Lyra Therapeutics Inc. (LYRA:NASDAQ) announced positive topline clinical trial data on its second product candidate LYR-220, reported H.C. Wainwright & Co. analyst Matthew Caufield in a September 12 research note. LYR-220 is a nasal implant designed to deliver medicine directly to the sinonasal tissues, as conventional therapies cannot do so, in patients with chronic rhinosinusitis (CRS).
LYR-220, delivering the corticosteroid, mometasone furoate, on a long-acting basis, is being evaluated in CRS patients with postsurgical anatomy in the Phase 2 BEACON trial. Lyra's similar lead product candidate, LYR-210, is being assessed in surgically naïve CRS patients in the Phase 3 ENLIGHTEN study.
"Ultimately, we view the platform as potentially treating the range of CRS disease, whether nasal anatomy is surgically naïve or post-surgical and with durable six-month anti-inflammatory delivery," Caufield commented.
Current management of CRS patients includes saline rinses, topical nasal steroids, oral steroids, and, sometimes, repeated nasal surgeries. Caufield pointed out there is no approved, on-label therapy for about 80% of the 8 million treated, polyp-free CRS patients in the U.S.
Compelling Potential Gain
Given the positive Phase 2 BEACON trial update, H.C. Wainwright reiterated its target price on Lyra of US$12 per share, noted Caufield. In comparison, the biotech's current price is about US$4.28 per share. The projected return for investors, therefore, is significant, at 180%.
Lyra is a Buy.
Interpretation of the Data
Caufield provided the main takeaways from the topline BEACON data:
1) Overall, these new results provide proof of concept and validate Lyra's nasal implant in this CRS population, patients who have had a bilateral ethmoidectomy and remain symptomatic.
2) Early and sustained improvement on the sinonasal outcome test score as early as two weeks carried forward through Week 24, "notably at almost twice the minimal clinically important difference," noted Caufield.
3) LYR-220 met the endpoint of improved 3CS composite score with a statistically significant result. This same endpoint is being evaluated in the Phase 3 ENLIGHTEN trial. Were the endpoint met in ENLIGHTEN, this would present an "opportunity for comprehensive CRS therapy," Caufield wrote.
4) Significant individual improvements shown in the study included reduced nasal blockage, nasal discharge, and facial pain and pressure.
5) Improvement could persist into the period off of treatment, and upcoming Phase 2 data through 28 weeks should shed light on this. Even in the event implants were to be replaced twice a year, purported Caufield, the improvement would still be greater than with noncurative surgeries or off-label nasal corticosteroid use.
"With the Phase 2 BEACON trial evaluating LYR-220 safety, tolerability, pharmacokinetics, and efficacy, we believe the therapeutic profile, without significant adverse events, presents a compelling approach to current postsurgical unmet need," Caufield wrote.
Treating a Range of Disease
The positive topline LYR-220 Phase 2 data bode well for Lyra's lead product candidate LYR-210 in the Phase 3 ENLIGHTEN clinical trial, in progress, wrote Caufield. Topline data from ENLIGHTEN are expected in H1/24.
"We specifically believe the Phase 3 ENLIGHTEN program is positioned for success," Caufield added.
LYR-210 could be an option for patients earlier on in treatment, and for patients not wanting ongoing nasal surgeries, Caufield pointed out. Further, insertion of a nasal implant in the office setting for durable drug release is straightforward, thereby aiding patient retention.
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Disclosures for H.C. Wainwright & Co., Lyra Therapeutics Inc., September 12, 2023
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H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Matthew Caufield and Andrew S. Fein , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Lyra Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of August 31, 2023 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Lyra Therapeutics, Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Lyra Therapeutics, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did receive compensation from Lyra Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Lyra Therapeutics, Inc. during the past 12 months. The Firm does not make a market in Lyra Therapeutics, Inc. as of the date of this research report.
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