Q3 2021 Lyra Therapeutics Inc Earnings Call

November 9, 2021

Good day and thank you for standing by welcome to the Lira Therapeutics third quarter Financial review and operational highlights conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session.

You will need to press star one on your telephone if you require any further assistance. Please press star zero now I'll turn the call over to Stephanie months with Argot partners.

Yeah.

Thank you operator and welcome everyone to today's call with me today are Dr. Maria collapses.

Lear is president and Chief Executive Officer, Jason Cavalier, Chief Financial Officer, Dr. Robert <unk>, Chief Medical Officer, and Corinne <unk> SVP of commercial strategy and market development.

This afternoon Lira issued a press release announcing its third quarter 2021 financial results and business update.

A copy of the announcement can be found in the Investor Relations tab of the Companys website lira Therapeutics dotcom.

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 company's current expectations and inherently involve 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 that the company described in the section titled Risk factors in the company's current report on Form 10-Q filed today on November nine 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 expectation and with that I'll turn the call over to Maria.

Thank you Stephanie and thank you all for joining US. This afternoon. This third quarter of 2021 was another quarter of significant progress at lira.

Clinical front, we continue to generate data that strengthens the profile of our lead candidate L. Wired to 10 for the treatment of chronic Rhinosinusitis, we announced new positive data from the phase two land turn post treatment evaluation, which showed continued safety and outpatient and a durable <unk>.

<unk> six months post removal of L Y our 210 and roughly half the patients that we've treated this durable response in some of the patients even six months after removal was impressive and important differentiator relative to other treatments in the field.

We also reported the full results from the 56 day pharmacokinetic kinetic clinical study, which demonstrated that mometasone furoate blood levels were low and constant overtime, providing further evidence that L Y our 210 delivers a steady daily dose of Mometasone.

We believe that it is these drug release kinetics of L Y our two time that underpinned the rapid and prolonged symptom relief that we've observed in our clinical studies.

This third study further strengthens our data.

Safety and efficacy database Dr. <unk> will review these data in more detail shortly.

Both clinical studies were presented at the 67th annual meeting of the American Rhinologic Society last month at <unk>, We presented the data in two oral presentations and also received additional recognition by the society for clinical research. The PK study was selected as a top.

<unk> clinical abstract at the meeting and the land turn phase two manuscript one the E. R. F. 2021 clinical science Maurice Cottle Award. This recognition speaks to the quality of the science at Lira.

Our clinical programs are advancing into late stage development with the start of the phase three clinical program for <unk> 10, and the phase two clinical trial for <unk> to 'twenty in the coming months.

On the corporate front, Jason Cavalier was appointed as our new Chief Financial Officer in September He brings over two decades of experience as an investment banker and has an extensive track record in advising companies on financing and strategic alternatives.

Most recently he was managing director director head of life Sciences, mergers and acquisitions at Cantor Fitz Gerald where he led numerous transactions across medical technology diagnostics and biopharma sectors.

He also held other investment banking positions at RBC capital markets.

Barclays Capital Bear Stearns and Lehman brothers.

Jason leads our financial and capital market strategy and will support our investor public relations and business development activities.

He takes the reins from Don Elsey, who guided the company through our IPO.

As you know Don is retiring he will remain an advisor through year end on behalf of the entire lira team I'd like to thank Tom for his tremendous dedication commitment and contributions to the company.

Now I'd like to take a few minutes to remind you why we have initially focused our development on a treatment for patients with chronic rhinosinusitis.

The rest is a debilitating disease that has been largely ignored the disease is highly prevalent in the world with about 14 million people just in the United States patients are currently treated with off label medications that have not been approved to treat Crs.

Consequently about half of these patients fell medical treatment and continue to suffer with their disease in the United States alone. There are 4 million patients that failed medical management each year. Their next the option is invasive surgery.

Currently marketed products have only been developed to treat pilots, which only represent 10% of the Crs patients.

<unk> mission is to provide the very first treatment for these millions of Crs patients who have been underserved by current treatment options by developing an effective drug vector directly targets inflammation at the epicenter of the disease.

Our proprietary <unk> platform technology enables delivery of a targeted and consistent therapeutic dosing directly to the disease submucosa for six months with one application no. One else has been able to achieve this to date.

It's developing two product candidates to fully address patients with Crs L Y our 210 and $2 20.

Both our small shape memory implants that are placed deep in the nasal passage using a small diameter applicator and then E&ps office during a routine endoscopy.

L Y. Our 210 is designed to be used early in the treatment paradigm and surgically naive patients after topical steroids sprays have failed.

We estimate this population to represent about $2 4 million patients in the United States each year.

The post market.

The post surgical market opportunity is also significant at about $1 6 million patients each year to address this market, we're developing <unk> to 'twenty, which is designed for the post surgical anatomy and patients who continue to require therapy, despite having had prior and.

<unk> sinus surgery.

A growing body of scientific evidence continues to support the safety and efficacy of <unk> 10, and highlights the benefits of our proprietary <unk> trio platform technology, we have strong validation of our technology in Crs are first targeting an indication and we intend to.

To leverage the platform and new indications over the next year.

In addition to our own research. We have also been hearing from key opinion leaders about their enthusiasm for the potential of L. Y our two tend to be a new treatment alternative for their Crs patients.

Over the past few months, we hosted two events with leading E&P, who all share their experiences and treating crs patients. The shortcomings of current therapies and the need for new effective treatments. We urge you to listen to the webcast, which are found in the IR section of our corporate website.

I'm sure that you will find their perspectives informative.

With the upcoming initiations of our two clinical programs are phase III enlightened program for <unk> 10 in the phase two Beacon program for <unk> to 'twenty, we're one step closer to potentially changing the treatment paradigm for the millions of underserved Crs patients.

I'll now turn the call over to Dr. Robert Kern, who will review the new data as well as the clinical trial designs for L Y our 210 and $2 20, which are both anticipated to initiate around yearend crop.

Thank you Maria.

As Maria mentioned, new positive data on <unk> 10 was the subject of two presentations at the suit 67 annual E. R. S V. That's your American Rhinologic Society.

Before I review these data I wanted to remark on the wood the Lantern man you should be perceived at that meeting.

My 30 years as a REIT knowledge has been a member of that society I have not seen that award given to two industry sponsored research.

It was quite an accomplishment for amira and a validation of our rigorous clinical program.

We entered post treatment evaluation of assessing the safety and efficacy over six months following.

Matrix removal.

During the post treatment period, there was no increase in terms of treatment related adverse events.

Also approximately half of these crs patients experienced a durable response six months after the removal of beltway are 210.

Well roughly 90% of the patients in the control arm showed worsening.

And things from week 24.

Global symptom relief observed in some patients after removal of alloy Archie Chen offers potential long term benefit and as a meaningful differentiator relative to other treatments.

We also reported results from the 50 <unk> pharmacokinetic study.

We showed that L. Why aren't you tend to lead with a constant daily dose of Mometasone furoate over the study period without a drug burst.

PK study enrolled 24 patients across four U S sites to receive or to 10, 2500, 7500, Picogram doses 175 times.

The study showed that <unk> tend to be safe and effective in patients with less severe disease as patients in the PK study at baseline Snot 22 score of around 38.

Compared to 60 in the Landrum phase two trial.

Impressively, 63% of patients achieved a score below 20.

And standard threshold for surgery, and 38% of patients achieved a normal score meaning below nine five.

<unk> 56.

These results further demonstrate our belief that <unk> has the potential to provide an effective treatment.

Mild all the way to severe C O N E.

We've now shown in three separate trials, both safety and efficacy for our lead product to China. We believe these impressive.

The results validate six month treatment duration provided with a single administration and the potential for a more durable thing post removal.

As a practicing physician an otolaryngologist I believe that Ah why aren't you 10 offers a significant advantage over existing therapies and has the potential to establish a new standard of care for chronic rhinosinusitis.

Looking ahead, the global Phase three enlightened program for OA are two tenants expected to initiate around year end.

We anticipate enrollment each trial to about 180 adult patients with Crs.

<unk> medical management, and our surgically night.

Two studies will remain randomized two to one to one or two tenants.

Versus control.

Primary endpoint will be the three cardinal symptom scores at 24 weeks with secondary endpoints to include its not going to.

Rescue treatments sinus, you teach cans quality of life and chemical economic evaluations.

The design is largely similar to the phase two landers study, which was highly strategic.

Stickley significant re cardinal symptoms at 24 weeks.

Enlighten one will include six month extension study, where from Seabold patients will caution retail one or 210 treatment and 50% of the treated patients who achieve a repeat dose.

It is important to note that the extension study will not related top line readout of the primary endpoint at 24 weeks. We believe an enlightened is a robust clinical development program.

It's Colin and his group.

Later this month, we will also start to phase two beacon study for L y out to 'twenty.

Plan to enroll approximately 65 post surgical patients across sites in the United States and Australia.

Randomized one to one to one to receive one of two different matrix designs.

Each of the dose.

Each of the dose of 7500 Picogram sport control.

Primary end point will be safety and feasibility over 24 weeks with secondary endpoints, including PK Snot 22, three cardinal symptoms rescue treatment signs she T newsom biomarkers and quality of life.

Let me now turn the call over to Jason who will review the quarter's financials Jason.

Thank you Dr <unk>.

Before I review, the quarter's financials I would like to take this opportunity to express my enthusiasm for the opportunity of lira over the course of my investment banking career I worked with numerous companies across the health care sector and I believe that Lear is uniquely positioned with tremendous potential to change the treatment paradigm for Crs patients.

I'm honored to be working with a stellar team here and support our mission to be a leader in Crs treatments.

Turning to the quarters financial results press release was just issued but let me review select highlights.

Lira ended the third quarter with cash and cash equivalents of $58 1 million compared to $69.0 million as of June 32021.

We believe that Lear has sufficient cash to fund the Companys planned operations through 2022.

Research and development expenses for the quarter ended September 32021 were $7 1 million compared to $3 7 million for the same period in 2020, primarily primarily attributable to an increase in product development and manufacturing expenses related to the tech transfer to our contract manufacturer as well as an increase in research and development head count and.

In consulting expenses as we ramp up for our later stage clinical programs.

G&A expenses for the third quarter 2021 were 4.0 million compared to $2 7 million for the same period in 2020.

Primarily attributable to an increase in professional and consulting expenses stock based compensation and general and administrative head count.

Total operating expenses for the third quarter were $11 1 million compared to $6 4 million for the same period in 2020 net loss for the third quarter was $11 1 million compared to $6 3 million for the same period in 2020.

And shares outstanding as of September 32021 were approximately $13 million.

With that I'll turn the call back to Maria.

Thank you Jason Lira is poised to be a dominant player in the Crs market L Y our 210 and $2 20 are designed to be disease modifying in best in class treatment for the millions of Crs patients who are underserved by current medical management, we're extremely excited to be advancing into late stage.

Men with the start of the phase III clinical program for <unk> in a phase two clinical trial for <unk> to 'twenty in the coming months.

Matt we are ready to take your questions operator.

Thank you at this time, if you'd like to ask a question. Please press star one on your telephone keypad again to ask a question simply press star one on your telephone keypad.

Yeah.

Your first question comes from the line of Tim Lugo from William Blair. Your line is now open.

Thanks for taking my question and congratulations on all the progress I guess, one quick housekeeping question can you give us an update on our manufacturing capacity.

Yes.

And at what point in the future do you likely scale without cause.

Possibly.

Yeah.

Hi, Tim Thank you for the question.

As we have mentioned in the past.

We have transfer the technology to an outside contractor in the past we have also manufactured in <unk>.

House and.

And we've used our sme's here to transfer the process.

The.

That scale up right now is geared towards our clinical studies and were you know were sufficient for those studies.

As you know we have three trials, we have the enlighten one the enlighten two and also began and so we're in very good shape.

With our manufacturing, we're going to be spending time during the enrollment period and follow up periods to be scaling up at our contract manufacturer and as I think I mentioned in the past we were very selective with who we have chosen we've chosen a contract manufacturer.

<unk> that we believe is very well suited to be able to scale up the matrix for commercial.

Yes.

Okay. So there's no need for second sourcing or I guess, you can cause a second sourcing since evolved manufactured in house from the past.

Well we.

At this point, we don't but yes, we will absolutely have a backup well continue to look at other backup in addition to layer out.

Certainly at this point.

We can and we're well positioned between our contract manufacturer and and layer out, but certainly in the future we will have additional hub.

Additional source to manufacture the product.

Okay, great and.

Interested I believe it was Dr. Karen mentioned this in the past or maybe a few maria as well.

And the fact that you wanted to clinical science Mores Cottle award and the other for deals.

Company from industry that has won this award I guess, what do you think the society saw in the phase two data.

Typically which stood out beyond the other biologics and we are there kind of larger phase III.

You, obviously have been presented in the past.

Well I should probably answered that I think the magnitude of the response.

As we've seen with a single administration is very striking.

That's.

The only thing that comes close to this and changing the snot 22, or the ease of the biologics, which you have to give.

Regularly and require are extraordinarily expensive and the other options surgery.

So to have that kind of outcome at six months is striking.

The statistics were robust.

And the.

The presentation was.

Appropriate Lee.

Scaled it wasn't too it was measured but it was exciting I think it was probably the main.

Region, and it was well done.

Yeah, maybe I can also I.

Thanks, Rob.

Totally agree with everything one thing.

I've been in this space for a long time doing drug delivery from from implants, and the fact that we had two doses and we did a dose response I think really stood out. It's it's it's really a rare thing to see because you do have to create a whole new product in formulation and.

And it just speaks to the strength of our development and scientific team.

That we did that we went into the study really not knowing whether we would see a dose response.

And the fact that we did see it.

With validating.

To layer on and to the scientific community.

Alright agree okay. Congratulations on that.

So I guess one last question could you give us an update on the <unk>.

Development plan.

It's kind of come together for your Asian.

<unk> partner.

Okay.

Sure. This is corinne noise.

But we're very pleased with how the <unk> collaboration is progressing and.

We are on track to have them participate in our second of the two phase III studies and the goal with that participation is for them to sell.

Admit and commercialize shortly after we do in the U S.

Great Congratulations on the progress.

Thank you Tim.

Thank you. Your next question comes from the line of.

Bert Hazlett from C. T I G. Your line is now open.

Yes, Thanks to just two for me my congratulations on all the progress as well.

With regard to the financial statements and looking forward given that you're starting to.

Major efforts fee of three studies with two major efforts with 210 and two 'twenty, how should we think about the trajectory of R&D going forward, it's been 7 million plus over the past couple of quarters.

Materially increase on a quarter to quarter basis.

If so roughly what level.

Should we be thinking about in terms of model.

Yeah.

This is Jason.

So I think.

Given that we've completed the.

The tech transfer to to a contract manufacturer, we expect that spending to tirelessly tear off offset by increase in manufacturing expense to to supply the units for the clinical trials. So.

Yeah, we would expect a slight uptick overall in our R&D manufacturing as well as the obviously the clinical expenses. So given that we're starting three three trials. So I would expect a slight uptick but again, we feel like with the cash on hand and expected milestones.

We will have enough cash on the business through.

At the end of next year.

Terrific.

Thank you.

Just a question on the clinical data the durability of effect.

Scene is.

It is terrific data.

How does that make you think about your.

Kind of re treatment rates with 210, either patients with polyps or non polyps.

Is that.

If you think about the.

The rate of re treatment or or is that pretty steady and just your general thoughts there in terms of the numbers of procedures that you would expect.

A patient with Crs to undergo per year with either to 10 or 20.

Yeah, So maybe I can start and then turn it over to Ted.

Karen.

And we can we cannot.

Her perspective too so.

We were excited to see that you know and about half the patients. We did see a durable response I think it really speaks to the fact that.

That these patients are getting.

A consistent and targeted dose of steroid which is a broad anti inflammatory.

Which which then potentially results in some remodeling of the tissue.

It's small numbers clearly so so.

So we do have to evaluate this further in phase III and as you heard from Rob.

We do plan to do that and in the Phase III extension study correct.

Yeah, and I think we've shared in the past, but with our modeling internally, we always assume about.

One and a half.

One five uses per year, so about 50% of patients get a re treatment and interestingly enough. This early data that emerged from the lantern study.

<unk> aligns with that assumption that around 50% of patients would get another one and 50% wouldn't need one in the first year, but might need another one at some point so.

We'll see a mix of repeat use.

Some patients have a durable response.

Terrific.

That's very helpful and just one more.

Question, then for me a brief one.

Okay, one would be uhm, what would be the expected enrollment cadence or timeline for the phase three programs for 210, Uhm and I, if you're unwilling or unable to kind of provide clear estimates there maybe you can remind us.

What the timelines word for the Lantern study.

And then the second question would be you know just as I I think we actually discussed this recently, but I'd be curious to see a doctor current or anyone else on the team had additional thoughts here about you know why is it that you're seeing durable effects six months after the the removal of the device.

Is there something about tissue remodeling or something else that that could be going on to explain to those durable effects. Thank you.

Thank you Chris I'll go ahead and take the first question and then Rob can address the second one.

We we expect that enrollment for both enlightened one and then lightning too well take approximately 12 months, we thanks will be enrolling patients through 2022.

<unk> will be you know will be trying to invoke patients as quickly as we can we're we're thinking a lot about the site that we pick to ensure that happens.

Uhm, we intend to not only have sites in the U S. But also in Europe. So we feel good about those estimates and we're hoping that we'll be able <unk> accelerated as possible.

Rob.

Sure Uhm, Yeah, I mean.

Obviously, the it's a very intriguing and encouraging finding and half of the patients.

Really sustain the improvement.

It's a small study need to keep in mind that this is improvement.

<unk> cure cure is a dangerous word to use with a chronic disease you can make it a couple of colds or you can spend the whole thing out of control. So it won't encourage you we don't get carried away I think if if if you wanted me to put my basic science Immunologist had on I could say that the what we don't see.

Oh before I get to that we don't see isn't it is a rebound effect the biologics despite.

There.

Power.

As soon as you take the drug away they start to reboot.

Now the difference and again I got my speculative had on my name is allergy speculative speculation had won the.

The steroids are much broader.

They they basically squelch, so almost the entire inflammatory cascade.

The biologics punched little holes.

They were like you know a little charges. So I my my sense is that what we're doing and we're so broadly suppressing it.

There is some element of remodeling that we are kind of turning back takes years to get this disease. We are suppressing all aspects of the inflammatory response. So we are perhaps walking back the clock.

If adding okay questions Nah I appreciate a doctor Karen I really do well, thank you and actually Maria if I might sneaking just another follow up could you give us maybe similar expectations for the phase two 220 study as well.

So the the phase two study is going to initiate this month and there.

There are two that two parts to that study there is the sort of the.

Open label part wherever we're going to be assessing the feasibility we're going to be optimizing the procedure of delivery and and then after that we're gonna be going into the randomized portion of the study.

And so we'll be starting in Australia, and then and then we're going to be clearly with the U S is focused on 210, but we expect then we'll get started in the U S too.

So in terms of enrollment again, it would be through 2022 that that will be enrolling that study.

Okay, Alright, well, thank you very much and congratulations on your progress.

Thank you Chris.

Thank you and again to ask a question. Please press star one on your telephone keypad.

And we have a question coming from a Swami Burma from Bank of America. Your line is now open.

I. Thanks for taking my question congrats on to apologize to help me.

So this nearby you'll collaboration just wanted to make sure I heard the cry I think you're assuming that day, though launch India Geography's one year after you've gone in the U S.

And how much of the mind some payments can be a Q.

In the in the next one meal and out of that 135, and how much would be I don't know the approval and launch.

That's my clothes question I'm just on the face to design that you just discuss so like <unk> venue cause that'd be open label part of this study just take optimizing the procedure is that something that you're willing to share with us just just that I'm, assuming that you you want to I'd have to find like with where the the detention.

Good enough on Dot I'll go bigger matrix. So just curious if you would share that with us.

Hi, Ash. Thank you for your questions, we'll start with current and Jason can address the first one.

So.

Answer your question about the timing of launch in China are current development plans have China launching shortly after the us so sooner than a year.

And on the.

On the milestones, we haven't disclosed the specifics around the milestones and timing the B M. Bio collaboration I would say that you know the structure and the overall structure of it is not dissimilar from similar similarly similar agreements.

But we haven't really specifics around the the milestone payments.

Oh Ash on your second question about the faith to design and and whether it will be able to share data from the open label certainly we would.

Report out when we have that data on hand.

And I would expect that in the second half of 2022 and and it really what we're going to be assessing there is the feasibility of place men and so.

So whatever.

Mm data, we have from that and the safety will be certainly reporting out.

Yeah, Okay got it thanks.

Thanks.

Thank you.

Ladies and gentlemen that concludes our Q&A session for today I'll have it back over to Maria Pilaf is the C E O for any closing remarks.

Thank you operator, and thank you all for joining US today, we look forward to updating you on our progress.

You may now disconnect enjoy your day.

[music].

Good day, and thank you for standing by and welcome to the Lira Therapeutics third quarter Financial review and operational highlights conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone if you require any further assistance. Please press star zero now I'll turn the call over to Stephanie marched with Argot partners.

Thank you operator and welcome everyone to today's call with me today are Dr. Marianne for Alaska.

Mirror is president and Chief Executive Officer, Jason Cavalier, Chief Financial Officer, Dr. Robert <unk>, Chief Medical Officer, and Corinne <unk> SVP of commercial strategy and market development.

This afternoon Lira issued a press release announcing its third quarter 2021 financial results and business update a.

A copy of the announcement can be found in the Investor Relations tab of the Companys web site, where a therapeutics dot com.

During the conference call management will make forward looking statements, including statements related to the clinical development of the company's product candidates business strategy and planned operations. These forward looking statements are based on the company's current expectations and inherently involve 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 that the company describes in the section titled risk factors in the company's current report on Form 10-Q filed today on November nine 2021.

Thank you Stephanie and thank you all for joining US. This afternoon. This third quarter of 2021 was another quarter of significant progress at lira on the.

Clinical front, we continue to generate data that strengthens the profile of our lead candidate <unk> L Y R to 10 for the treatment of chronic Rhinosinusitis, we announced new positive data from the phase two land turn post treatment evaluation, which showed continued safety in all patients and a durable <unk>.

Six months post removal of L Y our 210 and roughly half the patients that we've treated this durable response in some of the patients even six months after removal was impressive and important differentiator relative to other treatments in the field.

We believe that it is these drug release kinetics of L. Y are to turn that underpin the rapid and prolonged symptom relief that we've observed in our clinical studies.

This third study further strengthens our data.

Safety and efficacy database Dr. <unk> will review these data in more detail shortly.

Both clinical studies were presented at the 67th annual meeting of the American Rhinologic Society last month at HRS, We presented the data in two oral presentations and also received additional recognition by the society for clinical research. The PK study was selected as a top.

Clinical abstract at the meeting and the land turn phase two manuscript one the E. R. S 2021 clinical science Maurice Cottle Award. This recognition speaks to the quality of the science that lira.

Our clinical programs are advancing into late stage development with the start of the phase three clinical program for <unk> and the phase II clinical trial for <unk> to 'twenty in the coming months.

Most recently he was managing director director head of life Sciences, mergers and acquisitions at Cantor Fitzgerald, where he led numerous transactions across medical technology diagnostics and biopharma sectors.

He also held other investment banking positions at RBC capital markets.

Barclays Capital Bear Stearns and Lehman brothers.

Jason leads our financial and capital market strategy and will support our investor public relations and business development activities.

He takes the reins from Don Elsey, who guided the company through our IPO.

As you know downs retiring he will remain an advisor through year end on behalf of the entire lira team I'd like to thank Tom for his tremendous dedication commitment and contributions to the company.

Now I'd like to take a few minutes to remind you why we have initially focused our development on a treatment for patients with chronic rhinosinusitis.

<unk> is a debilitating disease that has been largely ignored the disease is highly prevalent in the world with about 14 million people just in the United States patients are currently treated with off label medications that have not been approved to treat Crs.

Currently marketed products have only been developed to treat pilots, which only represent 10% of the Crs patients.

Whereas our mission is to provide the very first treatment for these millions of Crs patients who have been underserved by current treatment options by developing an effective drug that directly targets inflammation at the epicenter of the disease.

The address patients with Crs L Y our 210 and 220 Boe.

Both our small shape memory implants that are placed deep in the nasal passage using a small diameter applicator and then E&ps office during a routine endoscopy.

L Y. Our 210 is designed to be used early in the treatment paradigm and surgically naive patients after topical steroids sprays have failed.

We estimate this population to represent about $2 4 million patients in the United States each year.

The post market.

The post surgical market opportunity is also significant at about $1 6 million patients each year to address this market. We are developing <unk> to 'twenty, which is designed for the post surgical anatomy and patients who continue to require therapy, despite having had prior and.

Scopic sinus surgery.

Our growing body of scientific evidence continues to support the safety and efficacy of <unk> 10, and highlights the benefits of our proprietary <unk> platform technology, we have strong validation of our technology in Crs are first targeted indication and we intend to.

To leverage the platform and new indications over the next year.

In addition to our own research. We have also been hearing from key opinion leaders about their enthusiasm for the potential of <unk> tend to be a new treatment alternative for their crs patients.

I'm sure that you will find their perspectives informative.

With the upcoming initiation of our two clinical programs are phase III enlightened program for <unk> 10 in the phase III Beacon program for <unk> to 'twenty, we're one step closer to potentially changing the treatment paradigm for the millions of underserved Crs patients.

I'll now turn the call over to Dr. Robert <unk>, who will review the new data as well as the clinical trial design for <unk> 210, and $2 20, which are both anticipated to initiate around yearend crap.

Thank you Maria.

As Maria mentioned, new positive data on <unk> 10 was the subject of two presentations at the 67th annual AOSP at generic Rhinologic Society.

Before I review these data I wanted to remark on the award Lantern manuscript received at that meeting.

30 years is rhinologist and a member of that society I have not seen that award given to two industry sponsored research.

Quite an accomplishment for Amira and a validation of our rigorous clinical program.

We entered post treatment evaluation assessed the safety and efficacy over six months following.

Matrix removal.

During the post treatment period, there was no increase incidence of treatment related adverse events.

Also approximately half of these crs patients experienced a durable response six months after the removal of beltway are to churn.

Well roughly 90% of the patients in the control arm should worsening Crs symptoms from week 24 to 48.

Horrible symptom relief observed in some patients after removal of alloy or two Chen offers potential long term benefit.

A meaningful differentiator relative to other treatments.

We also reported results from the 56% a pharmacokinetic study.

We showed that <unk> tend to lead with a constant daily dose of Mometasone furoate over the study period without a drug burst.

PK study enrolled 24 patients across four U S sites to receive or to 10, 2500, 7500 Picogram doses.

75000 feet.

The study showed that <unk> tend to be safe and effective in patients with less severe acute pain.

Patients in the PK study.

Baseline Snot 22 score of around 38.

Compared to <unk> 60 in the Landrum phase III trial.

Impressively, 63% of patients achieved a score below 20.

And standard threshold surgery, and 38% of patients achieved a normal score meaningful of nine <unk>.

<unk> 56.

These results further demonstrate our belief that <unk> has the potential to provide an effective treatment.

Mild all the way through severe Crs.

We've now shown in three separate trials, both safety and efficacy for our lead product <unk>. We believe these impressive.

Our results validate six month treatment duration provided with a single administration and the potential for a more durable thing post removal.

As a practicing physician an otolaryngologist I believe that <unk> offers a significant advantage over existing therapies and has the potential to establish a new standard of care for chronic rhinosinusitis.

Looking ahead, the global Phase III enlightened program for AAR to tenants expected to initiate around year end.

We anticipate enrollment each trial to about 180 adult patients from Sierra.

<unk> medical management, and our surgically 90.

Two studies will remain we randomized two to one to <unk> 10 versus control.

Primary endpoint will be the three cardinal symptom scores at 24 weeks with secondary endpoints to include Snot 22 rescue treatments sinus teach cans quality of life and chemical economic evaluations.

The design is largely similar to the phase two landry's.

Which was highly statistically.

<unk> significant re cardinal symptoms at 24 weeks.

Enlighten one will include six month extension study, where placebo patients crossing retail over to 10 treatments and 50% of the treated patients who achieve a repeat dose is.

It is important to note that the extension study will not related top line readout of the primary endpoint at 24 weeks, we believe an enlightened.

Robust clinical development program.

And it's kind of in this field.

Later this month, we will also start the phase III <unk> study for <unk> to 'twenty.

Plan to enroll approximately 65 post surgical patients across sites in the United States and Australia.

Randomized one to one to one to receive one of two different matrix designs.

Each dose.

Each of the dose of 7500 Picogram working tool.

Primary end point will be safety and feasibility over 24 weeks with secondary endpoints, including PK Snot 22, three cardinal symptoms rescue treatment <unk> and <unk>.

Biomarkers and quality of life.

Let me now turn the call over to Jason who will review the quarter's financials Jason.

Thank you Dr <unk>.

Before I review, the quarter's financials I would like to take this opportunity to express my enthusiasm for the opportunity in Europe over the course of my investment banking career I worked with numerous companies across the health care sector and I believe that Lear is uniquely positioned with tremendous potential to change the treatment paradigm for Crs patients.

Honored to be working with a stellar team here and support our mission to be a leader in Crs treatments.

Turning to the quarter's financial results press release was just issued so let me review select highlights.

<unk> ended the third quarter with cash and cash equivalents of $58 1 million compared.

Compared to $69.0 million as of June 32021.

We believe that Lear has sufficient cash to fund the Companys planned operations through 2022.

In consulting expenses as we ramp up for our later stage clinical programs.

G&A expenses for the third quarter 2021 were 4.0 million compared to $2 7 million for the same period in 2020.

Primarily attributable to an increase in professional and consulting expenses stock based compensation and general and administrative head count.

And shares outstanding as of September 32021 were approximately $13 million.

With that I'll turn the call back to Maria.

<unk> with the start of the phase III clinical program for <unk> in a phase two clinical trial for <unk> to 'twenty in the coming months.

Now we're ready to take your questions operator.

Thank you at this time, if you would like to ask a question. Please press star one on your telephone keypad.

To ask a question simply press star one on your telephone keypad.

Your first question comes from the line of Tim Lugo from William Blair. Your line is now open.

Thanks for taking my question and congratulations on all the progress I guess, one quick housekeeping question can you give us an update on the moral section capacity.

Sure.

And at what point in the future do you likely scale about capacity.

Hi, Tim Thank you for the question.

As we have mentioned in the past.

We have transfer the technology to an outside contractor in the past we have also manufactured in <unk>.

<unk>.

And we've used our sme's here that transfer the process.

<unk>.

That scale up right now is geared towards our clinical studies and where were sufficient for those studies.

As you know we have three trials, we have the enlighten one the enlighten two and also began and so we're in very good shape.

<unk> that we believe is very well suited to be able to scale up the matrix for commercial.

Okay. So there's no need for second sourcing or I guess, you would consider a second sourcing since evolved manufactured in house and with us.

Well we.

At this point, we don't but yes, we will absolutely have.

Back up we'll continue to look at other backup in addition to layer out.

Certainly at this point.

We can and we're well positioned between our <unk>.

Contract manufacturer and layer out, but certainly in the future we will have additional.

Additional source to manufacture the product.

Okay great.

Interested I believe Dr. Karen mentioned.

Asked or maybe a few more as well.

And the fact that you wanted to clinical findings Morris Cottle award any other firm.

The company from industry that has won this award I guess, what do you think the society saw English phase two data, specifically, which stood out beyond the other biologics and we are there kind of a larger phase III.

<unk>, obviously been presented in the past.

Well I should probably answer that I think the magnitude of the response.

Is we just shipped with a single administration is very striking.

That's the.

The only thing that comes close to this is changing the snot 22, or the ease of the biologics, which you have to give.

Regularly and require are extraordinarily expensive and the other option is surgery.

So to have that kind of outcome at six months is striking.

The statistics were robust.

And the.

The presentation was.

Appropriately.

Scaled it wasn't too.

We measured but.

It is exciting I think it was probably debate.

Region, and it was well done.

Yes, maybe I can also add.

Thanks, Rob.

Totally agree with everything one thing.

But in this space for a long time doing drug delivery from from implants, and the fact that we had two doses and we did a dose response I think really stood out.

It's really a rare thing to see because you do have to create a whole new product in formulation and and it just speaks to the strength of our development and scientific team.

We did that we went into the study really not knowing whether we would see a dose response and the fact that we did see it.

Validating certainly to layer on and to the scientific community.

Alright agree okay. Congratulations on that milestone and I guess, one last question could you give us an update on the <unk>.

<unk> plan.

<unk> kind of come together for your age.

<unk>.

Partner.

Sure. This is corinne noise.

We're very pleased with how the <unk> collaboration is progressing and we.

We are on track to have them participate in our second of the two phase III studies and the goal with that participation is for them to submit and commercialize shortly after we do in the U S.

Great Congratulations on the progress.

Thank you Tim.

Thank you. Your next question comes from the line of.

Bert Hazlett from <unk>. Your line is now open.

Yes, Thanks to just two for me my congratulations on all the progress as well.

With regard to the financial statements and looking forward given that you're starting to.

Major efforts fee of three studies with two major efforts with 210 and.

Through 'twenty, how should we think about the trajectory of R&D going forward, it's been 7 million plus over the past couple of quarters.

Materially increase on a quarter to quarter basis.

If so roughly what level.

Should we be thinking about in terms of model.

Yeah.

This is Jason.

So I think.

Given that we've completed the.

The tech transfer to.

To a contract manufacturer, we expect that spending to tirelessly tear off offset by increase in manufacturing expense too.

To supply the units for the clinical trial so.

Yes, we would expect a slight uptick overall in our R&D manufacturing as well as the obviously the clinical expenses. So given that we're starting three three trials. So I would expect a slight uptick but again, we feel like with the cash on hand and expected milestones.

We will have enough cash on the business through.

At the end of next year.

Terrific.

Thank you.

Just a question on the clinical data the durability of effect.

Sin.

Terrific data.

How does that make you think about your.

Kind of re treatment rates with 210, either patients with polyps or non polyps.

Is that.

Make you think about the.

The rate of re treatment or or is that pretty steady and just your general thoughts there in terms of the numbers of procedures that you would expect.

A patient with Crs to undergo per year with either to 10 or 20.

Yeah, So maybe I can start and then turn it over to <unk>.

Karen.

And we can we can.

Her perspective too so.

We were excited to see that you know and about half the patients. We did see a durable response I think it really speaks to the fact that.

That these patients are getting.

A consistent and targeted dose of steroid which is a broad anti inflammatory.

Which which then potentially results in some remodeling of the tissue.

It's small numbers clearly so so.

So we do have to evaluate this further in phase III and as you heard from Rob.

We do plan to do that and in the phase III extension study.

Correct, Yeah, and I think we've shared in the past, but with our modeling internally, we always assume about.

One and a half.

One five uses per year, so about 50% of patients get a re treatment and interestingly enough. This early data that emerged from the lantern study.

<unk> aligns with that assumption that around 50% of patients would get another one and 50% wouldn't be one in the first year, but might need another one at some point so.

We will see a mix of repeat use and some patients that have a.

A durable response.

And we have terrific.

Uh huh.

That's very helpful. Just one more.

Question, then for me a brief one.

<unk> had some very intriguing additional.

Data releases presentations, we had nice publication.

Based on land and other data for two Tim should we expect additional publications and presentations upcoming in the not too distant future.

Well our next conference is at have them, which.

Yes, so we have submitted some data at <unk> in April.

And we have submitted abstracts, there we'll find out if they are hoping to find out soon if they're accepted but we will be presenting some new data.

If all goes well at that conference and as soon as we share about that we will make that available.

Outstanding Thanks, so much.

Thank you and your next question comes from the line of Chris Howerton from Jefferies. Your line is now open.

Great. Thank you so much for taking the questions two for me one would be.

What would be the expected.

Enrollment cadence or timeline for the phase three programs for <unk>.

And if you are unwilling or unable to kind of provide clear estimates there maybe you could remind us.

What the timelines where for the Lantern study.

And then the second question would be just as I think we actually discussed this recently, but be curious to see if Dr. Karen or anyone else on the team had additional thoughts here about.

Why is it that youre seeing durable effect six months after the removal of the device is there something about tissue remodeling or something else that could be going on to explain when those durable effects. Thank you.

Thank you Chris I'll go ahead and take the first question and then Rob can address the second one.

We we expect that enrollment for both enlighten one and enlightened two will take.

Approximately 12 months, we think we'll be enrolling patients through 2022.

Clearly it will be.

We will be trying to enroll patients as quickly as we can wear.

We're thinking a lot about the sites that we pick to ensure that happens.

We intend to not only have sites in the U S. But also in Europe.

So we feel good about those estimates and we're hoping that we'll be able to accelerate as possible.

Rob.

Sure.

Yeah.

Obviously the.

Very intriguing and encouraging findings and half of the patients.

Really sustain the improvement.

It's a small study and we need to keep in mind that this is improvement.

Not sure cure is a dangerous word to use with a chronic disease. You can think of a couple of calls and can spend the whole thing out of control.

While it is encouraging we don't get carried away I think if you wanted me to put my.

Basic science Immunologists to add on.

I could say that the what we don't see well before I get to that when we don't see is is a rebound effect the biologics despite.

There.

Power as soon as you take the drug away they start to revert back.

Now the difference and again I've got my speculative had on my immunology speculative speculation had one.

The ste.

Steroids are much broader.

The basically squelch.

Almost the entire inflammatory cascade.

The biologics punch Doodle holding.

They're like little targets. So I my my sense is that what we are doing and we are so broadly suppressing it that there is some element of remodeling that we're kind of turning back takes years to get this disease. We are suppressing all aspects of the inflammatory response. So we are.

Hatch walking back the clock.

If adding a Ken question no I appreciate it Dr. Karen I really do.

Thank you and actually marine if I might sneak in just another follow up.

Could you give us may be similar expectations for the phase two 220 study as well.

So the phase two study is going to initiate this month.

And.

There are two there are two parts to that study there is.

The open label part, where we're going to be assessing the feasibility.

We're going to be optimizing the procedure of delivery.

And then after that we're going to be going into the randomized portion of the study.

And so we'll be starting in Australia, and then and then we're going to be clearly with the U S is focused on to 10, but we expect then we will get started in the U S too.

So in terms of enrollment again, it would be through 2022 that that will be enrolling that study.

Alright, well, thank you very much and.

Congratulations on the progress.

Thank you Chris.

Thank you and again to ask a question. Please press star one on your telephone keypad.

And we have a question coming from <unk> Verma from Bank of America. Your line is now open.

Hi, Thanks for taking my question Congrats on the progress two for me so.

Leah bio collaboration just wanted to make sure that I heard that right.

I think you had assumed that they will launch in the geographies one year. After you got in the U S.

And how much of the milestone payments can be assumed.

In the next one here.

Out of that $1 35, and how much would be.

Yep.

Launch.

That's my first question just on the Phase two design that you just discussed so like when you conduct the open label part of the study just like optimizing the procedure is that something that you will be shared with US just just at all I'm, assuming that you want to identify like with where does it eventually.

Good enough was got bigger.

Bigger metrics. So just curious if you would share that with us.

Hi, Ash. Thank you for your questions, we'll start with our current and Jason can address the first one.

So.

Answer to your question about the timing of launch in China. Our current development plans have China launching shortly after the U S. So sooner than a year.

And on the.

And on the milestones we haven't disclosed the specifics.

Around the milestones and timing.

<unk> collaboration I would say that.

The structure and the overall structure of it is not dissimilar from similar similarly.

Similar agreements.

But we haven't released specifics around the milestone payments.

So ash on your second question about the phase two design and whether we'll be able to share data from the open label.

Certainly we would.

Report out when we have that data in hand.

And I would expect in the second half of 2022, and and really what we're going to be assessing there is the feasibility of placement and.

So whatever.

<unk>.

Data, we have from that and the safety will be certainly reporting out.

Yeah, Okay got it.

Sure.

Thank you.

Ladies and gentlemen that concludes our Q&A session for today I'll hand, it back over to Maria Polos as the CEO for any closing remarks.

Thank you operator, and thank you all for joining US today, we look forward to updating you on our progress.

You may now disconnect enjoy your day.

Q3 2021 Lyra Therapeutics Inc Earnings Call

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