Earnings Call Transcript - BLTE Q4 2022

Operator, Operator

Good afternoon and welcome to the Belite Bio 2022 Full Year Financial Results Conference Call. At this time, all attendees are in a listen-only mode. A question-and-answer session will follow the formal presentations. As a reminder, this call is being recorded and a replay will be made available on the Belite website following the event. I'd now like to turn the call over to Tom Lin, Chairman and Chief Executive Officer of Belite Bio. Please go ahead, Tom.

Tom Lin, CEO

Thank you, Tara. Thank you, everyone, for participating in this earnings call. I'd like to take this opportunity to give you an update on our current overview and milestones. So, we're currently 18 months into a 24-month open label Phase 2 study, and we will be presenting that data at ARVO by the end of the month. At the same time, we have recruited 41 subjects out of the 90 subjects into our global Phase 3 Stargardt study and are expecting interim readouts by mid-2024 next year. We recently met with the FDA to request that we increased the sample size from 60 to 90. The reason being that after analyzing very promising top line treatment data from our Phase 2, we ran some simulations and worked out that if we increase the sample size to 90, we would have more data going to the interim. This will give us a very good chance of meeting the growth rate we need for efficacy. We've also initiated our global Phase 3 trial in geographic atrophy secondary to dry AMD, which is expected to start enrolling subjects by mid-year this year. With the interim analysis coming up for the Phase 2 18-month data, we feel that this will likely give a very good reference for what our Phase 3 data study will look like. So, the market opportunity today is that there is still no treatment for Stargardt disease, and there are about 30,000 patients in the U.S. with Stargardt, and currently, there’s no treatment. In terms of AMD, it remains a very large population globally, which is still increasing given the aging population worldwide. As shown on the graph, with more advanced age, AMD progresses. The market for wet AMD is about $10 billion a year, but we expect geographic atrophy to surpass the wet AMD market. Despite the approvals of many therapies, we still believe there is an unmet need for non-invasive treatment options such as oral therapies, which we think would surpass the market for AMD. Next slide, please. So, I hand it over to Nathan to go through the scientific slides.

Nathan Mata, CSO

Thank you, Tom. Hello, Nathan Mata here, CSO for the company. I want to talk about the mechanism of action of tinlarebant. Before I begin, I want to preface by saying in both Stargardt disease and geographic atrophy, they're both associated with the presence of toxic byproducts that cause retinal cell death and tissue damage. These toxic byproducts are derived from circulating vitamin A. Our approach is to reduce the entry of retinol into the eye as a means of reducing the bisretinoids that contribute to retinal disease. Our orally available once-a-day drug competes with vitamin A retinol for binding to retinol-binding protein 4, limiting the amount of retinol entering the eye. Consequently, the bisretinoids formed from retinol also decrease due to reduced amounts of retinoids traversing through the visual cycle. In Stargardt disease, the formation of A2E and related bisretinoids is the primary cause of vision loss, whereas in geographic atrophy, these molecules accumulate due to retinal pigment epithelium dysfunction. Next, I want to show you clinical presentations of what these diseases look like. On the top, a series of retinal photographs from a patient with Stargardt disease, and on the bottom, a patient with geographic atrophy over approximately 4.5 years. You can appreciate that the autofluorescent areas around the lesions indicate the growth of dead retinal tissue. The data suggests that the autofluorescence precedes lesion growth in patients with Stargardt disease and geographic atrophy, implying that reducing these bisretinoids may preserve vision in these patients. Next slide, please. I'm showing now our clinical development pathway beginning with our adolescent Stargardt patient population. After conducting our requisite SAD and MAD studies, we established the safety and tolerability of this drug. In the Phase 1b/2 study, we enrolled 11 Stargardt subjects and determined that a 5-milligram dose was effective, reducing retinal vitamin protein levels by over 70% from baseline. The study has been expanded to 13 subjects due to the addition of two more Stargardt patients. I have one-year safety and efficacy data to share today from this Phase 2 study. We also initiated recruitment for our Phase 3 adolescent Stargardt study. Out of 90 subjects, we've recruited roughly 42 so far. This will be a randomized double-masked global study. The primary endpoint will look at the rate of lesion growth, with secondary endpoints concerning best-corrected visual acuity. We are also initiating a Phase 3 trial in geographic atrophy, which will be a two-year study with a similar design to Stargardt, involving 430 randomized subjects with a 2:1 favoring tinlarebant. Looking ahead to 2025 to 2026, that is the earliest timing we might have for an NDA filing dependent on results from the Phase 3 study in Stargardt. If the outcomes are not promising, the FDA may require another clinical trial. However, they have assured us that they would review our data after the first Phase 3 pending favorable lesion results and stabilization of visual acuity. Certainly, post-2026, we would complete the GA study and commence a second Phase 3 trial. Next slide, please. I'd like to now share with you some clinical proof-of-concept data indicating that reducing retinal delivery to the eye may affect lesion growth. This study, conducted approximately 13 years ago while I was at Sirion Therapeutics, involved fenretinide, a synthetic derivative of vitamin A that unexpectedly reduced retinol delivery to the eye by binding to RBP4. The study was placebo-controlled with 100 and 300 milligram arms. At the end of the study, patients with a reduction of retinol binding protein 4 of at least 70% showed significant slowing of lesion growth. The histogram data illustrates that placebo subjects had about 50% larger lesions relative to baseline after two years, while those achieving significant RBP4 reduction showed only a 25% expansion of lesion growth, which indicates a meaningful treatment effect. Those in the 300-milligram group who did not achieve a sufficient reduction did not demonstrate a significant alteration in lesion size. Moreover, subjects with the satisfactory RBP4 reduction experienced stabilization of visual acuity after 12 months. Notably, in this study, the limited bioavailability of fenretinide restricted the number of subjects who achieved the RBP4 target. The oral tinlarebant we are developing, however, has greater bioavailability and potency than fenretinide. Next slide, please. I would now like to discuss the lesion growth rate data from our ongoing open label Phase 2 study. The autofluorescent lesion represents the earliest lesion that can be saved; whereas the atrophic retinal lesion indicates irreparable tissue. Over the 12-month period, the autofluorescent lesion grows approximately 0.45 millimeters square per year. Importantly, autofluorescent lesions are not stable, showing continual expansion without regression. The following images show a patient with both lesion types indicating that while the autofluorescent lesion can be rescued, the atrophic lesion is expanding exponentially and compromising the autofluorescent zone. Our main priority is assessing the growth of dead retinal lesions, DDAF, in this Phase 2 study where the 13 adolescent Stargardt patients had no DDAF lesions at baseline. We aim to determine the time for transition from autofluorescent to dead retina lesions, and how quickly dead retina lesions grow. At the six-month mark, only one of the 13 subjects transitioned to a DDAF lesion—this was remarkable compared with prior studies predicting that 50% of subjects would transition. This data indicated a striking reduction in lesion growth rate, showcasing a 60% reduction compared to historical data. There are two positive outcomes observed: a reduced transition from autofluorescent lesions to dead retinal lesions, and slowed growth once dead lesions form. Next slide, please. I will now present the safety data from the Phase 2 open label study in adolescent Stargardt subjects. There have been no systemic safety adverse events reported, and none required discontinuation. Vital signs and physical exams showed no clinically significant findings. The drug's behavior indicates its intended biological effect on the retina. For instance, chromatopsia, an aberration of color vision, arises from quick transitions between bright and dim environments, indicating an effective response. Patients have reported mild and transient Xanthopsia, which eases as they adapt. Similar conditions occur with delayed dark adaptation, where patients may take longer to adjust to dim environments—this is typical in Stargardt diseases. Yet, no one has left the study because of these effects, as they signal the drug's effectiveness. The pharmacodynamic effect shows a consistent decline in retinal binding protein 4 with a daily 5-milligram dose—starting lower than 70% and stabilizing through continued administration. Withdrawal of the drug gives a clear reversal of this pharmacodynamic effect. This flexibility of the dosing regimen is encouraging for long-term treatment management. Now, I'll provide an overview of the clinical trial design for our Stargardt study, reiterating our Phase 2 trial design. The upcoming Phase 3 pivotal study will require subjects to present measurable DDAF lesions at baseline, as this is critical for evaluating subsequent growth. This will be a global double-blind study with a two-year duration, looking at both primary and secondary efficacy measures of lesion growth rates and other visual and anatomical metrics. Next slide, please. Moving on to our Phase 3 study design for geographic atrophy, we are focusing on the essential pharmacodynamic dose needed for elderly patients who typically present at higher BMI. We expect similar outcomes with a reduced 5-milligram dose yielding an 80% RBP4 reduction as seen before. The clinical trial design aims to slow lesion growth in both Stargardt disease and geographic atrophy using similar endpoints and imaging modalities, targeting early-stage patients to halt visual loss risk. This broad potential emphasizes the advantage of our oral once-a-day therapeutic over invasive procedures. Next slide, please. Hao-Yuan.

Hao-Yuan Chuang, CFO

Thank you, Nathan. In 2022, our R&D expenses increased by $1.5 million from $7.4 million in 2021 to $8.9 million in 2022. This increase was primarily due to higher wages and salaries attributable to expanding our R&D team and increased share-based compensation expenses. Our G&A expenses rose by $1.6 million from $2.4 million in 2021 to $4 million in 2022, primarily driven by increased professional service fees, D&O insurance expenses, and payroll. In terms of cash, we secured $38 million from our IPO net proceeds in 2022. As of year-end 2022, we have cash totaling $42.1 million, which can sustain us until the end of 2025, allowing us to complete our Phase 2 and Phase 3 Stargardt trials without further expenditures on GA. However, given the promising data from prior Phase 2 studies and the market potential of GA, we aim to initiate a GA Phase 3 trial, with limited contractual liabilities in certain countries that have expressed considerable interest, including the U.S. and Australia. This funding will allow a runway until the end of 2024, enabling us to conclude the Phase 2 Stargardt trial and secure interim results in the Phase 3 Stargardt trial. We intend to expand the GA study into more countries once additional funding is obtained. I’ll now hand it back to Tom.

Tom Lin, CEO

Thank you, Hao-Yuan. So, the key anticipated milestones for the year include: in Q1, we initiated the PHOENIX Phase 3 study in GA and enrolled 42 subjects into the DRAGON study. I believe that by this month, approximately 6 to 10 additional subjects should qualify, bringing the total to about 50 by month’s end. For Q2, we have an ARVO presentation planned to discuss the 18-month treatment data for Phase 2 Stargardt disease. Following this, we will hold a KOL event to review the 18-month Phase 2 efficacy and safety data. We also expect to initiate enrollment for the PHOENIX Phase 3 study in GA by late Q2. In the second half of the year, we aim to present the topline 24-month Phase 2 treatment data, showcasing expected efficacy and safety for the two-year study. We anticipate completing enrollment for the DRAGON study by year-end, and with a pickup in recruitment rates, we expect to reach that target by the year's end. With that, I conclude my presentation and turn it over to Tara to moderate the Q&A session.

Operator, Operator

Our first question comes from Basma Radwan from SVB Securities. Please go ahead, Basma. You might be on mute? All right. We'll move to the next question. The next question comes from Jennifer Kim from Cantor Fitzgerald. Please go ahead, Jennifer.

Jennifer Kim, Analyst

Hi. Thank you for the update. I have a few questions. Firstly, I understand you've explained the decision to expand the size of the Stargardt trial to 90. Could you clarify if this change is intended to enhance the overall probability of a successful outcome for the study, or is it aimed at increasing the chances of a positive readout at the interim analysis? Additionally, regarding the mid-2024 interim, does it assume completion of enrollment by the end of this year? Can you confirm if the mid-2024 interim readout is based on a one-year analysis involving the total number of patients? Thank you.

Tom Lin, CEO

Thank you, Jennifer. You asked three questions, and I would like to clarify what the first question was.

Jennifer Kim, Analyst

Just the rationale behind increasing the size of the trial.

Tom Lin, CEO

That's right. It's actually for both. It increases the probability for interim analysis and for the final, if we miss the interim but still have a positive trend, it provides a good opportunity for the final analysis as well. So, actually, it's for both.

Jennifer Kim, Analyst

Okay. And then the timing of the interim in mid-2024. How does that work with the enrollment completion at year-end and the interim?

Tom Lin, CEO

Yes. Majority of the patients will complete 12 months by that time. I know some will be at the six-month mark. But the first third of patients will have 18-month data by then, so on average, we will have data reflecting 12 months for the majority.

Jennifer Kim, Analyst

Okay. Great. And then my second part of the question is for PHOENIX. Is there a way we can think about the pace of enrollment as you start in those specific targeted countries? How that will ramp up once you expand into other sites?

Tom Lin, CEO

Yes. We started enrolling patients in Europe. So the bulk of the initial group will come from Europe.

Nathan Mata, CSO

So she is asking about PHOENIX. So it's a GA study, not a Stargardt.

Tom Lin, CEO

Oh, sorry. What's the question again? Regarding GA study?

Jennifer Kim, Analyst

Since the GA study, I think you said you'll target enrollment in specific countries and sites. Is there a way to think about the enrollment before and after?

Tom Lin, CEO

So we started our global study in the U.S. and we will expand to other sites as we complete our financing, aiming for about 50 sites globally.

Jennifer Kim, Analyst

And of those 50 sites, how many come from those first steps into enrollment?

Tom Lin, CEO

I believe it's evenly distributed. I don't have the exact list here, but it's balanced among the U.S., Europe, and Asia.

Operator, Operator

Our next question comes from Lachlan Hanbury-Brown from William Blair.

Lachlan Hanbury-Brown, Analyst

This is Lachlan for Tim Lugo. We noticed that you've recently increased the upper age limit for enrollment from 18 to 20 years in DRAGON. I was just wondering if you could talk about the rationale for that, and how you chose the original age bracket of 12 to 18.

Tom Lin, CEO

Yes. Nathan, do you want to take the question?

Nathan Mata, CSO

Yes. Initially, Lachlan, the age range was capped because of the ODD designation and Rare Pediatric Disease designation which categorize adolescents up to 18 years. After discussions with the agencies, we learned that we could extend the age range without losing our ODD and RPD status. The rationale for expanding to 19 and 20 years was to accommodate inquiries from investigators who could not recruit qualifying patients due to age constraints. By allowing this change, we can reach our desired patient count.

Operator, Operator

So our next question comes from Yi Chen from H.C. Wainwright.

Yi Chen, Analyst

Could you provide additional detail on the enrollment criteria for lesion sizes in the Phase 3 Stargardt disease trial and the upcoming GA Phase 3 trials as well?

Nathan Mata, CSO

Yes. Great question, Yi. For the Stargardt disease study, for both studies, we conclude that lesions above a certain size—specifically, greater than 10 millimeters square—are less responsive to treatment. Preliminary data indicated that larger lesions grow slower, so we will cap the DDAF lesions at a minimum size of 0.05 millimeters square and a maximum of no greater than 8 millimeters square.

Yi Chen, Analyst

Are patients in the ongoing Phase 2 trial held to the same requirements for lesion sizes as the Phase 3 DRAGON trial?

Nathan Mata, CSO

No, this is a significant difference. The adolescent Stargardt subjects in Phase 2 did not have any DDAF lesions at baseline. Again, this was more proof-of-concept. We were examining our drug's efficacy on the conversion from autofluorescent lesions to DDAF lesions and the growth rate thereafter. The Phase 3 study requires subjects to demonstrate a measurable DDAF lesion of at least 0.05 millimeters square to enter.

Yi Chen, Analyst

And what's the requirement for the dry AMD patients?

Nathan Mata, CSO

It will be the same lesion size range as mentioned before.

Operator, Operator

Our next question comes from Bruce Jackson from Benchmark.

Bruce Jackson, Analyst

I have a follow-up question on the PHOENIX trial, the Phase 3 for AMD. You're going to start enrolling during Q2. How long do you think it will take to enroll 430 subjects?

Nathan Mata, CSO

Based on my prior experience, I anticipate it will take about 18 to 24 months.

Operator, Operator

Our next question comes from Yuan Zhi from B. Riley.

Yuan Zhi, Analyst

Thank you for taking my question. I have three. First, Nathan, can you share additional clarity regarding the enrollment change for Stargardt disease? What was the assumption used for statistical analysis?

Nathan Mata, CSO

Yes, regarding the increase in enrollment from 60 to 90 patients, the initial treatment effect assumed was 35%. However, given the positive preliminary data from previous studies, we decided to be more conservative and utilized a treatment effect of approximately 25%. This adjustment resulted in a higher sample size requirement to meet a power of at least 80% with 90% confidence and an alpha of 0.05.

Yuan Zhi, Analyst

Very helpful. My second question is for Hao-Yuan: Can you elaborate on the strategy for developing GA programs?

Hao-Yuan Chuang, CFO

I believe the strategy will focus on analyzing interim results from the Stargardt trial before seeking a partner for this pipeline, as both conditions use the same drug. If a partnership occurs, it would likely encompass both indications.

Yuan Zhi, Analyst

Understood. Lastly, regarding FDA requirements for safety, how many patients are required for the Phase 3 GA trial, factoring in treatment duration?

Nathan Mata, CSO

The FDA mandates a safety database involving at least 300 subjects treated at or above the intended clinical dose for a minimum of one year. However, the specifics of the Phase 3 patient count depend on the sponsor's assessment of significance and safety needs. Our protocol ensures comprehensive evaluations before proceeding.

Operator, Operator

Thank you for the questions, Yuan. This concludes the question-and-answer session for today's call. I'll now turn it over to Tom for closing remarks.

Tom Lin, CEO

Thank you, everyone. I appreciate your time and interest in the Stargardt and AMD programs. We look forward to keeping you updated with our data presentations at our upcoming KOL meeting. Hao-Yuan, and Tara will send out the invite and information regarding these events. Thank you again.