Lumos Pharma, Inc.
Q1 2021 Earnings Call Transcript

Published: 5 May 2021

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to Lumos Pharma's First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I will now turn the call over to Lisa Miller, Senior Director of Investor Relations.

[Lisa Miller:]

Thank you. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under 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 these forward-looking statements. Information presented on this call is contained in the earnings release we issued this afternoon and in our Form 8-K, which may be accessed from the investor relations page of the company's website.

[Rick Hawkins:]

Thank you, Lisa, and good afternoon and thank you for joining us on today's call. After the market closed today, we issued a press release detailing our first quarter 2021 financial results and highlighting our recent clinical and corporate activity. I'm pleased to report that the quarter was a productive one, during which we saw a presentation and publication of new data and analyses supporting the differentiated mechanism of action of our novel oral therapeutic candidate LUM-201 for the treatment of pediatric growth hormone deficiency and patients identified by our predictive enrichment markers. We also continue to advance our clinical programs for LUM-201, adding clinical sites for Phase 2B OraGrowtH210 trial and moving towards the initiation of our OraGrowtH212 trials during the second quarter. Finally, we completed the modernization of our Priority Review Voucher. Receiving in January the final $26 million tranche of the $60 million due to the company from this sale. With these resources in hand, we believe we are well-positioned to advance our LUM-201 programs and explore business development options to enhance our pipeline and deliver value to our investors. And before turning the call over to John McKew for a deeper dive on progress in our clinical programs, I just want to highlight a few recent events. Last week, we held a key opinion leader forum featuring presentations by Dr. Bradley Miller of the University of Minnesota and Fernando Cassorla of the University of Chile. This was a well-attended and informative event where Dr. Miller and Dr. Cassorla provided an overview of the current treatment landscape in PGHD and outlined the unmet medical needs in this space. As part of his presentation, Dr. Cassorla also presented newly released PK/PD data from a subgroup of the Merck 020 trial, evaluating LUM-201 and naive to treatment PGHD patients. These data were additive to the peer-reviewed data recently published in the Journal of Endocrine Society, demonstrating once again the potential of our predicament enrichment markers or PEMs of baseline IGF-1 levels and peak stimulated growth hormone levels after a single dose of LUM-201 to identify patients likely to respond to LUM-201 therapy.

[John McKew:]

Thank you, Rick, and good afternoon, everyone. As Rick mentioned, we had some very compelling data presented and published in recent weeks, some of which we highlighted on our last call, but are worth touching on again. Before getting into the details, I just want to remind everyone of the key differentiating factor in the LUM-201 mechanism of action. As you may recall, growth hormone deficiency can be defined by low to nearly absent secretion of growth hormone from the pituitary gland. Current therapies and those in development consists of the delivery by injection of a bolus of growth hormone, or long-acting derivative respectively to restore growth. LUM-201 on the other hand is not a growth hormone but is instead a growth hormone secreted out that acts within the body's natural endocrine pathways to stimulate the body's ability to release growth hormone at the same intervals and subject to the same endocrine feedback loops that occur naturally. Utilizing this endogenous release mechanism should enable the naturally occurring IGF-1 feedback loop to be preserved to help regulate the balance of growth hormone on IGF-1 levels in the body.

[Rick Hawkins:]

Thank you, John, and before we proceed, I first want to say a few words about Carl's well-earned retirement. As we announced on April 20, after distinguished 40-year career as a financial executive, Carl will be retiring effective on July 4. We want to thank him for his service to Lumos Pharma and we want to congratulate Lori Lawley, currently, our Senior VP for Finance and Accounting, and Carl's very capable deputy, who will be succeeding Carl as a CFO upon his retirement. So, I'm now returning the call over to Lori Lawley to discuss financial results for the first quarter of 2021. Lori?

[Lori Lawley:]

Thanks, Rick. I look forward to working with the team and engaging with investors in my new role as Chief Financial Officer. We ended the first quarter with cash and cash equivalents totaling $114.1 million, compared to $98.7 million on December 31, 2020. As Rick mentioned earlier, our current cash position includes the receipt in January at the final $26 million tranche from the sale of our Priority Review Voucher. We expect an average cash use of approximately $8 million to $9 million per quarter through 2021 and expect our current cash on hand to support operations through OraGrowtH210 readout and completion of the OraGrowtH212 trial. Net loss for the first quarter was $8.6 million, compared to a net income of $0.3 million for the same period in 2020. Now, I would like to turn the call back over to Rick before we open up for questions. Rick?

[Rick Hawkins:]

As you can tell, we're excited about our advancement over OraGrowtH trials and PGHD, and look forward to the initiation of our of our PK/PD OraGrowtH212 trial . We're on solid financial footing to execute on our strategy and believe that our clinical trials will confirm the potential for LUM-201 to disrupt the PGHD market. We look forward to continuing to provide updates as we progress. And with that, we'll open the call for questions. Operator?

[Operator:]

Your first question comes from the line of Charles Duncan from Cantor Fitzgerald. Your line is now open.

[Charles Duncan:]

Hi. Yes, thanks for taking my question. I'm juggling lots of calls and thanks, John, for all the detailed information. I have a couple of quick questions. One is on the OraGrowtH210 trial. You said that about 50% of sites were activated. Can you give us a sense of enrollment activity and then perhaps screen to enrollment ratio? Any early perspectives on that?

[Rick Hawkins:]

Charles, we haven't given any guidance to the market in terms of that update. You know these trials usually start at a certain pace. But as more patients are screened in some of the more active sites, and I say experienced sites, enrollment improved dramatically. And I think that we're in that stage now. But we haven't given any guidance as to the two questions you ask.

[Charles Duncan:]

Okay. And then with regard to the PEM, there's a lot of good information that you presented here recently. But I'm wondering if you've had any feedback from the FDA on this strategy and if you can provide any color on that with regard to their, I guess, comfort level, with this forming the basis of even making an observation out of a Phase 2B?

[Rick Hawkins:]

John, why don't you take that question?

[John McKew:]

Yes, so we've engaged with the FDA from the beginning about this idea because it is really the basis for how we think this product is going to move forward. Right? Selecting the correct patients and giving them the correct doses, really how this molecule is going to show itself to be effective. So yes, we have engaged and I think we need to bring them the results from this trial where we're applying the PEMs prospectively to go any further with the idea that we brought to them.

[Charles Duncan:]

Okay, that's helpful. And then one last question, then I'll hop back in the queue. pulsatile growth hormone release and the PEM strategy, do you think that that could go beyond -- call it a risk mitigator -- with regard to clinical trial conduct, but as a result in better outcomes or more effective gross stimulation, and perhaps even slower or shorter duration dosing? Given the mechanism with regard to stimulating release versus say, a bolus dose, do you think that the outcome measures could actually be better? What's the basis of that?

[Rick Hawkins:]

Go ahead, John.

[John McKew:]

So, there are some preclinical experiments that say, given the same amount of growth hormone in a fashion versus like continuous fashion so to grow better with pulsatile release, or administration of growth hormone. So, I think the potential is there for the importance of the peak to of pulsatility in the release of growth hormone to really show its effect in this study. It's never really been looked at before, because there hasn't been a way to, pulse 23 to 25 pulses of growth hormone across a day at an individual child and then look at their growth in six months. But I think this study will really get at that in a group of patients that we think we've selected to be responsive. So, we'll have a lot of information. And I think there's a very good potential to show that this unique mechanism of action will give us quite a bit of growth while maintaining growth-oriented IGF-1 levels within the physiological ranges.

[Charles Duncan:]

Thanks for the added color and thanks for providing all the information.

[Rick Hawkins:]

Thank you, Chaz.

[Operator:]

Your next question comes from the line of Lina Kaminski from JonesTrading. Your line is now open.

[Lina Kaminski:]

Hi, good afternoon. Thank you for taking my question and congrats on the quarter. So, I guess you did previously mentioned and also in your prepared remarks that you you're looking to expand LUM-201 into additional indications. So, I was hoping maybe you can help us understand what proportion of patients for each of the indications you're looking for? Should be PEM positive and respond to LUM-201? Thank you.

[Rick Hawkins:]

Well, we continue to engage the KOL community and the experts in each one of these diagnoses and we're in the process of determining just that type of question. John, do you want to add any additional color?

[John McKew:]

Yes. All the data we have now on kids with growth hormone deficiency, or kids with pediatric growth hormone deficiency, we've done some thinking and extrapolation. But the data that we have points to the PGHD population and I think each one of the other indications has some unique facets to its etiology and where the defects are. Some were more a combination of several events; others are related to growth and deficiency pretty directly. So, it's going to depend on each different disease indications, and it will depend on us acquiring, a little bit more knowledge about our molecule and how it affects growth in this OraGrowtH210 trial before we really can put our put our hand down and understand broadly for some of these secondary indications how many responsive patients there may be.

[Lina Kaminski:]

Got it. Just one follow up on this. Do you think you might need to adjust your PEM classification based on each indication? Based on the cut off for that?

[Rick Hawkins:]

John, go ahead.

[John McKew:]

We'll have to see, but I think in the end, this set of criteria is useful for identifying patients with a partially functioning access to produce growth hormone and that's kind of the first step in selecting patients that are going to be responsive to our molecule. Some of the other indications, you do have to think about whether some of the deficits are downstream of growth hormone production. Like some of them, you might have a deficit in growth hormone receptor interactions. So, we have to put all these pieces together and think through what's the best approach and what kind of dose range do we have access to in the information we get out of the growth hormone deficient -- that PGHD trial. So, I think there's a lot of really interesting data that's out there for these patients being treated with just for common human growth hormone or we can we can build on what's known about the etiology and find the best fit for our molecule to go after these secondary indications.

[Lina Kaminski:]

Got it. Well, thank you so much and again, congrats on this quarter. And I'll jump back in this queue.

[Rick Hawkins:]

Thank you.

[Operator:]

Your next question comes from the line of Derek Arhila from Stifel. Your line is now open.

[Jacques Villefranc:]

Hi, guys. Good afternoon. This is Jacques , on for Derek. Thanks for fitting us in here and taking our questions. Zooming out, can you talk about how you view adherence for an oral secretagogue versus weekly growth hormone injections? What are some of the pros and cons there?

[Rick Hawkins:]

Let me start with an answer. Jacques, there's so much data out there that any injectable product -- whether it be in PGHD or other indications. It's problematic in a pediatric population and terms of adherence. I think the longer I think products will improve that, but we've done some direct market research, which shows that if you want to ask both caregivers and clinicians which one they would prefer, that is a weekly injection or a once a day oral as our product is, they overwhelmingly choose an oral product. How that translates to compliance in real world is another question, I think we have to study some more. But we believe that it's definitely going to be a preferable treatment and we believe that there's enough attention by the parents that they're going to stay on their children and make sure that they take this once a day oral product as they should. John, do you have anything to add to that?

[John McKew:]

No, that's perfect.

[Jacques Villefranc:]

Thank you. Got it. That's helpful. And then if I may, on the BB front, can you speak to putative licensing opportunities? And how competitive that is right now to find an asset? What indications and modalities are you guys thinking about? Thanks.

[Rick Hawkins:]

Good question, Jacques and I can tell you, we have a robust process that has been underway for quite some time that is led by Aaron Schuchart, our CBO. And Aaron has 25 or more years of experience as a Business Officer with both large companies and small companies in the rare disease space. In addition to that, I think we have collectively as a team, many decades of experience of operating in this rare disease space. And as a result, those contacts have been very productive in bringing forth a number of interesting opportunities that we are once again, just actively reviewing and making sure that we make the right choice here.

[Jacques Villefranc:]

Great, that's very helpful. Thanks, and congrats on the quarter, guys.

[Rick Hawkins:]

Thank you, Jacques.

[Operator:]

Thank you. I'm showing no further questions in the queue at this time. I'll hand the call back to Mr. Hawkins for closing remarks.

[Rick Hawkins:]

Okay. Well, we thank you for joining us today and we look forward to keeping everyone apprised of our program over the course of the year. Really appreciate your time today.

[Operator:]

This concludes today's conference call. Thank you for participating. You may now all disconnect.