Welcome to the Mineralys Therapeutics Fourth Quarter and Full Year 2023 Conference Call. [Operator Instructions] This call is being recorded on Thursday, March 21, 2024. It is now my pleasure to introduce your host, Dan Ferry of LifeSci Advisors. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and welcome to our fourth quarter and full year 2023 conference call. Earlier this morning, we issued a press release providing our fourth quarter and full year 2023 financial results and business updates. A replay of today's call will be available on the Investors section of our website approximately 1 hour after its completion. After our prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that this conference call and webcast 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, March 21. 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 morning, everyone, and welcome to our fourth quarter and full year 2023 Financial Results and Corporate Update Conference Call. I'm joined today by Adam Levy, our Chief Financial 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 fourth quarter and full year financial results before we open up the call for your questions. Looking back over the past year, we've had so much to be proud of at Mineralys. Our entire team worked together to achieve several key milestones on both the clinical and corporate level. I believe this success speaks to the dedication the team has to our exciting programs that target diseases driven by abnormally elevated aldosterone. In 2024, we're working towards achieving several clinical events, which are expected to expand the data package of lorundrostat. We believe access aldosterone is common and is a significant contributor in approximately 25% of all hypertension patients and is tightly linked to obesity. Aldosterone is also a significant driver of cardiorenal, metabolic syndrome and thus our pursuit of an aldosterone targeted treatment approach that has the potential to benefit millions of patients who are impacted by hypertension, kidney disease and heart disease. I'm pleased by the significant progress our clinical team continues to make in implementing our development strategy for lorundrostat. Most importantly, we remain on track with our pivotal program for hypertension which includes the 2 pivotal clinical trials Advance-HTN and Launch-HTN. Advance-HTN is the only study of an aldosterone directed therapy that we know of that is utilizing the standardized background treatment approach, and we believe will be highly informative to lorundrostat's profile. Since initiating the trial in…

Thank you, Jon, and good morning, everybody. Today, I'll provide an update on the pivotal clinical program for lorundrostat, and then I'll give a summary update on the revised Phase 2 Explore-CKD trial of lorundrostat for hypertension and CKD. We were very pleased to announce at the end of the fourth quarter that we had dosed the first subject in our pivotal Launch-HTN trial. As Jon mentioned earlier, this is the second part of our pivotal clinical program for lorundrostat for treatment of hypertension. Total enrollment is expected to be approximately 1,000 subjects. Launch-HTN is a randomized, double-blind placebo-controlled 3-arm trial. The design is similar to the Target-HTN proof-of-concept trial, enrolling subjects who will remain on their previously prescribed background regimen of 2 to 5 anti-hypertensives. Subjects will be randomized 1 to 2:1 to either placebo, once daily 50 milligrams of lorundrostat or once-daily 50 milligrams of lorundrostat, but with the option to titrate up to 100 milligrams once daily as needed after week 6. The primary endpoint for this trial will be the change in systolic blood pressure as measured by automated office blood pressure, which was the same primary endpoint we used in Target-HTN. We believe this endpoint reflects a real-world measurement that will be relevant to the primary care provider this trial targets. In addition, subjects from this trial will be offered the opportunity to roll over into an ongoing open-label extension trial. Now turning to the pivotal Advance-HTN trial. We're progressing on track after implementation of the protocol changes and operational enhancements we discussed in our Q3 2023 earnings call. As Jon noted in his comments, Advance-HTN is a state-of-the-art, extremely rigorous hypertension trial designed and executed in collaboration with the very experienced cardiovascular research team at the Cleveland Clinic. We placed all trial participants on…

Thank you, Dave. Good morning, everyone. Today, I will discuss select portions of our fourth quarter and full year 2023 financial results. Additional details can be found in our Form 10-K, which was filed with the SEC earlier today. We ended the year with cash, cash equivalents and investments of $239 million compared to $110.1 million as of December 31, 2022. In February 2024, we completed a private placement financing for gross proceeds of approximately $120 million before deducting fees and expenses. We believe that our cash, cash equivalents and investments will be sufficient to allow us to fund our planned clinical trials as well as support corporate operations into 2026. The R&D expenses were $70.4 million for the year ended December 31, 2023, compared to $26.3 million for the prior year. R&D expenses for the quarter ended December 31, 2023, were $23.7 million compared to $7.8 million for the same quarter of 2022. The annual increase in R&D expenses was primarily due to increases of $21.4 million in preclinical and clinical costs driven by the initiation of the lorundrostat pivotal program beginning in the second quarter of 2023, $9 million in license fees upon achieving development milestones of lorundrostat in 2023, $7.8 million in clinical supply manufacturing and regulatory costs, $5.6 million in higher compensation expenses resulting from additions to headcount and stock-based compensation, and $0.3 million in other research and development expenses. G&A expenses were $14.3 million for the year ended December 31, 2023, compared to $5.2 million in the prior year. G&A expenses were $4 million for the quarter ended December 31, 2023, compared to $2.2 million for the same quarter of the prior year. The annual increase in G&A expenses was primarily due to $3.8 million in higher professional fees associated with operating as a public company, $3.4 million in higher compensation expenses resulting from additions to headcount and stock-based compensation, $1.1 million of higher insurance expenses, primarily associated with new director and officer insurance policies, and $0.8 million in higher other administrative expenses. Total other income was $12.8 million for the year ended December 31, 2023, compared to $1.7 million for the prior year. Total other income was $3.3 million for the quarter ended December 31, 2023, compared to $0.9 million for the same quarter of 2022. The annual increase was primarily attributable to increased interest earned on our investments in money market funds and U.S. treasuries. Net loss was $71.9 million for the year ended December 31, 2023, compared to $29.8 million for the prior year. Net loss was $24.4 million for the quarter ended December 31, 2023, compared to $9.1 million for the same quarter of 2022. The annual increase was primarily attributable to the factors I described earlier. With that, I'll ask the operator to open the call for questions. Operator? Operator, we're ready for questions.

[Operator Instructions] Our first question comes from the line of Michael DiFiore of Evercore ISI. Please go ahead. Your line is open.

Hi guys, thanks so much for taking my questions, and congrats on all the progress. A few for me. Number one, regarding the Advance-HTN trial. Any color on what we could expect in terms of placebo effect here, just given the standard background regimen, if we assume that equal amounts of patients will be on 2 versus 3 background drugs. I mean I think the lorundrostat [ph] suggests around 6 millimeters of mercury for non-resistant hypertension versus 9 millimeters in resistant patients, but just want to get your view on that. And I have 2 follow-up questions.

So just so I'm sure we're both on the same page. There's a run-in period on the background regimen during which we'll establish a new baseline due to those medicines. And then after that is when they'll enter placebo-controlled period comparing to lorundrostat. So we really don't expect that full placebo effect you were talking about to be manifest. Most of that will be in the run-in period. The running period is 3 weeks. And so it could be that there'd be a little residual effect, but I don't think it will change much from what we saw. And in the Target-HTN study using ABPM, our placebo effect was under 2 millimeters of mercury. So I think it will be in that under 5-millimeter mercury range for most likely, not the larger numbers that you quoted.

Very helpful. Another question. Earlier this week, a competitor anti-hypertensive drug recently got approved with its label having a black box warning, a REMS program and other notable safety warnings. Despite all of this and only having a 4-point -- roughly 4-point treatment effect, the drug was approved in a seemingly broad population, just want to get your views on the KOL [ph] appetite for this drug given its benefit risk profile and how this approval bodes for lorundrostat?

Yes, Mike, this is Jon. I think the introduction of any kind of new modalities is not a bad thing. We've seen an absence of innovation for a little over 20 years in this space. We know the unmet need with roughly 50% of the treated population not getting the goal, means that we need to have new approaches. As far as the KOL appetite for it, I think it's more broadly, we haven't really dug into the details around interest in Epros [ph] and Ten-Tan [ph] the label was interesting, and that creates a bit of a challenge. But again, I think the unmet need be met with new innovation. I think that's going to be valued by KOLs, certainly probably not in the first line category. But for us, our focus has always been on how do we bring a targeted approach, how do we bring that toolkit forward for prescribers. So they can really identify those subjects that will have an enhanced response to lorundrostat. We're very confident in what we've seen to date as it relates to the safety and tolerability profile of lorundrostat. That's why we're doing the broader pivotal program that we're doing to fully characterize that. But again, I think we're on the cusp of a lot of innovation that's needed given where the unmet need exists in this space right now.

Got it. And one final question. Any color you can provide on OpEx guidance this year?

Mike, I'm sorry, OpEx guidance.

Yes, Mike, this is Adam. We haven't provided any guidance going forward on expenses. What we have said is that our cash runway brings us into 2026. We'll be running on several clinical trials this year. So burn is expected to continue to ramp up.

Thanks so much.

Thanks, Mike.

Thank you. Our next question comes from the line of Greg Harrison at Bank of America. Please go ahead. Your line is open.

This is Mary Kate [ph] on for Greg. Thanks for taking our question. Looking at the top line data expected later this year, what are your expectations for the advanced top line readout? And maybe what would be a success for you here?

Yes. Mary Kate, this is Jon. It's hard to forecast forward. I think the -- if we look back at Target-HTN, we saw about an 8 to 10-millimeter placebo-adjusted reduction in systolic BP across the whole population. We saw an enhanced response for those on a diuretic and obviously, those with increased BMI. I think the way that we have framed the both pivotal programs to mitigate the risk is likely guiding to a similar response that 8 to 10 millimeter mercury reduction. Bear in mind that both Advance-HTN and Launch-HTN have diuretic required as part of a background. And we know that we saw an enhanced response with diuretic and lorundrostat. So I think that's a positive read through. The market research that we've done, and we've done a pretty exhaustive amount of that with primary care as well as specialists. If you're in that 8 to 10-millimeter mercury improvement on an uncontrolled or resistant population, that's extremely meaningful. That's something that they currently don't have access to when you're looking at the third or fourth line agent being added typically with what's currently available when you add a third or fourth agent, you get about a 5 to 6-millimeter mercury reduction based on extensive meta-analysis. And so that's why that 8 to 10-millimeter mercury resonates with prescribers. And particularly, if we can bring forward the toolkit again to identify those subjects like an obese hypertensive subject that's going to have an enhanced response, and we saw a 12 to 16 millimeter mercury improvement in Target-HTN. We'll see if that's replicated within this study. I think a point that it's why we're doing Advance-HTN in a more rigorous conduct and Launch-HTN with that standardized background is we truly are identifying subjects that are on the right drug, at the right dose, compliant and yet still uncontrolled and resistant. And then applying lorundrostat to that rigorous kind of study really gives us a chance to replicate and possibly improve upon the data that we saw in Target-HTN, but in a data set or a population, particularly for specialist that's clearly uncontrolled and resistant without any questions around proper dose, proper compliance or white-coat hypertension.

Great. Thank you.

Thank you. Our next question comes from the line of Seamus Fernandez at Guggenheim Securities. Please go ahead. Your line is open.

Great. Thanks for the question. So and congrats on all the progress. Just one of the questions that we're getting from investors is the importance and impact of GLP-1s specifically on the 2 things. Number one, the Flow trial is going to be presented at ACC and I think there's some enthusiasm within the, I guess, cardiology and endocrinology community for those results and its impact of 1 milligram of Semaglutide, on the outcomes in patients with limitations in disease there. Just wanted to know what your thoughts are on the impact of GLP-1s on both weight loss and in a CKD patient population. And then second question is really on the baseline patient characteristics in Advance-HTN, I assume that you've got a pretty good feel for what the baseline patient characteristics are kind of shaping up to. But just hoping that you'll reveal the baseline patient characteristics prior to the publication? And maybe you could just share with us what you think are the most important measures that you'll be looking at in exploratory analyses. Thanks.

Yes, Seamus, thanks for the question. The GLP-1s and the GLP-1, GIP and the GGGs are all obviously presenting really interesting data as it relates to weight loss. And then as it relates to the corollary benefits to comorbidities, we, like others are interested to see the full data set. I don't think it's overly surprising that if you see weight loss reduction, you see improvement in overall cardio renal metabolic health. I think that's been known for a long time through diet, exercise and everything else. I think the -- and I'll maybe have Dave add at a point to this from what we've seen of some of the data presented, I think it was with tirzepatide in some of the prior data over the last 3 to 6 months, there still remains significant residual risk that needs to be addressed. We think that addressing that broader cardiovascular and renal risk is going to be multifactorial. We know from frankly, decades of research that aldosterone is a significant driver of hypertension, of CKD, of heart failure and heart disease. And that's what we think in ASI like lorundrostat becomes a really interesting component of that broader treatment to get as much of the residual risk reduce as possible. But Dave, do you have any additional thoughts you want to add to that?

Well, thanks, Jon. I'm going to add a little bit to that, and then I'll answer your second part of your question following that. So we get this question a lot. It's a really interesting question, right, that weight loss is going to be important in reducing risk. But what Jon referred to as this, the trial that he spoke about reported a 20% reduction in cardiovascular events, major cardiovascular events. But that really translated going from 8% incidents to 6.5%. So 8 per 100 versus 6.5 per hundred, that's 20%. But in the real world, it's 1.5%, and there's still more than 6% of that rate to improve upon. Weight loss is only part of it. Jon mentioned, healthy lifestyle, exercise, all of these things, avoiding tobacco, alcohol. These things all add together and just having a drug that allows you to lose weight is not by itself a replacement for that. And so what we'll see over time is that people will look at this as a multifactorial treatment. The idea would be these lifestyle changes. But in reality, there's a room for other medications to be combined. And that's what we're seeing in everything in cardiovascular, renal metabolic. 3 and 4 drugs together making the difference. We believe our drug is going to be an important component of that. We will, regardless of weight loss, have the potential to lower all cardiovascular risk. There's a reason why aldosterone-targeted therapies are useful in things like heart failure. Our drug is a next-generation approach to that. So I hope that just gives you some color for where we think it's not an either/or and we're going to be obviously very interested in discussing this with companies that are focused on GLP-1s going forward. Now your second question was characteristics. What I -- I'm not going to go into that in deeply, but what I'll tell you is this that we had a really nice demographic profile in the Target-HTN trial, 40% African-American, about 50-50 male, female, we had about 50% on 2 drugs, 50% on 3 drugs. So our aspiration is to be in that range. And so far, we see no reason to think we won't be in that range using the inclusion/exclusion criteria we have.

Great. And then if I could ask one follow-up. As the reduction in the baseline eGFR from 45 down to 30, can you maybe just talk a little bit more about the importance of that inclusion criteria?

Sure, I can. So from a practical standpoint, the trial sites where we go to for trials like this are referral sites that have primary care doctors referring the patients to more specialized centers with chronic kidney disease. And so they tend to see enrichment with people with GFRs below 45. So Stage 3b. And so it will be a much more efficient to include those in 1 arm instead of 2 different arms of the trial. Now one might ask the question, though, since Part B also had a dose range discussion, are we -- is it important for us to be looking at dose ranging. One of the advantages of making sure everybody is on an SGLT2 is SGLT2 lower your potassium. And that's why that our 2 competitors in the space, let's say, AstraZeneca and Boehringer Ingelheim, who are both committed to CKD trials now are looking at the combination. And so we'll be doing the same thing. So it's just a practical thing. Those 2 practical changes. Everybody on an SGLT2 inhibitor in the trial and allowing the eGFRs down to 30 is going to be a much broader population, a much more efficient way to recruit the trial and will give us the same information we were looking for in terms of safety, efficacy of the combination.

Great. Thanks so much. Appreciate it guys.

Thank you. And our next question comes from the line of Mohit Bansal of Wells Fargo. Please go ahead. Your line is open.

Hey this is Adam [ph] on for Mohit. Thanks for taking our questions. My questions are for David, with regard to the OLE study. I'm trying to understand, firstly, in February a single-arm OLE you're pursuing, one that includes a treatment withdrawal sub study. So I wanted to understand what you could ultimately kind of drop from that approach there. And then secondly, does the inclusion of CKD patients in the OLE give important around hyperkalemia risk? Or was this pursued for another reason?

Okay. Well, thanks for the questions. And so just to break it down in its component parts. The first question was about the randomized treatment withdrawal. So the FDA requires that we do a randomized treatment withdrawal. And what that means is anybody who is in the open-label extension on active -- and obviously, they're on active drug who has a benefit on blood pressure. So they're informative, would then have -- be randomized to either stay on drug or go on placebo. They don't tell you how many, but it will be in the hundreds of subjects that go through that. The purpose of it is just to see what you would refer to as an on-off on approach. In other words, they come in on a certain amount of drug, they go off it, then they go back on it. How reversible are these things, how -- what time course, etcetera? We know our drug has a major advantage in that it's only got about a 10 to 12-hour half-life meaning that things like hyperkalemia, we can turn off and on very quickly, but we also can restore normal circadian rhythm. So Aldo goes up and down the way it's supposed to. And so that's what that's for. So we expect to learn a lot about those details, but primarily, it's because it's a requirement as well. So let me just stop there for a second. Did that answer your question, that part?

Yes. Thanks.

Okay. So another part of your question was about putting CKD patients in. What we're doing from a logistics standpoint is having one omnibus open-label extension. But we don't -- we have to have an integrated safety database of every single patient who got even one dose of drug and and there it'll be included in that. But beyond that, they're going to be a separate cohort that's analyzed within the trial. And so we'll be able to say, for instance, in subjects whose eGFR started at 30 to 45, what was their relative risk of a change in potassium. And that's very important because when we talk to experts at these referral center sites, I mentioned, they're not in the least bit worried about potassium. They deal with it all the time. They use the new potassium binders, and they just want that blood pressure to go down. So we'll be able to provide those data in that subset and then for primary care docs who may see somebody with an eGFR 60, they really don't want that patient's potential to go up over a certain threshold because they're in a different space in terms of management. And so we're going to have very, very good control over saying in this subset, here's the safety profile and this other subset, here's the safety profile. So I don't think we have concerns about suddenly getting a warning that you might get a high potassium. It's in fact just the opposite. We're going to have a very informative set of data to go into the label.

Appreciate the detail.

Thank you. And there are no further questions in the queue at this time. So this concludes the question-and-answer session. And I'd like to turn the call back to Jon Congleton for the closing remarks.

Thank you, operator, and thank you, everyone, for joining us today. We're very excited about the progress we've made over the past year in advancing our clinical programs and 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. This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.