Good morning and welcome to the Galmed Pharmaceuticals First Quarter 2017 Earnings Call. Before we begin, please note that Galmed will be making certain forward-looking statements on today’s call, including those regarding financial results, statements, forecasts regarding anticipated timelines and expectations with respect to 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 financial position and projected development programs and pipeline could differ materially. Galmed urge all investors to read carefully the risks and uncertainties disclosed in their filings with the SEC, including without limitation the risks under the heading Risk Factors described in the Annual Report on Form 20-F filed with the SEC on March 23, 2017 and the 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 or information, which speak as of their respective dates only. Today’s conference is being recorded. I now transfer the call to Allen Baharaff, President and CEO of Galmed. Please go ahead, sir.

Thank you, Denise. Good morning and thank you all for joining us on today’s conference call. I’m pleased to be here today with our CSO, Dr. Liat Hayardeny; our CMO, Dr. Tali Gorfine; and our CFO, Yohai Stenzler to provide you with an update on our development program and to report to you on our financial results for the first quarter of 2017. As always, we will be happy to take any questions you may have at the conclusion of our prepared remarks. During the last quarter and currently, we continue investing significant effort into better understanding the mechanisms by which Aramchol is down regulatory to steatosis and fibrosis. Additional animal models are being investigated with a variety of treatment regimens. Preliminary data demonstrate thus far dual mode of action of Aramchol on fibrosis via improvement of fatty acid oxidation as well as direct impact on stellate cells, which are the collagen producing cells in the liver, which results in reversing fibrosis, as it was recently presented at a scientific workshop we had at The International Liver Congress, EASL, shared by Arun Sanyal with professors Vlad Ratziu, Rohit Loomba and José Mato presenting. I was pleased to see the high attendance at the workshop, notwithstanding the early AM hour slot which was allocated by the EASL organizers. In addition, we had three poster presentations during EASL, which presented the new data on the anti-fibrotic effect of Aramchol on liver fibrosis in MCD and TAA animal models, as well as other in vitro models. We are deliberately endeavoring to improve our Board of Directors to include high-qualified candidates with direct relevant experience. We’ve recently nominated for shareholders’ approval, the nomination of Dr. Carol Brosgart as a member of our Board of Directors. Dr. Brosgart has extensive clinical and drug development experience with direct relevance to both our ARREST and ARRIVE clinical studies. Dr. Brosgart previously headed up clinical research at Gilead, where she oversaw the NDA, BU [ph] and global approval, and the launch of Viread for HIV and Hepsera for hepatitis B. Recently, she served as a member of the Board of Directors of Tobira Therapeutics until it was acquired by Allergan in November 2016. She is also active in the public policy arena for the AASLD, IDSA/HIVMA. With the recent appointment of Professor Ran Oren, head of Institute of Gastroenterology and Liver Diseases department at Hadassah University Hospital to our Board of Directors and expected appointment of Dr. Brosgart as our [first U.S. the pace] [ph] director. I’m pleased to see that we significantly upgrade our Board of Directors’ scientific capability as well as advanced or the completion of ARREST and ARRIVE clinical studies preparing Galmed for its next chapter. I would like to turn the call now over to Yohai Stenzler, our CFO. Yohai.

Thanks, Allen. Good morning and thank you for joining us today. This morning, I will be providing you with our financial results for the quarter ended March 31, 2017. 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 2017, our net loss totaled $3.2 million or $0.26 per share compared with a net loss of $4 million or $0.36 per share for the corresponding quarter in 2016. During the past quarter, we recognized $0.3 million of revenue compared to no revenue for the same period in 2016. The revenue relates to the amortization of the upfront payment under our license agreement with Samil Pharm. Research and development totaled $2.8 million for the first quarter of 2017. This compares with $3.4 million for the corresponding period in 2016. The decrease during the first quarter of 2017 primarily relates to the decrease in CMC related expenses. Turning now to G&A, our general and administrative expenses for the quarter totaled $0.8 million versus $0.7 million for the first quarter of 2016. The small increase primarily resulted from an increase in salaries and benefits expenses, including non-cash stock-based compensation expenses. Looking now at our balance sheet, at March 31, 2017 current assets which include mostly cash, cash equivalents and marketable securities totaled $12 million, which is $3.7 million less than the $15.7 million reported at December 31, 2016. We continue to believe that our existing cash balance will be sufficient to maintain our current operations through the first half of 2018 and allow us to complete the ARREST study as scheduled. With that said, operator, please provide instructions for the Q&A portion of our call.

[Operator Instructions] Ed Arce, H.C. Wainwright & Co. Please go ahead.

Hi, Allen. Congrats on the progress this quarter. I was wondering if you could give us sort of an overview of the three posters as well as the presentation that Dr. Sanyal and others gave at EASL on the anti-fibrotic effects in particular?

Okay. I suggest that, that would be Liat Hayardeny, our CSO, so she will take this answer on the three posters and the liver fibrosis [ph].

So the posters, actually we presented the new data that we have, that is the effect of Aramchol in TAA, which is a direct effect on fibrosis, which is a gold standard animal model that can actually demonstrate whether the compound will have an effect on fibrosis by a direct effect and not by a reducing steatosis, so interesting in this direct effect of Aramchol on fibrosis, since it is head-on on the effect that we already know that we have on steatosis. That was one of the posters that we had. We got a very good effect on down regulation on fibrosis in histoletry [ph] and then fibrosis marker. In this - this was a prevention model. And we hope to submit another poster and another abstract to the ASLV [ph] for the treatment effect of Aramchol in [same to US SME] [ph] which is the gold standard for fibrosis model. Another poster that we presented was the effect of Aramchol on MCD diet. MCD diet is another animal model that mimics better the NASH in human. The MCD is a sequential of steatosis, inflammation and fibrosis. This was a treatment effect, which is hard on a compound to show efficacy. Nevertheless, we showed a very significant effect on all the sequence of events on steatosis, inflammation and fibrosis. We are better understanding today, the mechanism by which Aramchol exerts its effect on steatosis and fibrosis. And we actually show that in the different posters. And third poster was together with OWL group, which we are currently investigating the metabolites in the serum, which maybe mimic the effect of Aramchol in order to find in a way to better understand the mechanism by which Aramchol has its effect on steatosis and fibrosis.

Great. And then just as a follow-up to that. Given your expanding understanding of the mechanism of Aramchol, how has your view changed with regard to the potential combinations with the drug in NASH? Thanks.

So the combination - so firstly, I want to say that I see Aramchol today has a very significant effect on steatosis and fibrosis. The effect on fibrosis, which by the mechanism that we see has two directions, we are down regulating steatosis and therefore - and is down regulating by the end of the sequence of events at the fibrosis, and we have a direct effect on fibrosis by down regulation of collagen production from stellate cells. Nevertheless, if we think about a combination therapy, taking into consideration the sequential of steatosis, inflammation and fibrosis, taking into consideration that we have an effect on steatosis, which was equivalent to clinic and we had a direct effects on fibrosis as on or a combination with anti-inflammatory as - maybe will have some potential even not for the whole period, but maybe as a start and move on, meaning, we can have an induction therapy of both compounds in anti-inflammatory together with Aramchol. And after three, four months, keep on with Aramchol as standalone or with reduced dose of anti-inflammatory in combination with Aramchol for the whole period of treatment, so we are considering this.

Great. Thank you for taking my questions.

[Operator Instructions] We’ll take your next question from Jason Kolbert from Maxim. Please go ahead, sir.

Hi, Allen. I’d like to just talk with you a little bit, you’re a year away from proof-of-concept data, you have some new management team. Do you plan to do any marketing on the road and talking about the valuation gap that exists between Galmed and some of the other NASH players? I guess, what I’m really asking you is what is the strategy and on behalf of investors to close this valuation gap that exists? Thanks.

Okay. Thank you. Actually thank you for the great question, Jason. I’m flying - actually tonight, I’m flying together with our VP Operations to Hong Kong. There is a two-day investors meeting in Hong Kong for Chinese investors. As you know, Aramchol has a very unique Chinese angle, because we have full PK data on Chinese - the healthy Chinese - Phase I early data on healthy Chinese volunteer subjects. And we also include Chinese patients in our ARREST Study. So we saw that and this is in fact our - following the Maxim event in Shanghai, and an early event that we participated this year in Beijing. So this is our first trip to China, and so we are attending it for Chinese and Hong Kong based investors. On June, we are planning [in non-deal road show] [ph] meeting mid-June, and a key opinion leader event with Rohit Loomba, as - who’ll be the guest speaker. He also would be joining on this trip. And in between, I think that we also have some meetings with European investors in London.

Thank you, Allen.

We’ll hear next from Gabrielle Zhou from Maxim Group. Gabrielle, your line is open.

Hi. Hi, good morning. Thank you for taking my questions. Can you just walk us through the endpoints of the ARREST Study, and more specifically to what degree of change in liver fat content [Technical Difficulty]? And also, can you discuss some of the surrogate metabolic endpoints that you will be evaluating? Thank you.

Okay. So this is Tali. The primary endpoints of the ARREST study is MR spectroscopy, using MR spectroscopy. This is the same endpoint that we used in our Phase IIa study in NASH trial patients, which shows a significant effect. Our secondary endpoints are first of all histology endpoints. We understand that the future of pivotal study, our next phase would be based on histology, and therefore our study includes histology at baseline, and at the end of the study. And our endpoints are - first three secondary endpoints is fibrosis improvement. And you have heard from Liat and from Allen, our expectations in terms of fibrosis. And then we have the other histology endpoints, as you are familiar with that, would be change in NAS score of two or more and for of course NASH resolution using the most client [ph] regulatory accepted destination. We also have ALT and other metabolites as endpoints in the study. And as you said, we will look at distant [ph] metabolites using OWL, as Liat alluded to, but these are all exploratory endpoints. So to answer your questions, our most important endpoints are the primary endpoints, which is MR spectroscopy, and our secondary endpoints, which are mostly histological.

Yes. Great. Thank you so much. I appreciate the answer.

We’ll hear next from Edward Nash from SunTrust.

Hey, guys. Thanks for taking my question. This is Mike on for Edward. Congrats on the recent approvals and your presentation at EASL. So just trying to understand like the level of liver fat reduction, which you consider clinically meaningful, as you also see that there are several Phase II trial presented at last month EASL, and present in liver fat reductions. So just want to get your thoughts from the Phase IIb ARREST trial, what kind of liver fat reduction is considered clinically meaningful at this moment?

Okay. So I don’t have a scientific agreed-on response to that, in terms of what would be consider clinically meaningful. Currently, the studies as well as our study is based on P value and showing a [difference in the] [ph] treatment and placebo. Basically, what we expect would be a reduction of, let’s say - I want to start with another sentence, it also very much depends, this is something that we know, on the baseline MR spectroscopy value or the baseline steatosis level of the patient and that is also something that needs to be taken into consideration. And we would expect, let’s say, 20% reduction in steatosis would be important and significant. And most important is what would be clinically significant is an effect on steatosis that translates into an effect on the other markers and important histology markers in the NASH. So - and we do believe that this kind of effect on steatosis will translate into an effect on fibrosis. Add to that the effect that we expect on fibrosis via a direct effect. I also want to point out that our population in terms of histology at baseline is very adequate to show an effect both on the MR spectroscopy and the histology endpoints, because we enroll, as you know, only patients with risk factors. They are diabetic or pre-diabetic, and they are overweight or obese. And indeed, we already know that their baseline characteristics are in the direction of a severe disease. So we have 70% - I’ll read the correct numbers - we have 40% with stage three fibrosis in baseline, this is a very high number, 20% with stage two fibrosis, only 3% with stage zero fibrosis. So you can see that we are - we have enrolled already a rather advanced population. And also the NAS score, 70% has five or more. So from all directions we have the enrolled population to be able to show an effect on the primary and secondary endpoints.

Got it. Thanks a lot.

We will go back to a follow-up from Ed Arce from H.C. Wainwright & Co.

Hi, Allen. Thanks for taking the follow-up, just a couple of questions. I didn’t hear completely your comments around the events that you expect to hold, I think in mid-June you said with Dr. Rohit Loomba, and where that might be. And is that something that’s going to be press released all the details? And the other question is around cash double, you have or had a $11.7 million at the end of March with an expectation for that to be sufficient for another 15 months through the end of the first half of next year? Just wondering how you’re expecting to make the current cash level last that long. Thanks.

Okay. So Yohai will take this question.

Hi, Ed. This is based on our cash estimations. I mean, our run rate for 2016 around $1.3 million, $1.5 million per month. Due to the high expenses of the recruitment, now that we’ve completed the recruitment and now we’re focusing only to finish the other side, the trial, the remaining cost to complete our trial are approximately $5.5 million adding additional costs, salaries and others and will they allow us to complete the trial schedule. We are looking at around $2 million to $2.5 million per quarter of run rate. So this will allow us to complete the trial as scheduled.

Okay, great. And any details around this event you expect to hold with Dr. Loomba in June?

Yes. I mean, press already - we will press release that. But it will be around mid - then we have to final the date to do - finalization of the date with Professor Loomba. But as we know now, it would be on the June 14. Once this is complete, once this is finalized, we will press release it.

Excellent. Thanks so much.

Thank you.

[Operator Instructions] We’ll move next to Vernon Bernardino from FBR. Please go ahead.

Hi, everyone, and good afternoon, Allen. Thanks for taking my question. Just wondered if you could provide an update on the collaboration with One Way Liver Genomics on the development of a non-invasive diagnostic tool. And just wondering if you could comment on what you saw on non-invasive tools and their use and their application perhaps in future studies with Aramchol that you saw as far as data presented at EASL this year?

Okay. I’ll take - Liat is leading this activity with Galmed, I will let Liat answer to it. Thank you, Vernon, and good to hear from you, Vernon.

Yes, I think that the aim of the community as a whole to find an alternative pathway to replace the device fee in any other way is coming from many directions. OWL Metabolomics is one of them. We are collaboration with OWL actually for the benefits of the community, but for our benefits as well, hoping to be able to recruit for Phase III invasive way, and an easier way, which is probably a common wish for all the companies that are doing NASH study. What we’re actually doing is we are - we have a lot of biopsies from the Phase II. Some of the patients were by biopsies recruited in a certain criteria [ph] for the study. Some of them actually did not meet the criteria and actually are screen-failed [ph]. We are sharing with them some of the data of course. And what they are actually looking is, they are screening over 600 metabolites in the serum, hoping to see some correlation between the definition of NASH and the sequence of metabolites. This will give them a certain algorithm, by which they will be able to diagnose NASH patients by this specific algorithm and by this specific correlation of metabolite and not - hopefully, I would say, not needed biopsies, so actually for everybody’s benefit for the future. We’re currently giving them of course in a way parts of the - part of the cohorts. They are using the algorithm. And then we will give them a validation cohort, which they will be able validate. These are all - these are non-causation [ph]. This is only the screening biopsies by which we enroll them into the study. We hope later on at the second stage, hopefully, we will get a good algorithm from them, which will be able to be validated in the second quarter, we’d get at the end of the whole study to see we have a second biopsy, we will have the second time the serum from the patients. The algorithm is going to be good enough. We will hope to see some benefit in the algorithm and in the sequence of the metabolite that we are currently checking.

Thank you.

At this time, there are no additional callers on the queue. I’d like to turn the conference back over to management for any additional or closing comments.

If so, thank you very much all. Thank for following and supporting the company. I was happy to see the very high attendance on this conference call. And thank you for all analysts and participants for the great questions. As always, we are happy, we are here and available for any questions you have. And looking forward to seeing you in Europe, Asia, Hong Kong and in New York. Thank you very much.

Thank you.

That does conclude today’s teleconference. We thank you all for your participation.