Bob Yedid - Investor Relations Allen Baharaff - President and Chief Executive Officer Liat Hayardeny - Chief Scientific Officer Tali Gorfine - Chief Medical Officer Yohai Stenzler - Chief Financial Officer.

Yasmeen Rahimi - ROTH Capital Partners Jason McCarthy - Maxim Group Ed Arce - H.C. Wainwright and Company.

Good morning and welcome to the Galmed Pharmaceuticals’ First Quarter 2018 Earnings Conference Call. Please note that today's call is being recorded. At this time, I would like to turn the call over to Bob Yedid. Please go ahead..

Good morning and good afternoon respectively. Thank you for joining us today.

Before we begin, please note that we will be making certain forward-looking statements on today's call, including those regarding financial results, statements and forecasts regarding anticipated timelines and expectations with respect to our regulatory and clinical development programs as well as other statements that relate to future events.

These statements are based on the beliefs and expectations of management as of today and actual results, trends, timelines and projections related to our financial position and projected development programs and pipeline could differ materially.

We urge all investors to read carefully the risks and uncertainties disclosed in our filings with the SEC, including without limitation the risks under the heading Risk Factors as described in our Annual Report on Form F filed with the SEC and risk and uncertainties included in the Form 6-K filed with the SEC earlier today.

Galmed assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates only. With that with the conclusion of those prepared remarks, it’s my pleasure to turn the call over to Allen Baharaff, our Chief Executive Officer of Galmed. Allen..

Thank you Bob. Good morning and thank you for joining us on today's conference call. I'm pleased to be here today with our; Chief Scientific Officer, Dr. Liat Hayardeny; our Chief Medical Officer, Dr.

Tali Gorfine; and our Chief Financial Officer, Yohai Stenzler to provide you with an update on our clinical development program as well as report you on your financial results for the first quarter of 2018. As well as always we will be happy to take any question you may have at the conclusion of our prepared remarks.

I would like to start with an update on our ARREST Phase IIb NASH study with Aramchol in 247 patients. Top line results are expected as planned during June 2018. All patient completed treatment during the last week of February and follow up period is scheduled due to end of this year.

Preparation for the three Phase III meeting with U.S Food and Drugs Administration FDA during the fourth quarter of [2018] (Ph) are ongoing. Let’s move now to our recent financing.

In April 2018, we sold to biotechnology value fund one million ordinary shares and warrants to purchase one million ordinary shares for a purchase price of $6 a share and related warrant. The Warrant has an exercise price of $15 per share and will expire one year from the date of issuance.

This proceeds of this financing are intended to be used for working capital needs, clinical development, business development activities and the advancement of our ongoing pipeline plan activities.

Following to our clinical development of Aramchol as a monotherapy, we are conducting three clinical studies of Aramchol in combination with advanced clinical stage anti-inflammatory and anti-apoptotic compound for the treatment of NASH.

We intend to submit - related to this combination for presentation at The Liver Meeting to take place on November 9, 2018 in San Francisco. I would like to turn the call now over to Yohai Stenzler, our CFO. Yohai..

Thank you Allen and good morning. This morning I will be providing you with our financial results for the quarter ended March 31, 2018. 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.

For the first quarter of 2018, our net loss totaled $2.5 million or $0.17 per share compared with a net loss of 3.2 million or $0.26 per share for the corresponding quarter in 2017. We recognized $0.3 million of revenue for the three months ended March 31, 2018, this same amount in the corresponding quarter.

The revenue relates to the amortization of the upfront payment under our license agreement with Samil Pharm. Research and development totaled $1.9 million for the first quarter of 2018. This compared with $2.7 million for the first quarter of 2017. The decrease resulted primarily from a decrease in the ARREST trial related expenses.

Turning now to G&A, our general and administrative expenses for the quarter totaled $0.9 million compared with $0.8 million for the corresponding period in 2017. Our cash balance as of March 31, 2018, which includes cash, cash equivalents and marketable securities totaled $15.5 million compared with $19 million at December 31, 2017.

As Allen mentioned, during April we have completed a registered direct offering with aggregate net proceeds of approximately $5.5 million. We believe that our existing cash balance including the fund raised during April would be sufficient to maintain our current operation for the first half of 2020.

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

Thank you. [Operator Instructions] And we will take our first question from Yasmeen Rahimi with ROTH Capital Partners..

Great, thank you so much for allowing me to ask my question.

So, question one, for the team, can you tell us little bit more about the follow-up period that’s scheduled for the end of this month?.

I’m sorry, can you repeat the question please Yasmeen?.

Yes good morning Allen.

Just quickly what does it entail for the follow-up period that is scheduled for the end of this month, what does that entail?.

Yasmeen, ARRIVE [indiscernible] included for all patients 52 weeks of treatment and then three months without treatment, and we are now in this period with the last patients are in the last month of this follow-up period. So the last patient should be completed this month..

And will we have that data will be part of the top line data or not, probably not?.

Probably not..

Yes that’s right. And then the second question is for Allen, more big picture given the financial constrain that it takes to conduct the Phase III study in NASH.

Can you walk us through upon positive data what your plans are, whether you are interested in going ahead and starting the Phase III as planned or wanting to wait for our potential partner to come in and carry out the Phase III in conjunction your team?.

Okay. As we always said, we believe that our edge is really in advancing clinical studies and preparing Company as the compound for Phase III ready.

So we are doing as I said it before all the necessary preparation including end of Phase IIb meeting, preparing the protocol for the Phase III and preparing all the logistic in signing agreements and identifying the forward curve, PIs and signing agreements with different type.

I guess based on subject of course to market conditions we would look both at the possibility to create operate additional plant and we will be open to discuss potential licensing or any other M&A activities based on what would be discussed at the time..

Thank and then if I may ask one last question.

In June, what sort of data are we expecting to top line the primary endpoint on fat reduction or are we going to be seeing the entire dataset combined between the top line as well as the histological dataset?.

So, as previously stated we are well positioned both with primary and secondary. The primary is the MRS or with equivalent to MRI-PDFF data.

Secondarily the histology data, our first secondary endpoint is a second fibrosis according to our statistical analysis plan and then we have the other endpoint which are to point it over the NASH or resolution of NASH if you will. So at least the data on fibrosis, you should expect to present that also together with a data on our primary endpoint..

Great. Thank you so much..

Thank you..

And we will take our next question from Jason McCarthy with Maxim Group..

Hi Allen how are you, it sounds like everything is going well. I’m just going to sort of piggy back Yasmeen’s question. In terms of the data, there is three or multiple scenarios that could play out here and I’m wondering if you could just give me your kind of off the cuff thoughts of what the data could mean.

So if the fat reduction data hits statistical significance, we would agree that that is basically “like a homerun”, but if there is a miss on the fat and you have reduction in fibrosis or you have a change in the NASH score, that can be viewed very positively by potential partners in the space, because Aramchol does have this kind of triple effect that could be attractive to big pharma partners and we have seen other groups in the space where the trial didn’t go exactly as they wanted to, but there was so much data behind the data if you would that companies were acquired, there is partnerships that happen, can you elaborate a little bit on that?.

Okay, well first of all good morning and thank you for the question. Yes you are absolutely right, there has been lot of data and certainly, the very robust study.

I think it’s a first NASH global study with population, various population from as you know about one-third coming from the U.S., one-third in Latin America and one-third from the rest of the world. This will be very, very important and this would be the data per population. There is also, we have the data on mechanistically.

We have Aramchol suppose have effect both as an effect on steatosis that we already shown in our Phase IIa study. But we also from data that we presented over the last year in The Liver Meeting, we expect also direct effect on fibrosis, so this is a quality data.

We are going to be, in fact [indiscernible] is going to be the first company that would show nine months data on imaging and how it is correlated to this histology. We are going to be the second company now to show the effect of one year of treatment on effect on histology and imaging.

So all of these are going to be very, very interesting, it is data which is not available at the moment and together with the [indiscernible] community, we will learn the different aspects, the different cause of the data in order to complete the big picture and understand how Aramchol mediates these effect both in steatosis and fibrosis..

Great. Thank you for taking the question..

[Operator Instructions]. Our next question comes from [Patrick Dozol with Life Site Capital] (Ph)..

Hi thanks for taking my question. So I guess one more on the ARREST study. I was just hoping, you could kind of further characterize what a successful trial readout might look like kind of from a competitive perspective.

Is there any magnitude of improvement that you are looking for on certain measures or is it just kind of achieving significant differences successful at this juncture?.

So I will let Tali take this question Patrick. Thank you and good morning Patrick..

Hi Patrick. So we are working according to [indiscernible] two months ago. And then the statics clearly defined what the primary endpoint is based on MRS. And it is positive and we have a statistical significant effect on MRS in weeks 52 that would be a positive trial.

All the secondary endpoint that are histology and also AOCs, there as a secondary endpoint. Our hierarchical plan is in the stat, in the statistical analysis plan. So the first one is fibrosis and two points to NASH et cetera.

And I would go back to the question that was asked before, the ARREST was planned as a Phase IIb study to provide enough information to understand both about the effects of the drug on either steatosis, fibrosis, NASH and to be able to provide data to prepare care for the pivotal study. So we have it to build to select the dose.

We have population with stage zero to three of fibrosis actually zero we have on few patients and 60% are stage two and three of fibrosis, that’s also an important subpopulation in the context of pivotal study.

And I want to remind everyone on the call in the ARREST all patients have risk factors or they are either pre-diabetic or diabetic over weight of obese.

And we will look all the data together to draw conclusion how we move forward for pivotal study, what is the primary endpoint of that pivotal would be, will it be fibrosis like some people tells well it’s the NASH resolution like others what would be the dose, what would be the duration, there is still talk about duration and how can [indiscernible] serves us even in a pivotal study and all this we will learn from I would exciting data that is coming in June..

Great, thank you. And then regarding the mini workshop at [indiscernible] on various sub-population such as HIV associated with lipodystrophy with NAFLD as compared to kind of traditional NAFLD and NASH.

Would you just be able to provide us with some of the key take home messages that were discussed?.

So in the mini workshop, we had the [indiscernible] give a very important talk describing some populations in NASH and how they may be different not only in the clinical setting or in the diagnosis but also in the path of physiology behind the disease.

In terms of our understanding, how each one of the fat population, what are the similarities and what are the differences, let’s say we are not there yet. We should put focus and better understand each population in order to help patients as best as we can and fit the treatment to the physiology.

[indiscernible] described at the top level results of the alliance which we published and which we discussed in the previous call and then [indiscernible] gave an elaborate talk about the mechanism behind the effect that we see in [indiscernible] maybe talk a little more about cost talk, specifically regarding the effect on fibrosis.

And again, this was from the angle of path of physiology and how to better understand exactly where the effect is, what is the biochemistry behind the effect in order to target the disease where this biochemistry is involved and to hit the right point.

And I’m happy that [indiscernible] gave an overview of the status of the ARREST to conclude as you know this will be waiting for results in June. Liat, can you elaborate on this..

Just as to what Tali just said, we all have to remember when we think about a [life] (Ph) that we are talking about HIV which is a major difference between the HIV and I wouldn’t even say NASH patients, because they are not actually defined as a NASH patient. [indiscernible] fact is HIV is defined as NAFLD in part to paper.

To add on that one should always remember that these patients have not only fat liver of HIV but they are also lipodystrophy patients.

Having said that, there are two main differences, so the disease is completely different, because we are talking about liver fat which is not NASH, but maybe resemble NAFLD, and we are talking about a patient population with a lipodystrophy which is another pathology that has to do with fat distribution.

Having all that said, we have paper coming out every day, yesterday there was another one published that if you treat these patients with antiviral you reduce the liver fat. So what one should understand that that means and we have all the pathologies talking about the virus itself attacks the cells.

And all this leads to a [indiscernible] is a main mechanism to Aramchol targeting steatosis and fibrosis pointing out with a reduction of [STD1] (Ph) as the major cause for the reduction of [indiscernible], but at the same time the main cause targeting the hepatics teller cells preventing the [indiscernible] introducing and reducing the [indiscernible] which is best market for fibrosis.

So, all this is leading us to better understanding about the mechanism and at the same time while we should target NASH patients the way ARREST is target, these are NASH patients and they don’t have any I wouldn’t say other [indiscernible] conditions as HIV viral infection and on top lipodystrophy..

Great, thank you for the detailed response..

And we will take our next question from Ed Arce with H.C. Wainwright and Company..

Hi everyone, thanks for taking my question.

Actually most of them have been asked, but I did want to follow-up on the readout of ARREST itself, just a quick question on what we can expect, obviously as you have said before and again today it’s scheduled for June, but do you anticipate putting out a press release ahead of time to give us some advance notice of the date, a few days before or a day before, or is it just going to be press release when its ready without any advanced notice?.

No, we will just finish with a press release when it’s ready and we will hold a call for the same day the press release is issued..

So, no advance notice is expected?.

No..

Okay. Thanks Allen. I appreciate it..

Thank you Ed for the question..

[Operator Instructions]. We will take our next question from Yasmeen Rahimi with ROTH Capital Partners..

Thank you for the follow-up question. So again the ARREST study is one of the most global studies that we have seen. So as we are going into the data readout. Maybe what do we think about the heterogeneity of the different patient population across different regions.

What do we know in terms of natural history study that can help us to understand that on one hand it’s a global study, but on the other hand, the patient population is homogeneous? And then the second one is, can you give us a little bit more detail on the anti-apoptotic molecule combination, is this a molecule that would built in house, is this something that you acquired maybe a little bit more color on that would be very helpful..

Thank you Yasmeen, I will answer your first question. There is no data available at this point about heterogeneity of or homogeneity of the study population. The baseline statistics and different population not only in terms of global distribution, but from all other point will be looked back after the top-line results are available..

Hi Yasmeen. With regard to the combination. So we picked up for our pre-clinical experiment, we picked up two [Technical Difficulty] it has an anti-inflammatory mechanism, anti-migratory mechanism and the other one is anti-apoptotic. We choose them because we believe that their mechanism of actions is complementary to Aramchol.

Aramchol is mainly just reminding everybody on this topic down regulator of FDD-1 - down regulating steatosis and down regulating the [indiscernible]. And it is something that we know that [indiscernible] does not target directly is inflammation.

So and I’m calling top down regulating of [indiscernible] and is not down regulating directly inflammation. Only consequence to the reduction of steatosis.

Having said that, we thought that in order to have synergistic effect between Aramchol and potential candidate for a combination for further investigation in men we chose these two molecule with - activity in clinical trial, in advance stage one of the anti-inflammatory and one of them is anti-apoptotic..

Okay.

But probably we will anticipate in later time point a more - will we see before The Liver Meeting maybe getting the MOA’s reveals or probably not at this point until the meeting?.

Yes..

Okay. Thank you..

Okay. Operator, you can close the call..

That does conclude today’s question-and-answer session. I would like to turn things back over to Allen Baharaff for any additional or closing remarks..

So, thank you all for joining the call today. And we look forward to welcome you all on our call on June, following the publication of our risk data. Thank you all..

And that does conclude today’s conference. Thank you for your participation. You may now disconnect..