Longboard Pharmaceuticals, Inc. (LBPH)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 advanced bexicaserin (LP352) meaningfully: Breakthrough Therapy designation for DEE seizures (≥2 years), completion of End-of-Phase 2 meeting, and Phase 3 program on track to initiate in H2 2024; LP659 topline SAD data showed rapid, dose/formulation-dependent lymphocyte reduction with a favorable safety profile .
• Cash and investments were $304.9M; management reiterated runway into 2027 and reported ~$19M quarterly cash burn as R&D scaled ahead of Phase 3; OpEx rose QoQ driven by bexicaserin preparation and LP659 activities .
• Operating expenses of $25.6M (+41% QoQ; +64% YoY) and net loss of $21.8M; diluted EPS was $(0.56) vs $(0.42) in Q1 and $(0.65) in Q2 2023; interest income increased to $3.9M .
• Estimate comparison unavailable: S&P Global consensus data could not be retrieved for LBPH at this time; therefore beats/misses vs Street are not provided.

What Went Well and What Went Wrong

What Went Well

• Bexicaserin secured Breakthrough Therapy designation for DEE seizures and completed End-of-Phase 2, enabling a global Phase 3 start in H2 2024; management emphasized being the first to receive BTD in DEEs and the strong community and FDA engagement .
• PACIFIC OLE interim analysis showed sustained seizure reduction over ~6 months with favorable safety/tolerability, supporting durability heading into Phase 3 .
• LP659 Phase 1 SAD topline showed a favorable safety profile (no SAEs, mild AEs, no first-dose bradycardia, normal ECG/echo, no infections) and strong PD signal (up to ~59% lymphocyte reduction at Hour 6), de-risking onward MAD plans .

Specific quote: “We intend to initiate our Phase III program in the second half of this year, and we'll provide additional details… on September 16.” — Kevin Lind .

What Went Wrong

• Higher operating expenses as programs scale: R&D rose to $20.4M (+$7.9M YoY) with bexicaserin clinical/preclinical and personnel as key drivers; G&A rose to $5.2M (+$2.1M YoY) on personnel and professional fees .
• Diluted EPS widened QoQ to $(0.56) on increased OpEx vs $(0.42) in Q1, despite higher interest income; net loss increased to $(21.8)M .
• LP659 remains under partial clinical hold pending the complete response and MAD proposal; indication selection timing deferred until MAD data to optimize risk/reward and IP strategy .

Financial Results

Notes:

• Longboard is a clinical-stage, pre-revenue biotech; revenue and margin metrics are not applicable based on reported statements of operations (no revenue line presented) .

KPIs and Operating Drivers:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are the first and only company to receive this designation for DEEs… We intend to initiate our Phase III program in the second half of this year.” — Kevin Lind (CEO) .
• “LP659 was generally safe and well tolerated… no first dose bradycardia… no abnormal ECGs or echocardiograms… no infections.” — Randall Kaye (CMO) .
• “We ended the second quarter with approximately $305 million… cash burn of about $19 million… expenses will continue to trend slightly upwards during 2024 as we… build-out our… Phase III program.” — Brandi Roberts (CFO) .
• Press release highlights: “Ended second quarter 2024 with $304.9 million… cash runway is expected to support current planned operations into 2027.” .

Q&A Highlights

• Phase 3 sizing and DEE breadth: Management will disclose full design at Sept 16 R&D Day; Study 301 will be a DEE study that includes LGS, not limited subsets; heterogeneity expected based on PACIFIC experience .
• LP659 formulations and MAD plan: Formulation 2 favored for MAD due to better plasma exposure and ALC impact; anticipate further ALC reduction with multiple dosing while maintaining safety; partial clinical hold to be resolved with MAD submission .
• Global regulatory alignment: Positive expectations that BTD precedent will facilitate alignment with non-U.S. regulators (authorities communicate; aware of BTD rationale) .
• Safety details: No clinically significant HR decrease; no QTC prolongation observed in SAD; ocular/pulmonary assessments normal; continued vigilance in MAD and beyond .

Estimates Context

• S&P Global consensus estimates for Q2 2024 (EPS, revenue) were unavailable for LBPH in our system at the time of analysis; therefore, we cannot provide beat/miss assessments vs Street for this quarter. Management’s commentary emphasized higher OpEx as bexicaserin moves toward Phase 3 and LP659 advances, which would have been the primary drivers of variance had estimates been available .

Key Takeaways for Investors

• Regulatory de-risking: Bexicaserin’s BTD in DEEs and completion of End-of-Phase 2 materially improve Phase 3 probability of success and shorten potential timelines; Phase 3 initiation in H2 2024 is a near-term catalyst (R&D Day Sept 16) .
• Clinical durability: PACIFIC OLE interim data support sustained seizure reductions and favorable tolerability over ~6 months, strengthening the efficacy narrative heading into pivotal trials .
• Balance sheet strength: ~$305M cash with runway into 2027 provides capacity to execute two global Phase 3 studies and advance LP659 through MAD without near-term financing risk; monitor incremental OpEx as program scales .
• LP659 optionality: SAD results de-risk safety/PD; MAD in Q1 2025 can unlock indication selection and resolve partial hold—watch for translational/feasibility-driven orphan CNS choices and potential partnering in larger indications .
• Near-term catalysts: Sept 16 R&D Day (Phase 3 design), ILAE ECC late-breaker OLE presentation, Phase 3 trial initiations—these events likely drive sentiment and could re-rate the stock on clarity of pivotal path .
• Expense trajectory: Expect modest OpEx increases as Phase 3 infrastructure scales; interest income offsets some burn; share count up vs prior year—EPS sensitivity remains to spending cadence .
• Trading implications: Momentum is supported by regulatory wins and imminent Phase 3 start; absence of revenue keeps valuation event-driven—position around catalysts while monitoring execution and safety signals in LP659 MAD .

Appendix: Additional Quantitative Details

Operating expense bridge (YoY, Q2 2024 vs Q2 2023):

• R&D: +$7.9M (bexicaserin +$3.8M; personnel +$2.7M; LP659 +$0.7M; other +$0.7M) .
• G&A: +$2.1M (personnel +$1.6M; consulting/professional +$0.3M; other +$0.2M) .