Lumos Pharma, Inc. (NASDAQ:LUMO) Q1 2024 Earnings Call Transcript

Lumos Pharma, Inc. (NASDAQ:LUMO) Q1 2024 Earnings Call Transcript May 15, 2024

Operator: Greetings, and welcome to Lumos Pharma First Quarter 2024 Financial Results and Clinical Programs Update Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Lisa Miller, Vice President, Investor Relations. Thank you, Ms. Miller. You may begin. Ms. Miller, go ahead.

Lisa Miller: Before we proceed with the call — yes, sorry. 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 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 press release we issued yesterday afternoon and in our Form 8-K, which may be accessed from the Investors page of the Lumos Pharma website. Speaking on today’s call will be Rick Hawkins, CEO and Chairman; John McKew, President and Chief Scientific Officer; and Lori Lawley, Chief Financial Officer. Dr. Duke Pitukcheewanont, Chief Medical Officer, will also join the call for the question-and-answer session. It’s now my pleasure to turn the call over to Rick for our opening remarks.

Rick Hawkins: Thank you, Lisa, and good morning, everyone. I’m pleased to be speaking with you today to provide an update on our progress advancing LUM-201 as the first oral therapeutic for moderate pediatric growth hormone deficiency, or PGHD. Our recent months have been incredibly productive at Lumos marked by significant milestones. We’ve had a constructive End-of-Phase 2 Meeting with the FDA and conducted fresh analysis on updated data from our OraGrowtH212 and 210 trials. I’ll keep my opening remarks concise before handing over to my colleagues to review in greater detail the strides we’ve made so far this year. So, let’s begin. As detailed in our press release, we recently held a collaborative End-of-Phase 2 Meeting with the FDA, where we reviewed the promising data from our Phase 2 OraGrowtH210 and 212 trials and discussed an optimal Phase 3 design for a successful regulatory path forward.

Both Phase 2 OraGrowtH trials, as you may recall, successfully met their primary and secondary endpoints, providing robust evidence supporting the potential of oral LUM-201 in treating moderate PGHD. Additionally, the trials demonstrated the effectiveness of our Predictive Enrichment Marker test in identifying patients likely to respond to LUM-201. And during our dialogue with the FDA, it was acknowledged that LUM-201 operates distinctly from growth hormone or its mimetics. The FDA recognized LUM-201 as a novel growth hormone promoter with a unique mechanism of action, and consequently, propose that we consider a placebo-controlled Phase 3 trial design. This trial design would not require an active comparator arm with a non-inferiority margin but would necessitate demonstrating clinically significant improvements in growth compared to placebo.

Now, we are delighted by these developments as we see them greatly enhancing the prospects for a successful Phase 3 trial of LUM-201. Pending final FDA approval of this trial design, we plan to initiate this trial by year-end 2024. We firmly believe that this refined design significantly bolsters our chances of advancing LUM-201 toward approval as the first oral therapeutic for moderate PGHD. Our confidence in LUM-201 was further strengthened through our examination of additional data from our Phase 2 OraGrowtH trials. As detailed in our press release, we unveiled updated 12-month and 24-month data from these trials, which consistently demonstrate a durable effect and substantial improvement over baseline annualized height velocity. We are confident that the advancements made positions Lumos Pharma as a late-stage biopharmaceutical company with substantial growth prospects and continue to support the potential of oral LUM-201 to disrupt the $4.7 billion global market for injectable growth hormone deficiency.

Now, I’ll hand the call over to John McKew for further insights and to our interaction with the FDA and our strategic planning for the pivotal Phase 3 trial. John?

John McKew: Thanks, Rick, and good morning, everyone. As Rick mentioned, we recently concluded our End-of-Phase 2 Meeting with the FDA to evaluate data from our OraGrowtH trials and explore potential strategies for a Phase 3 pivotal trial. A key highlight from the meeting was, it’s overwhelmingly positive and constructive nature. With approximately 30 FDA staff members present, including senior representatives from pertinent departments, the atmosphere remained collegial and centered on determining the optimal approach for the pivotal trial design of LUM-201 in treating moderate PGHD. The data package we presented to the FDA underscored the outcomes of our Phase 2 OraGrowtH trials. As you may recall, these trials successfully met their primary and secondary endpoints, demonstrating that LUM-201 achieved annualized height velocity consistent with predetermined targets derived from historical benchmarks in a moderate PGHD patient population.

Additionally, the growth rates observed at both six and 12 months on treatment with LUM-201 at the 1.6 mg per kg per day dose aligned with historical recombinant human growth hormone growth rates in similar patient cohorts with sustained efficacy observed at both 12 and 24 months. Notably, LUM-201 also exhibited the ability to normalize IGF-1 standard deviation scores within six months of treatment initiation. Furthermore, the trial data provided preliminary confirmation that our Predictive Enrichment Marker, or PEM, strategy accurately identified potential LUM-201 responders and showcase the PEM classification as 100% reproducible, surpassing the predefined statistical margin. Additionally, safety profile of investigational LUM-201 was further validated.

Upon reviewing these data, FDA representatives indicated a shift in their perspective regarding LUM-201’s distinct mechanism. They acknowledge that LUM-201 is not merely a growth hormone mimetic, but rather a distinct growth promoter. The FDA’s understanding of these data prompted them to suggest that LUM-201 should not necessarily be directly compared to traditional growth hormone products. As a reminder, LUM-201 is a small molecule that binds to the growth hormone secretagogue receptor 1a in both the pituitary and the hypothalamus. LUM-201 agonizes the receptor, and that signals the release of stored growth hormone in the somatotrophs. By also modulating somatostatin in growth hormone-releasing hormone in the hypothalamus, LUM-201 restores the natural pulsatile release of growth hormone.

This increase in the amplitude or peak of each growth hormone pulse boosts the circulating levels of growth hormone, subsequently elevating the levels of circulating IGF-1. Both growth hormone and IGF-1 that act on the open growth plates in the long bones of children with growth hormone deficiency stimulating growth. The FDA’s acknowledgment that LUM-201 operates as a novel growth-promoter rather than a mimetic of injectable exogenous recombinant human growth hormone enables a more expansive view in considering design approaches for a Phase 3 trial. A significant portion of the meeting was dedicated to exploring different options, culminating in the suggestion by the FDA that we contemplated placebo-controlled design. Heading into the FDA meeting, we examined historical pivotal trial designs with growth-promoting agents and propose to the FDA a standard non-inferiority design, consisting of, in this case, a 12-month study, evaluating LUM-201 against the lower approved dose of growth hormone.

We chose this comparator dose because it more closely mirrors the physiological levels of growth hormone and IGF-I that LUM-201 restores. We engaged in productive discussions with the FDA regarding this non-inferiority approach, but during these conversations, the FDA suggested we could explore a placebo-controlled trial. A placebo-controlled trial would be required to demonstrate clinically significant growth compared to the placebo with the 12 months of treatment. Following the FDA’s recommendation and drag from insights provided by our regulatory consultants, clinical and scientific advisory board, statisticians, we have designed a placebo-controlled trial featuring a 2:1 randomization of LUM-201 to placebo. One arm will receive LUM-201 for 12 months, while the other arm will initially receive placebo and then transition to LUM-201 after six months remaining on treatment for the next six months.

All subjects enrolled in the trial will be PEM-positive. This Phase 3 trial design serves two strategic objectives: the first, providing the FDA with ample data to evaluate LUM-201 for approval, and ensuring that all subjects receive treatment with LUM-201, the active agent. For this trial, we envisaged two co-primary endpoints. First, the 12-month treatment arm must demonstrate clinically significant growth. Second, there will be a pairwise comparison within subject assessing growth on placebo versus growth on LUM-201, which must also exhibit clinically meaningful growth. Following the 12-month trial period, all participants will have the option to transition into a long-term safety extension, which will provide LUM-201 treatment for up to three years.

We are confident that the trial size is more than adequate to meet the described co-primary endpoints. We anticipate finalizing this design over the next couple of months and pending approval from the agency, we aim to initiate the Phase 3 trial before the end of 2024. Our potential for success in pivotal trials bolstered by the evolving data and deeper analysis from our OraGrowtH trials. In yesterday’s press release, we unveiled preliminary updated 12- and 24-month growth data from our OraGrowtH210 trial. The data snapshot from our trials, specifically the six- and updated 12-month data on LUM-201 when measured against similar populations from Phase IV studies indicate comparable growth rates. Like these historical databases, we are focusing on treating the moderate PGHD population while excluding the more severe growth hormone-deficient cases.

Our updated data consistently demonstrates that we are achieving growth rates similar to those observed in historical data for the moderate PGHD patient cohort. Further analysis compare the six- and 12-month growth rates on LUM-201 and baseline growth rates. These findings highlight a noteworthy increase in AHV, or annualized height velocity, from baseline upon treatment of LUM-201. The baseline growth rate of 4.7 centimeters per year document in our Phase 2 trial should serve as an indicator of the placebo arm’s annualized growth rate in our Phase 3 trial. The full 12-month data for all cohorts in the OraGrowtH210 trial reinforces our choice to advance the 1.6 mg per kg LUM-201 dose into Phase 3. Finally, we combined the 1.6 and 3.2 mg per kg per day cohorts from our two Phase 2 trials since their growth rates were not statistically different.

These data include all subjects were treated to 24 months. Excluding those, we transition from tanner 1 to tanner 2 to enable a comparison to historical Pfizer KIGS database. These data — these updated data continue to underscore the enduring efficacy of LUM-201 when comparing year one AHV to year two AHV for LUM-201, only a modest drop off of approximately 10% is observed. This stands in contrast to the published data from the less severe GHD population in the KIGS database treated with recombinant human growth hormone where the drop-off is closer to 20%. These findings from our Phase 2 studies highlighted how LUM-201 can normalize growth hormone secretion and IGF-1 levels, thus restoring normal physiological growth with sustained benefits over time.

These data were presented at the FDA End-of-Phase 2 Meeting and were compelling enough to convince the agency of LUM-201’s novel mechanism of action, granting them the freedom to suggest innovative Phase 3 study designs. We believe that this placebo-controlled design significantly mitigates our regulatory risk and enhances our potential to introduce the first oral therapeutic for growth hormone deficiency to the market. This innovative oral therapeutic is anticipated to be a welcome treatment option for pediatric endocrinologists seeking to address pediatric growth hormone deficiency in their patients. Earlier this month, analysis of top line OraGrowtH trial results were presented at three major endocrinology conferences at the Pediatric Endocrine Society Meeting in Chicago, by Dr. Andrew Dauber, highlighting data showing LUM-201 achieved comparable annualized height velocity to daily recombinant growth hormone in PGHD at the 1.6 mg per kg per day dose with a promising safety profile, and the two subsequent conferences in Stockholm, the Growth Hormone Research Society and European Congress of Endocrinology.

Dr. Peter Clayton presented a comprehensive analysis of LUM-201 restoration of growth hormone secretion and the increase in AHV induced in moderate PGHD patient. We are pleased to announce that we have had two abstracts accepted for presentation at the upcoming Endocrine Society Meeting, or ENDO, next month, where we also plan to release the full 12-month data from our OraGrowtH212 trial with additional analysis from the OraGrowtH210 trial. The maturing data from our OraGrowtH trials continue to resonate with the global endocrinology community, and we are encouraged by the growing interest among experts as we finalize our plans for a pivotal trial. With that, I would like to turn it over to Lori for a review of our financial results for Q1.

Lori Lawley: Thanks, John. We ended the quarter on March 31, 2024, with cash, cash equivalents and short-term investments totaling $23.2 million as compared to $36 million on December 31, 2023. Cash on hand is expected to support operations through the third quarter of this year, inclusive of Phase 3 planning and preparatory activities. With the recent developments from the FDA, we are confident that we will be able to finance our Phase 3 trial for patients with pediatric growth hormone deficiency in the near term. Research and development expenses were $7.2 million, an increase of $2.9 million for the quarter ended March 31, 2024, compared to the same period in 2023, primarily due to increases of $2 million in licensing expense, $0.8 million in clinical trial expenses and $0.2 million in consulting expenses, offset by a decrease of $0.1 million in personnel-related expenses.

General and administrative expenses were $3.8 million, a decrease of $0.6 million compared to the same period in 2023, primarily due to decreases of $0.4 million in licensing expenses, $0.1 million in travel expenses, $0.1 million in consulting expenses and $0.1 million in other expenses, offset by an increase of $0.1 million in personnel-related expenses. The net loss for the quarter ended March 31, 2024 was $10.4 million compared to a net loss of $7.3 million for the same period in 2023. Lumos Pharma ended Q1 2024 with 8,107,121 shares outstanding. And now, I will turn it over to Rick for his closing remarks.

Rick Hawkins: Thank you, Lori and John. As mentioned earlier in the call, it’s been an exciting and fruitful time for Lumos and we are steadily progressing towards our objective of unlocking the potential of LUM-201 as a pioneering oral therapeutic poised to revolutionize the global growth hormone market, which has been dominated by injectable products for nearly four decades. Before opening the call to your questions, I’d like to take a moment to discuss the commercial potential we envision for oral LUM-201. If approved, we believe LUM-201 presents several potential advantages over current injectable recombinant growth hormone products, including sustained growth benefits and the restoration of physiological pulsatile release of growth hormone within the natural endocrine feedback loop.

As an oral therapy, LUM-201 represents an appealing alternative to daily and weekly injections and has the potential to broaden the pediatric growth hormone-deficient treatment market, particularly among moderately growth hormone-deficient patients. Additionally, it’s worth noting there is a small molecule, the cost of goods for commercial-scale production of LUM-201 would be significantly lower than for recombinant growth hormone. And as we consistently emphasized, we view LUM-201 not only as a singular product, but also as a robust pipeline. We see the potential for LUM-201 to address 10 additional indications, currently treated with recombinant growth hormone, including Prader-Willi syndrome and idiopathic short stature. With the FDA acknowledging LUM-201 as a novel growth promoter, we believe this paves the way for a streamlined clinical trial design for these other indications as well as for attractive commercial positioning.

Now, this is truly a pivotal moment in a company’s trajectory. With the positive guidance from the FDA, we’re propelling our late-stage program for oral LUM-201 towards the regulatory pathway with a high likelihood of success. Additionally, we anticipate some very exciting developments in the coming year and eagerly anticipate sharing updates on our progress with you. Thank you all very much for listening today. And operator, we’re ready to take questions as well, please.

Operator: Thank you. [Operator Instructions] The first question comes from the line of Yasmeen Rahimi with Piper Sandler. Please go ahead.

Q&A Session

Liam Hiester: Hi, team. This is Liam Hiester on for Yas. Thanks so much for the update this morning. Just to start, in regards to the upcoming Phase 3 study, I was wondering if you could provide some update on your expected bar for success in connection to growth? And then, also any clarity on why you chose the specific dose to move forward with? Further, what is the overall safety database requirement for approval? And have you had any chance to engage with the EMA in regards to the Phase 3 design as well? And then, also if you could comment at all on how long you expect it to take to enroll the Phase 3 trial as well as if there’s any overlap between the Phase 2 and Phase 3 sites? Yeah, and that’s for now.

Rick Hawkins: Okay. All excellent questions, and I think the bar to success question probably should be answered by John. So, go ahead, John.

John McKew: Yeah. So, as we mentioned, we have to show clinically meaningful growth. And so, what we have agreed to in the past with the FDA to define clinically meaningful growth is that agreement with the FDA at the end of 12 months in our Phase 2 trial, subjects have to achieve 6.7 centimeters per year growth, that was what we defined as the minimal clinically meaningful growth to continue on treatment with LUM-201. So, one of the options that we have is to present that as an option for clinically meaningful growth in this Phase 3 study. I think just to tackle some of your other question, the 1.6 mg per kg per day dose, we’ve shown throughout the study to be both numerically at the highest age, we across the three doses, we don’t really see a difference between the 1.6 and 3.2 mg per kg per day doses.

So, I think there’s no point to go to that higher dose. We do believe that there’s a pharmacodynamic plateau. So, we’re not getting increased growth hormone secretion at the higher dose, so it make sense that we wouldn’t see an increase in AHV. Those are two of your four questions…

Rick Hawkins: Yeah, the interaction with the EMA.

John McKew: So, the interaction with EMA, we will start that interaction after we have finalized our protocol with the FDA.

Rick Hawkins: Yeah. And Duke, why don’t you talk about the enrollment — number of patients enrollment and so on?

Duke Pitukcheewanont: Yeah. So, thank you. So, I think to answer the first question, do we have overlap of a Phase 2 side on Phase 3? Yes. There, we have some Phase 2 sites to continue to pass it in Phase 3. And also, we plan to initiate a new site for Phase 3 as well. As you note, a number of subject that enrolled in Phase 2 much smaller than Phase 3, which is nearly double. We want to increase the number of country and number of sites around the world. At this point, we have significant kind of like increased awareness of Phase 2 trial at the global scale. We do get significant increase and interest of the KOL around the world as well. So, we do believe that with enrollment timeline as we planned initially 15- to 18-month, just be intact if we start their enrollment towards the end of this year.

So again, pretty much everything on track and we do believe that we’ll be able to enroll all those patients with the new placebo-controlled trial at the timely manner and especially when we increase the number of site and the number of country to participate in this trial.

Liam Hiester: Awesome. And then just one more question, sorry. Just how do you plan on funding the Phase 3 beyond year-end 3Q 2024? Are there any details on that?

Rick Hawkins: Yeah. Lori, go ahead.

Lori Lawley: Yeah. We’ve been really busy since we’ve had our FDA meeting and planning for the upcoming Phase 3 trial design. Now that we have some of the details finalized, we are confident that we can go out to the investment community and finance the Phase 3 trial as is planned. Also, as we’ve said previously, we believe that there is opportunity to bring in potential strategic — potential partners for regional licensing deals, which would also allow for non-dilutive financing in some of those territories that we would not necessarily go out and commercialize on our own.

Liam Hiester: Great. Thank you so much.

Rick Hawkins: All right.

Operator: Thank you. Next question comes from the line of Charles Duncan with Cantor Fitzgerald. Please go ahead.

Charles Duncan: Yeah. Good morning, Rick and team. Congrats on the progress and recent constructive interaction with the FDA. Also really appreciate all the color you provided. I did have a couple of questions on the Phase 3 trial design, and then, one on your perspective regarding FDA engagement. So, with regard to the Phase 3 trial design, I’m wondering if you could affirm that the enrollment criteria in Phase 3 will be the same? Or if not, how different from the Phase 2? And then, the second question I had with regard to that is, if you could provide a little more color on the co-primaries? Is it a true co-primary? Or is there a, call it, a step down from the first 12-month AHV to the second? Thanks.

Rick Hawkins: Yeah. Duke, why don’t you answer the first part of the Phase 3 design question in terms of enrollment criteria? And then, John, if you’ll talk about the co-primary?

Duke Pitukcheewanont: Yes. Thank you. That’s a very good question. So, the majority of inclusion/exclusion criteria are pretty much similar compared to Phase 3 and Phase 2. The only small changes that we want to implemented is, number one, the upper limit of the age enrollment, we’re going to lower one year. The reason behind that because we want to make sure since we compare to placebo, we want to make very clear that no single subject would get into the tanner stage 2 during the 12-month trial period. And we have a bonus criteria that initially the [bonus] (ph) is delayed for greater equal to six months, but now we’re going to have it greater than 12 months. And other than that, pretty much the same. And again, part of this, the inclusion/exclusion criteria for the moderate PGHD, we do believe that majority of physicians who actually will participate in this trial, we see a significant — when we have a placebo-controlled trial, the different primary endpoint would be very clear.

As you know, I think in majority of those patients, as you see the data John presented earlier, the best baseline height velocity coming in this trial was 4.7. And our trial achieved 7.6 centimeter at 12 months. So basically, we see it very clearly that we can achieve the clinical significance based on the FDA requirement at the end of this Phase 3 trial.

Charles Duncan: Helpful.

Rick Hawkins: And John, on the co-primary?

John McKew: Yeah. So, Charles, we do see these as co-primary endpoints, the 12-month growth endpoint and the six-month comparison to placebo, both showing clinically meaningful growth. So that’s the plan going in. Obviously, we’ll release more details once we have a final sign-off from the FDA on the full Phase 3 protocol.

Charles Duncan: That will include powering, John? Which of the two do you power to? Or does it not matter?

John McKew: No, we’ll power them both. They’ll both be powered. And we do believe right now that we have — at the end that we have is more than sufficient to power both of those endpoints.

Charles Duncan: Okay. Neat design. Is the agency asking for bone mineral density imaging or any bone health monitoring?

Rick Hawkins: Duke?

Duke Pitukcheewanont: No, they did not. And actually, most of their — they tried to get approved, the focus on the efficacy in terms of [indiscernible] velocity, and the bone density trial in general, you may not see a significant change in the first 12 months. So that would not require for this 12-month study.

Charles Duncan: Okay. And last question regarding the agency perspective and always hazard for that speculating on that. But what do you think was the key shift or a driver to the shift in the view of this — of LUM-201 being a stimulator, not a simple mimetic? And did you get a sense that they appreciated the compliance challenges with the current standard of care with the growth hormone injectables?

Rick Hawkins: Yeah. Go ahead, John.

John McKew: So, I think the turning point, Charles, just in their viewing of our mechanism was around the extensive data that we’ve shared publicly and with the FDA about restoration of pulsatile ultradian rhythm of growth hormone release. And I think that data package was pretty substantial. And as you know, we’ve shown that we can restore normal pulses and levels of growth hormone across a 24-hour period in growth hormone-deficient subjects, which amounts to about 20% of the growth hormone that you need from an exogenous bolus dose, and we’re achieving almost the same amount of AHV. And I think that level of understanding and realizing that our growth hormone delivery is significantly more efficient because we’re doing it in a pulsatile 24-hour period. I think that was really the key to differentiate us away from exogenous growth hormone and really open up this whole discussion about kind of creative ways to evaluate the growth potential of LUM-201 in Phase 3.

Charles Duncan: Good deal. Great to hear. Appreciation of pulsate mechanism always a key point of our thesis. Thanks for taking the questions.

Rick Hawkins: Thank you, Charles.

Operator: Thank you. Next question comes from the line of Leland Gershell with Oppenheimer & Co. Please go ahead.

Leland Gershell: Hi, good morning. Thanks for taking our questions. I also wanted a comment on [indiscernible] agency’s view on Phase 3. Couple of questions from us. [indiscernible] to hear about the placebo-controlled versus inferiority versus growth hormone injections, maybe early days, but I wanted to hear to what extent could those data with the lack thereof of comparability data to growth hormone impact endocrinologists’ view in 201 as they go to potentially use it in addition? And two, I want to ask, given the ancillary, but important metabolic benefits of [indiscernible], will you be looking for those potential benefits apart from [indiscernible] in the Phase 3? Thank you.

Rick Hawkins: Duke, I only heard part of the question, but I think that was really for you. And so, why don’t you start if you heard the question?

Duke Pitukcheewanont: Honestly, I cannot hear the question quite well. So, anybody can be…

Rick Hawkins: Yeah. Go ahead, John.

John McKew: So, I think, Leland was asking about the impact of not having comparative treatment data in Phase 3 for pediatric endocrinologists as they think about how to prescribe this once we’re on the market.

Duke Pitukcheewanont: Right. Okay. So, Leland, that’s a very good question, right? I think, this is very important, right? As you know, first of all, FDA fully understood that mechanism of action of LUM-201 is totally different than growth hormone and they make it clear to us that you are not growth hormone. And as a pediatric endocrinologist, you know that if you participate in the trial, it’s a patient with growth hormone deficiency, such as in moderate PGHD, the only impact with no treatment is only high. No other significant detrimental outcome that could indicate the patient without treatment for six months or one year. So, we do believe that most patients are fully aware of that, especially the patient who enrolled in this study is pre-puberal.

So again, puberal impact with no treatment six month to one month is not going to have significant impact in the final [indiscernible]. With that said, we do believe that when we conduct this trial, they will have no issue to enroll this subject. And not to mention that all the patients participating in this trial potentially will be able to enroll into long-term extension study, which is we already have that in place and FDA approved that long-term extension study for three years. So, I do believe that we incentive to really help for physicians to enroll their patient, knowing that and the long term will be benefit to their patient, especially when the drug get approved.

Leland Gershell: Just the metabolic benefit, LUM-201, apart from growth is still — may have other beneficial effects on the body. Wondering if you’re going to assess those in Phase 3 study?

Rick Hawkins: John, do you want to answer that question?

John McKew: So, I think we won’t be examining that question specifically in this Phase 3 study. We do have an investigator-initiated study going on in NAFLD where some of that data is being collected in the context of examining the impact on liver fat. So, it’s being run at MGH. But for our Phase 3 trial, we’re going to focus on the approval endpoints and the path forward in PGHD to get an approval.

Leland Gershell: Okay. Thank you.

Operator: Thank you.

Rick Hawkins: Leland, I think you were also referring to — okay, go ahead.

Operator: Thank you. The next question comes from the line of Ed White with H.C. Wainwright. Please go ahead.

Ed White: Good morning. Thanks for the update this morning. So, just a couple of questions for me. Can you comment on your manufacturing readiness for the Phase 3 trial and regulatory filings?

Rick Hawkins: John, go ahead. Manufacturing readiness?

John McKew: Yeah. So, thanks for the question, Ed. So, yeah, we — as you know, we recently filed a patent on a new drug product form for Phase 3, which will give us very tight dose variance across the large weight range for children with pediatric growth hormone deficiency and also provide easier routes of administration. So, we have a mini tablet in a capsule. So, larger kids can take the capsule with the mini tablet, smaller kids can open the capsule and take the mini tablets by themselves or in soft food. So, that design is in place. The bridging studies are complete, and we’re moving forward to get our Phase 3 material ready to go. So, there are no hiccups on the road there. We’re well prepared to provide that Phase 3/commercial material to get us through Phase 3.

Ed White: Okay. Thanks, John. And just a question on the study. As you mentioned, it’s going to have some overlap with the Phase 2. Can you just let us know what you’re thinking of as far as a geographical breakdown for the U.S. versus outside the U.S. for sites and the number of patients enrolled?

Rick Hawkins: Duke, why don’t you answer that question?

Duke Pitukcheewanont: Yeah. So, [indiscernible] we plan right now is that we plan to enroll about 150 subjects. So, 2:1 randomization will be 100 subject in LUM-201 and fit the subject in placebo. We plan to include more countries outside the U.S. We’re in the process of send out a site survey to multiple region around the world, we’re waiting for those to receive those sites survey back before make decision, which country we go to. So around the site that we plan is about 90s-ish. So again, so potentially about 14 countries. However, the final number and numbers of sites in the country will be finalized when we receive the survey back.

Rick Hawkins: And Leland, if you recall — go ahead.

Ed White: I’m sorry, Rick. Sorry to interrupting you, Rick…

Rick Hawkins: Operator?

Ed White: My last question — can I ask another question?

Rick Hawkins: Sure, absolutely.

Ed White: So, we’ve talked about this before, but out of the 60% to 62% of the patient population that’s eligible, I just wanted to get your thoughts on why children who are eligible, wouldn’t want to be on the oral solution versus the injectable, especially since, as you mentioned, the cost will be lower, but the ease of use is apparent? And so, I’m just taking the other side of that and why wouldn’t patients and children want to take your product?

Rick Hawkins: Well, we did some preliminary research, Leland — no, this is Ed, excuse me, Ed. And it’s pretty clear. When we ask both the families, but also the ped endos, if they had a choice between a weekly injection or a once-a-day oral, they overwhelmingly said that they would prefer to take a daily oral. That’s sort of a given. And, of course, we have a way to identify the patients who are — drug will most likely be affected in, and that is our predictive enrichment — or PEM strategy, and that further enhances our ability to not only be successful in this trial, but also to easily identify those patients that will be effective.

Duke Pitukcheewanont: Yeah. I would like to add on top of what Rick just said, as a pediatric endocrinologist, majority of patients with PGHD fall into PEM-positive category. As you know, over 40 years, we don’t have options, but just give injection to those children, right? Just until about four, five years and we get long-acting approved, but does not get rid of injection, which is some of the children do not want it, especially not only treatment for a month or so, not a year or so, but much longer period of time. So, physician, in general, I do believe that the perception was if this drug get approved, they will offer this LUM-201 to mature those patients by using PEM-positive cutout. With the PEM-positive, they potentially can be on the treatment. So, I do believe that this is extremely important, right, to have this option for the treatment for patients moving forward. We never really have this option until LUM-201 at this point.

Ed White: Okay. Thanks for taking my questions.

Operator: Thank you. Next question comes from the line of Catherine Novack with Jones Research. Please go ahead.

Catherine Novack: Hi, guys. Good morning. I just wanted to drill down on the cash position. You need to bring an additional funding before you start the Phase 3. Do you see any inflection points between now and the start that might be — that you might be able to use to bring in new investors? And then just throwing out the possibility of pursuing strategic partnership, for example, what do you think they’d want to see before stepping in? Are there more analysis that you think partners or investors would be interested in? Or at this point, are most of the relevant data in hand?

Rick Hawkins: Yeah. Catherine, that’s a good question. I don’t think there’s any question that investors have enough information at this stage to make a decision. I think we’re — as Lori said, we’re really confident since the FDA gave us this trial design with a placebo comparator arm that we are fully confident, we’re going to be able to raise the capital needed to get this drug across the finish line. And Lori, I don’t know if you want to add any more to that or anyone else on the team.

Lori Lawley: Yeah. I think, Catherine, I think when we have talked with investors, I think a lot of investors have just been waiting to determine what the Phase 3 trial design would look like. And now that we have gotten feedback from the FDA, they have proposed a placebo-controlled trial as an option as we finalize that trial design and move forward with FDA approval of that trial design, we do believe that, that will instill confidence in the investors and allow us to completed a financing in this near term. As far as looking for regional partners, we’ve talked previously about looking for ex-U.S. options for regional partners and retaining U.S. rights, of course. And so that is something that we will continue to pursue. And I think what they also were waiting on and the partners that we’ve talked with have also been waiting on what the Phase 3 trial design will look like.

So, now that we have that information in hand and we have more of those details, I think that is why we are confident we’ll be able to move forward and complete the financing in the near term.

Catherine Novack: Got it. And then just, I guess, a clarification on the first co-primary endpoint. If you can help me understand the statistical analysis? Since placebo is not followed for 12 months, what is the hypothesis has been assumption for the first co-primary endpoint, if you could clarify it?

Rick Hawkins: Yeah. John? Yeah, John, go ahead if you want to answer that question.

John McKew: Sure. So, as we mentioned, we just have to show clinically meaningful growth. And so, we talked a little bit about one approach to show that, which is the agreement we already have with the FDA on 6.7 centimeters per year, representing minimal clinically meaningful growth. So, we’re using that to transition essentially from our Phase 2 study into our long-term safety extension. And that is an agreement we already have with the FDA. So that is the first option that we’ll pursue.

Catherine Novack: Okay. And then just one more. Thinking about this down the road. Right now, you’re focusing on treatment-naive patients, but it seems like — does this make sense to use after an initial year or two with growth hormone for people who aren’t maybe interested in having daily injections indefinitely?

Rick Hawkins: Duke, let’s — go ahead, if you will.

Duke Pitukcheewanont: Yeah. So, I think that — that’s a very good question. I do believe that most patients will look into that potentially because with the patient LUM-201. At this point, we don’t have data to show yet. So, what we think that moving forward, when we get this Phase 3 trial done, we put that in registry. So, majority of those patients going to get into the long-term extension, especially registry is someone who is not in Phase 2, they can continue to have the Phase 4 study. When the drug get approved, we’ll be able to determine some of those, especially when the patient want to discontinue daily and going to LUM-201, we’d be able to evaluate those efficacy in those trials.

Catherine Novack: Okay. Got it. That’s helpful. Thanks.

Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.