of patients who would be in the standard of care group who would get A transplant and survive and that's true. But witness the fact that we had a safety safety was fine, but we had a mortality signal even considering those. And I believe from talking to some of the people and understanding the path for some of the patients in this trial that what we're also seeing is For lack of a better term, a bridge to transplant, where some of these patients are severely ill at the beginning may not be alive long enough to get a Because they were dosed with our sucosterol, they were then potentially able to get a transplant 6 or 8, 10 weeks later. Speaker 200:21:20So that's another component of it all. And rather than try and separate that out and tease it out, it'd be very difficult to do. We're simply just going to look at mortality and let transplants fall where they may. So that's how we're going to deal with that because there are so many factors that influence transplant that the drugs can influence. The only thing the drug really can do towards transplant is keep you alive and make you a little healthier so that you might be still around if the liver by chance came up as rare as it is. Speaker 500:21:46Understood. That makes sense. And then perhaps just one more question from us. So you discussed a little bit earlier how the U. S. Speaker 500:21:59Populations with Lower mean age and also a low percentage with cirrhosis. So wonder how do you look at Potential U. S. Markets perhaps discussions of the EMA, is that on the table? No. Speaker 200:22:17I mean, we will be talking with the EMA We're just now starting to take the additional cuts of the data and look at that. And we will look at the data for a number of different reasons For all these different characteristics and try to understand how it responds because I'm certain that both the FDA and the EMA will want to understand that. My sense is that we'll be able to help patients. We've doses in CHOP UC patients who are dying or their lipids are failing and for other indications orally and saw some nice improvements in these patients just single dose safety studies, but saw some interesting biomarker changes and the like. So I do think There's the potential to help these patients. Speaker 200:22:57That being said, we're going to drive forward for approval in the U. S. Based on the U. S. Data and then We'll take on the rest of the world in these more severely ill patients as time goes on. Speaker 200:23:10That's what Operator00:23:10I said to them. We've got Speaker 200:23:11a long list to go And it's early days in analysis. Speaker 500:23:16Okay. Yes. Thank you again for taking our questions. I definitely look forward to the FDA meeting in the Q1. As do we. Speaker 200:23:28Thank you. Operator00:23:32Ladies and gentlemen, with that, we will conclude today's question and answer session. I'd like to turn the floor back over to Jim Brown for any closing remarks. Speaker 200:23:41Yes. I just would like to thank you all for your time today and for your support. And as always, if you have any Further questions, please reach out to Tim and myself or others on the team that you know and we're happy to get on the phone to talk to you. Thanks a lot and take care. Operator00:23:58Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallDURECT Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) DURECT Earnings HeadlinesStockNews.com Initiates Coverage on DURECT (NASDAQ:DRRX)April 20, 2025 | americanbankingnews.comOppenheimer Sticks to Its Buy Rating for Durect (DRRX)March 30, 2025 | markets.businessinsider.comTrump’s Secret Social Security Plan?In less than a decade, Social Security could be out of money. But a surprising plan from Trump’s inner circle may not just save the system — it could unlock a major opportunity for savvy investors. Financial insider Jim Rickards calls it “Social Prosperity,” and says those who act now could see the biggest gains.April 26, 2025 | Paradigm Press (Ad)Here's Why We're A Bit Worried About DURECT's (NASDAQ:DRRX) Cash Burn SituationMarch 28, 2025 | finance.yahoo.comDURECT Corporation (NASDAQ:DRRX) Q4 2024 Earnings Call TranscriptMarch 28, 2025 | msn.comDURECT outlines $20M Phase 3 trial for larsucosterol in alcohol-associated hepatitisMarch 27, 2025 | msn.comSee More DURECT Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like DURECT? Sign up for Earnings360's daily newsletter to receive timely earnings updates on DURECT and other key companies, straight to your email. Email Address About DURECTDURECT (NASDAQ:DRRX), a biopharmaceutical company, develops medicines based on its epigenetic regulator program. The company's lead product larsucosterol (DUR-928), an endogenous, orally bioavailable small molecule that is in Phase IIb clinical trial to play a regulatory role in lipid metabolism, stress and inflammatory responses, and cell death and survival to treat alcohol-associated hepatitis, as well as completed Phase Ib clinical trial to treat patients with nonalcoholic steatohepatitis. It also offers ALZET product line that consists of osmotic pumps and accessories used for research in mice, rats, and other laboratory animals. In addition, the company offers POSIMIR, a post-surgical pain product to deliver bupivacaine over three days in adults; and Methydur to treat attention deficit hyperactivity disorder. It markets and sells its ALZET lines through direct sales force in the United States, as well as through a network of distributors in other countries. The company has strategic collaboration and other agreements with Virginia Commonwealth University Intellectual Property Foundation; Indivior UK Ltd.; and Innocoll Pharmaceuticals Limited. DURECT Corporation was incorporated in 1998 and is headquartered in Cupertino, California.View DURECT ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 6 speakers on the call. Operator00:00:00Afternoon, everyone, and welcome to the Direct Corporation Third Quarter Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please also note today's event is being recorded. And at this time, I'd like to turn the floor over to Tim Papp, Chief Financial Officer. Please go ahead. Speaker 100:00:37Thank you. Good afternoon, and welcome to DURECT Corporation's Q3 2023 earnings conference call. Before we begin, I would like to remind everyone of our forward looking statement. During the course of this call, we will make forward looking statements regarding the results and clinical data from the AFFIRM trial, development plans for larsukosterol, expected product benefits, market potential, regulatory plans, potential regulatory approval and the company's financial projections. These forward looking statements involve risks and uncertainties that can cause Results to differ materially from those in such forward looking statements, including the risk that future trials of larsubosterol do not confirm the results from the AFFIRM trial. Speaker 100:01:21Further information regarding these and other risks can be found in our SEC filings, including our 10 ks and 10 Qs under the heading Risk Factors. To begin, I would like to review our Q3 2023 financial results. Our total revenues in the second quarter Q3 were $1,700,000 compared with $12,000,000 for the Q3 of 2022. This difference was largely due to the recognition of $10,000,000 of milestone revenue related to our licensing deal with InaCall that we recognized in 2022. R and D expenses $7,200,000 compared with $9,900,000 for the prior year. Speaker 100:01:58The decrease was primarily due to lower clinical trial and contract manufacturing expenses for larsukosterol and the elimination of feasibility programs offset partially by an increase in spending on other R and D projects. SG and A expenses were $3,800,000 compared with $3,900,000 for the prior year, so essentially unchanged year over year. As of September 30, 2023, we had cash and investments of $39,100,000 compared with cash and investments of 40 $3,600,000 at December 31, 2022. During the Q3, we completed a registered direct offering raising $13,900,000 in net proceeds. Our cash burn in the Q3 was approximately $9,700,000 excluding proceeds from the offering. Speaker 100:02:44We believe our cash on hand is sufficient to fund operations at least the middle of 2024. Now I would like to turn the call over to our CEO, Doctor. Jim Brown, for an update on our programs. Speaker 200:02:58Thank you, Tim. Hello, everyone. Thank you for joining us today for our Q3 2023 update. Last week, we announced the unprecedented top line results from our AFFIRM Phase 2b clinical trial, which evaluated their sucosterol and alcohol associated hepatitis. The Affirm results showed a clinically meaningful reduction in the key secondary endpoint of 90 day mortality for marsucosterol compared with standard of care. Speaker 200:03:31To my knowledge, no previously controlled trial has demonstrated an improvement in mortality of this magnitude in this devastating disease. We also saw an encouraging safety profile for larsukastral with a low number of adverse events for the active arms as compared with the standard of care. We have reviewed the AFFIRM data with many renowned hepatologists and Ah thought leaders. These physicians are excited by the compelling reduction in mortality at 90 days in the Larcico sterile arms. They were especially impressed with the data from the U. Speaker 200:04:06S. Patients and the safety data from the trial. Our Phase 2bAFFIRM trial was a placebo controlled double blind multinational study with 2 active arms dosing 30 milligrams 90 milligrams of larsukosterol and a standard of care arm of approximately 100 patients each. By comparing against the standard of care, we allowed the physicians to utilize their standard practice for treating Ah patients, which allowed for the use of corticosteroids in addition to supportive care such as fluids, nutritional support and antibiotics for infection. In total, we randomized 307 patients with severe alcohol associated hepatitis. Speaker 200:04:53These were patients with MELD scores ranging from 21 to 30 and MADRI discriminated function scores greater than or equal to 32. We enroll patients in Affirm through a global network of clinical sites, including leading hospitals in the United States, Australia, EU and the UK. Our sites included renowned liver centers and we had the honor of working with some of the world's preeminent thought leaders in Ah. The top line results in the key secondary endpoint of mortality at 90 days showed a 41% reduction with a 30 milligram dose of Larcicosterol and a 35% reduction with a 90 milligram dose of Larcicosterol as compared with the standard of care. We also reported a numerical improvement in the primary endpoint, a reduction in mortality or liver transplant at 90 days. Speaker 200:05:49So neither the primary or secondary key secondary endpoint achieve results that were statistically significant. Impressive results were found in the U. S. Population which comprised In the United States in the U. S. Speaker 200:06:12Patients, we saw reductions of mortality at 57% 58% for the 30 90 milligram arms respectively compared with the standard of care. Although not a part of the original trial statistical analysis plan, the P values for these results were both approximately 0.01. Very importantly, larcuchosterol exhibited an excellent safety profile with no serious adverse events in either arm and greater than 20% reductions in the number of treatment emergent adverse events for both active arms of these severely ill patients when compared with the standards of care. Ultimately, these clinically meaningful reductions Coupled with the reduction in adverse events in these severely ill patients reinforce the compelling risk reward proposition for the continued advancement of larsikosterol as the first approved treatment for Ah. We look forward to meeting with the FDA in the Q1 of 2024 to discuss the AFFIRM data and the path forward to seek approval of eloxigosterol in Ah, including design for a potential registrational Phase 3 trial using mortality as the primary endpoint. Speaker 200:07:36As a reminder, the FDA has granted our lachukosterol Ah program fast track designation. Ah is a cause of more than 158,000 hospitalizations each year in the United States with a 90 day mortality rate of approximately 30% and is responsible for tens of thousands of deaths each year. There are no effective treatments for Ah. If we were able to gain approval for larcugosterol, It would likely be the 1st FDA approved treatment for this disease. In addition to its high mortality rate, Ah represents a significant cost to the U. Speaker 200:08:17S. Healthcare system. Hospitalizations attributed to Ah incur costs of 62 to 167,000 each, a total cost to hospitals of approximately $10,000,000,000 annually in the United States. As a result, Larcucosterol represents a potential multibillion dollar opportunity in the U. S. Speaker 200:08:38Alone and could simultaneously provide overall cost savings to the healthcare system. We look forward to the possibility of bringing this potential life saving therapeutic patients with no effective therapies available today. We attended the AASLD Conference in Boston, this is the U. S. Liver meeting, over the weekend and had the opportunity to discuss the top line results with many of our investigators from Affirm and with more than a dozen influential KOLs. Speaker 200:09:07The reaction of this physician community has been overwhelmingly positive and enthusiastic about LARSUKO Sterile's prospects. These physicians expressed their frustration with the lack of effective treatment. They recognize that the type of mortality benefit and We'd now like to take any questions you might have. Operator00:09:35Ladies and gentlemen, at this time, we'll begin the question and answer session. Our first question today comes from Francois Brisebois from Oppenheimer. Please go ahead with your question. Speaker 300:10:16All right. Thanks for taking the question. Just a couple here. So in terms of the mortality, can you remind us what it was, the mortality that was seen in I know there was a fear that maybe the trial would not or Ah patients did not have quite the mortality that people expected. Can you just maybe remind us what you saw in the trial and was it in line with what you thought? Speaker 200:10:39Absolutely. Yes, for the overall The global trial we saw about a 25% mortality and we had powered it for about 30% Mortality. So it was a little bit lower than we had expected. And that was in all likelihood the primary reasons why we slightly missed that endpoint. Our biostatisticians tell me if we'd had X number of 15 plus more patients or something, we would have been able to possibly hit that endpoint. Speaker 200:11:09It's interesting when we look at the subset of the data, which is 3 quarters of the data from the United States, we see a mortality endpoint rate of 28% in the United States as compared to 12% in the 2 active arms. So that certainly was almost 60%. So that was highly Significant. So in the U. S, it hit right. Speaker 200:11:31When we look globally, it didn't. And that's unfortunately, it's We moved from this small four patient per group study to 100 patient per group in the 2b, but it gained so much information. And To have a trial that had this kind of signal and when we spent the weekend, as you know Frank in Boston with these investigators, they were quite excited about the data we have. Speaker 300:11:56Okay, great. No, that's great. And then in terms of the speaking to a lot of physicians over the weekend and whatnot, was there What are the thoughts in terms of their hypothesis and maybe there were differences in the U. S. Versus the ex U. Speaker 300:12:10S. Population? Is it too early to see? Anything you can share there or should we wait for more information about the potential differences there? Thank you. Speaker 200:12:20Yes, certainly. There certainly were some things that they focused on and we are investigating more thoroughly. And the first thing that they focused on was the differences in age. We saw the age of the U. S. Speaker 200:12:31Population of 43 and to a person they were saying, yes, these are the patients we're seeing. They're younger. I had a number of them Quote back the kind of numbers we've been talking about, 20 some odd percent of their patients are young women in their 20s 30s without cirrhosis and we certainly saw that in our trials. We saw younger people 43% excuse me, 43% With the mean age in the United States and ex U. S. Speaker 200:12:54It was 50. Even higher in Europe, I think it was 52. So, and there was a physician from Southern California from USC who we spoke to who talked about some papers that he had written showing that if you were over the age of 44, you Much greater chance of dying from this disease. So we know in a lot of diseases, the older you are, the more susceptible you are to dying. And certainly in this population that's the case. Speaker 200:13:19And so that was one component that we learned. The other thing that they focused on was the amount of cirrhosis. The U. S. Population had 76% cirrhosis, which means it fits with being younger, you would have left cirrhosis. Speaker 200:13:32But the ex U. S. Population was Especially for the EU with biopsy confirmed 90% cirrhosis, which means much basically means much less liver available to respond to the drug Fortunately. But we're still peaking out the differences because the other differences there were a much smaller population of patients and they were divided and randomized across Australia, the UK and the EU. And so you can also get into Mismatching of balancing of that as well, which can lead to greater variability. Operator00:14:11Thank you. Sure. And our next question comes from Carl Kerns from Northland Capital Markets. Please go ahead with your question. Speaker 400:14:23Thanks for the question. I'm wondering if there's any rationale for the FDA to not allow mortality as a primary endpoint in the Phase 3 trial, considering the limited number of liver organs available for transplantation, the mortality benefits that you saw, particularly in the U. S. Population And then the safety profile, which was clearly better than the standard of care, which is something we simply don't Speaker 200:14:52see. Thanks. Yes, I think first of all the FDA is happy to from the response that I've been associated with them, they would prefer mortality over anything else Quite frankly. And that will be if another trial is required for approval, we will do a trial looking at survival. So if you look at the secondary endpoint, if you look at the U. Speaker 200:15:13S. Population, those would be good surrogate Populations and analyses that we would do if we were required to do another Phase 3 or a Phase 3 trial for this drug because you're right, the mortality is horrific. And transplant, there's only there's less than 2% of these patients are going to be transplant in the U. A quarter liver transplants, but that's about 2,000 livers and there are 158,000 of these hospitalizations as of a couple of years ago, probably growing at about 4%, 5% a year. They always lag behind the actual data with what we can get from the government literature. Speaker 200:15:50So There are probably 98% of these patients in the United States never have a chance to deliver. And their only option then is what is out there today. So their only option is to potentially die at a rate of what we saw in this trial in the U. S. 28% or 30% How you look historically. Speaker 200:16:08So it's a horrible circumstance. And these physicians were so excited about the data we have and the ones who are involved with the trial were telling us stories about patients that they just really after having the week Where we had to talk about the data that we had, it was really heartening and really lifted up the spirits of everyone who's there, really good. Speaker 400:16:32Great. So on that thought, Fred, then I'm wondering is there any possibility or do you think there's any possibility That was luciferaero could be used on a compassionate basis given the safety profile in the meantime? Speaker 200:16:45I don't Compassionate use is a possibility, but what we'll do is we'll go have a conversation with them. We'll talk about the potential for an accelerated review as a possibility as well. So we're just going to have a conversation with the FDA about what we have. This is certainly a highly lethal condition with no therapy. As you said, it's got Very clean profile. Speaker 200:17:05If not, I would just say it at that, leave it at that from just a very nice profile from an adverse event standpoint. So we'll have that conversation with the FDA in the Q1 and find out what the next steps will be. Speaker 400:17:19Got it. Thanks. And then just one last question. There's been some concern about not seeing a dose response. But if we look at the U. Speaker 400:17:27S. Only population, again, you explained some of the nuances with respect to mismatching. But clearly, you did see a dose response. I think it was like 58% of the 90 mg dose versus 57.1% in the 30 mg dose. So is that correct? Speaker 400:17:43And I mean, what's your thought on some of the comments that are out there in terms of not seeing dose response? And that's my final question. Speaker 200:17:50Yes. Thank you, Karl. I think what we can glean first from the fact that both doses showed very well is first off Both doses showed very well, right? So that means you grab the population of 100 people, dosing with the drug, phenomenal result, almost 60%. Grabbing another 100 people, check them against standard of care. Speaker 200:18:07Once again, another phenomenal response, almost 60%. You can't really tease out the difference between 57 and 58, nor can you really between 3541. These are what they're showing is the drug is having an effect and that and so Most likely biologically, we're probably if you think about a curve, we're probably at the asymptotic component of the curve where we're just near the top of it. So One dose versus another dose is not going to make an appreciable difference there. And so that will be a conversation with the FDA. Speaker 200:18:38We certainly know a lot more about How the drug works in various animal models and other studies we've done. We know it's an inhibitor of DNMTs, DNA methyltransferases. We know it reduces hypermethylation. We know these patients have elevated levels of these enzymes. And so all that is well understood from a scientific standpoint and that The finer points of which dose to be selected will be a conversation we have with the agency at the end of the day and we're prepared to use either dose going forward. Speaker 500:19:10Great. Thanks again. You're welcome. Thank you. Operator00:19:23Our next question comes from Ed Arce from H. C. Wainwright. Please go ahead with your question. Speaker 500:19:30Hi, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. Perf's first question, Based on what you've learned from Affirm so far, can you discuss what are some inherent variability of the liver transplant endpoint in Speaker 200:19:55When you look at transplant, it's just inherently variable. That's the reality of it. It's Available as I said earlier to less than 2% of the patients who have this disease and the administration of the transplant It's very variable as well. It depends on which center you're at. It depends on what is your level of insurance coverage, whether or not you have a match, How aggressive your surgical team is and it also depends on how sick you are. Speaker 200:20:27There are a number of patients who are too sick when they first come in to get a transplant. So we think about the use of larsuchosterol in this setting. Certainly in a survival trial, a trial where you're looking at mortality, there are a certain number of patients who would be in the standard of care group who would get A transplant and survive and that's true. But witness the fact that we had a safety safety was fine, but we had a mortality signal even considering those. And I believe from talking to some of the people and understanding the path for some of the patients in this trial that what we're also seeing is For lack of a better term, a bridge to transplant, where some of these patients are severely ill at the beginning may not be alive long enough to get a Because they were dosed with our sucosterol, they were then potentially able to get a transplant 6 or 8, 10 weeks later. Speaker 200:21:20So that's another component of it all. And rather than try and separate that out and tease it out, it'd be very difficult to do. We're simply just going to look at mortality and let transplants fall where they may. So that's how we're going to deal with that because there are so many factors that influence transplant that the drugs can influence. The only thing the drug really can do towards transplant is keep you alive and make you a little healthier so that you might be still around if the liver by chance came up as rare as it is. Speaker 500:21:46Understood. That makes sense. And then perhaps just one more question from us. So you discussed a little bit earlier how the U. S. Speaker 500:21:59Populations with Lower mean age and also a low percentage with cirrhosis. So wonder how do you look at Potential U. S. Markets perhaps discussions of the EMA, is that on the table? No. Speaker 200:22:17I mean, we will be talking with the EMA We're just now starting to take the additional cuts of the data and look at that. And we will look at the data for a number of different reasons For all these different characteristics and try to understand how it responds because I'm certain that both the FDA and the EMA will want to understand that. My sense is that we'll be able to help patients. We've doses in CHOP UC patients who are dying or their lipids are failing and for other indications orally and saw some nice improvements in these patients just single dose safety studies, but saw some interesting biomarker changes and the like. So I do think There's the potential to help these patients. Speaker 200:22:57That being said, we're going to drive forward for approval in the U. S. Based on the U. S. Data and then We'll take on the rest of the world in these more severely ill patients as time goes on. Speaker 200:23:10That's what Operator00:23:10I said to them. We've got Speaker 200:23:11a long list to go And it's early days in analysis. Speaker 500:23:16Okay. Yes. Thank you again for taking our questions. I definitely look forward to the FDA meeting in the Q1. As do we. Speaker 200:23:28Thank you. Operator00:23:32Ladies and gentlemen, with that, we will conclude today's question and answer session. I'd like to turn the floor back over to Jim Brown for any closing remarks. Speaker 200:23:41Yes. I just would like to thank you all for your time today and for your support. And as always, if you have any Further questions, please reach out to Tim and myself or others on the team that you know and we're happy to get on the phone to talk to you. Thanks a lot and take care. Operator00:23:58Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.Read morePowered by