Good afternoon, ladies and gentlemen, and welcome to the Mineralys Therapeutics Third Quarter 2023 Conference Call. [Operator Instructions]. It is now my pleasure to introduce your host, Dan Ferry, of LifeSci Advisors. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to our third quarter 2023 conference call. Today, after the market closed, we issued a press release providing our third quarter 2023 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, November 7, 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, and welcome to our Third Quarter 2023 Financial Results and Corporate Update Conference Call. I'm joined today by Adam Levy, our Chief Financial Officer and Chief Business Officer; and Dr. David Rodman, our Chief Medical Officer. I'll begin with a brief overview of the business and recent milestones followed by David who will discuss our clinical programs, and then Adam will review our third quarter financial results before we open up the call for your questions. It was only 12 months ago when we first announced the positive top line results from our Phase 2 Target-HTN trial of lorundrostat in individuals with uncontrolled or resistant hypertension. We have since published additional data from the full analysis of the trial, which provided valuable insights supporting the potential use of lorundrostat to treat uncontrolled or resistant hypertension. Most recently, we announced the full data from this trial were published by JAMA and last week, we presented a new analysis, further providing additional data showing obesity was predictive of an enhanced response to lorundrostat across the continuum of BMI in a late breaking poster presented at ASN's Kidney Week 2023. The data in these recent publications support our strategy of developing lorundrostat as a targeted treatment for hypertension and CKD. Now let me provide some highlights from each of our clinical programs, and Dave will cover further details in a moment. Starting with Advanced-HTN, which is one of the most rigorous hypertension trials ever undertaken. The trial is designed to allow us to demonstrate the value of lorundrostat when added to standardized background medication in confirmed, uncontrolled, or resistant hypertension subjects. We believe this trial has the potential to generate the highest level of evidence that will be important for potential inclusion in hypertension guidelines for treating…

Thank you, Jon, and good afternoon, everyone. Today, I'll provide an update on the pivotal clinical program for lorundrostat, and then I'll give a summary overview of the plan Phase 2 trial of lorundrostat for chronic kidney disease that we've named Explore-CKD. The ongoing Advanced-HTN trial continues to enroll subjects. As a reminder, this trial which we designed in partnership with the Cleveland Clinic is a randomized double blind placebo controlled design that will enroll up to approximately 300 adult subjects with uncontrolled or resistant hypertension. Patients who have failed to achieve their blood pressure goal on 2 to 5 anti-hypertensive medications are placed on an optimized 2 or 3 drug regimen along with real time compliance monitoring. This is one of the most rigorously designed trials to be conducted in hypertension, optimizing for inclusion of truly uncontrolled or resistant hypertensive subjects. Subjects who failed to achieve 24-hour ambulatory or ABPM systolic blood pressure of 130 milligrams or lower are then randomized into the trial. One-third of subjects will be randomized to placebo, one-third to 50 milligrams of lorundrostat one day at once daily, and 100 milligrams of lorundrostat once daily that has been increased to a 100 milligrams based on pre-specified criteria. The primary endpoint of the trial will be change in systolic blood pressure as measured by 24-hour ambulatory monitoring at week 12, in the two active arms versus placebo. We have classified two key secondary endpoints, including the percent of subjects achieving 125 millimeters of mercury or below on the 24-hour ABPM, and the correlation of change in 24-hour ABPM to BMI or Body Mass Index in order to reinforce the obesity positioning relative to our targeted therapeutic strategy and potential label inclusion. For subjects in the Advanced-HTN trial, the treatment withdrawal component of the program has…

Thank you, Dave. Good afternoon, everyone. Today, I will discuss select portions of our third quarter 2023 financial results. Additional details can be found in our Form 10Q, which will be filed with the SEC later today. We ended the third quarter with cash, cash equivalents and investments of $265.9 million compared to $110.1 million as of December 31, 2022. We believe that our cash, cash equivalents, and investments as of September 30, 2023 will be sufficient to allow us to fund our planned clinical trials as well as support corporate operations through mid-2025. R&D expenses were $22.5 for the quarter ended September 30, 2023 compared to $6.1 million for the quarter ended September 30, 2022. The increase in R&D expenses was primarily due to increases of $12.4 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in 2023; $2.3 million in clinical supply, manufacturing and regulatory costs; and $1.7 million and higher compensation expenses as a result of additions to headcount. G&A expenses were $3.8 million for the quarter ended September 30, 2023, compared to $1.4 million for the quarter ended September 30, 2022. The increase in G&A expenses was primarily due to $1.2 million in higher professional fees associated with operating as a public company, $0.8 million in higher compensation expense as a result of additions to headcount, $0.3 million of higher insurance expenses associated with new director and officer insurance policies, and $0.1 million in higher other administrative expenses. Total other income was $3.5 million for the quarter ended September 30, 2023 compared to $0.7 million for the quarter ended September 30, 2022, which was primarily attributable to increased interest earned on the company's investments and money market funds and US treasuries. Net loss was $22.8 million for the quarter ended September 30, 2023 compared to $6.7 million for the quarter ended September 30, 2022. The increase was primarily attributable to the factors described earlier. With that, I'll ask the operator to open up the call for questions. Operator?

Thank you. Ladies and gentleman we will now begin the question-and-answer session. [Operator Instructions]. Your first question is from Michael DiFiore from Evercore ISI. Please ask your question.

Hi guys. Thank you so much for taking my questions and congrats on all the progress. A few from me on the advanced hypertension study, just curious how many patients were already past the 12-week endpoint and had not undergone treatment withdrawal and then would therefore need to be censored? And I have two follow ups.

Yeah. Mike, this is Jon. Appreciate the question. We haven't disclosed the number of subjects enrolled at different points. So that's just something we haven't addressed at this point in time.

Okay. Fair enough. So with regards to your Phase 2 CKD trial, I think on last call you said that SGLT2s alone reduce proteinuria by 30% to 40% over 12 weeks and that the potential bogey for the combination regimen would be around a 50% plus reduction, which AstraZeneca ZENITH trial of zibotentan plus dapagliflozin met at this - at this past weekend - ASN Conference this past weekend, I think the reduction was around 52.5. So based on your market research and conversations with KOLs, like, what's the willingness or appetite amongst cardiologists to use an effective anticancer treatment in this setting over an aldosterone synthase inhibitor such as lorundrostat.

Yeah. Mike, I appreciate the question. I think the 50% figure we've talked about before. I think that's kind of what we have in mind. Obviously, ASN this week and there was a lot of interesting data, for both Endothelin Receptor Agonists as well as ASIs from Boehringer Ingelheim. I don't know that we've gotten a lot of color from physicians on their interest in or not in using something like zibotentan. It was an interesting safety profile with that. From our standpoint, we think the BI data was confirming. I would say we anticipated seeing what BI reported with an ASI on top of an SGLT2 inhibitor. It's what has informed our thinking. I think the main takeaway for us, Mike, as we've been talking to KOLs, is the need to have more than just, say, one benefit. So in other words, rather than just have a benefit on CKD, having a new innovation that can provide benefit on hypertension while also providing benefit on proteinuria. That's where our focus has really been drilling in on the last several months as we've spoken with KOLs as we've done our market research. And that's where we think lorundrostat really has a unique profile and unique opportunity to provide benefit for those patients that have progressive kidney disease, but also have concomitant hypertension and then as we've spoken about in the past, there's pretty significant overlap between those two. And so that's why we've made the adjustment we did in our trial because we think that's what the market really needs is really a full complement, benefit in cardio-renal disorders.

That's very helpful. And you actually preempted my - my question on Boehringer Ingelheim. I think that trial was 14 weeks long in combination with Empagliflozin, which only showed about a 40% improvement in UACR, to the extent that you can, could you provide any color on if there's any fundamental potency difference between your drug and that drug, which may explain why this 50% bogey wasn't met?

Yeah. A couple of thoughts on that, Mike. The interesting thing is if you dig into that data, Empagliflozin actually performed a little bit less than you would typically think, right? You made the comment about 25% to 30%. And when you look at that study, I think Empagliflozin had about 11% reduction in UACR and so that the aldosterone synthase inhibitor, are they - as a delta performed probably equivalent, to what we're seeing if not maybe a bit better than zibotentan. The thing that was interesting to note from our standpoint was the presence of adrenal insufficiency, which could be related to the selectivity of that aldosterone synthase inhibitor. As you may recall, even at the highest doses in the Target-HTN study when we did ACTH testing, we saw no evidence of adrenal insufficiency even at the highest dose. So that was an interesting finding. I think the - comparing the cross trials can be somewhat challenging. I think the innovations with both are informative as we move into further development, I know for us, it was kind of a final piece of the puzzle with our thinking of Explore-CKD to see all of this data, but we're very excited to progress into that study and again we think the dual benefit of reduction in systolic BP as well as proteinuria could be a - a really interesting, component of the lorundrostat story.

Super helpful, Jon. Thanks for all the color. I appreciate it.

Thank you. Your next question is from Greg Harrison from Bank of America. Please ask your question.

Hi. This is Mary Kate on for Greg. Thanks for taking our question. And, also in - with your recent late breaking ASM presentation and anticipated presentation at AHA, I guess, how do these analyses here highlight the potential target market for lorundrostat if approved in terms of target population and anticipated impact? Thank you.

This is Dave. Thanks for the question. Our theory from the beginning was that the really the highest unmet need was actually people with visceral obesity that are more and more populating the - what we used to call a hyperaldosteronism. It's really a complication of obesity. And so we were gratified in our target trial to see that was true in the categorical evaluation we did above and below 30 BMI. In the paper that we recently presented - the poster we presented we did a continuous analysis looking from a BMI of 20 up to 40 and what we saw was there was a linear relationship that higher the BMI the greater the response, and where it really became prominent in the regression line was at a BMI of 30, just like the categorical, but what it also showed was there are people who are overweight but not obese who are also good responders and when we paired it down, what we found was that about a third of the subjects in the trial had exceptional responses of 30 or more millimeters of mercury median response, really truly exceptional responders. Right now, we know that obesity is one of the key factors driving that to a lesser extent, its exposure when you take the drug, hence that's why we're moving the dose up to 50 up to a 100 in people who don't achieve goal and we're using other techniques including artificial intelligence now to identify other factors and ultimately our plan is to develop deliver a toolkit to collect practitioners to figure out who these people are.

Great, thank you so much.

Thanks, Greg.

Thank you. Your next question is from Jack Padovano from Stifel. Please ask your question.

Hi. This is Jack on for Annabelle. Thanks for taking our questions. So now that lorundrostat has had data published and presented at multiple medical meetings. How is this exposure kind of help with the interest level for the ASI class overall and do you think that cardiologists and primary care providers are more aware of the importance of targeting aldosterone now than they were before?

Yeah, Jack. This is Jon. I appreciate your question. I - I think we're absolutely seeing an increase in awareness. I think there's this growing ground swell of interest and focus on aldosterone as really a driver of cardio-renal disorders, whether it's hypertension, whether it's CKD, whether it's heart failure, we're seeing that grow more and more in awareness and appreciation. I think that certainly tied to some of the really compelling data that's been put out. Some of it was a bit mixed earlier with Baxdrostat, I think with our data that's been very robust and showing a targeted effort and even some of the recent data by BI. So I think there's definitely an increasing interest and - and it's across the spectrum, it's cardiologist, it's endocrinologist, certainly nephrologists and primary care. I think that will just continue to grow as we continue to see more and more data published from subsequent studies from this exciting new class of therapy.

Great. And then a follow-up if I may. And this may be a longer term shift in the market but how do you see, GLP ones changing the opportunity for you given their impact on obesity and on cardiovascular factors as they've been shown to reduce blood pressure themselves by a not insignificant amount?

Yeah. I think it's - it's a really interesting point you make as we think about the market writ large, and maybe on that diabetes hyperglycemic sign, SGLT2 inhibitors GLP-1, GLP-1 combo with GIPs. They're obviously having a significant benefit as it relates to cardio renal would say the blood pressure responses while not insignificant are likely not as robust, is what we have seen in the past with the lorundrostat and what we're after it didn't to in a targeted approach. And, again that's where if you've tracked some of the recent conferences, Jack, there's this growing focus not just on a hypertension alone, not just on CKD alone, not just on hard failure, but on this cardiorenal metabolic syndrome and the fact that there's an interplay across all of these conditions, and frankly, we think aldosterone is probably one of the key contributors to that broader syndrome and having a drug that can have an effect across those conditions. We think it's going to be a three differentiating factor and the GLP-1s may be a part of that, but we certainly believe that ASIs are beginning to show a profile that's very robust at this stage on blood pressure reduction and potentially on proteinuria and we'll see beyond that.

Great. Thank you.

Thank you. Your next question is from Seamus Fernandez from Guggenheim Securities. Please ask your question.

Hi. This is Colleen on for Seamus. Thanks taking our question. You mentioned some changes to the Advanced-HTM protocol amendments to increase randomization rates. Could you provide a little more color there? And if these are considerations will be taken forward to Launch-HTN trial design too. And then secondly, we've touched on some of the competitor CKD readouts. Are there any learnings from these trials in terms of trial design or patient population that you'll be leveraging as you take lorundrostat forward there? Thank you.

Yeah. Let me - maybe take the first one on the CKD learnings, and I'll turn it over to Dave on the changes of Advance and implications to Launch. The CKD, I think as I alluded to in one of the prior questions, what we saw with the BI data, was frankly somewhat anticipated. We know that Aldosterone plays a role again in multiple conditions, CKD being one of them. I think the - the duration of our study that we have planned fits within the profile that we saw within the BI data as far as time to respond. I think the additivity with an SGLT2 inhibitor was anticipated that’s why we built it within our program. So I would say largely what we saw presented this past week at ASN was affirming to the design considerations we put into Explore-CKD. Let me have Dave address your question about Advance and Launch.

Will do. Hi, Colleen. So, good question. When we went into design and execution on the Advanced trial, this was a trial that was design that had only seldom been used, but always acknowledged that the absolute ideal design if what you want at the end is to be able to definitively say you have a treatment for resistant hypertension and hard to control hypertension. And so we were committed to it and remain committed to it. Now we understood though that whatever estimations we made on enrollment were only gonna be just at an estimation and so we always plan to be evaluating that in real time and have the agility to put a protocol amendment in place once we felt like there was justification and that's really what happened here. Let me give you two examples. So one sort of unanticipated thing was we put people on a very rigorous regimen, and it includes a diuretic called Indapamide. Now Indapamide is somewhat like Chlorthalidone. It's very potent. It's not often used, even though it's admittedly or I guess the consensus is it's probably the most powerful one. And what we found was that so many people were actually on hydrochlorothiazide and they didn't want to stop it and neither did their doctors, that that was the sole reason why they didn't wanna be screened and entered in the trial. And so one of the learnings we have was that if we just allow people to use the maximum tolerated dose of hydrochlorothiazide, we could fairly significantly increase the number of people who are willing to be screened to go in the trial. So that's one change we made, easy to understand simple, and it should have a pretty positive effect. Now if you look at the next gate…

Thank you. Your next question is from Mohit Bansal from Wells Fargo. Please ask your question.

Hi. This is Serena on for Mohit. Thanks for taking our question. Wanted to ask about CKD and how you're thinking about whether lorundrostat would be best combined with diuretics to maximize reduction of pressure on the kidneys or SGLT2s, which would confer kidney benefits beyond the impact on blood pressure?

Oh, this is Dave again. Thanks for that question. It's - it's complicated, right? What drugs should they be on? But the standard of care right now is for everybody to be on an ACE or an ARB and a diuretic, often a thiazide, but sometimes a loop diuretic. So those things are sort of a given. They're gonna be used and so our treatment would be add on to that. Right now, SGLT2s are approved and known to be effective, but they're pretty expensive and access is still kind of limited. So the percentage of people on an SGLT2 is somewhat less. So, but we anticipate by the time we launch, they'll be much more prevalent and also in standard of care. So the trial we're running will have people either on all three of those or just on the ACE or an ARB and diuretics. So we'll be able to answer your question with data at that point. And we're looking forward to seeing those data at that point. One thing I will mention though is the SGLT2s lower your serum potassium and so there is an advantage to that combination, because you have even less of a hyperkalemia risk, although we haven't really seen that as a problem yet with lorundrostat. Was there a second part to your question? No?

Nope. Thank you so much.

Yeah. You're welcome.

Thanks, Serena.

Thank you. There are no further questions at this time. I will now hand the call back to Jon Congleton for the closing remarks.

Thank you, operator, and thank you to everyone for joining us today. We're very excited about the progress we've made thus far in 2023 and advancing our clinical programs and we remain enthusiastic about the upcoming milestones for the rest of the year and into 2024. We look forward to updating you as our pivotal program for lorundrostat continues to advance. With that, we'll close the call. Thank you.

Thank you. [Operator Closing Remarks].