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

Good morning. Welcome to Lyra Therapeutics conference call and webcast to discuss top line results for ENLIGHTEN 2 Phase III trial of LYR-210 in Chronic Rhinosinusitis. My name is Kevin from Notified Conference Call Service, and I'll be your operator today. This webcast is being recorded. This webcast will be available on Lyra's website for a limited time. [Operator Instructions] Earlier this morning, Lyra announced results from ENLIGHTEN 2 Phase III trial in a press release. The press release is available on the Investor Relations page of the company's website at www.lyratherapeutics.com. On this conference call today, members of Lyra's management will make prepared remarks about the ENLIGHTEN 2 Phase III trial results with the accompanying slide presentation and the webcast. Today's speakers from Lyra Therapeutics will be Dr. Maria Palasis, President and CEO; and Jason Cavalier, CFO. Following the prepared remarks from Dr. Palasis, we will have a Q&A session. [Operator Instructions] I will now turn the call over to Mr. Cavalier.

Good morning. During the course of this call, we expect to make forward-looking statements, including statements related to the clinical development of the company's product candidates, business strategy, potential regulatory submissions and potential commercial plans for its candidates, including estimated addressable market opportunity. These forward-looking statements are based on the company's current expectations and inherently involve risks and uncertainties. Lyra's 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 would cause results to be different from these statements include factors that the company describes in the section entitled Risk Factors in the company's quarterly report on Form 10-Q filed with the SEC on May 6, 2025, and its other filings with the SEC. I will now turn the call over to Dr. Palasis.

Good morning. We are very excited to share the positive results from the Phase III ENLIGHTEN 2 trial, which evaluated LYR-210 for the treatment of chronic rhinosinusitis or CRS. Before I take you through the presentation, I want to take a moment to thank our employees for their perseverance and dedication to the continued development of LYR-210 following the ENLIGHTEN 1 trial set back in May 2024. In addition, I want to thank our investigators and patients upfront. Their continued belief in the potential of LYR-210 allowed us to complete the ENLIGHTEN 2 study and collect the data that I am sharing with you today. We will start on Slide 3 to briefly discuss CRS for those unfamiliar with this disease. CRS is characterized by inflammation that is localized within the nasal sinuses. It is widespread and challenging with approximately 8 million patients treated annually in the U.S. alone, 50% of these patients, which amounts to 4 million patients annually failed today's available medical therapy and represent our market opportunity. It's estimated that the annual health care expenditures related to CRS are approximately $60 billion. Generally speaking, CRS has 2 phenotypes, patients without nasal polyps, which represent about 70% of the market, and patients with nasal polyps, which represents the remaining 30% of the market. Patients with CRS experience chronic nasal obstruction and congestion, facial pain and pressure, nasal discharge and reduced sense of smell. These symptoms are referred to as the cardinal symptoms of CRS, and they are relentless and debilitating to patients in their daily lives. On Slide 4, I will briefly review our technology and product candidates. Our novel technology is an engineer elastomeric matrix that is designed to dynamically conform to the anatomy of the sinonasal passages and is designed to provide long-acting localized drug therapy. Our lead product candidate is LYR-210, which is the smaller version of our product candidate. It's designed to accommodate patients with a narrow ethmoid cavity. LYR-210 is formulated to deliver 7,500 micrograms of mometasone furoate, a well-known anti-inflammatory steroid over 24 weeks. Upon completion of our Phase II dose-ranging study, LYR-210 was studied in our pivotal Phase III ENLIGHTEN program, which we are sharing today. We have designed LYR-210 to be the new standard of care for CRS patients that have failed medical management. Within the CRS treatment community, it's well established that steroids work and are the mainstay of treatment. However, these treatments are inadequate for many patients due to limitations in delivery and administration. Oral steroids have well-known systemic safety issues and steroid nasal sprays don't reach the site of inflammation that is deep within the sinuses. They don't reside in the local tissue for long periods of time and are dependent on daily patient adherence, which can be challenging for these patients. Lyra's product candidates are designed to address these limitations. And if approved, we believe that LYR-210 is positioned to be the first long-acting product for CRS designed to provide 6 months of therapy with a single administration. Moving to Slide 5. The ENLIGHTEN program consists of 2 Phase III clinical trials, ENLIGHTEN 1 and ENLIGHTEN 2 to evaluate the efficacy and safety of LYR-210 for the treatment of CRS. Each trial was designed to evaluate approximately 180 CRS patients who have failed medical management and who have not had ethmoid sinus surgery, randomized 2:1 to ease their 210 or sham procedure control over 24 weeks. An important difference between the 2 trials was that ENLIGHTEN 1 had a 28-week extension stage where patients continue to be blinded to treatment and was intended to demonstrate safety and repeat usage as well as duration of effect, data for which we have previously disclosed. In addition, the sham patients at 24 weeks crossed over in treatment. While the ENLIGHTEN program included patients with and without nasal polyps, it's important to note that the primary endpoint was the change from baseline in the 3 cardinal symptoms or 3CS at 24 weeks in patients without nasal polyps. Key secondary endpoints include change from baseline in the 3 cardinal symptoms and SNOT-22 score at week 24 for the full population of patients with and without nasal polyps. Moving to Slide 6. As you can see in the table, patient demographics and baseline characteristics were similar across the LYR-210 treatment and sham group. In terms of region, 55% of the patients were in North America, 45% were in Europe. Baseline 3CS score was slightly higher in the sham group at 7.2 points compared to 6.5 points in the treatment. Baseline SNOT-22 score was very similar with the score of 45.3 in the treatment group compared to 45.7 in the sham group. Moving to Slide 7. In terms of safety, the ENLIGHTEN 2 study shows a favorable safety profile with no product or procedure-related serious adverse events. This table shows the most common treatment-emergent adverse events reported in the study. These were generally mild to moderate anticipated side effects. The most common adverse effect was epistaxis or nose bleed, which is a common adverse event for nasal steroid treatments and procedures. These resolved on their own without need for intervention. Moving to Slide 8. The primary endpoint of the ENLIGHTEN 2 study was a change from baseline for the 3CS at 24 weeks in the non-polyp patients. The study showed consistent improvement over sham control starting as early as week 8 with a p-value of less than 0.05 at weeks 20 and 24. At week 24, 210 showed statistically significant improvement with a 1.13 improvement over sham, representing a p-value of 0.0078. Slide 9 shows the results of the first key secondary endpoint, which is a change from baseline in 3CS at week 24 for the full population of patients with and without nasal polyps. Again, we see consistent improvement over sham starting at week 12 with a p-value of less than 0.05 at weeks 12 through 24. At week 24, 210 shows statistically significant improvement with a 0.9 point improvement over sham, representing a p-value of 0.0209. Slide 10 shows a result of the second key secondary endpoint, which is the change from baseline in SNOT-22 score at week 24. This is the data that our investigators are most excited about as SNOT-22 is a clinically validated assessment used by clinicians to measure the symptoms and impact on the patient's quality of life. 210 shows consistent improvement over sham control, starting as early as week 4 with a p-value of less than 0.05 at weeks 4 through 24. At week 24, LYR-210 showed statistically significant improvement with an 8.7 point improvement over sham, representing a p-value of 0.0101. For the SNOT-22 score, the minimal clinically important difference has been established as 8.9 points, so our 22-point improvement over baseline represents more than double this clinically meaningful benchmark. Moving to Slide 11. Here, we show the change in percent ethmoid opacification at week 20, which was our third key secondary end point and is an objective endpoint looking at level of disease in the ethmoid sinus on CT. In the ENLIGHTEN program, the inclusion criteria did not require a high level of disease on CT. And despite that, we observed a numerical improvement of approximately 2.2 points in percent ethmoid opacification by CT over sham. Moving to Slide 12. As a reminder, we pooled and analyzed separately the 64 patients with grade 1 nasal polyps across the ENLIGHTEN 1 and ENLIGHTEN 2 trials. This was a prespecified as opposed to post hoc analysis. For 3CS, we observed a consistent positive trend starting in week 4 and further improvement at weeks 20 and 24 in this small sample size of 64 patients. At week 24, interestingly, the 1.13 point improvement over sham is identical to what we saw in the non-polyp patients. On Slide 13, a similar consistent positive trend was observed in the SNOT-22 score starting in week 4 and throughout week 24 with a p-value less than 0.05 at week 20. At week 24, similar to the non-polyp patients, LYR-210 showed a greater than 20-point improvement over baseline, which represents more than double the clinically meaningful difference of 8.9 points. Slide 14 shows a change from baseline in nasal congestion score at week 24 for subjects with baseline nasal congestion that's greater than or equal to 2, which represents patients with moderate and severe congestion. Change in nasal congestion score would be a primary endpoint for future polyp trial. Again, we observed a consistent positive trend of improvement in nasal congestion score starting in week 4 and throughout week 24 with a p-value less than 0.05 at week 20. Moving to Slide 15. In conclusion, the ENLIGHTEN 2 Phase III pivotal trial met its primary endpoint and key secondary end points of change in 3CS and SNOT-22 in the full study population, a numerical improvement in the key secondary endpoint of change in percent ethmoid opacification by CT was also demonstrated. In the pooled ENLIGHTEN 1 and ENLIGHTEN 2 patients with grade 1 nasal polyps, a consistent positive trend was observed in symptomatic endpoints starting in week 4 and throughout week 24. Finally, LYR-210 was well tolerated with no product-related serious adverse events reported in the study. Needless to say, we are excited about these results as we believe that they support the robustness of our drug device technology to potentially treat CRS patients. We believe the positive data from our ENLIGHTEN 2 Phase III study enables us to advance our regulatory strategy toward FDA approval for LYR-210. It renews our vision to bring new therapeutic solutions to millions of patients who struggle with CRS in their daily lives. We intend to meet with the FDA in the second half of 2025 to align on the strategy for CRS without nasal polyps as well as initiating a Phase III trial with nasal polyps in the first half of 2026 pending additional financing. We plan to present the data from the ENLIGHTEN 2 study at the American Rhinologic Society Annual Meeting in October. We will now open it up for Q&A.

[Operator Instructions] Our first question comes from Lachlan Hanbury-Brown with William Blair.

Congrats on the good data here. I guess the first question that I think we've probably discussed over the past year is, can you just elaborate on sort of anything you've seen that may explain why ENLIGHTEN 1 and 2 were different? And I'm sure you've got plenty more analysis to do on this data. But anything you see at this point that may help explain the difference would be appreciated.

Lachlan, thank you for the question. Let me start with we're thrilled with the results clearly of ENLIGHTEN 2 and they're very much in line with what we expected, right, what we expected out of this trial and what we expected out of ENLIGHTEN 1, the effect size of greater than 1 point in 3Cs, and very importantly, the SNOT-22 score throughout the treatment duration and the magnitude of improvement. We know that there's an enormous need for non-polyp patients with the 2.8 million failures per year. And these patients, really they don't have anything other than 1 nasal spray that's been approved. There's no other drug other than sprays. So our plan is to move forward with ENLIGHTEN 2 with the data and ENLIGHTEN 2 data supporting the non-polyp and ENLIGHTEN 1 data. So first of all, what is consistent? ENLIGHTEN 1, as you know, we looked at the different populations in ENLIGHTEN 1. And we have reported that we have seen an improvement in the European patients, and this was consistent with our Phase II study. Now in ENLIGHTEN 2, we again see very consistent improvement in our European patients, and we see consistent improvement in our U.S. patients in ENLIGHTEN 2. And ENLIGHTEN 1, the U.S. patients had a much greater sham effect. That's what we've noticed. So why is it that the European patients we see consistent improvement? We have said before that there's, we believe, a higher level of disease burden in the European patients. They have lesser access to disease -- to treatment. And we believe that the U.S. population, non-polyp population, there's more heterogeneity in that population, and we may have had more transient patients with transient disease. In terms of the clinical study, the designs were very similar. We did have different sites, right? Because the studies were executed for the most part, in parallel, they were staggered, we had to use different sites. We have slightly more academic sites in the ENLIGHTEN 2 than we did in ENLIGHTEN 1. So those are the differences. We're going to continue to dig into the data, just like we did in ENLIGHTEN 1. I think what is critical is we intend to go to the FDA with the totality of our data. We believe that the risk/benefit profile supports moving to an NDA. The FDA may require us to do an additional study. And I think what's important is if they do, that we are very confident that we can design a successful ENLIGHTEN -- next ENLIGHTEN trial, if required based on all the data that we have. And I do want to mention, we have a very big data set now in non-polyp patients. We have more than 300 patients that we can use. Our clinical team has been digging into ENLIGHTEN 1. We know that a next trial, if we needed to do this would be -- we would have a lot of European patients. We also would increase the severity of disease on CT, which we think will be important. And we're going to validate all of this with our ENLIGHTEN 2 data. So let me just stop there and see if you have any follow-up.

Yes. That's very useful to hear all that. Definitely a lot to think about. I guess another question here is it's good to see the trends in the polyp patients, but you only enrolled grade 1, which I assume sort of caps the level of benefit that you could see. I guess could you just comment on that? Do you have a sense of how much only grade 1 patients could be capping the efficacy there and maybe if you would expect anything different in patients with larger polyps?

Yes. That's a great question, Lachlan. We do believe that, that is likely the case in the polyp patients. I think it's very interesting to see that both, the 3 cardinal symptoms and the SNOT-22 score in the grade 1 polyps, were very similar to the non-polyps. I think that helps us overall, right? We're showing consistency. And these grade 1 polyps are very small. So showing the differences that we've shown in the nasal congestion, and we have important differences also in CT, I think it bodes well. We would expect that patients that have bigger polyps, grade 2, grade 3, grade 4 should show greater congestion, right? We have to prove that out in a pivotal study. And that's our plan. I also want to note that there's been many antibody trials that have been done in polyps and those studies have, for the most part, not included grade 1, they've included the larger grade of polyp. So our thoughts right now on a polyp program would be an adaptive study where we would understand the benefit of our product in those larger polyps and then we would be in a position to do a sample size re-estimation for the pivotal stage of that program. But that's a very important question. Thank you.

No problem. And if I can squeeze in the third before passing on. In your communications with the FDA since ENLIGHTEN 1 readout, did you ever discuss the possibility of if ENLIGHTEN 2 is positive, what your options would be?

We did not discuss the non-polyp data with the FDA. We felt it was important to have ENLIGHTEN 2 readout first, so that we knew what the full data set is. Now having said that, we are planning to go to the FDA as soon as we can. Number one, we have to get all the data analysis on ENLIGHTEN 2 completed. The other thing I want to mention is that we have prespecified pooled analysis between ENLIGHTEN 1 and ENLIGHTEN 2 that we can do, and this was included in our integrated summary of efficacy. So these are planned analyses. And we believe that this pooled data is going to be really important to share with the FDA. So we're going to do this analysis. We're going to quickly put in a meeting request with the FDA, and our intent is to meet with them in the second half and talk to them about our pathway towards an NDA for non-polyp patients.

Our next question comes from Dennis Ding with Jefferies.

Congrats on the data. I just had a question just around the FDA. Just curious what precedent is there in the division of pulmonary and allergy where the FDA has allowed an NDA filing on only 1 positive Phase III. And if there are any differences in those examples relative with your own situation? And how much can you leverage the fact that the steroid is already approved in those discussions with the FDA?

Great. Dennis, so your first question is, is there precedent? There is precedent. There has been a nasal steroid eluting implant for patients with recurrent nasal polyps that have been approved off of 1 Phase III study. And there has also been an antibody, Nucala, which has been approved with 1 positive Phase III study. So yes, there is precedent there. And so your second part of your question was -- can you repeat that, Dennis? I'm sorry?

Yes. Just if you compare those situations with their situation side-by-side, if there are any similarities or differences?

Yes, absolutely. So that's right. There is a guidance document that the FDA has put out where that guides towards 1 pivotal study is being sufficient. And that guidance document states that if the drug is within the same pharmacological class as another drug that is approved for the same indication and the endpoints are similar that you may be able to use 1 trial. So what helps us both for polyp and non-polyp is that steroids are the foundational treatment for these patients. There's no doubt about that, right? Patients will go on steroids, nasal steroids for the most part. So the fact that nasal steroids now are approved, also in nonpolyps, there has recently been a steroid spray that was approved in non-polyps, I think that really helps our company, right? It helps us leverage the data that's already in there for both non-polyps and polyp. So that's our intent is to, number one, use our data where we have very strong benefit risk profile. We have a very strong safety profile with no serious adverse events that are product or procedure-related across any of our trials, right? We've done 6 trials to date. So leveraging all of our safety, all of our efficacy and also the fact that there is precedence at the FDA, both in terms of having an approval up of 1 pivotal and using the guidance document in cases where there have been recent approvals of local steroid therapies.

Perfect. And if I can follow up with 1 question. If the FDA does require a new trial, how much will that cost? And how will you bridge that funding gap?

Dennis, this is Jason. So if we do have to do another ENLIGHTEN 3 trial in non-polyp, again, depending on the feedback from the FDA on the sizing, we estimate about $20 million, which is roughly in line with our previous Phase III trials. In terms of bridging the funding gap, I can't be specific about our financing plans, but we had $32 million of cash at the end of the first quarter this year, which takes us to the end of this year, early into next year. So clearly, you can do the math and understand that we need to finance, but I can't be more specific about that right now.

Our next question comes from Matthew Caufield with H.C. Wainwright.

Very excited to see the update. Congratulations. From a practical standpoint in the clinic, I was wondering what are your thoughts on the 2 matrix sizes at this point? And if that approach is ultimately more practical for treating sort of the heterogeneity that exists among patients, what could be necessary to ultimately get both sizes across the finish line, first for non-polyp and then ultimately for polyp? Is that something that could be implemented into the next stages? Or is that something that would be thought about or pursued kind of down the line?

Matt, thank you for your question. So that's correct. We have 2 matrices, 2 sizes, a big and a small and LYR-210 is a small one. It opens up to about a diameter of 13 millimeters. Both matrices are in applicators that are about 3 millimeters, right? So 210 opens up to 13 millimeters and 220 opens up to about 20 millimeters. And it's important that we have the 2 sizes because one of the things that clearly we've learned is that no 2 patients are the same. They get surgery. And the surgery is more like an art. Each physician does a surgery differently. Sometimes they'll do a full ethmoidectomy. Sometimes they'll do what's called a partial ethmoidectomy. They may take out some of the ethmoid sinuses, but leave the other ones intact. Some patients have polyps. Some do not. So you really get a sort of a range of anatomy. And the great thing about our product candidates is that when they open up, they sort of bloom open, they adjust to whatever the anatomy is. And the small one will be better suited for surgically naive and also for postsurgical patients that have had -- that have some polyps and so maybe have a narrow space and the 220 will be more for those who have had a full ethmoidectomy. That's the heterogeneity, and that's why we need 2 sizes. So with respect to how are we going to bring forward. You know that we have studied 220 in the BEACON study in patients who have had a prior surgery. Our intent right now is to focus on LYR-210 in the presurgical patients and patients without polyp. And then in the polyp study that we plan to initiate, that study would be 210 in both pre and postsurgical patients with polyp. And we believe that we can access the majority of the market with those trials if we can get those indications. The 220 then would follow, right? So we would do that as a supplemental NDA to be able to bring another size in. We believe that could be done in a straightforward way. I mean, think about it like a drug-eluting stent where you'll test out 1 size, but then bringing in additional sizes requires a lower level of burden. So that would be our strategy for 220.

Excellent. Very helpful. I really appreciate that. And very excited to see next steps here.

Thank you, Matt.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Dr. Palasis for any closing remarks.

Thank you, operator. I want to thank everyone again for joining the call this morning. We look forward to sharing additional updates on our path forward as soon as we can. Thank you very much.

Thank you, ladies and gentlemen. This does conclude today's presentation. You may now disconnect, and have a wonderful day.