Good day and welcome to the Galmed Conference Call to discuss Financial Results for the Fourth Quarter and Year-end 2021. Today’s conference is being recorded. 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 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 disclosed in our filings with the SEC, including, without limitation, the risks under the heading Risk Factors described in our latest Annual Report on Form 20-F filed with the SEC. Galmed assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates only. I would now like to turn the call over to Allen Baharaff, President and Chief Executive Officer. Allen, please go ahead.

Thank you, Peter. Good morning, and thank you for joining us on today’s conference call. I am pleased to be here today with our Chief Scientific Officer, Dr. Liat Hayardeny, our Chief Financial Officer, Doron Cohen and Chief Accounting Officer Yohai Stenzler to provide you with an update on our clinical development programs, as well as report you on our financial results for the 2021 fourth quarter and full year financial results. As always, we will be happy to take any question you may have at the conclusion of our prepared remarks. On April 28 Galmed publish interim results from the open label part of the ARMOR Phase 3 study. As a quick reminder for those of you who are new to our story. The open labor part of the ARMOR study was designed to explore the effects side of the higher dose of Aramchol, for NASH induced fibrosis, and the kinetics of histological outcome measures as a function of treatment duration in preparation for the registration double blind, placebo controlled part of the study. In simple words, the aim of the open label study was to explore the speed and the extent of fibrosis reduction, testing the hypothesis that higher Aramchol exposure results in an improved efficacy profile. Acknowledging the complexity, variability and moderate reproducibility in liver pathology reading, the open label part was also used to further assess different methodologies that may support and improve fibrosis scoring. All slides were assessed using three histo pathological reading methodology. A central pathology committee scored the biopsies according to the conventional formal NASH CRN scoring system F1 to F4. Scoring was initially performed individually by the three independent pathologist, followed by consensus reading by the committee. To spare reading, maybe reflect real world pathological assessment. The same central committee was also…

Thank you, Allen. This morning I will be providing you with our financial results for the fourth quarter and year ended December 31 2021. For more information, please refer to our important Form 20-F filed earlier today with the SEC, which among other things provide a summary of such financial results. Our net loss for the three and 12-months ended December 31 2021 was of $7.5 million and $32.5 million respectively, compared with a net loss of $10.3 million and $28.8 million for the corresponding period in 2020. As a result, our loss per share for the three and 12 months ended December 31 2021 was $0.13 per share and $1.32 per share, respectively, as compared to $0.48 and $1.35 for the corresponding periods in 2020. Research and development expenses for the three and 12 months ended December 2021 totaled $6.3 million and $27.2 million. This compared with $9 million and $26.1 million for the corresponding period in 2020. Turning now to G&A. Our general and administrative expenses for the three and 12-months ended December 2021 totaled $1.2 million and $5.7 million respectively, versus $1.3 million and $4.1 million for 2020. During the three and 12-months ended December 31 2021 we had a net financial income of 0.0 5 million in 0.4 million, respectively, versus 0.1 million and 1.4 million during 2020. Our cash balance as of December 31 2021, which includes cash, cash equivalents restricted cash and marketable securities totaled $34.9 million. This compares with $51 million on December 31 2020. With that said, operator, please provide instructions for the Q&A portion of our call.

Yeah, apologies. Can you hear me?

Yes, we can hear you now. Hi, Steve.

Sorry about that, guys. Technical difficulties. Appreciate you taking the question. I wanted to ask about the histology data. I noticed you had two cohorts, 24 weeks and also greater than 48 weeks. And I wanted to ask if that meant patients just showing up a week or two late for the 48-week biopsy or if in fact that combines 48 and 72-week pair biopsies? And if so, could you break out sort of how many of each you had and maybe what data from 72 week biopsies would be forthcoming? Thanks.

Sure. So most of the patients came from the 48 weeks we did combine the 48 and 72 groups, approximately five patients came from the 72 and most of them came from the 48.

Can you comment on just the relative fibrosis improvement rates between 48 and 72 weeks? Thanks.

We think the numbers are too small for five patients to draw any conclusions. So -- but in general, what we've seen before in the small numbers of the 20 patient we see that also later on but we thought we just can't draw any real conclusions from five patients, so we prefer to group the two together.

Okay, thanks for taking my question.

Thank you. Our next question is from line of Kristen Kluska with Cantor Fitzgerald. Please go ahead.

Hi, good morning, and good afternoon. Thanks so much for taking my question. The first one I wanted to ask was on the second half of 2023 guidance in terms of the registration of study. So some of the factors that you cited are things that, of course, you as the company could control, like understanding which patient population to evaluate. But then some of the factors you cited were things out of your control. So you know, for example, understanding the biopsies is the primary surrogate endpoint. So just wanted to understand a little bit about this timeline and what you hope to understand from the field more broadly, by the time you plan to start this study next year.

So we believe the field is developing in the right direction. And we've in the recently there was a liver forum where the FDA presented and many of the pharma companies involved in the NASH space also participated. So we certainly see a very positive development. And the AI in particular is a very important one. But we feel that it is still from, as I said, I mean, with all the enormous effort and work that are done by the number of consortiums, both from academia and industry, trying to develop biomarkers and the better understanding of the biopsy reading, it is too risky now to initiate a registrational study when the primary endpoint is not very well defined. And we feel that we should wait and look. And we believe that in by the time that we plan the reinitiation, to reinitiate the study in the second half of 2023 means that we have to start working on that already early 2023. I hope that time, we'll see some positive signs coming from all these efforts that many participants are advancing. And we will also that will give us sufficient time to have a meeting with FDA, to discuss all these concerns and information to share with them the information, the FDA is extremely supportive. And we would like to show them the data that we have. I don't know if there are many companies that do this effort of reading the biopsies in three different methodologies. So this is very important data we've submitted this data is the latest breaker for easel. And it’s very valuable data for all NASH companies.

Okay, thank you for that. And then wanted to ask how some of the recent data that you shared last week, how you're thinking it could correlate the one daily Aramchol meglumine profile in light of some of the early PK work that you shared between the two drugs.

So as you recall, our uncle meglumine is circulated is out Aramchol. So the circling moiety is Aramchol. We're just talking about different kinds of formulation or a different dose. The advantage of Aramchol meglumine is that we'll be able to get to the same exposure that we see now with a twice daily 300mg with once daily 300 and something is running 80 about milligram of Aramchol meglumine, once daily. So this is a great advantage, both in terms of compliance, in terms of patients, the cost of goods, and the patterns of course. This has a very long patent as I alluded before. So simultaneously we are -- we continue the development of the meglumine, preparing it for the initiation of the double blind, but I don't really see any difference between the data between the two formulations Aramchol and Aramchol meglumine.

Okay, thanks. And then the last question for me was just on Amilo-5MER, you highlighted that over the next couple of months you might share some plans in terms of proof of concept study, but I just wanted to ask if you're still looking to first assess IBD, I know you first introduced Amilo-5MER to you had discussed a number of potential programs. Thank you.

So indeed, we developed the first formulation for Amilo-5MER, is an inter colonic oral formulation, and this is developed for IBD. Now, we look carefully the space and the competitive landscape. And we are trying to create kind of an edge for Amilo-5MER in this competitive landscape. So one of the possibility would be a combination with another compound which will ease the recruitment because we know that recruitment is very challenging, almost as much as challenging for NASH trials. But we can solve that if we do a combination treatment. And also the population which population are we targeting mild to moderate, moderate to severe. At the same time, we are also looking for the systemic exposure of Amilo-5MER, and once we will confirm that it will open for us a variety of other indications which 30 Amilo days plays a crucial role. And one, for instance, is FMF, Familial Mediterranean fever, but I can name others which are highly relevant for us. And we're trying to do it all inflammatory, looking for these inflammatory indications where Amilo-5MER can play important role.

Thank you, Allen.

Thank you, Kristen.

Our next question is from the line of Naz Rahman with Maxim Group. Please go ahead.

Hi, everyone. Thanks for taking our question. I have a few. First I'm going to start on your recent data on, so how you use the three different methodologies. Could you just sort of talk about what you started see as a clinical value of the different methodologies? And have you had any conversation with like KOLs or FDA on these methodologies on how the rates of fibrosis improvement were so different? Or, did you find that -- like KOLs are potentially the FDA would prefer like a more stricter, like, the more strict of sharing and methodology versus the AI methodology?

Yes, so thank you for the excellent question. All these methodologies are relevant to the question of sensitivity. And we need to really discuss the data with FDA. Galmed is under the opinion and together with the KOLs, I mean, this is something of course, we are consulting with the KOL, the AI company we use was highly recommended to us by KOL. I know that there are eight other abstracts which this company is going to present an easel for other NASH companies. So clearly they are the forefront of AI. Now, it -- we believe that there is a -- and I think we this is data that also presented but it certainly will be presented during AASLD is the correlation between the AI and reading, for instance, and the high correlation between AI and reading. And this is important because their reading is the closest methodology that we see for real life. And if we can support the pair reading together with AI, that would, I think the combination of the two, and potentially that can be also validated by biomarkers, non-invasive biomarkers, all of that can bring the NASH space and in particular people have the fibrosis effects into a different category. It's simply the NASH CRN is limited by definition. And as you may recall, in the hepatitis C-studies, the ranking was not done through NASH CRN, it was done by everything. And we are going back to the traditional quote unquote, reading that was used in Hep C clinical studies supported by the very novel AI technologies, which it shows the improvement that is normally missed by the human eye. So we are very excited and we try as much as possible to move away from categorical reading, F 1, 2, 3 into a continuous method, which is much more accurate.

You actually brought up with another point I was going to ask, during your analysis, did you find any biomarker correlation with the AI reading, or like any sensitive correlations with biomarkers and AI readings?

So I can't talk too much, because otherwise, AASLD would not give me my leg breaker. So unfortunately, I have to be very careful with the information that I disclose. But I can tell you these are very, very interesting. And I think what the interesting point is, again, as far as I know, our abstract is the first time that you have both the clinicians the key, the KOLs and clinicians, together with the leading histopathology on one paper, agreeing and raising the main issues and concerns and basically putting it in a very open and frank way, frank way the biopsy reading challenges, and hopefully that would support the entire space.

Just one last question. On Amilo-5MER, have you considered -- are you considering potentially partnering the product for future development and non-dilutive sources of financing?

Absolutely, absolutely. And thank you again, Justin, for this -- sorry, Naz for these questions. We -- Galmed is I think what we've demonstrated over the years, is our core competence is to advance those preclinical assets quickly into clinical, preferably Phase 1 and proof of concept studies. For longer studies, and Phase 2B, Phase 3 studies, collaborating with other biotech or pharma companies, I think, especially nowadays, is the right way to move forward. And we will continue and this is what we're trying to do is form coalitions of partners that are have the same, ideas that the and the -- with the idea to advance the assets as much as quickly as we can into clear advanced clinical studies, no matter whether it is a pharma or another biotech company.

Thanks for taking my questions.

Thank you. Our next question is from line of Ed . Please go ahead, sir.

Hi, can you hear me?

Yes. Hi, Ed.

Hi, Allen. Great. Thanks for taking my questions. First, I joined a bit late. But I understand that you were moving the timeline for the Phase 3 portion of our March the second half of next year. And having to do at least in part with did the defining of the primary endpoint and working with the FDA? Could you perhaps just give us a bit more detail on some of the criteria that you were reviewing as you were considering pushing this back? Just to give a better sense for why you felt this was necessary?

So, thank you, Ed. So to start with the screen fader. When you look at other NASH studies, including our study, the screen fader for the NASH studies is about between 80% to 90%. It means you have to biopsy 10 patients in order to get one eligible patient. I don't think that running for you know and in order to run into a 1000 patient, people to study you would need to biopsy 10,000 patients. It is something which I don't think no one should expect. And we should wait and see and find together with everyone who is working on biomarkers validated biomarkers How to reduce these numbers into sensible numbers. Because this not only for the cost of the study, but also I'm seeing over the patients, all these patients that need to do the unnecessary biopsies, and the frustration of the both the DI and the patient. And we're looking for a method better, with a better sensitivity will allow a smaller sample size, for instance, AI. So this is start with these clinics. And then moving towards the end of the study the results, you can't run a study when the rules of the -- I will say, we started playing basketball, and we are moving and playing hockey, or cricket. I mean, this is something which is again, when you see the discrepancy between the different methodologies. And no one can -- and there is no clear guidance, which one is the one that we should use? This is probably the reason why we see so many NASH studies have failed. So these two myself, I think demand in addition what I've said earlier, the ability to better design the study, think about the population, whether we should go for more advanced population, whether we should go for two smaller studies, rather than one large pivotal study, whether we should test combination. And there's still no guidance on combinations. How do you argue include a combination arm in the kind of pivotal study? So I hope that by the time that we initiate the reinitiate, the double blind part of the study, we will get answers to all these questions.

Okay, great. So the next question is, regarding your data, your initial data out of fibrinous and the fibrosis composite score, obviously, truly compelling data on the reduction of at least 0.3 units over that time period. And I understand that this does not correlate well with the NASH CRN definition of histology. And in fact, if you were really trying to devise a better method, you wouldn't necessarily want to have it correlate to histology. So you have in the end, and have the space has had for several years’ sort of attach '22, trying to move away from histology and yet still having to correlate to it. So the question is, with this data in hand, are you intending to have discussions with the FDA to say basically moving to essentially a better method and not having to continue to tie things to a biopsy? Or is the FDA more inclined to listen to some of these groups like in the U.S. and Europe that are large data base of patients that are being worked on over several years.

So thank you. So I think this is a very important question. We are trying to move from a categorical method into a sequential method, which by definition is more sensitive and more accurate. And hence we can also demonstrate the P value but you cannot demonstrate or categorical number. I think that in the first stage, it could be a combination of with AI support. You know that FDA has now already allowed to use AI as a false reader. There's another AI reading but this is not good enough. Because that keeps us to the NASH CRN and creates additional employees. And we are not alone. As I said eight other abstract is out. Large pharma, in the same and trying to better find, and together with FDA, find ways in which we can use the biopsies. And because I don't see in the near future, the any validated biomarkers that can replace the biopsies, but still use the biopsies and then using it in a different way, as I said before, for instance, a combination of the paired and AI. Now, we fix that plan correlations between methods. So, for example, the 24 is method and 48. So, there is very, very clear and data sets that we already see from these numbers, notwithstanding the fact that we are using three different methodologies. And this is across -- this is by the way across all methodologies. 24 -- the 48 better than 24 is the direction is the same. So, whether it's CRM, paired, or AI, you see, directly is the same. And this gives a lot of confidence in the paired and AI.

Great, thanks, Allen. Thanks for taking my questions.

Thank you, ladies and gentlemen, we have reached the end of the question and answer session. And I would now like to turn the call back to Allen Baharaff for closing remarks.

So thank you very much, everyone for joining our today's call. And, as always, we're available for any follow up questions. And we look forward to seeing you on next 2023 first quarter call, which is just around the corner -- sorry, 2022 first quarter call. Thank you all. Bye-bye.

Thank you. This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.