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

All right. Welcome, everyone, to this session of the Morgan Stanley Global Health Care Conference. We're very excited to have Belite with us this morning with Hao-Yuan Chuang and Hendrik representing the company. So thanks for being here, guys. Very quickly, I'm Judah Frommer, one of the Smid biotech analyst here at Morgan Stanley. For important research disclosures, please visit www.morganstanley.com/researchdisclosures. With that, it's an exciting time for Belite, with potential first in disease approval coming up. So before we dive in, maybe can you give the audience a quick in short to the company for those who may be less familiar with the story and how the company was founded.

Sure, sure. So Belite started as a spin of the parent company, [indiscernible] , which is also listing Taiwan. We currently have our leading pipeline called Tinlarebant in both Stargardt disease and geography atrophy. In Stargardt, we have completed our Phase III study and submit for the FDA, which they already set the NDA with the priority review with the PDUFA day for next February 12. We're also running in parallel a Phase III Stargardt trial for DRAGON II, that's mainly for the reservation for [indiscernible] . For GA, we have a fully enrolled global Phase III study called PHOENIX is ongoing.

Okay. Great. And like you mentioned, your drug Tinlarebant could be the first approved therapy for Stargardt disease. So can you talk us a little bit about Stargardt disease? How many patients does it affect what does the natural history look like here?

Yes, happy to. Stargardt disease was described by Stargardt about a century ago. It's amongst all the genes that if mutated would lead the retinal disease by far, the most prevalent. The disease has in populations of European descent, a prevalence of about [indiscernible] prevalence is somewhat lower in East Asia and actually higher in populations of African descent. The estimate given the penetrants and mutation rate in gene, that 47,000 to 59,000 patients in the United States are affected by the disease. And we currently -- that's the conclusion from our research data that 20,000 patients are currently clinically diagnosed and amongst those 20,000 clinically diagnosed patients more than half carry genetic confirmation, meaning that at least one mutation was detected in the ABCA4 gene.

Okay. Great. And like we said, this could be the first approved therapy for Stargardt, maybe just spend a manner on the standard of care, how are patients currently manage frequency of visit and treatment?

So Stargardt disease is a very important cause of legal blindness amongst all the inherited diseases is, by far, the leading cause of blindness in adolescents and young adults. The disease typically starts in childhood and early adulthood. And invariably gets worse and worse leads to legal blindness almost all cases and that is rare, but it can happen can lead to no light perception. So there's no light detection that -- no light detection remains, meaning the disease is kicks in early on in life and is severe, meaning that there's almost no patient that would not have any diagnosis because if you have such a severe disease and you cannot be corrected with glasses and your vision is down to 20 or 100 or a similar level, it would be an unlikely scenario that there was never any diagnosis made. The question is how precise the diagnosis because clearly, in order to initiate treatment, we need a precise diagnosis of Stargardt disease. It's not so difficult, I have to say, as I speak as a clinician and I still see patients one day a week in Switzerland. So the disease is -- can readily be diagnosed, especially nowadays with the imaging that we have in the clinic, which is fast and reliable and very precise. So to make the diagnosis is not so difficult. But we anticipate that when Tinlarebant is in the market that the vast majority of patients would need to be or will be followed by retina specialists, meaning they need to be referred to a retina specialists in the future. Many patients are currently being seen by retina specialists. Amongst all those patients, again, the majority will be seen by called IRD, inherited retinal disease specialist and we have a very good understanding in the United States where are the centers of excellence and where are those IRD specialists located.

Okay. Great. And switching to Tinlarebant itself. Can you tell us a bit about the drug's mechanism? How does it benefit Stargardt patients? And what did you see in your Phase III DRAGON study that kind of is proof point that the drug is working?

Yes. So, called Stargardt in 1909 described a macular degeneration. By the way, it's very similar to age-related macular degeneration. Just the patients are 60 to 80 years younger. Where the macula shows atrophy and around the atrophy, it is surrounded [ by Flex ] he called it flex at the time, yellowish flex. But we know exactly what these flags are made of, namely toxic bisretinoids that accumulate in the retina in Stargardt disease. And when we use so-called [indiscernible] imaging, which is a standard tool in retina clinics nowadays where you shine in blue light, and we detect the outcoming light from the retina. We see the East flex light up and those flags indicate the cause of the disease. The cause of the disease is this constant accumulation of toxic with retinas, which can be detoxified because the gene that -- the protein that would be important to do so is dysfunctional because of the mutated underlying gene with the name ABCA4, in those ABCA4 mutations, therefore, lead to dysfunction of ABCA4 and accumulation of toxic bisretinoids. The consequence of the disease of these toxic bisretinoids is then macular degeneration. And this, again, can be very precisely imaged with [indiscernible] imaging. Tinlarebant allow us to address A to E and bisretinoid accumulation in photoreceptors and the underlying tissue or the retinal pigment epithelium by targeting the so-called RBP receptor that is unique in the eye. The eye has a unique requirement to access it due to this receptor, no other organ. And Tinlarebant allows systemically to lower retinol-bound to retinal binding protein 4. Therefore, less compound available for the receptor, called the RPP receptor or specifically [indiscernible] And because of lowering influx of vitamin A into photoreceptors and no other organ in the human body, the underlying material, if you will, the substrate of forming the visual pigment in the photoreceptors, this process is called the visual cycle is reduced, and that allows to reduce A2E accumulation and therefore, to preserve vision.

Great. And I guess, just turning to what you saw in your Phase III program in the first DRAGON study. What was, I guess, best evidence of efficacy of the drug here?

So the best outcome measures in macular degeneration have been developed over the last two decades, in conjunction with the FDA. The FDA is very aware that the underlying reason to see is photoreceptors that are being preserved. And if you lose foot receptors, you lose vision and therefore, preservation of photoreceptors, is clinically valuable and beneficial. And therefore, the FDA 1.5 decades ago, accepted preservation of photoreceptors as imaged by order presence imaging as an approval endpoint and that led to the approval of [indiscernible], for geographic atrophy. And in Stargardt disease situation is essentially identical because we have a more technical -- more precise term, if I may say so, namely call these areas, DDAF definitely, decreased order fronts, that were shown to progress at a predictable rate in the worldwide natural history study called ProgStar and can be precisely measured from [indiscernible]. And this is an approval endpoint recognized by the FDA is something that reflects health or decline of 4 receptors and therefore, eventually will correlate with visual function. And this exact endpoint was used in the DRAGON trial and over the course of two years against placebo, it was shown that the progression rate or the deterioration of those lesions was slow down by more than 1/3, mainly by 36% over the duration of the trial, leading to a major difference between treatment and placebo in the resulting area of DDAF or essentially a lesion size.

Okay. And the question we get is on just separation from placebo on visual function. And you mentioned the ProgStar study. So, was it a surprise that you didn't see that separation on visual function? Or is that something that might be expected given the natural history here?

It's a very important question. And at the end, what counts for patients is can vision be preserved. And the challenge that we have and that started already in geographic atrophy is that the progression is still relatively slow and measurement of visual acuity is quite variable, and that introduces really a problem when you think about that the intersection variability of measuring acuity is 8 letters on a visual acuity chart. We call that ETDRS, Early Treatment Of Diabetic Retinopathy Study Chart that has 100 letters. And if the variability of letters between measurements that is significant variability that is very difficult to be managed in a clinical trial of a reasonable duration and a reasonable amount of subjects. And that is recognized by the FDA that if you have something that can be measured much more precisely, namely lesion size and all the [indiscernible] Images that allows to detect something that is clinically beneficial, much earlier than the effect in visual acuity. When we get to Stargardt specifically, I mentioned the worldwide natural history study, ProgStar. ProgStar has shown that the progression rate of visual acuity loss over time was 0.55 lets per year half a letter per year. When you apply the clinical significance level that the FDA defined, I think, a couple of decades ago, namely 15 letters on the visual acuity chart. And you hypothesized that you have a treatment that would actually allow to arrest progression completely, you have to run the trial for 30 years. And the FDA understands that, this is unreasonable and therefore accepted DDAF progression as an approval endpoint. So long story short, no, that was not surprising, given half a letter loss on average per year. This means that in a 2-year trial, you will not be able to see anything that would even apply in a 5-year trial. So we can, however, make conclusion from ProgStar data. that show and you look at cross-sectional correlations between the size of DDAF and visual acuity that there is a significant correlation.

Okay. Great. And it sounds like from your conversations, FDA has certainly embraced the DDAF as a proxy for visual acuity. But can you give us an idea of how other regulators are thinking about the correlation here and acceptance from their perspective?

Yes. Mean this is new territory. We believe that gaining approval from the FDA will be a major sign to the communities, including regulators worldwide. I think your question may stem back from the experience that we have seen in the approval process of injectables worldwide for geographic atrophy. But we have to take into account that stage disease is not geographic atrophy, and there are 2 major differences. Maybe the most important is that we speak about a pretty young patient population. And we speak about a very severe disease kicks in early in life. And also, when we think about what EMA published or announced when they looked into other compounds that would promise to slow down GA progression, they took into account safety and tolerability plus efficacy. And when we look at the efficacy signal that we have seen in the DRAGON trial, 36%, and put this into perspective, plus really in -- obviously, you can say I'm biased, but when I look at the tolerability profile, in my opinion, this was excellent. And it's just a pill a day without the need of monthly injections in the doctor's office. When we take efficacy and tolerability into account plus a pediatric and severe disease, we anticipate that the conclusion of other regulators will be positive.

Okay. Great. And maybe just a bit more on the tolerability profile, specifically the side effect profile? How do side effects relate to the mechanism of Tinlarebant and how well characterized are those?

Yes, this is very important because when we look at tolerability and safety of this drug, it must be excellent because the drug is intended to be given for a very long time, if not lifelong. So it must have an excellent tolerability and safety profile. When we think about Tinlarebant, it specifically acts on retinal binding protein 4. And that, again, will and should and this is what we see in the trial, only have an effect on the target tissue that expresses the RPP receptor, and that is the eye and nobody else in the human body. And that's exactly what we then observed in the DRAGON trial. When we look at systemic safety, we only observed over 2 years, 6 SAEs, 4 of them in the placebo group, 2 of them in the treatment group, none of them related to the treatment. When we get to ocular tolerability and safety, we see on-target effects. We see two main effects. One is on the [indiscernible] receptors, the cells that are able to see in the dark, and then the other is on the confooreceptors. These are the cells that are able to see in normal light conditions and allow us to have high acuity. And I'll start with the first. The effect that we see is, we call it delayed dark adaptation, meaning if you take Tinlarebant, it would not take you 20 or 30 minutes to get to your final threshold of sensitivity when you be in the dark and being exposed to very dim light but it may take you plus 5 minutes. So instead of 30 minutes to 5 minutes or 20 minutes or 25 minutes. This is in a predictable and anticipated effect that actually shows the drug works. And it's easily manageable. Road vision is not completely unimportant to patients. But what counts for patients is can we preserve their vision on the normal light conditions? Can we preserve acuity? Can we preserve the ability to recognize faces? All of these functions are mediated by the [indiscernible] Photoreceptors, not the road photoreceptors. When get to the con photo receptors, there's also an on-target effect. Now we talk about another adaptation process going from dark to light. This is a very fast process. We may have observed that this morning for everybody who woke up, put on the light. This is a process that takes only seconds or maybe a few minutes, but it's a very fast process in which we adapt to a bright environment coming out of the dark. And during this process, the visual scene, if you are on Tinlarebant can be discolored, meaning some false colors, it's not yet you do not see colors. It's just that the visual scene appears yellow, tinted then we call that antopsia or bluish tinted we call it [indiscernible] These fancy Greek names for the specific colors that you may perceive. This is a predictable, very benign side effect that only lasts for seconds or minutes and then fades away, doesn't really interfere with other functions of vision such as discrimination, reading, recognizing phases, but it will meet patient education and tell patients, if you take the drug, that may happen, it's very benign. It will fade away, and it's easily manageable.

Okay. Great. Maybe just kind of tying together two reasonably common questions we get. And we've talked about this many times before, but just the confidence on needing a single Phase III study for registration in the U.S. specifically, what kind of contributes to the confidence there? And then on maybe a related point, this is obviously an oral drug, you could potentially see benefit in both eyes. So what can you tell us about the fellow eye you've seen in DRAGON?