Belite Bio - Earnings Call - Q4 2024

Transcript

Operator (participant)

Ladies and gentlemen, thank you for joining us, and welcome to the Belite Bio Q4 and FY 2024 earnings conference 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 into today's call, please press star nine to raise your hand and star six to unmute. I will now hand the conference over to Julie Fallon. Please go ahead.

Julie Fallon (Head of Investor Relations)

Hello, and thank you for joining us to discuss Belite Bio's Q4 and FY 2024 financial results. Joining the call today are Dr. Tom Lin, Chairman and CEO of Belite Bio; Dr. Hendrik Scholl, Chief Medical Officer; Dr. Nathan Mata, Chief Scientific 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.

Tom Lin (Chairman and CEO)

Thank you for joining today's call to discuss our Q4 and FY 2024 financial results. 2024 was an exciting year for Belite Bio, as we continued to make strong progress towards advancing Tinlarebant in patients living with Stargardt 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 have been implicated in the progression of retinal lesions in patients with Stargardt disease and geographic atrophy. We believe this approach will be effective in slowing or halting lesion growth, which would ultimately preserve vision. It is important to note that our approach focuses on early intervention of emerging retinal pathology that is not mediated by inflammation. We believe that this may be the best approach to potentially slow the progression of Stargardt and GA.

To give you some perspective on the importance of this potential therapy, Tinlarebant has been granted rare pediatric disease and fast-track designations in the U.S. and pioneer drug designation in Japan. It has also been granted orphan drug designation 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 disease and no approved oral treatment for GA. More importantly, we are uniquely positioned as we are already in global phase III trials for both indications. With that, 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 disease. These are the phase III Dragon trial and the phase II/III Dragon II trial.

As part of the phase III Dragon trial, we recently announced that the Data Safety Monitoring Board has completed its interim analysis, which is based on all subjects having completed the one-year assessment period. The DSMB recommended that the trial proceed without sample size increase or modifications, so essentially maintaining the sample size at 104 subjects. In addition, they recommend we submit the data for further regulatory review for drug approval. With the DSMB's review done, completion of the trial is on track for end of this year. The Dragon II trial continues to progress rapidly. We have enrolled 11 of our targeted enrollment of approximately 60 subjects, including about 10 Japanese subjects. Data from the Japanese subjects is intended to expedite a new drug application in Japan, to which we have already been granted a pioneer drug designation.

In GA, we also continue to progress in our clinical global phase III Phoenix trial, which has already enrolled over 400 subjects to date. We expect to increase the number of subjects to be enrolled in the Phoenix trial from approximately 430 subjects to 500 subjects, as we have been making good progress on our subject enrollment. To summarize, with the excellent progress in our phase III trials and the promising interim results from phase III Stargardt study and the four-year cash runway, we remain well-positioned in advancing Tinlarebant as potentially the first oral treatment for people living with degenerative retinal diseases. I'll now turn over the presentation to Nathan. Nathan, please.

Nathan Mata (Chief Scientific Officer)

Thank you, Tom. Here we have an overview of our trial designs in Stargardt disease. As Tom mentioned, there are two phase III trials that we're currently involved in. The first is called Dragon. That's 104 subjects in that trial. The other trial is called Dragon II. There are 60 subjects in that trial. You can see the first three rows here. This is the areas where these two trials are different. Otherwise, the trials are designed identically. There is a difference in the number of sample sizes, as I just said. A difference in the geography. The Dragon is a global study. Dragon II is focused on geographies in Japan, U.S., and U.K. The Dragon study, because of the larger sample size, has a 2:1 randomization favoring Tinlarebant, whereas the Dragon II trial has a 1:1 randomization within 60 subjects. Otherwise, the trials are designed identically.

It's important to note that the endpoint for drug approval in Stargardt disease and GA is slowing the growth of atrophic lesions. At the bottom, you can see the key inclusion criteria for subjects involved in Dragon and Dragon II. Here you see the demographics and baseline characteristics for the adolescent subjects involved in the Dragon I trial. As I mentioned, there are 104 subjects. You can see the mean age is 15.4 years. These are school-aged children. They have the average height and weight of children that age. On the right-hand side, you see the breakout for male and female, roughly 60% male and 40% female in the study population. Just below that, you see the race distribution heavily favored towards the Asian population because we did heavily recruit in China.

We have approximately 56% of our Asian population representing the study, about 37% being Caucasian and European and North American, and the various other categories, approximately 7%-8%. Here is an overview of the interim analysis conclusions. As Tom mentioned, the study Dragon I included a sample size re-estimation in which, if the DSMB saw a trend towards efficacy at the middle of the study, then they would allow us to include up to an additional 30 more patients to maintain that trend towards the end of the study so that we could ensure a statistical significant difference by end of study. In fact, when the DSMB looked at the interim analysis, they felt there was no modification of the study required and that we should continue the study without a sample size increase.

I should remind you that the dosage that these children were getting in the Dragon I and Dragon II studies is five mg daily. This dose has been very well tolerated and deemed safe, a very, very nice safety profile. Also important to note that at the time of the interim analysis, where approximately half of the subjects had already completed two years of dosing, the withdrawal rate was 9.6%, which is 10 of 104 subjects. The withdrawal rate due to ocular adverse events was only 3.8%. That's four of 104 subjects. Visual acuity was stabilized in the majority of subjects with a mean change of baseline of less than three letters, so very well stabilized under both standard and low luminance throughout the two-year study. Perhaps the most important finding that the DSMB provided for us was what's provided at the bottom.

Their additional comments, as Tom mentioned, they recommended us to submit the data for further regulatory review for drug approval, indicating perhaps an efficacy signal. Here are the safety data from the Dragon I trial. These are the treatment emergent adverse events. We fully anticipate to see two adverse events in terms of the drug-related ocular event. One is a form of Chromatopsia called Xanthopsia. This is a yellow hue of color which appears in the visual field, typically upon waking when light essentially drives this visual AE. This is a transient AE. It lasts seconds to minutes, and no one dropped out of study because of Chromatopsia or Xanthopsia. Delayed dark adaptation is the other ocular AE that we anticipate based upon the mechanism of Tinlarebant action.

This is the opposite of Chromatopsia, in which going into darkness, patients have a longer time to accommodate to dim light settings. This can last two to three times longer than normal, perhaps somewhere between 16-20 minutes. Again, it's reported as mild. It's transient. This is not synonymous with night blindness or nyctalopia because these subjects will eventually get back their dark adapted sensitivity. You can see the distribution on the right-hand side in terms of the number of subjects and percentage in the patient population. The night vision impairment is a more severe exacerbation of delayed dark adaptation, in which the delay may be longer than 20 minutes. You can see that occurred in 15 subjects, approximately 14% of the population. Headache was another AE that we found in approximately 7%-8% of the population.

This can happen when subjects strain to use their visual acuity while experiencing these AEs. Importantly, there were no clinically significant findings in relation to vital signs, physical exams, cardiac health, or organ function. The only systemic drug-related AE was acne, which teenage kids can be prone to, especially when there's less vitamin A in the skin. Otherwise, an overall very, very well acceptable safety profile. Here we see the visual acuity data from the Dragon I study. This is the two-year data. We're looking at visual acuity under both standard and low luminance. We see overall stabilized visual acuity. For a clinical perspective, let's bring in our CMO, Dr. Hendrik Scholl, for his opinion. Hendrik.

Hendrik Scholl (CMO)

Thank you, Nathan. When considering the clinical relevance of the finding, we have to take into account that when we measure visual acuity, the intersession variability in normal subjects is two letters on an ETDRS chart. In patients with macular degeneration, it's up to five letters. That means that the variability that we see on the left for best-corrected visual acuity and on the right for low-luminance visual acuity is within the standard variability that we find in such patients. Still, when we look at the left and the development of best-corrected visual acuity, knowing that two-thirds of the subjects are under Tinlarebant treatment is very reassuring that there was essentially no loss at all of best-corrected visual acuity letters on a standard ETDRS chart. With that, I hand it over back to Nathan.

Nathan Mata (Chief Scientific Officer)

Thank you, Hendrik. Here is our overview of the trial design in geographic atrophy. This is our phase III trial called Phoenix. As Tom mentioned, we're going to recruit up to approximately 400 subjects. Right now, to date, we're right at about 400, so we've got about 100 more to go. We expect to close that enrollment by end of Q2 of this year. This, of course, is a global study, double-blind, same randomization as we had in Dragon I, 2:1 favoring Tinlarebant. It's a two-year treatment duration. Of course, just like in Stargardt, we're looking for the slowing of atrophic lesion growth as the primary endpoint for drug approval. Of course, we're also looking at BCVA, retinal anatomy by SD-OCT, and retinal sensitivity by microperimetry. Like the Stargardt Dragon I study, we will have an interim analysis at one year.

With that, I think I'll throw it to Hao-Yuan for the financial results. Thank you.

Hao-Yuan Chuang (CFO)

Thank you, Nathan. In 2024, we had R&D expenses of $29.9 million compared to $28.8 million in 2023. The increase in R&D expenses was primarily due to an increase in royalty payments for the completion of the phase II trial and an increase in share-based compensation granted in the Q3 of 2024. On G&A expenses, in 2024, G&A expenses were $10.1 million compared to $6.8 million in 2023. The increase was primarily driven by an increase in share-based compensation granted in the Q3 of 2024. On net loss, we had a net loss of $36.1 million in 2024 compared to $31.6 million in 2023. In terms of cash, we had $31.7 million in cash and $113.5 million in investment by end of 2024, as compared with $88.2 million by end of 2023. The investments were in liquidity fund, in time deposit, and U.S. Treasury bills.

One thing to note is that the net cash outflow for operating activities was $29.2 million in 2024, similar to the cash outflow of $29.8 million in 2023. We also raised $15 million in gross profit proceeds in a registered direct offering in February 2025. We still expect four years' cash runway without considering the cost from a second GA phase III study. Thank you. Back to you, operator.

Operator (participant)

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 into 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 Mark Goodman with Leerink. Your line is open. Please go ahead. Moving along, your next question comes from the line of Jennifer Kim with Cantor. Your line is open. Please go ahead.

Jennifer Kim (Equity Research Director)

Hi. Thanks for taking my questions and congrats on the progress. Maybe on my first question, starting with Stargardt. On the DSMB's recent recommendation, you've said that you plan to reach out and, I guess, seek harmonization across some ex-U.S. regulatory authorities. Could you outline the potential outcomes from those interactions, either positive or negative?

Tom Lin (Chairman and CEO)

Thanks, Jennifer. I can take that. The DSMB has recommended the interim results to be reviewed by regulatory agencies for drug approval, as you pointed out there. We believe this is a very positive outcome, and we'll be following DSMB's recommendations to request regulatory review and see whether the agency is conformed with DSMB's recommendation. We certainly believe that the regulatory agencies will probably align with the DSMB's recommendation because it's not every day that they make this kind of recommendations during interim. If they don't see it that way, then we'll just move on and carry on with the study.

Jennifer Kim (Equity Research Director)

Okay. Maybe turning to GA, what drove the decision to increase the sample size to 500 patients?

Tom Lin (Chairman and CEO)

We're getting so this GA study has been moving on very smoothly. We want to take this opportunity to enroll more subjects to further boost our chances of success. Based on this current enrollment rate, we should still be able to complete within our expected timeline, which is Q3 this year. The cost will still remain very feasible based on the current recruitment rate.

Jennifer Kim (Equity Research Director)

Okay. If I could squeeze one more question with GA, can you just remind me what is your latest thinking on what the interim analysis will entail and how that sort of feeds into the decision to start a second trial?

Tom Lin (Chairman and CEO)

You mean for the Phoenix interim?

Jennifer Kim (Equity Research Director)

For Phoenix, yeah.

Tom Lin (Chairman and CEO)

We certainly believe that if we get any positive signals from the IF of Phoenix, then we would speed up and expedite our second phase III trial for Phoenix. For GA, sorry.

Jennifer Kim (Equity Research Director)

Thank you.

Operator (participant)

Your next question comes from the line of Mark Goodman with Leerink. Mark, as a reminder, please unmute yourself. Your line is now open. Please go ahead.

Marc Goodman (Senior Research Analyst)

Hi, good afternoon. Can you hear me okay now?

Tom Lin (Chairman and CEO)

Yes.

Marc Goodman (Senior Research Analyst)

Okay. Hi, this is Basma on for Mark. Thank you for taking our questions. Our first question is about Stargardt disease. Are you going to be able, when you meet with the authorities, regarding regulatory clarity for the submission, will you be able to also get confirmation regarding the potential for a broad label, given that the study population so far is only adolescents? Our second question, again, could you give us an update about the current discontinuation rates in the GA trial, the Phoenix trial? Thank you.

Tom Lin (Chairman and CEO)

Sure. I'll take the second question, and I'll leave the first one for Hendrik. The dropout rate for Phoenix right now is approximately about 20%. It is very common because the majority of the subjects enrolled in the GA trial are elderly population. For previous studies, we've seen the dropout rate of more than 30%. In fact, the deuterated vitamin A study that was just recently presented at JPMorgan, the dropout rate is more than 30%, and certainly more for Emixustat and the anti-complement study. I'll let Hendrik confirm for the dropout rates for the anti-complement studies as well as answer your questions on the Stargardt broad label. Hendrik?

Hendrik Scholl (CMO)

Yeah, I'm happy to. Thank you, Tom.

What we have seen in natural history studies is that in patients that have an earlier onset of disease, the disease is generally more severe and shows a faster progression. The PROXA study has shown that subjects with a younger age and early onset still show a relatively similar progression rate compared to other subjects that were older in the PROXA study, not very old, obviously, but still a juvenile macular dystrophy, but would be adults. We believe that the threshold actually to get something approved for a pediatric population would be much, much higher. We feel that if we can show efficacy in our adolescent population, it should be relatively straightforward to get the drug approved for adults as well. Hendrik, can you also mention about the dropout rate for the anti-complements as well as for mixed-state?

In the anti-complement studies, the dropout rate was in the order of magnitude 20%-30%. I believe in the study with a mixed-state, which has quite extensive side effects, that dropout rate was even higher. I would actually hand over to Dr. Nathan Mata, who actually knows a lot about that specific drug and its effect in geographic atrophy.

Tom Lin (Chairman and CEO)

Yeah, it was a little over 40%.

Operator (participant)

Thank you. Thank you. That's very helpful. Your next question comes from the line of Yi Chen with H.C. Wainwright. Your line is open. Please go ahead.

Yi Chen (Managing Director)

All right. Thank you for taking my question. Just to clarify, the adolescent Stargardt disease patients enrolled currently into the Dragon trial, they represent what percentage of the Stargardt disease patients diagnosed in the real-world training?

Tom Lin (Chairman and CEO)

Hendrik, I believe there's a question for you as well.

Hendrik Scholl (CMO)

I'd be happy to take the question. The typical Stargardt patient would notice first symptoms in the second decade of life. We see patients that have a very early onset as early as five years, and then there are patients that are later in adulthood develop the first symptoms. As Carl Stargardt described the disease in 1909, right, this is a juvenile macular dystrophy, and it typically starts between 10 and 20 years of age with first symptoms. Given that our study population actually includes subjects between 12 and 20 years old, we feel that this is very representative and would show an overlap if we look at all Stargardt patients that would schedule a visit in clinic. I would believe that that would represent two-thirds of Stargardt patients that I would see, for example, in my clinic.

Tom Lin (Chairman and CEO)

You would expect potential approval in the future for all Stargardt disease patients in that age range, right? Not necessarily meeting the enrollment criteria in your current trial, correct?

Hendrik Scholl (CMO)

If I understood the question correctly, the question is if we show efficacy.

Tom Lin (Chairman and CEO)

The future prescription label is not restricted to the patient groups you're currently enrolling into a pivotal trial.

Hendrik Scholl (CMO)

Exactly. The answer is no, and there would be no reason why we would not prescribe that drug to, let's say, an adult patient that developed the first symptoms at age 30 and still shows progression of these DDAF lesions, which is typical also for adult patients.

Tom Lin (Chairman and CEO)

Do you expect any potential limitation on the payer side for reimbursement if the label is broader than the patients currently enrolled in the Dragon trial?

Hendrik Scholl (CMO)

I think we will definitely talk to the regulator to try to get the label for the adults, which we think is doable. We'll probably just do a PK study to prove that it works the same on the adult patients.

Yi Chen (Managing Director)

Okay. Thank you.

Operator (participant)

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

Bruce Jackson (Senior Analyst)

Hi, good afternoon, and thanks for taking the questions. First, a housekeeping question about the capital raise you did for $15 million. Has anyone exercised the warrants yet attached to that?

Hendrik Scholl (CMO)

Not yet.

Bruce Jackson (Senior Analyst)

Okay. In February, you said that your CRO is going to be handling some of the regulatory process for you with the data for Dragon. Could you just give us a little bit of color on where they are with that process right now and what the next step might be?

Tom Lin (Chairman and CEO)

Yeah. Thanks. Thanks, Bruce. We have two or three different CROs representing us for different jurisdictions. Certainly, they have a different procedure and certainly different templates for submitting these kinds of regulatory submissions. Right now, it's in good hands, and they are basically submitting as we speak.

Bruce Jackson (Senior Analyst)

Okay. All right. Great. That's it for me. Thank you.

Operator (participant)

Your next question comes from the line of Michael Okunewitch with Maxim. Your line is open. Please go ahead.

Michael Okunewitch (Senior Research Analyst)

Hi, guys. Thanks for taking the questions. Just first, what kind of difference in lesion growth between placebo and treatment is the Dragon study powered for?

Tom Lin (Chairman and CEO)

Nathan, do you want to answer this one?

Nathan Mata (Chief Scientific Officer)

Yeah. It's powered for 40%. It's 40% treatment effect with 80% power to detect that effect at the second year.

Michael Okunewitch (Senior Research Analyst)

Okay. Great. Thank you, and congrats on all the progress.

Tom Lin (Chairman and CEO)

Thank you.

Operator (participant)

There are no further questions at this time. This concludes today's call. Thank you.