Welcome to the Mineralys Therapeutics Second Quarter 2024 Conference Call. At this time, all lines are in a listen-only mode. A question-and-answer session will follow the presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Ferry of LifeSci Advisors. Please go ahead, sir.

Thank you, operator. Good afternoon everyone, and welcome to our second quarter 2024 conference call. After the close of market trading today, we issued a press release providing our second 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 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, August 13. 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?

Thank you, Dan. Good afternoon, everyone. Welcome to our second 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. I'll begin with an overview of the business, our clinical programs, and recent milestones, followed by Adam who will review our second quarter financial results, before we open up the call for your questions. Let me start out by saying that during the first half of the year, we made tremendous progress advancing the development program for our lead asset, lorundrostat. Specifically, we've been steadily moving towards several key milestones 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 explores CKD evaluating lorundrostat in hypertensive CKD subjects. Enrollment continues to progress in the Advance-HTN trial. As noted previously, this is an extremely rigorous hypertension trial designed to demonstrate the value of lorundrostat when added to standardized, optimized American Heart Association guideline treatment. While we typically do not provide enrollment updates for our clinical trials, we are approximately 90% enrolled in Advance-HTN, and our projections place top line data readout in the first quarter of 2025. While we're disappointed with the change in top line data timing, we remain laser focused on executing the best-in-class trial and ensuring a high quality data readout. We continue to work with our partners at the Cleveland Clinic to ensure we deliver the most robust dataset possible. In addition, we recently met with the FDA and aligned on maintaining the original primary endpoint of the Advance-HTN trial, given that we have already accrued substantial trial data. As such, we will maintain the original 12-week time point of change in 24 hours ambulatory systolic blood pressure from baseline for active cohorts versus placebo. We will still collect and analyze all relevant efficacy measures at the four week and twelve week time points. This does not impact the timing of the data readout for Advance-HTN. The planned analysis of the Advance-HTN trial includes several important subset analyses. Subjects with uncontrolled hypertension, those on a baseline regimen of two antihypertensives, and resistant hypertension on three baseline antihypertensive treatments were separately randomized, allowing us to perform a formal test in each population. This will provide optionality and independent support for each population. We believe that demonstrating efficacy and confirmed resistant hypertension, the area of highest unmet medical need, will be important in positioning lorundrostat for individuals with presumed aldosterone mediated hypertension, including obesity. We believe positioning lorundrostat as an important option for obese individuals with increased cardiovascular risk due to resistant hypertension will be a straightforward message to prescribers, payers, and patients. In addition, as we accrue more experience and data with lorundrostat, we plan to continue to explore other positive and negative predictive factors, using artificial intelligence to expand the precision toolkit for targeting lorundrostat to individuals with uncontrolled and resistant hypertension, who are likely to derive long-term clinical benefit. Moving to Launch-HTN, which is our second pivotal trial that was initiated in the fourth quarter of 2023. We are pleased to announce that enrollment in this trial is currently ahead of schedule, and we continue to expect top line data to be available in the second half of 2025. However, the time to data may accelerate and we will keep you informed as we move forward. Launch-HTN is a Phase 3 trial of lorundrostat for the treatment of subjects with uncontrolled or resistant hypertension as add-on therapy, who fail to achieve blood pressure control on their existing prescribed background treatment of two to five antihypertensive medications. Launch-HTN will enroll up to approximately 1000 adult subjects and is designed with the objective of evaluating lorundrostat in a real world setting when added to a subject's previously prescribed antihypertensive regimen. Subjects who fail to achieve blood pressure control on their prescribed background treatment during the run-in period will be randomized 1-2-1 to either placebo, once daily 50 mg of lorundrostat, or once daily 50 mg of lorundrostat with the option to titrate to 100 mg once daily as needed at week-six. The primary endpoint for this trial will be the 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. 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 our pivotal program in hypertension, we are conducting the Explore-CKD Phase 2 clinical trial for lorundrostat when added to background treatment with SGLT2 inhibitor in patients with uncontrolled or resistant hypertension and Stage 2 to 3b chronic kidney disease. The amended protocol has been implemented and enrollment is ramping up. We anticipate announcing top line data in the first half of 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 stable SGLT2 inhibitor treatment. This proof-of-concept trial will enroll approximately 60 subjects with hypertension in stage 2 to 3b CKD. We look forward to keeping you apprised of the status of the lorundrostat development program over the coming weeks and months. Let me now turn the call over to Adam, who will provide a financial review for the second quarter of 2024.

Thank you, Jon. Good afternoon everyone. Today I will discuss select portions of our second quarter 2024 financial results. Additional details can be found in our Form 10-Q, which was filed with the SEC today. We ended the quarter with cash, cash equivalents, and investments of $311.1 million, compared to $239 million as of December 31, 2023. 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 June 30, 2024 were $39.3 million, compared to $11.9 million for the same quarter of 2023. The increase in R&D expenses was primarily due to increases of $22.8 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in the second quarter of 2023 and the Explore-CKD trial in the fourth quarter of 2023. $2.6 million in clinical supply, manufacturing, and regulatory costs, $1.7 million in higher compensation expenses resulting from additions to headcount, increases in salaries and accrued bonuses, an increase in stock-based compensation, and $0.3 million in other research and development expenses. G&A expenses were $5.9 million for the quarter ended June 30, 2024, compared to $3.9 million for the same quarter of the prior year. The increase in G&A expenses was primarily due to $1.5 million in higher compensation expenses resulting from additions to headcount, increases in salaries and accrued bonuses, increased stock-based compensation, and $0.5 million in higher professional fees and other administrative expenses. Total other income was $4.2 million for the quarter ended June 30, 2024, compared to $3.6 million for the same quarter of 2023. The increase was primarily attributable to increases in interest earned on investments in money market funds and U.S. treasuries. Net loss was $41 million for the quarter ended June 30, 2024, compared to $12.1 million for the same quarter of 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.

Thank you. Our first question comes from Michael DiFiore with Evercore ISI. Please state your question.

Hi guys, thanks so much for taking my question. Two from me. I just want to get more clarity on why exactly the timelines were extended for Advance-HTN and the CKD trial? And then separately, obviously the Phase 2 advanced hypertension primary endpoint is now back at 12 weeks, the FDA's rationale was just because you had so much accrued data and want to clarify that? And now that it's back at 12 weeks, are you concerned that now the waters will be muddied at 12 weeks with the inclusion of patients on 100 mg? Thank you.

Yes Mike, it's Jon. Glad to have the questions. The first one regarding the timing, when we originally established Q4, I think it was late last year for guidance on Advance-HTN, at that point in time, we were still earlier in the enrollment, particularly with the protocol amendment. As we've discussed before, the rigor and complexity of Advance-HTN had made it difficult to really project when we thought we would see top line data as we've spent the last several months, six, seven, eight months since that guidance and we've obviously gotten further along in the enrollment of the study. The ability to project the time for the top line data has progressively become easier. As we noted in the press release and in the earnings call here, we're at 90% enrolled at this point. So we have high confidence on where we're at currently with enrolled subjects, where we're forecasted to continue to enroll, that we'll have the top line data in Q1 of 2025. Kind of a similar construct Mike with Explore-CKD. We announced earlier this year that we were doing a protocol amendment just based on the changing dynamics within the hypertension CKD space and the utilization of SGLT2 inhibitors. We put that protocol in place. It's had the intended effect as far as improving enrollment within that study. As that protocol has gone into effect and we began to enroll subjects, it's been able to give us a clearer sense of timing and that's why we adjusted the readout for Explorer CKD from Q4, Q1 to Q1, Q2. And so that's really what's driven it is just having more data, more experience with these trials, and to try to give a really clear sense of when we anticipate that top line data.

Just to clarify too, you said that the protocol amendment you made now has boosted enrollment as intended. So why were the timelines moved up if enrollment has been enhanced?

It's been enhanced relative to what it was Mike, and we thought there was an opportunity to see that top line data in Q4 to Q1. While it's been enhanced, from our perspective, it's prudent to change that guidance to Q1, Q2 at this point.

Got it, okay.

Hey Mike, it's Dave Rodman, and thanks for the question. So the question, just to reiterate it and let me know if I've got it right, is are we going to encounter less confusion or less clarity, let's say at 12 weeks, because we have some people on 50 mg straight through and others who could have their dose increased to 100 mg? Is that your question?

That's correct. And also want to clarify if the FDA's rationale for keeping it at 12 weeks was just purely because you had so much data already accumulated?

Got it. I'll answer the second one first. The answer to that is yes. It was just simply that we're past halfway enrollment. They just thought to stay the course at that point. So in terms of your other question, it's a good question. We're going to kind of have our cake and eat it too in a sense because we are going to do the full analysis at four weeks that we proposed, and we're going to do the 12-week analysis. So we'll have the clarity of the analysis when everybody's on 50 mg at four weeks, but then the primary is going to be done at 12 weeks. So the only difference is really when is that primary going to be done? That's kind of just a p-value question, if you will. We'll have the clarity at four weeks. That will allow us to have lots of power for subset analyses like obesity, et cetera. So we won't really lose anything there and we'll still have apples-to-apples between the two trials because of that as well. Did I answer your question?

Yes, very much. Thanks so much.

Thanks Mike.

Hey guys, thanks for taking my question. Just following up on that, what patients will be included in the 12 week endpoint analysis for Advance-HTN? So will the patients in that 50 mg to 100 mg cohort, would those be included in the 12-week primary analysis? And also, what is the powering on just that pure 50 mg group alone? And I have a couple more questions.

Good question. So the primary analysis at 12 weeks is a comparison between Placebo and each of the active arms. They're not co-primaries where you have to hit both. They're just dual primaries, and so the way that works is we'll take everybody who started on 50 mg and ended on 50 mg, and that started on 50 mg in that second arm, they'll all be essentially treated with 50 mg compared to placebo. And then the other arm, if they went up to 100 mg, they're still included in the analysis. So it doesn't matter if they end on 50 mg or 100 mg. There's a second. So, and that's again versus placebo. So that's for the p-values, you'll see two, one for arm two, one for arm three. There's also a key thing here, which is what we want to know is in arm three, the reason we're doing it is if you're a clinician and somebody doesn't respond to 50 mg, you think they belong on the drug, and everything else looks good, potassium, everything else. What you want to know is, can I just double the drug safely and rescue that guy and get him the benefit I think he should accrue? That's a within subject question, right? You take a person who hasn't responded, give him the drug, and now you say, did he get better from that point? So that's what's going to happen at 12 weeks. Let me stop there and see if that was responsive to your question.

Yes. So the patients who are on the 50 mg to 100 mg arm, so just that titration cohort, can you pull those 50 mg patients who did not get titrated to 100 mg, can you pull them into the other, like the pure 50 mg cohort or are these patients completely separately analyzed by itself?

Yes, it's a good question. So, in terms of 12 weeks, no you can't pool them, but in terms of the four-week analysis, absolutely. And so, and we know from the Target-HTN trial that we saw the full benefit by four weeks. So we'll also be looking at four weeks and 12 weeks in the same people and ask the question, did they maintain the benefit within subjects? And so that will also be answered. Now, I forgot to answer your powering question, and let me just repeat that. You said, what's our power going to be for just the 50 mg arm at 12 weeks? Is that what you were asking?

Yes.

I see. So is the data for that 50 mg to 100 mg cohort for the patient who did not get titrated to 100 mg, is there any use for that 12-week data point for those patients? Yes, absolutely. So we can do a sensitivity analysis on that and we will. We can do a pooling analysis as you suggested. All of those are essentially sort of sensitivity analysis kind of questions. And so there probably won't be enough power. We could ask do the people who finish on 50 mg differ from the people who increased to 100 mg? But there's just so much you can do. But to answer your question, yes, there's going to be use to them. Those things will be deep in the data, but they'll be available.

Got it. And then the last question from me is that do you control or cap the number of patients coming into the study who've previously been exposed to MRA or spironolactone? And if not, what proportion of these patients do expect to be enrolled in the Advance-HTN study?

Thanks, Rich.

Hi, thanks for taking my question. Just on the four-week measurement, can you remind us the rationale for wanting to look at the four-week time point in the first place? I just want to make sure I understand what importance that four-week time point is for you. And I have some follow ups from that.

Hi Annabelle, it's Dave. So your question, just to repeat it, so I got it right is, what was the rationale for wanting to make the change or why are we looking at it just on basic principles?

Well, why were you looking at it for basic principles? Just, you had a four-week endpoint and 12-week endpoint. I'm just curious what the four-week endpoint measurement was going to give you.

So it's a good question. By four weeks, you've achieved the maximum benefit and by having two data points, so baseline, but then four weeks and 12 weeks, you manage a lot of issues. To answer the question, we think four weeks will be the maximum. Is it predictive of 12 weeks? In other words, is there any loss of activity over at least the 12-week time period? Because we only went out to eight weeks before and didn't see any loss. From a statistical standpoint, it allows you to, let's just say somebody later in the trial has a problem or whatever and you stop their drug, as long as we have the four-week, we do have mechanisms for imputation that can be used. Now, that's a complicated thing, but as long as they stay in the study, that four-week data point is informative for the modeling. So there are a couple reasons to do it. The third one is the ability to pool the two groups that are replicates up to four weeks. And so you do have at four weeks superpower in terms of getting a point estimate.

Okay, that's helpful. Thank you. And then just a question that we've been grappling with some investors, just can you remind us again what the difference was in the patients who saw 24-hour blood pressure monitoring benefits and target versus those who did not? And I guess, how it could have been that the AOBP measurements overall saw such a strong response while the 24-hour could not. So I just want to try to reconcile those two figures.

If I understand your question, I'm not sure. Let me just say what we saw. So first of all, ABPM, because of the replicate measures every 20 to 30 minutes over the course of the day, you get lots of measurements. So the precision is better when you average it, so the standard deviation is smaller. But remember, a normal person's blood pressure goes down significantly overnight, and so the average blood pressure over the course of 24 hours will be lower with ABPM than the automated office done just in the morning. The same is true of changes then, because you're changing from a lower baseline. So typically what you'll see is a lower baseline pressure with ABPM and a smaller treatment effect, but a smaller standard deviation. So we saw extremely good concordance between AOBP and ABPM, but there is this systematic difference of smaller numbers. Now, the other thing that happened, however, is there is this phenomenon of white coat hypertension. In other words, when you get an AOBP when you come into the clinic at 10 in the morning, you've got a lot of adrenergic tone because you had to find a parking space, you had to walk up two flights of stairs, you had to wait in the waiting room, etc., and that all goes away with a 24 hours. And so we have this thing where people have hypertension with AOBP, but not with ABPM. And we tend to assume they don't have true hypertension that leads to adverse outcomes, but rather they just have apparent hypertension. Was that the question kind of you were thinking of asking?

A little bit. I'm just curious. So the ABPM, where you reach statistical significance, when you reach statistical significance, after you move some outliers of the study. So I'm just trying to understand what those outliers were. They made you comfortable that it was a fair assessment. And how do you control for those outliers in this next coming trial, so that you don't have some of those divergences?

Yes. And Annabelle, just to add to Dave's point, the distinction between target and advance and target AOBP was part of the randomization rule, not ABPM. And AOBP was the primary endpoint in this case of Advance-HTN. They have to be hypertensive on the 24 hours ABPM to be randomized. And so that rule, or randomization rule itself, should eliminate that phenomenon that we saw on Target-HTN.

Okay, great. Thank you. That sounds good, thanks.

Yes, thanks, Annabelle.

Great. Thank you very much for taking my questions. I have two, but I'll ask one by one. So, first question, I'm a little bit confused by all the talk about Advance-HTN and then the 12-week thing. If I go back to the Launch trial, can you just help us understand what was the confounding issue that probably made FDA to ask you to move to six weeks versus 12 weeks? Because the way I see the trial, there are three different arms. There is 150 mg, there is under 50 mg moving to 100 mg. So you can still compare the 50 mg arm to the placebo arm. So I'm a little bit confused by the change here. Thank you.

So it wasn't them telling us what to do, it was us suggesting that it would be better to do it that way. It doesn't have to do with the primary. It didn't matter in that trial, as big as it was, if you did the primary at four weeks or 12 weeks, it has to do with power for the subset analysis. In other words, because you have two replicate arms, both at 50 mg, we can do the independent tests for the primary, each arm versus placebo. But let's say we want to ask a question. Does it matter whether you're African-American? Well, we expect maybe 40% of the subjects will be African-American, so now you're down to half the sample size. But by pooling the two, now you get back up to the number, and so you get much more precision to get accurate answers to the subsets. So that's what we went back to the Agency with and said, in this big data set, we want to make sure that we can fully realize the power of the study, and we think for the subsets we'd be better at six weeks. And basically the decision was, okay, if you're going to do that, let's just do the primary at six weeks.

Got it. So that is basically to make sure that you can do the subgroup analysis properly with a bigger data set here.

It just makes it much more simple and higher productivity. It's just a good idea.

Got it. And then I have one more question. So we have seen a couple of readouts from MRAs, so obviously, no had some data which was not that successful. But then Bayer had some data in Type 2 diabetes related CKD, and that was quite successful. So how do you see, like, obviously different classes, but related, how do you see these two data sets and what do you learn from them? Those data sets to inform for, inform your own CKD studies?

Well, first of all, MRAs generally are pretty similar. It doesn't matter if it's spironolactone from 1959 or a very new one. The only difference are the steroidal side effects, things like breast development in men and impotence and vaginal bleeding and that kind of stuff. As far as everything else, mechanistically, they're the same. What we observe with the MRAs is almost always you are unable to achieve the maximum therapeutic benefit on something like blood pressure because you're limited by the on-target increases in potassium and also sodium going down, those kinds of things. For instance, with spironolactone, the maximum efficacious dose is probably 200 milligrams. The conventional dose that's used is 25 mg, 50 mg by nephrology specialists sometimes. That's different. So we found in our drug, we can go above the maximum efficacious dose. 100 mg is the same as 50 mg. So we can safely give 50 mg, which is the maximum efficacious dose. So, overall, what I would say is the biggest difference that's apparent in the trials we're running is that the benefit-risk, the ability to dose people all the way up to their applications, doses from getting rid of aldosterone is probably more achievable with an ASI like ours than an MRA. Now, long-term, there are a lot of aldosterone effects that aren't blood pressure and kidney, they have effects on adipocytes, on insulin sensitivity, on inflammation, on heart and blood vessel fibrosis. And not all of them are mediated through the MR that's blocked by those MRAs. And, in fact, if you give an MRA, you increase aldosterone by 200% or 300%, and you drive it into these other pathways. So, if you did a longer trial and looked at things like vascular stiffness, maybe even blood pressure, I think eventually they would differentiate, but that's for us, something to define. Once we're in the market for hypertension, we will certainly be looking at that. Those are really the two aspects we would say, that look pretty likely to differentiate and show the advantage of ASI over MRA.

Okay, thank you very much, makes sense.

Thanks, Mohit.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Jon Congleton for closing comments.

Thank you, operator, and thank you to everyone for joining us today. We're very excited about the program's progress to date that we've made in the first half of 2024 in advancing our clinical programs. And we remain very enthusiastic about the upcoming milestones for the rest of the year and into 2025. We look forward to updating you as our pivotal program for lorundrostat continues to advance. With that, we will close the call.

Thank you. This concludes today's conference. All parties may disconnect. Have a good day.