Lumos Pharma, Inc. (LUMO) CEO Richard Hawkins on Q1 2022 Results - Earnings Call Transcript

May 10, 2022 10:03 PM ETLumos Pharma, Inc. (LUMO)
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Lumos Pharma, Inc. (NASDAQ:LUMO) Q1 2022 Earnings Conference Call May 10, 2022 4:30 PM ET

Company Participants

Lisa Miller - Senior Director, IR

Richard Hawkins - CEO & Chairman

John McKew - Chief Scientific Officer & President

David Karpf - Chief Medical Officer

Lori Lawley - CFO & Principal Accounting Officer

Conference Call Participants

Avraham Novick - Cantor Fitzgerald & Co.

Yasmeen Rahimi - Piper Sandler & Co.

Catherine Novack - JonesTrading Institutional Services

Edward White - H.C. Wainwright & Co.

Operator

Good afternoon, and welcome to Lumos Pharma's First Quarter 2022 Results & Clinical Update Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I'd now like to turn the call over to Lisa Miller, Senior Director of Investor Relations. Please go ahead.

Lisa Miller

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 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 the forward-looking statements. Information presented on this call is contained in the press release we issued this afternoon and in our Form 8-K, which may be accessed from the Investors page of the company's website.

Speaking on today's call will be Rick Hawkins, CEO and Chairman; John McKew, our President and Chief Scientific Officer; Dr. David Karpf, our Chief Medical Officer; and Lori Lawley, our Chief Financial Officer.

I will now turn the call over to Rick.

Richard Hawkins

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us on today's call. Now after the market closed today, we issued a press release announcing our financial results for the 2022 first quarter and detailing our progress advancing our clinical programs for the treatment of patients with idiopathic or moderate pediatric growth hormone deficiency or PGHD using our daily oral therapeutic LUM-201.

On today's call, I'll provide a brief update on our LUM-201 clinical trials and other developments before turning it over to John, who will discuss our new collaboration with Massachusetts General Hospital for an investigator-initiated Phase II pilot trial. Then David will discuss an update to our clinical team. And finally, Lori will review our financial results.

First, I want to say that during these turbulent times, both in our industry and in the markets in general, Lumos Pharma is fortunate to be in good position to advance our trials through key data milestones. Our company is on solid financial footing and continues to have sufficient cash on hand to get us through not only the interim readout by the end of this year, but also the primary outcome readout of our OraGrowtH210 trial expected in the second half of 2023 and our OraGrowtH212 trial as well.

Now I'm pleased to report that 2022 has begun on a positive note. The encouraging enrollment trends we highlighted on our last call for our OraGrowtH210 and OraGrowtH212 trials have continued. And the OraGrowtH210 trial has now exceeded the 50% randomization milestone. Enrollment trends in both trials are sufficient for us to reiterate our commitment to conducting an interim analysis of clinical efficacy and safety data and the results of which we will announce by the end of this year.

Our interim analysis will provide an early look at the safety and annualized high velocity data at 3 dose levels of LUM-201 gives a standard dose of recombinant human growth hormone in 40 subjects after at least 6 months on therapy. As a reminder, our OraGrowtH210 trial is our global clinical study evaluating oral LUM-201 in approximately 80 subjects diagnosed with idiopathic or moderate PGHD.

The primary clinical outcome is annualized height velocity in these subjects selected by our predictive enrichment marker or PEM strategy. Secondary outcome measures include comparison of annualized height velocity of LUM-201 at 3 dose levels that's at 0.8, 1.6 and 3.2 mg per kg versus the control arm of patients treated with a recombinant growth hormone at a daily dose of 0.24 mg per kg a week. Dose levels of LUM-201 were selected to span the entire dose response curve elucidated in the prior PK/PD study. The goals of OraGrowtH210 are to identify the optimal dose of LUM-201 to be used in a Phase III registration trial as well as validate the PEM strategy.

You also remember that on our last call, we announced the initiation of our OraGrowtH213 trial or the Switch study. This is an open-label, multicenter Phase II study, evaluating the growth effects and the safety of LUM-201 following 12 months of daily injectable growth hormone and up to 20 PGHD patients who have completed the OraGrowtH210 trial. Subjects will be administered LUM-201 at a dose of 3.2 mg per kg a day for up to 12 months. Primary outcome for the OraGrowtH213 trial is annualized height velocity and secondary outcomes include safety and PK/PD measures.

Now the OraGrowtH212 trial is our single-site open-label trial evaluating the pharmacokinetic and pharmacodynamic effects of LUM-201 and up to 24 PGHD subjects at 2 dose levels, 1.6 and 3.2 mg per kg a day. The objective of our 212 trial is to confirm prior clinical data, demonstrating the amplified pulsatile release of endogenous growth hormone, unique to LUM-201 and the potential for this mechanism of action to increase growth on the secretion across the entire dose response curve in the majority of PGHD patients. The primary endpoint is 6 months of PK/PD and height velocity data with additional 12-month data to be collected.

We continue to anticipate primary outcome data from the oral growth 210 and 212 trials in the second half of 2023. Now we're also pleased to announce that the U.S. Food and Drug Administration is now permitting treatment with oral LUM-201 beyond 12 months following a review of preliminary unblinded safety and efficacy data from our OraGrowtH trials. As you'll recall, in July 2021, we announced that the FDA had restricted treatment with LUM-201 to no more than 12 months. And based on the agency's review of preliminary safety and efficacy data from both OraGrowtH trials we have in progress, the FDA has lifted its partial hold and will now permit treatment with LUM-201 beyond 12 months. And as a result, we are extending the OraGrowtH210 trial to up to 24 months on treatment to allow subjects to continue LUM-201 therapy uninterrupted.

Additionally, we plan to extend the OraGrowtH212 trial. These extensions will not change the anticipated timing of primary outcome data readouts to occur after 6 months on treatment. Again, the primary data readout for our OraGrowtH210 trial is anticipated for the second half of 2023. In addition to the progress we've been making in our prospective trials, we're pleased to see the publication of a retrospective analysis by Dr. George Bright and Michael Thorner in a journal, Hormone Research in Paediatrics. This peer-reviewed manuscript titled LUM-201, elicits greater growth hormone response than standard growth hormone secretagogues in pediatric growth hormone deficiency presents an analysis of data from a prior clinical study comparing the peak growth hormone response of LUM-201 to that of standard diagnostic growth hormone secretagogues in children previously diagnosed with growth hormone deficiency who are naive to treatment.

The analysis demonstrates that in children with growth hormone deficiency, the growth hormone response to a single oral dose of 0.8 mg per kg of LUM-201 and that is the lowest dose administered in our OraGrowtH trials greatly exceeds that observed with standard growth hormone stimulation agents. Results of this study were originally presented at the 2021 Endo Annual Meeting and further support prior data suggesting that LUM-201's therapeutic potential when administered to pediatric subjects with idiopathic growth hormone deficiency.

Now I'll now turn the call over to John McKew, President and CSO, to discuss our new collaboration with Massachusetts General Hospital. John?

John McKew

Thank you, Rick. Last week, we announced a new collaboration with Dr. Laura Dichtel and Massachusetts General Hospital to explore the potential of LUM-201 in patients with nonalcoholic fatty liver disease, or NAFL. This investigator-initiated Phase II pilot trial is a single-site 6-month open-label study of daily oral LUM-201 in adults with NAFLD. The trial will evaluate a dose of 25 milligrams per day of LUM-201 in 10 adult subjects with NAFLD and relative IGF-1 deficiency.

The primary endpoints will be to determine the reduction in liver lipid content, inflammation and potentially fibrosis in these subjects administered daily oral LUM-201 compared to historical placebo treated control studied under identical procedures. While we remain focused on our core LUM-201 program in PGHD, we are pleased to support Mass. General's exploration of LUM-201's potential in this indication. The condition estimated to be prevalent in approximately 25% of adults worldwide.

NAFLD can often advance to the more serious liver diseases such as nonalcoholic steatohepatitis, NASH, with fibrosis and potentially liver cancer. Also NASH-associated liver failure is one of the leading causes of liver transplants in the United States. In addition to advancing our clinical trials for LUM-201 in PGHD, we continue to explore expansion opportunities for LUM-201 into other rare endocrine disorders where injectable recombinant growth hormone is the standard of care. We believe that LUM-201 is a pipeline in a product and through its unique mechanism of action may have the potential to treat many of the indications comprising the $3.4 billion growth hormone market, indications such as Prader-Willi Syndrome, Idiopathic Short Stature, Children Born Small for Gestational Age and Turner Syndrome.

With that, I will pass it over to David for an exciting announcement regarding in addition to our clinical team. David?

Richard Hawkins

Maybe you're on mute, David.

David Karpf

Yes. Thank you, John. It is my great pleasure to announce that Dr. Pisit Pitukcheewanont, also known as Dr. Duke, has just joined Lumos Pharma as Vice President of Global Clinical Development and Medical Affairs. Dr. Duke is an esteem pediatric endocrinologist with a noted career in academia and in both the nonprofit and corporate realms. He is a Professor of Clinical Pediatrics at the Children's Hospital of Los Angeles, Keck School of Medicine of the University of Southern California, where he has worked since 1998. Importantly, since 2011 and until very recently, Dr. Duke has also served as President of the Human Growth Foundation, where he has been instrumental in raising the organization's profile and involvement in the endocrine community and spearheading its support of research, education and patient advocacy related to growth disorders.

Dr. Duke has also served on multiple advisory and executive boards for noted pharmaceutical and rare disease companies. He has presented numerous times at national and international medical conferences and has even appeared on local and national news platforms as an expert on pediatric endocrine disorders.

During his career, he has received numerous research brands and has authored over 70 publications. Dr. Duke completed medical school and a residency program at the Chiang Mai University, a residency program in pediatrics at the University of Tennessee, Memphis and a fellowship in pediatrics, endocrinology and metabolism at the University of Tennessee, both in Knoxville and Memphis.

Most recently, Dr. Duke served as Vice President of Medical Affairs and Vice President, Global Medical Ambassador and Medical Education at Ascendis Pharma. I had the pleasure of working with him on the development of SKYTROFA, the once-weekly injectable for pediatric growth hormone deficiency that was FDA approved this past August. Lumos Pharma and I are thrilled to have him join our team as we advance our clinical programs, evaluating an oral therapeutic LUM-201 for the same indication. We believe Dr. Duke will be instrumental in helping Lumos execute on our current trials and will also help us with the advanced preparation for our Phase III program.

With that, I'll pass it over to Lori for a review of our first quarter financial results. Lori?

Lori Lawley

Thanks, David, and good afternoon, everyone. For the quarter ended on March 31, 2022, we ended with cash and cash equivalents totaling $86.8 million compared to $94.8 million on December 31, 2021. We continue to expect average cash use of approximately $8.5 million to $9.5 million per quarter through the remainder of 2022. Cash on hand as of the end of our first quarter is expected to support our operations through the primary outcome data readout from our OraGrowtH210 trial anticipated in the second half of 2023 and our OraGrowtH212 trial.

Research and development expenses were $4.2 million for the first quarter, a decrease compared to $4.7 million for the same period in 2021, primarily due to a decrease of $0.8 million in personnel and stock compensation expense, offset by an increase of $0.5 million in clinical trial and manufacturing expenses.

The general and administrative expenses were $3.6 million for the first quarter compared to $4 million for the same period in 2021, primarily due to a decrease of $0.5 million in legal consulting and stock compensation expenses, offset by an increase of $0.3 million in licensing and other expenses.

The net loss for the first quarter was $7.7 million compared to a net loss of $8.6 million for the same period in 2021. And with that, I'll turn it back to Rick for closing remarks.

Richard Hawkins

Thank you, Lori. And so our first quarter was a productive one for Lumos. Enrollment trends for our OraGrowtH trials are positive, and we'll be able to announce the results of our interim analysis by the end of this year. And after a review of unblinded preliminary data, the FDA now permits treatment with LUM-201 beyond 12 months, so the extended treatment for both trials beyond that time frame.

Primary outcome data for these Phase II trials will be captured at 6 months on therapy. The extension of treatment duration will allow subjects to continue uninterrupted on therapy and will create a more robust data package for regulatory and commercial purposes.

The therapeutic potential of LUM-201 was highlighted in a recent peer-reviewed publication, and we have a new collaboration with Mass. General Hospital to explore the potential of LUM-201 in NAFL, and we continue to prudently explore other opportunities to expand this platform.

And finally, as you know, the financial markets continue to be volatile, and many of our biotech peers do not have sufficient funds to advance their clinical programs. In contrast, Lumos Pharma's cash position is strong, sufficient to carry us beyond our primary outcome data readout in the second half of 2023. So we look forward to reporting interim data by the end of this year and updating you on our continuing progress.

Operator, we are now ready to take questions.

Question-and-Answer Session

Operator

[Operator Instructions]. I show our first question comes from the line of Charles Duncan from Cantor Fitzgerald.

Avraham Novick

It's Avi on the line for Charles. Congrats on the enrollment and regulatory progress. So I guess my first question is what -- could you provide some color on the safety and tolerability learnings for the FDA that is previously learned from the Merck trials? And then I have a couple of follow-ups.

Richard Hawkins

John, it's a regulatory question. So why don't you go ahead? You're on mute, John.

John McKew

Yes, sure thing. So the -- as you know, this molecule has been over 1,000 adults, some of them for up to 2 years and up to 200 kits for at least 6 months as well. And so it had a very clean safety and tolerability package already going into this trial that we're running right now, and we've seen nothing to contradict that clean safety data.

Richard Hawkins

I think that, John, that the FDA was more concerned about seeing patients on drug for longer than 12 months based on efficacy. Is that right?

John McKew

Yes. So I think the question was mostly on safety and tolerability, is that correct? But I'm happy to answer other aspects of that question if you have them.

Avraham Novick

Yes, absolutely. That was very helpful. Yes. And then I just had a couple of follow-ups with regards to the NAFL program. So I guess could you discussed the mechanistic rationale for using 201 in NAFL and then with regards to the study design, are patients going to be allowed on concomitant medications?

Richard Hawkins

Yes, go ahead, John.

John McKew

So there's kind of a long history. First, kind of just the actions of growth hormone promoting lipolysis. The actions of growth hormone itself and secretagogues like LUM-201 being -- having immune modulator effects and anti-inflammatory properties. And then there are -- there's quite a bit of clinical data already in molecules with similar mechanisms of action.

So tesamorelin, which is a peptide analogue of growth hormone releasing hormone is approved for patients in -- with HIV lipodystrophy, they published data on HIV patients with fatty liver and the impact that a daily growth hormone releasing hormone injection has on those patients and they've recently started a larger Phase III trial more broadly in the NAFLD space.

There's also a clinical trial that you can find in clinicaltrials.gov that was run by Dr. Laura Dichtel who has actually used growth hormone as daily injectable in this NAFLD population. So I think there's a lot of mechanistic data. There's a lot of preclinical data, and there is also quite a bit of clinical data to support this.

All the molecules that have been used to date are daily injectables. And I think we have probably a better mechanism of action when it comes to comparing against tesamorelin because we modulate both somatostatin and growth releasing hormone and we're in oral compared to those daily injectables, which I think will have a hard time finding a foothold in this market -- in a market like NAFLD.

Avraham Novick

Okay. And then I guess, with regards to concomitant medications, all patients in the study really feel...

John McKew

Yes, yes, they'll be able to use concomitant medications as well. Obviously, there are some that we watch out for, obviously, as with any medication, but I think there should be a broad range of absolutely no problem concomitant medications.

Avraham Novick

You're done. They cannot take another agent to reduce liver fat such as TCDs, et cetera.

John McKew

Yes. Yes. I mean that's the whole -- I don't know if that's the concomitant medication you were talking about were not -- these patients are on -- they're not currently being treated for fatty liver if that's -- or diabetes, if that's what you're asking.

Avraham Novick

Yes. That was exactly it. Yes. Thank you for the color. Congrats on the quarter.

Operator

I show our next question comes from the line of Yasmeen Rahimi from Piper Sandler.

Yasmeen Rahimi

Yes. I think it would be really helpful for us and our clients who are listening, if you could walk us through what range in height velocity do you expect to see in this interim readout across both of the studies. If you could also shed a little bit light on to the age of the 50% of the patients that will be reported out that could also be really helpful for us. So I think it would be really helpful if you could help us understand sort of expectation going into the data. That would be great.

Richard Hawkins

David, why don't you take that clinical question?

David Karpf

Sure. Thank you very much, Yasmeen. Yes. So it's important to understand that there's about 3 or 4 decades of work with growth hormone showing that the magnitude of the response to recombinant growth hormone depends upon the severity of the disease. So more severely, more deficient patients respond much better to growth hormone and less severe less.

So all the data with the population that we are studying, which could be broadly characterized as idiopathic GHD from 3 different sources show that in contrast to the values that you might see in number of severe patients studied say in the TransCon growth hormone program, you might see 10, 10.5, 11 centimeters of annualized growth. You actually see a mean of about 8.3 centimeters for growth, and that's with growth hormone.

So that's really the target that we are expecting to see with the standard dose of growth hormone the population we're studying in the 210 study, and we are hopeful that with the dose range that we are studying at LUM-201 that we will find at least one dose that looks to be comparable to that.

Richard Hawkins

Okay. And I think that there's a question about the age of the patient population. Sure, we can answer that question, except to say to give a range in the protocol.

David Karpf

We have a pretty broad range, 10 to 11, depending upon gender, -- probably the average age, I would guess, would be somewhere right around 7.

Yasmeen Rahimi

Okay. And then maybe just a quick follow-up in that regard. Are you planning to put the 2 data sets across both studies combined? Or would the data include 2 separate analyses as well as a combined?

John McKew

Yes. The agreement with FDA, we'll be presenting the data in several different ways. We'll be reporting the data separately from each trial and will also be performing a combined analysis whereby the subjects from the 212 study will augment and add to the mid and the high dose arms in the 210 study.

Operator

I show our next question comes from the line of Ed White from H.C. Wainwright.

Edward White

With regard to the FDA giving you the ability to follow the patients for longer than 12 months, I believe you opened the 212 trial in late June last year, but the 210 trial was opened -- you announced that on the third quarter '20 results call. I think it was November of 2020. So I'm just curious as to how many patients you have that are bumping up against that 12-month time frame? And were some patients past the 12 months? And can you address them now by putting them back on drug?

Richard Hawkins

David, do you want to answer that?

David Karpf

Sure. As it turns out, the initial patients randomized into the trial were randomized to the recombinant arm. So they're being covered by the 213 study. We have not lost any patients who will reach 12 months to date, and we are anticipating that we will be able to capture all of them in the revised 24-month vertical.

Edward White

Okay. Great. And just a question on -- you have this investigator-sponsored trial now in another indication. I was just wondering if and when you are planning on entering another indication, a company-sponsored trial and what your thoughts are? We've talked about it in the past, you have many different opportunities. I'm just wondering if you have narrowed the field yet.

Richard Hawkins

John, why don't you go ahead?

John McKew

So Ed, we are still working to continue to narrow down to one indication that we feel quite comfortable with to announce our next indication. We're not in a place yet where we've made that decision, but we are getting close.

Operator

I show our next question comes from the line of Catherine Novack from Jones Research.

Catherine Novack

I'm kind of curious, you talked a little bit about your potential internal thoughts on efficacy for the higher doses in 210. And given that the study is open label, do you anticipate that interim data in 40 patients could potentially support moving into pivotal studies? Or can you talk about what you sort of want to see with the drug before making that decision?

Richard Hawkins

David, it's a clinical question. So go ahead.

David Karpf

Sure. So it's a little bit premature to know until we actually see the data. It is entirely possible based upon the sample size that the interim look at the end of this year will be sufficient for us to narrow down the optimal dose. Having said that, initiation of Phase III depends on a number of factors, including efficacy and safety from Phase II as well as having adequate drug product availability.

So I think that for us to look at this interim results and if the data are robust, that would allow us to choose an optimal dose at an earlier time point than the full readout by 3, which could jump-start a lot of the planning for Phase III. So just contacting some of the regulatory agencies that have much longer lead time, for example, than FDA does. So I think it could be very, very helpful if the data are positive, robust. But it may not necessarily advance the initiation of Phase III per se, but it could certainly jump start a lot of the front load a lot of the activities for the 3 trial.

Catherine Novack

Okay. That's kind of helpful to know. And then, I guess, on that same vein, could you talk a little bit about the enrollment dynamics that you've been seeing? And if you've seen a reversal of some of the headwinds that we had in the fall and winter months.

Richard Hawkins

It's -- I wouldn't recommend any company start a 50-site global trial in the middle of a pandemic. But we responded really well. And I think that's because of the experience and quality of our clinical development team. But I also think that there's a number of investigators out there not only who have a great deal of experience, but -- and working with the recombinant growth hormone. But this is the first chance that they had to work with a once-a-day oral product. So I think they're pretty excited for themselves and for their patient population. And so there's a lot of interest. There's no question about it.

We're cautiously optimistic about where we're headed next. I think we announced in the past that we lost a number of sites in Russia and Ukraine, although we've added additional sites beyond that, plus we're coming online in other parts of the world that haven't entered any patients yet, but now are fully cleared and screening patients. So cautiously optimistic going forward.

Catherine Novack

That sounds great. All right.

Richard Hawkins

Sure.

Operator

Thank you. I'm showing no further questions in the queue at this time. Thank you for joining us and enjoy your afternoon.

Richard Hawkins

Thank you.

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