As part of the deal, Gilead will pay Phenex an upfront payment plus additional payments based upon achievement of certain development milestones that may potentially be worth about $470m.
NASH is characterized by inflammation and excessive fat accumulation in the liver and may lead to progressive fibrosis, cirrhosis and liver failure.
The company said that FXR is a nuclear hormone receptor that regulates bile acid, lipid and glucose homeostasis, which can help reduce liver steatosis and inflammation as well as may help prevent liver fibrosis.
Phenex Pharmaceuticals CEO Dr Claus Kremoser said: "This agreement represents a significant milestone for our company and for the field of liver disease research.
"After 15 years of research, FXR is now one of the few clinically validated targets for NASH and we are delighted that Gilead will be continuing the research necessary to more fully realize its potential for advanced liver disease."