Belite Bio, Inc

Hello, and thank you for joining us to discuss Be Light Bio's second quarter 2024 financial results. Joining the call today are Dr. Tom Lin, Chairman and CEO of Be Light Bio, Dr. Nathan Mata, Chief Scientific Officer, and Hao-Wan Zhang, Chief Financial Officer. Before we begin, let me point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and actual results may differ materially. We encourage you to consult the risk factors discussed in our SEC filings for additional detail. Please note that you can submit questions throughout the call by clicking on the Q&A box at the bottom of your screen, and we will respond to questions following our prepared remarks. Now, I'll turn the call over to Dr. Lin.

Dr. Thanks, Julie. Thank you, everyone, for joining our second quarter 2024 earnings call. We had another strong quarter advancing our 11 trials, and I'm pleased with our progress in the year to date. Let me start off with our accomplishments during the second quarter by the overview of our programs. We had a productive quarter marked by several advancements in our programs. We have initiated Phase 1B and Phase 2 adolescent STAGA patients, also known as the Dragon 2 study. And we have already completed enrollment for Phase 1b portion with six subjects in Japan. We've also received Sakigake designation in Japan, which means pioneer drug designation in English. Such designation has only been granted to 27 drugs since its initiation in 2015. And Teneraband is the first ophthalmic drug to receive Sagi Kage designation, which is a testament to the groundbreaking potential of this drug and the unmet need it stands to address the people living with Saga disease. We've made progress in our pivotal global phase three trial of Teneraband in geography atrophy subjects as well, known as the PHOENIX study. and have already enrolled nearly 200 subjects up until now. In addition, we've also raised $25 million from the registered direct offering in April of this year for strengthening our balance sheet. The Phase 3 Dragon 1 study is fully enrolled with estimated interim readouts by 2024 or early 2025 at the latest. As we enter the second half of the year, we are well positioned to execute on key milestones, and we look forward to sharing interim analysis from our pivotal phase three dragon study in the fourth quarter. Next slide, please. Okay. So, for those of you that are new to the story, GENERBEN is a novel once-a-day oral tablet designed to bind to serum retinol-binding protein as a means to specifically reduce retinal delivery to the eye. This approach is intended to slow or stop the formation of toxic retinal-derived byproducts which are generated in the visual cycle and are implicated in the progression of Stargardt disease and geographic atrophy. We believe that early intervention directed at emerging retinal pathology, which is not mediated by inflammation, is the best approach to potentially slow the disease progression in Stargardt disease and also in geographic atrophy. Importantly, there is still a significant unmet need for both indications, as currently there is no approved treatment for SARS disease and no approved oral treatments for geographic atrophy, and we're already in global phase three trials for both indications. To give you an indication of the importance and potential for our oral therapy, so far we have been granted fast-track designation, rare pediatric disease designation, and orphan drug designation in the U.S., EU, and Japan. and pioneer drug designation in Japan, as I just mentioned. Finally, we have strong patent protection for 14 patent families, and most of these are composition of matter patents. And the latest composition of matter patent is expected to last until 2040 with additional patent term extension potential with new patents to be filed. We will have patent protection past the 2040. All of this highlights the potential of TeneraBand to create people who are living with these debilitating needs and capitalize on the large market opportunities. We are very excited with the path ahead, and our team is focused on our mission to leverage TeneraBand to address the unmet needs of patients suffering from blindness. I would like to pass this to Nathan, our CSO, and give you a clinical and scientific update. Nathan?

Yeah, thank you very much, Tom. So what I'd like to share with you is the data from our two-year open-label phase two study in adolescent Stargardt subjects. This study was, as I mentioned, a two-year study, 13 enrolled subjects from Taiwan and Australia. What a lot of people don't understand about Stargardt disease is there are over 1,500 known mutations that are associated with the disease. Not all of them are known to be pathogenic. In fact, many are mild or benign. So one of the analyses we did initially was to determine the genetic composition in our cohort. And we actually gave the genetic data to one of the premier a preeminent geneticist in Stardust disease in the world, Dr. Randall Alkmits at Columbia University. He evaluated our genetic data and determined that 11 of 13 subjects in our cohort had severe biallelic mutations which would predict pathogenicity. In those two where there was a moderate allele in these two subjects, In vitro testing actually showed that these were pathogenic alleles. Our entire cohort really has severe pathogenic mutations that were predicted to progress very rapidly through the disease course. An independent assessment of the genetic severity is provided by something called a CAD score, that stands for combined annotation-dependent depletion score. It tells you the degree of severity of a particular genetic variant or genetic mutation. Scores above 20 are predicted to be among the 1% most deleterious, and every single one of our subjects in the section of subjects three and five had these CAD scores above 20. So we have two independent confirmations of the severity of the genotypes of these kids. Despite the severity of these genotypes, we had five subjects, which represents 42% of the cohort that never developed atrophic lesions. So I should have mentioned that in this study, these adolescent subjects came in with an early form of disease where they only have a type of lesion which is autofluorescent. This is known as a questionably decreased autofluorescent lesion. Over time, these autofluorescent lesions convert. atrophic lesions, and that's one of the parameters we're looking at, and we see here in 42% of subjects that conversion never occurred. Another interesting outcome from the genetic data was we found two pairs of siblings that had the exact same identical mutations. This is important because there are companies, competing companies of ours, that are using as a premise for their therapeutic approach that identical mutations predict an identical disease course. So this gives us an opportunity to evaluate that premise and determine whether or not there's any validity to it. Because this is an open-label study, one of the metrics we want to look at to see if we're having an effect to improve patients' essential well-being is visual acuity. So we looked at visual acuity in subjects prior to enrollment, and we looked specifically for subjects who were losing letters in both eyes. That's called bilateral BCVA loss. And we found a subgroup of six subjects within our larger cohort that was losing a mean of 10 letters per year prior to enrollment. The natural history in our study, basically over two years, predicts that there would be clinically significant vision loss in these subjects during the duration of the study. So we want to keep an eye on that to see how these subjects fare. Another important thing about these data, these sort of pre-enrollment data, is the fact that they're losing vision. All these kids are losing vision, some of them significantly, and they don't have atrophic lesions, suggests that non-atrophic lesions, these QDF lesions, can actually compromise visual acuity. That's very important. Because all of these kids have full wheel involved lesions, which means they are compromised, their vision will be compromised over time. But the current thinking in the scientific and clinical community is that you have to have atrophic lesions before there starts being some effect on actual visual function. And that seems not to be the case. And finally, regarding the sibling comparisons, we did find that sibling subjects with identical mutations do in fact have different levels of BCVA loss. And this data can be found in the appendix of this presentation. If we look at the overview of visual acuity in all subjects that's shown on the left-hand side over the two-year study, we see a mean loss of about 2.5 letters per year. That is significant because that essentially shows stabilization. This vision is not really changing in all subjects. But significantly, if we look at those subjects with prior vision loss, that is those subjects that were losing 10 letters per year before coming into study, that's shown on the right-hand side, now they're only losing about 1.9 letters per year. So we've significantly altered the visual acuity progression in these kids, and we've stabilized it. That's very significant. And really, the only reason you could do that is if you're having some effect on lesion growth. So I want to go to that right now. As I mentioned, five of 12 subjects never grew an atrophic lesion, but I want to show you sort of anatomically what that looks like. The images you see here on the upper right-hand side are representations of what basically all these subjects look like. This is subject 10 at baseline, but all these subjects have these types of autofluorescent lesions that are encroaching the phobia. They're just of different sizes. And we're measuring over time how this autofluorescent lesion converts to an atrophic lesion. And as I said before, there are seven out of the 12 that actually grew these atrophic lesions. And what we found was something very interesting. In every case except one, the increase of the atrophic area was matched by a decrease in the autofluorescent area in every single subject. So wherever you see an orange bar, that's the increase of atrophy, and where you see a blue bar, that's a decrease of the autofluorescent lesion size. The reason that's significant is because the boundary, the perimeter of the lesion is not actually growing. Only the eutrophic lesion is growing within the autofluorescence. So it suggests that this lesion could potentially burn itself out over time because there's no place else for the lesion to grow. So sort of what these data are telling us is that there are cells that are predestined to die. Perhaps we cannot save them with our treatment, but we're certainly preserving the margin of cells on the outside that would lead to further lesion growth. They're not growing anymore. So this is a pretty important finding. There was only one subject where we found a lesion that was outside of the initially area of QDAF lesion, so just this one subject. And finally, getting back to the genetic mutations, it was subjects nine and 10 and subjects 12 and 13 that had the identical mutations. But if you look at nine and 10, yeah, they both have lesion goals, somewhat different in subject 10 versus nine, But then if you look at 12 and 13, there's absolutely no lesion growth. Yet all these kids have essentially the same, they have the identical genotypes and very similar disease duration. So these data, again, suggest on a lesion growth metric, identical mutations do not predict an identical disease course. We have one other very important piece of information to pass along, and that is an assessment of how these lesions are actually graded. So currently, we're using the routine methodology that everyone is using. It's basically an autofluorescent camera that takes a picture of the lesion, and then a reader, a physical reader, goes in and draws the boundary around the perimeter of that lesion so that the computer can then tell you the area. So two readers have to grade every single image because there has to be an agreement in terms of the lesion size before it can move on into basically being validated. And if those two readers don't agree with a certain variance, a third reader has to come in and sort of be a tiebreaker. So this particular method is subjective to inter- and intra-reader bias. It doesn't look at any one specific area in the red. It's looking all over, and it's very time consuming. so in order to address the shortcomings in this currently used methodology our reading center has developed a new ai based method for assessing the size of these lesions this is a mathematical classification of lesions that uses basically the gray level density in area of healthy tissue let's say out here to the area of disease tissue which would be sort of represented by the density of the optic nerve disc so it's doing a scan of the gradation in gray levels And it's just looking at the macula for different areas of gray that would predict either autofluorescence or atrophic lesions. In this case, we're looking at atrophic lesions. So this is important because it removes the reader and the potential subjective bias out of the equation. When our reading center used that methodology to re-scan our images at baseline, they found 12 eyes of eight subjects that had atrophic lesions within the macula at baseline. And this is something the traditional methodology did not pick up. So we asked our reading center to go back and re-read all these images to see what's happening with macular lesion growth in these subjects that it was identified in. This is the data that they developed. On the left-hand side shows you the growth of the lesions into the macular area over time. It's pretty linear until about month 16, at which time it completely stops and there's no further lesion encroachment into the macula during the subsequent 18 months. On the left-hand side is shown basically the same exact data, except here we're looking at the percent change of lesion into the macula over time, where 100 percent would mean the entire six millimeter zone of the macula is occupied with lesion. You can see in our subjects, they never get to more than about single digit, involvement into the macula. So this is significant and it renders our visual acuity data sensible because now we understand why we're getting a stabilization of vision because we're halting lesion growth into the macula. Again, a very significant observation. Finally, the safety data. This is the two-year safety data. I want to start by saying that over this two years of observation, there hasn't been one drug-related systemic EE whatsoever in these kids. And this is a testament to the specificity of this drug, the way it was designed by the scientists at Columbia University. Basically, this drug targets just the residues that are in the binding pocket of retinal binding protein 4, and these residues exist nowhere else in biology in terms of their three-dimensional orientation. So this drug was supposed to be very specific, and the AE data systemically tell us that basically it is very clean. What we're seeing in terms of jugulated AEs are anticipated ocular events that we want to see because they're telling us we're having the intended biological effect in the retina. And the other important thing about these AEs is they're completely manageable by accommodating to differences in light because these AEs are driven by light. The first is a form of xanthopsia or chromatopsia called xanthopsia. This is mediated by a cone photoreceptor in your eye which confers bright light and color vision. So when patients transition suddenly from a dark light to a bright environment, these cone photoreceptors wake up, they want vitamin A immediately, but under our treatment regimen, we're only supplying it sort of slowly. So there'll be a period of time in which these cone photoreceptors don't have maximal amount of vitamin A. They will electrically misfire and produce transient hues of color in the visual field, in this case yellow, that's xanthopsia. But all the kids are reporting it as mild, and of course no one's left to study because of this AE. Finally, the other one is delayed dark adaptation. This is the opposite manifestation. So this is needed when you transition from a bright environment to a very darkened environment. There'll be a delay in the ability to accommodate to dim light. This particular AE is actually a manifestation of the disease process. So patients with Stargardt's disease already have delayed dark adaptation, so they're used to accommodating it. And that's probably why most of them are reporting this pharmacological immediate ADD as mild or transient. And again, no one's left to study because of this. And importantly, as I said, these AEs can be mitigated by moderating transitions from bright to dark and vice versa. And this has been very, very helpful for kids. I can say that In over one year of dosing in our phase three study, the dropout rate from these AEs is less than 4%. So that is significant. Night vision impairment is a more severe manifestation of the delayed duct adaptation, which the delay is 20 minutes or more. The increasing error score on the FM100 is a more severe exacerbation of the chromatopsia. You see that in one subject. And the intermittent headaches we think can occur when subjects strain to use their visual acuity while they're experiencing these AEs. So with that, now I'll move over to the overview of the trials that Tom discussed, the DRAGON1 and the DRAGON2 Stargardt trials. We're showing you here the overview of those studies. These studies are essentially identical. There's differences in the geography, as Tom mentioned. We have Japan involved vis-a-vis the Sakigaki designation. Essentially, the demographics are similar except for that. Both studies are done double-blind. There is a difference in the randomization. We're doing a two-to-one randomization in the DRAGON study and a one-to-one randomization in the DRAGON2, again, principally because the DRAGON2 study has fewer patients. But other than that, every other assessment, safety, efficacy, et cetera, is the same as is the key inclusion criteria for these subjects. So because of the similarity in these two studies and how they match the Phase 2 study, and because the Phase 2 study is trending quite well, we believe, or we have optimism, that we'll have very promising safety and efficacy data in both Dragon 1 and Dragon 2 studies. Moving forward to geographic atrophy, to show you the trial design in GA, it as well is very, very similar to the Stargardt disease phase three trials. The only difference in the trial design in GA is the indication, of course, geographic atrophy, and the higher number of subjects to reflect the higher prevalence of the disease in the population. Otherwise, these studies are essentially identical. So again, we expect because the GA studies are lagging behind the Stargardt studies, Whatever we see in Stargardt's, it could be highly predictive of what we see in GA. And a principal reason for that is that we're using the same dose. And there's a very high pathological similarity between Stargardt's disease and geographic atrophy in the particular patients we've enrolled. So with that, I'll turn it back over to Haoyan, or turn it over to Haoyan for the financial results.

Thank you, Nathan. So in Q2 2024, we had R&D expenses of $9.1 million. compared to 5.5 million for the same period in 2023. The increase was primarily due to increasing expenses related to the milestone payment to Columbia for the completion of the Phase 2 study and share-based compensation. On G&A expenses in Q2 2024, the G&A expenses were 1.4 million, basically the same as Q2 2023. On net loss, we had a net loss of 9.5 million in Q2 2024, compared to $6.8 million for the same period in 2023. Regarding cash, we have cash on deposit in U.S. Treasury bills of total $112 million. We still expect around three years of cash runway. Thank you. Back to you, Tom.

Thank you, Al. To summarize, we've had a strong start to the first half of the year and continue to make meaningful strides in advancing trials for status disease and geographic atrophy across several countries. We're also proud that we have received Sakigake designation in Japan, which we believe is a testament to the groundbreaking potential of this drug and the unmet need to, well, unmet need as there is no currently, no treatment for status disease. We're also in a strong financial position with 110 million in cash and cash equivalents. As we enter the second half of the year, we are well-positioned to execute on key milestones and look forward to conducting period-to-phase III interim analysis from our DRAGON study in the fourth quarter. Finally, we look forward to seeing some of you next week at the HC Wenright Fourth Annual Ophthalmology Conference and hope you join our presentation on August the 15th. Please also note that in September, we will also be attending conferences with HC Wenright you there thanks again for joining this call and now we will open the call for questions

please raise your hand and the moderator will unmute you. Our first question comes from Mark Goodman with Lear Inc. Partners. Mark, your line is now open.

Hi, good afternoon. This is Basma on for Mark. Our question is on Dragon 2. Did you provide... color about this trial and what the goal of this trial exactly does. Statistical significance needs to be achieved with this trial, yes or no, and do you think the powering is enough? And do you also need to run another safety, long-term safety trial in these global sites as well for the submission or U.S., or only the Dragon 2 will be enough and the safety database in the U.S. will be sufficient? Thank you. That's it.

Nathan, do you want to take this?

Yeah, I'm happy to take that, Basma. So thank you for the question. Regarding statistical significance, yes, of course, we'll have to. We're powering for statistical significance at the two-year time point. That will have to be achieved in order to essentially meet that requirement for showing efficacy. Conditional power will not be a problem because in this particular study, we're actually randomizing one-to-one versus two-to-one in our original dragon study. So in the dragon study, there's roughly about 35 placebo subjects and the remainder of the 104 are the tenlarivant treated subjects. Whereas in the dragon two study, there's an equal distribution in the randomization. So that helps the conditional power. And no, I don't believe we'll have to do, I believe you asked about an open-label extension study to evaluate safety. Based upon what the PDMA has told us in Japan is that they would only require the two-year safety data from the required Japanese subjects that will be enrolled in Dragon 2, which is a minimum of nine Japanese subjects, which is exactly what we're complying with. So I hope that addresses all the questions, Basma.

Yes, I think it is very helpful.

Sure.

Our next question comes from Jennifer Kim with Cantor. Jennifer, your line is now open.

Jennifer, I think you're on mute.

Oh, hi. Can you hear me now?

Yeah.

Okay, great. Thanks for taking my questions. Maybe to start off with Dragon one, with the interim analysis later this year, can you just remind us what you're thinking of in terms of the format of that update and what level of update of detail we should expect? And then my second question is, maybe following up on the last question on Dragon two, you've completed the phase one B portion. Any thoughts on when we could see initial data from this trial? Is it going to be the two year data? Or could we see an interim update? Thanks.

So thanks, Jim. So the guidance that we're not allowed to review any data. In fact, only the DSMB would have that knowledge, simply because the study, the treatment is ongoing, and we don't want to bias the data in any source. And the second question, Nathan, do you want to take it?

Regarding Dragon 2? Yeah. Yeah, sorry, Jennifer, what was the portion on Dragon 2?

The injured data as well.

Yeah, so the phase 1B, so they're sort of tied together, right? This is a PKPD study originally just designed to make sure that the five milligram dose that we're using in all of our other trials achieves the same pharmacokinetic and pharmacodynamic response in Japanese subjects, which we have every confidence that it will. We won't be disclosing that data until we get to the end of the efficacy portion, the phase two, three portion of the study, which of course is two years later. So we'll allow all that data to be disseminated once we have all of the top line two-year data, which would of course include the PKBD, which basically dose efficacy or dose finding study.

Thanks. If I could squeeze in one more question, just on Phoenix, could you confirm the timing of enrollment completion for Phoenix and what kind of one-year interim look should we expect for that trial? Thank you.

Yeah. So, you know, we're targeting an enrollment size of 429 subjects. We're about at the 200 mark right now, so roughly about halfway in. Based upon our run rate, we expect to close that enrollment by the end of Q1 of 2025. In terms of data coming out of that study, you said the interim data, we haven't really decided what we'll be doing in terms of the interim analysis. In fact, we haven't quite developed or at least completely fleshed out the SAP, the statistical analysis plan for that study. So sort of, you know, put a tack in that one. You can get back to us later when we have a little bit more information for you.

Our third question comes from HC Wainwright. Yi Chen, your line is now open.

Thank you for taking my questions. My first question is just to confirm that both data from Dragon 1 and Dragon 2 trials are needed to submit it to PMDA under the Sakigaki designation, correct?

Yes, that's correct.

And the same will be committed to the US and European regulatory agencies as well. But under the Takigaki designation, do you think there's a chance that Japan could approve the drugs faster or first before FDA and the EMA?

Good question. So, based on the Takigaki designation, Japan would want to be the first country to approve this drug. So a lot of discussion still needs to, we still need to discuss with the PMDA regarding when they will want to see the data. So once the study completes for the curriculum one, we will still need to communicate with the PMDA. regarding when would they want to see the Dragon 2 data?

Well, Yichen, I want to clarify that. So the Japan FDA does not require us to complete the entire Dragon 2 for Japan submission. I think the requirement is that we complete Dragon 1 and we complete those nine patients from Japan. in the Dragon 2, then we can submit. We don't need to wait for the other US and UK patient to complete their Dragon 2 because the key point for them is that they just want to see how Japanese subjects are doing in this study. So they think Dragon 1 is enough and we just need to, and we decided to be able to carve out those Japanese data for submission for Japan.

Thank you very much for the clarification. And my follow-up question is, regarding ABCA4 mutation, is that something being measured in the DRAGON1 and DRAGON2 trials? And how should we interpret the Phase II observation regarding those mutations, those five patients, into our potential, you know, projection of the DRAGON1 and DRAGON2 readouts?

Nathan? Yeah, I'll take that. So, of course, we do genetic analysis, genotyping on all subjects. They are required to have both a clinical and molecular confirmation of Stargardt's disease, so that will be done regardless of which study we're looking at. We do that in all of our Stargardt trials. In terms of Sorry, I lost track of the other part of your question.

Yeah, I mean, the results you observed from the five subjects in the Phase 2 trial, how should we translate that into interpreting the Phase 3 data?

That's really difficult because I think I mentioned before, there's over 1,500 known mutations in Stargardt disease. It's very difficult to sort of gene match everyone to sort of evaluate. So for instance, in those five subjects that never evolved an instant atrophic lesion, they had severe genotypes, but there are other severe genotypes would probably behave similarly, but they would be different, right? Still severe, but not in the same genetic locus. So it's very difficult to sort of take the genotypes from those five subjects that didn't basically spawn any disease and sort of infer what would happen in the larger patient population as different genetic mutations. Because again, there's such a varied genotype among these patients. You can see in our cohort, just randomly, our 13 subjects, they all had severe pathogenic mutations. So our thinking is that If they have a genotype that has a mutation and they have the pathology, this is going to be a severe disease, a very quickly progressing disease. And so we're actually having that validation at screening. So we'll know with some measure of confidence whether or not our patients have pathological gene mutations or not. So we're not necessarily trying to match what we saw in those five subjects with what is happening in the other dragon studies. But it is important to note just generally speaking, those pathologic mutations that lead to disease have been sort of neutralized with our treatment. So we hope to see that again, of course, with other severe genotypes. That's our hope.

Thank you.

Thank you. Yeah.

Our next question comes from Bruce Jackson with Brent Benchmark. Bruce, your line is now open.

Hi, can you hear me okay? Yeah, yes. Okay, super. With the presentation of the interim analysis for Dragon, is that going to coincide with a medical meeting?

I don't believe medical meeting, do you refer to our AAO? Possibly AAO, yeah. yeah no no it's not it's not so the intro analysis will be somewhere around i think uh end of the year um and but that's that's tricky time during christmas so uh we have to get um the dsmb uh the day timing and and get them when when they can review the data so it may rather just run out into uh january 20 30 25 but we expect at the end of the year to conduct that miniature analysis. And again, per FDA guidance, we are not allowed to review any data to the public, not to buy us the data while the treatment is ongoing.

Okay, great. And then with the R&D expense, you had the milestone payment this quarter. Can you just remind me what the base rate of R&D is for the next couple of quarters and how the milestone timing for the remainder of the year in 2025 might play out? Sure.

I can answer that. So basically, well, this quarter, we have a higher expense because of that milestone payment. For the rest, I would expect to be probably the same between probably $7 million to $8 million a quarter. So for the entire 2024, it probably will be still around $30 million to $35 million. Next year, 2025, it may be slightly higher, given that we expect some milestones to be achieved. from the Phoenix study. So I would say probably next year it will be around 35 to 40. So I think for this year and next year until 2026, these three years will be pretty similar in terms of expense around that, like each expense per year, given the running of the Phoenix study for these three years.

Okay, great. And congratulations on all the progress. Thank you. Thank you so much.

Hao, please let me know if there are any additional questions.

No, I don't have any on the written question here.

Great. This concludes our Q&A portion of the call. I will now turn it back to Tom Lin for closing remarks.

Thanks. So thank you everyone for attending this call for this quarter. We will certainly update once we have conferences at AAO. We'll be presenting at AAO. And again, we will update all the events that's coming up, further coming up as time comes. Thank you, everyone, and we'll keep you updated.