Lumos Pharma Inc (LUMO) 2021 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Lumos Pharma's First Quarter 2021 Financial Results 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.

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 these forward-looking statements.

Information presented on this call is contained in the earnings release we issued this afternoon and in our Form 8-K, which may be accessed from the Investor Relations page of the company's website.

Joining me on today's call are Rick Hawkins, CEO, President and Chairman; John McKew, Chief Operating Officer and Chief Scientific Officer; Carl Langren, Chief Financial Officer; and Lori Lawley, Senior Vice President, Finance and Corporate Controller.

Rick Hawkins will provide a corporate update.

John McKew will review the company's lead therapeutic candidate and our clinical trials, and Lori Lawley will wrap up the call with a review of the first quarter of 2021 financial results and an update of cash guidance.

Following our prepared remarks, we will open the call to questions.

I will now turn the call over to Rick.

Thank you, Lisa, and good afternoon, and thank you for joining us on today's call.

After the market closed today, we issued a press release detailing our first quarter 2021 financial results and highlighting our recent clinical and corporate activity.

I'm pleased to report that the quarter was a productive one during which we saw a presentation and publication of new data and analyses supporting the differentiated mechanism of action of our novel oral therapeutic candidate, LUM-201, for the treatment of pediatric growth hormone deficiency and patients identified by our predictive enrichment markers.

We also continue to advance our clinical programs for LUM-201, adding clinical sites for our Phase IIb OraGrowtH210 trial and moving towards initiation of our OraGrowtH212 trial during the second quarter.

Finally, we completed the monetization of our priority review voucher.

Receiving in January, the final $26 million tranche of the $60 million due to the company from this sale.

With these resources in hand, we believe we are well positioned to advance our LUM-201 programs and explore business development options to enhance our pipeline and deliver value to our investors.

And before turning the call over to John McKew for a deeper dive on progress in our clinical programs, I just want to highlight a few recent events.

Last week, we held a key opinion leader, a forum featuring presentations by Dr. Bradley Miller of the University of Minnesota; and Fernando Cassorla the University of Chile.

This was a well-attended and informative event where Dr. Miller and Dr. Cassorla provided an overview of the current treatment landscape in PGHD and outlined the unmet medical needs in this space.

As part of his presentation, Dr. Cassorla also presented newly released PK/PD data from a subgroup of the Merck 020 trial evaluating LUM-201 in naive to treatment PGHD patients.

These data were additive to the peer-reviewed data recently published in the Journal of Endocrine Society, demonstrating once again the potential of our predictive enrichment markers, or PEMs, of baseline IGF-1 levels and peak stimulated growth hormone levels after a single dose of LUM-201 to identify patients likely to respond to LUM-201 therapy.

Additional data were presented last month at the Endocrine Society 2021 Annual Meeting, known as ENDO, further demonstrating LUM-201's unique potential to elicit therapeutic level response in PGHD patients and in differentiating this molecule from standard growth hormones secretagogues.

These results add to the previously mentioned data further supporting the approach we are using in our clinical trials.

John McKew, our COO and Chief Scientific Officer, will have more to say about these data in a moment.

So as I mentioned, our Phase IIb OraGrowtH210 trial in PGHD continues to enroll patients.

Additional clinical sites have open for enrollment with over 50% of our target number of sites now activated.

Our OraGrowtH210 trial, a PK/PD study in PGHD, is expected to be initiated this quarter with data from that trial anticipated to confirm prior data demonstrating the unique pulsatile MOA of LUM-201.

We believe LUM-201 has a potential to disrupt the injectable therapeutic market for PGHD.

We also believe that LUM-201 is essentially a pipeline and a product with the potential to target up to 10 other indications for which growth hormone has been approved.

We're focusing first on PGHD.

And once we gather data from our current program, we plan to evaluate LUM-201 in a subset of these other indications.

We're also pursuing business development opportunities to add other rare disease assets to expand our portfolio.

We are excited about the programs we're making in our -- toward our clinical programs.

And with our solid balance sheet strengthened by the receipt of the final tranche of the $26 million from our PRV sale, we are in good position to advance our corporate strategy.

So with that, I'm going to turn the call over to John to review our OraGrowtH hormone secretagogue LUM-201 and recently published data.

John?

Thank you, Rick, and good afternoon, everyone.

As Rick mentioned, we had some very compelling data presented and published in recent weeks, some of which we highlighted on our last call, but are worth touching on again.

Before getting into the details, I just want to remind everyone of the key differentiating factor in the LUM-201 mechanism of action.

As you may recall, growth hormone deficiency can be defined by low to nearly absent secretion of growth hormone from the pituitary gland.

Current therapies and those in development consists of the delivery by injection of a bolus of growth hormone or a long-acting derivative, respectively, to restore growth.

LUM-201, on the other hand, is not a growth hormone, but is instead a growth hormone secretagogue that acts within the body's natural endocrine pathways to stimulate the body's ability to release growth hormone at the same intervals and subject to the same endocrine feedback loops that occur naturally.

Utilizing this endogenous release mechanism should enable the naturally occurring IGF-1 feedback loop to be preserved to help regulate the balance of growth hormone and IGF-1 levels in the body.

Given this endogenous nature of LUM-201, to benefit from LUM-201 therapy, individuals must have a functioning though diminished HP-GH axis.

For this reason, our approach is to target the moderate PGHD population of patients who are able to produce some growth hormone naturally, but not insufficient amounts to attain normal adult height.

We believe these patients can be identified using our predictive enrichment markers, or PEMs, to select the moderate PGHD patient group likely to respond to LUM-201 therapy.

Our analysis of the large genesis dataset published in the Journal of Endocrine Society suggests that approximately 60% of the total PGHD population would fall into this moderate category.

The new data highlighted by Dr. Cassorla during our key opinion leader event last week supported this thesis, demonstrating that the specific PEM for the baseline IGF-1 level greater than 30 nanograms per ml and a peak growth hormone level of greater than or equal to 5 nanograms per ml after a single dose of LUM-201 identify this moderate PGHD patient population likely to benefit from LUM-201.

In his KOL event presentation, Dr. Cassorla discussed newly released data from Merck's 020 study as part of his overview of LUM-201's mechanism of action.

The subgroup of the Merck 020 trial specifically examined the effect of LUM-201 had on the pulsatile secretion of growth hormone over 24 hours in patients with PGHD after 6 months of treatment with LUM-201 compared to each patient's baseline GH secretion.

As has been previously observed in adults, LUM-201 increased the pulsatile release of growth hormone for 24 hours in 2 PEM positive patients.

Importantly, following 6 months of treatment with LUM-201, area under the curve analysis showed increases of growth hormone of less than twofold in these PEM positive patients that resulted in substantial increases in height velocity.

As expected, the one PEM negative patient showed no increase in growth hormone AUC over the 24-hour monitoring period and no increases in height velocity after 6 months of treatment with LUM-201, further supporting the ability of the selected predictive enrichment markers to identify both those likely and those unlikely to respond to LUM-201.

We believe these data are important as they support preclinical data, which show that pulsatile delivery of growth hormone produces greater efficacy than continuous exposure to the same amount of growth hormone.

Data presented at ENDO in March distinguished LUM-201 from standard growth hormone secretagogues.

A poster entitled "LUM-201 Elicits Greater Growth Hormone Response than Standard Growth Hormone Secretagogues in Pediatric Growth Hormone Deficiency," supports other data suggesting that LUM-201 is unique in its ability among the secretagogues traditionally used to diagnose growth hormone deficiency.

The poster presented an analysis of data from a prior clinical study comparing the peak growth hormone responsive LUM-201 to that of standard growth hormone secretagogues in children naive to treatment and previously diagnosed with growth hormone deficiency.

The objective of the analysis was to determine whether LUM-201 stimulates growth hormone response uniquely compared to standard growth hormone secretagogues.

The analysis demonstrated that in children with growth hormone deficiency, the growth hormone response to a single oral dose of LUM-201 greatly exceeds that observed with standard growth hormone stimulation agents.

The difference in growth hormone responses increases with higher baseline concentrations of IGF-1 and higher growth hormone stimulation test results as identified by our predictive enrichment markers.

The synergistic actions of LUM-201 on the physiological pathways regulating growth hormone release explained by growth hormone responses are greater in response to LUM-201 compared to traditional tests used to diagnose PGHD and indicate that the greatest difference may be found in children with more moderate degrees of growth hormone deficiency.

These results further support data analyses recently published in the Journal of the Endocrine Society, demonstrating that LUM-201 has the potential to elicit a therapeutic response in pediatric patients with moderate growth hormone deficiency or approximately 60% of the total PGHD population as identified by the specific PEMs and gives us greater confidence in the potential efficacy of LUM-201 in this patient population.

Collectively, these data support the importance of PEM selection and the mechanism of action of LUM-201 to identify patients likely to respond to LUM-201.

Given its oral delivery and its mechanism of action, that depends on the natural HP-GH axis.

We believe that LUM-201 may offer a preferred treatment option for approximately 60% of children suffering from growth hormone deficiency.

We believe these data strongly support our clinical development strategy in PGHD and illustrate why these are the PEMs we are using in our Phase IIb OraGrowtH210 trial.

This trial is a global, multisite trial involving approximately 80 PGHD patients randomized into 1 of 3 dose levels of LUM-201 or a comparator arm of standard of care daily injectable growth hormone therapy.

Only those PGHD patients determined to be PEM positive as evaluated by the predictive enrichment markers I described earlier will be randomized in the study.

During this Phase IIb study, the repeatability of the PEM classification will be evaluated during screening for randomization.

Dosing will be administered over 6 months with annualized height velocity as the key clinical outcome measure.

The main objectives for the Phase IIb study are to prospectively confirm the utility of our predictive enrichment marker strategy in selecting likely LUM-201 responders to assure that the PEM classification is consistent and repeatable and to determine the optimal dose for Phase III registration trial.

The 3 dose levels of 0.8, 1.6 and 3.2 mg/kg of LUM-201 were chosen based on supporting data from the Merck study in PGHD patient mentioned earlier as well as a prior PK/PD study of LUM-201 in healthy adults.

A post-hoc analysis of the Merck study in PGHD showed no statistical difference in average height velocity for PEM positive patients dosed with 0.8 mg/kg LUM-201 versus those dosed with standard of care recombinant human growth hormone.

The PK/PD study in healthy adults showed that 0.8 mg/kg pediatric equivalent dose is only approximately 1/3 of the way of the pharmacodynamic growth hormone dose response curve.

These data showed that administering increasing doses of LUM-201 in healthy adults up to 100 mg, the equivalent of 2.8 mg/kg in children, result in higher plasma concentrations of growth hormone.

The 3 doses chosen for our Phase IIb trial cover that full pharmacodynamic range and suggests the potential for greater growth from a secretion and potential efficacy in the PGHD patients in our study.

The trial opened to enrollment last quarter, and we currently have over 50% of the sites activated with additional sites expected to open soon as we progress toward our goal of 40 to 50 trial sites in total.

These sites were selected based on their prior history of enrolling PGHD patients in clinical trials, which should enhance the enrollment process and increase our confidence in our anticipated mid-2022 data readout.

We expect to initiate a second concurrent trial of LUM-201 for patients with PGHD shortly.

The OraGrowtH212 trial is intended to further illustrate the mechanism of action of LUM-201 in amplifying the natural pulsatile secretion of growth hormone.

The OraGrowtH212 trial will focus on pharmacodynamic end points at 2 different doses, 1.6 and 3.2 mg/kg in approximately 24 children with PGHD.

The purpose of this study is to replicate in a larger cohort of PGHD patients the pulsatility data in adults and in a small subset of children for the Merck 020 trial reviewed by our KOL.

We plan to conduct this trial at a single specialized pediatric center with the ability to perform the more frequent sample collection and monitoring required for these types of clinical trials.

The study will assess growth hormone levels over 24 hours at baseline and after 6 months on therapy to confirm LUM-201's amplification of pulsatile secretion.

Once initiated, the study will run in parallel with the Phase IIb OraGrowtH210 trial with the goal of providing supportive data in future regulatory filings and ultimately in any commercial marketing efforts.

On our last call, we reported that a fire occurred at the San Borja Arriaran Hospital in Santiago, Chile, the planned clinical site for OraGrowtH212 trial.

Our investigator's clinic was not directly involved in the fire and access to the hospital has been restored.

And we anticipate initiating the OraGrowtH212 trial in the current quarter.

As we have previously stated, this trial is not on the critical path for regulatory approval of LUM-201, and we do not believe the brief interruption caused by fire will delay our time lines.

Finally, as Rick mentioned, we believe that LUM-201 may serve as a platform therapy potentially applicable to other indications for which were common human growth hormone is approved.

Pending results from our concurrent OraGrowtH trials just discussed, we plan to evaluate LUM-201 in these other indications.

Beyond LUM-201, we continue to pursue business development opportunities to license or acquire other rare disease assets in order to expand our pipeline and our ability to provide innovative therapy to those suffering from rare diseases.

Before we discuss our financial results, I will turn the call over to Rick to make a few comments about our announced CFO succession.

Thank you, John.

And before we proceed, I first want to say a few words about Carl's well-earned retirement.

As we announced on April 20, after a distinguished 40-year career as a financial executive, Carl will be retiring effective on July 4. We want to thank him for his service to Lumos Pharma, and we want to congratulate Lori Lawley, currently our Senior VP for Finance and Accounting and Carl's very capable deputy, who will be succeeding Carl as a CFO upon his retirement.

So I'll now return the call over to Lori Lawley to discuss financial results for the first quarter of 2021.

Lori?

Thanks, Rick.

I look forward to working with the team and engaging with investors in my new role as Chief Financial Officer.

We ended the first quarter with cash and cash equivalent totaling $114.1 million compared to $98.7 million on December 31, 2020.

As Rick mentioned earlier, our current cash position includes the receipt in January of the final $26 million tranche from the sale of our priority review voucher.

We expect an average cash use of approximately $8 million to $9 million per quarter through 2021 and expect our current cash on hand to support operations through OraGrowtH210 readout and completion of the OraGrowtH212 trial.

Net loss for the first quarter was $8.6 million compared to a net income of $0.3 million for the same period in 2020.

Now I would like to turn the call back over to Rick before we open up for questions.

Rick?

As you can tell, we're excited about our advancement of our OraGrowtH trials in PGHD and look forward to the initiation of our PK/PD OraGrowtH212 trial.

We are on solid financial footing to execute on our strategy and believe that our clinical trials will confirm the potential for LUM-201 to disrupt the PGHD market.

We look forward to continuing to provide updates as we progress.

And with that, we'll open the call for questions.

Operator?

(Operator Instructions) Your first question comes from the line of Charles Duncan from Cantor Fitzgerald.

Juggling lots of calls and thanks, John, for all the detailed information.

I had a couple of quick questions.

One is on the OraGrowtH210 trial, you said that about 50% of sites were activated.

Can you give us a sense of enrollment activity and then perhaps screen to enrollment ratio?

Any early perspectives on that?

Chaz, we haven't given any guidance to the market in terms of that update.

These trials usually start at a certain pace.

But as more patients are screened in some of the more active sites and I say, experienced sites, enrollment improved dramatically, and I think that we're in that stage now, but we haven't given any guidance as to the 2 questions you asked.

Okay.

Okay.

And then with regard to the PEM, there's a lot of good information that you've presented here recently.

But I'm wondering if you've had any feedback from the FDA on this strategy and if you can provide any color on that with regard to their, I guess, comfort level with this forming the basis of even making an observation out of a Phase IIb.

John, why don't you take that question.

Yes.

So we've engaged with the FDA from the beginning about this idea because it is really the basis for how we think this product is going to move forward, right, selecting the correct patients and giving them the correct dose is really how this molecule is going to show itself to be effective.

So yes, we have engaged and I think we need to bring them the results from this trial where we're applying the PEMs prospectively to go any further with the idea that we brought to them.

Okay.

That's helpful.

And then one last question, then I'll hop back in the queue.

Regarding pulsatile growth hormone release and the PEM strategy, do you think that, that could go beyond, call it, a risk mitigator with regard to clinical trial conduct, but actually result in better outcomes or more effective growth stimulation and perhaps even slower or shorter duration of dosing, given the mechanism with regard to stimulating release versus, say, a bolus dose, do you think that the outcome measures could actually be better?

And what's the basis of that?

Go ahead, John.

There are some preclinical experiments, let's say, given the same amount of growth hormone in a pulsatile fashion versus a continuous fashion, [dwarf rats] grow better with pulsatile release or administration of growth hormone.

So I think the potential is there for the importance of the peak to nadir pulsatility in the release of growth hormone to really show its effect in the study.

It's never really been looked at before because there hasn't been a way to pulse 23 to 25 pulses of growth hormone across a day in an individual child, and then look at their growth in 6 months.

But I think this study will really get at that, right, in a group of patients that we think we've selected to be responsive.

So we'll have a lot of information.

And I think there's a very good potential to show that this unique mechanism of action will give us quite a bit of growth while maintaining growth hormone in IGF-1 levels within the physiological ranges.

Your next question comes from the line of Lina Kaminski from JonesTrading.

Congrats on the quarter.

So I guess, you did previously mentioned and also in your prepared remarks that you're looking to expand LUM-201 into additional indications.

So I was hoping maybe you can help us understand what proportion of patients for each of the indications you're looking for might -- should be PEM positive and respond to LUM-201.

Well, we continue to engage the KOL community and the experts in each one of these diagnoses.

And we are in the process of determining just that type of question.

John, do you want to add any additional color?

Yes.

So the date -- all the data we have now on kids with growth hormone deficiency are kids with pediatric growth hormone deficiency, right, so we've done some thinking and extrapolation, but we’re really -- the data that we have points to the PGHD population.

And I think each one of the other indications has some unique facets to its etiology and where the defects are.

Some are more a combination of several events.

Others are related to growth hormone deficiency pretty directly.

So it's going to depend on each of the different disease indications, and it'll depend on us acquiring a little bit more knowledge about our molecule and how it affects growth in this 210 trial before we really can put our hand down and understand broadly for some of these secondary indications, how many responsive patients there may be.

Got it.

Just one follow up on this.

Do you think you might need to adjust your PEM classification based on each indication, based on the cutoff for that?

Yes.

John, go ahead.

We'll have to see.

But I think in the end, this set of criteria is useful for identifying patients with a growth hormone, with a partially functioning axis to produce growth hormone.

And that's kind of the first step in selecting patients that are going to be responsive to our molecule, right.

Some of the other indications, you do have to think about whether some of the deficits or downstream of growth hormone production, right, like some of them, you might have a deficit in growth hormone receptor interactions, right.

And so we have to put all these pieces together and think through what's the best approach and what kind of dose range do we have access to in the information we get out of the growth hormone -- the PGHD trial.

So I think there's a lot of really interesting data that's out there for these patients being treated with just for common human growth hormone or we can build on what's known about the etiology and find the best fit for our molecule to go after these secondary indications.

Got it.

And again, congrats on the quarter, and I'll jump back in the queue.

Your next question comes from the line of Derek Archila from Stifel.

This is Jacques on for Derek.

So zooming out, can you talk about how you view adherence for an oral secretagogue versus weekly growth hormone injections?

What are some of the pros and cons there?

Let me start with an answer.

Jacques, there is so much data out there that any injectable product and whether it be in PGHD or other indications, it's problematic in a pediatric population in terms of adherence.

I think the longer acting products will improve that.

But we've done some direct market research that shows that if, when asked both caregivers and clinicians which one they would prefer, and that is a weekly injection or a once a day oral as our product is, they overwhelmingly choose an oral product.

How that translates to compliance in the real world is another question.

I think we have to study some more.

But we believe that it's definitely going to be a preferable treatment.

And we believe that there's enough attention by the parents that this is -- that they're going to stay on their children to make sure that take this once a day oral product as they should.

John, do you have anything to add to that?

No.

That's perfect.

Got it.

That's helpful.

And then if I may, on the [BD] front, can you speak to putative licensing opportunities and how competitive that is right now to find an asset?

And what indications and modalities are you guys thinking about?

Good question, Jacques.

And I can tell you, we have a robust process that has been underway for quite some time that is led by Aaron Schuchart, our CBO.

And Aaron has 25 or more years of experience as a business officer with both large companies and small companies in the rare disease space.

In addition to that, I think we have collectively as a team, many decades of experience of operating in this rare disease space.

And as a result, those contacts have been very productive in bringing forth a number of interesting opportunities that we are, once again, just actively reviewing and making sure that we make the right choice here.

Great.

That's very helpful.

And congrats on the quarter, guys.

I'm showing no further questions in the queue at this time.

I'll hand the call back to Mr. Hawkins for closing remarks.

Okay.

Well, we thank you for joining us today, and we look forward to keeping everyone apprised of our program over the course of the year.

We really appreciate your time today.

This concludes this conference call.

Thank you for participating.

You may now all disconnect.