Josh Blacher - Corporate Development Allen Baharaff - Chief Executive Officer Maya Halperin - Chief Medical Officer Ray Morris - Chief Financial Officer.

Analysts:.

Vernon Bernardino - MLV & Co:.

Good day and welcome to the Galmed Pharmaceuticals Third Quarter 2014 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Josh Blacher Please go ahead, sir..

Good morning, everyone. My name is Josh Blacher and I recently joined Galmed with responsibility for Corporate Development.

Before we begin, please note that we will be making forward-looking statements on today’s call including without limitations those regarding financial results, statements and forecast 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 including without limitations the risks under the heading “Risk Factors” described in our regulatory statement on Form F-1 filed with the SEC, and the risk and uncertainties included in Form 6-K filed with the SEC earlier today.

Galmed assumes no obligation to update any forward-looking statements or information which speaks as of the respective dates only. I would like now like to turn the call back to Allen..

Good morning, thank you Josh good morning, and thank you for joining on today’s conference call. I am pleased to be here today to provide you with an update on our Clinical development programs as well as to report to you on our financial results for the nine months ended September 30, 2014. With me on today’s call is Dr.

Maya Halperin, our CMO and Ray Morris, our Chief Financial Officer. We will be happy to take any questions you may have at the conclusion of my prepared remarks.

I am pleased to report to you that all of our clinical programs are progressing as planned, and in the third quarter we achieved the main short and regulatory, clinical and R&D milestone that we have set for ourselves at the time for our initial public offering.

As published before, our R&D application for aramchol became effective in July and subsequently aramchol received fast track designation for the treatment of Non-Alcoholic Steato-Hepatitis, or NASH. Although there can be no assurance that we believe that this designation could facilitate the FDAs review of aramchol and expedite the approval process.

In September, we successfully completed two, six-month chronic toxicology studies; we did not observe any significant adverse events in these studies.

These two studies will continue into December 2014 to satisfy an initial FDA requirement to complete nine-month pre-clinical toxicology studies of aramchol prior to conducting clinical trials in the USA. Importantly, the fact that no maximum tolerated dose were reaching these studies, dealt as a further support of aramchol’s favorable safety profile.

In [Indiscernible] we also observed the decrease in blood cholesterol levels in dogs which reinforce our understanding of the positive effect of aramchol on lipids as previously observed in pre clinical studies in other species.

The successful completion of these studies support our planned Phase IIb clinical trial of aramchol in NASH patients which we intend to initiate on schedule prior to year end. A clinical trial first would be located in Europe, Israel and Latin America.

As you may know from prior press releases and other public filings we expect our phase IIb our risk study to include 240 NASH patients who are obese and suffer from insulin resistance. And those are the majority of NASH patients and we believe this population has benefited the most from our treatment.

We believe that our phase IIb, our risk study, design addresses both the profile and the drug, sorry profile of the drug and the emerging therapeutic trends and anticipated regulatory guidelines that may be applicable for the drug..

Both the BfArM and ANSM also confirmed within minutes of each of their respective scientific advisory meetings, that if successful, this Phase IIb trial may serve as a basis for Phase III pivotal trials of aramchol.

We currently expect to have interim result data of the Phase IIb NASH study by the second half of 2015 and topline data by the fourth quarter of 2016. As you can understand there can be no assurance that we will meet such anticipated timeline and the exact time it will be depended on many variables, several of which maybe beyond our control.

With respect to extending our understanding of aramchol’s effect on reducing the cardio vat metabolic traces of NASH patients, I am pleased to highlight our collaboration with Itamar Medical, including the use of Itamar’s EndoPAT devices in our Phase IIb NASH study, which we purchased at the end of the third quarter.

If our planned Phase IIb trial confirmed aramchol effect on endothelial functions in those NASH patients, we believe that Itamar’s EndoPAT could potentially be used by physician in outpatient clinic as a non-invasive test for aramchol effect on vascular function. Turning now to financials.

Let me provide you with an update on our results for the nine months ended September 30, 2014. For more information please refer to our quarterly report on Form 6-K filed earlier today with the SEC which among other things provides a summary of such financial results. We reported cash and cash equivalents totalling $35.3 million at September 30, 2014.

This is up from $137,000 at December 31, 2013. The increase results in net proceeds we received as a result from our initial public offering in March.

We believe our existing cash balance will be sufficient to fund our current operations through mid 2017, including the completion of our planned Phase IIb trial of aramchol in NASH patients and our planned proof of concept Phase IIa, proof of concept study of aramchol in patients with cholesterol gallstones.

Of course [Itamar] rate and our plans could change in the future, so there is no assurance that this fund would last through mid-2017 as anticipated. For the nine months ended September 30, 2014 our net loss was $7.1 million or $0.71 per share, on both the basis and diluted basis.

This compares with a net loss of $2.2 million or $0.44 per share for the nine months ended September 30, 2013. Research and development expenses totalled $5.5 million compared with $1.9 million for the first nine months of 2013.

This was primarily the result of increase in R&D subcontractor expenses in connection with our clinical development program and then increase in salaries and benefits due to an increase in the clinical personnel.

General and administrative expenses for the nine months ended September 30, 2014, totalled $1.6 million; this is compared with $333,000 for the first nine months of 2013. The increase was primarily due to an increase in professional services, salaries and benefits, including non-cash stock-based compensation.

In closing, I am pleased to report that we have completed all the short term milestones that we said for the first three quarters of 2014 at the time of our initial public offering in March. Overall, we are very pleased with our progress and the status of our clinical development program and look forward to continue to execute on our plans.

With that said, operator, please provide instruction for the Q&A portion of our call..

Both the BfArM and ANSM also confirmed within minutes of each of their respective scientific advisory meetings, that if successful, this Phase IIb trial may serve as a basis for Phase III pivotal trials of aramchol.

We currently expect to have interim result data of the Phase IIb NASH study by the second half of 2015 and topline data by the fourth quarter of 2016. As you can understand there can be no assurance that we will meet such anticipated timeline and the exact time it will be depended on many variables, several of which maybe beyond our control.

With respect to extending our understanding of aramchol’s effect on reducing the cardio vat metabolic traces of NASH patients, I am pleased to highlight our collaboration with Itamar Medical, including the use of Itamar’s EndoPAT devices in our Phase IIb NASH study, which we purchased at the end of the third quarter.

If our planned Phase IIb trial confirmed aramchol effect on endothelial functions in those NASH patients, we believe that Itamar’s EndoPAT could potentially be used by physician in outpatient clinic as a non-invasive test for aramchol effect on vascular function. Turning now to financials.

Let me provide you with an update on our results for the nine months ended September 30, 2014. For more information please refer to our quarterly report on Form 6-K filed earlier today with the SEC which among other things provides a summary of such financial results. We reported cash and cash equivalents totalling $35.3 million at September 30, 2014.

This is up from $137,000 at December 31, 2013. The increase results in net proceeds we received as a result from our initial public offering in March.

We believe our existing cash balance will be sufficient to fund our current operations through mid 2017, including the completion of our planned Phase IIb trial of aramchol in NASH patients and our planned proof of concept Phase IIa, proof of concept study of aramchol in patients with cholesterol gallstones.

Of course [Itamar] rate and our plans could change in the future, so there is no assurance that this fund would last through mid-2017 as anticipated. For the nine months ended September 30, 2014 our net loss was $7.1 million or $0.71 per share, on both the basis and diluted basis.

This compares with a net loss of $2.2 million or $0.44 per share for the nine months ended September 30, 2013. Research and development expenses totalled $5.5 million compared with $1.9 million for the first nine months of 2013.

This was primarily the result of increase in R&D subcontractor expenses in connection with our clinical development program and then increase in salaries and benefits due to an increase in the clinical personnel.

General and administrative expenses for the nine months ended September 30, 2014, totalled $1.6 million; this is compared with $333,000 for the first nine months of 2013. The increase was primarily due to an increase in professional services, salaries and benefits, including non-cash stock-based compensation.

In closing, I am pleased to report that we have completed all the short term milestones that we said for the first three quarters of 2014 at the time of our initial public offering in March. Overall, we are very pleased with our progress and the status of our clinical development program and look forward to continue to execute on our plans.

With that said, operator, please provide instruction for the Q&A portion of our call..

(Operator Instructions).And we’ll first hear from Jason [Colbert] with Maximum Group..

Hi guys, this is Jason [McCartney] for Jason Colbert. Just have two quick questions.

And I was wondering if you can help me define what endpoints you see as provable for the NASH trial in the U.S.?.

Okay maybe Jason let me – thank you very much for the question. First of all Jason let me hand it to Maya, she will clarify these..

Hello everybody. Thank you Jason for the question. We understand from our discussions with opinion leaders and what we read lately that resolution of NASH measured by two biopsies will be acceptable for pivotal Phase III studies.

Of course the Phase III and efficacy ratio will play a critical role in the approvement process, and this is our secondary endpoint in Phase IIb as we plan to take it forward as a primary endpoint in pivotal study..

Thank you.

And just another question, did the [Indiscernible] in the competitive landscape?.

[Paul] I’m just really following the [Flint] data. That just came out..

First of all the positive effect of Cholic acid on NASH and fibrosis are a good signal for the whole field. That fibrosis can be reversed and NASA deflamation, NAS sorry inflammation can be affected by medication. This is the first time that we see robust data in a drug in this field..

Okay.

Having said that, if we compare our safety which upto now did not show any problem whatsoever we had no serious adverse events in Phase I too, the toxicology data that Allen just mentioned also showed a clear profile and we have no increase whatsoever in LDL in humans and decrease in animals.

So we feel confident that aramchol has a place in the treatment of NASH, of course after we be able to prove in additional studies efficacy and safety..

Thank you..

And next we’ll move to Vernon Bernardino with MLV & Co..

Hi, Maya and Allen, congrats on the fast track designation.

I was wondering regarding the cost studies, when do you plan to disclose, do you plan to disclose any data from the Tox studies?.

Yes, we will once we will complete the nine months, as said before the nine months treatment period and recovery we decided also to do a long recovery period. We will obviously publish the result and that should be previewed before the year end..

Okay, so you are just going to wait until its done to disclose the data..

Of course..

Okay. And….

It is, sorry Vernon this is a very important data because aramchol today is the only [SEP] molecule or -- that has shown basic data, superior safety data to all other SEP molecules that failed on those stages earlier before which were a complete knock out.

Aramchol being as you know a positive inhibitor, they don’t demonstrate any of the other known side effect SED one side affect which mainly a [Indiscernible] sterosis and other in….

Okay. And what do you still need to do before initiating a phase IIb in the U.S. Does it require arm the completion of the nine months talk or…..

Yes..

Okay..

Yes the nine months is mandatory for Phase IIb in the U.S. but as I said before we do not intend to have any sites for the Phase IIb in the U.S. They will only be in Europe, Latin America and Israel. We are planning to do the pivotal study in the U.S. So there will be two pivotal studies, one in Europe and one in the U.S..

I see, that’s what’s I meant on the fitness study in the U.S. So you -- just to clarify will you also do a Phase IIb in the U.S.

or would you just go right into pivotal?.

No we are hoping we will discuss we were invited to discuss the study results with the FDA once they will be available and we are hoping that we will then proceed directly based on the results to pivotal study, the phase III pivotal study..

And can you share anything about those discussions with the FDA regarding implants. I know an answer to Jason’s question you mentioned that and in discussion [indiscernible] resolution of NASH and two biopsies and of course safety would at this point be the need to be the primary endpoint in pivotal studies to gain approval.

Just wondering what else you could share as far as discussions with the FDA on endpoints in general?.

What we can share is that we understand the FDA will finally publish the minutes of the workshop on three contract design are in print and they will show reflect the discussions from which all of us understood that this would be the endpoint for a phase III conditional approval and this again, will come up very soon and they are still working on the final guidelines..

Okay, yeah we are all waiting with bated breadth for that publication.

And then regarding that two biopsies and [accounting] for the pavements during the conference it does seem like two biopsies will be needed of course base line and then the end, but what I had gathered from talking to key opinion leaders is that the minimum would be one year in between or what are the time frame are you looking at for the two biopsies?.

We are looking at what one year in this Phase IIb depending on what we see the effect, the magnitude of the effect would see, we’ll decide where to, how long to make the treatment for the next study. .

And again, when the endpoint is the resolution of NASH that doesn’t necessarily mean also any resolution of fibrosis, what is your opinion as far as that has….?.

Okay. For early NASH which is Steato-Hepatitis and not fibrosis. The endpoint will be resolution of NASH with no what’s in the fibrosis. As we know, fibrosis, what’s in the fibrosis in itself reduces the amount of fissures that can be infiltrated with fat and inflamated so this is apparently a decrease in the NASH, but this does not mean resolution.

Resolution means reversal to a normal liver biopsy. And we are including patients with fibrosis in our study. We enrich our population not cyrohitic and we expect to see what happens to fibrosis. We don’t think we’ll see any improvement, but of course we would have to see no worsening..

Okay. Perfect, and I have two more questions and I’ll get back in the queue as far as – many and taking advantage.

Now how high – heavy dose in the Tox study?.

In the [Tox] studies we have dose 1600 mix per day. We did not reach maximum tolerated dose and this is the maximum administrated dose the animals that was possible to administered to animals and again no [MPD] was reached. And this is approximately 20 times the anticipated human dose..

Okay. And then my last question is regarding the cardiovascular studies and looking in the [indiscernible] function what do you need to see to show that aramchol is having an effect there..

We would need to show a statistical significant improvement in the treated group as compared to Placebo..

Okay. And the actual measure will be using the Itamar devices. What’s….

It will be a measurement of the [indiscernible] in the finger in the small vessels of the finger. It is in an endopath device. The device is approved by the FDA and the European authorities, health authorities. It’s standardized and will be the readings will be analyzed entirely by Itamar through their software..

And will you also be taking blood samples during the study..

We’ll take blood samples, yes, but there is also blood samples will reflect both parameters, non-invasive parameters that are affected.

You know there is not one validated non invasive parameter measuring NASH unfortunately which is why we need to buy a [fit] that will look at liver enzymes and we will – we have also exploratory biomarkers which will be compared to biopsies and validated through our study, metabolomic, lipidomic and we’ll take also blood for the genetic analysis that we’ll do post -- after seeing responders, non responders..

Perfect. Thank you for indulging in all my questions..

Just as a reminder, Vernon, in the Phase IIa study we will deserve trend or improvement in the endothelial function though not statistically significant but it was those dependent improvement in endothelial function. So we are quite optimistic about these results in the Phase IIb..

Perfect. Thank you for the additional information..

Thank you..

And at this time there are no further questions. I would like to turn the call back over to Allen Baharaff for any additional or closing remarks..

Okay, so thank you very much everybody. We actually we just came back from the AFCB in Boston and after a week of non [indiscernible] meetings in New York and Boston and I am -- to say there is still a positive interest and we are looking forward to continue to execute and hopefully we’ll have good news in the future.

Thank you very much for joining today’s call..

And that will conclude today’s call. We thank you for your participation..