Greetings. Welcome to Mineralys Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Dan Ferry of LifeSci Advisors. Please begin.

Thank you, operator. Good afternoon, everyone and welcome to our third quarter 2024 conference call. After the close of market trading today, we issued a press release providing our third quarter 2024 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 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 in 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 11. 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 2024 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 an overview of the business, our clinical programs and recent milestones. Then Adam will review our third quarter financial results before we open up the call for your questions. I want to kick things off with a recap of the progress the Mineralys team has made these past several months, advancing our pivotal clinical development of lorundrostat in hypertension and then discuss the upcoming milestones we anticipate throughout the first half of 2025. We recently completed enrollment in our pivotal Advance-HTN trial which is evaluating the efficacy and safety of lorundrostat for the treatment of uncontrolled or resistant hypertension, when used as an add-on therapy to a standardized background treatment of 2 or 3 antihypertensive medications. Subjects were randomized across 3 arms, including placebo, lorundrostat 50 milligrams once daily, or lorundrostat 50 milligrams once daily with the possibility to titrate up to 100 milligrams once daily. We announced the key characteristics of subjects enrolled in the trial include more than 66% of the subjects have a BMI equal to or greater than 30, more than 40% of the subjects are women and more than 50% of the subjects are Black or African-American race. Notably, in terms of demographics, we took extra steps to broaden the diversity of the subjects in this trial to provide a better representation across different populations, with a goal of showing equivalency across race and sex. As a reminder, this trial was designed in collaboration with the Cleveland Clinic based on the most rigorous standards. The trial will be utilizing 24-hour ambulatory blood pressure monitoring…

Thank you, Jon. Good afternoon, everyone. Today, I will discuss select portions of our third quarter 2024 financial results. Additional details can be found in our Form 10-Q which will be filed with the SEC tomorrow, November 12. We ended the quarter with cash, cash equivalents and investments of $263.6 million as of September 30, 2024, compared to $239 million as of December 31, 2023. The company believes that its current cash, cash equivalents and investments will be sufficient to fund its planned clinical trials as well as support corporate operations into 2026. R&D expenses for the quarter ended September 30, 2024, were $54 million compared to $22.5 million for the same quarter of 2023. The increase in R&D expenses was primarily due to increases of $26.1 million in preclinical and clinical costs, driven by the initiation of the lorundrostat pivotal program in the second quarter of 2023; $3.4 million in clinical supply, manufacturing and regulatory costs; $1.7 million in higher compensation expense as resulting from additions to headcount, increases in salaries and accrued bonuses; and increased stock-based compensation of $0.3 million and other research and development expenses. G&A expenses were $6.1 million for the quarter ended September 30, 2024, compared to $3.8 million for the same quarter of the prior year. The increase in G&A expenses was primarily due to $1.7 million in higher compensation expense, resulting from additions to headcount; increases in salaries and accrued bonuses and increased stock-based compensation; and $0.8 million in higher professional fees, partially offset by a decrease of $0.2 million in other administrative expenses. Total other income was $3.8 million for the quarter ended September 30, 2024, compared to $3.5 million for the same quarter of 2023. The increase was primarily attributable to increased interest earned on the company's investments in money market funds and U.S. treasuries. Net loss was $56.3 million for the quarter ended September 30, 2024, compared to $22.8 million for the same quarter of 2023. The 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 Instructions] Our first question is from Michael DiFiore with Evercore ISI.

Congrats on all the progress. Three for me. First one is just in reviewing the Target-HTN data set, looking at the night-time blood pressure results and in the sensitivity analysis, even after the white coat hypertension patients were eliminated, you noticed that there wasn't any nocturnal dipping at 8 weeks in the 50-milligram QD group. Any color to explain that would be great. And then I have 2 follow-ups.

So this is Dave Rodman. Why don't I take that question. So first of all, you're absolutely right that the big value driver in 24-hour ambulatory measurements is, first of all, you get a lot of measurements, so you get much quieter data, a lot less noise. But you also get to segment it into night-time and daytime. And as you mentioned, night time is particularly important because untreated nocturnal hypertension is a big risk factor for adverse cardiovascular outcomes and MACE. So if I can point you first to the 100-milligram cohort where we had very little white coat hypertension, there, the night-time response to lorundrostat was comparable to what was seen in wakefulness, even though the dose was taken in the morning and those measurements were in the evening. And so that's what you would expect. The 50-milligram is a little more problematic to interpret because there was a very high proportion of patients who on the ABPM appear to have kind of a lower blood pressure than they had with AOBP or so-called white coat hypertension. So we had to subtract all those people out to do the sensitivity analysis and when we did that, it was about a 50% reduction compared to daytime. I think it's unlikely that that's true because the numbers got too small. I do think the 100-milligram is probably a better guide post. But in any event, we'll be looking and controlling for that in the trial. So we'll have the accurate answer for that.

Got it, Dave. Very helpful. And my 2 follow-ups are, we're just reviewing the early safety database of like the first-in-human study data set. And I noticed that in the Phase I MAD trial, there was one case of sinus tachycardia at 360 milligram. And then my question is how big of a safety margin relative to the NOAEL is 360 milligram? And separately, in the same data set, there was also one case of dysgeusia at 40 milligram. And I'm just asking because that could potentially be an unblinding -- a functional unblinding type of thing. Any explanation of those 2 AEs would be great.

So the first one, I'll take the first one first. So that's a pretty big dose, 360 milligrams. How does this drug work? Well acutely, it causes volume loss, so you urinate out sodium and water. The response to that is sinus tachycardia. So when you get dehydrated or volume depleted, that's what happened. So it's not really a safety finding. It's a pharmacodynamic effect of a healthy volunteer having too much volume depletion. And so that, we don't expect to read through at the lower doses, especially in these hypertensive patients. Now your second question, dysgeusia. I got no idea on that one. I just don't know. We didn't -- haven't seen it again. Whether it's unblinding or not, it just hasn't been a functional problem in our trials. We didn't see it in the...

Very helpful.

Anything else, Mike?

No, that's it. Appreciate it.

Our next question is from Richard Law with Goldman Sachs.

A couple of questions from me. The first one is for Advance-HTN. You guys are tracking and proactively enforcing adherence. Can you discuss what is the adherence rate for Target-HTN? And how much do you think that adherence can improve in Advance-HTN?

So the question was what's the adherence rate in the Target-HTN trial versus Advance or...

No, you're looking for what is the goal? Rich, can you restate your question again? Sorry.

Yes. So for Advance-HTN, you guys are tracking and proactively enforcing adherence but you guys are not doing -- you guys didn't do that for Target-HTN. So just curious to see, what was the adherence rate for Target-HTN? And how much do you think that could improve as you move into Advance-HTN by that proactively tracking and enforcing?

Okay. Got you. Good question. So we didn't -- the only thing we did was really was to do pill counts when people came in to see if they had taken their drug or not. We piloted some technologies but we didn't really use the data. That's how we ultimately ended up choosing the AiCure method that we're using now. So I can't give you any accurate information because pill counts are notoriously ineffective because people know you're doing it. And so they might just dump them in the sink or whatever. But in the Launch trial, we are also doing adherence. But we're not actively supporting that in terms of reaching out or telling them much and so -- other than the normal reminders. So, I think there -- and there, we're going to do a subset analysis that looks at your question which is how much is non-adherence a problem in terms of responses. So we'll do a sensitivity analysis on people who took more than 75% or not. So I can't really comment too much on the Target but we will have an answer to your question.

I see. Got it. And then another question. You guys mentioned a lower absolute SBP value with the ABPM measurement. How do you think about the placebo-adjusted ABPM and how would that change compared to placebo-adjusted AOBP, for example, in Advance-HTN? Is it safe to assume that both are very similar if the study is well controlled?

Well, I'll give a quick heads up on that, Rich. We typically see with 24-hour ambulatory, it's plus or minus 1, maybe 2 millimeters of mercury with the placebo. With that 24-hour AOBP, you see a little bit more variability with that because it's in office. It's a single time point from a measurement standpoint. From Target-HTN, because of the technique we use in doing 5 measurements in a quiet room unattended and averaging the last 2, we saw about a 4-millimeter mercury change. We know prior studies that have used different methodologies around that, such as the CinCor trials actually saw higher figures than that. So from our standpoint, following the recommendations from the AHA, we're continuing to repeat our technique for in-office measurement and have not only 24-hour ambulatory as the primary in Advance. Along with in-office, we also have in-home. So we have 3 different measures within Advance-HTN and then the in-office practice that we use for Launch-HTN. And so we feel confident that we've controlled for the variables within the different techniques. Then we'll -- that's based on the work that we've done with Target-HTN.

Rich, one other comment here is that the measurements with ABPM, because they average in night-time which tends to be lower in people that don't have say sleep apnea [ph], tend to be about 5 millimeters mercury lower. And response to hypertension drugs is proportionate to the level of the baseline blood pressure. So if you have a lower baseline blood pressure, you have -- you can go down less, so you have a little bit smaller response. So it's -- so most people say you have 1 or 2 millimeters smaller placebo-adjusted treatment effect when you do ABPM versus AOBP. And then as Jon mentioned, those numbers are just shifted up with the ABPM. But there's more variability in the placebo effect there, so they're just a little bit noisier. Maybe that was more than you wanted to know but just thought I'd pass it on.

No, I think that helps a lot. So you're saying about 5 or so on an absolute basis. But once you adjust for placebo, that should be about 1 to 2?

Not sure on that but -- so the difference is that with ABPM, because of all the multiple measurements, your placebo effect is going to be pretty small. I would say 1 to 4 is what I've seen in the literature. In a big enough study, it will be 1 or 2 and that's what we were with our Target study. ABPM, up to 7...

AOBP.

I mean, AOBP, sorry, up to 7 millimeters of mercury. Or even if you look at baxdrostat, they had 9, I think, in their first trial. Up to 7 is acceptable. In general, it's in the range. We had 4, so -- and we put a lot of work into making sure we get the best data we can. Obviously, when you get to bigger trials and more sites, you tend to have slightly more variability. I'm not sure I understood your question per se but I hope that gives you the answer you needed.

Okay. Got it. And then just one final question. You guys mentioned greater than 66% patients with BMI greater than 30. What is the power assumption for that like greater than 30 and less than 30 BMI group from that 66% number? I think you guys mentioned a 90% powering assumption for the overall group. So I just want to see what that powering assumption looked like once you go down to these prespecified subgroups.

Yes, Rich, thanks for the questions. Advance-HTN, overall is 90% power for 7-millimeter mercury change relative to placebo. Launch-HTN, greater than 95% power for the same reduction. And we haven't disclosed at this point in time any of the subset analysis power calculations.

Our next question is from Annabel Samimy with Stifel.

I just want to clarify a couple of things. For Advance-HTN, the primary endpoint is at 12 weeks, with titration at 4 weeks. And then Launch has up titration at 6 weeks, with the primary endpoint there but it runs to 12 weeks, if I'm reading your presentation correctly. So is that -- is the 6 weeks sufficient for that separation, given the possible additional noise that might be introduced with real-world background meds? I guess, how are you managing the placebo response in that scenario? Are there going to be more confounding results possibly? And is 6 weeks sufficient? I guess, why not run it to 12 weeks with that kind of background variability?

Yes, Annabel, appreciate the question. I think it's important to think of Launch-HTN very much as a confirmatory study to Target-HTN. There are a lot of similarities as far as the construct. As you know, in Target as in Launch, we allow subjects to stay on their background medication of 2 to 5 antihypertensive treatments. We have that 2-week run-in period on placebo, when we get them compliant to their existing background meds. We're using AOBP in Launch-HTN, same techniques, same technology that we used in Target. What we saw in Target-HTN was about 70%, plus or minus, of the effect at week 2. And by week 4, the vast majority of the effects. So we're comfortable that, that 6-week data readout, we're not going to be missing really any significant reduction in blood pressure within that time course, just based on what we saw within Target-HTN at week 4. And I'll just highlight that maybe one of the biggest distinctions between the 2 studies is we definitely saw a potential synergy with a diuretic in Target, where about half the subjects were on a diuretic. And by design, both in Advance and in Launch-HTN, all subjects are on a diuretic. So I think we've factored in the profile of lorundrostat within this confirmatory design of Launch-HTN that we don't feel we're going to be missing anything. Plus, as part of the secondaries, we will be looking at that 12-week time point for both the 50-milligram arm and the 50 up titrated to 100-milligram arm.

Okay. Got it. And just to go back to the last question for -- I mean, I know you haven't disclosed the powering for obese versus non-obese. But is there a possibility to see statistical significant separation between the two?

Well, I think we'll be looking at -- as we did in Target-HTN and these prespecified subsets in both Advance and in Launch, the primary benefit of moving the primary endpoint of Launch-HTN from week 12 to week 6 was not power for the primary but was power for those subset analysis. And so we feel very confident that we're going to be able to, if the trend reconfirms as we saw on Target-HTN, be able to have the statistical power to evidence that. But again, we've got to get to the data but that's going to be part of the prespecified analysis as we did in Target-HTN.

Okay. Got it. And then just to also clarify, should we expect any dose response between the 50 and the 100 milligrams arms? Or is this more about getting patients to the right exposure so they can actually have a response as opposed to -- like in other words, should we be looking for a dose response? Or should we just be looking for blood pressure control period?

Yes. What a good question. So 2 ways to look at that. At 12 weeks, say -- let's just talk about Advance. At 12 weeks in Advance, there'll be 3 arms, right? They'll be -- and the same thing is true in Launch. There'll be a placebo group, there'll be a group that stayed on 50 and then there'll be a group that got escalated if they hadn't reached goal to 100. And so if the -- if people didn't have a high enough exposure at 50 because they didn't absorb it well or whatever, 100 might fix that. If people just have a lot of aldosterone production and they aren't completely suppressed at 50, then 100 would fix that. So we won't know for sure if its exposure to drug or individual biology until we start looking at maybe downstream mechanistic biomarkers which won't come for a while. So I hope that answered your question. You're absolutely right.

Our next question is from Mohit Bansal with Wells Fargo.

This is Sadia [ph] on for Mohit. So you've outlined patient demographics for the Advance trial. I'm wondering if in Launch, you're targeting similar demographics in terms of the percentage of obese patients and the percentage of African-Americans are -- will they be similar? Or should we expect differences in any of these? And can you remind us how these rates in Advance compare to the population that was enrolled in Target?

Yes. We haven't updated on the demographics of Launch-HTN. We may do that in the future. Target-HTN, I believe we had about -- the BMI average was 31 or mean. In Target-HTN, it was 31, what is it, kilograms per meter squared, Dave. In the Black or African-American population, I believe it was around 39%, so not terribly dissimilar from what we saw in Advance. I think it's fair to point out that both Advance and Target are probably beyond what you typically see as far as representation for Black or African-American. We think that's important to really show equivalency between Caucasian and Black or African-American hypertension patients because that's not always the case with all anti-hypertensives. Sometimes, you can see disparity in response. We wanted to be able to evaluate that as a part of our precision tool kit. As far as Launch-HTN, it is a global study. We've gotten questions, is that going to dilute the BMI effect? I think the counterpoint to that is the obesity correlation with hypertension holds pretty strong globally. And so we don't have a concern that the makeup of Launch-HTN is going to look too terribly dissimilar from what we saw in Target-HTN even though it is a global study versus U.S. alone for Target.

Jon, if I could just add one thing and that was a very nice discussion. There's a difference between African-Americans and Black Africans as well as the European population which tends to be -- it doesn't have the same ad [ph] mixture of the white -- of the Caucasian genes. So African-Americans are, on the whole, super sensitive to aldosterone. Lower levels of aldo produce more hypertension. That's not true in Europe. And so since we have European sites, we are going to have to distinguish between those 2 and we will.

Got it. That's helpful. And then with respect to the number of sites and geographies that are being enrolled in Launch versus the other trials, how are you thinking about the placebo response in Launch? Do you think there could be a higher placebo response? And was that part of your powering assumption for Launch?

So Launch is pretty much super powered because it's such a big study and looking at similar effect size. So if your question is, well, if there's an upward shift from the placebo effect which presumably would affect both arms, is that going to introduce more variability and, therefore, decrease the power? And the answer is it will be -- it won't be a significant problem in a trial of that size with the powering it has.

Our next question is from Rami Katkhuda with LifeSci Capital.

Just a couple of quick ones from me. I guess, based on the inclusion criteria, Advance and Launch are recruiting patients with lower eGFR than those in Target? Does that have the potential to affect hyperkalemia rates at all in the pivotal studies?

You're right, Rami. We looked at 60 eGFR and above for Target. Based on that, we were comfortable going down to the 45 for both Launch and Advance. I think it's too early to tell at this point. We'll have to see what the data indicates. But we know from the 50-milligram arm in Target-HTN, we really saw a modest change in potassium similar to what you would expect with an ACE or an ARB. The Explore-CKD study where we're going down to an eGFR of 30 is allowable. We've actually reduced the dose to 25 milligrams QD. I think it's within that population that we want to move cautiously as we investigate lorundrostat in both the benefits as well as the safety profile, specifically related to this pharmacological effect on sodium and potassium.

Got it. Makes a lot of sense. And then in Launch, obviously, compliance is not being enforced as it is in Advance. Do you plan to do kind of an analysis of those patients who were compliant throughout the trial versus those who were not?

Yes. The technology of AiCure is really -- it's been validated but it's really just a next-level advancement in how do we really ensure patients take the drug. For those that may not be aware, subjects have to take a picture of not only their background meds but also either the placebo or the active ones. They're randomized. They also have to film themselves consuming it. That technique and that technology is being used both in Advance and in Launch. In Advance, we're proactively reaching out to subjects if they're not being compliant and reminding them of the importance of that. As you know, in Launch, we are not. But we are going to prespecify an analysis looking at compliance. I believe it's for those above 75% compliant and those below 75%. So we'll have that as a prespecified analysis, so that we can look at that impact. And then I think just to build on Dave's point, we saw really nice compliance in Target-HTN but it was with less advanced technologies that are not completely fool-proof. In other words, pill counts are kind of a standard way to do it but we know patients can manipulate that. We're progressively trying to use technology to help patients help us with one of the most important things they can do and that is being compliant to the pill. So I think we're currently using state-of-the-art but validated technology to really help ensure that we've addressed one of the bigger questions in these kind of studies that we know has been an issue with other hypertension studies contemporaneously.

Our next question is from Matthew Caufield with H.C. Wainright.

So you kind of touched on this with the powering. But for Advance-HTN, during the KOL event, it was mentioned that 6 to 8 millimeters of ambulatory BP benefit could be clinically meaningful. Does that range translate the same to potential target ranges or better for Launch and Explore to be considered successful?

Yes. Matt, I appreciate the call. Yes, I think the KOL call was really instructive because I think they started by highlighting the fact that 1 or 2-millimeter mercury change, particularly in a truly resistant or even uncontrolled hypertension -- a hypertension patient, is meaningful as far as reducing cardiovascular risk. So it's always important to put that into context. I think the 6 to 8-millimeter that Luke Laffin alluded to in a broad population is absolutely on point. There's a clear correlation to reduced risk from an outcome standpoint. Based on the market research we've done with payers and with physicians, that's certainly within the realm of what's important and transformative for them. We've always guided that, that 8 to 10-millimeter mercury change that we saw in Target-HTN, if replicated in Advance and within Launch, would be truly meaningful to the market. And that's based on meta-analysis that show with currently available generic treatments, when you add a third or fourth-line agent, you typically get a 5-millimeter mercury further reduction in systolic. New advances like renal denervation or aprocitentan have found 4 to 6-millimeter mercury reduction. So that replication of 8 to 10 is truly meaningful. And if we find subsets, such as an obese population that have a more pronounced effect, that becomes even more transformative. And ultimately, the goal is getting patients below their prescribed BP goal. And that's something we'll be looking at within both of these studies as well. It's not only the absolute and placebo-adjusted reduction but what is the percent of subjects actually getting to goal and having a foundational shift in their cardiovascular risk profile.

Very helpful. And you would say that applies to Explore-CKD as well?

Yes, I think it does. It certainly does. In Explore, it's not only that benefit from a BP standpoint but really investigating what we think is now a de-risked benefit of an ASI in combination with an SGLT2 on renal function as well.

With no further questions in the queue, I would like to turn the conference back over to Jon for 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 2024 in advancing our clinical programs. And we remain enthusiastic about the upcoming data milestones planned for the first half of 2025. We look forward to updating you as our pivotal program for lorundrostat continues to advance. With that, we will close the call.

Thank you. This does conclude today's conference. You may disconnect at this time and thank you for your participation.