Lumos Pharma, Inc. (LUMO) Earnings Call Transcript & Summary

Good afternoon, and welcome to Lumos Pharma 2023 Fourth Quarter and Year-End Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the call over to Lisa Miller, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Before we proceed with this call, I'd like to remind everyone that certain statements made during this call are forward-looking statements under the U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements. Information presented on this call is contained in the press release we issued this afternoon and in our Form 10-K, which may be accessed from the Investors page of the company's website. Speaking on today's call will be Rick Hawkins, CEO and Chairman; John McKew, our President and Chief Scientific Officer; Dr. Duke Pitukcheewanont, Chief Medical Officer; and Lori Lawley, our Chief Financial Officer. Following our prepared remarks, the management team will be available for a question-and-answer session. I will now turn the call over to Rick.

Thank you, Lisa, and good afternoon, everyone. After the market closed today, we issued a press release announcing our results for 2023. I'm pleased to report that 2023 was a successful year for Lumos led by our announcement of positive top line results from our OraGrowtH210 and OraGrowtH212 trials, LUM-201 and pediatric growth hormone deficiency. On today's call, we'll briefly summarize our trial results and other progress made in 2023, recap highlights for recent weeks and lay out plans for 2024. Then we'll be happy to answer your questions. Before I begin, I'd like to take a moment to congratulate Dr. Pisit Duke Pitukcheewanont on his recent promotion to the role of Chief Medical Officer for Lumos. Dr. Duke's exceptional credentials are widely acknowledged given his renowned expertise in growth disorders and his current leadership at a human growth foundation among various other distinguished roles in his esteemed career. Since joining us in 2022 Dr. Duke has played a pivotal role in steering our OraGrowtH trials to fruition, providing invaluable guidance, leveraging his influential network for enrollment and significantly contributing to analysis of trial data. As our new CMO, Dr. Duke, will continue to advocate for exploration of LUM-201 within the PGHD clinical community, a mission that has already garnered remarkable interest from pediatric endocrinologists globally. Thanks to this advocacy efforts. Furthermore, Dr. Duke will be an integral part of shaping the trial design for a pivotal LUM-201 trial in PGHD, details of which we're going to delve into later during this call. Dr. Duke will join the call today for our Q&A session. So please join me in congratulating him on his well-deserved promotion. Let's now revisit the key highlights of the results we disclosed last November. As many of you are aware, LUM-201 has successfully met all primary and secondary endpoints in both OraGrowtH trials demonstrating clear proof of concept for its efficacy as an oral alternative to daily and weekly injectables for patients with PGHD. Results from OraGrowtH210 demonstrated that the 1.6 mg/kg dose of LUM-201 achieved annualized high velocities or AHVs of 8.2 centimeters a year at 6 months and 8 centimeters a year at 12 months, aligning consistently with historical growth rates for the moderate PGHD population. The difference in AHV at 6 and 12 months between the optimal 1.6 mg/kg LUM-201 dose and the recombinant growth hormone comparator arm fell within the non-inferiority margin of less than 2 centimeters a year, and that's the criteria we recently used for FDA approvals. Although OraGrowtH210 was not specifically designed to establish non-inferiority, we are pleased to note that the growth outcomes observed in this study are in line with the non-inferiority thresholds seen in recent successful FDA applications. These findings enable us to design a successful Phase III trial to show non-inferiority against the daily injectable growth hormone comparator arm. Now the preliminary 24-month LUM-201 data we presented in November, gathered from a subset of the OraGrowtH210 patients or participants who met the protocol requirements for an extension beyond 12 months, combined with OraGrowtH212 subjects. These data revealed a sustained effect showing a minimal decrease of approximately 6% in annualized high velocity from year 1 to year 2 as opposed to the significant decline of approximately 20% reported for daily recombinant growth hormone in moderate PGHD patients. Now OraGrowtH210 successfully achieved its prespecified primary endpoint, validating our predictive enrichment marker or PEM test. While also meeting the secondary endpoint by demonstrating 100% reproducibility of PEM positive classification. Additional data from the OraGrowtH212 trial demonstrated that only 20% growth hormone concentration was needed to achieve comparable annualized high velocity. That suggests that LUM-201 is more efficient than exagenous growth hormone to promote growth. These data confirmed the importance of LUM-201's unique mechanism of action to restore the natural physiology of pediatric growth hormone secretion. Our data from both trials provided a clear safety profile for investigational LUM-201. Now following the release that top line results in November, ongoing data collection and analysis have continued. We anticipate presenting comprehensive 12-month annualized high velocity data from the OraGrowtH210 trial in the second quarter of this year, most likely at a major medical conference. This data set will include 12-month AHV data on all enrolled patients from the OraGrowtH210 trial. Additional 24-month data beyond the data set we announced in November will also be available. We expect to present these data at additional analysis at several meetings throughout 2024 to capitalize on the growing interest and excitement in the pediatric endocrine community about LUM-201 as potentially the first oral therapeutic in this population. Now following the announcement of our top line results, we've been diligently conducting additional analysis and preparation for end of Phase II meeting with the FDA and as scheduled for the second quarter. Our data package for this meeting is comprehensive featuring a larger data set compared to other growth hormone counterparts at this developmental stage. These data show LUM-201 induces annualized height velocities consistent with historical levels for moderate PGHD on recombinant growth hormone. That also demonstrate that oral LUM-201 produces a robust and enduring response at the 1.6 mg/kg dose, making use of our predictive enrichment marker or PEM strategy for selecting suitable moderate PGHD patients, thereby further derisking our Phase III program. As a result, we approached this end of Phase II meeting with a high level of confidence. Now long before we announced top line results from our OraGrowtH trials, we've been actively involved in advanced planning for a pivotal Phase III trial. Following our Phase II meeting with the FDA, we will finalize the ultimate design of the trial, which we anticipate initiating in the fourth quarter of 2024. We believe that this trial's results will support a new drug application for LUM-201 in the PGHD indication. With that, I'm going to turn it over to Lori Lawley, our CFO, for a brief overview of our financial results.

Thanks, Rick. Lumos Pharma ended the year December 31, 2023, with cash, cash equivalents and short-term investments totaling $36.1 million compared to $67.4 million on December 31, 2022. The cash on hand as of December 31, 2023, is expected to support operations through the third quarter of 2024, inclusive of our Phase III preparations and other operational activities. Initiation of our Phase III clinical trial by end of 2024 is subject to securing financing in the near term. Research and development expenses were $22.1 million, an increase of $4.2 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to increases of $3.3 million in clinical trial expenses, $0.9 million in contract manufacturing expenses, $0.2 million in consulting expenses and $0.2 million in other expenses, partially offset by a $0.4 million decrease in personnel-related expenses. General and administrative expenses were $16.6 million, an increase of $0.9 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to increases of $0.5 million in personnel-related expenses, $0.4 million in royalty expenses paid to the Public Health Agency of Canada and $0.1 million in travel expenses, partially offset by a $0.1 million decrease in other expenses. The net loss for the year ended December 31, 2023, was $34 million compared to a net loss of $31.1 million for the same period in 2022. We ended Q4 2023 with 8,102,555 shares outstanding. And with that, I will turn it back to Rick for his closing remarks.

Thanks, Lori. And to conclude, we're absolutely thrilled by the progress of our program to date and by the excitement among the endocrine community regarding the potential for the first oral therapy for PGHD. We've been on a podium presenting data on numerous endocrine conferences over the past 2 years and have seen the overwhelming acceptance of and the excitement for oral LUM-201. We're confident in the distinct advantages offered by LUM-201 for patients with moderate PGHD and are enthusiastic about advancing to the next developmental stage for this asset. We firmly believe that the data set we are submitting to the FDA for upcoming end of Phase II meeting provides ample support for a pivotal trial of LUM-201 at the 1.6 mg/kg dose affirming its potential as a viable alternative to injectable products for appropriately selected moderate PGHD patients. And we eagerly anticipate turn further insights from our OraGrowtH trials throughout this year and keeping you abreast of our progress. So thank you for your attention, everyone. And operator, we can now open this up for questions.

[Operator Instructions] Our first question coming from the line of Charles Duncan with Cantor.

Rick and team, congrats on the progress last year. Looking forward to hearing more updates here in the near term. I had a key question about the end of Phase II meeting with agency. Is that actually scheduled? And can you provide us some insight on what the key question is, is it really something that needs to be answered? Or do you feel like this is more a point of execution in terms of going forward. And then when would you anticipate being able to share the outcome? Would it be post the meeting minutes? Or do you think it will be pretty straightforward and you will share shortly after the meeting?

I'm going to ask a -- good question, Charles, and thank you for it. I'm going to turn that question over to John McKew.

Yes. Thanks Charles, I appreciate the question. So before we start our Phase III study, we really would like to use this end of Phase II meeting to take everything we've learned from Phase II data that we read out, we put that into our Phase III protocol, and we want to walk away from that meeting with agreement on all the specifics of that protocol. So I think it's a very important time for us to talk through any questions the agency has on the data as well as come to an agreement on the path to move forward. So it is -- it will be a very -- it will be a good step forward for us when we get through that, and we have agreement on the Phase III protocol. So we expect to communicate that information, the outcomes of that when we hear back from the FDA probably in the meeting minutes, right? So we've said that, that time frame was in Q2 of this year.

And Charles, I might add is that there are a lot of historical precedents here. We're -- we feel confident about this meeting and really an outstanding briefing book. I think that historically, these studies have been 12-month non-inferiority trials against an active comparator. The non-inferiority margin historically has been 1.8 to 2 centimeters and we also expect to have a randomization to the 1.6 mg/kg a day, a 2:1 randomization to growth hormone. I think most of these studies have been about 200 subjects. We expect a similar design and also, of course, we validated our PEM strategy. I think we derisked our program pretty considerably given the fact that we can select patients we believe will be -- our drug will be effective in and that is the moderate growth hormone deficient patient. So we're pretty confident about our meeting with the -- our community meeting with the FDA.

That's helpful. If I could just ask a follow-on question to that -- those 2 observations, Rick. Would you anticipate the PEM strategy to help you design and conduct a smaller sample size or conduct 1 about that size with perhaps greater confidence in the signal to noise.

John, do you want to go there?

Yes. So I think the -- how we view the PEM test is it's going to kind of raise our efficiency, right? We're going to be able to bring in subjects that are likely responders to our molecule. So I don't think it's going to reduce that size. It will make it a more efficient trial at that site.

Okay. Last question in terms of business development activity. At one time, you had talked about possibly ex U.S. partnering. I guess I'm wondering if you have any further thoughts on that, and then I'll hop back in the queue.

Thanks for that question, Charles. And sure, I think that you can imagine as the first oral product in this very large global market there are certain ex U.S. regional markets that -- and companies that have completed an outreach to us or vice versa. And we continue with those discussions and at the appropriate time, I think that we will partner with anyone who's going to -- we believe, is going to be a good partner in those markets. Obviously, this will allow us to bring in some non-dilutive money. And I think that's 1 of the goals that we would have for ourselves.

And our next question coming from the line of Leland Gershell with Oppenheimer.

Rick and team, just a question from me with respect to additional indication potential for 201 as we think about use of growth hormone products today and indications such as Turners and other such disorders. I'm just wondering if you could comment on any plans down the road to explore 201's potential to be approved for those additional label indications?

Yes. And John, I'm going to let you start with that as an answer. And thank you for the question, Leland.