Q1 2024 Talphera Inc Earnings Call
Welcome to the Tal Fair, our first quarter 2024 financial results Conference call.
Operator: Welcome to the Talphera first quarter 2024 financial results conference call. This call is being webcasted live via the Event Center in the Investor section of Talphera's website at www.talphera.com. This call is the property of Talphera, and any recording, reproduction, or transmission of this call without the express written consent of Talphera is strictly prohibited. As a reminder, this webcast is being recorded. You may listen to a replay of this webcast by going to the investors section of Talphera's website. I would now like to turn the call over to Raffi Asadorian, Talphera's Chief Financial Officer. Please go ahead.
Speaker Change: This call is being webcast live via the events page of the investors section of <unk> website at Triple double you don't sell Farah dotcom.
Speaker Change: This call is the property of Tal Farah and any recording reproduction or transmission of this call without the express written consent self era is strictly prohibited.
Speaker Change: As a reminder, this webcast is being recorded.
Tal Farah: You may listen to a replay of this webcast by going to the investors section of self-interest website.
Speaker Change: I would now like to turn the call over to Rafi, if the Dorian Telfair Chief Financial Officer. Please go ahead.
Speaker Change: Thank you for joining us on the call today. This afternoon, we announced our first quarter 'twenty 'twenty four financial results and associated business updates in our press release.
Raffi Mark Asadorian: Thank you for joining us on the call today. This afternoon, we announced our first quarter 2024 financial results and associated business updates in a press release. This press release can be found in the investors section of our website. With me today are Vince Angotti, our Chief Executive Officer, and Dr. Pam Palmer, Talphera's Founder and Chief Medical Officer.
Speaker Change: This press release can be found within the investors section of our website.
Speaker Change: With me today are Vince and Gaudy, our Chief Executive Officer, and Dr. Pam Palmer, Telfair, as founder and Chief Medical Officer.
Speaker Change: Before we begin I want to remind listeners that during this call we will make likely make forward looking statements within the meaning of the federal securities laws.
Raffi Mark Asadorian: Before we begin, 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 Talphera. Please refer to our press release in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission 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, at www.talphera.com.
Telfair: These forward looking statements involve risks and uncertainties regarding the operations and future results of tell Sara Please.
Speaker Change: Please refer to our press release in addition to the company's periodic current and annual reports filed with the Securities and Exchange Commission.
Sara: For a discussion of the risks associated with such forward looking statements.
Sara: These documents can also be found on our website within the investors section.
Sara: Www Dot telfair Dot com.
Raffi Mark Asadorian: I'll now hand the call to Vincent.
Sara: Now I'll hand, the call to Vince.
Vince Gaudy: Thank you Rafi and.
Vincent J. Angotti: Good afternoon, and thank you for joining us on the call. Today, I'll provide a status update on our nephro-CRRT study evaluating famistat's use as an anticoagulant in the extracorporeal circuit. Later, we'll provide some other corporate updates, and Raffi will update you on the financial results for the quarter. And since our last call was just two months ago, we'll keep our prepared remarks brief so we can move directly to any questions you may have.
Vincent J. Angotti: Good afternoon, and thank you for joining us on the call.
Vincent J. Angotti: Today I'll provide a status update for <unk> C. R. R. T study evaluating the famous stats use as an anti coagulant and the extra coil circuit.
Rocky: Later, we'll provide some other corporate updates and Rocky will update you on the financial results for the quarter.
Rocky: And since our last call was just two months ago, we'll keep our prepared remarks brief. So we can move directly to any questions you may have.
Speaker Change: Before we begin I'm thrilled to welcome Dr. Shaquille asking them to the tough fair team as our new Chief Development Officer effective may 20th.
Vincent J. Angotti: Before we begin, I'm thrilled to welcome Dr. Shaquille Aslam to the Talphera team as our new Chief Development Officer, effective May 20th. Dr. Aslam has over 20 years of clinical research experience specializing in the field of nephrology. He'll support Dr. Palmer and the rest of the team in the development of NIAID and support the preparation of NIAID for commercialization. Dr. Asim joins us from Biocrest Pharmaceuticals, where he was the vice president of clinical development for nephrology and rare diseases.
Dr. Shaquille: Dr. <unk> has over 20 years of clinical research experience specializing in the field of nephrology.
Pamela Pierce Palmer: You'll support Dr Palmer and the rest of the team and the development of NIAD and supports preparation for.
Pamela Pierce Palmer: For commercialization Dr.
Dr. Shaquille: <unk> joins us from Biocryst Pharmaceuticals, where he was the vice president of clinical development nephrology and rare diseases.
Vincent J. Angotti: He's held development roles at Angion, Fresenius, and Ann Amgen, who was an assistant professor at Georgetown University Hospital for 11 years with a focus on clinical services for acute and chronic kidney disease, hypertension, renal transplantation, and other nephrological diseases. His extensive experience across industry and academia as a renal expert is impressive and is a true asset to our organization. Welcome, Dr. Asner.
Amgen: <unk> development roles at Amgen.
Amgen: <unk>.
Amgen: And Amgen was an assistant professor at Georgetown University Hospital for 11 years.
Dr. <unk>: On clinical services with acute and chronic kidney disease.
Speaker Change: Hypertension, renal transplantation and other neurological diseases.
Speaker Change: Extensive experience across industry and academia as a renal expert is impressive and is a true asset to our organization welcomed Dr. RASM.
Raffi Mark Asadorian: Now moving to our study update as a reminder, this FDA agreed Registrational study will enroll only 166 patients at up to a limit of 10 sites.
Vincent J. Angotti: Now, moving to our study update, as a reminder, this FDA-agreed registrational study will enroll only 166 patients at up to a limit of 10 sites. Once sites are activated, we expect enrollment and completion of the study will be rapid, particularly since the design of the study calls for the primary endpoint to be achieved within 24 hours, with a patient completed after only 72 hours. We have finalized the negotiation of clinical trial agreements with five large academic institutions and just await these sites to finalize their internal administrative activities prior to beginning patient enrollment, which is expected to start this quarter.
Raffi Mark Asadorian: One sites are activated we expect enrollment and completion of the study will be rapid particularly since the design of the study calls for the primary endpoint to be achieved within 24 hours with a patient completed after only 72 hours.
Speaker Change: We have finalized the negotiation of clinical trial agreements with five large academic institutions and just the way these sites to finalize their internal administrative activities prior to beginning patient enrollment, which is expected to start this quarter.
Speaker Change: We're also advancing clinical trial agreements with the five remaining potential sites.
Vincent J. Angotti: We're also advancing clinical trial agreements with the five remaining potential sites. The principal investigators inform us that they remain eager to initiate the NEFRO study and that they continue to believe the trial will be quickly enrolling. These PIs estimate that up to 80% of their patients currently on CRRT would meet the inclusion criteria in the study protocol, and they continue to support us in our efforts with their respective administrations to finalize their institutions' requirements.
The principal investigators informed us that they remain eager to initiate the <unk> study.
Speaker Change: They continue to believe the trial will be quickly enrolling.
principal investigators: These pies estimate that up to 80% of their patients currently on C. R. R. T would meet the inclusion criteria in the study protocol and they continue to support us in our efforts with their respective administrations to finalize their institutions requirements.
principal investigators: Furthermore, the number of patients receiving C. Our RT continues to increase as evidenced by our quantitative market research published in the journal renal failure.
Vincent J. Angotti: Furthermore, the number of patients receiving CRRT continues to increase, as evidenced by our quantitative market research published in the journal Renal Failure, estimating that the number of patients undergoing CRRT has increased by roughly a third since COVID and remains at this heightened level. Therefore, we don't believe patient availability will be a concern that limits enrollment.
principal investigators: The meeting the number of patients undergoing C. R. R. T has increased by roughly a third since COVID-19 remains at this heightened level.
principal investigators: Therefore, we don't believe patient availability will be a concern but limits enrollment.
Speaker Change: As stated in today's press release as a result of the initial administrative delays, we expect that our previous guidance of having topline data available by September 30 will be revised.
Vincent J. Angotti: As stated in today's press release, as a result of the initial administrative delays, we expect that our previous guidance of having top-line data available by September 30 will be revised. Once patients begin enrolling, we plan to provide an update on our expected study completion and PMA filing date. Importantly, with the PI's feedback about rapid enrollment, a 24-hour primary endpoint, and a 72-hour timeline for patient completion, we expect the timeline for a PMA filing will not be significantly delayed.
Speaker Change: Once patients begin enrolling we plan to provide an update on our expected study completion and PMA filing dates.
Speaker Change: Importantly, with the Pea ice feedback about rapid enrollment a.
Speaker Change: A 24 hour primary endpoint.
Speaker Change: And 72 hour time line for patient completion.
Speaker Change: We expect the timeline for a PMA filing will not be significantly delayed.
Vincent J. Angotti: And we plan to provide new estimates once we have better information available. Now, separate from Nefro 12, we continue to make positive advancements in our manufacturing and related efforts for NIAD. All active ingredient and finished drug production to date have met our specifications. We are now in the process of collecting extended stability data on our GMP-grade product to support shelf life for commercial lawns.
Speaker Change: And we plan to provide new estimates once we have better information available.
Pea ice: Now separate from the <unk> trial, we continue to make positive advancements in our manufacturing and related efforts for <unk> yet.
Pea ice: All active ingredient and finished drug production to date have met our specifications.
Speaker Change: We are now in the process of collecting extended stability data on our GMP grade product to support shelf life for commercial launch.
Vincent J. Angotti: Our manufacturing partners have done an excellent job achieving timelines. We've set the specifications and the cost expectations we have set for them. We're excited to continue to work with them as we prepare for a commercial launch expected in 2025, to gain further insight beyond the market research already performed. We recently completed some additional qualitative market research with a group of nephrologists. Intensibus, and Pharmacy Directors on the Attributes of Nefamistat. These participants emphasize FEMSTAT's strong safety profile over the past 30-plus years, particularly for patients with liver impairment or contraindications to heparin and citrate.
manufacturing partners: Our manufacturing partners have done an excellent job achieving timelines specifications and the cost expectations, we've set for them.
Speaker Change: We're excited to continue to work with them as we prepare for commercial launch expected in 2025.
Speaker Change: To gain further insight beyond the market research already performed.
Speaker Change: We recently completed some additional qualitative market research with the group of Nephrologists in.
Nephrologists: Intensivists and pharmacy directors on the attributes of the salmon stock.
Speaker Change: These participants emphasized defense that's strong safety profile over the past 30 plus years, particularly.
participants: Particularly for patients with liver impairment or contraindications to heffernan sits right.
participants: Specifically the participants commented on the thermostat safety attributes such as ultra short half life.
Vincent J. Angotti: Specifically, participants commented on Famistat's safety attributes, such as its ultra-short half-life, allowing it to be rapidly cleared from circulation and potentially avoiding unwanted complications seen with longer-circulating agents such as heparin and Sitchin. In addition... The research continues to support uptake of NIAID at a competitive price compared to the total cost of citrate for anticoagulation. This total cost of citrate anticoagulation includes the cost of calcium and the required monitoring of calcium levels.
Speaker Change: Allowing it to be rapidly cleared from circulation and potentially avoiding unwanted complications seen with longer circulating agents, such as heparin and situated.
Speaker Change: In addition, the research continues to support uptake of not yet at a competitive price to the total cost of citrate.
Speaker Change: And I coagulation.
Speaker Change: This total cost of citrate anticoagulation includes the cost of calcium.
Speaker Change: And the required monitoring of calcium levels.
Speaker Change: Importantly, the additional market research reinforces our belief in the estimated peak market sales potential for <unk> exceeding $200 million across C. R. R T and intermittent hemo dialysis.
Vincent J. Angotti: Importantly, the additional market research reinforces our belief in the estimated peak market sales potential for NIAID, exceeding $200 million across CRRT and intermittent hemodialysis. However, our initial focus is on CRT, and the estimated peak market sales potential approximates half of this amount, or $100 million. On the IP front, we filed multiple patent applications for the NIAID product candidate in the US and other major pharmaceutical jurisdictions worldwide. During and after study completion, we expect to continue to pursue additional patent rights to enhance our patent position.
Speaker Change: Our initial focus is on CRT and the estimated peak market sales potential approximate after this amount of $100 million.
Speaker Change: On the IP front, we filed multiple patent applications for the NAIAD product candidate in the U S and other major pharmaceutical jurisdictions worldwide.
Speaker Change: During and after study completion, we expect to continue to pursue additional patent rights to enhance our patent position.
Speaker Change: In addition to our focus on NIAD development during the quarter, we successfully closed on two separate transactions to fund this development.
Vincent J. Angotti: In addition to our focus on NIAID development during the quarter, we successfully closed on two separate transactions to fund this development. Two existing investors, led by Nathahala Capital Management, supported the company with $18 million in total proceeds, structured with $6 million at the first close earlier in the quarter and $12 million in committed capital at the second closing after achieving the pivotal trial milestone. Importantly, NAFTA HALA remains supportive and committed to ensuring Talphera has adequate funding to reach PMA approval by NIAID.
Speaker Change: Two existing investors led by not the Hollow capital management supported the company with $18 million in total proceeds structured with $6 million at the first closed earlier in the quarter.
Speaker Change: And $12 million in committed capital at the second closing after achieving the pivotal trial milestone.
Natala: Importantly, natala remains supportive and committed to ensuring tough Farah is.
Natala: Adequate funding to reach PMA approval or not.
Vincent J. Angotti: Given the potential extension of the original timeline, the support is highly appreciated. Also, during the quarter, we agreed to partially monetize the Dissuvia Royalty and Milestone Streams with Zoma Royalty, which provided us with $8 million in cash to focus on NIAID development. This non-dilutive financing allows us to participate equally in certain royalties and milestones after Zoma has achieved their specified return. And now, before handing the call to Raffi, I wanted to mention that last week we received the court's order in the Class Action Securities litigation granting our motion to dismiss, with prejudice on all claims.
Natala: Given the potential extension of the original timeline the support is highly appreciated.
XOMA royalty: Also during the quarter, we agreed to partially monetize the studio royalty and milestone streams with XOMA royalty, which provided us with $8 million in cash to focus on <unk> development.
XOMA royalty: This non dilutive financing allows us to participate equally in certain royalties and the milestones. After XOMA has achieved their specified return.
XOMA royalty: Now before handing the call to Rafi I wanted to mention that last week, we received the court's order and the class action Securities litigation.
Rafi: Granted our motion to dismiss with prejudice on all claims.
Vincent J. Angotti: We're pleased the court has granted the motion to dismiss, and while it's taken a long time to receive this order, and the plaintiffs have an opportunity to appeal the order with a higher court, we're happy with the outcome. Now I'll hand the call over to Raffi to take you through the details of our first quarter financial results.
Natala: The court has granted our motion to dismiss and while it's taken a long time to receive disorder and the plaintiffs have an opportunity to appeal the order with a higher court, we're happy with the outcome.
Rafi: Now I'll hand, the call over to Rafi to take you through the details of our first quarter financial results.
Raffi Mark Asadorian: Thank you Vince.
Raffi Mark Asadorian: After completing the XOMA royalty transaction in January.
Raffi Mark Asadorian: After completing the Zoma royalty transaction in January, all DeSuvia royalties and milestones earned will be paid to Zoma until they reach their agreed return. Only royalties earned from DoD revenues will be recorded in revenues going forward. Therefore, there were no revenues recorded during the first quarter. Royalties earned on commercial DeSuvia sales going forward will have no revenue impact due to the accounting for the transaction.
Raffi Mark Asadorian: All of the Soviet royalties and milestones earned will be paid to XOMA until they reach their agreed return.
Raffi Mark Asadorian: Only royalties earned from D. O D revenues will be recorded in revenues going forward.
Raffi Mark Asadorian: There were no revenues recorded during the first quarter.
XOMA royalty: Royalties earned on commercial <unk> sales going forward, we will have no revenue impact due to the accounting for the transaction.
Raffi Mark Asadorian: Further, we have recorded a $6.3 million liability on our balance sheet related to the transaction. Even though there is no recourse to Talphera or obligation to repay the proceeds received from the transaction, should DeSuvius sales not result in achievement of the agreed return, are cash operating expenses, or combined R&D and SG&A expenses in the first quarter. Excluding non-cash stock-based compensation of $0.3 million, total revenue totaled $3.9 million compared to $4.8 million last year.
XOMA royalty: Further we have recorded a $6 $3 million liability on our balance sheet related to the transaction.
Speaker Change: Even though there is no recourse to tell for fera or obligation to repay the proceeds received from the transaction should the Cvs sales not result, and achieve it would be a great return.
XOMA royalty: Yes.
Speaker Change: Our cash operating expenses.
Speaker Change: Or combined R&D and SG&A expenses in the first quarter, excluding non stock non cash stock based compensation of zero point $3 million totaled $3 $9 million compared to $4 $8 million last year.
Raffi Mark Asadorian: The decline from 2023 is due to the reduction in headcount and other costs related to Dysuvia that was divested in April 2023. Full year 2024 cash operating expenses are expected to be at the lower to middle end of the previously provided range of $21 to $23 million. Cash and investments totaled $18.6 million at the end of the first quarter. As mentioned earlier, we completed two separate financings during the quarter. $8 million received from a partial monetization of our DeSuvia royalties and milestones, and $6 million received from the first closing of our equity financing with Nathahala and Raza.
Speaker Change: The decline from 2023 is due to the reduction in head count and other costs related to the Soviet that was divested in April 2023.
Speaker Change: Full year 2020 for cash operating expenses are expected to be at the lower to middle end of the previously provided range of 21% to $23 million.
Speaker Change: Cash and investments totaled $18 $6 million at the end of the first quarter.
Raffi Mark Asadorian: The second closing of this equity transaction is committed upon the achievement of the pivotal trial milestone. While the delay we have experienced in initial enrollment may impact the timing of the completion of the clinical trial and therefore the achievement of the pivotal trial milestone, our lead investor, Nathahala, has expressed their continued financing support as required to ensure the company is appropriately funded through at least the approval of NIAID. We are grateful for the commitment demonstrated by Nathahalla as we aim to rapidly enroll and complete the NIAID study. Now, I'll turn the call back to Vincent. Thank you, Raffi.
Speaker Change: As mentioned earlier, we completed two separate financings during the quarter.
Speaker Change: $8 million received from a partial monetization of our <unk> royalties and milestones and $6 million received from the first closing of our equity financing with not the holler and Rosalind.
Speaker Change: The second closing of this equity transaction is committed upon the achievement of the pivotal trial milestone.
Speaker Change: While the delay we've experienced in the initial enrollment may impact the timing of the completion of the clinical trial and therefore, the achievement of the pivotal pivotal trial milestone our lead investor not the Halle as expressed their continued financing support as required to ensure the company is.
Speaker Change: <unk> funded through at least an approval or not yet.
Natala Farah: We're grateful for the commitment demonstrated by Natala as we aim to rapidly enroll and complete the NIAID study.
Vincent J. Angotti: And now I'll turn the call back to Vince.
Vincent J. Angotti: Thank you, Raffi. And I'd like to open it up for any questions you might have. Alan?
Vince: Thank you Rafi and now I'd like to open the lineup for any questions you might have Alan.
Alan: Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star 1 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 2. If you're using a speakerphone, please lift the handset before pressing any key. One moment, please, for your first question. Your first question comes from Ed Arce of H.C. Wainwright. Your line is already open.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: So do you have a question. Please press star one on your Touchtone phone.
Vince: You'll hear a prompt that your hand has been raised.
Operator: Should you wish to decline from the polling process. Please press star two.
Speaker Change: If you are using a speaker phone please lift the handset before pressing any Q1.
Speaker Change: One moment. Please for your first question.
Speaker Change: Your first question comes from Ed Arce of H C. Wainwright your line.
Speaker Change: It is already open.
Antonio Eduardo Arce: Great. Thanks for taking our questions and let me add my congratulations to Dr. <unk>.
Antonio Eduardo Arce: Great, thanks for taking our questions, and let me add my congratulations to Dr. Aslam. I have three questions for the team.
Antonio Eduardo Arce: I have three questions for the team first on the timeline delay you mentioned the PMA filing delay would not be significant.
Antonio Eduardo Arce: First, on the timeline delay, you mentioned the PMA filing delay would not be significant. At this point, out of the 10 possible sites, you have now five finalized agreements. I'm wondering if we can reasonably assume top-line results this year. That's for second...
Speaker Change: At this point out of the 10 possible sites you have now five finalized agreement.
Antonio Eduardo Arce: I'm wondering if we can reasonably assume topline results this year.
Antonio Eduardo Arce: One second.
Antonio Eduardo Arce: The opportunity size in CRT or you mentioned that CRT.
Antonio Eduardo Arce: The opportunity size in CERT, you mentioned that CERT, C-E-R-T, is up about a third since COVID, and it's remained elevated. I'm wondering if you can give some... Rayne or quantify what numbers we're talking about here in terms of those procedures. And then lastly, around the cost of NIAID, or excuse me, the price, you mentioned the total cost of citrate. I'm wondering, again, if you could quantify exactly either a point estimate or some sort of a range for that. Thanks so much.
Antonio Eduardo Arce: Our team is up about a third since Covid has remained elevated.
Antonio Eduardo Arce: I'm wondering if you can give some.
Antonio Eduardo Arce: Range or quantify.
Antonio Eduardo Arce: What numbers, we're talking about here in terms of those procedures.
Speaker Change: And then lastly around the cost for NIAD or excuse me the price.
Speaker Change: Mentioned.
Speaker Change: The total cost of Citrix.
Speaker Change: I'm wondering again, if you could quantify exactly.
Speaker Change: Either a point estimate or some sort of a range for that thanks. So much.
Vince: Yeah. This is Vince will take each of those three and secrets from a time delay.
Vincent J. Angotti: Yeah, this is Vince. We'll take each of those three in sequence. From a time delay, again... We don't expect different delays. I know I'm repeating what has already been commented, but we hope to provide better guidance on our next earnings call. I think something that's important you've continued to hear as a theme on this call is the rapid enrollment and how the PIs continue to communicate that to us. Just to give you an order of magnitude of the size of some of these sites, Dr. Palmer has spoken to or been at many of these sites.
Vince: Again.
Vince: We don't expect significant delays I know I'm repeating what.
Vince: As already commented, but we hope to provide better guidance on our next earnings call I think something that's important you have continued to hear as a theme on this call.
Vince: Is the rapid enrollment.
Vince: And how the Pis continue to communicate that to us.
Vince: Just to give you an order of magnitude or the size of some of these sites. Dr. Palmer has spoken to where it's been in many of these sites start Paul maybe just talk about the number of machine some of these sites.
Vincent J. Angotti: Dr. Palmer, you can just talk about the number of machines some of these sites have and the fact that, on the high end of those numbers, those sites are actually involved with the first five we finalized an agreement with.
Paul: And the fact that on the high end of those numbers those sites are actually involved with the first five we finalized agreements with.
Pamela Pierce Palmer: Yeah, these are all large academic institutions. I mean, some of them have over 30 CRRT machines. So they're massive, massive ICUs, a large number of beds, plenty of CRRT going on. They just feel like patients qualifying for this study is not going to be a limiting factor. And so we definitely have enrollment scenarios that do have us playing into, you know, what you mentioned as far as top line still this year. That's absolutely within the realm of our enrollment.
Paul: Yes. These are all large academic institutions I mean, some of them have over 30 <unk> machines. So they're massive massive ice to use large number of beds.
Speaker Change: Plenty of CRT going on.
Vince: They just feel like.
Speaker Change: Patients qualifying for the study is not going to be a limiting factor and so we definitely have enrollment scenarios that have us playing into it.
Speaker Change: What you mentioned as far as top line is still this year, that's absolutely within the realm of our scenarios.
Vincent J. Angotti: And Ed, I think importantly, on average, and this was an interesting data point for us, when you look at all 10 sites that we either have ready to go or are in the process of being ready to go, about 20 machines per site, CRT machines, and again, some sites have over 30 machines. And some of those larger sites are already involved with those initial five weaves identified. On the second question, I want to be sure we understand what you're asking relative to CRRT and the $100 million and the range of procedures. Can you question that one more time, Ed?
Speaker Change: And then I think importantly on average and this was a <unk>.
Speaker Change: <unk> data point for us when you look at all all 10 sites that we either have ready to go or in the process ready to go about 20 machines per site and CRT machines and again some sites have over 30 machines.
Antonio Eduardo Arce: Yeah, I think you were referring to the number of procedures annually and that since the start of COVID, it's up one-third. So, I would assume it's 133 million a year.
Speaker Change: And some of those larger sites are already involved with those initial five we've.
Speaker Change: Identified.
Speaker Change: The second question I wanted to be sure we understand what you're asking relative to C. R. R T and the $100 million in the range of procedures can you can you question that one more time Ed.
Antonio Eduardo Arce: Yes, I think you were referring to the number of procedures annually and thats since the start of Covid, It's up one third.
Speaker Change: So.
Antonio Eduardo Arce: Obviously assume it's $133 million per year or.
Antonio Eduardo Arce: No no no no no. So I think I think the point of that what we stated in the prepared remarks is to give give everyone comfort that this study will be rapidly enrolled its not like CRT procedures are declining.
Vincent J. Angotti: No, no, no, no, no, no, no. So I think the point of that, what we stated in the prepared remarks, is to give everyone comfort that this study will be rapidly enrolling. It's not like CRRT procedures are declining, and there are not enough CRRT machines at these large academic institutions, and that the study is going to be long. So we wanted to give you comfort that.
Speaker Change: And and there's not enough C. R. R. T machines at these large academic institute institutions.
Speaker Change: And that the study is going to be long. So we wanted to give you covered that.
Vincent J. Angotti: We believe this study, and through our discussions with the PIs, that this will rapidly enroll, and that's the point. So, I mean, I think our procedures that we've outlined in previous discussions of CRT, the 165,000 patients, are increasing at a relatively good rate. It's not increasing year over year over year, 33 percent. But, you know, COVID definitely had an impact on the number of procedures.
Speaker Change: This we believe this study and through our discussions with the Pea is that this will rapidly enroll.
Speaker Change: And that's the point, so I mean, I think our procedures that we've we've outlined.
Speaker Change: Lined.
Pea ice: In previous discussions of CRT This 165000 patients.
Pea ice: Increasing at a relatively good right, it's not increasing year over year over year at 33%.
Pea ice: But.
Speaker Change: Covid definitely had an impact.
Speaker Change: On the number of procedures.
Raffi Mark Asadorian: And that $100 million was. (inaudible) The number of procedures had increased, so we're reiterating that. Yes, so there's been no change to the market for CRRT specifically. And then Raffi, Ed's third question was about the comment we made based on the market research reinforcing the customer's perspective that competitive pricing would revolve around the total cost of anticoagulation. Can you comment further on that for Ed, please?
Speaker Change: In that $100 million was the same messaging, we had post close but when we realized that.
Speaker Change: The number of procedures had increase so we're reiterating that yes, so theres been no change to the market.
Speaker Change: For C R a T.
Speaker Change: Typically.
Rafi: And then Rafi edge third question was about the comment we made off of the market research.
Fred: Reinforcing the customer's perspective that competitive pricing would revolve around the total cost of anticoagulation with citrate right can you comment further on that Fred Please yes.
Raffi Mark Asadorian: Yeah, so we may have stated this earlier, but... The total cost that we are, and through the secondary market research that we've just performed—sorry, let me restate that—it was primary market research, but a second qualitative study that we performed supported what our assumptions were of having the cost of nephamostat, or the price of nephamostat, at a price that is, I would say, between parity to about a 10% premium to the cost of citrate.
Fred: We may have stated this earlier, but.
Fred Please: The total cost that we are and through the second secondary research secondary market research that we've just performed sorry, let me restate that it was primary market research, but a second qualitative study that we performed.
Raffi Mark Asadorian: And that cost of citrate includes the cost of the calcium that has to be infused on the back end as well as all the monitoring. We haven't included any additional HR and personnel costs for the nurses and a bunch of other costs, but we've just focused on those direct costs. And so where that's gotten to us right now, it's going to cost around $47 to $49 a vial for nefamistat. Obviously, we will continue to work on pricing and additional commercial launch prep during this year. But that's where we think we'll end up pricing it.
Fred Please: Reported.
Fred Please: What our assumptions were of having the cost of no famine stat for the price of the famous debt.
Speaker Change: At a price that is I would say between parity to about a 10% premium to.
Speaker Change: The cost of citrate and that cost of citrate includes the cost of the calcium that has to be infused on the backend as well as all the monitoring we've not included any additional HR and personnel for the nurses and bunch of other costs, but we're just focused on those direct costs and so we're that's gotten to us right now.
Speaker Change: It is going to price around 47% to $49 a vial.
Speaker Change: Four four and a famous that obviously, we will continue to work on pricing.
Speaker Change: And additional commercial launch prep.
Speaker Change: During this year, but.
Speaker Change: But that's where we think we'll end up pricing.
Speaker Change: Great I appreciate it that's helpful.
Antonio Eduardo Arce: Great, I appreciate it. That's helpful.
Speaker Change: Thanks, Ed.
Speaker Change: Your next question comes from James Molloy of Alliance Global Partners. Your line is already open.
James Francis Molloy: Your next question comes from James Molloy of Alliance Global Partners. Your line is already open.
James Francis Molloy: Great. Good afternoon, guys. Thanks for so much for taking my questions.
James Francis Molloy: Great. Good afternoon, guys. Thanks so much for taking my questions.
James Francis Molloy: The, let's walk through, have you guys elucidated some of the main reasons for the delay? Are there particularly one or two main reasons, or is it a variety of issues that have sort of been a perfect storm that's gonna push back the delay a little bit? I agree it should run very quickly once it gets up and running, but obviously focus on getting it up and running.
James Francis Molloy: Let's walk through because.
James Francis Molloy: Lucid and what's sort of the main reasons.
James Francis Molloy: For the delay are there, particularly one or two main reasons or is it a variety of issues that.
Speaker Change: It's sort of been a perfect storm that kind of perspective, a little bit I agree it's going to it should run very quickly once it gets up and running.
Speaker Change: Obviously.
Speaker Change: Focus on getting that up and running.
Speaker Change: And then.
James Francis Molloy: And then, The OPEX levels are pretty good levels here. I presume those will be coming. What sort of change do we expect as the trial gets up and running through 2024? And then I have a follow-up from there.
Speaker Change: The opex levels.
Speaker Change: Pretty good levels here I presume those would be coming to you what sort of a change we expect as the as the trial gets up and running through <unk>.
Speaker Change: 2024, and then I have a follow up from there.
Pamela Pierce Palmer: We'll have Dr. Palmer start, Jim, with the examples of the delays, Ross, in your head on the OpEx. Yeah. I mean it.
Speaker Change: We'll have Dr. Paul more start Jim with.
Dr. Paul: Examples of the delays were often you hit on the Opex.
Pamela Pierce Palmer: Yeah, I mean, there are some consistent factors. I mean, the budgeting offices and the contracting offices of these massive institutions are understaffed, basically, and have a lot of different, you line up in a queue for their attention. Luckily, we've been in that queue for a while, so as you heard, half of our sites we've already finalized the CTAs with. In addition to CTAs and budgets, there is nurse education. There is pharmacy work that needs to be done to bring in, you know, investigational products and get them, you know, sort of storage locations, get them on their computer systems, et cetera.
Speaker Change: Yeah, I mean, it's.
Speaker Change: Yes.
Speaker Change: Consistent factors.
Jim: <unk> offices and the contracting officers at these massive institutions.
Speaker Change: Our understaffed basically and <unk>.
Speaker Change: <unk> a lot of different <unk>.
Speaker Change: Line of any queue for their for their attention and Luckily we've been in next year for a while so as you can.
Speaker Change: You heard half of our sites have already finalized.
cta: As a cta with <unk>.
cta: In addition to the Cta is in budgets.
Speaker Change: There is a nurse education, there is a pharmacy.
Speaker Change #102: Work that needs to be done you're bringing in destination products to get it.
Speaker Change: Okay.
Speaker Change #103: Storage location and get it on their computer systems et cetera, So that there is any.
Speaker Change: Common things and also unique things in each site.
Speaker Change #101: But once we get through these and clinical trials are never easy, especially when they're in large academic institutions.
Pamela Pierce Palmer: So there are common things and also unique things in each site. But once we get through these, and clinical trials are never easy, especially when they're in large academic institutions, the enthusiasm of the PIs and the sheer number of patients that need anticoagulation for CRRT on a daily basis leads us to believe that we're through the painful part of this clinical trial and that we'll hopefully be, you know, enjoying smooth sailing very, very soon.
Speaker Change: The enthusiasm of the Pis and the sheer number of patients.
Speaker Change: That debt.
Speaker Change #104: Neat anticoagulation for STR on a daily basis.
Speaker Change #100: It leaves us to believe that we're through the painful part of this clinical trial and that will hopefully be smooth.
Speaker Change #106: New feeling very very shortly.
Rob: Second question, Rob, Yeah, and James So the Opex levels, we had this quarter or.
Raffi Mark Asadorian: Yeah, James, so the OPEX levels we had this quarter on a cash basis were $3.9 million. The guidance for the full year, we've given a range of $21 to $23 million. We'll probably end up in that $21 to $22 million range. So you can see it's going to ramp up a little more as the clinical study starts enrolling much quicker. So I think it's similar to the guidance that we've given, but probably in the lower to mid range of that range.
James Francis Molloy: Cash basis were $3 9 million.
James Francis Molloy: Great, thank you. Ed's very helpful. Actually, because I heard the 21-23, I was wondering what you were referencing earlier. So, thank you very much for clarifying that for me. We have some more on Ed's question from earlier.
James Francis Molloy: The guidance for the full year, we've given a range of 21 to 'twenty three we'll probably end up in that $21 million to $22 million range.
James Francis Molloy: So you can see it's going to ramp up a little more as the clinical strategy clinical studies starts enrolling much.
Speaker Change #100: Much quicker so I think it's similar to the guidance that we've given.
Speaker Change #108: But probably in the lower to mid of that range.
Speaker Change #108: If that's all right. Thank you.
unknown: It is very good actually because I heard the 'twenty one 'twenty three I was wondering what you are referencing earlier. So thank you very much.
Speaker Change #114: We're finding that for me.
Speaker Change #100: Some more on Ed's question from earlier, you mentioned, the 47 49 per vial.
James Francis Molloy: You mentioned 47 to 49 per vial. Rough estimate, how many vials per patient do you anticipate you'll be using? I know that back in December, the KOL call, the KOLs on your call were estimating that if approved... Chamistack could replace all of the 30% of the citrate market and CRT and almost half of the pepper market. It sounds like you guys have done some additional research on that. How about those numbers sort of change or stay the same given what you guys have seen, you know, subsequent to last December when we had the KOL call? Yeah, I could. I could take the first one.
Speaker Change #116: Rough estimate of how many vials per patient you anticipate.
Speaker Change #111: Youll be using and then.
Speaker Change #111: I know that Oh.
K: Back in December the K well call.
K Well: Kols on your color estimating that.
Speaker Change #117: If approved.
Speaker Change #110: Famous that could replace.
Speaker Change #113: All of the 30% citrate market CRT and almost half of the temporary market sounds like you have done some additional research on that.
Speaker Change #113: Although those numbers sort of change were to stay the same given what you guys have seen subsequent to last December when we hit the catwalk.
Speaker Change #115: Yes, I can I can take the first part of that and what the assumption is that we use in terms of number of days in.
Raffi Mark Asadorian: Yeah, I could I could take the first part of that on what the assumption is that we use in terms of the number of days. So we've assumed about 10 vials a day and six days of therapy. So it ranges, you know, five to seven days on CRRT therapy. So yeah, 10 vials a day and about six days of therapy is what we've assumed.
Speaker Change #118: So we've assumed about 10 miles a day.
Speaker Change #119: And six days on therapy, So it's ranges.
Speaker Change #122: Five to seven days on our CRT therapy.
Speaker Change #125: So, yes, 10 10 per day and about six days of a therapy is what we've assumed.
Speaker Change #122: Okay.
Speaker Change #115: Good.
Speaker Change #115: Yes. Thank you.
Speaker Change #115: Okay.
Catherine: And then the comment was about replacing century and hassle Catherine et cetera, Yes, we're remaining that's actually been consistent feedback, but we're remaining what I'll call.
Vincent J. Angotti: The comment was about replacing citrate and half of heparin, etc. Yeah, we're remaining, that's actually been consistent feedback, but we're remaining what I'll call Measured communications on peak sales at $100 million, depending on which physician you speak to; every institution is different.
Speaker Change #120: Measured communications on the peak sales at the $100 million, depending on which physician you speak to every institution is different some of the standard of care.
Vincent J. Angotti: Some have a standard of care of "No anti-coagulation." The rationale for that is... They find heparin and citrate to be dirty drugs as it relates to this particular use in the training required and the risk involved for the patient. Others have opposite views, where they'll use citrate as a standard of care. Now, clearly citrate comes with limitations, particularly based on training of the staff. Anybody with liver disease, compromised liver function, you can't use it.
Speaker Change #124: No anti coagulation.
Speaker Change #120: And.
Speaker Change #120: The rationale for that is.
Heffernan: They find heffernan situate to be dirty drugs as it relates to this particular use and the training required and the risk involved for the patients.
Heffernan: Theres, a opposite use where they'll use <unk> as a standard of care now clearly citrate comes with limitations particular based off of training of the staff.
Speaker Change #126: Anybody with liver compromised liver function you can't use it.
Vincent J. Angotti: So there is a clear opportunity for simplicity if the study achieves what we certainly expected it to achieve based on the 30 years of use outside the U.S. And then to your point on heparin, heparin has been an old standby, and what I'll call, there's been tolerant use of it, where people can use it because of the longevity of experience with it. But it's often used at risk in patients where they would prefer not to.
Speaker Change #127: So there is a clear opportunity for simplicity, if the study achieved what we certainly expected to achieve based off the 30 years' use outside the U S. And then to your point on heparin.
Speaker Change #128: <unk> has been an old standby in what I'll call Theres been tolerant you saw that where they can use it because.
Speaker Change #129: Oh, the longevity of experience with it but it's often used at risk in patients where they prefer not to.
Vincent J. Angotti: And we all know that in the ICU, the risk of bleeding can be high. These are very fragile patients. There are significant mortality rates involved with them. There are complications. So depending on the institution you speak to, some could say it could take more than half, some will say it'll take half, some might say a little bit less, but there's clearly... a high medical need for this alternative. And I think I'm going to leave it at that.
Speaker Change #130: And we all know that in the ICU the risk of bleeding can be high these are very fragile patients.
Speaker Change #135: They're significant mortality rates involved with them there's complications so depending on the institution you speak too.
Speaker Change #130: Some could say it could take more than half somewhat say it will take half.
Speaker Change #130: Some might say a little bit less but there is clearly.
Speaker Change #131: A high medical need for this alternatives.
Speaker Change #132: And I think I'm going to leave it at that our guidance of 100 million remains where it is but the receptivity towards this product as extraordinary as matter of fact I was on a call with one of our clinical sites. This morning, one of our large academic institutions and again as we had mentioned the eagerness of the pie and what was interesting to me the entire Nephrologist team Nintendo this groups.
Vincent J. Angotti: You know, our guidance of the $100 million remains where it is, but the receptivity to this product is extraordinary. As a matter of fact, I was on a call at one of our clinical sites this morning, one of our large academic institutions. And again, as we had mentioned, the eagerness of the PI, and what was interesting to me, the entire nephrology team and intensivist groups' interest in this product to get it into their clinics was extraordinary, as you hear them comment on the safety profile of our product versus what they're using as a standard of care. Their standard of care happens to be Heparin. Thanks, Jim. We appreciate the question. Was there an additional question, Jim?
Speaker Change #139: Interest in this product to get it into their clinic.
Speaker Change #137: Was extraordinary as you hear them comment on the safety profile of our product versus what they're using other standard of care their standard of care happens to be heparin.
Speaker Change #137: Okay.
Speaker Change #132: Thanks, Jim we appreciate the questions.
Jim: Is there additional question Jim.
Speaker Change #138: Sorry, there are no further questions at this time.
Operator: Sorry, there are no further questions at this time. I would hand over the call to Vincent Angotti for closing comments. Please go ahead.
Vince: Hand over the call to Vince <unk> for closing comments. Please go ahead.
Vincent J. Angotti: Again, thank you to Ed and Jim for being on the call today and for their continued interest in sharp questioning relative to our commentary. I also want to thank the balance of you for joining us today and for your continued support.
Vince: Again, thank you too.
Vince: And Jim for being on the call today and the continued interest in sharp questioning relative to our commentary I just want to thank the balance of you for joining us today and your continued support.
Vincent J. Angotti: Look, we remain absolutely focused on driving long-term shareholder value, especially on the execution of the NEFRO study to make NIAID, which we certainly believe is a very promising product candidate to be made available to patients, which can make a real change in the standard of care for these patients undergoing CRRT. If you have any additional questions after the call, please don't hesitate to contact us through our investor line, and we certainly look forward to sharing with you our future developments and progress. Allen, thank you for the call.
Speaker Change #136: Look we remain absolutely focused on driving long term shareholder value, especially on the execution of the <unk> study to make NIAD.
Speaker Change #136: Which we certainly believe it's a very promising product candidate.
Speaker Change #134: We've made available to patients who can have a real change in standard of care for these patients undergoing <unk>.
Speaker Change #140: If you have any additional questions after the call. Please.
Speaker Change #141: Please don't hesitate to contact or contact us through our investor in line and we certainly look forward to sharing with you our future developments in progress.
Alan: Alan Thank you for the call.
Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Speaker Change #133: Thank you ladies and gentlemen. This concludes today's conference call. Thank you for your participation and you may now disconnect.