Lumos Pharma Q2 2024 Earnings Call Transcript

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August 1, 2024

There are 11 speakers on the call.

Operator

Good afternoon, and welcome to Lumos Pharma's 2nd Quarter 2024 Financial Results and Clinical Programs Update Call. Currently, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I will now turn the call over to Lisa Miller, Vice President of Investor Relations.

Speaker 1

Thank you, operator. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward looking statements under U. S. Federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

Speaker 1

Additional information concerning factors that could cause actual results to differ is contained in our periodic reports filed with the SEC. Forward looking statements made during this call can speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward looking statements. Information presented on this call is contained in the press release we issued this afternoon and in our Form 10 Q and 8 ks, which may be accessed from the Investors page of the Luma's Pharma website. Speaking on today's call will be Rick Hawkins, CEO and Chairman John McHugh, President and Chief Scientific Officer and Lori Lalley, Chief Financial Officer. Doctor.

Speaker 1

Duke Pratyukchwanand, our Chief Medical Officer, will also join the call for the question and answer section. It is now my pleasure to turn the call over to Rick for our opening remarks.

Speaker 2

Thank you, Lisa, and good afternoon, everyone. I'm pleased to be speaking with you today to provide an update on our progress advancing LUN-two zero one as the first oral therapeutic for moderate pediatric growth hormone deficiency or PGHD. During the Q2 and recent weeks, we've made significant progress in advancing our plans for a Phase 3 pivotal trial of LUNK-two zero one in PGHD. Following a very positive and productive end of Phase 2 meeting with the FDA, we've nearly finalized our proposal for a Phase 3 double blinded placebo controlled clinical trial with a 2:one randomization in approximately 150 patients. The FDA's input has been instrumental in shaping our proposed trial design, acknowledging LINC-two zero one's unique mechanism as a growth hormone secretagogue and recognizing that a placebo controlled clinical trial is an appropriate approach for Phase 3.

Speaker 2

We expect to finalize the design details in the Q4. Prior to our meeting with the FDA, we had not developed plans for manufacturing a placebo to match our patented form of LUM-two zero one. Now with the decision to move forward with placebo controlled Phase 3 trial, additional time is required to complete the manufacturing process and create the placebo match materials necessary for use in the study. Consequently, we're extending our intended timeline to initiate Phase 3 into the Q2 of 2025. And this extension also allows all of us to continue managing our cash resource prudently and extend our cash runway.

Speaker 2

Additionally, in today's press release, we announced that we have engaged Piper Sandler to explore all strategic opportunities to maximize shareholder value and advance the Loom201 platform. Our regular ongoing business development activities have generated significant interest in the global potential for Loom201 in multiple markets. Given this positive feedback, we felt it was the right time to formally engage Piper Sandler to ensure we're thoroughly exploring every potential transaction and opportunity that serves our shareholders' best interest. We're confident in LUMETULO-one's potential as the 1st oral therapeutic in the expanding $5,000,000,000 global growth hormone market. We're going to continue to focus our efforts on optimizing value for all of our stakeholders.

Speaker 2

In a moment, Don and Lori are going to provide more details on this and other measures we're implementing to ensure we're well prepared to successfully initiate this trial next year. In the Q2, we're pleased to see new analyses of data from our ORV-two twelve trial presented at end of 2024. The data emphasize the significance of the pulsatility pattern and growth hormone secretion for the growth response from LUM-two zero one. They further illustrate LUM-two zero one's unique ability to restore natural pulsatile growth hormone secretion, achieving similar to injectable recombinant growth hormone with significantly less exposure to circulating growth hormone. These findings strongly support our planned placebo controlled Phase 3 trial of LUNG-two zero one in moderate PGHD.

Speaker 2

Top line results from the oral growth trial were presented at 3 major endocrinology conferences in May this year. At the Pediatric Endocrine Society meeting in Chicago, Doctor. Andrew Dauber highlighted data showing that LUM-two zero one at a dose of 1.6 mgs per kg a day achieved annualized high velocity comparable to daily injectable growth hormone and PGSD with a promising safety profile. Meanwhile, at the Growth Hormone Research Society and the European Congress of Endocrinology, Doctor. Peter Clayton presented detailed analysis of LUN-two zero one's effectiveness in restoring growth hormone secretion and increasing annualized high velocity in moderate PGSD patients.

Speaker 2

The evolving data from our oral growth trials continue to attract significant interest from the global endocrinology community and we're encouraged by the growing enthusiasm from experts eager to participate in our Phase 3 trial as we finalize our plans. Now I'm going to turn it over to John McHugh for more details on our engagement with the FDA and our Phase 3 planning. John?

Speaker 3

Thanks, Rick, and good morning and good afternoon, everyone. As Rick mentioned, following our productive end of Phase 2 meeting with the FDA, we have been diligently designing a placebo controlled Phase 3 registrational trial. Based on the FDA's recommendations and insights from our regulatory consultants, key opinion leaders and statisticians, we have crafted a trial design aimed at maximizing the likelihood of success. This trial will involve approximately 150 patients at over 80 global centers, the 2:one randomization ratio of LUM-two zero one to placebo. 1 group will receive LUM-two zero one for 12 months, while the other group will start with a placebo for 6 months and then cross over to LUM-two zero one for the remaining 6 months.

Speaker 3

All participants must meet our PEN positive criteria during the screening process before randomization. This Phase 3 trial aims to achieve 2 key strategic objectives. The first is to provide the FDA with a comprehensive data from a blinded controlled trial to support the evaluation approval of LUM-two zero one. The second is to ensure that all participants receive LUM-two zero one at some point during the study, enhancing its appeal to both patients and physicians for enrollment.

Speaker 4

The study

Speaker 3

will have 2 co primary endpoints. The first would be to demonstrate the superiority of LUM-two zero one in annualized height velocity compared to the growth on placebo. 2nd co primary would be to ensure that the AHD of LUM-two zero one has a lower bound of the 95% confidence interval above 6.7 centimeters per year, which is the minimal clinically meaningful AHV agreed upon with the FDA. Following the 12 month treatment period, all participants will have the option to transition into a long term safety extension, receiving wound to own treatment for up to 3 years. We believe this extension will be a compelling feature for enrollment and will help fulfill FDA's requirements for longer term exposure.

Speaker 3

We are confident that the trial is sufficiently powered to achieve the 2 co primary endpoints. We are currently finalizing the design proposal and expect to secure final agreement with the FDA in the Q4. A key component of the trial is the manufacturing of the placebo material, which we began after our end of Phase 2 meeting with the FDA. As Rick mentioned, the placebo needs to be a capsule filled with many tablets that exactly match the presentation of active LIGO-one capsules. Additionally, we must establish all standard stability data for this newly created placebo.

Speaker 3

Although we began work on these elements promptly, producing the initial batches that met these specifications took longer than anticipated. Consequently, we chose to postpone other preparatory steps for trial initiations to manage our cash reserves effectively. We believe this is a prudent use of resources and expect to be fully prepared to launch Phase 3 in the Q2 of 2025. With the careful attention given to the trial design, we are confident in our ability to enroll patients in this pivotal trial in a timely manner. With that, I will turn it over to Laurie for a review of our financial results for the Q2.

Speaker 5

Thank you, John. We ended the quarter on June 30, 2024 with cash, cash equivalents and short term investments totaling $16,800,000 as compared to 36,000,000 December 31, 2023. As Rick and John have discussed, we are managing our cash resources conservatively By extending the initiation date of our Phase 3 trial into the Q2 of 2025, we have also extended our cash runway through into the Q1 of next year. We will continue to manage our resources carefully and work with Piper Sandler to explore our opportunities to ensure we are well prepared to launch the trial effectively when the time is right. Research and development expenses for the quarter were $4,600,000 a decrease of $1,400,000 for the quarter ended June 30, 2024 compared to the same period in 2023, primarily due to decreases of $1,100,000 in contract manufacturing expenses, dollars 300,000 in personnel related expenses and $200,000 in clinical trial expenses, offset by an increase of $200,000 in consulting expenses.

Speaker 5

General and administrative expenses for the quarter were $3,700,000 a decrease of $500,000 compared to the same period in 2023, primarily due to decreases of $200,000 in personnel related expenses, dollars 100,000 in travel, dollars 100,000 in consulting and $100,000 in other expenses. The net loss for the quarter ended June 30, 2024 with $7,600,000 compared to a net loss of $8,900,000 for the same period in 2023. Lumos Pharma ended Q2 2024 with 8,123,186 shares outstanding. With that, I will now turn it over to Rick for his closing remarks.

Speaker 2

Thank you, Lori and John. And as we mentioned at the start of the call, it's been an exciting and productive period for Lumos. Again, we're thrilled by the outcome of the end of the Phase 2 meeting with the FDA. In recognition that LOOP-two zero one is not another growth hormone mimetic, the FDA's guidance supporting a placebo controlled trial, we believe has significantly derisked our program. We're progressing toward initiating a Phase 3 registrational trial and achieving our goal of establishing MUTU-one as the first oral therapeutic capable of transforming the global growth hormone market, which has been dominated by injectable products for nearly 40 years.

Speaker 2

We anticipate some very exciting developments throughout this year and look forward to keeping you informed about our progress. Thank you all very much. And operator, we're ready to take questions.

Operator

We will now begin the question and answer session. Our first question will come from Catherine Nowak with Jones Trading.

Speaker 4

You may now go ahead.

Speaker 6

Hey, good afternoon, guys. It's exciting that you're able to get the Phase 3 trial design nailed down with the FDA. But I wanted to ask about your expectations for enrollment dynamics. How long is it going to take for you to enroll 150 patient study? And given that it's a 12 month study, should we not be expecting data until late 2026, 2027?

Speaker 6

When are we going to see updates from this?

Speaker 2

So, Duke, will you answer that question and recall Duke is our Chief Medical Officer and he's a pediatric endocrinologist. Thank

Speaker 7

you. Thank you, Catherine. That's a good question, right? So when we have the trial DECIDE placebo controlled trial, we have been looking to diligently about where the site might be. So as you know, this type of placebo controlled trial, we want to make sure now to meet the timeline 15 to 18 months like what we planned.

Speaker 7

We do believe and be confident we can get that task in that durations complete. What we plan to do is that we try to enroll the patient in different continent, especially we go including Latin America and Asia and Southeastern Europe. In those areas, we have limited access to growth hormone. And we do believe that by include some of those area, we will be able to enroll those patients. Not to mention when we announced the placebo controlled trial, the last year earning call, we have influx of interest of the physician who interest to be part of our Phase 3.

Speaker 7

We have more than sight that we need. So with expected 150 subject, 80 to 100 patient and we do believe that with 15 to 18 month enrollment, we can achieve that pretty easily.

Speaker 6

Got it.

Speaker 7

Is that what is another go ahead.

Speaker 6

Sorry. Okay. And then sort of a strategic thought, assuming you are able to secure additional financing, are there other opportunities you could explore in the meantime to compensate for a data catalyst or data shadow from PGHD?

Speaker 2

Well, Catherine, we're completely focused on PGHD, obviously. Yes, there are other indications that are out there for us to explore, but we're going to do a prudent use of our capital to focus on where we're going to get across the finish line first. And I don't know, Laurie, if you have any additional thing you want to add to that?

Speaker 5

No. I think you covered it well, Rick. I think as we suggested, our goal is to manage cash conservatively and ensure that we are extending our runway to support operations and evaluate all opportunities at hand.

Operator

Our next question will come from Leland Gershell with Oppenheimer.

Speaker 4

You may now go ahead.

Speaker 8

Hey, good afternoon. Thanks for taking my questions. Just wanted to ask, Rick, it sounded from your commentary around the potential goals with the strategic opportunities that you could be looking at, but maybe ex U. S. Deals for ILUM-two zero one and then initial monies from those deals could help fund your registration trial.

Speaker 8

Is that a reasonable scenario? Thanks.

Speaker 2

Yes, it's reasonable. But you have to remember, Leland, on a regular basis, our business development folks have been generating a significant amount of interest on global potential of MOVE-two zero one in multiple markets. And we've gotten a lot of positive feedback. And as a result, we felt it's probably the right time to engage an investment banker to make sure that we explore every one of these opportunities and any kind of potential transaction or opportunity that really serves all of our shareholders best. So as a result, I think it's easy to say we're in a lot of different directions we can go.

Speaker 2

We're in active discussions with not just investors, but as you pointed out, strategics have been interested for quite some time, both for maybe either global and also their regional players. But we're going to really choose the right deal or combination of deals that provide just

Speaker 3

the highest

Speaker 2

value to our shareholders at the lowest cost of capital that we can. Now I can tell you we're as a Phase 3 ready asset in a $5,000,000,000 market that we offer some really significant advantages, not just the fact oral delivery, but unique mechanism of action. I think we're feeling pretty good about our position right now.

Speaker 8

Okay. Thanks. That's helpful. And then just wanted to ask, I believe you have there's an ongoing study on the academic side in nonalcoholic study of liver. Just wanted to see if there's any update you can provide there.

Speaker 8

Thank you.

Speaker 2

Not much of an update except to say that the study is progressing in non alcoholic fatty liver disease with our clinician at MGH. And as you know, I think we have a potential in the cardiometabolic space as a combination product. And we have some very interesting data that tells us we should spend more time there. And I think this study will also help us get to the next stage.

Speaker 8

Great. Terrific. Thanks very much for the added color.

Operator

Our next question will come from Charles Duncan with Cantor Fitzgerald.

Speaker 4

You may now go ahead.

Speaker 9

Good afternoon, Rick and team. Thanks for taking our question. And let's see, I guess, congratulations on the recent end of Phase 2 meeting. I guess we've talked about that a little bit in the past, but I wanted to ask you a couple of more questions about that. Do you plan or are you contemplating an interim review to look at conditional power?

Speaker 9

Is there any natural cut point in which you may take a look at the patients enrolled and what kind of rates you're seeing in terms of annual height change, even just on a blinded basis? Is there any news flow during the conduct of the trial that you could point to?

Speaker 2

John, do you want to answer that question?

Speaker 3

Hi, Charles. No, we do not plan to take an interim peak. Not a great idea for the Phase 3 study even in a blinded sense, but we do we will keep the data as pure as we can going forward.

Speaker 9

Okay. Appreciate the rigor. The other question that I had with regard to operationalizing that protocol, I get what you're saying in terms of manufacturing the placebo because that was a new and in many ways positive twist to the plan. But I'm kind of wondering between now and second quarter, what are some of the rate limiting steps? Is it possible that your second quarter goal is not June, it's maybe April or help us understand the path to getting this trial underway?

Speaker 2

Yes. John, I want you to answer that question too.

Speaker 3

So while we are finalizing the protocol with the FDA, we are doing quite a bit of pre work right now. We are looking at sites, identifying investigators, identifying the best regions to work at, finalizing our placebo work, right. And as we transition to having an FDA approved protocol towards the end of the year in Q4, then we start the regulatory reach out for all the ex U. S. Regulators.

Speaker 3

We go to the EMA, we go to some of the other regions. And then that starts the process of us negotiating contracts and budgets with each one of the 80 plus sites that we intend to have in the Phase 3 trial. So I think there really is quite a bit of work for us to do after the FDA finalizes the design with us that will take us that period of time. Q2 is 3 months long, so we'll be in that window. I don't have any more precise estimates for each person.

Speaker 9

Okay. And then with regard to the FDA finalizing the protocol, if you will, as you just mentioned, are there any outstanding issues? Do you see this as a Gantt chart thing? Or do you believe there are points of, call it, debate that you really want to get their input on? At this point, do you have full alignment?

Speaker 2

Pete, please continue, John.

Speaker 3

Yes. I do think there's points of clarification on the specifics of the design. And remember, we have to proceed with the FDA's timelines for back and forth interactions, right? So that's really where we are right

Speaker 9

now. Okay. My last question is perhaps for Laurie. I'm wondering if you've been able to put pen to paper. I imagine you have been able to subsequent to the end of Phase 2 meeting to kind of plan the budget for this trial.

Speaker 9

And I'm wondering where you're landing in terms of all in capital or cash needed to at least complete enrollment?

Speaker 2

Sure. Go ahead, Maury.

Speaker 5

Sure. So if you recall, Charles, and great to talk with you today, we previously have said and we've continued to say about $85,000,000 to $100,000,000 will support operations through 2026. And so that has been the goal in terms of the capital we're looking to bring in to finance the Phase 3 and to initiate the Phase 3 trial. As we initiate and finalize the plans with the FDA, we'll issue additional guidance around timelines from an enrollment perspective and we may update those numbers as we finalize that trial design.

Speaker 9

Okay. That's great. No, I didn't recall that. So I appreciate you reminding us. So, thanks for taking the questions.

Speaker 3

Thank you, Charles.

Speaker 5

Thank you. Our next

Speaker 10

good afternoon team. This is Jung Vu on for Yas. Thanks for taking our questions. First, could you remind us of the rationale for the formulation change from Phase 2 to Phase 3? Do you need to do any additional bioequivalence studies with the mini tablets?

Speaker 10

And secondly, could you provide a little bit more color on what types of potential strategic opportunities are considering at this juncture? Thank you.

Speaker 2

I'll let you go first, John, in terms of bioequivalents or any other types of studies.

Speaker 3

Yes. So the rationale for the change in formulation was really 3 fold. So we wanted to if you remember, we are dosing by weight across a wide rate range with an oral product. So switching to this mini tab in a capsule allows us to make 3 different dosage strengths by just varying the number of many of the same many tablets inside a capsule that allows us to have a much tighter dose variance across that large weight range. And it also gives us the opportunity for several different routes of administration.

Speaker 3

The larger kids and the older kids who are able to swallow a capsule or able to just take their capsules, the younger children who might have a harder time can open the capsule up and take a mini tablet or even a mini tablet in a soft food like puree banana that will ease kind of the treatment burden across that whole age range that we're talking about in our trial and commercially. And yes, there would be a bridging PK study that we have already completed.

Speaker 2

So to answer your the second part of the question is, yes, you can imagine, I mean, our BD folks have done a great job and outreach to all the markets. And they've really generated considerable interest and we've had ongoing discussions. Once again, we can't be specific about those discussions, but say that at least that they're not only strategic in strategic markets, but even beyond. So both global and regional type of players who are interested. We're going to be very careful and look at all the possibilities and potential deals that are on the table and a combination of whether it be financing or strategic, it's really going to be an interesting exercise over the next coming weeks months.

Speaker 2

I can leave it at that.

Speaker 10

All right. Thank you very much. That was very helpful.

Operator

This concludes our question and answer session as well as the conference. Thank you for attending today's presentation. You may now disconnect.

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