Q2 2021 Lyra Therapeutics Inc Earnings Call
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Welcome to where Therapeutics conference call at this time, all participants are in a listen only mode.
After the Speakers' prepared remarks, there will be a question and answer session and if you have a question at that time. Please press. The Star then the number 1 key on your Touchtone telephone.
Now I'll turn the call over to MS. Stephanie marks with Argot partners.
Thank you operator and welcome everyone to today's call with me today are Doctor Maria Colossus, whereas President and Chief Executive Officer, Don Elsey, Chief Financial Officer, Dr. Robert Kern, Chief Medical Officer, and Corinne noise SVP of commercial.
<unk> strategy and market development.
This afternoon Lira issued a press release announcing its second quarter 2021 financial results.
And business update.
Quarter, a copy of the announcement can be found in the Investor Relations tab of the company's website.
Our therapeutics Dot com.
During the conference call management will make forward looking statements, including statements related to the clinical development of the Companys product candidates business strategy and planned operations. These forward looking statements are based on the Companys current expectations and inherently involve significant risks and uncertainties.
<unk> actual results and the timing of events could differ materially from those anticipated in such forward looking statements as a result of these risks and uncertainties.
Factors that could cause results to be different from these statements include factors. The company describes in the section titled Risk factors in the company's current report on form 10-Q filed today August 19.2021.
<unk> cautions you not to place undue reliance on forward looking statements and undertakes no duty or obligation to update any forward looking statements as a result of new information future events or changes in its expectations.
And with that I'll turn the call over to Maria.
Thank you Stephanie and thank you all for joining US. This afternoon I hope everyone is doing well.
Second quarter has been an exciting 1 for lira, we release the full data set from our positive lantern phase 2 study we had a very successful end of phase 2 meeting with the FDA for our lead program, we entered into a licensing agreement in greater China, and other Asian markets with Lam Bio <unk>.
And we reported positive topline results from the PK study, which supported a 505 b 2 new drug application for <unk> to 10.
Our fundamentals are strong and we are in a position to successfully execute against our upcoming milestones.
The foundation of our company is our proprietary <unk> technology platform, which is grounded in drug formulation chemistry and polymer science.
Our product candidates, our pharmacologic intervention, which target highly potent therapeutics directly to the site of disease for months to manage chronic illnesses.
Our ability to deliver the right drug to the right place for the right amount of time translates into a number of potential benefits for patients, including increased efficacy improved compliance and avoidance of systemic side effects.
Deep drug formulation expertise has been a core capability of lira developed over many years.
This expertise provides us with a distinct advantage over others in the field.
Lear is now at a major inflection point, we have strong validation of our technology and our first 2 indications and our first indication chronic rhinosinusitis or Crs.
Randomized controlled land true phase II study clearly demonstrated with high statistical significance that <unk> works as designed providing 6 months of symptom relief for patients suffering with Crs from just a single treatment.
We are deep in preparation to advance clinical programs for both of our de risked pipeline candidates <unk>.
<unk> is a phase III and <unk> are 220 into phase 2 both around the end of this year Leer is now on a strong position to bring these new therapies to the Crs patients who need them.
Chronic rhinosinusitis has been described as an unrecognized epidemic in the U S about 14 million people have Crs 8.
8 million of those patients are treated each Europe, but at least half of them failed current medical treatments.
Of those 4 million patients who failed medical management each you're only about 400000 go on to have invasive surgery and the rest remain undertreated.
This is an enormously underserved market and we know patients do not want to sign up for surgery similar dynamics apply globally with millions of Crs patients underserved in Asia and Europe.
We believe our current candidates for.
For the treatment of Crs will completely transform the current treatment landscape by uniquely addressing the unmet need in the broad Crs market.
Why are to turn into 'twenty are designed to provide a therapeutic option for the full spectrum of Crs patients treated by e&ps, including both those seeking to avoid surgery and those returning after surgery.
The E&P physician community is particularly eager to have a safe and effective treatment for the millions of Crs patients who are undertreated.
<unk> product candidates are the only ones designed to address this vastly underpenetrated patient population.
As you can see we are positioning ourselves to be a dominant player for this tremendous opportunity there have been no products. In this space that have had this type of broad potential we remain confident that the purposeful design of our pharmacologic intervention. The strong data that we've generated to date and.
The clinic and the relationships, we're building with the E&P community give us a chance to truly create a best in class products that will benefit millions of Crs patients.
Dr. Robert <unk>, our Chief Medical Officer, and share of Northwestern's E&P Department will share his insight into the current treatment landscape and unmet need in Crs and review our recent regulatory developments Rob.
Thank you Maria.
Our treat Crs patients every day and I can attest to the fact that we have very few medical options.
And no FDA approved therapies for the vast majority of patients suffering with chronic rhinosinusitis.
Consequently, <unk> to Gen truly has the potential to change the Crs treatment paradigm.
<unk> is designed to fit into the Sino nasal anatomy on operated patients.
In a matter of minutes.
On the single administration in a simple non invasive office procedure.
Anti surgeons can provide patients with relief for up to 6 months.
<unk> delivers highly potent anti inflammatory drug mometasone Furoate kantar.
Continuously and directly to the affected tissue for a prolonged period of time, thus exerting the maximum therapeutic effect and Maxim symptom relief for patients.
Our products are designed to deliver the drug to the.
The epicenter.
So on your second area.
Okay.
Eliminating drug washout.
And also eliminating the need for patient compliance.
Thus addressing the 3 major limitations of current topical treatments.
Furthermore, our products are designed to avoid systemic side effects, which are a potential issue with costly biologics and certainly the major issue with oral corticosteroids.
Yes.
I believe it will weigh on 210 will become the standard of care for the 60% of Crs patients $2.4 million patients.
Our failed medical management and have not yet had censored.
For the marine and $1.6 million, who had a prior surgery and seek to avoid a second surgery.
<unk> I'm sorry.
Elvira is designed <unk> to 'twenty.
Keep in mind that surgery is not curative and the majority of cases.
And usually requires ongoing medical management to manage residual in recurrent Crs symptoms.
<unk> is an enlarged mometasone furoate eluting matrix.
Size to fit into the operating sinus cavity and again designed to provide up to 6 months of symptom relief for patients with recurrent disease.
<unk> thousand 200, <unk> have been created to help patients avoid surgery, whether it's their first second or third.
And I know firsthand that this.
It seems obvious but most patients would prefer a simple office rather.
Rather than surgery.
It is important to note that no other products in this space target the breath of Crs patients debt.
For products that are available.
Currently available only address about 10% of Crs patients for visa ones that have polyps, whereas <unk> <unk> and 'twenty have been developed to treat 90% of the Crs patient population, providing an option for the vast majority of patients including those without pulse.
As a result, we believe these products have the potential to represent the most important advance in the medical care for Crs patients since the introduction of intranasal corticosteroids over 30 years ago.
I truly believe that 210 and $2.20 has the potential to fill the void in the Crs treatment landscape with a novel and differentiated approach to this burdensome disease.
As we reported in June following our positive into phase 2 meeting with the FDA.
Company now has a clear path forward on our pivotal program for <unk> to chip.
Our phase II study was highly successful and we view the upcoming phase III.
I'm sorry.
That our upcoming phase III has been significantly de risked as a result for the phase III program will largely mirror that trial.
The phase III program will consist of 2 multi center randomized patient blinded controlled trials evaluating <unk> at 750 microgram dose with approximately 180 Crs patients per trial.
These patients will have failed medical treatments.
Continue to be symptomatic for single primary endpoint of the pivotal program will be a composite score of the 3 cardinal symptoms of Crs at 24 weeks and these are nasal blockage nasal discharge and facial credit.
As a reminder, in the phase II <unk> study <unk> 2 tenants 750 microgram dose showed highly statistically significant improvement over control at this endpoint with a P value of 0.003 week 24.
We also recently reported positive topline results from a pharmacokinetic study of <unk>.
There are 2 important takeaways from this PK trial. The first is safety day to provide a bridge to support a 505 <unk> approval pathway.
The second point is that this was our first U S study of <unk> and was fully enrolled across for size and just 11 weeks during the fall of 2020 in the midst of high rates of Covid infection.
We believe it.
<unk> is well positioned to address this large underserved market with unique and disruptive Crs products that have the potential to alter the current treatment landscape.
Don will next discuss the financials Don.
Thank you Rob the earnings release, we issued today outlines our financial results from full so I'll only provide a summary here.
Starting with our cash on cash equivalents, we ended the second quarter was $69 million compared with $74.6 million.
Number 31, 2020, we believe that lira has sufficient cash to fund the company through planned operations in.
2023.
Total operating expenses for second quarter were $11.1 million compared to $4.5 million for the same period in 2020. This.
This increase was driven by our tech transfer program and <unk> clinical operations as we wrapped up the lira 210 phase II trial and prepared for our FDA meeting.
Net loss for the second quarter was $11.1 million.
<unk> shares outstanding as of June 32021 were approximately 13 million shares and with that I'll turn the call back to Maria.
Thank you Don as you heard from Dan we are sufficiently funded to drive all our clinical programs forward through next year.
We are at an exciting inflection point in <unk> evolution, we have strong validation of our technology on our first indication and have several important catalysts on the horizon.
Preparations are already underway for advancing our 2 clinical programs. We're manufacturing the clinical products, we have already selected our CRO I'm on.
Also pleased to announce that we recently received approval in Australia to begin our phase II clinical trial for <unk> hundred 20, which will then expand into the U S.
We remain on track to initiate 2 clinical studies around the end of this year.
First phase III trial for <unk>, <unk> and the phase II trial for <unk> to 'twenty.
With both of these programs significantly de risked our stellar team and our deep clinical and regulatory expertise.
I'm highly confident in our ability to execute.
We expect we will begin seeing data from from that $2.20 trial towards the end of 2022 and readout from the 210 trials in 2023.
In addition, we are making meaningful progress with the <unk> bio team and are confident in our ability to bring <unk> to turn to Asia through our partnership.
We have significant additional significant events in the near term on Tuesday August 31, we will be hosting an event with kols for a deep dive into the current Crs treatment landscape and how <unk> 10 in 2020 could impact management of their patients.
The event will be moderated by Rob and include 2 leading E&P position factor Amber Luang Professor and Vice Chair of research in Otolaryngology head and neck surgery at University of Texas, Mcgovern Medical School and Baxter, Brent Senior Professor.
And Vice chair of Otolaryngology at University of North Carolina School of Medicine.
Additional details will follow soon and we look forward to your participation.
We are very proud of the commitment we have to conducting high quality science at lira and are excited to have our work acknowledged by the American Rhinologic Society and in leading journals we've.
We've had 2 abstracts accepted for podium presentation at the annual meeting of the American Rhinologic Society in October.
We will present long term follow up from the Lantern study and the full data set from the PK study of <unk>, which was selected by the Academy as a top clinical abstract.
Also we recently received further validation of our work with the acceptance of 2 publications in leading scientific journals.
For full land turn data has been accepted for publication in the International Forum of allergy and Rhinology.
In our preclinical research and <unk> has been accepted for publication in the American Journal of Brian Ology in allergy.
We expect they will both be available online shortly.
We've come a long way and I am very proud of what we've accomplished we have demonstrated the safety and efficacy of <unk> lead product and 3 clinical studies, it's important to understand that this data not only provide validation for our products for Crs, but also for our X trio.
<unk> platform, which has broad potential across a wide range of chronic diseases.
We can now begin to take concrete steps to leverage our technology to expand our pipeline for the future.
And now we'd be happy to take your questions.
Yes.
Thank you ma'am, ladies and gentlemen, if you have a question at this time. Please press. The Star then the number 1 key on your Touchtone telephone. If your question has been answered or you wish term move yourself from the queue. Please press the pound key.
Our first question is from Bert Hazlett from <unk>. Your line is now open.
Yes, so thank you for taking the questions.
A couple of them from me first of all.
Just with regard to <unk> could you provide a little bit more color on.
The Covid studies Sars endpoints things like that.
Second we would like to ask about the pace of R&D spend.
And then.
I'll follow up with another 1 after that.
Great.
Bert I hope you're doing well.
So 220.
Is the larger matrix that we've developed for patients who have had surgery. So it's been designed to be able to stay opposed to that larger anatomy it'll have the same dose of drug 7500 microgram.
And the release kinetics are aligned with <unk> to 10.
We estimate approximately 60 patients in that study, we're going to be evaluating the safety, we're going to be doing pharmacokinetic and characterizing the pharmacokinetics.
We will also be assessed.
Assessing the Crs symptoms via Snot 22 score and also the 3 cardinal symptoms.
And as I had mentioned in the past Theres 3 arm to that study.
We'll have a control group and then we have.
2 designs that that we'll be evaluating again, both with the same dose of drug.
Terrific.
From the pace of R&D spend and then my other question is simple.
M&A in the sector recently I'd love your thoughts on.
What that means for for Leer on in the near term.
Maybe the longer term.
With regard to commercial infrastructure and or other strategic implications.
Alright, Dan do you want to address the question on the pace of R&D spend sure Hubbard.
So basically as we sit here today, we look out through the balance for the year.
The R&D spend given that debt.
<unk>, both tech transfer and clinical operations.
Tech transfer.
<unk> is going to continue basically.
Levels that are somewhat similar today, maybe a little bit less as we have done.
A lot of work in the first half.
And then the clinical operations will start to pick up.
Toward the latter part of the year.
Once they pick up I anticipate that will probably continue in first quarter and then start to level off.
During the course of the trial once once we've got the sites up and running we've got all of that.
Then it's of course as you know its patient recruitment and then.
Following through the 6 months of treatment, so a little bit of a spike.
Year end into the first part of the year for clinical operations on a leveling off Tech ops should should generally is for you approach the end of the year start to level off.
But it will continue somewhat on pace with.
With the supply of the clinical material.
And then of course, all sites are on getting ready for commercial material.
Terrific I appreciate the color.
And then I'd love your thoughts on.
On what it might mean for Lear on with regard to some of the M&A debt has gone on this sector.
I'll take that bird and Karen if you want you can.
You had some color with respect to the commercial opportunity there.
Wasn't announcement.
<unk> is acquiring intersect DMT, which we think is really great news for us we've been saying that the market is huge and vastly underpenetrated and so.
Apparently Medtronic also agrees and.
<unk> has taken steps.
2 more sort of fully participate in the market.
We suspect that Medtronic will be aggressively developing the E&P market, which will benefit us when we get to that point.
At the same time I think it's important to note that we don't overlap <unk> 10 doesn't overlap with intersects product.
That when when we get to that point, we will be able to really address the lion's share of the market.
Karen do you have anything you'd like to add.
No I think that's exactly right. It validates what we're trying to do we will benefit from what Theyre doing in the marketplace and our products are uniquely differentiated and targeting a different patient population that we think we can leverage all of their work and be positioned to really benefit from.
That's great news.
Terrific. Thank you very much I'll get back in the queue.
And our next question is from Keith Lugo from William Blair. Your line is open.
Alright, Thanks for taking my question and congratulations on all the progress during the quarter.
And also thank you for setting up your absolute R&D Derek those are always very helpful.
Maybe a question for Dr <unk> to occur.
I'll comment on.
Given your experience in treating those patients on how teekay will be differentiated from the biologics I think there is still a big disconnect between how the street is looking at the respective opportunities between <unk> and the biologics, which isn't unusual but I'd love to hear from.
For treating physicians.
For sure.
Moving to biologics are really practically speaking only going to be applied to patients who have failed surgery and have failed surgery and have extensive nasal polyps.
So youre talking about a pretty small chunk of the market, where we're looking at 4 million patients theyre looking at probably by their own admission about 100.
So that's the first step for the second thing is that <unk>.
Biologics there.
They are very powerful.
But there are systemic drug with systemic side effects, there's going to be huge approval hurdles for for those products.
From insurance companies and there are $38.35000 a year basically for the rest of the patient's life.
So that's a massive commit.
Talking about what we are looking at a completely opposite end of the market.
Patients to 10 is really for patients that have had no surgeries.
Net are patients that have symptomatic disease, but yet continue to live with it they don't like using nasal steroids or steroid nasal steroids are ineffective.
And it's the vast majority of patients.
And.
It's more of an entry level as opposed to an end stage product.
So and it's also a simple office procedure patients in and out there's minimal commitment from the patient and really from the insurance companies. So.
They're really kind of apples and oranges, but.
I live this so it's obvious to me.
Fully answering your questions.
That's very helpful. Thank you.
Maybe kind of pivoting to.
But we agree.
The agreements and the.
Clinical program in Asia.
Could you I guess Maria or whoever.
The address is can you maybe talk about the regulatory environment. There with the study is going to look like is there kind of a similar 500 <unk> pathway versus the states.
And also maybe just the prevalence there.
Tim Hi, so.
And then Karen.
Turn it over to you okay.
For that.
Agreement and the collaboration with Lam bile is has been going very well. So we're very pleased with how things are progressing.
On a.
And in terms on the regulatory environment. They don't per se have a 505 b to process, but we are going to be able to leverage our U S data in China, we're very confident about that.
<unk> would you like that for.
Follow up on the commercial question sure so.
In China, what we know is that there is a.
Treatment paradigm looks very similar to what exists in the United States with patients starting with medical management and after medical management sales roughly around the same percentage 50% of patients. The only other option is surgery. So we know there are over 80 million patients in China that have Crs.
Captured in a very concentrated hospital setting where patients go in for treatment for even outpatient treatment.
And what we can say right now about the market is that we know at least as large if not larger than what exists in the United States and with the development plan that we're putting in place.
We're very excited that there is the potential to access China in those other territories in short order following a U S approval.
Great. Thank you for that.
Again, if you would like to ask a question at this time. Please press. The Star then the number 1 key on your Touchtone telephone.
Our next question is from Ashwin <unk> from Bank of America. Your line is open.
Hi, Thanks for taking our questions. This is the <unk> from.
Bank of medical is a couple of for follow ups on what has been discussed earlier.
Regarding our <unk>.
<unk> 10.
Is that any.
Inclusion exclusion criteria of difference between the phase 3 that you planned to conduct.
What you had in phase 2.
That's my first question.
Separately just on the Leon <unk>.
Milestone payments on the.
Any color on around the timing will be so $135 million milestone is that based on your activity or does <unk> have to conduct some operations for that.
And I have another follow up after that.
Hi, Ash <unk>.
Regarding debt to 10 trial of the phase III program inclusion exclusion.
Phase 2 trial was very successful.
We are.
Very pleased with the results of that trial and as as you know because of Covid, we had to stop it short.
But despite that.
We were able to see statistical significance in many of the endpoints.
<unk>.
Snot 22 for Cardinal symptom.
On.
Also the.
Rescue medication.
So we are mirroring the phase III.
As inclusion exclusion to that phase III trial.
1 of the things that will be different is as you recall in the phase II study we.
We measured the for Cardinal symptoms.
In the phase 3 study.
We will be looking at the individual symptoms as we did in the phase 2 but the primary endpoint is going to be the 3 cardinal symptoms.
So that'll be the composite that we'll be using another.
No that is different we did imaging and the phase 2 we did MRI imaging.
And the reason we did that was.
Due to concerns about radiation burdened outside of the U S. However in the U S is really the standard so we will be doing.
Rather than MRI, but really other than that we're talking about a very similar trial.
And then the next question was on the milestone payments what we've.
<unk> said publicly is that the milestone payments, our regulatory clinical and commercial payments both.
In the U S and in.
In.
Asia.
So beyond that we haven't really given any more specific.
Yes, okay.
And just so on the Opex I wanted to go back for that so I think Don you mentioned that the R&D line driven by debt transferred on clinical operations span.
Have you given the breakdown of those 2 lines by any chance and just curious on the I.
I think on G&A also game on elevate above expectation. So is that could that be like the new run rate that we can we can on soon.
First part of that question have we ever given that breakdown between those couple of loans we haven't.
It's not really are on retention to get that granular on that spending category.
With respect to general and administrative.
Yes.
Going to say that.
It's not necessarily indicative of a new run rate there are some.
Things that come along Episodically.
Drove Q2, probably a little bit higher than what I would consider a run rate.
That being said as we as we look forward.
And clearly expand activities with <unk>.
China and the like there will be some additional spending in that category.
Not particularly material, but there will be some increase there.
Yeah, Okay, great. Thank you so much.
You bet.
I am showing no further questions at this time I would now like to turn the conference back to MS. Maria Colossus CEO. Thank you.
Thank you so much for joining us today, please keep an eye out for details about our upcoming <unk> event, we look forward to.
Updating you as we make progress thanks again have a good evening.
Thank you presenters ladies and gentlemen. This concludes today's conference. Thank you for your participation and have a wonderful day you may all disconnect.
Yes.
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Yes.
Sure.
Good day.
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