Lyra Therapeutics, Inc. (LYRA) Earnings Call Transcript & Summary

Hello. I think that we're ready to start. So my name is Perry Mayo-Malasky. I am an analyst here at Bank of America on Jason Gerberry's team, who covers SMID Biotech. Pleased to introduce our next speaker, Lyra Therapeutics. This is CEO, and I'm here with CEO, Maria Palasis. And Maria, I'll turn it over to you for a presentation.

All right. Thank you, Perry. Thank you for the introduction and the invitation to present today. It's really an exciting time at Lyra right now. We've got 2 products in development, and we have some clinical trial readouts that are coming out very soon here. Our first one at the end of the year and then another one soon after in the first half of 2024. So Lyra has developed 2 products to treat chronic rhinosinusitis, and we're actually really proud to be one of the few companies that is developing products for this disease. Chronic rhinosinusitis is an inflammatory disease, similar to psoriasis, eczema, but it's localized in the sinuses. And there is not a drug that's approved to treat CRS. There's 14 million patients that have this disease. And there's not a drug that's approved. So the way that patients are treated right now is, they're put on saline lavage to treat their symptoms. When that doesn't work, they'll use topical steroids, sprays steroid actually are the fundamental of foundational treatment for these patients. And the steroids work really well. It really is a delivery issue. So oral steroids will -- patients tend to do well after that. However, that's not a chronic therapy. And topical steroid sprays, the sprays just don't get to where the disease is. If any of you have used a steroid spray before, you know you can taste it, that really delivers it just to the nose and the disease is backed by the eye. So what Lyra has done is we've used technology to be able to place the steroid. This is a known steroid. It's mometasone furoate directly at the cited disease and be able to target exactly what the disease is. And we have 2 products that we've developed to be able to do this and just going to go through this here. So what you'll see is that, our technology is an expandable mesh and it's placed in a doctor's office and in ENT's office, and is placed using just a small applicator that's easy to administer in an office setting back at the location of the disease. A couple of things to note about our technology. If you look at that image, it looks really simple, but there's actually a lot of innovation that has gone into this. Number one, the way that we formulate drugs with the polymer. We're able to load a high payload of drug, 6 months' worth of therapy and then very gradually and consistently release the drug so that the patient is getting the same dose of drug in the first month that they're getting in the last month of treatment. That's one thing. The second thing is that our technology includes elastomeric polymers that we've developed. It gives the matrix shape memory properties. This is really important because it allows us to place the matrix within a small applicator only 3 millimeters to then be able to deploy it in an irregular shape or it's going to conform. And then as the drug is released and inflammation recedes, the space gets bigger. So this matrix will enlarge. It will -- it has shape memory properties that then allows it to actively adjust to the environment. And this is important because it will stay in place then during that 6 months of treatment. All of this technology has been developed by Lyra scientists and engineers and all of the intellectual property is wholly owned by our company. If you look to the photo to the left, that's LYR-210, that's our lead program for patients that haven't had a surgery. And you can see it's very small for patients that have that anatomy. And in the cartoon, what you'll notice is that the matrix has a very high surface area to be able to optimize the contact with the mucosa and allow good delivery of the drug over time. So when patients go into see an ENT, they'll fall into 1 of 2 categories. Either they are surgically naive and haven't had a surgery before to treat their sinusitis or they've had a surgery or multiple surgeries. And I just want to mention that once patients fail medical management, their next choice is surgery. And surgery is in curative. It doesn't treat the inflammation. You need to have an anti-inflammatory onboard. The surgery just opens up the space to allow access of the inflammatory medicine. And so in these postsurgical patients, they also continue to be symptomatic. So we've got LYR-220, which has the same dose of drug, the same release kinetics, but it's an enlarged matrix for those patients who have had the surgery. And what they do in the surgery, they remove the walls between the sinus cavities and having a larger space. So 220 is simply a larger matrix to get good apposition. So our lead program, LYR-210, is in pivotal Phase III trials and for LYR-220, it's in Phase II. That study has completed enrollment. So chronic rhinosinusitis. Some people call it an unrecognized epidemic. There's approximately 12% of the U.S. population have the disease. And many people aren't aware of it unless they have it themselves or one of their -- somebody in their family or somebody they know has a disease. It's defined via the 4 cardinal symptoms. And those cardinal symptoms are nasal obstruction, nasal discharge, facial pain and pressure, and a loss of sense of smell. And by definition, you have to have 2 or more of these symptoms for more than 12 weeks. And the reality is patients have it for really the rest of their lives once they get it. These patients are -- there's -- in the U.S., 8 million of these patients are treated a year. We know that about 50% of them fail medical management. That's 4 million patients each year that fail. And that is a population that Lyra is targeting with these 2 products that -- the 4 million failed population. Of those 4 million patients, you can see at the bottom the initiated area, those represent patients they have polyps. So there have been therapies that have been developed to treat polyps, but it's really the minority of these patients. The vast majority of patients do not have polyps and do not have a treatment. Lyra's focused on the broad population of which the majority are non-polypatients. The matrix has been developed such that it can be placed easily in an office procedure at the time of endoscopy. Once it's placed in the middle meatus, it will release the drug and provide localized anti-inflammatory therapy for 6 months. Once it's put in place, patients don't feel that. We know that from our previous 3 studies that we've done. And the procedure is straightforward. It's done in an office setting using topical anesthetic at the time of a routine visit. The matrix, since it's designed to release drug for 6 months, it's also designed to be removed. So it can be removed at 6 months easily. It is fully resorbable. It takes longer to resorb. But what we do in our trials is we ask the physicians to take it out at 6 months, so then they could place another one. The LANTERN Phase II study, that's the most recent study that we did. It was a randomized controlled study, dose range and we had 2 doses. The high dose of 7,500 micrograms, that's the one we're moving forward, a lower dose and then the control treatment group. So the control group is a MAC procedure. Patients are decongested, they're cleaned out, and then they do saline irrigation. So they are getting a treatment. And then at 24 weeks, the plants removed, and we did follow these patients for an additional 24 weeks to collect safety data. The SNOT-22 score is a validated symptom score that physicians use in their practice to be able to assess how therapies are working. There's a minimally clinically important difference. MCID that's been validated. That's 8.9 points. So when you look at this graph on the y-axis is the change from baseline in this SNOT-22 score, and this is out of a total of 110 points, and on the x-axis is the time and weeks. And first of all, what you see is, we see a dose range -- a dose effect, which is very validating to see, particularly with a controlled release product like this. At 4 weeks, we see a rapid effect. Patients are feeling better quickly. In the high dose, the improvement is 25 points. So that's a very dramatic effect, more than twice at MCID. At 24 weeks, the difference from baseline is 40 points with a difference from control of 19 points. So twice that MCID relative to control. What this is saying is that, the difference that we see relative to the control treatment is clinically meaningful. And then the p-value at 24 weeks is 0.001, so also highly clinically significant. As I mentioned, there's the cardinal symptoms that define the disease. The 3 most prevalent are nasal discharge, nasal blockage and facial pain and pressure. Again, we're seeing a dose effect here. And then the difference between the treatment and control is statistically significant for each of these more prevalent cardinal symptoms. The one that's not listed here is a sense of -- loss of sense of smell. And there, we saw a trend. The reason we saw a trend is that many of our patients, when they entered the trial did not have an impairment in the sense of smell. That tends to be associated more with large pilots. So we did see a trend in that. But what we have done is the FDA has guided us towards a composite of 2 or more of the cardinal symptoms as a primary endpoint, and we propose a composite of these 3 symptoms, which I'll show you on this next slide. So if you look at the composite of those symptoms at 24 weeks, again, you see a dose effect. And the difference relative to control is statistically significant with a p-value of 0.003. So we're seeing a very dramatic effect. And I do want to mention that this was a trial of 67 patients. So there's about 22 patients per arm, and we're seeing high statistical significance between the high dose and the control group. This really sets our program up for a strong pivotal program. In our Phase III pivotal, which is ongoing. We have 2 trials that we're doing. ENLIGHTEN-1 and ENLIGHTEN-2, they are both 180 patients each where they're randomized 2:1 treatment to control. And the reason we're doing 2 trials is the FDA asked us to study it in 2 studies, they're virtually identical, apart from an extension study that is part of the ENLIGHTEN-1. So the primary endpoint is at 24 weeks for both of these studies, and then in ENLIGHTEN-1, the treated patients will cross over and half of them will get repeat dosing to collect safety data on repeat dosing. The other half will get a MAC procedure so we can examine the duration of benefit. This is important in our LANTERN Phase II. We saw that half of those patients that we studied out to 24 weeks actually had -- did not -- their symptoms didn't worsen. So we want to get more data. We believe this extension study is going to set us up for commercialization. The other point I'll mention is that the numbers of patients is really driven by the safety data that we have to collect for ICH guidelines. It's not the statistics. We're really overpowered in this program based on what we saw in LANTERN in the Phase II. The BEACON study is the Phase II study for the larger matrix I mentioned in the post-surgical patients. This is the first time that product has been in the clinic. So we did do a small part 1, 6 patients. We had 2 designs that had the same dose of drug of 7,500, but the weave was a little different in the matrix to assess the physician preference. We're taking one of those designs forward in the BEACON study. It's 40 patients, 1:1 randomization between treatment and control, and that study is fully enrolled and will read out in the fourth quarter of this year. I'd like to talk about the ENTs a bit here because this is -- this type of product fits in well with how they treat patients. These ENTs are proceduralists. That's how they treat their patients. And given that this is a therapeutic procedure, it really falls in nicely with how they practice. They have many patients that they see -- that prefer to not have surgery. So we know that 1.4 million patients see in ENT each year. But there's many more patients out there from that 4 million, and these are patients that really prefer not to have surgery. This gives them another option to provide these patients as an alternative to surgery or something in addition to surgery. Our go-to-market strategy is highly focused. Though we're focusing on the 1.4 million failed patients that are seeing in ENT each year. And then in terms of the ENTs, there's 10,000, but it's only about 2,500 ENTs that do most 90% of the sinus procedures. And in fact, it's about 600 ENTs that are the high-volume centers. So we're focusing on those. We believe our sales force of about 20 to start then growing up to about 40 with some MSLs also to support commercialization. So just to run through of our upcoming data milestones. The next one is the BEACON readout in the fourth quarter of 2023. After that, we have our ENLIGHTEN-1 pivotal trial readout in the first half of '24. The extension study will read out in the second half of '24. And after that, ENLIGHTEN-2, which we just restarted after bringing manufacturing in-house that will be in 2025. So thank you.

Okay. And I think we're out of time. Thanks so much for joining us, Maria.

Thank you.