Q2 2020 Lyra Therapeutics Inc Earnings Call

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Welcome to the Delaware Therapeutics second quarter 2020 financial results incorporate update conference call.

At this time, all participants are in listen only mode.

Following many management's prepared remarks, we will hold to any session.

To ask a question during two asked the question at that time. Please press star followed by one on your Touchtone phone.

If anyone has difficulty hearing the conference. Please press star zero for operator assistance.

As a reminder, this call is being recorded today August this 2020.

I would now like to turn the call over to Laurence Watts, managing director of at Gilmartin Group. Please go ahead.

Thank you Daphne.

Joining us today Im Lear Therapeutics, as President and Chief Executive Officer, Maria <unk>, Chief Financial Officer don't LC, and senior Vice President commercial strategy and market development or annoying.

Oh, you today Lira released financial results for the second quarter ended June Thirtyth Twentytwenty, if you're not received the news release. So you would simply like to be added to the company distribution list to receive future releases. Please go to the Investor Relations section of liver website, which can be found at www dot liver therapeutics dot com.

On the copper gold management will make forward looking statements, including statements related to lira Twentytwenty financial results and guidance on the clinical development of the company's product candidates business strategy.

These forward looking statements all based on the company's current expectations and apparently involve significant risks and uncertainties lira's actual results on the timing of events could differ materially from there was anticipated in such forward looking statements as a result, but these risks and uncertainties.

Factors that could cooled results to be different from these statements include factors. The company describes in the section entitled Risk factors and the company's current report on form 10-Q filed today August fit Twentytwenty.

Lira cautions you not to place undue reliance on forward looking statements undertakes no duty or obligation to update any forward looking statements as a result of new information future events or changes in its expectations.

With that I'll now turn the call Labor summary, epileptic CEO of their therapeutics Maria.

Thank you Laurie let me start by saying how delighted I am to welcome you to Lira second quarter 2020 financial results conference call, which as I write first as a public company.

Although where it does not intend to house regular quarterly financial call. We wanted to talk with you today and you wouldn't be near term read out for my Lantern Phase two study.

Arguably the most important milestone in our company's history.

Moving forward he will likely hoped call for our fourth quarter financial result in order to provide you with some guidance for the year ahead, we well how additional color what we have data or other important information to share with you for example, when our phase two lantern trial reads out later this year.

With that said I will go over some recent highlights before reviewing their pipeline.

The highlight of our second quarter was undoubtedly our successful initial public offering on that fast, which raised 64 million in gross proceeds and came just over three months. After we completed a 30 million series C financing.

Whereas common stock began trading on the NASDAQ global market I may 1st 2020 under the ticker symbol L. why are.

Two other pieces of news that we'd like to highlight our appointment of Dr., Robert Richard as senior Vice President of research and development and Pamela Nelson as senior Vice President their regulatory affairs.

I live in industry veteran who possesses extensive leadership product development and commercialization experience in drug delivery and complex combination product. He will oversee the development of Lear is to try to candidates for the treatment of chronic rhinosinusitis, including the transfer of manufacturing to the.

Contract manufacturer and at first time expansion of our platform.

We are also excited to welcome Pam who brings 25 years of experience in the biotechnology industry with regulatory expertise and drugs and drug device combination products across a range of therapeutic area early development through to commercialization she wants.

There had our regulatory strategy for you with clearance of our two product candidate, which will be critical in the upcoming months in years, as we announced phase two results for and where to 10 and work with the FDA to establish the protocol for our pivotal trial.

Now I would like to provide an update on our clinical and development program starting with the progress we are making with our lantern phase two trial.

Our phase two study where to 10 is intended to confirm the results we observed in our phase one trial selected dose for us will take forward into a phase three study and then form the design of that Registrational trial.

As we announced earlier this year, we completed enrollment have the lantern trial at 67 patients compared to an initial target up 99 evaluable patients.

This decision was made due to the adverse impact of Coven 19, Nonclinical trial site operations.

During the past month. The 67 patients has continued to receive therapy in this trial and record their results.

More than 60 of these patients have already completed that 24 weeks of treatment. We project that the last patients will complete the stage by the end of August.

Following the treatment phase last year and participants will continue to be followed for an additional four weeks following the removal of their ramp plans to collect safety data.

At the conclusion of the fall week period, we expect that our phase two data will be verified and the database won't be locker room. This time point before reporting out top line data.

All told we believe this puts us on track to announce top line efficacy and safety at the end of this year.

With respect to what we had been able to observed thus far although we remain blinded to the randomization of the trial I believe there a number of signs that bode well for the outcome of our phase two lantern study and I would like to take the time to share a few of these with you.

Firstly and independent data monitoring committee has been reviewing the ongoing safety data generated from the trial and the study has been a lot to proceed without modification I believe this is important given the nature of the three randomize groups within the trial.

Those of you who are familiar with our trial design, what we call that the lantern trial had three arms. The first is the formulation of Lear to 10, using a 2.5 milligram dose the human met his own pure rate.

[laughter] dosage that we used in our phase one study, which showed very good levels of safety and clinically meaningful results.

The second arm is a formulation of Lear to 10, using an exploratory 7.5 milligram dose of met its own Fury three times. The dosage we used in our phase one study the third arm is a sham procedure control.

The 7.5 milligram dose was included to see whether it even greater efficacy could be obtained without causing a worsening in the safety profile of lira to Ted.

The nonintervention today by the independent data monitoring committee likely points to a safety profile of Lear to 10 at both formulation concentration.

It is acceptable including had been previously untested higher dose.

As such we believe that no news in this case represents good news.

We can also see though we remain blinded that's a standard deviation from the lantern trial is coming in tighter than what we had used to design the phase two study.

This bodes well for the statistical powering of the trial, even though we kept enrollment at 67 patients because we plan for a standard deviation similar to our phase one trial when we designed the larger phase two study.

Next I'd like to return to the number of patients in our study, although we kept enrollment at 67 patients compared to the initial plan for 99, you've valuable I.

I wouldn't know said some two thirds of participants will be receiving some form of drug treatment based on the one to one to one randomization into low dose high dose and Chan.

This means that when the data read out we will have efficacy data from around 40 to 44 patients.

Let between the low and high doses.

We believe that the number is similar to phase two trials sizes that are have been conducted previously in the Crs space.

Lastly, I would like to talk about our data collection.

The primary and key efficacy assessments are lantern are based on patient reported symptom scores, which are collected via electronic diary.

This method was always part of our trial designed and not reaction to the Kobin 19 pandemic.

As such we do not believe it's a pandemic is likely to have impacted the ability of our patients to continue reporting their daily symptom scores.

So what do we plan to provide when we say top line data will be available by yearend.

It is our current intention that our top line data announcement lantern will include firstly the trials primary outcome measures.

Defined as change from baseline and Cardinal symptom score that week for.

Secondly, the change from baseline and Cardinal symptom scores at later wakes up to impossibly, including week 24 to demonstrate the potential longevity of lyric to pen as a long term treatment.

And thirdly summary safety in serious adverse events.

It will be our aim to preserve as much of the secondary endpoint data as possible for presentation at future scientific meetings, which is why am laying on it in advance what investors and analysts should expect to see once we have the data in hand.

In summary, then we are confident not only in there to 10 as a potential long term treatment for chronic rhinosinusitis patients, both with and without Pollo.

But in the ability of our ongoing lantern trial to demonstrate their to 10 near term and long term efficacy and safety profile.

Once we haven't now the phase two results from lantern at the end of the year, we will use the data to inform the design of a pivotal study from there to Ted after all appropriate consultation and communication with the FDA.

Now, let me turn to the rest of our development pipeline.

Where to 20 is our second lead product candidate the drugs utilizes the same apiay is there to 10 embedded in a larger matrix designed for Crs patients, whose nasal anatomy isn't large due to sinus surgery.

The development of Lear to 20 is designed to provide entities with a practice wide solution for the vast majority of patients they encounter regardless of surgical or polyps status.

The next steps in the development of Lira to 20 is the initiation of a proof of concept clinical trial. The early planning for which is currently underway.

Also leer to 10, and Lear to 20 make use of lira innovative medical prion, Terry drug delivery platform X trio, which is designed to deliver drugs directly continuously and consistently to affected tissue over a sustained period of time V. A single administration.

Xtremio will form the backbone of our development pipeline expansion.

Xtremio was comprised of three interrelated technology components.

Biocompatible mesh scaffold, which is designed to maximize surface area for drug release, while maintaining underlying tissue function.

And engineer the last American matrix, which has advanced shape memory physical properties, resulting in an implant that dynamically adapt to be anatomy.

And lastly, a versatile polymer drug complex, which can be customized for the treatment of various chronic diseases treatable by entities.

As such Lira's Xtremio platform has potential applications and many additional indications the crs for a long term delivery would improve local bioavailability and enhanced efficacy and or safety.

We have identified a number of BMT indications for which we believe Xtremio would act as a better delivery mechanism for currently approved therapeutics.

With that update of our land Karen Phase two study and our development pipeline I will now hand, the call over to Don for Sunrise lyrics financial results for the second quarter Don.

Thank you Maria starting with our cash and cash equivalents balance we ended the second quarter with $86.6 million.

This balance includes funds raised during or me IPO, the gross proceeds of which were 64.4 million.

And the search launch year to date or impacts was $8.8 million. The earnings release, we issued today outlines our financial results and sold so I will not go through the details from this call.

In terms of financial guidance, we've stated that we believe our current cash position is sufficient to fund the company through a planned phase three study of lira to Tim in chronic rhinosinusitis.

Additionally, we are projecting our year end 2020 cash balance will be in the range of $67 million to $70 million.

Certainly lira shares outstanding as of July 30, Onest 2020 were approximately 12.9 million shares.

With that I will turn the call back to Maria.

Thank you Don.

In summary, I believe lira has a very exciting feature in the short term I believe that Lear is on track to report phase two results for Lear to 10 before the end of the here that demonstrate the drug efficacy safety and suitability if a long terms treatment for Crs patients.

In the meantime, we won't be working to present, the development of leery to 20 and leverage our R&D investment and next trio expands our development pipeline into new indications.

With that I will now open up the call for questions operator.

At this time, if he would like to ask a question Press Star then the number one on your telephone keypad.

To withdraw your question press the pound key.

Please stand by while we compiled acuity roster.

Okay. Oh first question comes from the line up.

Wanni Burma with Bank of America.

Hi, Thanks for taking my question congrats on the on the problem. This year I have few questions. So just wanted to understand until the data monitoring Committee you mentioned beginning to safety data. The hybrid go beyond you know all put any modification like what contributes.

And adverse event profile that would require a modification. It did it go fishing for bad idea the picture than she disease. This.

I understand you know what.

They did the kind of line is drawn here and then I have a couple of put upon looks.

Hi, Ash I. Thank you for your question is that the that monitoring committee is made up of empties with many years of experience and and you know we depend on their expertise to look at the study and according to their practice and why.

They observe if they see for instance.

Ah adverse events that are at a very high rate our adverse event that are not expected then they will pass a judgment at that point and asked for a modification, but we do not have a threshold establish we really depend on experts to assess the sale.

Safety and proposed changes that they see fit.

Okay, great and the other question. They had would just staying on the number of patients who took it looks like it can have a 40 foolish stations that that he had the efficacy data for in big fish Casino.

As a deal getting bone look at some of these secondly, do the point I know that we call them at the midpoint gets game.

And show not a lot of flush the being good shouldn't just come bidding oh, the the efficacy in polyps, Washington Nonpublic.

So my question the.

<unk> includes a couple of actually discussing them, so where do these patients like what's the split off color there should not called if indeed.

Hi, Andrew loses and then when VB one the data would be enough that we could come back to be some of the other treatment options that have either they got b malls and Oh merged company.

On the asked thanks for your question.

So with respect to polyps and non pilots were at about 50 50.

And our trial and we do insurers that those patients our fall into each group.

And a consistent way so and that's consistent with our phase one we're also a pretty much at at about 50 50 in terms of polyps and non pilot patients.

With respect to comparing data you know, we really are or the first products that we are aware of that provides a six month therapy for surgically naive.

Patients that have polyps and don't have pilots and so comparing to other trials.

You know well well be I'm not straight forward because other trials have really focused on non pilot patients now having said that you know we do look at FX side.

As a reminder, what what we saw in our phase one is we saw and a an effect that was statistically significant starting at one week and certainly with pilot patience, we saw a significant effect at four weeks.

And our symptom scores at 20 weeks, we saw a 50% effect, which was a very substantial effect. So.

While it's difficult to compare across trial, because the endpoints are different in terms of how how we how we collect our symptom scores.

We are very encouraged with a large effect that that we see and just you know just to add a little bit here just to remind the we are doing and space to the for Cardinal symptoms.

And and pilot studies generally a we'll use that nasal obstruction score, which is one of the for Cardinal symptoms.

Right, Yeah, Yeah, that's great and it seems a bit is a additionally that coming from all angles family. So GBC digital one they ought to be held a different endpoint does though they're using small 22 primary endpoint even do they are looking at big unbundled call.

Due to what's what's your view that group and then how that might though.

These competitive be compared to nobody knows product offerings.

Yeah, I can't I guess.

Start that's a question and maybe Korea and you can chime in I can.

What I can't say is that yes, I am we are familiar with that trial, we understand that they are using this not 22 score. That's not 22 score is a is also being used as a secondary end points and our trial through our conversations with the FDA.

It's very clear that the XP, a preferred cardinal symptoms and that's why.

That is our primary end point and and also our key secondary end points overtime, but we are collecting that's not 22 score.

And you know when via that's not 22 school, we certainly can.

You know couldn't can look at other trials. It is really important though to know that our population is likely to be different from these other studies then and the are the most part we are treating surgically naive patients and.

Often we see study where they are treating postsurgical patient.

I don't know Correnti, you have anything you'd like to add.

I do you know in terms of how do we view that product from a competitive perspective, you know, we view customer a product like customers product the anti bodies. There all systemic agents, which definitely will have a rule in the treatment of Crs.

Fair in our mind, the most refractory patients we speak with physician.

Their preference is to treat Crs, which is a disease.

Local inflammation with.

First and foremost local treatment and we really believe that our product mix you can it will be the preferred local treatment of choice and as such would be used before.

A product like the antibodies were like customer, which really is systemic treatment to treat what is ultimately local information.

So we view ourselves earlier in the treatment paradigm.

Well, let me speak that physicians they confirmed that preference.

Okay. Okay. Thank you so much and know what Don I had a quick one thing you should just as you look I'd be a Mike you mentioned about deal Cashman did you actually look at the Opex spend over the next couple of quarters today any additional color that you would like to go away.

Oh, no really I think that a as we go through the balance of the year ash.

You're gonna see sort of steady as she goes.

Probably the couple of the biggest influences will be in manufacturing tech transfer as well as.

Other preparations to put in place for a ultimate phase three trial.

Some of those her capex and so the timing could be.

Somewhat fluid on those but.

You're not going to see anything dramatic or on a quarter to quarter basis.

Oh, they can give you on.

Thank you.

Thank you.

Our next question comes from the line of Chris Howerton with Jefferies.

Hey, everyone. Thanks, so much for taking my questions I think I have the futures. So the first would be you know you were kind of describing marine is that you're observing a tighter standard deviation than you initially planned Corey.

So hoping to maybe get a little more color in terms of what the magnitude you expecting there secondary.

Oh I'm just curious to know if you expect to see any disruption or potential risk due to the cokemaking pandemic in terms of the end of steady removal.

With mobile procedure and you know what kind of mitigation may or may not be required for that.

And then the third question is what's the gating factors or activities that are either ongoing or planned to get to 20 into the clinic. Thanks guys.

Thank you Chris.

So regarding the standard deviation.

We have not done formal statistical analysis or were not able to share that.

What I I can't say is that you know our phase one study, we didnt controlled the Cardinal sometimes right that phase one study was up as a safety and Tolerability study in the phase two trial, we are and sure.

During that that patients are coming in with a certain characteristics as far as our cardinal symptoms and and so bad as you know again the trial is blinded, but we can see that the data appears to be tighter as we would expect I'm in the face.

Two trial.

Regarding disruption or risk as I mentioned, we have about 60 of our patients that have already completed that 24 week follow up.

We well I mean, we're fortunate that that you know the trial is using these electronic data bases. We do have follow up visits at four weeks at 12 weeks and at 24 weeks.

We we have not seen a significant impact there I well have to see once we have loved the trials completed but at this point our site have remained operational and we don't expect to I really have much of an impact on.

The data as a as a result of cobot and then the other thing to keep in mind is that you know many of our side. The majority of them are in Europe. So we do expect that the remaining patients. They have their visit scheduled in August and they will be able to complete those visits.

With respect to lira to 20.

For that product, we really need to complete the product development.

And and then planned for the designed the back clinical study and that as I mentioned is in process and as we had mentioned we are on track.

To start that clinical program at the end of next year.

Okay, all right well. Thank you so lunch for for taking my questions and all of the additional details on wind related according to the dividend and hope that you and the team and they will.

Thank you Chris.

Your next question comes from the line of Tim Lugo with William Blair.

Hey, this is locked in on the Tim Thanks for taking my questions.

I was just wondering related to the data monitoring committee.

And sort of data collection in general as you mentioned the efficacy endpoints Saddam electronically bit.

Has there been any disruption to.

Bob testing I'm thinking specifically.

Specifically.

Yeah cortisol levels for the high dose cohort.

Do you know if the data monitoring committee.

How about data for all patients so it's interesting to some judy coated.

And then the second question as you sort of outlined in the prepared remarks, obviously, it's been some.

Thank you didn't management.

The past few months, so I guess, just where where does the teams down at the moment and are there any other conditions that youre looking to fill functionality feeling to build out.

Over the coming six to 12 months.

Oh, great. Thank you for your questions I'm, So weve with respect to that data monitoring committee.

Yeah, they do get to see all of that safety data that we have available and and certainly if there were any.

Tests that.

That were out of range or that they were concerned about I suspect that.

They would have made from a recommendation.

So.

As far as till they do have the cortisol data as you.

So when they do.

Ted Lab testing again, we we have been fortunate that I've a follow up visits and the testing have been taking place you know I do think that there may be some instances where that were appointment may have been reschedule, but it's our understanding that they have.

Happened and.

And and that really is more of the minority so where we are fortunate that we have been able to collect that data.

With respect to changes in management as you would expect when we look at what lira needs to do in the upcoming months in years, we constantly look at our management team and the experience within the company and ensure that we have the right skill sets in place.

We're very fortunate that we have five Richard who has joined who has a polymer science background, who have had experience with polymer drug combination products and and transferring processes, who has joined us.

And then also Pamela Nelson, who brings extensive regulatory experience as you know the next space for our company is really focused on the FDA and working with the F.D.A. on our pivotal trial design and Pam is just gonna be.

So instrumental in those conversations as we move forward. He will continue to look at our management structure and see what we need to add for the time being we really I have the right team in place.

And I'm really proud of that the people that we've been able to add.

Great. Thank you very much.

Your next question comes from the line Bert.

Yeah.

T G.

Yes. So thank you for taking the questions congratulations on the progress and apologies this morning.

My My line is.

Broken up having trouble here well just.

If you could tenant in general terms on the Crs patient visits to empties that was affected by Ur cobot to some degree hasn't recovered we expected to recover over time as as a things wax and wane in certainly by the time.

You finish your phase three but is that recovered to any meaningful extend and if so how much you have any metrics well along those lines at all that would be helpful.

Hi, Bert Thank you for your question.

You know, we do monitor that and I can start and and perhaps Korean we'll have something to add its how understanding bad that office visits have recovered for the most part it's it's not as clear as you know if.

Surgeries are happening at the same rates that they were happening and and it may be that in the future. There may be more of a shift from surgical procedures to treat Crs two office based procedures.

Whereas the risks to the patient and the rest of the physician is lower and so this is how we understand the current do you have something you'd like to add.

No I mean, I when we speak with physicians. That's correct you know we hear that up around you know it depending on the physician, 50% to 75% inpatient volume has come back but that surgeries and procedures are still lagging it depends on where we are in the country, but.

Some of those some centers are starting electric elective procedures again, others haven't so I think.

The bulk of the recovery in terms of procedures in surgeries is still ahead of us.

[noise]. Thank you that's all I had congratulations on the progress before the more.

Thank you Bert.

Hi, I'm showing no further questions at this time I would now like to turn the conference back to Miss Maria classes.

Thank you Daphne.

We continue to use technology to keep in touch with our shareholder base in the coming days, we do plan to attend virtually the William Blair and the B T. I GE healthcare conferences and we welcome your request for virtual meetings and calls that those events.

Thanks, a lot for participating in today's call and have a great rest of your day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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