naphtalina/iStock via Getty Images
naphtalina/iStock via Getty Images
I covered Lyra Therapeutics (NASDAQ:LYRA) in June this year, and since then, the stock has had a nice ride, going up and down and then settling down to near where it was in June. Last time, I gave it a buy rating; this time, I am giving it a hold. In each of my articles, I disclose my own meaning of "Hold," which is slightly different from what is commonly held. What I say is the following:
My Hold rating only means "I will not Buy now." I am not telling you to hold, because I see some risks here. But I am also not telling you to sell, because, a) the risks are not insurmountable, and b) you may have bought at such a low price that your risk-benefit ratio is acceptable to you. Thus, my "Hold" is a bearish rating, but it is not as bearish as a "Sell" rating.
This is exactly true of the current situation. I just had a nice little ride with LYRA, and the risk situation, discussed below, although minor, is such that I do not wish to try my luck twice. I also do not consider it a sell, because I am really not that bearish here. I just think, given what I will discuss here, that a wait and watch approach with my existing shares would serve me better.
Lyra has two product candidates. LYR-210 is in phase 3 trials for surgically naive Chronic rhinosinusitis (CRS') patients, while LYR-220 is in a phase 2 study for CRS patients who have recurrent disease post-surgery. These products, as I noted before, consist of a biocompatible mesh scaffold, an engineered elastomeric matrix, and a versatile polymer-drug complex, which enable sustained, non-invasive, single procedure delivery of therapy to deep tissues.
Thus, Lyra is running two trials for these two candidates which are essentially the same long-acting mometasone furoate MF presented as a bioresorbable polymeric matrix. The difference is that LYR-220 has a slightly larger mesh to fit patients who have had their nasal passages enlarged due to surgery.
Now, LYR-210 is in a phase 3 trial after producing positive phase 2 data; this is the data I covered in my previous article. The phase 3 trial will topline next year. Meanwhile, the other candidate, LYR-220, was running a phase 2 trial at that time, and was planning to topline in August.
Before I get to this data, let me quickly recap that LYR-210 successfully met the primary endpoint of the phase 2 trial in CRS patients who are treatment-naive. The primary endpoint was "Change from baseline in 4 cardinal symptoms composite score (4CS) at Week 4." The study was done completely ex-US, which is an important point to remember. In this study, LYR-210 "demonstrated significant improvement in each CRS symptom subdomain of the SNOT-22 compared to control, achieving statistical significance (p<0.05) in each SNOT-22 subdomain at week 24."
Using our proprietary comparison tool, I put together some of the data from the LYR-210 phase 2 trial and the new LYR-220 phase 2 trial that toplined in August. See below:
Parameters | LYR-210 | LYR-220 | ||
Trial name | A Phase II, Randomized, Blinded, Sham Procedure-Controlled, Parallel-Group Trial to Evaluate the Efficacy, Safety and Tolerability of LYR-210 in Adult Subjects With Chronic Sinusitis (LANTERN Study) | BEACON: A Phase II, Patient-blinded, Two-part, Randomized, Parallel-group Trial to Evaluate the Safety, Tolerability, Pharmacokinetics, and Efficacy of LYR-220 in Chronic rhinosinusitis (CRS) Patients Who Have Had a Prior Ethmoidectomy | ||
NCTID | NCT04041609 | NCT05035654 | ||
Acronym | N/A | N/A | ||
Indications |
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Interventions |
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Primary Completion Date | 03-25 | 2023-08-01 | ||
Phase | Phase 2 | Phase 2 | ||
Status | Completed | Active, not recruiting | ||
Drugs to PCD | passed | passed | ||
Enrollment | ||||
Primary Endpoints |
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Allotment | Randomized | Randomized | ||
Intervention Model | Parallel Assignment | Parallel Assignment | ||
Masking | Single (Participant) | Single (Participant) | ||
Comparator | N/A | N/A | ||
Adverse Event Occurrences | N/A |
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Does Limiting Toxicity | No | No | ||
Discontinuous Rate | N/A | N/A | ||
Safety Summary | N/A | The study met its primary safety endpoint, with no serious adverse events observed. The most commonly reported adverse events included sinusitis, nasopharyngitis, bronchitis, and COVID-19. | ||
Number Enrolled | N/A | N/A | ||
Met Primary Endpoint | Yes | Yes | ||
P Value | N/A | N/A | ||
Efficacy Summary | LYR-210 provided up to 24 weeks of clinically meaningful global symptom improvement in CRS patients. LYR-210 achieved significant improvement in each CRS symptom subdomain of the SNOT-22 compared to control. LYR-210 may improve mental and physical health and quality of life of CRS patients. | Statistically significant improvements in a composite of the 3 cardinal symptoms of CRS, nasal obstruction, nasal discharge, and facial pain/pressure, were observed at week 4 and week 24 (-0.87 and -1.50, p=0.037 and p=0.02, respectively). Statistically significant improvements in Sino-Nasal Outcome Test (SNOT-22) scores were observed at week 2 and week 24 (-9.0 and -16.8, p=0.031 and p=0.007, respectively). The improvements in SNOT-22 scores were sustained throughout the study, exceeding the minimal clinically important difference at week 24. |
As you can see, while the primary outcome measure of LYR-220's phase 2 was safety, there was enough efficacy data to see that the molecule did just as well as its counterpart, LYR-210. This bolsters the case for both products, and it does so especially for LYR-210, which has topline phase 3 trial data to be announced next year.
LYRA has a market cap of $190mn and a cash balance of $116mn. Research and development expenses for the quarter ended June 30, 2023, were $10.8 million, while general and administrative expenses for the quarter ended June 30, 2023, were $4.6 million. At that rate, they do have a cash runway into 2025; however, I wish they had more cash.
PE/VC firms hold the largest share of LYRA, at 43%, followed by hedge funds at 21% and institutions at 20%. Retail stake has substantially reduced since my last coverage. Key holders are Perceptive Advisors, NBVM GP, LLC, and Venrock. Insider transactions consist exclusively of purchases.
In my previous article, I discussed two risk factors - lack of a composition of matter patent, and poor cash balance. I also noted that they did fail the phase 2 trial whose data I just discussed, but on a modified primary endpoint similar to what they will have in the phase 3, they did well.
I am going to suggest holding LYRA for some more time, wait and see how the phase 3 data toplines, and then take a call. In the last few months, a few solid things have happened, and nothing overly negative has happened. I think a hold and watch approach works best for investors now.