Mineralys Therapeutics, Inc. (NASDAQ:MLYS) Q4 2024 Earnings Call Transcript

Mineralys Therapeutics, Inc. (NASDAQ:MLYS) Q4 2024 Earnings Call Transcript February 12, 2025

Mineralys Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.98, expectations were $-1.

Operator: Good morning, ladies and gentlemen, and welcome to the Mineralys Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. [Operator Instructions] Also note that, this call is being recorded on Wednesday, February, 12, 2025. Now I would like to turn the conference over to Dan Ferry of LifeSci Advisors. Please go ahead, sir.

Dan Ferry: Thank you, operator. I would like to welcome everyone joining us today for our fourth quarter and full year 2024 conference call. Earlier this morning, we issued a press release providing our fourth quarter and full year 2024 financial results and business updates. A replay of today’s call will be available on the Investors section of our website approximately one hour after its completion. After our prepared remarks, we will open up the call for Q&A. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. Actual results could differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company’s business.

These forward-looking statements are qualified by the cautionary statements contained in today’s press release and our SEC filings, including our annual report on Form 10-K and subsequent filings. Please note that, these forward looking statements reflect our opinions only as of today, February 12, 2025. Except as required by law, we specifically disclaim any obligation to update or revise these forward looking statements in light of new information or future events. I would now like to turn the call over to Jon Congleton, Chief Executive Officer of Mineralys Therapeutics.

Jon Congleton: Thank you, Dan. Good morning, everyone, and welcome to our fourth quarter and full year 2024 financial results and corporate update conference call. I’m joined today by Adam Levy, our Chief Financial Officer; and Dr. David Rodman, our Chief Medical Officer. I’ll begin with an overview of the business, then Dave will discuss our clinical programs and recent milestones. Then Adam will review our fourth quarter financial results before we open up the call for your questions. Looking back over the past year, it was a tremendous period for the company. I’m very proud of the work our team has done in executing and supporting our clinical strategy of targeting dysregulated or elevated aldosterone in patients with uncontrolled and resistant hypertension.

The data for Advance-HTN will be available this coming March and Launch-HTN will be available mid first half of this year. We also have our exploratory programs evaluating lorundrostat in hypertension and chronic kidney disease as well as hypertension and obstructive sleep apnea. Our purpose at Mineralys is to create more healthy days for people dealing with cardiorenal metabolic disorders and the trial readouts we have this year will evaluate the potential of lorundrostat to deliver on that promise. The first of the two ongoing pivotal trials is the Advance-HTN trial that is evaluating the efficacy and safety of lorundrostat for the treatment of uncontrolled or resistant hypertension, when used as an add-on therapy to a standardized background treatment of two or three anti-hypertensive medications.

Q&A Session

The trial enrolled 285 subjects and the rigor of the standardized American Heart Association recommended background regimen was designed to ensure only subjects, who were enrolled had confirmed uncontrolled or confirmed resistant hypertension. As noted, we anticipate announcing the top-line data for this trial next month. The second pivotal trial was Launch-HTN with 1083 subjects enrolled and is designed to be confirmatory to our Target-HTN proof-of-concept trial. The objective is to evaluate the benefit risk of lorundrostat in a real world setting, when added to a subject’s previously prescribed regimen of two to five antihypertensive medications, one of which must be a diuretic. As previously guided, we anticipate top-line data in the mid first half of this year.

Upon completion of the treatment phase in the Advance-HTN and Launch-HTN trials, participating subjects were offered the opportunity to enter the Transform-HTN open label extension trial. As we await the announcement of these pivotal top-line data, I invite everyone to revisit the KOL event we held last quarter. An archived webcast is available on the Investor Relations section of our website. This discussion focused on the unmet medical need and uncontrolled and resistant hypertension, the long-term impact of uncontrolled blood pressure and insights into the treatment of hypertension, from these leaders in cardiovascular medicine. In addition, during the event, the KOLs gave their perspectives on our highly-selective aldosterone synthase inhibitor, lorundrostat, as a new therapy and its potential to change the current treatment paradigm.

To provide more color on our clinical pipeline and recent milestones, I will now turn the call over to Dave. Dave?

David Rodman: Thank you, Jon, and good morning, everyone. Picking up from where Jon just left off, discussing the KOL event we just had last quarter, I agree that, there were a lot of great topics discussed. The clinicians did an excellent job of highlighting the need for innovation, and there was agreement that targeting aldosterone would address an important gap in the current anti-hypertensive armamentarium. They also agreed that a confirmation of the favorable safety and blood pressure reduction of 8 to 10 millimeters of mercury we saw in the Target-HTN trial would be transformative for patients. Over the next few months, we look forward to sharing the data with you from lorundrostat from both the Advance-HTN trial and Launch-HTN trials.

We are excited about the potential of lorundrostat to demonstrate a meaningful benefit in patients with uncontrolled or resistant hypertension. I would like to echo Jon’s appreciation for the work of the Mineralys team, as well as the investigators and patients in both trials to advance the hypertension development plan. We’ve recently had some exciting news around the rest of our clinical program, including the Explore-CKD and Explore-OSA Phase II proof-of-concept trials. Both of these trials are designed to provide data that augments the anti-hypertensive profile of lorundrostat, while also providing insight into the potential benefit in reducing overall cardiovascular risk. Last week, we announced that enrollment was completed in the Explore-CKD Phase II trial.

This trial is evaluating the efficacy and safety of lorundrostat for the treatment of hypertension in subjects with an eGFR as low as 30 and albuminuria, despite having received stable treatment with an ACE inhibitor or an ARB as well as an SGLT2 inhibitor. Hypertension and associated hypertensive nephropathy is a leading cause of kidney damage alone, and in combination with other obesity associated comorbidities. This is another area with great unmet medical need for aldosterone synthase inhibition with lorundrostat has the potential for transformative benefit to patients. We look forward to announcing top-line data from the trial in the second quarter of 2025. In January, we announced our plans for the initiation of the Explore-OSA Phase II trial to evaluate the effect of lorundrostat in the treatment of moderate-to-severe obstructive sleep apnea.

During the night, blood pressure increases significantly during each hypoxic episode. This leads to resistant nocturnal hypertension that is under diagnosed and lacks a specific therapy. We are using a novel approach in this trial to measure blood pressure continuously with each heartbeat during sleep. In addition, we anticipate that, dosing lorundrostat at bedtime will maximize aldosterone suppression during the period that it is being driven by Hypoxia, while still providing daytime blood pressure control and the favorable safety profile achieved with once a daily dosing of lorundrostat. It is estimated that 60% to 85% of patients with OSA have resistant hypertension. Establishing the benefit risk of lorundrostat in treating these patients could lead to the development of lorundrostat as a unique small molecule treatment for the adverse respiratory and cardiovascular manifestations of obstructive sleep apnea.

We are very excited about our programs that are designed to evaluate the value of the lorundrostat and the associated milestones expected in the first half of this year. I will now turn the call over to Adam to review our financial results for the quarter and the full year.

Adam Levy: Thank you, Dave. Good morning, everyone. Today, I will discuss select portions of our fourth quarter 2024 financial results. Additional details can be found in our Form 10-K, which will be filed with the SEC today, February 12. We ended the quarter with cash, cash equivalents and investments of $198.2 million as of December 31, 2024, compared to $239 million as of December 31, 2023. We believe that, our current cash, cash equivalents and investments will be sufficient to fund our planned clinical studies as well as support corporate operations through the first quarter of 2026. R&D expenses for the year ended December 31, 2024, were $168.6 million compared to $70.4 million for the year ended December 31, 2023. R&D expenses for the quarter ended December 31, 2024 were $44.6 million compared to $23.7 million for the quarter ended December 31, 2023.

The annual increase in R&D expenses was primarily due to increases of $88.7 million in pre-clinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in the second quarter of 2023, $10.6 million in clinical supply, manufacturing and regulatory costs, $7 million in higher compensation expense, resulting from additions to headcount, increases in salaries and accrued bonuses and increased stock-based compensation, and $0.9 million in other research and development expenses, partially offset by a decrease of $9 million in licensing fees associated with development milestone payments in 2023 that did not recur in 2024. G&A expenses were $23.8 million for the year ended December 31, 2024, compared to $14.3 million for the year ended December 31, 2023.

G&A expenses were $7.2 million for the quarter ended December 31, 2024, compared to $4 million for the quarter ended December 31, 2023. The annual increase in G&A expenses was primarily due to $6.6 million in higher compensation expense resulting from additions to headcount, increases in salaries and accrued bonuses and increased stock based compensation, $2.6 million in higher professional fees and $0.3 million in higher other administrative expenses. Total other income net was $14.6 million for the year ended December 31, 2024, compared to $12.8 million for the year ended December 31, 2023. Total other income net was $2.8 million for the quarter ended December 31, 2024, compared to $3.3 million for the quarter ended December 31, 2023. The annual increase was primarily attributable to increased interest earned on the company’s investments in money market funds and U.S. treasuries.

Net loss was $177.8 million for the year ended December 31, 2024, compared to $71.9 million for the year ended December 31, 2023. Net loss was $48.9 million for the quarter ended December 31, 2024, compared to $24.4 million for the quarter ended December 31, 2023. The increase was primarily attributable to the factors I described earlier. With that, I will ask the operator to open the call for questions. Operator?

Operator: Thank you, sir. [Operator Instructions] First, we will hear from Michael DiFiore at Evercore ISI. Please go ahead, Michael.

Michael DiFiore: Hi, guys. Thanks so much for taking my questions and congrats on all the progress. A couple from me. I guess a hypertension question. In the Phase II target trial, when the QC analysis was performed on the 50 milligram QD group, you took out two additional patients that had improbable readings, leaving 12 evaluable patients that were truly hypertensions. This seems like a very small end to extrapolate to the larger pivotal study. So I guess my first question is, what gives you confidence that the SBP reduction seen in this 12 patients and these 12 patients can be extrapolated to Phase III? And then I have two follow ups.

Jon Congleton: Yes, Mike, thanks for the call. I appreciate it. From our standpoint, as we looked at both the in office measurement as well as the 24 hour ambulatory. And as you noted, when we looked at the 24 hour ambulatory, we had some subjects that actually had baseline blood pressure below goal. And so, that confounded the findings a bit. But as we looked at the totality of the evidence for the 50 QD, the 100 QD, even the 25 BID, looked at the individual exposure response. We got very comfortable that the fifty milligrams QD provided, what we believe is the ideal benefit risk as far as reduction in blood pressure as well as benefit from a safety tolerability standpoint. Obviously, as we move the 50 milligram into the pivotal program, it showed our confidence in that dose to provide 24 hour blood pressure control.

Michael DiFiore: Got it. Very helpful. And then, just two follows from me. One on the OSA trial, one on the CKD trial. For the OSA trial, will improvement in the apnea hypopnea index after four weeks be primarily due to fluid volume reduction or would non-genomic anti fibrotic effects equally contribute over that time period? And my final question is, for the CKD trial, for the SGLT2 naive patients who start their SGLT2 for the first time in the trial, to what extent may that confound SBP and or eGFR changes? Thank you.

David Rodman: Okay. Why don’t I take that one. This is Dave Rodman. Thanks for the call and for the questions. And so, I’m going to take your first of those two questions, which was an OSA question and oh, wait a minute, did you want me to do yes, so the OSA question. And your question there was about the apnea hypopnea index and what the mechanism is. So as you know, first of all, that when you — in two small trials with both spironolactone and eplerenone, at the hypopnea index was reduced on a pretty short-term study like two to four weeks by 50%, which is pretty dramatic. We anticipate, being at least as good as that with our mechanism, and it may be mediated by both the decrease in MR activation and non-genomic effects.

But when we look at the mechanism with MR, its volume shifts. In other words, there’s something called rostralcaudal redistribution of fluid. These patients will have edema in their legs. When they lay down, that fluid will redistribute horizontally and caudally towards the head and their neck, which is already obstructed usually with fat tissue, will then become even more obstructed. So you’re right, that mechanism’s volume and the combination of a diuretic plus lorundrostat should dramatically decrease that effect. Now you asked about non-genomic effects. The answer there is not is, yes, but not fibrosis. It’s inflammation most likely. So if there is a contribution, it’ll be related to the genomic effects on inflammation, but also the effects on oxygen radical production in small vessels, which is non genomic.

Does that answer that question?

Michael DiFiore: Yes, it does. Thank you.

David Rodman: Now SGLT2 inhibitor, we know that SGLT2 inhibitors in combination with an ASI, do have some theoretical and practical advantages. I would say, one of them is those are modest anti-hypertensive drugs and it’s possible that there will be some additively between the two mechanisms. In addition, there is some loss of potassium that you have with the SGLT2 inhibitor. The three weeks run-in period in this trial is sufficiently long for most of those effects to already be manifest by the time that we start the drug. In addition, it’s a crossover study, where in the first period, the placebo people will have that same effect. So it’s built in that we can assess exactly the effect that you are discussing, know what it is, and have a sensitivity analysis to address that possibility.

Operator: Next question will be from Rich Law at Goldman Sachs. Please go ahead, Rich.

Richard Law: Hi, guys. Good morning. A couple of questions for me. Given your guidance for Advanced and Launch readout timelines overlap with each other, is there more refined guidance now on your base case of when each of those will be presented first? Can we assume that, Advance will go first before Launch or is there a chance that both can go together? And then I’ll follow-up with that.

Jon Congleton: Yes. Rich, thanks for the question. As we noted in our opening remarks, we’re continuing to guide Advance-HTN for March and Launch-HTN for mid first half of this year.

Richard Law: Okay. Got it. And then, for Advanced, I know you potentially could present that twice, one for, like, a top-line webinar and one at ACC. Do you see something similar for Launch?

Jon Congleton: Yes. We’re certainly excited about the acceptance of the late breaking abstract for lorundrostat and the Advance-HTN trial at the upcoming ACC meeting. Depending upon when we get the top-line results, we’ll either do a corporate announcement in conjunction with that or if we have the results sooner than that, we would anticipate doing a corporate top-line announcement. As to Launch, I think it’s too early to opine on what the communications would look like with that trial.

Richard Law: Got it. And then one final question. So the Advance trial actively tracks and enforce adherence of the treatment. But what do you expect compliance for patients wearing the ABPM device for that whole 24 hour period? Have you seen any issues of patients, taking off the device for a long period of time that could affect results? And then are patients, required not to do certain activities, while wearing the device like exercise or stuff like that?

Jon Congleton: Yes, Rich. Thanks. We I’m glad that the team made the choice with Target-HTN to not only do the in office measurement, but the 24 hour ambulatory. It gave us as a team experience with the device, with the vendor. We’re working with the same vendor and technology and Advance-HTN. So we’ve got that past experience, as far as how to use that device, how to teach and train sites and subjects on proper technique with that. We do allow subjects, when they either exercise or bathe to have breaks from that. There are compliance or QC requirements with the 24 hour ambulatory where we have to get a certain percentage of the I think it’s roughly 70 measurements over a 24 hour period. So we’re very confident that we have sites and subjects well trained for that And the experience that our team has in working with that device, gives us high comfort in the data and the quality of the data that we’re going to get from that.

And that’s why we chose 24 hour ambulatory, which is you know is the gold standard. And in a trial as rigorous as Advance-HTN, where we are optimizing treatment, optimizing dose, optimizing compliance, easing the gold standard really gives us a high-quality data set, particularly relative to what’s been done with new innovations in this space and what’s being done with other ASIs. Dave have one comment.

David Rodman: Yes. Hi, Rich. That’s a great question. It’s key to have as much good data from the primary, as you can. You’ll never have it perfect with ABPM. But we went through the QC procedures as a root cause for losing data in the first trial and we identified several ways to improve retention of informative data from those studies. We did lots of work on statistics and we’re confident that, we’re going to have more than adequate good quality data to have the power that we imputed, when we designed the size of the trial.

Richard Law: Great. And then, just to follow-up on that, is there any — what’s the plan for like any missing data, if patients take off the device and then for like say couple hours and then what’s the plan for that?

David Rodman: Rich, that was part of the root cause analysis. We’ve got that built into the algorithms. We went over it with the FDA. They approve it.

Operator: Next question will be from Charlie Yang at Bank of America. Please go ahead, Charlie.

Unidentified Analyst: Hi. This is Alice on for Charlie. Thank you for taking our questions. Just on the upcoming pivotal readouts, what are your latest expectations around safety and tolerability? Where do you hope to differentiate MOSE versus typical MRAs? And even, if efficacy were to be slightly less than MRAs, for example, wouldn’t a cleaner drug still be a commercial winner? Thank you.

Jon Congleton: Yes. Thanks for the question. I think, it’s important to continue to distinguish the aldosterone synthase inhibitor class from the mineralocorticoid receptor antagonist. The MRAs block the effect of aldosterone at one of the biological pathways that aldosterone affects, and that’s the mineralocorticoid receptor. Aldosterone synthase inhibitors, however, go to the root cause of the problem and actually reduce the amount of plasma aldosterone. The benefit of that is not only how aldosterone can be its effects mitigated at the mineralocorticoid receptor, but also at other pathways, such as GPR30 that affects fibrosis, inflammation and oxidative stress. So as such, the adverse events that are attributable, particularly for spironolactone, on blockade of BMR such as the androgenic effects of Schadikomastia and fertility issues with women are something we don’t see with this class of drugs.

I think it’s also fairly well-accepted that the mineralocorticoid receptor antagonists seem to have a compromised trade off that, as you push those to get to efficacy, you invariably see a push in hyperkalemia. From our perspective, we think, there’s a more modest impact on potassium with an aldosterone synthase inhibitor. It’s something that was exhibited in Target-HTN. And so, we’ll continue to evaluate that in the pivotal program, but we believe, that is the key distinguishing factor relative to the MRAs. I’ll have Dave add a thought as well.

David Rodman: Yes. So obviously everyone thinks about this a lot. I want to point out something about just the trial designs. When you say how are we going to compare to say, MRA, as far as I know, no one’s ever done a trial like our Advance trial, as rigorously to deliver the data we’re going to have with Advance. In other words, we’re looking at confirmed you failed on two or three drugs at maximum doses, you took the drug and then we use 24 hour ambulatory to prove it. So there is no benchmark. Launch trial is the closest thing to a benchmark. And so, what I encourage you to do is, look at these trials as they stand alone. These will be, especially the Advance trial, but also Launch, definitive establishment of the point estimate for how good these drugs are.

Operator: Next will be Annabel Samimy at Stifel. Please go ahead.

Annabel Samimy: Hi, all. Thanks for taking my questions. Just to put things in perspective, again, can you remind us, what coverage payers could give you if you hit in specific ranges like 7 to 9, 8 to 10, over 10, as you did just in various subpopulations. So can you help us frame how payers are going to look at the different responses and where they can position you within the treatment paradigm? And then, I have a follow-up.

Jon Congleton: Yes, Annabelle. Thanks for the call. We have to date completed four separate payer research projects in the United States and feel very bullish about our ability to get access for lorundrostat and particularly in our targeted approach. We have basically put forward a base case of an 8 millimeter to 10 millimeter mercury improvement that’s well tolerated. And typically fourth line, we think that’s a space we can own. So in that resistant population, particularly as Dave highlighted with the prior answer with Advance-HTN, frankly being one of the most rigorous, if not most rigorous study ever done. That kind of data set, we believe based on the research, gives us an opportunity to really own the resistant hypertension space.

And then as we look at third line, and this is what we put in front of payers as well, when we bring forward a patient type or an endophenotype of a responder, such as those with a BMI over 30, so that more targeted approach, that is viewed favorably by payers as well with that 8 millimeter to 10 millimeter mercury improvement. Now all of this obviously Annabelle is going to be based on also the pricing and the rebate strategy within that, but just that clinical profile has resonated with the payers in that resistant population and targeted third line.

Annabel Samimy: Okay. And then I guess, can you remind us the proportion of the population that are truly the third, fourth line population. How does each of those different? I guess, how does that positioning change your opportunity within the different populations that you have?

David Rodman: Yes. I think the resistant population, so those failing on three or more with the diuretic is a little bit more easy to quantify. It’s typically seen as about 10% to 15% of the treated population, so roughly 7.5 million to 10 million subjects are in that resistant hypertension category. Those that would be third line, so failing on two or more is a little bit difficult to triangulate to with the data, but ballpark, we view that population as about 10 million as well. So collectively, between those that are failing on two or those are failing on three or more, it’s roughly $15 million to $20 million, I would say as an addressable market.

Operator: Next question will be from Seamus Fernandez at Guggenheim. Please go ahead.

Unidentified Analyst: Hi. It’s Colleen on for Seamus. Thanks for taking our question. Could you just talk a little bit about where you view the threshold for hyperkalemia rates in Advance and Launch, and what needs to be shown there to be differentiated in the clinic? And then just how would you expect the addition of diuretics, required in every patient to impact the rates versus what we saw on target?

Jon Congleton: Yes. Thanks, Colleen. We’ve done, as I said, a significant amount of payer research. We’ve also done a significant amount of physician research over the last several years. 5% or less is what we’ve always tested as rate of hyperkalemia as part of a base case. And I think that’s viewed as favorable, by the physicians that we’ve done the research with. As you may recall, we saw about a 3.6% rate in Target-HTN. To your point, there is a belief that, the use of a diuretic can be potassium wasting, so could offset the modest rise that we know, we see with aldosterone synapse inhibitors. We saw that, with lorundrostat, saw that with baxterstat and on par with what you typically see with an ACE inhibitor or an ARB that have been used safely for decades at this point.

So I think that’ll be an interesting addition to the pivotal program where all subjects in both studies are on a diuretic. And in Target-HTN where we saw that modest impact, only half of the subjects were on a diuretic, because it wasn’t required per protocol. Let me have Dave add a comment on top of that, Colleen.

David Rodman: Yes. I’m going to give you a clinician perspective, and we hear this all the time. This is about benefit risk. The FDA has told us that. It’s not p-values. It’s nothing. It’s really what’s the benefit and what’s the risk. And what that means is, the bigger the blood pressure response, the more tolerance there is for changes like potassium. And what that means for us is that, we are looking at both. When you asked about the thiazides, they lower potassium, ensuring that, people are taking their thiazides to improves benefit risk, both by increasing the response and decreasing the potassium. So think about it that way, it’s benefit risk. For the worst patients, the ones with CKD, the clinicians uniformly say, we have great potassium binders, what we don’t have are great antihypertensives. And so, they’re willing to tolerate almost any level of hyperkalemia and just treat it to get the maximum blood pressure response to lorundrostat is the feedback we get.

Operator: Next question will be from Mohit Bansal at Wells Fargo. Please go ahead.

Mohit Bansal: Great. Thank you very much for taking my questions. I have a couple of questions. I’ll start with first. Do you think we’ll see meaningful differences in the placebo-adjusted results in terms of ABPM versus AOBP? And then, like, how do you think this whatever office reading is from Advance-HTN could read to Launch-HTN where office reading is the primary endpoint? And I have one follow-up.

Jon Congleton: Mohit, I got your first question. Can you repeat your second one? No, I’m sorry, there was a little bit of a break up in the line.

Mohit Bansal: Sorry about that. So what I’m saying is that, from Advance-HTN, whatever you see in office blood pressure reduction, how much you could read that for, or what is the read across for Launch-HTN, because Launch-HTN has AOBP as the primary endpoint?

Jon Congleton: Yes. Okay. Thank you for clarifying that. What we saw in Target-HTN was about a 4 millimeter mercury change in the in office measurement and in the 24 hour ambulatory about a 1 to 2 millimeter mercury placebo change. So fairly tight concordance. I think it’s a tribute to the team, the work they did to align to the recommended best practices in measuring blood pressure. We’ve applied those same techniques for in office measurement for both Advance as well as Launch. I’d hate to opine on, are we going to see a replication of that? What’s the read through from Advance to Launch? There are different studies, but it’s the same technology, the same technique, the training that we’ve done with the sites. So it’s difficult to project what it could be. I just think, the team has made the right choices as far as technology and technique that was validated in Target-HTN and that’s what we’re applying in Advance and Launch.

Mohit Bansal: Fair enough. That’s helpful. And then the second part is that, how are you thinking about the nighttime coverage with lorundrostat? The reason I’m asking is, because half life is shorter here. Do you think timing of the dose could impact the ABPM measure more than the AOBP there?

Jon Congleton: Yes. Let me I’ll have Dave give a comment to this. I think it’s important to reiterate that we think the 10 to 12 hour half life of lorundrostat is actually ideal for, as Dave articulated earlier, the benefit risk of an ASI in the treatment of hypertension. I’ll reiterate that in Target-HTN, when we saw that eight to ten millimeter mercury drop in an in office measurement, that blood pressure measurement was in the morning at trough, before that day’s dose. So we have strong confidence in the 24 hour coverage of lorundrostat with that ten to twelve hour half life. We also think it provides the ideal mix of efficacy and safety, particularly the on target component, which is potassium and sodium. Dave, do you want to add some thoughts on top of that?

David Rodman: I can just add a little bit. As Jon said, we know from Novartis and I was there that a four hour half life isn’t long enough. We also believe that, leaving a window that recapitulates normal circadian rhythm when aldo does go up pre arousal is the best way to try to treat it, restore the normal rhythm. We have 100% by our healthy volunteer study suppression of aldo with our drug. We can adjust how long that 100% lasts. And so, just to reiterate that last point for Jon, we tune that, so that it’s a 100% until you go to sleep essentially and then it slowly comes up to only 30% of pretreatment baseline, which is 70% suppression and then goes back down to zero again after the morning dose. We just think that’s science, based on what we know about circadian rhythm and it’s the most appropriate way to treat this disorder.

Operator: Next question will be from Rami Khadkar at LifeSci Capital. Please go ahead.

Rami Khadkar: Good morning, guys. Thanks for taking my questions. Maybe going off of previous one, do you expect a delta in the treatment effect observed with lorundrostat in the pivotal studies just given the slight difference between trials and the fact that patients in Advance are potentially enriched with aldosterone driven hypertension? And then I have a follow-up.

Jon Congleton: Yes. Rami, thanks for the question. I think it’s hard to predict the response in Advance, the response in Launch in a differential. There are different studies, as you heard Dave articulate. I think the interesting aspect of Advance is that, we have a truly confirmed and controlled or resistant hypertension population. On the one hand, that may be a more rigorous challenging population to treat. On the other, it may be somewhat enriched for an aldosterone dependent form of hypertension. Launch is largely confirmatory to what we saw or what we designed in Target-HTN with the exception of all subjects in Launch are going to be on the diuretic. And we know there was a favorable synergy as far as more enhanced response there.

So it’s difficult to predict across these two trials. We’re just excited about the design of these two. I think they address key aspects of the market. Advanced being as rigorous as it is, is really built for the specialists that are dealing with the difficult-to-treat patients. It’s also the kind of study that gets us the opportunity to be included in hypertension guidelines. And then Launch is the real world setting of what the primary care physicians are going to be doing with lorundrostat should we be able to bring it into the marketplace.

Rami Khadkar: Got it. Makes sense. And then a recent paper detailed that BI’s aldosterone synthase inhibitor has a half life of four to six hours, which is lower than what we’ve seen with lorundrostat and baxdrostat. I guess, does this affect how you view their CKD data at all and lorundrostat’s, I guess, overall positioning in that population?

Jon Congleton: That’s a very good question and it is reminiscent of what happened with LCI699, osilodrostat, which pretty much the same half life. And if you read the papers that were written, it was recommended that a longer half life would be required to develop a maximally efficacious dose. We agree with that. We are targeting in CKD the subset of patients, who mainly have not enough control with their blood pressure, which is damaging their glomeruli, scarring them every day and driving the deterioration in eGFR. If you don’t treat that adequately, get it down to goal, you will continue to have progression of the CKD. So at least in with our drug, with our tunable suppression in that disease, and you’ll remember we’re testing 25 milligrams in that group, although it can be escalated in the real world, we have an optimum way to do that.

I don’t want to comment on somebody else’s drug in their program. They probably know more than I do, but we like our approach. We also like the fact that, we can add it on to an SGLT 2 of choice, which we think may also be an advantage when you’re mainly going after the hypertension and not using the combination for the metabolic syndrome component mainly.

Operator: Next question will be from Matthew Caufield at H. C. Wainwright. Please go ahead.

Matthew Caufield: Hi. Thank you. Good morning, guys, and thanks for the updates this morning. So kind of changing gears, considering obstructive sleep apnea. Can you speak a bit more to the mechanism expectations for ASI benefit for those patients? And then, any read through from the current pivotal developments? Thanks again.

Jon Congleton: Let me address that in two ways. There are two potential benefits. At this stage, near-term, we’re focused on the fact that, these patients have 60% to 85% resistant hypertension. And on top of that, it’s not being diagnosed or treated, because it’s at night. And so our goal there is to look at the aldosterone dependent mechanism, which is right in the sweet spot for our hypertension program. What happens in these people, and it’s often men and only post-menopausal women, is what’s driving the aldo is the hypoxia. Remember, we say 15 apneas per hour. Think about that. Every four minutes, you’re unable to move oxygen from your airway down into your lungs. Your body responds to that with a stress response that drives aldosterone.

And so, that’s the mechanism for why they have such exceptionally high incidence of dying in their sleep, arrhythmias like, ventricular and artial arrhythmias, et cetera. So that mechanism is directly targeted by our drug. It’s part of the theory for dosing the drug for that indication at night, even though you’re trying to go after the hypertension primarily, it’s a better way to do it and still get that window in our opinion. Now the OSA piece, the airway obstruction itself, well, we know you can treat that with CPAP. It’s not a treatment people love. And if you don’t use it six hours a day, you get essentially almost no benefit on either blood pressure or survival. And so, again, by adding our drug in, and we’re going to study it during a two day period off the CPAP, you will get potentially additive benefits from the fact of the mechanisms I told you referred to before, which is primarily fluid shift and secondarily probably some inflammation.

Operator: At this time, we have no other questions registered. So I would like to turn the call back over to Jon for closing remarks.

Jon Congleton: Thank you, operator, and thank you to everyone for joining us today. We’re very excited about the progress we made in 2024 and thus far in 2025. In advancing our clinical programs, and we remain enthusiastic about the upcoming data milestones planned for the first half of 2025. We look forward to keeping you updated. With that, we will close the call.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.