Lumos Pharma Inc (LUMO) 2021 Q3 法說會逐字稿

Good afternoon, and welcome to Lumos Pharma's Third Quarter Results Conference Call. (Operator Instructions) 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; and Lori Lawley, Chief Financial Officer. Following their prepared remarks, Rick and Lori will be joined by John McKew, our President and Chief Scientific Officer; as well as Dr. David Karpf, our Chief Medical Officer, for the question-and-answer session. I will now turn the call over to Rick.

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us on today's call. After the market closed today, we issued a press release announcing our financial results for the 2021 third quarter and detailing our progress advancing LUM-201 for the treatment of pediatric growth hormone deficiency, or PGHD. On today's call, I'll provide the overview of our LUM-201 program and broader development strategy and give an update on our clinical trials, and Lori Lawley will review our financial results, then we'll be happy to take your questions.

So I'm pleased to report that since we last spoke with you, we've made steady progress on our LUM-201 program. The majority of site for OraGrowtH210 trial are now open for enrollment, and importantly, most of those that we opened recently or will open soon are historically high enrollment sites. With screening and enrollment for OraGrowtH210 progressing, we continue to expect the primary outcome data readout for this trial in the second half of 2023. Enrollment has picked up in our OraGrowtH212 trial. You'll recall that OraGrowtH212 is a single site open-label trial designed to provide pharmacokinetic, pharmacodynamic data on LUM-201. Primary endpoint is 6-month data with additional 12-month data to be captured. Since the trial is open label, an interim analysis may be conducted at the company's discretion.

As a reminder, our OraGrowtH210 trial is a global clinical study evaluating oral LUM-201 in approximately 80 patients diagnosed with PGHD. A primary clinical outcome is annualized height velocity and patients selected by our predictive enrichment marker, or PEM strategy. Secondary outcome measures include comparison of annualized height velocity of LUM-201 in 3 doses -- in 3 dose levels, 0.8, 1.6, and 3.2 mg per kg versus a control arm of patients treated with recombinant growth hormone at a daily dose of 0.24 mg per kg per week. Dose levels of LUM-201 were selected to span the entire dose response curve elucidated in a prior PK/PD study. The goals of our OraGrowtH210 trials are to identify the optimal dose of LUM-201 to be used in a Phase III registration trial and validate the PEM strategy.

During the last quarter, we made significant progress toward our goal of opening approximately 50 sites. Currently, we have over 40 sites open and screening patients. Additional high-volume sites expected to open shortly include those in Russia, Ukraine, New Zealand, and Israel. And based on the progress made in recent weeks, we feel confident that enrollment supports our 6-month data readout for the OraGrowtH210 trial in the second half of 2023 with additional 12-month data to be collected.

Turning now to our OraGrowtH212 study. This is our single site open-label trial, evaluating the pharmacokinetic and pharmacodynamic effects of LUM-201 in up to 24 PGHD patients at 2 dose levels, 1.6 and 3.2 mg per kg per day. This trial continues to enroll patients at an encouraging pace. The objective of the OraGrowtH212 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 is 6 months of PK/PD and height velocity data with additional 12-month data could be captured. And given the open-label design of this trial, we have ability to perform an interim analysis at our discretion.

Now in addition to advancing our clinical trials for LUM-201 in PGHD, during the quarter, we continued to explore expansion opportunities for LUM-201 into other therapeutic areas where injectable, recombinant human growth hormone is a standard of care. As we've said previously, 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 are actively reviewing potential clinical development plans for LUM-201 in several of these indications and are in advanced discussions with key opinion leaders and our Clinical and Scientific Advisory Board about the best next step for expanding our LUM-201 pipeline. So we look forward to providing a more detailed update on these plans soon.

We also 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. So before I turn the call over to Lori, I just want to remind everyone of some context surrounding our LUM-201 program and some of the reasons why we have confidence in our current clinical trials and the potential of LUM-201, generally.

Now you may recall, unlike standard of care, PGHD therapies or the weekly injectables coming to market, LUM-201 is an oral growth hormone secretagogue that acts within the body's natural endocrine pathway, and LUM-201 acts selectively on receptors in the pituitary and hypothalamus to simulate the body's ability to release growth hormone at the same intervals and are subject to the same intercon feedback loops that occur naturally. This mechanism enables the naturally occurring IGF-1 feedback loop to be preserved to help regulate the balance of growth hormone in IGF-1 levels in the body. So less severe PGHD patients are those with an intact pituitary growth hormone access, but who are secreting insufficient growth hormone to attain normal height are those who should respond best to LUM-201. Evidence suggests that this group represents approximately 60% of the total PGHD population, and our trials are designed using specific predictive enrichment markers or PEMs, to identify this addressable population.

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

Thanks, Rick, and good afternoon, everyone. During our third quarter, research and development expenses were $4.1 million compared to $2.1 million in the same period in 2020. This increase of $2 million was primarily due to increases of $1.8 million in clinical trial and contract manufacturing expenses, $400,000 in personnel-related expenses, and $100,000 in stock compensation expense, offset by a decrease of $300,000 in supplies and other expenses. General and administrative expenses in the third quarter of 2021 were $3.4 million compared to $5.2 million in the third quarter of 2020. This decrease of $1.8 million was primarily due to decreases of $1.3 million in personnel-related expenses and $500,000 in legal, consulting, and other operating expenditures.

For the third quarter, we recorded a net loss of $7.5 million compared to net income of $1.8 million for the prior year quarter. In Q3 of 2020, the company recorded a gain of $6.5 million related to the sale of our priority review voucher and a tax benefit of $2.4 million during Q3 of 2020, which offset the operating expenses in that quarter of $7.2 million. We ended the third quarter of 2021 with cash and cash equivalents totaling $1.7 million compared to $98.7 million on December 31, 2020. We currently expect our cash on hand as of the end of third quarter to support operations for the 6-month data readouts from both the OraGrowtH210 and OraGrowtH212 trials.

I'll now turn it back to Rick for closing remarks.

Thank you, Lori, and before taking your questions, I just want to remind everyone that our immediate focus is on the execution of our current clinical plan for LUM-201 in exploration of the indications we will pursue next to expand this platform. While life cycle management of LUM-201 is our priority, we will opportunistically consider other business development opportunities as they present. And then we'll remain highly selective though and focus on long-term value creation for our shareholders.

So we look forward to sharing more details with you soon. So operator, we're now ready to take questions.

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

I wanted to ask you a little bit about the 210 study. You mentioned high enrolling sites. And I guess I'm wondering how you know what a high enrolling site is? Did you do some feasibility study to be able to demonstrate that? And then with regard to timing, I know that you're deploying the predictive enrichment marker paradigm, and that makes sense. But could you remind us what your screen-to-enrollment assumptions are, and give us a sense of color lines for a 6-month readout in that study?

Thank you for the question, Charles. In terms of the high enrollment sites, I think these investigators are incredibly well known. And as you know, growth hormone, recombinant growth hormone has been around for 35 years, and there have been a number of clinical trials that have been conducted over the years. I think mainly looking at data from those trials in terms of investigators and their enrollment patterns, they've become pretty clear. And as I said, some of those sites, those high enrolling sights are now coming online. So our expectation of having an increased enrollment is certainly there. We haven't released any information on screen failures, or I'm not sure it's as relevant in a trial like this, especially when we're using a predictive enrichment marker or PEM, but we haven't released any data there, Charles.

Okay. Well, I guess I'm assuming you mentioned later on in your comments that patients who may respond to growth hormone, but inadequately represent maybe 50% of the patient population. So that's probably a good place to start. But I guess I'm wondering if you think that patients who may present to a clinical trial may be enriched in any way in terms of more of them presenting that may respond to PEM or not?

John, do you want to answer that question? John, I think you're on hold. You're on mute.

Can you hear me now?

Yes.

So the data indicates that upwards of 60% of patients diagnosed with PGHD should be responsive to our molecule just based on database analysis and kind of the general division of growth hormone deficiency spectrum. So I think with that said, we've done a lot of work to educate all of our investigators on what type of patients are going to be most responsive to our molecule, and they've actually done quite a good job at finding patients who fit the needs just generally for a patient with what's called kind of idiopathic growth hormone deficiency. So not organic, not the most severely growth hormone-deficient Kids. And so I think the screening rates we're seeing right now don't align with screening studies that we've done in database -- large databases of everyone diagnosed with growth hormone deficiency. So I think we're getting a fairly high-return rate because the clinicians on our sites are pretty cognizant of the kind of patient who's going to respond to our therapeutic.

Okay. Very helpful. Last question is back to -- or onto 212, this 212 study. Rick mentioned conducting an interim analysis that would be conducted at the company's discretion. And I guess I'm wondering what kind of factors you may consider in doing that interim analysis? Does it have something to do with the protocol that's specified or a certain number of patients? We would like to hear updates. So looking forward to that, but just kind of wondering what would drive that decision.

Yes. Go ahead, John.

So I think what we'd like to see ahead of that interim analysis is essentially a large enough and at each of the 2 doses that we're exploring, so 1.6 and 3.2 mg per kg per day that we have a data set that I think is important to share. We've released data on the 0.8 mg per kg dose in 3 patients, 2 PEM positives and one PEM negative, and that's a great, kind of case report type information, but we'd like to have a larger cohort when we release the higher doses, and we have defined that in our protocol. And as soon as we reach that interim decision, we'll move forward with that.

Next question is from Yasmeen Rahimi of Piper Sandler.

This is Jesse on for Yas. I wanted to kind of get into the pipeline expansion. I know that during the prepared remarks, you began talking about expansion Turner Syndrome and Prader Willi, and I just wanted to know -- and how do you -- how -- can you please explain how LUM-201 works and would work in these indications? And which one would Lumos most prefer to go after?

So John, why don't you go ahead with the mechanism of action in those patient population?

Yes. So I think the way we've looked at this is there are a group of patients who have an active access that can be stimulated with a growth of a secretagogue like LUM-201 to increase their growth hormone release, right? And that in turn increases IGF-1 and downstream modulators. And for growth hormone deficiency, it's for pediatric growth hormone deficiency, it allies perfectly with our mechanism if we choose our patient populations correctly. And we spent a lot of time just aligning our thinking around many of the other indications where there are kind of a constellation of things that might affect -- for many of them in individual child's growth patterns. Some of those other indications are a little bit more complicated. And so what we're spending time doing right now is weighing the different contributions, and looking at how successful doses of growth hormone are in stimulating growth. Not all these approved indications are growth-driven. There are indications for adults, but that's just an example of how we are trying to make sure that our mechanism and the kind of patients that can respond to our molecules, those who have an active access and can be stimulated with growth hormones precog to increase their growth hormone production. So that's really the thinking we're doing as we go through the 11 approved indications for recombinant human growth hormone and try to prioritize them as we go forward.

And then when you say the updates are soon, can we expect them on the 4Q call or 2022? Can you let us know?

Absolutely.

Sorry, I might like will we have an update on which indications on the 4Q call, or would it be in 2022 or beyond?

We haven't talked about the time we're going to -- the time period we're going to do, but we're actively going through our discussions with our KOLs and our Clinical and Scientific Advisory Board at the moment. And we're not quite there yet, but I think soon, we'll be able to tell you which ones we're going to first.

And our next question is from Elemer Piros of ROTH Capital Partners.

I just had one question, please. I just wanted to verify that at the clinical trials.gov, the information is correct. I see that there are 42 sites are now open and 40 out of the 42 is actually recruiting. And I think you plan to have 50 altogether. Just trying to see how close to the final number you are.

Yes, I'm not sure that the site keeps up with the total number. But say the least, we have at least those 40 sites open and recruiting patients. And as we speak, we're activating more of these sites. And as I mentioned earlier, I think there are some traditional high enrollment sites that are now just coming online. So we're optimistic that, that's going to improve our enrollment considerably in the very near future.

And our next question is from Catherine Novack of Jones Research.

I just wanted to ask kind of like a bigger picture question about the pediatric growth hormone market. With the approval of Ascendis' TransCon hGH, I guess, how do you see that shaping the market? And especially, what have you heard from KOLs about potential prescribing practices for weekly growth hormone, given that this product is sometimes associated with higher than normal levels of IGF-1?

We haven't gotten a lot of feedback. We're really focused on our own programs. However, the market release price we're more than pleased with. You can imagine, it's a small molecule and a lower cost of manufacturing. That leaves us a great deal of flexibility in pricing, especially at that level. I think it's a little too early to tell what the response to the -- in the market is going to be and from the pediatric endocrinologists. But maybe I can ask Dr. Karpf to talk about that a little bit more.

Sure. Again, as Rick said, at least I work very closely on -- it became [Sci Tropa] program, and it has been approved. I have not even heard yet, and it's been actually launched. It'll -- I would imagine it will take some time to get on to formularies, which is the real driver for sales because it's really the outpatient. It's the cost of the patient that dictates sales in the market. And there is no question that the cost of goods for LUM-201 will be much less than the cost of goods for Sci Tropa, which does provide quite good flexibility.

Got it. Okay. Yes, I think maybe what I was trying to get at is comfort in general with a weekly -- have you heard anybody who might be a little bit hesitant to prescribe weekly GH? Or is IGF-1 level is not a concern for some KOLs?

And -- I mean, David, if you want to address that at all?

Sure. I think that most of the key opinion leaders that I talked with when I was in development of Ascendis did not have a big concern about IGF-1 levels because -- traditionally because kids with growth hormone deficiency are rarely diagnosed right when they develop it, there's a lag time to diagnosis and treatment. You don't want to target kind of the average IGF-1 value in these kids, if you've got 5 years to treat them to adult height. So you want to tend to be in the upper half of normal range. And there are data showing that if you target a positive 2, you get better growth than you targeted it, IGF-1 is set to zero. And by definition, targeting IGF-1 suggests you're going to have half above half below. So I don't think there's a big concern. And there's no question that on everything else being equal, most kids and parents would prefer one injection a week compared to 7 injections per week. But by the same token, it's not at all unlikely that a lot of people would prefer a once-daily oral compound to even a once-weekly injection.

And Catherine, I think that as pediatric endocrinologists, many of them will wait and see, I believe, to see what the patient population reports or their colleagues report over time. I think there's going to be some early adopters, but I also think there will be some pediatric endocrinologists who will not jump in right away, perhaps because of the excursions of IGF-1 levels that are -- that sometimes can be of concern to some clinicians.

I am showing no further questions in the queue at this time. Thank you for joining us, and enjoy your afternoon.

Thank you very much.