Mineralys Therapeutics, Inc. (NASDAQ:MLYS) Q1 2024 Earnings Call Transcript

Mineralys Therapeutics, Inc. (NASDAQ:MLYS) Q1 2024 Earnings Call Transcript May 11, 2024

Mineralys Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, ladies and gentlemen, and welcome to the Mineralys First Quarter 2024 Earnings Conference Call. At this time all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday, May 9, 2024. I would now like to turn the conference over to Garth Russell of LifeSci Advisors. Please go ahead.

Garth Russell: Thank you, operator. Good morning, everyone, and welcome to our first quarter 2024 conference call. Earlier this morning, we issued a press release providing our first quarter 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 certain 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, May 9. 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, Mineralys. Jon?

Jon Congleton: Thank you, Garth. Good morning, everyone. Welcome to our first quarter 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. Considering the relatively short period of time between this call and our fourth quarter call, we're going to keep our prepared remarks today fairly brief. I'll begin with an overview of the business and recent milestones followed by Adam, who will review our first quarter financial results before we open up the call for your questions. Let me start now by stating that we continue to make great progress with our clinical trials and reaffirm our previously stated guidance on the timing of our top line data readouts, which I will review in a moment.

Before getting into each trial in detail, let me take a moment to touch on our overall strategy and basis for our pipeline, which is focused on targeting dysregulated aldosterone. Aldosterone is known to be a significant driver of cardiorenal metabolic diseases. And thus, we're developing an aldosterone targeted treatment approach with lorundrostat. We believe lorundrostat has the potential to benefit millions of patients who are impacted by hypertension, kidney disease and heart disease. For example, dysregulated aldosterone levels are a key factor in driving hypertension in approximately 25% of all hypertension patients. This is a significant population as there are an estimated 115 million patients in the United States who have hypertension.

And of the 60 million treated patients, more than half fail to achieve their blood pressure goal. The outcome can be severe for these patients. As according to the World Health Organization, there are 7.5 million deaths attributable to hypertension per year globally. Given the impact of uncontrolled hypertension on cardiorenal outcomes, we made hypertension our lead indication for the development of lorundrostat. In addition to hypertension, we're currently investigating the benefits of lorundrostat in subjects with hypertension in CKD. We entered 2024 with clear goals for our registration program in hypertension, which is comprised of two pivotal clinical trials titled Advance-HTN and Launch-HTN, an open-label extension trial called Transform-HTN to capture long-term safety and efficacy data and the proof-of-concept trial Explore-CKD evaluating lorundrostat in hypertensive CKD subjects.

Advance-HTN is the first of the two pivotal trials we have initiated, which started enrolling patients one year ago. Enrollment in the trial remains ongoing, and we anticipate top line data to be available in the fourth quarter of this year. This is a state-of-the-art, extremely rigorous hypertension trial, which is designed and executed in collaboration with the experienced cardiovascular research team at the Cleveland Clinic. The trial is designed to demonstrate the value of lorundrostat when added to standardized, optimized AHA guideline background treatment in patients with uncontrolled or resistant hypertension as confirmed by 24-hour ambulatory BP measurement. We believe this is the only trial of an aldosterone directed therapy that is utilizing this rigorous standardized background treatment approach.

As such, this trial has the potential to generate high-quality evidence that will be important for potential inclusion in the hypertension guidelines for treating physicians and for creating favorable access via payers. As you may be aware, the targeted treatment of hypertension is a major point of our strategy. Data presented last year from Target-HTN trial laid the foundation for identifying patients who best respond to lorundrostat, such as those patients with an elevated BMI. The planned analysis of the Advance-HTN trial includes a well-powered confirmatory test of the predictive value of obesity on the efficacy of lorundrostat. We believe the inability of an optimized two or three drug standard anti-hypertensive regimen to reduce BP to goal in the setting of obesity will be a straightforward approach to identifying candidates for treatment with lorundrostat.

In addition, we plan to continue to explore other positive and negative predictive tools using an unbiased artificial intelligence model, to expand the repertoire of useful tools for targeting lorundrostat to individuals most likely to derive long-term clinical benefit. Launch-HTN is our second pivotal trial, which we initiated in the fourth quarter of 2023. We continue to anticipate top line data to be available in the second half of 2025. This Phase 3 trial, which will enroll up to approximately 1,000 adult subjects is designed with the objective of evaluating lorundrostat set in a real-world setting when added to subjects previously prescribed background regimen of two to five antihypertensives. Subjects who fail to achieve blood pressure control on their prescribed background treatment during the run-in period will be randomized 1 to 2:1 to either placebo, once daily 50 milligrams of lorundrostat or once daily 50 milligrams of lorundrostat with the option to titrate to 100 milligrams once daily as needed at week 6.

The primary endpoint for this trial will be change in systolic blood pressure as measured by automated office blood pressure. We believe this endpoint reflects real-world measurements that will be relevant to the primary care provider this trial targets. In addition, subjects from these two trials will be offered the opportunity to roll over into the ongoing open-label extension trial called Transform-HTN. In addition to the hypertension pivotal program, we're conducting the Explore-CKD Phase 2 clinical trial for lorundrostat in patients with hypertension and Stage 2 to 3b chronic kidney disease. We continue to anticipate top line data to be available in Q4 2024 to Q1 2025. Explore-CKD is a within subject comparison trial designed to demonstrate the benefit of lorundrostat in reducing blood pressure and provide supportive evidence for potential benefit on chronic kidney disease on the background of a stable SGLT2 inhibitor treatment.

This proof-of-concept trial will enroll approximately 60 subjects with hypertension in Stage 2 to 3b CKD. We are pleased with the steady progress the team has made in the strengthening of our clinical program for this promising new approach to treating hypertension and the associated complications like chronic kidney disease and heart disease. We look forward to keeping you apprised of the status of the lorundrostat development program. Let me now turn the call over to Adam, who will provide a financial review for the first quarter of 2024. Adam?

Adam Levy: Thank you, Jon. Good morning, everyone. Today, I will discuss select portions of our first quarter 2024 financial results. Additional details can be found in our Form 10-Q, which was filed with the SEC earlier today. We ended the quarter with cash, cash equivalents and investments of $338.6 million compared to $239 million as of December 31, 2023. In February 2024, we completed a private placement financing for net proceeds of approximately $116 million. We believe that our cash, cash equivalents and investments will be sufficient to allow us to fund our planned clinical trials as well as support corporate operations into 2026. R&D expenses for the quarter ended March 31, 2024, were $30.8 million compared to $12.3 million for the same quarter of 2023.

The increase in R&D expenses was primarily due to increases of $16.8 million in preclinical and clinical costs, $3.7 million in clinical supply, manufacturing and regulatory costs, $1.7 million in higher compensation expenses resulting from additions to headcount and stock-based compensation and $0.3 million in other research and development expenses, partially offset by a decrease of $4 million in license fees. G&A expenses were $4.6 million for the quarter ended March 31, 2024, compared to $2.6 million for the same quarter of the prior year. The increase in G&A expenses was primarily due to $1.3 million in higher compensation expenses resulting from additions to headcount and stock-based compensation, $0.5 million in higher professional fees associated with operating as a public company and $0.2 million in higher insurance and other administrative expenses.

Total other income was $3.9 million for the quarter ended March 31, 2024 compared to $2.3 million for the same quarter of 2023. The increase was primarily attributable to increased interest earned on our investments in money market funds and U.S. treasuries. Net loss was $31.5 million for the quarter ended March 31, 2024, compared to $12.6 million for the same quarter of 2023. The increase was primarily attributable to the factors I described earlier. With that, I'll ask the operator to open the call for questions. Operator?

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