Q4 2023 Talphera Inc Earnings Call

Operator: Thank you. Thank you. Thank you.

Yes.

Operator: Welcome to the Telfair Fourth Quarter 2023 Financial Results Conference Call. This call is being webcasted live via the events page of the investor section of Telfair's website at www.telfair.com. This call is the property of Telfair, and any recording, reproduction, or transmission of this call without the express written consent of Telfair is strictly prohibited.

Welcome to the Tel Fair, our fourth quarter 2023 financial results Conference call.

This call is being webcast live via the events page of the investors section of tell ferrous website at Triple double your dot Telfair a dotcom.

This call is the property of Tal Farah.

Any recording reproduction or transmission of this call without the express written consent of tell Farah is strictly prohibited.

Operator: As a reminder, this webcast is being recorded. You may listen to a replay of this webcast by going to the investor section of Telfair's website. I would now like to turn the call over to Raffi Asadorian, Talfera Pharmaceuticals' Chief Financial Officer. Please go ahead.

As a reminder, this webcast is being recorded.

You may listen to a replay of this webcast by going to the investors section of tell ferrous website.

I would now like to turn the call over to Raffi ASUR Dorian Telfair Pharmaceuticals, Chief Financial Officer. Please go ahead.

Raffi Mark Asadorian: Thank you for joining us on the call today. This afternoon, we announced our fourth quarter 2023 financial results and associated business plan and business updates in a press release. This press release can be found within the investors section of our website. With me today are Vincent Angotti, our Chief Executive Officer, and Dr. Pam Palmer, Telfaira's Founder and Chief Medical Officer. Before we begin,

Thank you for joining us on the call today. This afternoon, we announced our fourth quarter 2023 financial results and associated business plan, our business updates and our press release.

This press release can be found within the investors section of our website.

With me today are Vincent Gaudy, our Chief Executive Officer, and Dr. Pam Palmer, Telfair, as founder and Chief Medical Officer.

Before we begin.

Raffi Mark Asadorian: I want to remind listeners that during this call, we will likely make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of Telfera. Please refer to our press release, in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission, at www.sec.gov, for a discussion of the risks associated with such forward-looking statements. These documents can also be found on our website within the Investors section. Talferro.com. I'll now hand the call over to Vin. Thank you, Raff.

I want to remind listeners that during this call we will likely make forward looking statements within the meaning of the federal securities laws.

These forward looking statements involve risks and uncertainties regarding the operations and future results of tough era.

Please refer to our press release in addition to the company's periodic current and annual reports filed with the Securities and Exchange Commission.

At Www Dot FCC dot Gov or.

For a discussion of the risks associated with such forward looking statements.

These documents can also be found on our website within the investors section of <unk> Dot com.

I'll now hand, the call over to Vince.

Thank you Rafi and good afternoon to everyone and walk you through the first call we are having a tough farah.

Vincent J. Angotti: Good afternoon to everyone, and welcome to the first call we're having at Tal Farah. Throughout 2023, we focused on our objective of repositioning the company around a new portfolio of assets with an immediate priority on NIAID and a longer-term strategy on the broader Nefamistat pipeline and other pipeline assets, as these assets have the traits to drive our vision to support health care providers in optimizing patient outcomes in medically supervised settings 2023 was a productive year in achieving this objective, culminating in our ultimate rebranding to Talfera, signifying the completion of this repositioning. With this transition, we believe we've successfully capitalized on Telfera to achieve our 2024 goal of advancing NIA to a pre-market application submission, or PMA. Today, we'll number one highlight the activities completed in 2023 that have positioned Telfera for success over the next 12 to 18 months.

Throughout 2023, we focused on our objective of repositioning the company around a new portfolio of assets with an immediate priority on NIAD and longer term strategy on the broader and a famous that pipeline and other pipeline assets.

As these assets have the traits to drive our vision to support health care providers and optimizing patient outcomes in medically supervised settings.

2023 was a productive year in achieving this objective, culminating in our ultimate rebranding to Tao Farah signifying the completion of this repositioning.

With this transition we believe we successfully capitalized tough faro to achieve our 2024 goal to advance nights, we pre market application submission or PMA.

Today, well number one highlight the activities completed in 2023 that are positioned tavera for success over the next 12 to 18 months.

To identify the important upcoming milestones in 2024.

Vincent J. Angotti: Identify the important upcoming milestones in 2024, and then 3. Update you on the status of our NIAID Registrational Study. As for 2023, in April, we closed the transaction with Allure to divest Dissuvia to a partner with experience in manufacturing and commercializing controlled substances. This transaction allowed us to complete the reduction in our annual Dishuvia-related operating expenses by approximately $14 million and refocus these resources on the development of NIAID. With this transaction, we will earn royalties of 15% on commercial sales.

And then three update you on the status of our NAIAD Registrational study.

As for 2023 in April we closed the transaction with Florida divest the shoe to a partner with experience in manufacturing and commercializing controlled substances.

This transaction allowed us to complete the reduction in our annual the shoe beer related operating expenses by approximately $14 million and refocus these resources on the development of not yet.

With this transaction, we earn royalties of 15% on commercial sales.

Vincent J. Angotti: Seventy-five percent on sales to the Department of Defense and up to $116.5 million in potential milestone payments. We're confident that Allure is the right partner, and we expect they'll begin commercializing in 2024 after they complete all their work around restructuring and insourcing the supply chain. In October, another pivotal success was achieved.

75% on sales to the department of defense and up to $116 $5 million in potential milestone payments.

We're confident that a law is the right partner and we expect they'll begin commercializing in 2024 after they complete all their work around restructuring and in sourcing the supply chain.

In October another pivotal success was achieved after several months of working on the NIAID study protocol and discussing modifications with the FDA. We received an approval of our I D E from the FDA.

Vincent J. Angotti: After several months of working on the NIAID study protocol and discussing modifications with the FDA, we received FDA approval for our IDE. This allowed us to start preparations for the single registrational study that we expect to begin enrolling in the coming weeks. The clinical and regulatory teams have designed a 166-patient study, as agreed to with the FDA, that many of our KOLs believe should be quickly enrolled. Remember, Phantostat is an approved and long-standing product in Japan and South Korea for anticoagulation and other indications with a wealth of safety and efficacy information.

This allowed us to start preparations for the single Registrational study that we expect to begin enrolling in the coming weeks.

The clinical and regulatory teams have designed a 166 patient study.

<unk> agreed to with the FDA that many of our Kols believe should be quickly enrolled.

Remember the famous that isn't approved and longstanding product in Japan, and South Korea.

For anti coagulation and other indications with a wealth of safety and efficacy information.

Vincent J. Angotti: Our Nifamistat product candidate, NIAID, has received breakthrough designation from the FDA. We believe all of this bodes well for a successful clinical trial this year. Dr. Palmer will provide an overview of the study and its status later in the call. Another key achievement in 2023 was the December publication in the journal Renal Failure of our market research with 150 physicians in the U.S. regarding the practice of anticoagulation of the extracorporeal CRRT circuit. Many of the authors of this study are in the process of becoming investigators in our clinical trial and have provided us with valuable information and a better understanding of how physicians are currently using anticoagulants during CRRT and the potential issues with current standards of care. We hosted two authors of the study and a KOL panel discussion in December, which provided interesting insights into the market and clinical practices at two leading academic institutions. We believe that nifamistat, if approved in the US, would be an important addition to the market for anticoagulant therapy during CRRT, particularly given the disadvantages raised in this publication of the two anticoagulants currently used, those being heparin and citrate.

Aren't a famous that product candidate NIAD has received breakthrough designation from the FDA.

We believe all of this bodes well for a successful clinical trial this year Dr.

Dr. Palmer will provide an overview of the study and its status later in the call.

Another key achievement in 2023 was the December publication in the journal renal failure of our market research with 150 physicians in the U S regarding the practices of anti coagulation or the extra coupon you'll see our RT circuit.

Many of the authors of this study are in the process of becoming investigators in our clinical trial.

Provided us with valuable information and better understanding how physicians are currently using anti coagulants during C. R. R T and the potential issues with current standards of care.

We hosted two authors of this study and a K well panel discussion in December which provided interesting insights into the market and clinical practices of two leading academic institutions.

We believe that the Spanish status approved in the U S would be an important addition to the market for anti coagulation during C. R. R T, particularly given the disadvantages raised in this publication of the two anti Coagulants currently used those being heparin and citrate.

Vincent J. Angotti: If approved by the FDA, NIAID would be the only regional anticoagulant approved in the U.S. for the extracorporeal circuit after achieving these 2023 objectives to reposition the company. We were prepared to proceed with a corporate rebranding to ensure all stakeholders were aware of our new vision with a focus on NIAID in the near term. Accordingly, in January, we rebranded the company to TauFera. The new name was derived in part from Talisman, meaning a strong leader, and it reflects the new pharmaceutical era for the company.

If approved by the F D. A <unk> would be the only regional anti coagulant approved in the U S for the extra portal circuit.

After achieving these 2023 objectives to reposition the company we.

We were prepared to proceed with corporate rebranding to ensure all stakeholders. We're aware of our new vision with a focus on not yet in the near term.

Accordingly in January we rebranded the company to Tao Farah.

The new name was derived in part from talisman, meaning a strong leader and reflects the new pharmaceutical era for the company.

Vincent J. Angotti: This signals the beginning of our newly transformed company, and we're excited about the momentum we have gained and the positive feedback we've received from the many investors we've met with over the last couple of months. Soon after the rebranding, And most importantly, we announced the completion of two financing events focused on ensuring we have sufficient capital to get to a potential approval of NIAID in the second quarter of next year. The first was a non-dilutive royalty financing closed with Zoma Royalty where we partially monetized our DeSuvio royalties in Milestone. We received $8 million at closing from Zoma in exchange for the royalties and milestones being paid by Allura. Once Zoma receives a specified amount of payments, it will share equally in the Department of Defense royalties and the Milestone Payment. Separately, we closed equity financing from two of our existing investors, Nathahala and Rosalind. The equity financing provides $18 million in total funds structured over two closings. We received $6 million at the first closing.

This signals the beginning of our newly transformed company and we're excited about the momentum we have gained and the positive feedback we've received from the many investors we met with over the last couple of months.

Soon after the rebranding importantly, we announced the completion of two financing events focused on ensuring we have sufficient capital to get to a potential approval of NIAD and the second quarter of next year.

The first was a non dilutive royalty financing closed with domo royalty, where we partially monetized our disunity of royalties and milestones.

We received $8 million at closing from XOMA in exchange for the royalties and milestones being paid by our Lora.

Once XOMA receives a specified amount of payments will share equally in the department of defense royalties and milestone payments.

Separately, we closed an equity financing from two of our existing investors not to holler and Rosalind.

The equity financing provides $18 million in total funds structured over two closings.

We received $6 million at the first closing.

Vincent J. Angotti: And another $10 million of committed capital will be received at the second closing upon the announcement of positive Nefro trial data by September 30 of this year, and an additional $2 million if Telfair stock trades above $0.92 following that announcement. To be clear, this is committed capital once the milestones are met. In addition, should the milestone-based warrants from the July 2023 financing be exercised, an additional $14.4 million of capital would be injected into the company. Concurrent with the equity investment, we were delighted that Abhi Jain from Nantahala agreed to be on our board of directors, which adds further depth to our experienced board. As you may have seen, we announced last week that the board had decided to reduce the total number of directors to seven from the ten we previously had. This reduction is consistent with best governance practices of other companies our size. Accordingly, Howie Rosen, Rick Affable, and Pam Palmer voluntarily resigned from the board.

And another $10 million of committed capital.

<unk> will be received at the second closing upon the announcement of positive Neff Road trial data by September 30 of this year.

And an additional $2 million, if tough fair stock trades above 92.

Following that announcement.

To be clear this is committed capital once the milestones are met.

In addition should the milestone based warrants from the July 2023 financing be exercised and.

An additional $14 4 million of capital would be injected into the company.

Concurrent with the equity investment we were delighted that Avi Jain from Natala agreed to bear on our board of directors, which adds further depth to our experienced board.

As you May have seen we announced last week that the board has decided to reduce the total number of directors to seven from the 10, we previously had.

This reduction is consistent with best governance practices of other companies our size.

Accordingly.

Erosion rectified way and Pam Palmer voluntarily resigned from the board.

Pamela Pierce Palmer: I'd like to expressly thank Howie Rosen and Rikka Fably for all their valuable contributions over the years on our board. And, of course, I look forward to continuing work with Dr. Palmer as our Chief Medical Officer. Finally, before handing the call over to Dr. Palmer, I'd like to remind everyone of all the upcoming milestones expected over the next 18 months. We anticipate our first patient in the NIAID study to be enrolled in the coming week. Once patients begin enrolling, we'll have a better overall sense of the timing, but based on feedback received from the various KOLs, we expect this study to enroll quickly. After 32 patients have been enrolled, there will be a planned interim safety analysis. Top-line data readout from the completed study would then be expected by the end of the third quarter, with a PMA submission planned for the end of the year. Now, with a six-month FDA statutory timeline, this would put us on track for a potential PMA approval by the end of the second quarter of 2025. With that, I'll hand the call over to Dr. Palmer, who will provide an update on the nephro-CRRT, or NIAID, clinical study. Pam?

I'd like to expressly thank Howie Rosen, there Rick a family for all of their valuable contributions over the years on our board and of course look forward to continuing work with Dr. Palmer as our Chief Medical Officer.

Finally, before handing the call over to Dr. Palmer I'd like to remind everyone of all the upcoming milestones expected over the next 18 months.

We anticipate our first patient in the NIAID study to be enrolled in the coming weeks.

Once patients begin enrolling well have a better overall sense of the timing, but based on feedback received from the various kols. We expect this study to enroll quickly.

After 32 patients had been enrolled there'll be a planned interim safety analysis.

The topline data readout from the completed study would then be expected by the end of the third quarter with a PMA submission planned for the end of the year.

Now with a six month FDA statutory timeline this will put us on track for a potential PMA approval by the end of the second quarter of 2025.

With that I'll hand, the call over to Dr. Palmer, who will provide an update on the <unk> T or NIAD clinical study Pam.

Pamela Pierce Palmer: Thank you, Vince, and good afternoon to everyone. Today, I'll provide a brief update on the NEFRO study status as we've been eager to get the study started. Most of our clinical sites contracting with us are large academic institutions across the country, and we've experienced delays in administrative efforts to have our contracts and budgets in place to begin enrolling patients.

Thank you Vince and good afternoon to everyone. Today I'll provide a brief update on the <unk> study status as we've been eager to get this study started.

Most of our clinical sites undergoing contracting with us are large academic institutions across the country and.

And we've experienced delays in ministry efforts to have our contracts and budgets in place to begin enrolling patients.

Pamela Pierce Palmer: We had expected to have our first patient enrolled already, but our CRO has confirmed that they are seeing similar administrative delays with institutions across many other studies as well. However, we do not expect to have any significant delays in enrolling patients once each site is set to start. As Vince mentioned, the feedback provided by KOLs is that they believe once they are set up to initiate the study, enrolling should be fairly rapid given the relatively short study period and broad inclusion criteria for the trial. Patients are considered completers after only 72 hours on CRRT, and all primary and secondary endpoints are assessed during this period.

We had expected to have our first patient enrolled already but our CRO has confirmed that they are seeing similar administrative delays with institutions across many other studies as well.

We do not expect any significant delays in enrolling patients once each site is set to start.

As Vince mentioned the feedback provided by Kols is that they believed once they are setup to initiate this study enrolling should be fairly rapid given the relatively short study period and broad inclusion criteria for the trial.

Patients are considered completed.

After only 72 hours on CRT.

And all primary and secondary endpoints are assessed during this period.

Pamela Pierce Palmer: This said, we expect the first patient to be enrolled in the coming weeks at our first site as we have recently completed the site initiation visit, with an additional site initiation visit and other institutions scheduled for next week. As a reminder, our clinical study will include 166 patients, with half receiving an infusion of NIAID into the CRRT circuit, while the other half will receive an infusion of saline as a placebo into the circuit. The primary endpoint will be the CRRT post-filter activated clotting time over the first 24 hours, with a key secondary endpoint including the same measurement over 72 hours. Additional secondary endpoints evaluate filter lifespan, number of transfusions, and dialysis efficacy.

This said, we expect the first patient being enrolled in the coming weeks at our first site as we have recently completed the site initiation visit with an additional site initiation does at another institution scheduled for next week.

As a reminder, our clinical study will include 166 patients with half receiving an infusion of NIAD into the CRT circuit, while the other half will receive an infusion of saline placebo into the circuit.

The primary endpoint will be the C. R. R. T post filter activated clotting time over the first 24 hours with a key secondary endpoint, including the same measurement over 72 hours.

Additional secondary endpoints evaluate filter lifespan number of transfusions and dialysis efficacy.

Pamela Pierce Palmer: There are a number of reasons we are confident in the successful study outcome, first and foremost being the three decades of Nifamisat's safe and effective clinical use in Japan and South Korea. Secondly, an independent meta-analysis evaluating almost 3,000 patients published in 2022, analyzing the use of nifamistat as an anticoagulant for the extracorporeal circuit, provides insightful data on mortality, bleeding risk, and filter life, all of which were favorable for nifamistat as compared to conventional anticoagulant therapy or in the absence of an anticoagulant. Thirdly, the Nefro-CRRT straightforward study design in which we The use of saline as a comparator in our study is ethical as we know from our recent published market research that nearly a third of CRRT patients receive no anticoagulants. KOLs have informed us that the main reason for not using an anticoagulant is that the current available options, heparin and citrate, carry risks that many patients cannot tolerate.

There are a number of reasons, we are confident in the successful study outcome first and foremost being the three decades of know famous that safe and effective clinical use in Japan and South Korea.

Secondly, and independent meta analysis evaluating almost 3000 patients published in 2022.

Analyzing the use of the family status and anticoagulants with Extracorporeal circuit.

Insightful data on mortality bleeding risk and filter life, all of which were favorable for the families that as compare to conventional anticoagulant therapy or in the absence of any <unk>.

Thirdly is the net proceeds our RT straightforward study design.

Which we are comparing a proven powerful anticoagulants to saline and measuring inactivated clotting time as a primary endpoint.

Yeah.

The use of saline as a comparator in our study is ethical as we know from our recent publish market research that nearly a third of C. R. A T patients receive no anticoagulant.

Kols have informed us the main reason for not using an anticoagulant is that the current available options heffernan citrate carry risks that many patients cannot tolerate.

Pamela Pierce Palmer: Heparin is a systemic anticoagulant with a half-life of up to three hours. Therefore, it circulates back into the patient from the circuit and should not be used in patients at risk of bleeding. By comparison, nifamostat has an ultra-short half-life of only 8 minutes, reducing the risk of systemically anticoagulating the patient. Various citrate formulations, used either off-label or under an EUA, are complex to administer and have their own complications, including hypocalcemia, citrate toxicity, and ventricular arrhythmia. While we do not have enough time here today to discuss all the disadvantages of citrate and heparin, suffice it to say that nifamistat, if approved, will be an important addition to the current anticoagulants being used. More information on the disadvantages of heparin and citrate, as well as the risk of using no anticoagulant, is detailed in the recently published market research study in the journal Renal Failure, as well as in the KOL panel discussion that we hosted in December of last year.

Heparin is a systemic anti coagulate with a half life of up to three hours, therefore circulate back into the patient from this circuit.

And should not be used in patients at risk of bleeding.

By comparison, the famous status in ultra short half life of only eight minutes.

Houston, the risk of systemically anticoagulation the patient.

Various citrate formulations used either off label or under an EUA are complex to administer and have their own complications, including hypocalcemia citrate toxicity and ventricular arrhythmias.

While we do not have enough time here today to discuss all the disadvantages at citrate and heparin suffice it to say, we believe that the famous that if approved will be an important addition to the current anticoagulants being used.

More information on the disadvantages of heparin and citrate as well as the risk of using no anticoagulants.

As detailed in our recently published market Research study in the journal renal failure as well as by the Kols panel discussion that we hosted in December of last year.

Vincent J. Angotti: Both the publication and a webcast recording of the KOL panel can be found on our website. I will now turn the call back over to you, Pam. We've previously discussed the peak sales potential of NIAID of $200 million, which is split fairly evenly between CRRT in the hospital setting and intermittent hemodialysis use in the outpatient setting. We will initially start concentrating on CRRT in the hospital setting, as this is the focus of the nephro-CRRT clinical study. We're currently working on additional market research to inform potential updates to the market opportunity, pricing, and market penetration potential of NIAC. However, our pig sales potential assumes only 19.5% market penetration in the hospital CRRT setting.

Both the publication and a webcast recording of the Kols panel can be found on our website.

I will now turn the call back over to Vince.

Thank you Pam.

We've previously discussed the peak sales potential of NAIAD of $200 million, which is split fairly evenly between C. R. T. In the hospital setting and intermittent hemodialysis use in the outpatient setting.

We will initially by concentrating on CRT in the hospital as this is the focus of the net proceeds of our T clinical study.

We're currently working on additional market research to inform potential updates to the market opportunity pricing and market penetration potential of not yet.

Our peak sales potential assumes only a 19, 5% market penetration in the hospital C. R T setting.

Vincent J. Angotti: However, feedback we're receiving from our KOLs indicates we may be underestimating our market penetration potential. We will share any updates needed to our estimated peak sales following the completion of our additional market research. Now, I hand the call over to Raffi to take you through the details of the financial results. Thank you, Vince. 2023 was clearly a year of transformation for Telfera.

However, feedback we're receiving from our Kols indicates we may be underestimating our market penetration potential.

We will share any updates needed to our estimated peak sales following the completion of our additional market research.

Now I'll hand, the call over to Rafi to take you through the details of the financial results.

Thank you Vince.

2023 was clearly a year of transformation for <unk> and we're excited about the prospects of our lead asset night Ed.

Raffi Mark Asadorian: And we're excited about the prospects of our lead asset, NIAID, as well as the longer-term potential within the Phamastat portfolio. We are thankful for the support from our investors, including Nantahala and Rosalyn, who participated in the January 2024 equity financing with the objective to ensure we have sufficient capital to reach a potential Q2 2025 PMA approval for NIAID. The company-friendly structure of this equity financing, the majority of which requires the investors to fund the company at the second closing, should we achieve the pivotal trial milestone regardless of the stock price at the time, demonstrates the investors' conviction and belief in the company. Cash and cash equivalents were $9.4 million at the end of the quarter or $23.4 million on a pro forma basis if you include the $16 million of initial proceeds received from the January financing.

As well as the longer term potential within the <unk> portfolio.

We are thankful for the support from our investors, including onto Halle and Rosalyn, who participated in the January 2024 equity financing with the objective to ensure we have sufficient capital to reach a potential Q2, 2000 and twenty-five PMA approval of <unk>.

The company friendly structure of this equity financing majority of which requires the investors to fund the company at the second closing should we achieved a pivotal trial milestone regardless of the stock price at the time.

Demonstrates the investors' conviction and belief in the company.

Cash and cash equivalents were $9 $4 million at the end of the quarter or $23 $4 million on a pro forma basis. If you include the $16 million of initial proceeds received from the January financings.

Raffi Mark Asadorian: We continue to remain vigilant over our cash expenditures for the year. Our combined R&D and SG&A expenses, excluding non-cash stock compensation for the year, were $15.8 million, slightly better than the guidance range of $16 to $20 million we provided. For the quarter, the combined R&D and SG&A expenses, excluding $0.3 million of non-cash stock compensation, were $4.3 million. Our estimated full year 2024 combined R&D and SG&A expenses, excluding non-cash stock related expenses, are expected to range from $21 to $23 million. Revenues for the fourth quarter of $0.3 million were generated from royalties on the sales of Dissuvia.

We continue to remain vigilant over our cash expenditures for the year.

Our combined R&D and SG&A expenses, excluding noncash stock compensation for the year were $15 $8 million.

Slightly better than the guidance range of $16 million to $20 million we provided.

For the quarter, the combined R&D and SG&A expenses, excluding zero point $3 million of noncash stock compensation was $4 $3 million.

Our estimated full year 2020 for combined R&D and SG&A expenses, excluding noncash stock related expense are expected to range from $21 million to $23 million.

Okay.

Revenues for the fourth quarter of <unk> $3 million were generated from royalties on the sales of the Silvia.

Vincent J. Angotti: Principally from sales to the Department of Defense, on which we earn a 75% royalty from Allura, as stated earlier. We will continue to account for these royalties and milestones as revenues. However, there will be no cash flow impact going forward until Zoma receives their specified return and we begin sharing equally in the DoD royalties and the milestones. Given the historically variable nature of these revenues, we do not plan to provide any guidance on the expected timeframe when these royalties and milestones will begin to generate cash flow to Telfera. I'll now turn the call back over to Vincent. Thank you, Raff.

Principally from sales to the department of defense on which we earn a 75% royalty from our Lora as stated earlier.

We will continue to account for these royalties and milestones as revenues.

Over there.

There will be no cash flow impact going forward until XOMA received their specified return and we began sharing equally in the D O D royalties and the milestones.

Given the historically variable nature of these revenues, we do not plan to provide any guidance on the expected timeframe of when these royalties and milestones will begin to generate cash flow to tell farah.

Now I'll turn the call back over to Vince.

Operator: I'd now like to open the line for any questions you may have. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star 1 and your touchtone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press start. If you are using a speakerphone, please lift the handset before pressing any key.

Thank you Rafi.

I'd now like to open the line for any questions you may have operator.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session.

Should you have a question. Please press star one on your Touchtone phone.

You will hear a prompt that your hand has been raised.

Should you wish to decline from the polling process. Please press star two.

If you are using a speaker phone please lift the handset before pressing any keys.

Thomas Yip: Your first question comes from Ed Arce of H.C. Wainwright. Good afternoon, everyone. This is Thomas Yip.

Your first question comes from Ed Arce of.

H C Wainwright.

Good afternoon, everyone. This is Thomas Yip.

Thomas Yip: Hi everyone, this is Thomas Yip asking a couple of questions for Ed. Thank you for taking the time to answer my questions. So first, good to see that the PMA submission is still on target by year-end 2024. Just trying to tease out, you know, as we are close to the end of the first quarter. Should we expect the first patient to be enrolled by the end of the quarter? I know you said within the coming weeks, and also I believe top line data is still on target sometime into the quarter of this year. Yeah, so I'll answer the first part of that.

Hi, everyone. This is Thomas Yip, asking a couple questions for Ed.

There are no questions.

So so first.

Good to see that PMA submission.

Still on target by year end 2024.

Just trying to tease out.

And that's very close to the end of first quarter.

Should we expect the first patients have been enrolled.

By the end of the quarter.

I think we sit with them and also I believe right.

So on target.

And sometime in third quarter of this year.

Yes, so I'll answer the first part of that so again reiterating what you mentioned our target remains by the end of the year to have the PMA submission occurred we've already completed a site visit SIV or site initiation visit with one of the sites. Another one scheduled for next week and we'll monitor the enrollment from that point moving forward.

Vincent J. Angotti: So again, reiterating what you mentioned, our target remains by the end of the year to have the PMA submission completed. We've already completed an SIV or site initiation visit with one of the sites, another one scheduled for next week. And we'll monitor enrollment from that point forward. Dr. Palmer might be able to give you some additional color as it relates to discussions with the sites and the availability of patients moving forward. And really, what we just heard from the site we're visiting next week. Yeah, so the sites are really excited to move forward. They're as frustrated, I think, by these administrative delays as we are.

Dr Palmer might be able to give you some.

Additional color as it relates to discussions with the sites and the availability of patients moving forward and really what we just heard from the site. We're visiting next week.

Yeah. So the slides are really excited to move forward. There is frustrated I think by these administrative delays as we've been.

Pamela Pierce Palmer: You know, they've even said to me, hey Pam, I had two patients last week that would have qualified for the study. You know, so they see these patients that they want to get in, and we're just trying to get these SIVs, site initiation visits, done so they can quickly start enrolling. It is a competitive enrollment, so there is no cap on any site.

You know they have even said to me Hey, Pam I had two patients that we thought it would have qualified for the study yesterday. They see these patients that they want to get in and we're just trying to get these siv's decided initiation visits done.

John So they can quickly start enrolling.

It is competitive enrollment. So there is no cap on any site that means the first up and running we'll get to enroll more patients than the last so well.

Pamela Pierce Palmer: That means the first up and running will get to enroll more patients than the last. So we're really trying to move this forward and keep it on the timeline. Yeah, I think, in direct answer to your question, by the end of Q1, that's certainly our goal, Thomas, and with the feedback, hopefully that's what we'll achieve here in short order.

We're really trying to move this forward and keep it on the timeline.

Yes, I think indirect answer to your question by the end of Q1, that's certainly our goal Thomas.

With the feedback.

Hopefully that's what we'll achieve here in short order.

Got it and then.

Thomas Yip: And then perhaps a follow-up on that for Dr. Palmer. Can you discuss the nature of these administrative delays you mentioned? You know, at least delays on all of the sites or some, you know, just some of the sites that Yeah, well, no, it's actually kind of across the board. And what we've been hearing is these large academic centers really have had an exodus of administrative personnel, you know, in the past few years; a lot are working from home, they've been, the numbers have been cut, such that we're dealing with fewer folks in the contracting office and the budgeting office.

Perhaps a follow up on that for about pharma.

Can you discuss the nature of these administrative delays.

Yes.

These delays and all of the sites or so just some of the sites that are that have been chosen.

Yeah, well no it's actually kind of across the board and what we've been hearing is these large academic centers.

Really had an exit is of administrative personnel.

Yeah.

In the past few years, a lot of working from home they have been.

The numbers have been cut such that we are dealing with the fewer folks in the contracting office in the Virginia office and so when you put in your.

Pamela Pierce Palmer: And so when you put in your contracts and budgets, you're sort of queuing up for their attention. And so we are banging the drum and making phone calls and emailing and pestering as much as we can. But things are slowly starting to move. So we're excited. But no, they're almost all on the same timeline.

Yes.

Contracts and budgets, you're sort of queuing up for their attention and so we are banging, the drum and making phone calls and E mailing in passenger cars such as we can but.

They are slowly starting to me that so we're excited but no. There. They are almost all on the same timeline. So now we are starting to see these suvs being scheduled and we're super excited because once we do meet with the team and we're doing these suvs, where the caliber of researches that we're dealing with is very high.

Pamela Pierce Palmer: So now we are starting to see these SIVs being scheduled. And we're super excited because once we do meet with the team, and we do these SIVs, the caliber of researchers that we're dealing with is very high. Their patient populations qualify; they see these patients every single day in their ICUs. And so we just really feel like once we can get these sites kicked off, it'll be a nice rapid enrollment. Pam, can you please comment quickly?

Ah patient.

Populations of qualify they're seeing these patients every single day in the ICU and so.

We just really feel like once we can get these insights kicked off it'll it'll be a nice rapid enrollment Pam can you comment quickly. We've used the words are shortening of Siv's site initiation visits. So we just started completing them have more now scheduled what does the site initiation for the site initiation visits are the last thing you.

Pamela Pierce Palmer: We use the words or shortening of SIVs, site initiation visits. So we just started completing them, and we have more now scheduled. What is a site initiation visit? Yeah, so the site initiation visit is sort of the last thing you do. You know, you have to initially do confidentiality agreements, you have to do site feasibility questionnaires, you have to then negotiate a contract, and you've got to negotiate a budget.

Gil.

You have to originally do you know.

Confidentiality agreements you have to do site feasibility questionnaires you have to then negotiate a contract you've got to know negotiate a budget all of that is what's taken awhile. The very last thing you do the final enrollment as a site initiation visit.

Pamela Pierce Palmer: All of that has taken a while. The very last thing you do before enrollment is a site initiation visit, where you're actually on site, you know, looking at the pharmacy, looking at their, you know, data entry and things like that. So, you know, it really shows you that there's a lot of paperwork and there's... It just takes time to get through it, but once you get through it and you get up and running, we're excited about what we're hearing from the sites. I think they'll be able to enroll us fairly quickly. And just to add a little additional color on the site initiation visits, we've already started completing some, and we have the additional ones really in the process of scheduling. They happen within a day.

Youre actually on site looking at the pharmacy looking at their data entry and things like that so.

It really shows you.

Yes, there's a lot of paperwork and theirs.

It just takes time to get through it but once you get through it and get up and running.

We're excited with what we're hearing from the sites I think they'll be able to roll this fairly quickly and just to add a little additional color on the site initiation visits we've already started completing some have the additional ones really in the process of scheduling they happen within a day or these arent extended visits it's less than a day visit at site by the CRO.

Pamela Pierce Palmer: These aren't extended visits. It's less than a day visit on the site by the CRO, finishing up the final details. Hope that gives you some insight, Thomas, on that. Yeah, definitely.

Finishing up the final details hope that gives you some insight Thomas on on that.

Yeah definitely okay. Thank you both.

Thomas Yip: Thank you both for being here. And then David's background, you mentioned on the call, or maybe Vince, that there will be an interim analysis from NASPRO after dairy patients have been dosed. Will this be a blinded safety analysis? Transcribed by https://otter.ai Yeah, it's a DSMB, a Data Safety Management Board. And what they do is they're evaluating, yes, it is actually unblinded, because they're selected to look at the data to make sure there are no safety signals. That's very typical for a new chemical entity that hasn't been approved yet in the US before, although it's got 30 years of great history in Japan and South Korea, it's coming over here for the first time.

For your other T cells.

And then.

Maybe start off on the you mentioned on the call or maybe events.

That there will be an interim analysis from macro after a very patients I think those will be.

A private safety analysis.

What can we expect from it.

This analysis.

Yeah, It's a D S MBA data is safety.

Managing board and what they do is there they're a valley we yes. It is actually unblinded because there are selected.

To look at the data to make sure Theres no safety signals, that's very typical for a new chemical entity that has not been approved yet in the U S. Before although it's got a great 30 years, a great history in Japan, South Korea is coming over here for the first time. So the first 32 patients which will be 16 active 16 placebo.

Pamela Pierce Palmer: So the first 32 patients, which will be 16 active, 16 placebo in general, are going to be evaluated by this unblinded committee, and they will give thumbs up or thumbs down to continue the study. Okay. Understood. Thanks for clarifying. Perhaps one question for Raffi, so cash runway up to the second quarter next year, I believe that includes this 16 million per former cash influx during the first quarter of 2024, is that right? Yeah, just I need to correct what I said in the prepared remarks, actually $14 million on that first closing plus the royalty financing, that's $16. So correct that there. That includes that plus the additional $12 million that we're expecting once we announce the pivotal trial milestone or the top line data, which we're planning for in the third quarter. It does not include I mean, obviously, as we mentioned in the prepared remarks, on top of that, should the July 2023 warrants be exercised, there's additional capital that comes into the company. That's on top.

In general.

Going to be evaluated by this.

Unblinded Committee and they gave some separate thumbs down to continue the study.

Okay got it understood thanks for clarity.

Perhaps one question.

So so a cash runway up to second quarter of next year.

So that includes the $16 million.

Former cash influx.

During the first quarter 'twenty, sorry for that right.

Yeah, just just I need to correct my what I said in the prepared remarks actually 14 million on that first closing plus the royalty financing that 16, so correct that there. So yes that includes that plus the additional $12 million that we're expecting once we announce the pivotal trial milestone or the top line data.

Which we're planning for in the third quarter.

It does not include I mean, obviously as we mentioned in the prepared remarks on top of that.

Should those July 2023 warrants be exercise there is additional capital that comes into the company.

Got it that's all.

Thomas Yip: Okay, thank you. Thank you everyone for taking the questions and looking forward to the first patient's enrollment in the study. Operator, additional questions?

Okay.

Thank you. Thank you everyone for taking my questions.

Looking forward to the first patient enrollment in the study.

Yes.

Well operator additional questions.

Thanks Thomas.

Vincent J. Angotti: There are no further questions at this time. I would hand over the call to Vince Angotti for closing comments. Please go ahead.

There are no further questions at this time I would hand over the call to Vince and body.

Vincent J. Angotti: Before I give my final comments, there's clearly a high interest in the study and execution thereof, and Dr. Palmer mentioned a component of the call for competitive enrollment. Dr. Palmer, can you just give a quick elaboration on competitive enrollment? Yeah, basically, no site is capped, and so the first site that gets the SIV and gets the first patient in then has a much longer period of time to enroll patients. And so it's an incentive for all the sites to get up and running as quickly as they can; otherwise, they will be limited in the number of patients they can enroll if they're... I think a pretty important feature of the study design and the contracts that we have with the sites.

For closing comments. Please go ahead. Thank you operator before I give final comments Theres clearly a high interest in the study and execution thereof, and Dr. Palmer matching.

A component of the call to competitive enrollment Dr. Barbara can you just give a quick elaboration on on competitive enrollment.

Yeah basically it's.

No site is capped and so the first site that gets the SIV and get the first patient in then as much longer period of time to enroll patients.

And so it's an incentive for all the sites to get up and running as quickly as they can otherwise they will be limited in the number of patients. They can enroll and Sarah I think a pretty important feature of the study design and contracts that we have with the sites so with that as the final Q&A I want to thank everyone for joining us today.

Pamela Pierce Palmer: So with that, as the final Q&A, I want to thank everyone for joining us today. As the new Tal Farah and also for your continued support, we certainly remain focused on driving long-term shareholder value as a newly positioned company with a focus on executing this NEFRO study to make NIAID available to healthcare providers moving forward. We look forward to sharing future developments with you and thank you again for your continued interest and support in our company. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

As the new Tav Farah and also for your continued support we certainly remain focused on driving long term shareholder value as a newly positioned company with a focus on executing this neff ROE study to make <unk> available to the health care providers moving forward, we look forward to sharing future developments with you and thank you.

Again for your continued interest and support in our company. Thank.

Thank you.

Ladies and.

Gentlemen, This concludes today's conference call. Thank you for your participation and you may now disconnect.

Okay.

Yeah.

Okay.

Okay.

Okay.

No.

Yes.