Lumos Pharma, Inc.

Good afternoon and welcome to Lumos Pharma's second quarter 2024 financial results and clinical programs update call. Currently, 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 want to now turn the call over to Lisa Miller, Vice President of Investor Relations.

Thank you, Operator. 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 SEC. The forward-looking statements made during this call can speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements. Information presented on this call is contained in the press release we issued this afternoon and in our Form 10Q and 8K, which may be accessed from the Investors Page of the Loomis Farmer website. Speaking on today's call will be Rick Hawkins, CEO and Chairman, John McHugh, President and Chief Scientific Officer, and Lori Lawley, Chief Financial Officer. Dr. Duke Patuptiwanand, our Chief Medical Officer, will also join the call for the question and answer section. It is now my pleasure to turn the call over to Rick for our opening remarks.

Thank you, Lisa, and good afternoon, everyone. I'm pleased to be speaking with you today to provide an update on our progress advancing Loom 201 as the first oral therapeutic for moderate pediatric growth hormone deficiency, or PGHD. During the second quarter and recent weeks, we've made significant progress in advancing our plans for a phase three pivotal trial of LIMB201 and PGHD. Following a very positive and productive end of phase two meeting with the FDA, we've nearly finalized our proposal for a phase three double-blinded placebo-controlled clinical trial with a two-to-one randomization in approximately 150 patients. The FDA's input has been instrumental in shaping our proposed trial design, acknowledging link 201's unique mechanism as a growth hormone secretagogue and recognizing that a placebo-controlled clinical trial is an appropriate approach for phase three. We expect to finalize the design details in the fourth quarter. Prior to our meeting with the FDA, we had not developed plans for manufacturing a placebo to match our patented form of LUM201. Now, with the decision to move forward with a placebo control phase three trial, additional time is required to complete the manufacturing process and create the placebo-matched materials necessary for use in the study. Consequently, extending our intended timeline to initiate phase three into the second quarter of 2025. And this extension also allows all of us to continue managing our cash resources and extend our cash runway. Additionally, in today's press release, we announced that we have engaged Piper Sandler to explore all strategic opportunities to maximize shareholder value and advance the Loom 201 platform. Our regular, ongoing business development activities have generated significant interest in the global potential for Loom 201 in multiple markets. Given this positive feedback, we felt it was the right time to formally engage Piper Sandler to ensure we're thoroughly exploring every potential transaction and opportunity that serves our shareholders' best interest. We're confident And Loom Tool wants potential as the first oral therapeutic in the expanding $5 billion global growth hormone market. We're going to continue to focus our efforts on optimizing value for all of our stakeholders. In a moment, Don and Laura are going to provide more details on this and other measures we're implementing to ensure we're well prepared to successfully initiate this trial next year. In the second quarter, we're pleased to see new analyses of data from our Orgo 212 trial presented at Endo 2024. The data emphasize the significance of the pulsatility pattern and growth hormone secretion for the growth response from LUM201. They further illustrate LUM201's unique ability to restore natural pulsatile growth hormone secretion, achieving similar to injectable recombinant growth hormone with significantly less exposure to circulating growth hormone. These findings strongly support our planned placebo control phase three trial of LUM201 in moderate PGHD. Top line results from the oral growth trial were presented at three major endocrinology conferences in May this year. At the Pediatric Endocrine Society meeting in Chicago, Dr. Andrew Dauber highlighted data showing that LUM201 at a dose of 1.6 mg per kg a day, achieved annually high velocity comparable to daily injectable growth hormone and PGHD with a promising safety profile. Meanwhile, at the Growth Hormone Research Society and the European Congress of Endocrinology, Dr. Peter Clayton presented detailed analysis of LUM201's effectiveness in restoring growth hormone secretion and increasing annualized height velocity in moderate PGSD patients. The evolving data from our oral growth trials continue to attract significant interest from the global endocrinology community. And we're encouraged by the growing enthusiasm from experts eager to participate in our phase three trial as we finalize our plans. Now I'm going to turn it over to John McHugh for more details on our engagement with the FDA and our phase three planning. John?

Thanks, Rick, and good morning and good afternoon, everyone. As Rick mentioned, following our productive end of phase two meeting with the FDA, we have been diligently designing a placebo-controlled phase three registrational trial. Based on the FDA's recommendations and insights from our regulatory consultants, key opinion leaders, and statisticians, we have crafted a trial design aimed at maximizing the likelihood of success. This trial will involve approximately 150 patients at over 80 global centers with a two-to-one randomization ratio of LUM201 to placebo. One group will receive LUM201 for 12 months, while the other group will start with a placebo for six months and then cross over to LUM201 for the remaining six months. All participants must meet our PEM-positive criteria during the screening process before randomization. This phase three trial aims to achieve two key strategic objectives. The first is to provide the FDA with comprehensive data from a blinded, controlled trial to support the evaluation and approval of LUM201. And the second is to ensure that all participants receive LUM201 at some point during the study, enhancing its appeal to both patients and physicians for enrollment. The study will have two co-primary endpoints. The first would be to demonstrate the superiority of LUM201 in annualized height velocity compared to the growth on placebo. Second co-primary would be to ensure that the AHV of LUM201 has a lower bound of the 95% confidence interval above 6.7 centimeters per year, which is the minimal clinically meaningful AHV agreed upon with the FDA. Following the 12-month treatment period, all participants will have the option to transition into a long-term safety extension, receiving LUM201 treatment for up to three years. We believe this extension will be a compelling feature for enrollment and will help fulfill FDA's requirements for longer-term exposure. We are confident that the trial is sufficiently powered to achieve the two co-primary endpoints. We are currently finalizing the design proposal and expect a secure final agreement with the FDA in the fourth quarter. A key component of the trial is the manufacturing of the placebo material, which we began after our end-of-Phase II meeting with the FDA. As Rick mentioned, the placebo needs to be a capsule filled with many tablets that exactly match the presentation of active LOOP201 capsules. Additionally, we must establish all standard stability data for this newly created placebo. Although we began work on these elements promptly, producing the initial batches that met these specifications took longer than anticipated. Consequently, we chose to postpone other preparatory steps for trial initiations to manage our cash reserves effectively. I believe this is a prudent use of resources and expect to be fully prepared to launch Phase 3 in the second quarter of 2025. With the careful attention given to the trial design, we are confident in our ability to enroll patients in this pivotal trial in a timely manner. With that, I'll turn it over to Lori for a review of our financial results for the second quarter.

Thank you, John. We ended the quarter on June 30, 2024, with cash-cash equivalents and short-term investments totaling $16.8 million, as compared to $36 million on December 31, 2023. As Rick and John have discussed, we are managing our cash resources conservatively. By extending the initiation date of our Phase III trial into the second quarter of 2025, we have also extended our cash runway into the first quarter of next year. We will continue to manage our resources carefully and work with Piper Sandler to explore our opportunities to ensure we are well prepared to launch the trial effectively when the time is right. Research and development expenses for the quarter were $4.6 million, a decrease of $1.4 million for the quarter ended June 30, 2024, compared to the same period in 2023, primarily due to decreases of $1.1 million in contract manufacturing expenses, 0.3 million in personnel-related expenses and 0.2 million in clinical trial expenses offset by an increase of 0.2 million in consulting expenses. General and administrative expenses for the quarter were 3.7 million, a decrease of 0.5 million compared to the same period in 2023, primarily due to decreases of 0.2 million in personnel-related expenses, 0.1 million in travel, 0.1 million in consulting, and 0.1 million in other expenses. The net loss for the quarter ended June 30, 2024, with $7.6 million, compared to a net loss of $8.9 million for the same period in 2023. Lumos Pharma ended 2-2, 2024, with 8,123,186 shares outstanding. With that, I will now turn it over to Rick for his closing remarks.

Thank you, Lori and John. And as we mentioned at the start of the call, it's been an exciting and productive period for Lumos. Again, we're thrilled by the outcome of the end of the phase two meeting with the FDA. In recognition that LUM201 is not another growth hormone mimetic, the FDA's guidance supporting a placebo-controlled trial, we believe has significantly de-risked our program. We're progressing toward initiating a phase three registrational trial and achieving our goal of establishing LUM201 as the first oral therapeutic capable of transforming the global growth hormone market, which has been dominated by injectable products for nearly 40 years. We anticipate some very exciting developments throughout this year and look forward to keeping you informed about our progress. Thank you all very much, and operator, we're ready to take questions.

We will now begin the question and answer session. To ask a question, you may press star then one in your telephone keypad. If you're using a speakerphone, please pick up your hands up before pressing the keys. To withdraw your question, please press star then two.

At this time, we'll pause momentarily to assemble our roster. Our first question will come from Catherine Novak with Jones Trading.

You may now go ahead.

Hey, good afternoon, guys. You know, it's exciting that you're able to get the Phase 3 trial design nailed down with the FDA, but I wanted to ask about, you know, your expectations for enrollment dynamics. How long is it going to take for you to enroll 150 patients study? You know, and given that this is a 12-month study, you know, should we not be expecting data until late 2026, 2027? You know, when are we going to see updates from this?

Duke, will you answer that question and recall Duke is our chief medical officer and he's a pediatric endocrinologist.

Thank you. Thank you, Catherine. That's a good question, right? So when we have the try, you know, decide placebo-controlled trial, we have been looking to diligently about, you know, where the site might be. So as you know, this type of placebo-controlled trial, we want to make sure now to meet the timeline 15 to 18 months like what we plan. We do believe and be confident we can get that passed in that duration complete. What we plan to do is that we try to enroll the patient in different continents, especially we go including Latin America and Asia and Southeastern Europe. In those areas, we have limited access to growth hormone. And we do believe that by include some of those area, we will be able to enroll those patients. Not to mention when we announced the placebo control trial, the last year earning call, we have influx of interest of the physician who interest to be part of our phase three. We have more than site that we need. So with expected 150 subjects, 80 to 100 patient, And we do believe that with 15 to 18 month enrollment, we can achieve that pretty easily.

Got it. Is that? What is another?

Go ahead. Sorry. Okay. And then sort of a strategic thought, you know, assuming you are able to secure additional financing, Are there other opportunities you could explore in the meantime to compensate for a data catalyst or data shadow from PGHD?

Well, Catherine, we are completely focused on PGHD, obviously. Yes, there are other indications that are out there for us to explore. But we're going to do a prudent use of our capital to focus on where we're going to get across the finish line first. And I don't know, Lori, if you have any additional thing you want to add to that.

I think you covered it well, Rick. I think as we suggested, our goal is to manage cash conservatively and ensure that we are extending our runway to support operations and evaluate all opportunities at hand.

Got it. Thanks, guys. Thank you, Catherine. Our next question will come from Leland Gershall with Oppenheimer.

You may now go ahead.

Hey, good afternoon. Thanks for taking our questions. Just wanted to ask, Rick, it sounded from your commentary around the potential goals with the strategic opportunities. that you could be looking at what may be ex-U.S. deals for Loom 201 and then initial monies from those deals could help fund your registration file. Is that a reasonable scenario?

It's reasonable, but you have to remember, Leland, you know, on a regular basis, our business development folks have been generating a significant amount of interest on, you know, global potential of MUM201 in multiple markets. And we've gotten a lot of positive feedback. And as a result, we felt it's probably the right time to engage an investment banker to make sure that we explore every one of these opportunities and any kind of potential transaction or opportunity that really serves all of our shareholders best. So As a result, I think it's easy to say we're in a lot of different directions we can go. We're in active discussions with not just investors, but as you pointed out, strategics have been interested for quite some time, both for maybe either global and also their regional players. But we're going to really choose the right deal or combination of deals that provide just the highest value possible. to our shareholders at the lowest cost of capital that we can. Now, I can tell you, you know, we're as a phase three ready asset in a $5 billion market that we offer some really significant advantages, not just the fact of oral delivery, but a unique mechanism of action. I think we're feeling pretty good about our position right now.

Okay, thanks. That's helpful. And then Just wanted to ask, I believe you have an ongoing study on the academic side in non-alcoholic fatty liver. Just wanted to see if there's any update you can provide there. Thank you.

Not much of an update except to say that the study is progressing in non-alcoholic fatty liver disease with our clinician at MGH. As you know, I think we have a potential in the cardiometabolic space as a combination product. And we have some very interesting data that tells us we should spend more time there. And I think this study will also help us get to the next stage.

Great.

Terrific. Thanks very much for the added color. Our next question will come from Charles Duncan with Cancer Fitzgerald.

You may now go ahead.

Good afternoon, Rick and team. Thanks for taking our question. And let's see, I guess congratulations on the recent end of phase two meeting. I guess we've talked about that a little bit in the past, but I wanted to ask you a couple of more questions about that. Do you plan or are you contemplating in the interim review to look at conditional power? Is there any natural cut point in which you may take a look at the patients enrolled and what kind of rates you're seeing in terms of annual height change, even just on a blinded basis? Is there any news flow during the conduct of the trial that you could point to?

John, do you want to answer that question? Sure. Hi, Charles.

No, we do not plan to take an interim peak. Not a great idea for the phase three study, even in a blinded sense. So we do, we will keep the data as clear as we can going forward.

Okay. Appreciate the rigor. The other question that I had with regard to operationalizing, that protocol, I get what you're saying in terms of manufacturing the placebo because that was a new and in many ways positive twist to the plan. But I'm kind of wondering between now and second quarter, what are some of the rate limiting steps? Is it possible that your second quarter you know, goal is not June, it's maybe April, or help us understand the path to getting this trial underway.

Yeah. John, I want you to answer that question too.

So while we are, you know, finalizing the protocol with the FDA, we are doing quite a bit of pre-work right now. We are looking at sites, identifying investigators, you know, identifying the best regions to work at, finalizing our placebo work, right? And as we transition to having an FDA-approved protocol towards the end of the year in Q4, then we start the regulatory reach-out for all the ex-U.S. regulators. We go to the EMA. We go to some of the other regions. And then that starts the process of us negotiating contracts and budgets with each one of the 80 sites that we intend to have in the phase three trial. So I think there really is quite a bit of work for us to do after the FDA finalizes the design with us that will take us that period of time. You know, T2 is, you know, three months long, so we'll be in that window. I don't have any more precise estimates for each course.

Okay, and then with regard to the FDA finalizing the protocol, if you will, as you just mentioned, are there any outstanding issues? Do you see this as a Gantt chart thing, or do you believe there are points of, you know, call it debate, that you really want to get their input on? At this point, do you have full alignment?

Please continue, John.

Yeah, I think there's points of clarification on the specifics of the design. And remember, we have to proceed with the FDA's timelines for back and forth interactions, right?

So that's really where we are right now.

Okay, my last question is perhaps for Laurie. I'm wondering if you've been able to put pen to paper. I imagine you have been able to subsequent to the end of phase two meeting to kind of plan the budget for this trial. And I'm wondering where you're landing in terms of all in capital or cost cash needed to at least complete enrollment. So go ahead, Lori.

Sure. So, you know, if you recall, Charles, and great to talk with you today, we previously had said and we've continued to say about 85 to 100 million will support operations through 2026. And so that has been the goal in terms of the capital we're looking to bring in to finance the phase three and to initiate the phase three trial. As we initiate and finalize the plans with the FDA, we'll issue additional guidance around timelines from an enrollment perspective, and we may update those numbers as we finalize that trial design.

Okay, that's great. No, I didn't recall that, so I appreciate you reminding us. So, thanks for taking the questions.

Thank you, Charles. Thank you. Our next question will come from Yasmine Rahimi with Piper Sandler.

You may now go ahead.

Hey, good afternoon, team. This is Jungyuan for YAS. Thanks for taking our questions. First, could you remind us of the rationale for the formulation change from phase two to phase three? Do you need to do any additional bioequivalent studies with the mini tablets? And secondly, could you provide a little bit more color on what types of potential strategic opportunities are considering at this junction? Thank you.

I'll let you go first, John, in terms of bioequivalents or any other types of studies.

Yes. So, the rationale for the change in formulation was really threefold. So, we wanted to, if you remember, we are dosing by weight across a wide weight range with an oral product. So, switching to this mini tab in a capsule allows us to make three different dosage strengths by just varying the number of the same mini tablets inside a capsule. That allows us to have a much tighter dose variance across that large weight range. And it also gives us the opportunity for several different routes of administration. The larger kids and the older kids who are able to swallow a capsule are able to just take their capsules. The younger children who might have a harder time can open the capsule up and take a mini tablet or even a mini tablet in a soft food like pureed banana. That will ease kind of the treatment burden, you know, across that whole age range that we're talking about in our trial and commercially. And yes, there would be a bridging PK study that we have already completed.

So to answer the second part of that question is, Yeah, you can imagine. I mean, our BD folks have done a great job in outreach to all the markets, and they've really generated considerable interest, and we've had ongoing discussions. Once again, we can't be specific about those discussions, but I'll say the least, that they're not only strategics and strategic markets, but even beyond. so both global and regional type of players who are interested. We're going to be very careful and look at all the possibilities and potential deals that are on the table, and a combination of whether it be financing or strategics is really going to be an interesting exercise over the next coming weeks and months. I can leave it at that.

All right. Thank you very much. That was very helpful. This concludes our question and answer session as well as the conference. Thank you for attending today's presentation. You may now disconnect.