Lumos Pharma Inc (LUMO) 2022 Q2 法說會逐字稿

Good afternoon, and welcome to Lumos Pharma's Second Quarter 2022 Results and Clinical Update Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I will now turn the call over to Lisa Miller, Senior Director of Investor Relations.

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. Additional information concerning factors that could cause actual results to differ is contained in our periodic reports filed with the SEC.

The forward-looking statements made during this call 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 8-K, which may be accessed from the Investors page of the company's website.

Speaking on today's call will be Rick Hawkins, CEO and Chairman; John McKew, our President and Chief Scientific Officer; Dr. David B. Karpf, our Chief Medical Officer; and Lori Lawley, our Chief Financial Officer. I will now turn the call over to Rick.

Thank you, Lisa, and good afternoon, everyone, and thank you for joining us on today's call. So after the market closed today, we issued a press release announcing our financial results for the 2022 second quarter and detailing our progress advancing our clinical program evaluating LUM-201 for the treatment of idiopathic or moderate pediatric growth hormone deficiency or PGHD.

On today's call, I'll provide a brief update on LUM-201 clinical trials and other developments before turning it over to Lori Lawley for a review of our financial results. Then John and David will join us for a Q&A session.

I'm pleased to report that the enrollment trends we highlighted on our last call for our OraGrowtH210 and 212 trials have continued and are able to confirm our intention to announce interim data from both trials in the fourth quarter of this year. Additionally, we expect the primary outcome data readouts for both trials in the second half of 2023, which we expect to include data at 80 subjects from the OraGrowtH210 trial and up to 24 subjects anticipated from our OraGrowtH212 trial.

Our interim analysis from the OraGrowtH210 trial will provide an early look at the safety and annualized height velocity or AVH -- or AHV data at 3 dose levels of LUM-201 compared to a standard dose of recombinant human growth hormone in 40 patients at 6 months on therapy. And as we approach interim data readout, I want to take a moment to explain what we'll be looking for in the data.

As most of you know, OraGrowtH210 is a global, multisite, blinded, active control clinical study evaluating oral LUM-201 in approximately 80 subjects diagnosed with idiopathic or moderate PGHD. The primary clinical outcome is annualized height velocity at 6 months on LUM-201 for subjects selected by our Predictive Enrichment Marker or PEM strategy compared to the control arm of subjects treated with recombinant growth hormone.

So the data signal we will be looking for will be the annualized height velocity in these PEM-positive subjects versus the recombinant growth hormone control arm, not historic comparisons to the height velocity in other trials that typically enroll more severely growth hormone deficient subjects.

It's also worth noting that OraGrowtH210, like all of the 6-month Phase II trials in the growth hormone space is not powered to show noninferiority. The OraGrowtH210 trial is different from all prior PGHD registration studies. This study is in risk to include only PEM-positive idiopathic or moderate PGHD subjects. Our trial does not include individuals with more severe organic PGHD. Now this is important because it's well known that more severe PGHD subjects respond better to recombinant growth hormone than do moderate PGHD subjects. Therefore, the annualized height velocity values we would expect in the more moderate idiopathic patient population enrolled in our trial will be lower in all treatment groups compared to, for example, prior long-acting growth hormone studies.

You will recall that the overall goals for the OraGrowtH210 trial are: one, to identify the optimal dose of LUM-201 from 3 dose levels that is 0.8, 1.6 and 3.2 mg per kg a day to be used in a Phase III registration trial; and two, for the annualized height velocity to be numerically comparable to the recombinant growth hormone control arm in this trial; three, to validate our PEM enrichment strategy; and finally, four, to confirm safety and tolerability of LUM-201. And as we begin to plan for a single Phase III trial required for approval, we expect that its design will mirror prior pivotal trials for growth hormone deficiency therapies conducted by our peers.

We therefore anticipate enrolling approximately 150 to 200 subjects in our pivotal trial randomized 2:1, LUM-201 to a control arm of daily injectable recombinant growth hormone. The subjects will remain on therapy for 12 months at which point height velocity and safety data from both cohorts will be obtained. Again, the LUM-201 dose administered in our Phase III trial will be determined from our Phase II OraGrowtH210 trial results. These details are obviously subject to the approval of the FDA and other health authorities, and we will engage the agency in discussions about the trial design at the appropriate time.

As I mentioned earlier, our upcoming interim data readout will also include data from our OraGrowtH212 trial, our single-site open-label trial evaluating the pharmacokinetic and pharmacodynamic effects of LUM-201 in up to 24 PGHD subjects at the 2 higher dose levels of 1.6 and 3.2 mg per kg a day. The objective of the 212 trial is to confirm prior clinical data demonstrating the amplified pulsatile release of endogenous growth hormone unique to LUM-201 and the potential for this mechanism of action to increase growth hormone secretion across the entire dose response curve in the majority of PGHD patients. The primary endpoint for this trial is 6 months of PK/PD data with an additional height velocity data also being assessed at 6 months and from the extension of this trial to follow subjects to near adult height.

We also expect to announce the interim data from the OraGrowtH212 trial in the fourth quarter of this year. For the interim data readout, comparability of baseline characteristics of subjects in each study will determine whether it is appropriate to pull the annualized height velocity data from the OraGrowtH210 and 212 data sets for a combined analysis. The primary outcome data readout for OraGrowtH212 is anticipated around the same time as the primary data readout for the OraGrowtH210 trial in the second half of 2023, and we expect this OraGrowtH212 data set to include data in up to 24 subjects.

Last quarter, we announced the initiation of our OraGrowtH213 trial, or the Switch study. This is an open-label, multicenter, Phase II study evaluating the growth effects and safety of LUM-201 following 12 months of daily recombinant growth hormone in up to 20 PGHD subjects who have completed the OraGrowtH210 trial. Subjects will be administered LUM-201 at a dose level of 3.2 mg per kg a day for up to 12 months. Primary outcome for the 2013 trial is annualized height velocity. Secondary outcomes include safety and PK/PD measures. This trial continues to enroll subjects from the OraGrowtH210 trial.

Now before turning to other updates, I want to touch on 2 operational matters related to our clinical trials. We announced last quarter that we had suspended enrollment at our OraGrowtH210 clinical sites in Russia and Ukraine due to ongoing conflict. Fighting in the region has continued, so we have decided to formally close these sites. And as a reminder, no subjects were enrolled at these sites prior to their suspension, so we do not expect these closures to impact our target data timelines. We're adding a few sites in the United States, which should allow us to maintain our original enrollment timelines.

And additionally, as many -- as you probably know, COVID cases continue to have risen again, both in the U.S. and internationally, and the disease continues to be unpredictable. Fortunately, the world continues to adjust to the presence of COVID and we, therefore, do not believe that the ongoing pandemic will alter our current clinical development plan. We will, of course, continue to monitor the situation closely.

As our clinical trials advance toward data readouts, we're noticing significant interest in the potential of LUM-201 building within the wider PGHD research community. Attendees at both the Endo Conference in June and the Magic Foundation Meeting in July advise us that they are following our progress closely and are looking forward to our interim data readout. Last quarter, we announced that renowned pediatric endocrinologists, Dr. Pisit Pitukcheewanont or Dr. Duke, as we call him, joined our Medical Affairs leadership team. Dr. Duke recently attended the Human Growth Foundation Gala and has been holding investigator meetings in both the U.S. and internationally and he has observed this growing interest as well. We believe that this reflects the desire among health care professionals for an alternative to daily or weekly injections of growth hormone to treat PGHD patients.

Feedback, I can tell you at this nature goes beyond mere buzz. Based on discussions we're having within the broader PGHD community, we believe that the availability of an oral option to treat PGHD has the potential to expand the overall market. Considering the hesitance of some parents had been when faced with the treatment of burden of daily or weekly injections involved with current standard of care, it's not surprising that an oral option may be more attractive.

This is especially true in the more moderate cases that LUM-201 is intended to treat or the exact patient population we are enrolling in our current trials. We look forward to working with both the health care professionals and the PGHD patient community to raise awareness about LUM-201 programs and the potential of this drug to be a real game changer in this space.

Now turning to the collaboration we announced last quarter with [Dr. Laura Dickel] and Massachusetts General to explore the potential of LUM-201 in patients with nonalcoholic fatty liver disease, or NAFLD. This investigator-sponsored pilot trial is a single site, 6-month, open label study of daily oral LUM-201 in adults with NAFLD. The trial has been rapidly prescreening patients and should begin enrollment in the near future. Again, this pilot study will evaluate a dose of 25 mg a day of LUM-201 in 10 subjects with nonalcoholic fatty liver disease or NAFLD and relative IGF-1 deficiency. Prior studies evaluating growth hormone in this indication have been promising, supporting the potential for oral LUM-201 to address this condition.

And while we remain focused on our core LUM-201 program in PGHD, we are pleased to support Mass General's exploration of LUM-201's potential in this indication, the condition estimated to be prevalent in approximately 25% of adults worldwide, which can often advance to the more serious liver diseases and result in need for a liver transplant. Now as we have mentioned, we continue to explore expansion opportunities for LUM-201 and other conditions where injectable recombinant human growth hormone is a standard of care. We believe that LUM-201 is a pipeline and a product.

And through its unique mechanism of action, may have the potential to be efficacious in indications such as Turner syndrome, Prader-Willi syndrome, idiopathic short stature and children born small for gestational age. We're actively reviewing potential clinical development plans for LUM-201 in several of these indications and believe that interim data from our OraGrowtH trials should clarify the direction we take. We continue to be judicious in our pursuit of rare disease assets beyond LUM-201 with careful attention to shareholder value creation. That said, our priority remains LUM-201 and its development.

And with that, I'm going to pass it over to Lori for a review of our second quarter financial results. Lori?

Thanks, Rick, and good afternoon, everyone. For the quarter ended on June 30, 2022, we had cash and cash equivalents totaling $79.5 million compared to $94.8 million on December 31, 2021. We expect average cash use of approximately $8.5 million to $9.5 million per quarter through the remainder of 2022. Cash on hand as of the end of our second quarter is expected to support our operations into Q2 2024.

Research and development expenses were $4.6 million for the second quarter, an increase compared to $4.1 million for the same period in 2021, primarily due to an increase of $0.3 million in personnel and stock option expense and $0.3 million in legal and consulting expenses, offset by a decrease of $0.1 million in clinical trial and contract manufacturing expenses.

General and administrative expenses were $3.7 million for the quarter ended June 30, 2022, a decrease as compared to $4.6 million for the same period in 2021, primarily due to decreases of $0.6 million in personnel-related expenses, $0.4 million in stock compensation expenses and $0.3 million in legal and other expenses offset by an increase of $0.3 million in royalty expenses. The increase in royalty expenses were due to fees paid to the Public Health Agency of Canada as a result of royalties earned of $0.4 million from Merck for the sale of Ervebo, the Ebola vaccination.

The net loss for the second quarter was $7.8 million compared to a net loss of $8.7 million for the same period in 2021. Lumos Pharma ended the second quarter with 8,377,567 shares outstanding.

I will now turn it back to Rick for closing remarks.

Thank you, Lori. And so during our second quarter, we continued to execute on our plans for LUM-201. Enrollment trends for our OraGrowtH trials continues to be positive. This is a very special time in the history of Lumos Pharma. We're excited to be able to announce the results of our interim analyses from 2 Phase II studies evaluating oral LUM-201 in our fourth quarter. The therapeutic -- the potential of LUM-201 continues to garner attention in both clinical and patient communities. Our cash position is solid, sufficient to carry us into the second quarter of 2024 beyond both the interim readouts in Q4 of this year and the primary outcome data readout for OraGrowtH210 and OraGrowtH212 in the second half of 2023. Once again, it's an exciting time for Lumos Pharma as we look forward to providing interim results by the end of this year.

Operator, we're now ready to take questions.

(Operator Instructions) Our first question comes from Charles Duncan from Cantor Fitzgerald.

Rich and team, congratulations on the progress. Had a couple of questions about the OraGrowtH210 study. I guess, I'm wondering if -- as you characterize enrollment patterns in second quarter, can we assume that those are continuing roughly the same into the third quarter despite some of the kind of usual summer slowdown?

And then you mentioned the height, not setting highly severe PGHD and really looking at moderate levels. So could you let us know what you would anticipate as a good result out of those particular patients even just responding to recombinant growth hormone?

David, why don't you proceed with that question?

Sure, Charles. Both great questions. So to the first question, as far as the enrollment, your assumption is correct. It's -- it does not appear to have been any slowdown in enrollment and it is -- that is why we can really -- where we reported the enrollment is still going very, very well.

Yes. And again, it's really important to understand that PGHD writ large is primarily combined of 2 subsets. 35% to 40% of the kids have organic GHD, which is indicated by an abnormality at MRI involving pituitary usually or occasionally can result from a brain cancer radiation therapy, knocking off all the equivalent producing cells. About 2/3, 60%, 65% of the population has so-called idiopathic GHD, which means nonorganic. Idiopathic basically means you don't know why they have GHD. Although it's felt now to be probably a hypothalamic dysregulation, because the hypothalamus controls with pituitary. And that's tailor-made really for a compound with the mechanism of LUM-201, which really binds to the growth hormone secreting or hormone receptor in the hypothalamus as well as pituitary and also suppresses somatostatin. So by both those actions, it enhances normally more to growth hormone.

So as far as the question about what kind of growth we expect. When we look at the studies that have been done in the past, that have evaluated this and we've looked at a cut of the GeNeSIS database that we've reported previously and is published where we have kids that basically meet the requirement for our studies and ultimately look at a study that was published actually in Spanish group where they enrolled 100 kids with idiopathic GHD. The response to the standard dose of growth hormone really are aligned in both of those analyses, and it's right around 8.3 centimeters per year, which is somewhat less than what you see in the more severe GHD kids that can grow 10, 10.5, et cetera, centimeters per year.

So many, many studies over the past 30, 40 years have demonstrated that the more severe the GHD, the better response to growth hormone. So kids that are severely GHD can basically wave the bottle over them -- they'll grow. They grow perfectly well on much less than standard doses of growth hormone. Doses as low as 0.16 to 0.18 mg per kg per week versus standard in the trial, 0.24. And the average in the U.S. is probably 0.28, 0.3 mg per kg per week.

And so all these studies show that if you are younger, if you have more lower growth hormone peak response stimulus at less than 3, which is exclusionary for our study. the lower your IGF-1 SDS, the farther away you are from mid-primal height, the lower your base in height velocity, all of these factors predict a greater response to growth hormone. And so because we're really identifying the bulk of the population with idiopathic, we don't think that they have exactly the same growth potential as the more severe subjects who were studied, for example, in the height studies that I ran with Ascendis, for example, and all the other long-active (inaudible) studies, which tend to favor enrollment of the more severe organic subjects over the less severe subjects. Does that answer your question?

I think it absolutely does, very, very thorough, and I appreciate that. And then when you look at -- on a blinded basis at some of the phenotypic variables that you can easily see such as age, et cetera, and other measures, do you feel that your subject -- or your samples is enrolling the patients that you really want to have in this study?

Yes. We're doing a very good job of excluding organic subjects in the trial. And that's pretty key because except with organic GHD is not going to respond to our PEM test because they can't respond nor are they likely to respond to LUM-201. And that's part of the reason why our screen failure rate is actually lower than we had anticipated because if the investigators are just enrolling any kid, we expect about 2/3 of the population to be PEM-positive and we had to be excluding 1/3 of the kids that are screened. But because they're really identifying kids with the diagnosis of idiopathic GHD, we're experiencing a much lower screen failure rate than we had put into the protocol.

Okay. Very good. Last question, quickly. On the Switch study, Rick mentioned that you are enrolling patients. Can you be at all quantitative or at least qualitative with regard to the percentage of patients who complete the 210 study who decided to switch over to the Switch study, 213?

Yes, we can't right now because it's only subjects who completed their 12-month. So the sample size is really too small to comment, I think, right now. It's fair to say that all the subjects who have completed to date have desired to continue on LUM-201.

The next question comes from Yasmeen Rahimi from Piper Sandler.

This is Emma on for Yas. We have 2. First, could you please comment on how many total sites are active at this junction, providing us some insight on how enrollment has ticked up in the last 3 months, specifically? Do you notice that certain geographies have greater uptake versus others?

And second, what is your expectation regarding annualized height loss in the upcoming interim data readout such as what is the expected range? And what could be drivers of potentially different data outcomes?

Yes. It's fair to say that we have about 40% or 45% enrollment from 5 sites in Poland and the bulk of the other ones come from the U.S. with some enrollments in Australia, New Zealand. So it's -- I honestly don't recall exactly because of the recent changes. I can't quote you...

(inaudible) distribution is about half of the patients in the U.S. and half the patients in the rest of the world is the distribution right now.

Right. And as far as the anticipated growth, I answered that question when Charles asked it -- but again, I can say that based upon the published data in this population, we would expect the mean response to be something around 8.3 centimeters per year. There'll obviously be variability around that as there is with all treatments. And the predictors are really quite well known. So the more -- I mean, the shorter kids grow better than taller kids, lower IGF-1 SDS value grows more than higher IGF-1 SDS values. Lower baseline height velocity grows more to growth hormone than higher baseline height velocities. Age, younger kids grow more than older kids. So there's a lot of parameters, (inaudible) , that are well known by (inaudible) and others to predict the response to growth hormone. So this is very well described in about 30 years of publications.

The next question comes from Ed White from H.C. Wainwright.

First, just a little clarification on the OraGrowtH212 study. You said that you're going to follow patients to near adult height. Can you clarify a bit that means?

Sure. The pediatric dosing of growth hormone for both the organic and the idiopathic population, usually extends until one of several things happen. So either they complete puberty or they have demonstrated closed efficacies or growth velocity falls to less than 2 centimeters per year. All of those indicate basically that you've basically -- that efficacies are either closed or very close to being closed and you've basically consumed all the time when you can treat with growth hormone to add to their adult height. And so the way the protocol is written is they're treated to near-adult height, and that's widely understood by the pediatric enterocologic community to mean one of those things. It's [either when] height velocity falls very, very low or there is evidence of a efficacy closure or a [canersage] 3 or 4 basically. So completion of puberty. Does that answer your question?

If you're organic, then you should -- not always happens, but you should transition to adult GHD doses. But many of the idiopathic kids, once they complete puberty, now test normal and no longer need to take growth hormone as adults.

Okay. Great. That does answer my question. And now we've gone into this a few times, the human growth hormone has been approved for about 11 different indications. And you mentioned several today that might be of interest to the company. In things that Rick had mentioned today that once you see interim data that should clarify what actions you can take. So should we be anticipating to hear your next steps for different indications sometime at the end of this year or next year? And how do you think about -- how is this data going to impact what indications you pick? Is there something in particular that you're looking for from the data?

Sure, sure. We haven't given any guidance about what indication we're going to go to next. But...

It's logical to assume that before you can write a protocol for another indication, you kind of need to know what the optimal dose is. So that's really what is gating now really with our discussion of next indications, is the interim data showing what the optimal dose is. So it would be reasonable to expect that sometime after that, we may be in a position to discuss other indications, but we have not given guidance on that as of yet, the timing.

Okay. Great. And I guess the last question that I have is just on the tentative Phase III trial design. Have you received any input at all from the FDA on this potential trial design? Or you're going to wait to talk after the [Phase II] ?

Yes. So we have not yet had our end of Phase II meeting, but having had the experience of getting a growth hormone approved by FDA and EMA, this is not actually rocket science. So our Phase III program will likely look like everyone else's Phase III program. Novos with [sumhepacitin], Ascendis with Skytrofa, et cetera. So the actual sample size will be confirmed after end of Phase II meeting.

I will say that the -- so what's widely misunderstood is kind of why Ascendis added the Switch pivotal Phase III trial because they didn't actually add it to broaden the indication to include non-naive subjects. They added it because we switched from an older formulation Phase II to a newer formulation in Phase III. And so the Phase II trial was truncated in 6 months, maximum 6-month data. So in order to reach the required safety database for a BLA filing, they had increased the sample size above and beyond the height trial, and the Switch trial was considered to be and it was the fastest way to get other subjects into the program ahead of the BLA filing.

Here at Lumos, we have the advantage of having 24 months in our main trial. We have like 3 or 4 or 5 years in the 210 trial. And so that's going to be increasing our safety database. And also if it should turn out, for example, let's say, that 1.6 milligrams per kilogram per day turns out to be the optimal dose, it means we'll have up to 2 years of treatment with twice that dose, which will add tremendously to the safety database, which is a key box check for an NDA filing.

So my assessment based upon my past experience is that given our Phase II population, the single pivotal Phase III trial will be sufficient for NDA. We'll confirm that at the end of Phase II meeting. And if we have to add more subjects for any reason, we may do a Switch study, but I don't think that will probably be necessary. But we'll see after we discuss with the health authorities.

So that's why the guidance is between 150 to 200. 150 to 160 would be my best guess unless we need to get more safety data, but there isn't a good rationale for that because Phase II is providing tremendous amount of safety data.

Any other questions, Ed?

No.

Our next question comes from Catherine Novack from Jones Research.

I'm wondering, given that the OraGrowtH study is not powered to show efficacy, can you give us a sense of, from your standpoint, what numerically comparable means, both from a go-forward perspective and a dose selection perspective? And what other factors are going to play into the Phase III design?

Yes. So first of all, I will state categorically that no Phase II study is ever powered if it was powered, it would be a Phase III study. And so the Phase II study done with (inaudible) was also not powered for (inaudible), but you can look at the data, if you get a consistent response that looks basically the same as growth hormone, you can say it's comparable. So if any of the 3 doses of LUM-201 produces height velocity curves that basically overlap growth hormone, I would say that if the mid and the top dose look very, very similar and overlap growth hormone that would push us to choosing the lower of the 2 doses at the optimal dose, whereas if there's a dose response, then given the good safety, we would go with the highest dose. But it will be based upon a numerical assessment of the curves, but not actual statistics. -- because the study is not actually powered for proving non-inferiority statistically. Does that make sense?

Yes.

Kind of a qualitative assessment, but it's proven to be successful in the past with other (inaudible) , but from a (inaudible) .

And then I wonder if you can talk just briefly about the NAFLD study about how this fits into the company's overall strategy. And from your perspective, what differentiation does LUM-201 brings to this landscape?

John, why don't you answer that question?

So NAFLD is just an interesting opportunity for us to look at other applications of LUM-201 and its effect more broadly. And I think the important thing here is that we've connected with a really talented researcher who is very interested and has done multiple studies in Apple space including studies with injectable growth hormone. And I think she brings a lot of experience to the table to help us understand what the impact of a daily oral molecule that stimulates growth hormone and has an impact on lipids and on body composition and all the other parameters that can really have an impact in NAFLD.

So I think it's going to -- this is a small exploratory study, but I think it's going to have quite an interesting impact that we can learn more about the -- how the mechanism of action of LUM-201 can have a broader application outside of our -- the pediatric endocrine indications we're looking at now.

And of course, Catherine, we filed a patent for this indication, too.

The next question comes from Leland Gershell from Oppenheimer.

Good to see the progress. A couple from me. First, if you could just repeat for us how you're going about measuring the 10 markers in the 210 study and how frequently and what times a day and in relation to the dosing of (inaudible) in that study and also the (inaudible) biomarkers themselves. And also I have a question with respect to the Logan vendor (inaudible) just your experience there, if you could elaborate with that having occurred after Ascendis already has Skytrofa in the market, clearly, there's a new option that's perhaps more convenient than the other growth hormone you're offering an even more convenient one.

I know your market news suggested that there'd be great interest in once daily oral or once in place to oral versus an injectable. But now that that's in market, I just wanted to see if you could share any further perspectives that may have come from physicians who have been prescribing Skytrofa and their continued interest in LUM-201, how that may have changed or not, given that some patients who may be coming on to -- your candidate may have already switched once from daily to weekly and then be switching again if that causes any hurdles?

Okay. Let me start and then maybe anybody else can jump in. But we -- the company has done an exploratory market research study, and we queried both pediatric endocrinologists and caregivers. And we've asked the question if they would prefer a weekly injection or a once-a-day oral. And both groups, the pediatric endocrinologists and parents overwhelmingly chose an oral. So we -- based on that preliminary independent market research, we believe that we have really a market shift or kind of a game changer in this space.

It's pretty obvious that kids don't like injections, whether it's once a day or even once a week. And we have a mini tablet, doesn't make any difference whether you give it morning or evening or with or without food. It can -- there's a great deal of flexibility here. So we think we're going to have -- it's going to be impactful, let's put it that way.

And then I think you wanted a definition of our predictive enrichment markers. So these are predictive enrichment markers that fell out of Merck that we derived from Merck's existing clinical data in kids with growth hormone deficiency. So we published on this previously in the Journal of Endocrine Science in 2021. But just to reiterate, basically for PEM-positive kids, they have to -- from a single dose of our molecule, they have to make greater than equal to 5 nanograms per ml of growth hormone at Cmax, so within an hour of taking a single dose of our drug in there their baseline IGF-1 values, unstimulated, have to be greater than 30 nanograms per ml.

Does that answer your question, Leland? Or questions?

Yes. That's great.

The next question comes from Elemer Piros from ROTH Capital Partners.

I would just like to maybe confirm something, a couple of things, want to make sure that I understand it correctly. So combining the 210 and the 212 trial would make sense to you if the baseline parameters are similar in those cohorts? Is that correct to assume?

Yes, it's exactly right, because...

Finish your question, Elemer, I'm sorry.

This was the first one, Rick. So I can wait with the other one.

Okay, then go ahead David.

Yes, based upon the breadth of the data showing that the baseline characteristics predict the response to growth hormone, it would make sense to combine them if the populations look very, very similar as far as the degree of GHD and if they look different it would argue against combining them.

Okay.

And so if -- yes.

Yes. And also about the PEM strategy. So as you mentioned, there is about 2/3 of the patients who are idiopathic. And -- but you -- in your trial, you find that the screen's failure rate is less than the 1/3. So you're actually finding patients that are higher in percentage that would fit your strategy? How do you explain that?

Well, yes, it's pretty easily explainable. If we told the investigators just to screen for our study, any subject they diagnose with GHD, we would expect that basically about 2/3 of them would be PEM positive and 1/3 would be screen failed for being PEM negative. But they're not doing that. They're doing the smart thing, which is they're screening subjects who are already identified as having idiopathic GHD. So they're self-selecting to not screen subjects with organic GHD.

Don't get me wrong, there's many reasons why a subject can fail, can be [screened] off the study. They can have a condition at baseline, they can be taking new drugs that's prohibited, they can lack up on age delays. There's lots of reasons. But the sum total of all the possible screen failure reasons is much lower than we had predicted in the protocol because in the protocol, we -- we modeled a somewhat greater screen failure rate on the basis of failing the PEM test. And it turns out because there (inaudible) The appropriate patients, subjects -- or patients until they're subjects. We're seeing a much lower screen failure rate because of the PEM test. Does that make sense?

It does.

The next question comes from Suji Jeong from Jefferies.

So I understand that choosing Phase III dose based on the Phase II result is going to be qualitative. But my question to you is approximately like how many centimeter difference would be considered as a comparable to growth hormone? And I have a follow-up question.

Yes. It's a hard question to answer because in Phase III, when you have an agreed upon with agencies (inaudible) margin, you can accurately state what the lower boundary of the 95% confidence interval is -- but Phase II will be doing it the same way the doses are selected from -- by Novos, by Ascendis, et cetera, by looking at the data and deciding does the balance of the data support this dose or that dose. So it will be largely driven by the height velocity response. It will probably be partially supported by the IGF-1 response, it will be supported by the safety. I mean it's kind of a thumbs up, thumbs down kind of adjustment, kind of how Phase II selects doses for lots of different indications and drugs, but especially in the growth hormone deficiency space.

I see. So if you look at historically, other Phase III trials for growth hormone for PGHD, what is the non inferiority margin used?

I can tell you categorically that the one used for Skytrofa was 1.8 centimeters.

(inaudible)

(inaudible) was 2 centimeters -- so in that range, 1.8 to 2 centimeters. But it's -- the nonoperating margin is based upon the growth hormone response in your trial. So the variability of the response to growth hormone. So we'll have a much better sense of what the non inferiority margin we would propose would be once we see the final data in all 80 subjects. Well, the 20 subjects on growth hormone actually in our trial.

Yes, yes. And then expanding on that because LUM-201 trial for Phase III or even Phase II, you mentioned that the patient population is more moderate compared to growth hormone trials, which tend to enroll more severe patients. Do you think the variability in the trials for LUM-201 might be greater than what you -- what other trials in for GH have seen in the past?

Do I think the potential for growth is greater?

Variability.

Yes, well variability in growth specifically.

The variability? I've looked at all the published data that have -- studies that have looked at this population. And I have been impressed with the somewhat less growth. I haven't been impressed with greater variability, but I can't say that I've looked at that specifically.

And even the difference between Versartis and Ascendis is only 0.2 centimeters. So there's not a huge number in the other studies. Our population is...

You're saying in the growth or in the non inferiority margin?

No, in the variability and determines a non inferiority margin or very similar variabilities.

Our population will be different, but it's -- like David said, I think it's a little hard to guess because all the studies that are published, I think, on idiopathic aren't exactly -- they're observational trials, they're not ...

Yes. And I'll just comment that whereas at Ascendis, the non-inferiority margin was based upon the Phase II growth hormone response Versartis because it lacked a growth hormone in Phase II. I'm not sure how they arrived at the non inferiority margin (inaudible) .

But thank you for the question Suji. Do you have another one?

No, I don't.

Thank you for the question.

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