Mineralys Therapeutics, Inc. (MLYS) Earnings Call Transcript & Summary

Welcome to the Mineralys Therapeutics Second Quarter 2026 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Ferry of LifeSci Advisors. Please go ahead, sir.

Thank you. I would like to welcome everyone joining us today for our second quarter 2026 conference call. This afternoon, after the close of market trading, we issued a press release providing our second quarter 2026 financial results and business updates. A replay of today's call will be available on the Investors section of our website approximately one hour after its completion. After our prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. These forward-looking statements are qualified by the cautionary statements contained in today's press release and our SEC filings, including our annual report on Form 10-K and subsequent filings. Please note that these forward-looking statements reflect our opinions only as of today, August 11, 2026. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in light of new information or future events. I would now like to turn the call over to Jon Congleton, Chief Executive Officer of Mineralys Therapeutics.

Thank you, Dan. Good afternoon, everyone. Welcome to our second quarter 2026 financial results and corporate update conference call. I'm joined today by Adam Levy, our Chief Financial Officer; and Eric Warren, our Chief Commercial Officer. I'll begin with an overview of the business and recent milestones. Eric will then provide a commercial update, and Adam will review our second quarter financial results before we open the call for your questions. Before I get started with the business update, I would like to take a moment to welcome Dr. Terry Ferguson to the team. Terry joins us as Chief Medical Officer, succeeding Dr. David Rodman, who will continue to play an important role as a full-time strategic adviser to the company. Terry brings more than 35 years of experience in cardiovascular medicine, clinical development and executive leadership. He served as Cardiovascular Therapeutic Area Head at Amgen and held senior cardiovascular leadership roles at AstraZeneca and The Medicines Company. He also spent more than 20 years on the faculty of the Texas Heart Institute and in cardiovascular medicine, a proven track record of -- Terry's deep expertise in cardiovascular medicine and a proven track record of advancing innovative therapies positions him well to lead our medical and late-stage clinical activities as we continue preparing for the potential commercialization of lorundrostat. I want to thank David for his dedication and hard work over the past several years. During his time as Chief Medical Officer, he guided the development of lorundrostat from proof of concept through the pivotal program and our recent new drug application filing with the FDA. In the second quarter, our focus was on commercial launch readiness, the evaluation of partnering opportunities and the next steps in the clinical development of lorundrostat. In the third quarter, we continue to build our commercial infrastructure as we approach our December 22 PDUFA date. Turning to our clinical progress. Our Transform-HTN open-label extension trial continues to generate valuable long-term safety and efficacy data that further supports lorundrostat's potential best-in-class profile. In May, we presented a post hoc analysis from our pivotal Launch-HTN trial at the European Society of Hypertension's Annual Meeting. The analysis focused on participants with chronic kidney disease, a high-risk and difficult-to-treat patient population. Despite entering the trial with more severe hypertension and greater use of background antihypertensive therapies, these participants experienced statistically and clinically meaningful blood pressure reductions comparable to those observed in the broader trial population. In addition, participants with baseline albuminuria achieved a 52% placebo-adjusted reduction in urine albumin to creatinine ratio, an important marker of kidney injury and disease progression. Just a few weeks later, at the Endocrine Society's Annual Meeting, ENDO 2026, we presented late-breaking proteomic data from our Launch-HTN and Advance-HTN trials, demonstrating that lorundrostat was associated with significant reductions in multiple biomarkers of heart failure risk. While exploratory in nature, these coordinated biomarker changes provide additional biological evidence that lorundrostat use may favorably modulate disease pathways implicated in heart failure. We believe these findings further strengthen our understanding of the broader biological implications of aldosterone and the potential for lorundrostat to provide benefits in hypertension and related comorbidities. We continue to evaluate further clinical development for lorundrostat, and we'll keep you informed on our progress as appropriate. We also completed several corporate initiatives that enabled our long-term value creation objectives. During the quarter, we announced an agreement to repurchase the potential future royalty payments due to Tanabe Pharma Corporation related to lorundrostat. Under the terms of the agreement, Mineralys agreed to pay Tanabe $200 million upfront and up to $100 million once certain commercial milestones are met. Our aggregate potential future milestone payments to Tanabe are now up to $265 million. We believe this represented a unique strategic opportunity to enhance the long-term value of lorundrostat as we approach commercialization. Concurrently, we completed a $150 million equity offering and entered into a $500 million committed senior secured term loan facility with funds managed by Pharmakon Advisors. Beyond funding the royalty repurchase, this facility provides Mineralys with access to additional capital and financial flexibility while positioning Mineralys to capture the long-term value of lorundrostat. As we look ahead to the remainder of the year, we believe lorundrostat is entering an exciting new phase in its evolution. We have continued to build the clinical evidence supporting lorundrostat, enhanced the long-term value of the asset, expanded our access to capital and continue to make meaningful progress preparing for a potential commercial launch. In parallel, we continue to evaluate partnering opportunities and engage in strategic discussions to enhance value and enable us to reach more patients who could benefit from lorundrostat. With that, I'll turn the call over to Eric to provide a commercial update.

Great. Thank you, Jon. Approximately 20 million adults in the United States have uncontrolled or resistant hypertension. And despite the availability of numerous anti-hypertensive therapies, these patients remain unable to achieve their blood pressure goal. These patients face significant increased cardiovascular and cardiorenal risk, highlighting the need for new treatment options that address an underlying driver of disease. Our extensive market research continues to reinforce the value proposition lorundrostat could offer if approved. Physicians consistently tell us they are seeking new therapies that deliver meaningful and durable blood pressure reductions, demonstrate a favorable tolerability profile and fit naturally within existing treatment algorithms. We believe lorundrostat's clinical profile aligns well with these expectations and differentiates the compound from both currently available and emerging therapies. Now over the past several quarters, we have systematically executed against the key elements of our commercial launch planned. As a result, many of the foundational components of our commercial infrastructure are now in place, and our efforts are increasingly focused on final launch readiness and execution. First, we've established strong relationships with leading hypertension specialists and key opinion leaders who we believe will play an important role in shaping clinical practice following a potential approval. Second, we've made significant progress in our initial payer engagement activities. The payers we have engaged with to date collectively account for the vast majority of covered lives in the United States. Our discussions have centered on clinical and economic burden associated with uncontrolled hypertension and the value proposition supported by lorundrostat's clinical data package. These conversations continue to reinforce our belief that payers recognize the unmet need in this patient population. Third, we're well underway in the development of a differentiated launch campaign that's designed to educate both health care providers and patients. We've done extensive research to understand the optimal messaging, resources and communication platforms that will drive rapid adoption. Lastly, we're in the final stages of building the field organization that will support our launch. Our experienced sales leadership team is now in place, bringing a track record of successfully launching and commercializing cardiovascular therapies. We've also completed detailed geographic mapping to identify the regions with the highest concentrations of physicians treating patients with uncontrolled or resistant hypertension, allowing us to optimize field deployment. And perhaps most importantly, we expect our sales organization to be staffed in advance of our December PDUFA target date, positioning us to execute swiftly and decisively following a potential approval. We've built our commercial organization around clear objectives, which are to ensure physicians have the education, resources and support needed to identify appropriate patients and if approved, make lorundrostat available to those patients as efficiently as possible. We continue to be encouraged by the feedback we are receiving from physicians payers and thought leaders and believe Mineralys is well positioned to execute a successful commercial launch. I'll now turn it over to Adam to review our second quarter financial results.

Thank you, Eric. Good afternoon, everyone. Today, I will discuss select portions of our second quarter 2026 financial results. Additional details can be found in our Form 10-Q, which will be filed with the SEC today. We ended the quarter with cash, cash equivalents and investments of $661.4 million as of June 30, 2026, compared to $656.6 million as of December 31, 2025. We believe that our current cash, cash equivalents and investments will be sufficient to fund our planned operations, including the commercial launch of lorundrostat into 2028. R&D expenses for the quarter ended June 30, 2026, were $221.4 million compared to $38.3 million for the quarter ended June 30, 2025. The increase in R&D expenses was primarily due to the $200 million upfront payment to Tanabe in June 2026 in connection with the license agreement amendment. The increase was also due to $0.6 million of increased personnel-related expenses resulting from headcount growth and increased compensation and $0.2 million of increased clinical supply, manufacturing, regulatory and other costs. These increases were partially offset by $17.8 million of lower preclinical and clinical costs, primarily due to the conclusion of the lorundrostat pivotal program in the second quarter of 2025. G&A expenses were $24.7 million for the quarter ended June 30, 2026, compared to $8.5 million for the quarter ended June 30, 2025. The increase in G&A expenses was primarily due to $8 million in higher professional fees, $8 million in increased personnel-related expenses resulting from headcount growth and increased compensation and $0.2 million of increased other administrative expenses. Total other income net was $5 million for the quarter ended June 30, 2026, compared to $3.5 million for the quarter ended June 30, 2025. The increase was primarily due to $2.3 million of increased interest earned on investments as a result of higher average cash balances, partially offset by $0.8 million of interest and amortization expenses related to the senior secured term loan entered into in June 2026. Net loss was $241.1 million for the quarter ended June 30, 2026, compared to $43.3 million for the quarter ended June 30, 2025. The increase was primarily due to the factors impacting our expenses that I just described. With that, I will ask the operator to open the call for questions. Operator?

[Operator Instructions] The first question is from Richard Law from Goldman Sachs.

Congrats on all the progress as we approach PDUFA. And I also want to extend our welcome to Terry and look forward to working with him. So a couple of questions for me. I see that you guys have a lot of postings on the territorial manager positions. How are you finding the quality of candidates after Baxfendy's launch, which I assume will be competing for talent out there as well? And also, are there any key attributes that you guys are looking for regarding like hypertension experience -- or on certain drugs? And also, when are you guys going to start hiring for the rest of the sales reps given the launch is nearing in four months?

Rich, this is Jon. Thanks for the question. I have to admit it was a little bit garbled. So I'm going to paraphrase your question back and tell me if I got it on point. I think your question is about the field sales force, the phenotype we're looking for and our likelihood of having those in position ahead of the PDUFA. Is that the paraphrase of your question?

Yes, exactly. So basically, the -- how are you guys finding the quality of candidates given that Baxfendy's launch already been happening? So I assume there's competition for talent there. So what you guys, are looking for in terms of experience? And also, like when are you guys going to hire the rest of the sales force given that the launch is four months away?

Yes. I think as Eric alluded to, our goal is to have the team in position ahead of the PDUFA date. I'll tell you, I'm really excited about the quality of not only the sales representatives, territory managers that we're seeing, but also of the first-line sales managers. I think Mineralys represents the kind of exciting opportunity that attracts high-level talent that are energized by the kind of innovation that lorundrostat represents and the impact that it could have on millions of patients. So I think that in and of itself becomes a very exciting offering that attracts high-level talent. I will tell you, there's not a one phenotype that we're looking for. There's certainly a lot of cardiovascular experienced reps that are out there, but we're also looking for those kind of individuals that we believe align to our values, the purpose that we have and are energized by the opportunity. So I'm very comfortable with the quality of candidate and our ability to hit that target of having the full team in position ahead of the PDUFA.

Fantastic. And then just to follow up on that. And how are you seeing the payers in terms of -- are they waiting for lorundrostat's approval before deciding on how to manage both ASI products? Is there anything that you guys are seeing that Baxfendy is doing well or not doing well with payers or other commercial aspects that you can do differently or better?

I'll give you a quick thought, and then I'll turn it over to Eric. I think the feedback we're getting from our national account team that was in place in Q1 of this year continues to be very bullish on access for this kind of innovation, particularly in the third and fourth line position. But Eric can give you maybe some more specifics behind that.

Yes. Thanks, Jon. Rich, so from a payer perspective, payers, it's still early for baxdrostat, obviously. But I think it's encouraging to see that there's recognition of the innovation that the ASI class brings. We haven't seen a lot of payer decisions yet, but we're firmly in a position to believe that both of these agents will be in an equivalent position that will give HCPs the ability to choose, and that's where our differentiated profile comes into play.

The next question is from Michael DiFiore from Evercore ISI.

Two for me. You said in the past that the label and post-marketing conversations typically start a couple of months out prior to PDUFA. Has that process begun? And has anything in the -- at least your initial conversations changed in terms of what you expect to negotiate in the label? And then second question is on pricing. When do you actually plan to lock in that decision? And would you communicate that ahead of the launch or at the launch?

Yes. Thanks, Mike. The label and post-approval commitments that typically occurs a couple of months ahead of the PDUFA. So I would expect sometime in the October, November time frame. I would say -- I would characterize the current dialogues with the agency, no surprises from us. I think the data package that we put together was robust from the pivotal studies, Launch-HTN, Advance-HTN, including Explore-CKD and the open-label extension. So we feel very confident with the package that we have, and I think the dialogues to date have been regular course. From a pricing standpoint, obviously, we've seen the price of baxdrostat. We're continuing to do our analysis. We weren't overly surprised by the price point they came out with. It's in that non-specialty tier pricing area. But I would not anticipate us sharing the price until approval and subsequently probably around launch.

The next question is from Jason Gerberry from Bank of America.

A couple from me. Just in terms of the early AZ launch, any learnings as you interrogate the data so far in terms of perhaps good, bad or just too early to formulate any conclusions? And then as a follow-up to the point you raised about confidence around parity payer access. I'm not sure you can say much, but directionally, I'm just curious like your -- I guess, sort of the gross to net deductions in order to achieve parity access is that coming in perhaps in line, better, worse than maybe you would have expected, say, 6 to 12 months ago?

Yes, Jason, I'll take the first part and have Eric address your question about payer access. I think your point you made, it's still early days to gauge from the numbers that you see the same things we do publicly on the baxdrostat launch. I will tell you anecdotally, I think there's enthusiasm and excitement for this new class of therapy. It's been over 20 years since there's been a meaningful introduction of an antihypertensive therapy. We know there's significant patients, 20 million on two or more meds that cannot get to goal right now. We know the implications of that. And so I think the enthusiasm that we're seeing anecdotally in the marketplace for this class of drugs speaks for the opportunity that, and I know we're excited about with lorundrostat. But as to the payer dialogues, I'll let Eric comment.

So payer dialogues have been very, very positive. I would say the level of rebate that we're hearing that's coming from baxdrostat is very consistent with what we expected, and that's obviously on the commercial side. From the Medicare side, so far, it looks like access is this medical exception, which then allows us to go to label. So --so far, again, without giving any kind of precise indicators of what we're doing, generally as we would expect, Jason.

The next question is from Seamus Fernandez from Guggenheim Securities.

This is Evan Wang on for Seamus Fernandez. Just two for me. Just I guess, first off, as you're speaking with KOLs and doing your outreach, what's really resonating with KOLs about the profile here? And then second, congrats to Terry for joining. I'm just curious, I know it's extremely early, but curious what the priority list will be as he gets settled?

Yes. The question -- and again, I apologize, the audio is not the best. I think your question was the profile they get most excited about with lorundrostat. And I think it's pretty clear. It's aligned to the attributes that matter to physicians when treating their patients. And that is the blood pressure reduction, which we know is extremely meaningful and we think best-in-class with lorundrostat, combined with safety and tolerability. So in other words, the patients need to be able to not only get the blood pressure reduction, but get it in a way that is safe and can be adhered to over a long period of time. So we continue to believe that, that profile that we've seen from our clinical program reinforces a profile that meets the needs of physicians as they're treating these patients third line and later. As to Terry, yes, we're very excited. I mean I'm actually thrilled to be able to expand the expertise that we're able to apply to Mineralys and lorundrostat by retaining Dave in his strategic advisory full-time role to really help continue to investigate translational opportunities for lorundrostat. We know aldosterone plays a significant role beyond just hypertension, but across cardiorenal metabolic disorders. But having Terry come in with his expertise in latter stage development and very specifically medical affairs, I think does nothing but just augment and build on the success we've had to date. We've got our medical affairs team in place right now, adding Terry's expertise over 35 years of either clinical work or industry work, I just think really amplifies the message, the resonance, the relationships he has with KOLs. I think it's going to be a significant build for us as we continue to prepare lorundrostat for a successful commercial launch.

And Jon, I just want to add one thing. So in addition to the efficacy and the safety, the advanced data are really resonating well with the KOL audience. So having a unique data set really does differentiate us in their minds.

Great. And maybe one follow-up. I'm just curious in terms of anything you can provide in terms of the number of reps you guys are targeting out of the gate, especially as you're kind of thinking about your efforts here?