SecProbe.io

CORRESP
 1
 filename1.htm

 CORRESP

 Divakar Gupta

 VIA EDGAR

 +1 212 479 6474

 dgupta@cooley.com

 *FOIA Confidential Treatment Request*
 Confidential Treatment Requested by LB Pharmaceuticals Inc
 in connection with its Registration Statement on Form S-1 (File
 No. 333-289812) September 3, 2025
 U.S. Securities and Exchange Commission Division of Corporation
Finance Office of Life Sciences 100 F Street, N.E.
 Washington, D.C. 20549

 Attn:
 Christine Torney
 Mary Mast Doris Stacey Gama
 Laura Crotty

 Re:
 LB Pharmaceuticals Inc

  
 Registration Statement on Form S-1

  
 August 22, 2025

  
 File No. 333-289812
 Ladies and Gentlemen: On behalf of LB
Pharmaceuticals Inc (the “ Company ”), in response to comments from the staff (the “ Staff ”) of the U.S. Securities and Exchange Commission (the “ Commission ”) received by
letter dated June 17, 2024 (the “ Comment Letter ”), relating to the Company’s draft Registration Statement on Form S-1 confidentially submitted to the Commission on
May 20, 2024 (the “ DRS ”), and which was subsequently updated by the Company with Amendment No. 1 to the DRS confidentially submitted with the Commission on June 24, 2024, Amendment No. 2 to the DRS
confidentially submitted with the Commission on July 23, 2025 and the Registration Statement on Form S-1 publicly filed with the Commission on August 22, 2025 (Registration No. 333-289812) (the “ Registration Statement ”), we are submitting this supplemental letter to further address Comment No. 7 of the Comment Letter. For the convenience of the
Staff, we have incorporated the text of Comment No. 7 into this letter. Due to the commercially sensitive nature of information
contained in this letter, this submission is accompanied by the Company’s request for confidential treatment for selected portions of this letter. The Company has filed a separate letter with the Office of Freedom of Information and Privacy
Act Operations in connection with the confidential treatment request pursuant to Rule 83 of the Commission’s Rules on Information and Requests (17 C.F.R. § 200.83).
 Cooley LLP  55
Hudson Yards  New York, NY  10001 T:+1 212 479 6000  f:+1 212 479 6275  cooley.com

 U.S. Securities and Exchange Commission
 September 3, 2025 Page Two

 Staff Comment
 Management’s Discussion and Analysis and Financial Condition and Results of Operations
 Critical Accounting Estimates Determination of the
Fair Value of Common Stock, page 103

 7.
 Once you have an estimated offering price or range, please explain to us how you determined the fair value of
the common stock underlying your equity issuances and the reasons for any differences between the recent valuations of your common stock leading up to the IPO and the estimated offering price. This information will help facilitate our review of your
accounting for equity issuances including stock compensation. Response:
 Preliminary Price Range The
Company respectfully advises the Staff that the Company currently expects a price range of approximately $[***] to $[***] per share (the “ Preliminary Price Range ”) for the planned initial public offering
(“ IPO ”) of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ”), which Preliminary Price Range does not reflect the impact of a reverse stock split of the Common Stock
that the Company anticipates may be effected prior to the filing of, and reflected in, an amendment to the Registration Statement to be filed prior to the commencement of the Company’s road show (the “ Reverse Stock
Split ”). The share and per share numbers in this letter are presented on a pre-Reverse Stock Split basis. This Preliminary Price Range implies a pre-money
equity valuation for the Company of $[***] million to $[***] million. The Preliminary Price Range is based in part upon the
Company’s prospects, prospects for the biopharmaceutical industry generally, the general condition of the securities markets and the recent market prices of, and the demand for, publicly traded shares of generally comparable companies in the
biopharmaceutical industry, as well as input received from Leerink Partners LLC, Piper Sandler & Co. and Stifel, Nicolaus & Company, Incorporated, the representatives of the several underwriters for the IPO (the
“ Representatives ”). The Company notes that, as is typical in initial public offerings, the Preliminary Price Range for the Company’s IPO was not derived using a formal determination of fair value or single valuation
methodology but was determined by discussions among the Company and the Representatives based on a variety of considerations and methodologies, including the assessment of the aforementioned factors.
 The Company will include a narrower bona fide price range of the Common Stock, as adjusted for the Reverse Stock Split, in an amendment to the
Registration Statement that will be filed prior to the commencement of the Company’s road show. However, the parameters of the bona fide price range will be subject to then-current market conditions, continuing discussions with the
Representatives and material business developments impacting the Company, and, due to the volatility in the securities markets, in particular the volatility experienced in the market by recent initial public offering issuers, there is a possibility
that the bona fide price range for the IPO may fall outside of the Preliminary Price Range. In any event, the Company confirms to the Staff that the bona fide price range will comply with Item 501(b)(3) of Regulation
 S-K and Compliance & Disclosure Interpretation 134.04.
 FOIA Confidential
Treatment Requested by LB Pharmaceuticals Inc [***] Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Cooley LLP 55 Hudson Yards New York, NY 10001
 T:+1 212 479 6000 f:+1 212 479 6275 cooley.com

 U.S. Securities and Exchange Commission
 September 3, 2025 Page Three

 Common Stock Valuation Methodologies
 As there has been no public market for the Common Stock to date, the Company’s board of directors (the “ Board ”)
has determined the estimated fair value of the Common Stock for purposes of granting equity awards, as of the date of each option grant, with input from management, considering (i) the Company’s most recent arm’s length sales of its
redeemable convertible preferred stock, (ii) the most recent third-party valuation of its Common Stock, and (iii) the Board’s assessment of additional objective and subjective factors that the Board believed were relevant and which
may have changed from the date of the most recent third-party valuation through the date of the grant. The Board considered various objective and subjective factors to determine the estimated fair value of the Common Stock as of each grant date,
including:

 •

 the prices of the Company’s redeemable convertible preferred stock sold to outside investors in arm’s
length transactions and the rights, preferences, and privileges of the Company’s redeemable convertible preferred stock as compared to those of the Common Stock, including liquidation and redemption preferences of the Company’s
redeemable convertible preferred stock;

 •

 the progress of the Company’s research and development programs, including the status and results of
clinical trials for LB-102, the Company’s lead product candidate, and progress of the Company’s development and manufacturing processes;

 •

 the Company’s stage of development and business strategy, and material risks related to the Company’s
business;

 •

 the hiring of key personnel and management;

 •

 external market conditions affecting the biopharmaceutical industry, and trends within the biopharmaceutical
industry;

 •

 the Company’s financial position, including cash on hand, and historical and forecasted performance and
results of operations;

 •

 the lack of an active public market for the Common Stock and the Company’s redeemable convertible preferred
stock;

 •

 the likelihood of achieving a liquidity event for the holders of Common Stock, such as an initial public offering
or a sale of the Company, given prevailing market conditions;

 •

 the achievement of enterprise milestones, including entering into collaboration and license agreements;

 •

 the analysis of initial public offerings and the market performance of similar companies in the biopharmaceutical
industry; and

 •

 the economy in general.
 The third-party valuations of the Common Stock that the Board considered in making its determinations were prepared in accordance with the
American Institute of Certified Public Accountants’ Accounting and Valuation Guide , Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “ Practice Aid ”), which prescribes several
valuation approaches for determining the value of an enterprise, such as the cost, market and income approaches, and various methodologies for allocating the value of an enterprise to its capital structure and specifically its common stock.
 FOIA Confidential
Treatment Requested by LB Pharmaceuticals Inc [***] Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Cooley LLP 55 Hudson Yards New York, NY 10001
 T:+1 212 479 6000 f:+1 212 479 6275 cooley.com

 U.S. Securities and Exchange Commission
 September 3, 2025 Page Four

 In accordance with the Practice Aid, the Company considered the following methods for
allocating the enterprise value across its classes and series of capital stock to determine the estimated fair value of the Common Stock at each valuation date.

 •

 Current Value Method (“ CVM ”). The CVM estimates the fair market value of the
enterprise by subtracting the liquidation preference of any preferred stock considering all rights and assumed conversion behavior associated with those shares.

 •

 Option Pricing Method (“ OPM ”). The OPM estimates the value of
the Common Stock using the various inputs in the Black-Scholes option pricing model. The OPM treats the rights of the holders of Common Stock as equivalent to that of call options on any value of the enterprise above certain break points of
value based upon the liquidation preferences of the holders of the Company’s redeemable convertible preferred stock, as well as their rights to participation, and the stock prices of the outstanding options. Thus, the value of the Common Stock
can be determined by estimating the value of its portion of each of these call option rights. Under this method, the Common Stock has value only if the funds available for distribution to stockholders exceed the value of the liquidation preference
at the time of a liquidity event, such as a merger or sale.

 •

 Probability-Weighted Expected Return Method (“ PWERM ”). The PWERM is
a scenario-based analysis that estimates the value per share based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes considered by the Company, as well as the economic and
control rights of each share class.

 •

 Hybrid Method (“ Hybrid Method ”) . The Hybrid Method is a weighted-average
method that combines both OPM and PWERM. Weighting allocations are assigned to the OPM and PWERM factoring in possible future liquidity events.
 To support the Board in determining the estimated fair value of the Common Stock as the Company sought to obtain better visibility into the
timing of the potential IPO, but accounting for uncertainty around the Company’s value should the IPO not occur, the Hybrid Method was utilized for the independent third party valuation of the Common Stock as of September 30, 2024 (the
“ September 2024 Valuation ”). The OPM and Hybrid Method are commonly used in these situations, and such use is consistent with guidance from the Practice Aid. In the Company’s case, the Hybrid Method incorporated two
scenarios: (1) a stay private scenario where the allocation of total equity value was performed using the OPM and (2) an IPO scenario where all outstanding shares of the Company’s redeemable convertible preferred stock were assumed
to be mandatorily converted into shares of Common Stock. In addition, given the Common Stock represents a non-marketable equity interest in a private enterprise, an adjustment to the preliminary value
estimates was made in each of the sale and IPO scenario to account for the lack of liquidity. This adjustment is commonly referred to as a discount for lack of marketability (“ DLOM ”).
 At each grant date, the Board evaluated any recent events and their potential impact on the estimated fair value per share of the Common
Stock. For grants of awards made on dates for which there was no contemporaneous independent third-party valuation, the Board determined the estimated fair value of the Common Stock on the date of grant taking into consideration the most recent
valuation report as well as other pertinent information available to it at the time of the grant.
 FOIA Confidential
Treatment Requested by LB Pharmaceuticals Inc [***] Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commission. Cooley LLP 55 Hudson Yards New York, NY 10001
 T:+1 212 479 6000 f:+1 212 479 6275 cooley.com

 U.S. Securities and Exchange Commission
 September 3, 2025 Page Five

 Common Stock Valuations and Stock Option Grants
 The Company granted the following stock option awards since July 1, 2024, which remained outstanding as of the date hereof:

 Date of Grant

 Numbers of Shares Subject to Stock Options Granted

 Exercise Price Per Share of Common Stock

 Estimated Fair Value Per Share of Common Stock at Grant Date

 November 18, 2024

 4,935,000

 $
 1.50

 $
 [
 ***]

 January 7, 2025

 219,138

 $
 1.50

 $
 [
 ***]

 February 11, 2025

 1,000,000

 $
 1.50

 $
 [
 ***]
 September 2024 Valuation—November 18, 2024, January 7, 2025 and February 11, 2025 Stock Option Grants
 On November 18, 2024, the Company granted stock options to purchase a total of 4,935,000 shares of Common Stock at an exercise
price of $1.50 per share. The Board determined the fair value of the Common Stock at the time of the grant to be $[***] per share based on a number of factors, including the September 2024 Valuation.
 On January 7, 2025, the Company granted stock options to purchase a total of 219,138 shares of Common Stock at an exercise price of $1.50
per share. The Board determined the fair value of the Common Stock at the time of the grant to be $[***] per share based on a number of factors, including the September 2024 Valuation.
 On February 11, 2025, the Company granted stock options to purchase a total of 1,000,000 shares of Common Stock at an exercise price of
$1.50 per share. The Board determined the fair value of the Common Stock at the time of the grant to be $[***] per share based on a number of factors, including the September 2024 Valuation.
 For the September 2024 Valuation, the total equity value was considered and adjusted for the changes in the market environment using a
combination of the cost-based approach and market-based approach. Based on an analysis of the market, the selected guideline public companies suggested a [***]% decrease (based on mean and median) in the enterprise value since the prior valuation.
The observed market change was applied to the June 30, 2024 enterprise value to arrive at an adjusted enterprise value of approximately $[***] million. Further, the total productive expenses incurred by the Company since June 30, 2024,
through the valuation date, was approximately $[***] million. The Company also factored in a [***]% return on the productive expenses considering that it had completed its Phase 2 trials and was awaiting trial results.
 FOIA Confidential
Treatment Requested by LB Pharmaceuticals Inc [***] Certain information in this document has been omitted and filed separately with
the Securities and Exchange Commis