Belite Bio - Earnings Call - Q2 2025

Transcript

Speaker 7

Ladies and gentlemen, thank you for joining us and welcome to the Belite Bio second quarter 2025 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the call over to Sophie Hunt. Please go ahead.

Speaker 6

Good afternoon, everyone. Thank you for joining us. On the call today are Dr. Tom Lin, Chairman and CEO of Belite Bio, Dr. Nathan L. Mata, Chief Scientific Officer, Dr. Hendrik Scholl, Chief Medical Officer, and Hao-Yuan Chuang, Chief Financial Officer. Before we begin, let me point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and actual results may differ materially. We encourage you to consult the risk factors discussed in our SEC filings for additional detail. Now, I'll turn the call over to Dr. Lin.

Speaker 0

Thank you for joining today's call to discuss our second quarter 2025 financial results. We have made excellent progress in the quarter towards advancing Tinlarebant in patients living with Stargardt’s disease and geographic atrophy. For those who are new to our story, Tinlarebant is a first-in-class oral therapy intended to reduce the accumulation of toxic vitamin A byproducts, which is implicated in the progression of retinal lesions in patients with Stargardt’s disease and geographic atrophy. We believe this approach will be effective in slowing or halting lesion growth, which would ultimately preserve vision. To give you some perspective on the importance of this potential therapy, Tinlarebant has been granted Breakthrough Therapy, Rare Pediatric Disease, and Fast Track designations in the U.S., and Pioneer designation in Japan. It has also been granted Orphan Drug status in the U.S., Europe, and Japan.

We believe this speaks to the significant unmet need for both indications, as currently there is no approved treatment for Stargardt’s disease and no approved oral treatment for geographic atrophy. Importantly, we are uniquely positioned to address these unmet needs, as we are already in global phase three trials for both indications. Let me provide a high-level overview of the recent progress we have made. We have two studies underway with Tinlarebant in patients living with Stargardt’s disease. These are the phase three Dragon trial and the phase two/three Dragon II trial. As part of the phase three Dragon trial, we were pleased to announce earlier in the year that the Data Safety Monitoring Board had completed its interim analysis and recommended that the trial proceed without a sample size increase or modifications. They also recommended that we submit the data for further regulatory review for drug approval.

As a result, the FDA granted Tinlarebant Breakthrough Therapy designation, and we remain on track to complete the study in Q4 this year. The Dragon II trial also continues to be on track. We have enrolled 17 of our targeted enrollment of approximately 60 subjects, including about 10 Japanese subjects. The data from the Japanese subjects is intended to expedite a New Drug Application in Japan, where we have already been granted a Pioneer drug designation. In geographic atrophy, I'm pleased to share that we recently completed enrollment of our global phase three study with 529 subjects enrolled. We recently also raised $15 million in gross proceeds in a registered direct offering on August 8. To summarize, we made excellent progress against our key milestones in the first half of the year. We are looking to carry this momentum into the second half of the year.

Our balance sheet is also strong with four years of cash runway. We remain well positioned to advance Tinlarebant as potentially the first oral treatment for people living with degenerative retinal disease. I'll now turn over the presentation to Hao-Yuan.

Speaker 2

Thank you, Tom. For Q2 2025, we had R&D expenses of $11 million compared to $9.1 million for the same period last year. The increase was mainly due to higher pathway expenses related to the Phoenix trial and manufacturing expenses, which was partially offset by lower grad and trial expenses and the development milestone payment for the completion of the phase two trial in 2024. Also, due to an increase in share-based compensation expenses. Regarding G&A expenses, we had G&A expenses of $6.5 million compared to $1.4 million for the same period last year. The increase was mainly due to an increase in share-based compensation expenses. Overall, we had a net loss of $16.3 million compared to a net loss of $9.5 million for the same period last year.

One thing to note is that as the majority of the increase of the expenses came from the share-based compensation, which was about $7.6 million and was not cash related, the operating cash outflow was only about $8.6 million. At the end of Q2, we had $149.2 million in cash, liquidity fund, time deposit, and U.S. Treasury bill. We also raised $15 million in gross proceeds in a registered direct offering on August 8th. We still expect four years of cash runway without considering the commercialization costs and expect to be able to complete all three phase three trials with our current cash. Thank you. Back to you, operator.

Speaker 7

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Boris Speaker with Titan Partners. Please go ahead.

Can you guys hear me? I just want to confirm the line is live.

Yes, I can hear you.

Congratulations on the progress. I guess my first question is, what is the status of the FDA discussion regarding the interim data that you have from the Dragon trial? Just trying to get a sense if that could potentially be a trigger for filing NDA. If it's not, what data would you think you'd need to actually get from Dragon II study, one-year follow-up, two-year follow-ups? How long prior to an NDA filing?

Speaker 0

Thank you. I could take this one. We've made, we filed the Breakthrough Therapy based on the IA data we've made with the FDA. Given the IA criteria was met when all subjects achieved 12 months on the study, the majority of subjects have already reached 15 months. We could try for accelerated approval, but that would still require a confirmatory follow-up study. The FDA recommended that we complete the 24-month study, which we're about to complete coming up in September, September, October. We will submit that final data, and there will possibly be a single study approval based on the robust statistical significance.

Gotcha. Just to confirm, could it be a possibility just filing on Dragon and using that as a basis and then Dragon II? When would you actually know that if Dragon in and of itself is sufficient for approval?

I think based on the FDA's recommendation that the P-value would be robust enough, and we believe that we are on track to meet the criteria.

Gotcha. Okay. Appreciate that. Maybe if I could squeeze in just one question on geographic atrophy.

Sure, sure.

Now that the Phoenix trial has completed enrollment, can you discuss if there's going to be an interim analysis, let's say a year from now or so, or any other timing around the data readouts?

Yeah, sure. There will be an IA for geographic atrophy. I think based on the overall regulatory strategy right now, I don't think I have a timeline with me, but it will be somewhere in between halfway during the, similarly to the Stargardt’s. I just don't have the details, but it will be halfway mark.

Gotcha. I appreciate you taking my questions, and congrats on progress again.

Thank you so much.

Speaker 7

Your next question comes from the line of Bruce Jackson with Benchmark. Please go ahead.

Hi. Thank you for taking my questions. Can you hear me okay?

Speaker 0

Yeah, yeah.

Okay. Super. You got the Breakthrough Therapy designation, and have you discussed with the FDA yet if there's a route to accelerated approval?

Yes. There was a route for accelerated approval, but the FDA recommended since we have a majority of the patients completing the 15-month time point already, it wouldn't be long to reach the 24 months. Given that the accelerated approval will still require a second study, they recommended a single study path with robust statistical significance.

Okay. My second question is about educating the medical community about your drugs. Are there any upcoming presentations or data readouts that we can look to near-term, not just the completion or the follow-up analysis of the study, anything on an interim basis?

Our timeline is very tight that we are expecting. We ran the timeline with the FDA, and they acknowledged that we'll be submitting around the first half of next year. They want us to remain confidential on revealing any efficacy data. We were planning on presenting the IA data at AAO, which is roughly around late October, but given that we'll be submitting very soon after that, the FDA would prefer that we stay confidential on the data.

Okay.

Speaker 2

I think I can add that. Once we have the final 24-month data, we will announce that. Just so you wouldn't need to wait until the submission to see the data, before that, we will not reveal interim data.

Okay. That's it for me. Thank you.

Thank you.

Speaker 7

Your next question comes from Jennifer Kim with Cantor. Please go ahead.

Speaker 8

Hi. Thanks for taking my questions. Can you hear me?

Speaker 0

Yes.

Speaker 8

All right. Maybe two. To start with Dragon, can you remind us what the exact timing of data will be after the trial finishes in the fourth quarter, and then how and what data will be communicated and what you're hoping to show in terms of efficacy to support filing? Maybe we can start there.

Speaker 0

Nathan, probably best that you have answered this question.

Speaker 8

Yeah. I mean, as you know, we're looking at the change of atrophic lesion growth, right? Lesion growth rate over time in all subjects at all available time points. We're looking for statistical significance between placebo and treatment in terms of changing the trajectory of lesion growth. That's what we expect to show to the agency, a statistically significant difference in lesion growth rates. That is what you need for approval. It's the same endpoint that was used in geographic atrophy to get the two intravitreal drugs approved. It's basically the same metric. Okay. My second question is just for Phoenix. What is the latest dropout rate you've seen to date? Is it still in the 20% range? What can we expect in terms of the depth of data in an interim analysis?

Speaker 0

We still don't know the expected range. The depth of the interim, we have not finalized the interim design yet. We'll announce that once we know.

Speaker 8

Great. Thank you.

Speaker 7

Your next question comes from the line of Yu Chen with H.C. Wainwright. Please go ahead.

Thank you for taking my questions. For the Dragon II trial, what is the current estimate timeline for reaching the target enrollment of 60 patients? Is the current enrollment speed meeting your expectation?

Speaker 0

Yeah, I can take that question. We initially launched Dragon II in Japan, and now we are in the process of expanding into additional countries, which we expect will accelerate enrollment. We strategically timed Dragon II not to compete with Dragon, so that we can speed up the completion of Dragon. In the case if the Data Safety Monitoring Board recommends further sample size addition, that wouldn't slow down the completion of Dragon. Since the Data Safety Monitoring Board recommended that we wouldn't need to add any sample size, we're kind of speeding up Dragon II. We purposely staggered Dragon II to not compete with Dragon. Even though it's slower than what we expected, that is because Dragon II wouldn't compete with Dragon. I think we are still on time. I think the expectation of completing the enrollment probably would take, I would say.

Speaker 8

End of this year.

Speaker 0

Yeah, end of this year. Yeah.

Thank you. I noticed that your operating expenses continue to rise in the second quarter. Can you talk about the primary drivers for operating expenses and whether these kind of level of expensing is sustainable as you approach key clinical milestones later this year?

Speaker 2

Sure. First of all, the operating expenses do include a majority of the expenses coming from the share-based compensation. Those are not cash-related, and it's a little bit hard to really have a precise forecast about that because they are purely based on the valuation of the options and the probability of reaching those milestones. Many of our ESOP is going to be related to development milestones, so it will be purely based on the probability. Instead of time, you only get those vested after we reach those milestones. If you remove those, then the cash outflow is actually pretty close to Q1 2025. This year and next year, we do expect to have higher cash burn given that we do expect to reach several milestones through all three phase three studies.

This year and next year, we probably expect to have cash outflow around $40 to $45 million for two years, this and next year. It will dial down a lot starting from three years from now. That's why we still expect four years of cash runway.

Got it. Thank you.

Thank you.

Speaker 7

A reminder that if you would like to ask a question, please raise your hand now. Your next question comes from the line of Michael Akunovic with Maxim Group. Please go ahead.

Hey, guys. Thank you so much for taking my questions today. Congrats on all the great progress. Thank you. I just wanted to follow up a little bit on the single pivotal design. In particular, if under the current FDA, because there have been a lot of changes over the past several months, if you received any communication from the current admin that confirms that single pivotal for full approval, perhaps around when you got Breakthrough Therapy designation.

Speaker 0

I think we had, as we met with the FDA after submitting the IA data, which we call Breakthrough Therapy status, the path forward is very clear for us and very straightforward for a single study. If we met the statistical significance, robust statistical significance that is P of less than 0.01, then we have a single study approval path.

All right. Thank you. Do you have a sense of what sort of scale of a commercial force you would need to actually bring this to market, just given that you do have four years of runway, and it seems like you're pretty well positioned to reach approval here?

Speaker 2

The current cash burn that we forecast for four years' runway does not include the full skill set of the commercialization costs, which, you know, we are in progress of preparing that. We will build the budget once we confirm.

All right. Thank you very much for taking my questions. Once again, congrats on all the great progress.

Speaker 0

Thank you very much.

Speaker 7

Your next question comes from the line of Mark Goodman with Leerink Partners. Please go ahead.

Hi, can you hear me there?

Yeah.

Speaker 0

Yes.

I guess what I want to know is we get the data release and this press release that you were talking about late this year, early next year. We get good news. How soon after will we be able to file? What are the gating issues between that press release and the filing? Specifically, talk about CMC as well as long-term safety data.

I can answer this question. The first one, long-term safety data, I think we will need data safety data of 300. I believe we've acquired it. Hendrik, can you help me out on the GA study? We will have enough safety subjects, right?

Speaker 2

Exactly, Tom, right? The requirement is that we would have 300 subjects that would be 12 months on the drug. Including our Phoenix trial, we easily will have that by the first quarter of next year.

Speaker 0

Sorry, Mark, what was your other question?

Basically, you could use the safety for both studies, you're saying, to include into that. That's why you're there. The other was the CMC.

We have ongoing discussion with the CMC with the FDA. So far, we are on track. It will probably be another discussion with the FDA before we submit.

Where are we on that? You know, where's the.

We are on the registration batch that's required for NDA. Thanks, Mark.

Speaker 7

There are no further questions at this time. This concludes today's call. Thank you for joining. You may now disconnect.