Good day, and welcome to the Galmed Pharmaceuticals' Third Quarter 2015 Earnings Call. Today's conference is being recorded. At this time, I’d like to turn the conference over to Josh Blacher, Chief Financial Officer. Please go ahead.

Thank you, Andrea. Good morning everyone and thank you very much for joining today's conference call. I'm pleased to be here with President and CEO, Allen Baharaff; and Chief Medical Officer, Dr. Maya Halpern to report to you on our financial reports for the third quarter of 2015 as well as to provide you with an update on our clinical development programs. As always, we will be happy to take any questions you may have at the conclusion of our prepared remarks. Before we begin, please note that we will be making certain forward-looking statements on today's call, including those regarding financial statements, 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 our beliefs and expectations of management as of today and actual results, trends, timelines and projections relating to our financial position and projected development program 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 headlines, Risk Factors, described in our annual report on Form 20-F filed with the SEC, and risks and uncertainties included in the Form 6-K filed with the SEC earlier today. Galmed assumes no obligation to update any forward-looking statements on the information. This morning, we will be providing you with our financial results for the quarter ended September 30, 2015. For more information, please refer to our quarterly report on Form 6-K filed earlier today with the SEC, which among other things provide the summary of our financial results. For the third quarter of 2015, our net loss totaled $2.6 million or $0.23 per share, compared to a net loss of…

Thank you, Josh. In detail Galmed has made very significant strives during the third quarter. First, our clinical site in Israel increased their screening and enrollment of patients. In addition to strengthening patient recruitment, our operating experience in Israel to-date has also served to optimize the trial execution across the United States, Latin America, and Europe. During the quarter we launched our clinical operations in Germany, France and Mexico. So we are now well situated with operational site that had commenced cleaning in six out our estimated eight countries. At the end of the third quarter, 55 sites of our expected 72 sites has been approved by the respective regulatory bodies and ethics committee. There have been even more approval since the beginning of the fourth quarter. We are still preserving and learning from the trend and the run time of our screening and enrolment processes. In addition, our screen failure rate is rather wide ranging among several sites to conclusion about the blended average across all sites and feel difficult until we have all the sites up and running and more of weak behind our back. As such, we are maintaining our earlier guidance concerning timeline forward study. With that said, Operator, please provide instructions for Q&A portion of our call.

[Operator Instructions] We'll go first to Jason Kolbert of Maxim.

Hi, good morning Allen. Thank you and boy, I do really appreciate the brief call. I think it's very smart on your part. Can you talk a little bit about the 65 of the 73 sites that are open and talk a little bit about the screening process for patients and just give me some granularity on kind of your confidence and the timelines in terms of patient enrolments? Thanks.

Okay. Thank you, Jason. As I said, we started about 7 months ago screening in Israel. This was the first 14 sites which were operating and this is our home base. So it helped us a lot on the learning curve for the rest of the site. In total, we would have 72 sites in nine countries and as I said, 7, in fact 8 now of them have been approved and we are taking basically many of the question Jason assume returning - coming back from site to site. So the same question we have from the site in Israel, we that had in the U.S. and later in Mexico, Chile, France, Germany et cetera. So now we feel very confident. We even prepared for our clinical team like frequently asked questions and answers. So we are almost, we have very little surprises from questions that can come from site and we see there is a definitely – scale, we definitely see that now with the last country that was open site approval is going very quickly, smoothly and with no surprises. As you remember, we are very, very careful in the selection of our patients because we worked to see the good compensation and make sure that we recruit patients which have not greater than 4 and this is why we've selected Latin America which is very important because there are no competing sites in Latin America. In fact I’m traveling, I was there - I think two months ago and I’m travelling again with our clinical trial manager, with our local people in Latin American, Chile and I’m going to visit the sites one by one and see for myself how recruitment - screening and recruitment is going. Last time I was together with Vlad Ratziu, our Principal Investigator. So we feel the very strong commitment from the site. So I am very, very happy from the way things progressed so far.

Allen, thank you. And I just have a quick question for Maya. I know we've been talking a little bit corresponding over some of the changes in the competitive landscape. I just wondered if you have any comments on some of the things that you’re seeing, competitively speaking in that space.

Thank you, Jason, again. We had seen lately the FDA approving the Phase 3 study for intercept and this is important as we might have allowed case by case approvals of protocols and we are very much looking forward to listen our Genfit got into Phase 3. As you know there are no guidelines still for Phase 3 because all of studies for approval of products to treat NASH, so this is in fact most important outcome of the discussions -- I mean the Intercept study design and Genfit study design are very, very important milestones for the development of NASH product. If you are referring also to Intercept study in Japan, I think it would be too early to discuss it's impact. One of the lessons we learned from them and from Genfit study also, is the importance of having well balanced study randomization over continent, over groups, and we saw that the Intercept study in Japan had too few patients and also not a lot of collaboration from the patients. So, this is why maybe the results are not very presentative of what the drug can do. And this connects to what Allen just said, we are very, very careful in our recruitment in randomization and hope to reach much more balanced randomization of patient among the group to reflect our of course good profile and success.

Perfect, thank you, Maya, and one last question on the gallstone trial. I know in the second quarter we have been talking a little bit about kind of the slower enrollment process than anticipated. Can you just give us a little bit of an update on how that trial is doing? Thanks.

We stopped recruiting patients for the study, due to the low recruitment rate, as you remember the population we selected were patients following bariatric surgery, and we now understand that this is a very problematic community in general and they are non-compliant, to say the least these are not compliant patients. They don't show up for the meetings, they don't take the drug, so we decided to stop the recruitment, redesign the protocol, we are taking our time but we would like to concentrate now - full attention to ARREST study and make sure that we stand by our milestone which are very, very important to show the execution of our risk and then we would come back to the study.

Okay guys, thanks for the update.

We'll move next to Elemer Piros at ROTH Capital Partners.

Yes, good afternoon or good morning. What I'd like to ask Maya, coming back to the competitive landscape just a little bit, Maya very surprised that there was no impact on fibrosis seen in the Japanese study?

That's a tough question. I can't say we're surprised because if you remember the effect in the FLINT study was not that significant. The whole point was there was an effect but the effect was not huge, and in the Japanese study they have four arms, and out them two are clinical sub optimal therapeutic doses of fatty acid. So, they cannot show any effect on fibrosis in half of the patients. And for the other two arms, they did not show any effect as you say, which raises question regarding the clinical trial design and the magnitude of the sample size needed to show such a small effect, the smaller the effect the bigger the sample size. So, maybe in the Phase 3 they will be able to show an effect, but questionable.

Yes. And maybe just a clarification --

But of course we are making our own design, the point that it's not a real competition for us, I mean we are not positioning ourselves and aren't called as an anti-fibrosis drug, so the endpoint of improvement of fibrosis is not directly relevant for us. We are looking at resolution of NASH, which is an earlier stage in the disease and this is why I was also mentioning we would -- we're very eager to see what the FDA will say regarding Genfit trial which also was not powered -- their GOLDEN trial was not powered to show any effect on fibrosis and we want to see how they will go forward.

Thank you very much for that, Maya. And just a clarification from Allen, if I may. I'm not sure if I heard it correctly but 55 or 65 out of the 72 Ethics Committees that have approved the study.

Thank you, Elemer. It's 55 and growing. And we are quite confident that as I said before that we will according to our earlier guidance, everything is developed as planned with the site approval.

And just a follow up on that Allen, so I didn't know how up to date the clinicaltrials.gov records are but two questions related to that. I noticed that for the regenerate study, this is the Intercept study, 27 sites are enrolling patients and 10 for the Aramchol study. Do you see any overlap between sites and do you see any competition for patients with the Intercept drug?

Naturally there is some competition, but we are -- we anticipated that and our plan is to recruit, if I recall, I don't have the numbers in front of me, about 50 or 60 patients from the U.S. And as I said before, one of our major recruitment engine would come from Latin America. There we did not see any trials, and this is when we designed the study we were the only Company and we're now -- and that was very important. It's not, this is not an easy route to have a study in Latin America, it's much easier to have it in the Western side of the world, but its all – with approved - they've started to recruit patients, screen and repeat patients, we see that there is a major difference from the U.S. for instance. So, yes, there is some competition evidently but it's not -- I don't think it will affect our plans or our screening plans.

And yes, certainly I heard in Europe you have least four countries identified and I don't see any evidence that Intercept has done any work there yet?

That's correct.

And one final question, can you confirm Allen, that you would be able to recruit half the patients or 120 patients by the end of the year?

We hope so. These things, we can't be very precise, but it might be one month here or there but we are -- everybody is working, U.S., Latin America, Europe, it's a long screening process, it's a six week screening process and sometimes it's even -- we have a possibility of extending even to eight weeks. We have if you remember in addition to the biopsy, we also have the MRI which has to be scheduled and sometimes it's not dependent on us or on the -- it's simply queue to get the MRI screening for patients in order to be eligible for the study. So, but the screening is there, we are screening a lot of patients, the randomization is there, it's just a matter of aligning the interest of all these entities, the hospitals, the investigators, the MRI centers, many people to coordinate together hoping that we'd be able to more or less stand by our focus.

Allen, if I could just add that one point. The machine is absolutely in place and its really, really important for us to focus on not only the screening which is going exceptionally well but also to make sure that we're recruiting the right patients. ` So we are not going to air on the side of enrolling the wrong patients just to get the exact number at the right date. We want to make sure that the trial is robust. We have the best patient selected and as elements before everything is working according to schedule and we just have to be a little bit more patient with the time and see how that trends from screening to recruitment actually are fulfilled.

Yes, thank you very much, Josh, and Allen, and Maya.

We’ll go next to Yi Chen at H.C. Wainwright.

Hi, thank you for taking my questions. As I understand the phrase of our solution of NASH is interpreted differently by different parties. Can you give us some color on your current understanding of this phrase regarding – in terms of three aspects of steatosis, inflammation, and ballooning and how that may affect regulatory approval and physicians prescription behavior? Thank you.

Maya?

Okay. So, thanks for the question, it's a very good question. This is working process. As you mentioned, different companies have different perspective on these question critically. It's a critical question – as this is one of the probability approval end point and in fact we are holding a conference symposium in the next ten days is ASLD where tighter is resolution of NASH, pathological and clinical implications and the best pathologists and hepatologist in the field, in the word are taking, discussing in this panel. Having said that, right now the accepted definition for resolution of NASH is disappearance of ballooning and some improvement in inflammation, this is what we – is our definition of resolution of NASH and the - study definition also of Victoza. And the other companies as you know Genfit, has a too low bar and they consider even one point - disappearance of first even if it was plus one, as a resolution this is why they had so many patient in the placebo receiving this endpoint. Intercept probably put a bar too high, and we believe now that VCV and our of course Advisory Board believe that this is a right definition, clinically significant definition as ballooning is very important for the advance of the disease. And disappearance is a very good find, disappearance of ballooning is a sign of reversal from NASH to simple steatosis.

I hope that you'll be able to join us in hopefully – in ASLD because we will have the privilege to have the opinion of both the pathology of Genfit, we have Victoza of Intercept, and we have everybody -- I mean we specifically build forum of eight pathologists and clinicians to debate these questions and hopefully once we can come with one solution and this is open for other study investigations and not for the benefit of the investigators to better understand it's area.

Okay. Thank you.

We'll move next to Vernon Bernardino at FBR & Company.

Hi, good morning everyone and good to hear the progress with the clinical trial sites. I know that ARREST has just started and you're just carefully selecting the patients, and rather than just talk about specifically about a competitor, I just wanted to get your cake as far as - an advisory panel is expected to be put together for a competitor product, and one of the issues that's a negative signal with OCA for example, is a cardiovascular signal and Aramchol has so far shown itself to be very safe. In the future, how much of a consideration do you think -- as you know in these situations the cardiologist is very much present as far as the care of these patients whether or not they are symptomatic with their fatty liver disease, they often have counter diseases such as hypertension, high cholesterol, and so on. What is your view as far as Aramchol and the whole landscape as far as investigation on therapies out there for NASH as to how they maybe viewed from the cardiologist point of view, in particular do you think such a cardiologist will always be part of such an advisory committee panel that FDA would put together in reviewing any of the drugs for NASH?

Very good question like usual Vernon, and yes, the answer is, the cardiovascular aspect of NASH, it's more and more visible and the publication -- the joint publication of the FDA and the American Association for the study of liver disease at the beginning of this year state clearly that a drug to treat NASH should be at least neutral for cardiovascular risk and the optimal drug should improve cardiovascular risk. Now, as you mentioned, those patients have multiple morbidities and they die of cardiovascular complications before they develop fibrosis. And the proof of the footing is in the FLINT study where there were four days, cardiovascular days in the active arms to placebo arms, and none of the patient advanced to fibrosis. And again it's not a big study, 250 patients for follow up for less than two years. So, this shows that cardiovascular risk is a big, big problem for NASH patients. The FDA would not at this moment as far as we know and we discussed this with them, would not add a cardiovascular team to the committee to approve drug for NASH. But again, this is returning the fact that cardiovascular risk should be part of the approval and we also saw in the Intercept Phase 3, people have started - they exclude patients which already have cardiovascular disease which seriously narrows their possible population by 50% maybe to be treated. And this is a very, very important point. And NASH is a chronic disease, any treatment for NASH is a lifetime treatment and as we saw we did not see an improvement in Fibrosis in the Japanese OCA study, but we saw the same [indiscernible]. So safety, it is a point to be taken into consideration and we hope we'll continue to show the very good profile, 50 profile of Aramchol that we saw until now, and we hope to be able to see the same during our future studies.

Thank you very much. And it's accepted that Aramchol and OCA will not be competing directly for the same patient population much of the stage of the disease. One other fascinating things to me about Aramchol is actually as you know because of my background - Aramchol effects on endothelium. Do you anticipate that there will be actually cardiovascular benefits from the - can you mend out such patients with our Aramchol in such that there may be actually some long term benefit as far as cardiovascular outcomes not just on the liver disease. I know its early but –

Okay, we hope very much to be able to recruit the positive effects on the endothelium from the Phase 2A. It was in the Phase 3. It was only a trend but the numbers were very small and now all patients recruited for rest will has endothelium function measure the basic line and after the treatment in well standardized method. And we very much hope to be able to show an cardiovascular improvement as you said. And in this way to meet the conditions for an ideal drug and not on the [indiscernible] drug. In safety in the chronic talks on [Dots] [ph] we saw decrease of 20% we published this on cholesterol, total cholesterol and we look very carefully at endothelium, we open the big arteries, we did not see any signs of [indiscernible] and we hope to be able again to show these positive effects in the other studies.

And then last question for me again the cardiovascular aspect fascinates me greatly, I know the primary focus is on the liver disease but it does seem that Aramchol with its potential beneficial and clinically meaningful effects on cardiovascular parameters. Do you anticipate that you might someday study that as a different population for which that Aramchol could be directed?

I'm not sure about that. We are not developing Aramchol as another anti-cholesterol drug or direct treatment for cardiovascular disease but again - is the first study in which endothelium function would be studied in patients treated for the last, there was as far using our never such as conducted until now and we could add – as you said on - hopefully again we did prove that but if would add a very important aspect to treat this population. I want to remind you also that those are diabetic patients who had - have the highest cardiovascular risk in the whole population. So, we hope to be able to have labors for those patients. Having said that, I don't think and I agree that it will be developed for - treatment for cardiovascular disease only but, were it seems will develop and we’ll see how it goes.

And one last follow up, can you confirm again when do you anticipate -

Yes, wait Vernon. What we are looking at is another not a general cardiovascular improvement but we are checking the effect of Aramchol on cross sellers used to the diastolic dysfunction. This is 50% of patients with heart failure and we are running now to – proof-of-consultations in 30 patients in Israel to look at a possible effect on the cardiac function. Again this might be a new indication but still we do not have any indications regarding the effect.

Yes, that's certainly early, I'm just probably more fascinated than most. And then could you confirm again please when do you anticipate you might see a result from the biomarkers and all collaboration. I know it’s in parallel with the Phase 2b study but just wondering if you could provide perhaps a time frame?

Okay. This is an ongoing project. The first phase should be fairly soon because that will be based on our getting samples of patients, our skin failure patients and not only the randomized patients and blinded of course and hopefully so once we will complete recruitment by that time or soon thereafter we’d able to see or validate really – have liver test and see how they are - and see that the same - they have the same disease as the biopsies. The second phase is to see the effect of our employees and to see – monitoring the diagnosis and not only diagnosing of NASH but monitoring the disease and the drug. But that it will only happen at the end of the study. So I’m hoping that during the ARREST study, we will be able to communicate number of milestones without collaborating with them.

Terrific. Thank you for taking my questions and providing some more insight.

Thank you, Vernon. And hope to see you soon in [ASLD] [ph] in San Francisco.

Yes, see you there. Thank you.

[Operator Instructions] And at this time there are no further questions. I will turn the conference back over to Mr. Baharaff for any closing remarks.

Thank you very much. I would like to thank you for your continued interest and support to the Company and urge you to follow us with our press releases. And as always Josh, myself, Maya we are all available for you for any questions you may have and please feel free to contact us even between those course. Thank you very much.

And that does conclude today's conference. Again thank you for your participation.