Company: LBRX
Filing Date: 2025-07-23
Form Type: DRS/A
Source: 0000950123-25-006557
Chunk: 24

Company: LB PHARMACEUTICALS INC
Filing Date: 2025-07-23
Form: DRS/A
Chunk 24
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 biotechnology and pharmaceutical companies in this field have faced certain challenges in drug development. In particular, clinical trials focused on many neuroscience diseases, such as schizophrenia and bipolar
depression, rely on subjective patient-reported outcomes as key endpoints. This makes these trials more difficult to evaluate than indications with more objective endpoints. Furthermore, these indications are often subject to a higher placebo
effect, which may make it more challenging to isolate the beneficial effects of our product candidate. While a product candidate may show clinical activity or therapeutic benefit, a high placebo effect in a clinical trial will make it difficult to
ascertain that benefit or to show a statistically significant effect of the product candidate as compared to the control arm, which may ultimately cause a clinical trial to fail or otherwise not translate to actual clinical benefit. Moreover, the
risk for this higher placebo effect can increase from one successful completion of a Phase 2 trial to another Phase 3 trial, as there is clinical evidence of therapeutic benefit to which patients would already be aware of. There can be no guarantee
that we will successfully overcome these challenges in our ongoing or any future clinical trials of our product candidate or that we will not encounter other challenges in the development of our product candidate. In addition, negative investor
perception of our initial clinical trial results due to a high placebo effect may adversely affect our stock price.

For example, certain
of our primary or secondary endpoints in our clinical trials, including our completed Phase 2 trial of LB-102 in patients with acute schizophrenia, involve subjective assessments by physicians and/or patients,
which can increase the uncertainty of clinical trial outcomes. The primary endpoint of our proposed Phase 3 acute schizophrenia trial is to evaluate the efficacy of LB-102 compared to the placebo, as
measured by change from baseline in PANSS, total score at six weeks, which requires patients or examiners to undertake a questionnaire regarding symptoms at the beginning and end of the trial. This and other assessments are inherently subjective,
which can increase the variability of clinical results across clinical trials and create a significant degree of uncertainty in determining overall clinical benefit. Accordingly, these subjective assessments can complicate clinical trial design,
adversely impact the ability of a study to show a statistically significant improvement, and generally adversely impact a clinical development program by introducing additional uncertainties.

The obligations from our royalty agreements may be a drain on our cash resources or may cause us to incur debt obligations to satisfy the payment obligations.

In August 2023, contemporaneously with the closing of our Series C financing, we entered into several amended and