Belite Bio, Inc (BLTE) Earnings Call Transcript & Summary

Good afternoon. Welcome to the H.C. Wainwright 3rd BioConnect Investor Conference at NASDAQ. For this session, we will have a fireside chat with Dr. Hendrik Scholl, Chief Medical Officer of Belite Bio. Thank you for joining us.

Thank you for having me.

Dr. Scholl, you joined Belite Bio last September. Is that right?

That's correct.

Yes. Yes. Could you tell us what is unique about Belite Bio that made you join the company?

Keep in mind that I have been seeing patients affected by Stargardt disease in AMD for more than 2 decades in Germany, the United Kingdom, I was Professor at the Wilmer Eye Institute for more than 6 years. I was the principal investigator for the largest natural history study ever conducted for Stargardt disease, the ProgStar study in the United States and then continue to see patients as a Chairman in Basel but I always wanted to be connected with therapy for these patients because these patients inevitably go blind. So -- and I have been collaborating with Belite for more than half a decade in various capacities. And this obviously is a major opportunity to get as close as possible to the first therapy ever for Stargardt disease, and I took that opportunity, and I'm very happy with it.

Could you tell us -- well, your lead candidate is called Tinlarebant. Could you tell us how Tinlarebant's mechanism of action is differentiated from other competitors?

Happy to. Maybe, first of all, it's an oral compound. So it's a chemical compound. It addresses the most important part of the pathophysiology of Stargardt disease and late dry age-related macular degeneration. I think there's a lot of activity in the field of gene therapy. I have been very active in that field as well. But specifically for Stargardt disease, there's a problem, namely that the ABCA4 gene is very large, exceeds the packing capacity of the typical vectors that are being used for gene therapy, namely AAV. And there are more than 2,800 variants in the gene. Plus when you develop gene therapy for a condition that affects the macular, the only way currently to efficiently transduce photoreceptors is subretinal delivery. Surgically, that means you have to detach the macular in order to have a treatment effect for macular diseases and this is absolutely counterproductive. I speak as a retinal surgeon and always when you detach the macular, you deteriorate the situation and you harm photoreceptors. When it comes to the mechanism of action of Tinlarebant, it addresses retinol or vitamin A availability in photoreceptors and the RPE. And we need vitamin A in photoreceptors. But if ABCA4 is mutated, then we get an accumulation of all-trans-retina, which is part of the visual cycle, and that is toxic itself, plus it forms with other molecules, so-called bisretinoids that are very toxic. And Tinlarebant efficiently reduces the amount of vitamin A in photoreceptors but not too much and efficiently reduces the accumulation of bisretinoids at the level of the retinal pigment epithelium and the photoreceptors. And this with an excellent safety profile. And this is unique. The only other compound that may be similar, if you will, is Deuterated Vitamin A, also called drilled retinol, whereby modifying vitamin A, you reduce downstream the bisretinoids accumulation in photoreceptors but you really give very high amounts of vitamin A to the human body to photoreceptors. If you do the math, it equals 70,000 international units of vitamin A. And keep in mind, the drug is intended to be used for the rest of the life of the patient and giving such high amounts of vitamin A, in my opinion, poses a big risk for patients.

Thank you. So are there a good number of Stargardt disease patients available in the U.S. that would present an attractive market opportunity for the company?

The answer is a clear yes. So in the past, it has been difficult to estimate the prevalence of relatively rare diseases such as Stargardt disease because population-based studies are not sufficient to allow us to really estimate the prevalence of Stargardt disease. Many papers still cite an opinion from a publication of 1988, where a Dutch ophthalmologist was asked how prevalent is Stargardt disease? And the answer was, oh, it's more prevalent than retinoblastoma but less prevalent than retinitis pigmentosa. Therefore, I estimate the prevalence to be 1 in 8,000 to 1 in 10,000, which is kind of funny that this is still being cited. But there's an opportunity in Stargardt disease. It's an inherited disease due to biallelic mutations in ABCA4. And there is no nonpenetrants, meaning if you carry 2 mutations in both alleles, you will be affected. And because of that, you can look into genetic databases of the world populations, and you can calculate the number of affected individuals. And if you do that, you find that in populations of European descent, the prevalence is 1 in 6,500. And if you look into the prevalence in East Asians, you find that the prevalence is pretty much exactly 1 in 11,000 to 1 in 12,000. So it's actually a pretty high prevalence. And when you do the math and calculate the number of affected patients in the U.S., the number is taking into account so-called hypomorphic mutations then you find the lowest number would be 43,000 and the highest number, 59,000 patients in the U.S. Long story short, more than 50,000 on average. And I think this is a big market opportunity.

So I understand the Tinlarebant is currently being evaluated in 2 Phase III trials, named DRAGON and DRAGON II trials. And the first DRAGON trial is now on track to be completed in the fourth quarter of this year, right? So can you tell us your expectations for the data readouts? What would be considered positive results?

Thank you very much for the question. This is a very important moment for myself because actually at 11:37 today, we received a letter from the FDA of the designation of breakthrough for Tinlarebant based on the interim data that were submitted to the agency a couple of weeks ago. So the interim analysis was preplanned and about 75% of the data were available and were presented to the DSMB, an independent Data Safety Monitoring Board of the DRAGON trial with a task to provide feedback on safety and efficacy in so far, the trial would fall into a so-called promising zone, which would allow to add 30 more subjects in order to boost conditional power. If no subjects would be added, that would mean either futility or an efficacy signal beyond the so-called promising zone. And since the DSMB provided an additional recommendation, namely submit the data for further regulatory review, the only conclusion that can be drawn in my opinion, is that there must have been a significant efficacy signal that prompted the DSMB to make this recommendation. And we followed the recommendation of the DSMB and have initiated interactions with various regulatory agencies, the FDA, the Chinese FDA, the PMDA, the MHRA, the EMA. And we are currently in discussions with all these agencies with one example that I just mentioned, namely breakthrough designation that was granted actually this late morning today. So therefore, I have high expectations of the final study data that we would have available by the end of this year. The last patient last visit is September 30. And I believe with the image analysis by the central reading center, then data cleaning in QC, we should have the data available by the end of the year.

Well, congratulations on getting the breakthrough therapy designation. Does that mean the pathway to approval could be accelerated?

I would hope so. We have feedback from the FDA. We had that before that if one trial is sufficient would be a review issue. I would believe it's the same with interim data. Given the fact that 75% of the data is already available, was available at the time of the interim analysis and the combination of the efficacy and the safety of Tinlarebant, plus the fact that our secondary endpoints could represent so-called surrogate endpoints for the primary endpoint would mean that we should be in a strong position to at least discuss with the agency about accelerated approval but it remains to be seen.

And meanwhile, the DRAGON II trial is still advancing as planned, right? Can you talk about the status of the DRAGON II? And is DRAGON II having the exactly same trial design as DRAGON I?

So DRAGON II is based on an opportunistic approach due to the PMDA in Japan providing the Sakigake designation with the requirement that Belite Bio would run a Phase Ib clinical trial looking into the pharmacokinetics and pharmacodynamics in Japanese patients, plus enrolling at least 10 Japanese patients into an interventional trial. And that prompted the DRAGON II trial, although EMA, PMDA and so forth do not require a second trial explicitly. We took that opportunity to launch the trial in Japan and invited centers in the United States and United Kingdom to also participate in the DRAGON II trial. So -- if we ever needed a second trial, we would have one. It's currently running. The target enrollment is 60 6-0 patients. Currently, 16 are enrolled, 8 patients in Japan have been enrolled, which means we need another 2, and we anticipate that to be completed by summer or so at least. And the trial design is almost identical to the DRAGON 1 trial. There are 2 differences. One, it's a 1:1 randomization between Tinlarebant and placebo, while in DRAGON I, we have a 2:1 randomization. And the second difference is that we somewhat lowered the lower threshold of visual acuity to from 2,200 to 2,400 to allow more patients to be enrolled into the DRAGON II trial. Otherwise, same intervention, 5 milligrams per day daily, same primary outcome measures, same secondary outcome measures. So in other words, it's almost identical.

Okay. So does that mean later this year, you will have data from the 10 Japanese patients from DRAGON II and combined with data from DRAGON, you will be able to submit to PMDA in Japan for potential approval?

That is correct. The PMDA is -- I mean, I think the Sakigake designation speaks for itself. It's keen on having Tinlarebant being market authorized in Japan. It remains to be seen if Japan indeed would be the first country in the world. If you ask me, I would still bet that it will be the United States. But clearly, Japan is very welcoming towards an approval for Tinlarebant in Japan.

I guess it remains to be seen whether Belite Bio will launch the drug in the U.S. first or in ex U.S. territories, right, given the current most favored nation pricing policy?

Yes, this is an excellent, excellent question. I think it was a very good plenary session this morning from 8:00 to 9:00, where this was also discussed. And I like the conclusion that we cannot really conclude anything right now how to position ourselves. I can speak as a physician, I've seen these patients for more than 2 decades. And my big motivation is to get the drug to the patients as soon as possible. And I think this is the path we are currently following. But you're absolutely right. We will observe closely about future uncertainties being imposed on to the market, the world by the Trump administration, and we'll try to find the best path forward.

Got it. Tinlarebant is also being evaluated in the Phase III PHOENIX trial for geographic atrophy. Do you expect the drug to work equally well in GA as in Stargardt disease?

We don't know yet. In Stargardt, the situation is clear, if you will. There's this gene ABCA4 that is very well characterized. We know exactly what it does. Geographic atrophy is a different beast. It's a so-called complex disease. There are various pathways that contribute to GA. We know that the photoreceptors and RPE are sick, very similar to Stargardt disease when ABCA14 was discovered, it was claimed at the time that this is an AMD gene. I believe that the 2 diseases are different but they are so similar, plus it has been established that bisretinoids play a role in late dry AMD that I feel that Tinlarebant must be efficacious in geographic atrophy. Since there are other pathways in late dry AMD that may also contribute, you could argue that Tinlarebant may be less efficacious in geographic atrophy. But there is one factor that would speak for the same efficacy, namely the pace of geographic atrophy that is typically 2 to 3x faster or larger in geographic atrophy, which means that intervention targeting successfully one of the important pathways because of the relatively fast pace could have a similar treatment effect as observed in Stargardt disease.

Are there any close competitors in the GA space that you think investors should be aware of, particularly those drugs that are noninvasive like Tinlarebant?

Yes, that's a good addition that you mentioned -- we know -- I mean, I'm practicing in Switzerland, in Europe, there is no drug available at all. In the United States, the situation is different. We have 2 injectables that target the complement system. I'm proud to say that my group in 2008 was the first to show that there is systemic complement activation in AMD. So those drugs make sense. But when you look at the treatment effect, when you -- at least in the published literature, in the GATHER2 trial, the efficacy signal was 14% reduction after 12 months. And when we look at Syfovre, there were 2 trials. One actually did not meet its primary endpoint with an efficacy signal of 12% in 12 months. The other one, the OAKS trial met the primary endpoint with an efficacy signal of 21% based on monthly injections, right? And I mean, it's a hard sell because the disease will continue to get worse. And you think about the treatment effect of about, let's say, 15% of taking those 2 interventions together, which means 85% of progression remains and this still on a monthly injection basis for many, many years. So that this is a hard sell. But still, there is a treatment available in the United States. In my opinion, Tinlarebant would be truly transformative because it's an oral treatment that simply needs to be taken as 1 pill per day. When we consider other systemic interventions, then there is one compound that could be considered similar, namely Deuterated Vitamin A. This was tested in the so-called SAGA trial that was presented at the last Academy meeting last October and was observed to fail its primary endpoint. In our opinion, in our interpretation, there was a trend at least that was shown in this -- with Deuterated Vitamin A. And we feel this kind of supports this intervention, namely targeting bisretinoids in geographic atrophy, right? So I would say for AMD patients, that was a not so nice piece of information that the trial failed. But at least there was a good piece of information that targeting bisretinoids may be or is a good idea, and that's exactly what we are doing with Tinlarebant. I think that's the current landscape.

Does Belite Bio currently have sufficient capital to complete the -- all the ongoing Phase III trial?

The answer is a clear yes. Currently, we have USD 157 million available, and that would allow to complete all the clinical trials that are currently running.

Okay. That's all my questions. Questions from audience? No. All right. Thank you very much.

Thank you very much.