LB Pharmaceuticals Inc (LBRX) Guggenheim 3rd Annual Healthcare Innovation Conference - LB PHARMACEUTICALS INC

healthcare innovation conference. I am Delma Cagliatti and I'm one of the analysts here at Guggenheim and it's my pleasure to welcome next LB Pharma here with us. So from the company we have Gad Soffer, the chief operating and business officer. So it's a pleasure to have you here Gad and to have this conversation with you. So this is such an exciting time for the company of course and before we have a lot to discuss but before we go into the Q&A, I would like you to take the stage and maybe give us an overview of where you stand now, what investors should be looking for over the next 12, 24 months. So why don't we start there? Excellent. Yeah. And Delma, thank you very much for the invitation. It's a pleasure to be here. And thank you all for coming to learn more about LB Pharma. And you're right, it is very much an exciting time here at LB. Our vision at LBE is very clear. Our goal is to build a fully integrated neuromedicines company, one that is both capable and ready to commercialize innovative therapeutics that have the potential to really improve the ability for patients to fully live their life. As we say this internally, it's to live boldly. Our lead program, LB102, is really a foundational asset. It's one that stands on the shoulders of decades of clinical and real-world validation from one of the most successful antipsychotics outside the United States. And earlier last year, we read out data from our NOVA1 study in schizophrenia that had highly statistically significant results across all the doses and suggested the opportunity for a really differentiated profile in what we know is a very large branded antipsychotic market. Coming out of conversations with FDA, we believe we have a path to registration with just a single additional phase three study. The mechanism of the drug is also broad so it provides opportunity to expand both in psychosis as well as in in mood disorders as I know we'll talk about we have a strong IP portfolio with compositions covering to the early 2040s including patent term extension and a really strong balance sheet now that balance sheet enables us to fund our ongoing Phase III NOVA II trial, which we expect to read out in the first half of 2027. It also supports the ongoing open-label safety trial, as well as the NDA-enabling studies, all the things that we need to do to put ourselves in position to support and approval of a new chemical entity. We're also running a phase two bipolar depression study, which started earlier this year and should read out in the first quarter of 2028. And in addition, we expect to start an MDD phase two trial early next year, which we'll read out. And we're also going to be doing a phase three in the second half of 2029. So stepping back, the capital base that we have today really puts us in a position to have a very meaningful set of significant clinical milestones across very large diseases with significant unmet need, starting in 27 with schizophrenia, 28 bipolar depression, 29 MDD. Thank you for that great overview and clearly a lot of things going on in the company. But let's take a step back. So as you said, LB102 is the first benzamide to be developed in the US. But Amisulpride, which is a similar structure, has been already approved at XUS, and is one of the most efficacious antipsychotics. So why Amisalpride was never developed in the US, why it was never brought here, and how did you make a new molecular entity out of that? Yeah, so Amisolpride Was originally developed by a company called Synthalabo. It got its initial approval in France in the late 80s and then expanded to other European geographies from there. And you're right, it is a very well-regarded therapeutic, second highest effect size, only to clozapine, very low all-cause discontinuation rate. You know, Sanofi purchased Syntholabo in the later 90s, and they tried to bring Amisulpride to the United States. Unfortunately, they were asked to do an entirely new clinical development program, and they simply didn't have the requisite IP life remaining on the drug, and so they chose not to do that. Although amisulpride is a very successful drug, it's approved in schizophrenia, negative symptoms of schizophrenia, dysthymia, it does have a couple of significant limitations. It has very poor blood-brain barrier permeability, and as a consequence, it needs to be delivered at very high doses, and it needs to be administered twice daily. So LB Pharma set out to retain the benefits of amisulpride. It is a very unique D2 antagonist, very selective for D2, D3, 5-HT7, but do it in a way that we could also solve those limitations. We did that by methylating the drug. That methylation improved the lipophilicity of the molecule and improved the ability to permeate the brain, resulting in a molecule that was more potent. 50 milligrams of LB102 is the equivalent of about 400 milligrams of amisulpride. Both of those doses have about 70 percent receptor occupancy. It also enabled us to dose QD because we have a little bit of a longer residence time in the CNS. And as we saw in our NOVA1 trial, you know, potentially an even better tolerability profile than that of emesolpride. And following up on the tolerability side in particular, so we know that schizophrenia is obviously a challenging market in a way where differentiation matters. So what are the key differentiating features of LB102 as you saw from the phase two trial and based on what we know also from emesopride, and which one really matters when you think about the commercial perspective? Yeah, you know, I think schizophrenia is a disease, you know, where first and foremost, physicians need to know that you have a drug that can control the positive symptoms. But beyond, that's sort of the entry ticket. Beyond that, as you said, tolerability is centrally important because, you Know, these patients need to stay on these drugs chronically. And, you Now, every time a patient relapses, you Know, they do irreparable harm to themselves. So the profile that we generated in NOVA1, you know, we think demonstrates that very competitive efficacy, you Know, effect sizes near the top of approved antipsychotics with a tolerability profile that, you Now, we see as class leading among the D2 antagonists and partial agonists, specifically as it relates to extrapyramidal symptoms, which are, These movement disorders that often come along with D2 antagonists, as well as sedation, which can be a very challenging side effect for many of these patients. The other element of having, I think, a successful therapy in schizophrenia is simplicity of use. Adherence is so important. Speed of onset is important. So having a drug with no titration that you can start at a therapeutic dose immediately that's QD with no food effect, few drug-drug interactions, that's really important. So those are really the key elements. And then being able to address the residual symptoms that are also significant unmet needs in schizophrenia, like negative symptoms, like cognitive impairment, those are upsides. But the core is competitive efficacy, tolerability to sustain use, and simplicity of dosing. And low EPS, as you were saying, is a particularly interesting feature of the drug, because if we consider all the other D2 agents, they are all producing high level of extrapyramidal symptoms. So from a scientific perspective, how can that be explained? What have you seen clinically and also based on the mechanism that justifies that differentiation? Yeah, it is a really striking finding. You know, the NOVA1 trial tested doses between 50 and 100 milligrams of LB102, which equate to receptor occupancies of 70 to 80 percent. And, you know, in that range, you would expect to see more EPS. What we saw was really striking. At our 50 milligram dose, we had just a single case of akathisia, less than 1% EPS rate. At 100 milligram dose even when we were pushing, you know, slightly above 80% receptor occupancy, we just had 5.6% EPs compared to 3.7% placebo. So really, really low. You know, one of the things, you now, there's a lot of literature on, you kno, MSL pride focusing on regional selectivity in the CNS. And so at our R&D day a couple of weeks ago, we presented some data where we specifically looked at the relative activation profile of LB102 and mesopride and various other antipsychotics in the motor versus the associative part of the striatum. And ideally, what you want to do in schizophrenia is suppress dopamine signaling in the associative portion of the striatum and not affect the motor to avoid EPS. And we were really encouraged to see in those results, which a preclinical study, of course, but really encouraged to see that LB102 is really selective for the associitive part of the triatum. And I think the import of that finding is that it provides a plausible potential mechanism for why it is that we're seeing such low rates of EPS despite the high receptor occupancy. Yeah, that makes sense, and it's clearly supportive. Now, looking forward to the phase three that is ongoing, you will have data in the first half of next year. So, of course, as we know, in schizophrenia, managing placebo is always challenging. And you have mirrored, basically, with NOVA2 what you did with the NOVA1 trial. But there are a few changes there. How do you expect those changes to affect placebo, and how are you controlling for that? Yeah, you're right. Placebo is the primary risk in these trials. And in our NOVA 1 trial, we made a really deliberate effort to control placebo, which we think was successful there. So, you know, first and foremost, it starts with site selection. You know, it's really important to ensure that you have sites with the adequate experience to run these trials, you know looking at their rater training programs and things like that. You know the second is these trials require a very significant level of oversight, both of the CRO and the trial sites themselves. These are not the place where you can just hand a trial off to the CRO. You know, we also implemented central raters to add a measure of quality control over the local raters. We were very judicious about the number of scales that we used in these trials. And as you said, the Nova 2 is a virtual carbon copy of Nova 1. And I think if you were to go ask sites, they would say our trial is very simple, right? And it's done that way intentionally. We know that patient fatigue and rater fatigue, if you have too many scales, can be a problem and can cause increases in placebo rate. We also use dedicated vendors to help us identify and exclude professional patients. In NOVA1, we used one vendor to do that. Now, in NOVA2, we're actually using two independent vendors to help identify and exclude professional patients. I think there's two other elements of the changes between NOVA 2 and NOVA 1 that I think will help on the placebo front. The first is that we've dropped one of the arms. So NOVA1 was a forearm study, NOVA2 is a three-arm study. Every time you increase an arm in a trial like this and there's a higher probability that a patient thinks they're on active drug, it can impact the placebo rate. The other thing that we've done is we've developed internally an application, an app, that is on the phones of our clinical development staff that enables them to basically monitor and drill into the study at a whole study level, at a regional level, at a site level, even down to a patient level. So that nearly real-time monitoring really allows us to exercise a significant degree of oversight. Got it. I know the big question, what is the bar for success? So you are powered at 85% to show six points, delta on the primary endpoint. Can you help us to contextualize that statistical powering versus what you saw in phase two? And maybe clarify the importance of the effect size there versus just purely the difference, the six points. So what do you want to see in terms of difference on the primary endpoint, Madras, and potentially the effect sizes as well? Yeah. So I think first and foremost, what we want to is a statistically robust study. So our NOVA1 trial was highly statistically significant across both the primary endpoint as well as all the sensitivity analyses, and so we'd like to see the same thing. Now, from an efficacy standpoint, all of the approved antipsychotics are largely overlapping with respect to efficacy. What's important is that we show competitive efficacy. And from there, I think you look at the tolerability profile, right? As we said, what's so critical in this disease state is efficacy that can demonstrate the ability to control the positive symptoms with a tolerability profile and simplicity of use that can enable people to stay on this drug. So, you know, those are, you know, I think, you know, as we look to the safety profile, you know, what we saw in NOVA1 with the low EPS rate, the negligible sedation, you know, and I think if few GI side effects, you know, if the safety profile is broadly consistent with what we observed in NOVA 1, that would be great because it would reflect this, you know, this balance that we're trying to achieve. And, you Beyond that, the results that we saw on cognition, on negative symptoms in NOVA1, I think those are upside. Got it. And do you expect to see a dose response? And is the alpha split between the two doses or not? So, yeah, look, I Think when we, you know, commercially, we thought it was important to include two doses in the trial. We did see dose response in NOVA1, and there's some advantage among physicians to have multiple doses. Having that flexibility allows them to start at a minimally efficacious dose to try and manage the safety profile and then escalate as needed. Got it. And now from a regulatory perspective, so you have guided for a pre-NDA meeting in the second half of 2027. Maybe can you clarify to us what are the gating factors for that meeting? So will you need to wait for the NOVA 3 results, and where do you stand with the NOva 3 program as well? Yeah, so the primary gating result for the pre-NDA meeting is actually the NOVAA 2 readout. So we're expecting the NOvAA 2 redout in the first half of 27, and the pre-'NDA' meeting will be in the second half of27. You know, of course, the long-term safety data, that is always one of the long poles in the tent for any submission, and so I think what we'll be doing at the pre-NDA meeting is aligning with FDA on the scope of the submission and when all the different pieces will come in over the course of the process so that they're comfortable with that up front. You know, once we have the pre-NDA meeting, we'll be giving much more concrete guidance as to when we expect to submit. Got it. And something we hear from investors all the time, and I think people are struggling to figure out, is what's the real commercial opportunity for a new entrant in schizophrenia, especially because new entrants have not performed well with CoBanfi, we know, and all of that. So how should we think about the oral branded market going forward? Is it growing? What are the growth drivers? And what's the commercial opportunity for LB102 in that context? Yeah, so schizophrenia is an attractive market. I think what you've seen with the recent launches is the challenges associated with a drug that has a very difficult profile, one that actually doesn't create that balance that we talked about between efficacy, tolerability, and simplicity of use. Things like BID dosing, things like food effects, challenges switching from one agent onto another, those can be real hindrances to the commercial profile of a drug. The way the commercial landscape works in schizophrenia is all patients are required to go through somewhere between one and three generics before they can get to a branded agent. And based on the profile from NOVA1, we believe LB102 will be positioned as the branded antipsychotic of choice. And so I think we're excited about the profile. Now, if you look more broadly at antipsykotics, you'll see schizophrenia is an important part of the revenue stream for all of these drugs. But, you know, the fact of the matter is when you look at the antipsychotics that have eclipsed the blockbuster status, the commonality among them is that they've all expanded to the mood disorders. And so, you Know, that's why we chose to, you Now, again, based on, You Know, all of our belief in a high probability of success to, You Now, initiate studies as quickly as possible and bipolar depression and also MDD. Those patient populations are just so much bigger. And the potential expansions to those indications is also a very interesting part of the story for exactly that reason. But before moving to those programs, a quick one on pricing. How are you thinking about that? And where do you stand with the commercial launch preparation? Yeah, so, you know, on price, I would expect us to be kind of in the range of other branded therapies. We haven't given, you now, a specific number. You know, commercial prep is ongoing. So, you know, very shortly after the IPO, we brought in our chief commercial officer, Kaya Pai-Panendyker, who's an incredibly experienced commercial operator who's launched a number of drugs and schizophrenia, as well as the mood disorders. And what we've been doing, you know, what she's been leading, you know, now encompasses, you know, market insights and positioning and, you know, initial, you know, work with payers. That'll all get cemented, you know, as we read out the phase three data, and we'll be building, you know, commercial infrastructure kind of in a stage-gated way. Got it. And now looking at the bipolar depression study, so you expect the data in the first quarter of 2028. Is this designed as a pivotal study? Is your base expectation that you will have to run another one after this? And what's the bar of success there? Yeah. So I think our base case expectation, although all of our trials are designed to be adequate, well-controlled trials. So the bipolar depression study, the MDD study that's planned to start early next year, they're all designed with that in mind. That said, our base case assumption is that we will be running, you know, phase three studies in bipolar depression. You know, what you typically see is often companies will run, you know. A monotherapy study as well as an adjunctive study in combination with lithium and valproate. Got it. So when we look at the scientific rationale for expanding into more disorders. Of course, there is a lot supporting that. Where do you have stronger confidence between, let's say, the bipolar and the adjunctive MDD program? And how much will the bipolar results influence or read through, I would say, to the adjuctive Mdd study? Yeah, I mean, I think, so the confidence comes from really, you know, three core factors. The first is the mechanism. You know, we know that, you know, LB102, like amisulpride, has this affinity for presynaptic autoreceptors, specifically at lower doses, that serves to increase dopamine signaling. You know. Beyond that, we also hit D3 and 5-HT7, like Amisulpreide. So there's really multiple mechanisms for antidepressant efficacy. to see. The second is the very strong clinical and real-world validation from MSL-Pride itself. MSL Pride is approved in a number of jurisdictions in dysthymia, which is a persistent form of depression. It's approved in negative symptoms, which although distinct from depression, shares a lot of symptoms with it, chiefly anhedonia. And MSL pride, you know, clinically was studied head-to-head versus Paxil and Solof, shown to be as good or better. It was studied head-TO-head versus placebo in depression, had a very nice 4.8 Madras Delta. And in the real world, we know from IQVIA script data that there's more than 2 million scripts for amisulpride in Europe, 20% of which are for mood disorders. So beyond that, the results from our NOVA1 study also give us a lot of reason to believe the safety profile that we generated there, even at our schizophrenia doses, and we're moving to lower doses in the mood disorders, was really compared quite favorably with other drugs that are approved for those indications. And lastly, we have trial designs that we think set us up very well for success. Both studies are designed to allow us to study two doses in a two-arm trial. Got it. And maybe in this last minute or so, you have a lot going on. So how should we think about the spend rate and what does the cash runway cover in terms of milestones? So our runway now goes beyond the second quarter of 2029. That encompasses all of the clinical milestones that we talked about earlier. So where we find ourselves is a situation where we have line of sight to phase three data for schizophrenia in 27, bipolar depression data in 28, MDD data in 29, very clinically meaningful events. And all of those are funded alongside our efforts to develop a long-acting injectable, as well as thinking about expansion to other indications like negative symptoms or Alzheimer's. Really exciting time for the company. And thank Thank you so much, Gad, for this great conversation. Thank you. Thank you, thank you.