Q4 2024 Palvella Therapeutics Inc Earnings Call & Business Update
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to Palvella's full year 2024 financials and corporate update call. At this time all participants are in a listen only mode.
Speaker Change: After the speakers presentation there will be a question and answer session.
Speaker Change: To ask a question during the session, you will need to press star at 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
Speaker Change: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Bohemwe Vice President of Corporate Development. Please go ahead.
Speaker Change: Thanks operator. Good morning. My name is Bo Hanwe and I'm the Vice President of Corporate Development for Palvella Therapeutics. I joined Palvella in December of last year after ten years at Centerview Partners and Town. And I'm excited to help bring you to our rapid-mice and to market and continue to build our rare disease pipeline.
Speaker Change: I'm pleased to kick off Palvella's first earnings call and I would like to first extend our thanks to everyone for joining today's call.
Speaker Change: On today's call we are joined by several members of the Palvella Senior Executive Team, including West Covenant, our Founder and Chief Executive Officer, Dr. Jeff Martini, our Chief Scientific Officer, and Matt Kornberg, Palvella's Chief Financial Officer.
Speaker Change: As a reminder, the press release issued earlier today can be found under the Investors page of the Palvella website at www.PalvellaTX.com.
Speaker Change: I would like to remind you that we will be making certain forward-looking statements today. These may include statements regarding, among other things, the timing and expectations of research and development plans, regulatory plans, our plans to present or report additional data and our financial resources in cash runway.
Speaker Change: These forward-looking statements are based on current information, assumptions and expectations that are subject to change, and involve risks and uncertainties that may cause the actual results to differ materially from those contained in the forward-looking statements. These and other risk factors can be found in our most recent Periodic Report filed with
Wes Koppinen: Now I would like to turn the call over to West.
Wes Koppinen: Thanks, Bobon. Good morning. And thank you all for joining Palvella's first earnings call. It's a publicly traded company.
Wes Koppinen: I'd like to begin this morning's call by sharing Palvella's mission, strategy and vision.
Wes Koppinen: Which together are the foundation upon which we are building and enduring rare disease biopharmaceutical company that we believe will become the leader in developing and commercializing novel therapies for serious rare genetic skin diseases.
Wes Koppinen: Palvella Infinish means to serve. An arm mission is to relentlessly serve patients suffering from serious rare diseases with no FDA-proof therapies.
Wes Koppinen: We are accomplishing this mission through the development and commercialization of novel therapies which we believe will have a transformational impact on patients' lives.
Wes Koppinen: Our strategy at Palvella is to be first. First, with an approved therapy in a serious rare disease that previously lacked a single approved treatment. We believe tremendous value can and will be created by identifying a rare disease with no treatment.
Wes Koppinen: and changing that treatment paradigm from 0 to 1. We firmly believe this strategy can create outsize concurrent value for both patients and also for our shareholders.
Wes Koppinen: Our vision at Palvella is to build the leader in this area of rare genetic skin diseases. It is estimated that there's 597 rare skin diseases, many of those genetically based and unfortunately only 2% of these diseases have an FDA-approved therapy.
Wes Koppinen: Therefore, we believe rare skin diseases are an unambiguously high on met need and also low competitive intensity corridor of the orphan universe. Dynamics which are ideally suited for the Palvella team to build an enduring leader in the space.
Wes Koppinen: We now have both a compelling late stage pipeline and a platform for reproducing novel reproducible producing novel topical product candidates, which is called Q turn the highlight of our late stage pipeline is our lead product candidate <unk>, three 9% Rapamycin anhydrous gel, which we.
Wes Koppinen: We refer to as key turn Rapamycin.
Wes Koppinen: We're advancing Quito and Rapamycin for Microsystems, lymphatic malformations, where we've been granted FDA breakthrough therapy designation and also for cutaneous venous malformations, both are serious rare and chronically debilitating genetic diseases for which there are no FDA approved therapies and importantly, both does.
Wes Koppinen: Eases are driven by the mammalian target of Rapamycin or <unk> pathway.
Wes Koppinen: If approved we believe based on market research that key torn rapamycin has the potential to be first line therapy and standard of care for patients with Microsystems, lymphatic malformations and cutaneous venous malformations.
Wes Koppinen: We will now move to our lead product candidate <unk>, three 9% Rapamycin anhydrous gel. The <unk> pathway has been shown through scientific work by academics and geneticists to be a key driver for many genetic skin diseases over 200 published papers exists describing the clinical and commercial.
Wes Koppinen: <unk> of inhibiting the <unk> pathway across a multitude of skin diseases.
Wes Koppinen: This broad potential exists what has been elusive for the scientific and clinical communities is a commercially viable FDA approved topical formulation.
Wes Koppinen: Tempts to properly develop top Guam Tor inhibitors, such as Rapamycin and topical <unk> inhibitors for the treatment of Microsystems lymphatic malformations in venous malformations had been unsuccessful relegating the field to off label oral Rapamycin, which comes with unwanted immuno suppression.
Wes Koppinen: The off target toxicities that are unacceptable, especially for pediatric populations and limited efficacy for skin diseases due to rapid licensed poor skin bio distribution.
Wes Koppinen: Or the field is relegated to unproven and unapproved compounded formulations, which are typically formulated at low rapamycin concentrations between 0.1 and 1%.
Wes Koppinen: And those formulations lack the reliable quality efficacy and most of all safety characteristics that patients and physicians deserve. We believe we have overcome the challenges of unlocking rapid license potential in rare genetic skin diseases with our breakthrough innovation queue torn rapamycin.
Wes Koppinen: Two on Rapamycin as a result of more than a two year innovation process in which we evaluated more than 80 prototypes with leading experts in topical formulation science from the U S and Europe several of our key innovations from Quito and Rapamycin are listed on this slide first we discovered a coast solvent system that allows for sinter.
Wes Koppinen: <unk> ability of Rapamycin, a highly insoluble molecule, enabling a three 9% rapamycin concentration Quito and Rapamycin is three 9% drug concentration we believe could number one lead to a fast onset of therapeutic activity for patients with chronically debilitating skin disease.
Wes Koppinen: Eases and number to result in more predictable efficacy and a more dramatic therapeutic impact on their diseases.
Wes Koppinen: Second we have been able to demonstrate pre clinically that keep touring rapamycin delivers rapamycin into the dermis, the lower layer of the skin and the site of disease origin for many of the diseases that we target the rapamycin levels that we've shown pre clinically exceed the IC 90 for <unk> inhibition, indicating the potential.
Wes Koppinen: Central for therapeutic activity at the site of disease pathology.
Wes Koppinen: Third we developed a formulation that has no traditional penetration enhancers, which we believe lends itself to having a patient friendly tolerable profile. Furthermore, multiple clinical studies have shown that key torn rapamycin results in limited systemic absorption, which we believe indicates retention of rapamycin and the skin.
Wes Koppinen: Without absorption levels that trigger unwanted immuno suppression and toxicities were now pleased to have six issued or pending patents in the United States with claims until at least 2038.
Wes Koppinen: It's a very exciting next four quarters have called Ela highlighted by what we expect to be our top line phase III data and Microsystems lymphatic malformations. We now have 13 clinical sites open and recruiting patients in our phase III <unk> study.
Wes Koppinen: And we're pleased to confirm the study is on track to read out top line results in Q1 2026. Furthermore, later this year in Q4 of 2025, we also expect to announce topline results from our phase II study of Q torn rapamycin and cutaneous venous malformations.
Wes Koppinen: Furthermore, as highlighted earlier, we truly believes detour and Rapamycin is a pipeline in a product with clinical and commercial potential that extends well beyond microsystems, lymphatic malformations and cutaneous venous malformations, we expect to unveil our third target indication for <unk>.
Wes Koppinen: Rapamycin later this year and we also anticipate unveiling our next <unk> program in the second half of this year.
Wes Koppinen: We will now move to our lead indication Microsystems lymphatic malformations Microsystems lymphatic malformations are a serious rare chronically debilitating and lifelong genetic disease.
Wes Koppinen: We estimate that the disease impacts more than 30000 diagnosed patients in the United States.
Wes Koppinen: The genetics disease biology target skin tissue and natural history of Microsystems lymphatic not formations have all been well characterized genetically they're caused by <unk> mutations biologically the <unk> mutation results in hyper activation of the <unk> pathway, which <unk>.
Wes Koppinen: <unk> produces now formed vessels that protrude through the skin.
Wes Koppinen: The target skin tissue is the dermis, which is the site of disease origin in Microsystems lymphatic malformations.
Wes Koppinen: From a natural history perspective, the diseases present at birth has no spontaneous regression and as proliferative and progressive the major clinical burden for these patients is referred to as Lymphuria.
Wes Koppinen: Which is the leaking or discharge of internal lymphatic fluid onto the skin or into the soft tissues. The result of Lymphuria is that these patients are at persistent risk of serious infections, including acute cellulitis, which can cause repeated hospitalizations. In addition, bleeding can also cause significant disease morbidity.
Wes Koppinen: For these patients moving to the current treatment paradigm first there is no FDA approved therapies attempts to treat the disease. Therefore have typically been through highly invasive approaches such as surgery sclerotherapy, which involves repeated injections of chemotherapeutic agents such as bleomycin.
Wes Koppinen: And laser therapy.
Wes Koppinen: These invasive approaches are destructive to the patients skin and are characterized by a lack of durable efficacy due to the known high disease recurrence rates rates, which stem from the genetic basis of the disease more recently since the discovery of the genetic basis of lymphatic malformations around 2015.
Wes Koppinen: Which recognize the central role of the <unk> pathway and micro <unk> theres been use of off label oral and topical <unk> inhibitors and incremental move towards targeted molecular inhibitors, albeit with major limitations.
Wes Koppinen: Moving to our phase three study of detour and Rapamycin.
Wes Koppinen: For Microsystems lymphatic malformations I'm pleased to share thanks to the dedicated efforts of our phase III investigators and the research coordinators at clinical trial sites are passionate patient advocacy collaborators the highly committed Paul <unk> clinical operations team and most of all the patients living with Microsystems.
Wes Koppinen: Malformations, who have enrolled in this landmark study that the phase III study is on track to read out top line data on 40 patients in Q1 of 2026.
Wes Koppinen: In terms of study leadership the principal investigator is Dr. Joyce Tang from Stanford Dr. <unk> is a true champion for.
Wes Koppinen: For patients with serious rare genetic skin diseases. In addition to Microsystems lymphatic malformations. She has worked tyrus tirelessly to advance therapies for patients with other rare diseases, such as Epidermolysis <unk>.
Wes Koppinen: And our retro program Protoporphyria or ETP.
Speaker Change: We've had the pleasure of working closely with Dr. Tang for many years and we're honored to have her leading this study.
Speaker Change: Stanford is joined by an additional 12 sites listed on this slide all of whom are active in all of whom are recruiting patients.
Speaker Change: From a study design perspective, we designed our phase III study after extensive interactions with our key opinion leaders such as Dr. Jim treat pediatric dermatologists that children's hospital of Philadelphia and Dr. Mike Kelly, a pediatric hematology Hematologist oncologist at Cleveland clinic, as well as collaborative interactions with the FDA is <unk>.
Vision of dermatology and dentistry, including our type B meeting after the AD agency granted breakthrough therapy designation to Quito and Rapamycin.
Speaker Change: Overall, the design of the Phase III study mimics our phase III study the phase III is a single arm baseline controlled study with a clinician reported dynamic change scale as the primary endpoint in a sample size of 40 patients. We believe a baseline control design is an appropriate and a.
Speaker Change: Reliable trial design and Microsystems lymphatic malformations since the natural history of Microsystems, LMS is well documented to have no spontaneous regression of their disease. The primary endpoint for the phase III study is the Microsystems lymphatic malformation investigator global assessment, a seven point change scale, which has.
Many similarities with the clinician global impression change instrument that was used in our phase III study, we expect top line data from this study in the first quarter of 2026.
Speaker Change: Our phase III Silva trial Microsystems, <unk> builds upon our compelling phase II data the results of which led to fda's granting of breakthrough therapy designation.
The study design was a phase II open label baseline controlled study over 12 weeks with a sample size of 12 patients importantly.
Speaker Change: Importantly, the results from that study showed a clinically and statistically significant improvements on pre specified global and individual endpoints some of which we'll review here Bill.
Speaker Change: Beginning with the clinician global impression of change. This is a single item question that the physician completes in clinic, where theyre comparing the patient lesion severity at the end of the treatment period to baseline as you can see from the data under the clinician global impression of change at week 12, Sichuan Rapamycin average effect size.
Speaker Change: On a scale, which goes from negative three very much worse to plus three very much improved was $2 42.
Speaker Change: All 12 patients in this study on the scale, where either a plus two or plus III. So either much improved or very much improved importantly, a similar result was seen on the patient global impression of change were at week four week eight and week 12 statistically significant results were achieved with the average patient at just above two.
Speaker Change: <unk> are much improved.
Speaker Change: We also evaluated individuals signs of Microsystems lymphatic malformations in the phase II study. The results are listed on the right side of the slide were also statistically significant.
Speaker Change: We've included here some other photography results from the trial, which illustrate the patients lesions at baseline and then the patients lesions at the end of treatment.
Speaker Change: After 12 weeks of couture and Rapamycin as seen on the slides when compared to baseline.
Speaker Change: At week 12 patients improved in terms of the height of the lesion on the skin and the presence of bleeding. While also demonstrating a reduction in the presence of Microcyst, where the vehicles on the scan at week 12. So overall exciting phase II results that strongly encourage the advancement of key torn rapamycin into a <unk>.
Pivotal phase III study.
Speaker Change: We were excited a press release earlier this year that our phase II data has been published in the journal of vascular anomalies or job, which.
Speaker Change: Which is the official journal of the International Society for the study of vascular anomalies. The phase II publication highlighted the remarkable visual improvement observed in the phase II study as a result of Q2 or in Rapamycin treatment as well as noting a robust clinical response that was statistically significant across a variety of.
Speaker Change: Clinician and patient endpoints.
Speaker Change: In our phase II study, we also prospectively implemented patient qualitative interviews aimed at capturing the voice of the patient.
Speaker Change: This is an emerging technique used in many rare disease studies to capture clinical meaningfulness of a potential treatment effect. This involve conducting qualitative interviews of patients before they initiated treatment and also at the end of the study after 12 weeks of treatment the job of publication highlights that these patient interviews confirmed that.
Speaker Change: Positive results from the Phase II study.
Speaker Change: Preparations are underway for an NDA submission in 2026 following a successful phase III study result from a regulatory strategy perspective, we intend to leverage the 505 Btu pathway for our NDA submission, which can represent a streamlined drug review process enable.
Speaker Change: US to incorporate existing data on rapamycin into our NDA submission while avoiding.
Speaker Change: Unnecessary duplication of certain studies that have already been performed on the drug in.
Speaker Change: In addition to <unk>, we intend to leverage the large growing real world evidence base, indicating rapamycin therapeutic activity in lymphatic malformations, which should augment the clinical data from our prospective phase III and phase II studies in our NDA submission will be supported by the designations UC list.
Speaker Change: Here breakthrough therapy fast track and orphan drug designations as a function of breakthrough therapy and fast track designations, we should be in a position to execute.
Speaker Change: A rolling NDA submission and we will also be eligible for an expedited six month priority NDA review.
Speaker Change: In addition to the financial support from the institutional investors from our pipe financing last December we're pleased to have the FDA financially supporting the phase III sell the study through a non dilutive FDA orphan product grant of up to $2 $6 million as background. The FDA orphan product ran pro.
Speaker Change: Graham is administered by Fda's office of orphan products development annually. They award non dilutive grants typically to programs that are in serious rare diseases with either no approved therapies are inadequate therapies, where there has been a high level of scientific and technical merit demonstrated to a particular therapeutic approach.
Speaker Change: Last year, there were 51 applicants for the FDA orphan drug Grant program and only seven recipients we were one of the seven recipients and notably we're the only phase III study that the FDA is supporting.
Speaker Change: On this slide here is an article from Jaime <unk>, Phelps and Mcnamara, our leading FDA law firm that contextualize as the grant program, while noting that these grants likely represent a meaningful degree of alignment with the FDA Review Division on a particular program and trial.
Speaker Change: Paul Dell as commercial planning is well underway for micro assisted lymphatic malformations based on multiple methodologies, including primary perspective research published in the orphan at journal of rare diseases as well as a claims analysis. We recently conducted in partnership with Trinity Life Sciences.
Speaker Change: We estimate that there are more than 30000 diagnosed patients in the United States afflicted with Microsystems lymphatic malformations for 2025, we have additional claims analysis work ongoing which will help elucidate number one the estimated annual incidents of Microsystems.
Speaker Change: <unk> malformations or commercially speaking the number of new patients annually coming into the addressable pool of patients that could be treated with Quito and rapamycin.
Speaker Change: <unk> to the concentration of Microsystems, lymphatic malformation patients and establish centers of excellence, sometimes referred to as vascular anomalies centers. We look forward to sharing the results of this ongoing work later this year.
Speaker Change: Continuing with the theme of market research, we're encouraged by the results from the market research. We conducted in 2024 with 52 high volume traders of Microsystems lymphatic malformations, we presented those physicians with the product profile of a topical three 9% rapamycin gel 98% of physician survey.
Speaker Change: <unk> indicated that incorporate such a product into their clinical practice, 98% would consider topical three nine rapamycin gel as first line therapy, and 96% saw advantages to a targeted topical rapamycin intervention when compare to orally administered <unk> <unk> inhibitors over.
Speaker Change: For all this research confirmed Quito and Rapamycin has potential to be first line standard of care therapy for Microsystems lymphatic malformations.
Speaker Change: Our plan is successful in our phase III trial is to commercialize <unk> rapamycin on a standalone basis in the U S. We believe there are favorable commercial dynamics that will allow <unk> to execute a successful U S launch in line with other rare disease companies, who have launched first and only approved therapies in serious rare diseases.
Speaker Change: Seizes at launch we plan to focus our efforts on the established centers of excellence referred to as vascular anomaly centers, which today diagnosis create microsystems lymphatic malformations and other vascular malformations, specifically over the last 15 years. There has been approximately 150 of these vascular.
Speaker Change: Anomaly centers that have been formed and they are usually associated with pediatric hospitals we.
Speaker Change: We believe these vascular nominal nominally centers are a logical point of focus for our sales marketing and medical affairs efforts. After FDA approval since a meaningful percentage of patients with Microsystems lymphatic mapping maisons are diagnosed and treated at these centers.
Speaker Change: Furthermore, patients with cutaneous venous malformations are also oftentimes diagnosed and treated at these vascular anomaly centers. So overall, we see strong synergy from a commercialization perspective, as we think about adding cutaneous venous malformations as our second indication for Q2 on Rapamycin.
Wes Koppinen: With that it's my pleasure to turn it over to Dr. Jeff Martini, our Chief Scientific officer to provide an overview of our second indication for key torn rapamycin cutaneous VNS malformations, Jeff.
Wes Koppinen: Thank you and good morning, everyone I'm, Jeff Martini, Chief Scientific Officer, I have a passion for rare disease drug development and I joined <unk> in 2020 to execute on what I saw as an attractive opportunity to bring transformative treatments to patients with rare skin diseases. This has been a neglected corridor orphan <unk>.
Wes Koppinen: Doug development and we are building the leader in this space, while bringing therapies to these deserving patients our second clinical program <unk> to earn Rapamycin isn't cutaneous venous malformations.
Wes Koppinen: Another serious rare genetic disease with no FDA approved therapies similar to Microsoft's pigment product malformations cutaneous venous malformations disease pathology is driven by the <unk> pathway caused by mutations either tied to <unk>, which leaves over activated <unk> signaling.
Wes Koppinen: <unk> malformations are characterized by dis regulated growth a malformed beads in the skin, which can bleed and cross functional impairment.
Wes Koppinen: Because of the genetic driver of this disease cutaneous munis malformations continued to grow over time and do not spontaneously regress.
Wes Koppinen: From a prevalence perspective venous malformations are the most common vascular malformation and represent a more prevalent disease when compared to Microsoft's equipped product malformations. We estimate based on published epidemiology work and prospective work conducted with clarity pharma, but there are greater than 75000 diagnosed patients you guys place.
Wes Koppinen: With munis malformations.
Wes Koppinen: There is a significant amount of real world evidence supporting the use of Rapamycin and treating venous malformations, including over 20 published studies, where case reports most of this data is from systemic Robin Weisman for internally located venous malformations.
Wes Koppinen: In the publication is shown here on the slide the offers referred to Rapamycin at the gold standard for this disease, but also note the unmet need in treating specifically the cutaneous presentation, which is often not addressed with systemic therapy.
Wes Koppinen: April of last year, we were pleased that the FDA granted us fast track designation for detour maximizing for venous malformations.
Wes Koppinen: I want to spend a few minutes on our scientific rationale.
Wes Koppinen: In our phase III study in cutaneous <unk> malformations, we're including book tied to and pick <unk> mutations.
Wes Koppinen: Starting at the far left of the slide from an accident mechanistic standpoint somatic over activating mutations in both of these <unk> result in increased <unk> activity and ultimately Venus endothelial cell proliferation. The breakdown between mutations is roughly 70% caused by timing of patients and the remaining by picked <unk>.
Wes Koppinen: <unk> <unk>.
Speaker Change: And an excellent review by Dr. Emmanuel Sharon and colleagues with which we adopted the mechanism graphic here he nicely highlighted commutations and tied to leads to ligand independent activation of the <unk> pathway and we further recommend rapamycin as first line treatment for Bt's malformations caused by both mutations.
Speaker Change: Moving to the center panel a preclinical study conducted conducted by Dr. Aliza Boscolo in 2015 demonstrated how rapamycin reduced venous malformation growth and restored normal vascular tissue and a biggest malformation model mouse model with <unk> mutations compared to controls.
Finally on the right hand side of the slide data from Dr. Surround in 2023 from the largest human clinical study we are aware of with systemic rafts rapamycin for the treatment of venous malformations demonstrated that a sustained benefit was observed in 84% uptime <unk> mutated and 83%.
Speaker Change: <unk> mutated patients, indicating a similar clinical response to rapamycin for both mutation types.
Speaker Change: Earlier this quarter, we announced the first patient dose in our phase two trial, a few torn rapamycin and continuous munis malformations, which we call toy box for.
Speaker Change: For development of Detour Rapamycin for cutaneous munis confirmations, we employed a similar drug development strategy to the approach we undertook for Microsystems product malformations. First this is a proof of concept study, where we'll be collecting safety and tolerability data along with efficacy data from numerous clinician and patient endpoints.
Speaker Change: Second study is a baseline controlled studies since there is no spontaneous regression in this disease third in terms of sample size, we anticipate approximately 50 patients.
Speaker Change: Fourth dosing regimen will be once daily detour and Rapamycin and finally statistically there is no form of hierarchy. Since it is a rare disease that hasn't been previously studied and we are therefore looking to determine which efficacy endpoints are most appropriate for detecting a treatment effect.
Speaker Change: Should this study would be successful in terms of achieving a compelling safety and efficacy profile.
Speaker Change: We will be submitting a breakthrough therapy designation request to the FDA and urging the expedite torn rapamycin to patients in need.
Speaker Change: Finally, the envision submission plan would be a supplemental NDA or S. NDA, assuming that Quito and Rapamycin. Our original NDA is approved and Microsystems product operations. We expect top line data from this study in the fourth quarter of this year.
Speaker Change: We are similarly encouraged by results from our market research. We conducted in 2024 with 50, dermatologists and Hematologist, who are high volume treaters of Microsoft's metallic malformations and venous malformations.
Speaker Change: 86% of physicians surveyed would consider topical three 9% rapamycin gel as first line therapy.
Speaker Change: Overall this research confirmed <unk> potential to be first line standard of care for cutaneous <unk> malformations.
Speaker Change: With that I'll turn it over to Matt Kornberg, our Chief financial officer to discuss our financial results and outlook.
Matt Kornberg: Thanks, Jeff.
Matt Kornberg: Good morning, everyone, I'm, Matt Kornberg, Chief Financial Officer at <unk>.
Matt Kornberg: I've known <unk> since 2018, when as a senior executive at ligand Pharmaceuticals.
Matt Kornberg: <unk> finance some of the early work on couture and Rapamycin.
Matt Kornberg: At ligand.
Matt Kornberg: I had.
Matt Kornberg: Excuse me.
Speaker Change: Our broad view into many novel drugs under development, particularly in the orphan space.
Speaker Change: Was compelled to join <unk> full time and help shape the successful approval and commercialization of Q2 on Rapamycin simultaneous simultaneously leveraging the strengths of the <unk> R&D team to <unk>.
Speaker Change: A broader pipeline of rare disease programs aimed at treating.
Speaker Change: Diseases with no FDA approved therapies.
Speaker Change: <unk> is in a strong financial position.
Speaker Change: Mowing us to execute on our R&D and commercial strategies with confidence cash.
Speaker Change: Cash and cash equivalents as of December 31, 2024 were $83 6 million.
Speaker Change: Following the reverse merger and oversubscribed pipe financing led by Bvs partners and Frazier Life Sciences.
Speaker Change: We believe we have a clear cash runway into the second half of 2027.
Speaker Change: Our funding covers our major upcoming milestones, including the completion of our phase III Microsystems Lf trial.
Speaker Change: Completion of our phase III cutaneous venous malformations trial.
Speaker Change: The mission of the Microsystems L M NDA filing to the FDA and pre commercialization efforts.
Speaker Change: As well as that the addition of two new programs to the pipeline.
Speaker Change: As presented in our press release. This morning, I will briefly review our financial activities and results for the full year 2024.
Speaker Change: Research and development expenses were $8 2 million for the full year 2024, as compared to $8 8 million for the comparable period in 2023.
Speaker Change: General and administrative expenses were $5 9 million for the full year 2024.
Speaker Change: As compared to $3 1 million for the comparable period in 2023.
Speaker Change: Okay.
Speaker Change: Our net loss was $17 4 million or $7 83 per diluted share for the full year 2024, compared to net income of $17 9 million.
Speaker Change: Or $2 17 per diluted share for the comparable period in 2023.
Speaker Change: Finally, looking forward to 2025, we expect to end the year with at least $55 million in cash and cash equivalents based on the current strategic operating plan.
Speaker Change: During the year, we expect to see approximately $30 million in total cash spend given.
Speaker Change: Given the significant increase in our clinical activity in 2025 as compared to 2024, we expect the R&D portion of the spend to be 18% to $20 million.
Speaker Change: As we grow our team in full fully transitioned to a public company. We expect the G&A portion of the spend to increase as well with your outlook for 10% to $12 million in 2025.
Speaker Change: Okay.
Speaker Change: With a clear strategic vision, a strong financial foundation and the team experienced in bringing rare disease therapies to market <unk> is well positioned for success.
Speaker Change: We thank you for your continued support and we look forward to keeping you updated on our progress.
Speaker Change: With that let's open the floor for Q&A.
Speaker Change: Operator, Please go ahead.
Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone.
Speaker Change: <unk> for your name to be announced.
Speaker Change: Draw. Your question. Please press star one one again.
Speaker Change: And our first question comes from Josh Shimmer with Cantor Fitzgerald. Your line is now open.
Josh Shimmer: Great. Thanks for taking the questions and for the comprehensive overview I guess first question, how do we think about quantifying the dose that each patient is getting as part of that can you turn rapamycin gel I guess that would be measured as number of pumps per patient and then how many pumps per tube well do you expect.
Speaker Change: Can you turn rapamycin to be supplied.
Josh Shimmer: Hey, Josh Thanks for the questions, we'll pass it over to Matt Kornberg CFO to address those questions.
Speaker Change: Thanks, Josh.
Josh Shimmer: So.
Josh Shimmer: Josh as you are.
Josh Shimmer: No well the.
Josh Shimmer: Q2, and rapid license delivered through our pump.
Josh Shimmer: And each pump is a single dose.
Speaker Change: Haven't given any specific guidance on.
Josh Shimmer: Exactly the size of our commercial product, but we expect that the.
Josh Shimmer: Each patient will use one pump per day to cover roughly be.
Josh Shimmer: Surface area of the disease that they are treating.
Josh Shimmer: And then eventually will determine our pricing.
Josh Shimmer: Dose.
Josh Shimmer: Q2 on pump size.
Josh Shimmer: Based on the final commercial product.
Josh Shimmer: Okay got it and then given the difference in clinical manifestation, how do we think that the difference if any in the primary endpoint.
Josh Shimmer: Tween, the cutaneous lupus malformation or the Microsoft the MLM Microsystems, lymphatic malformation trial versus the cutaneous venous malformation trial.
Speaker Change: Great. Thanks, Josh for the question, we'll pass it over to Jeff Martini.
Josh Shimmer: Hey, Josh this is Jeff.
Jeff Martini: For the for the Phase III ongoing trial, we are a dynamic seven point change scale, it's conducted.
Josh Shimmer: By live clinician assessment.
Josh Shimmer: <unk> <unk> lesion compared to the baseline photograph.
Josh Shimmer: At end of treatment.
Josh Shimmer: The phase III MLM trial for phase two we're looking at a number of different efficacy endpoints and ultimately what we're going to do is look at the data see which endpoints moved the most will look at the clinician and patient interviews and ultimately take that package of data to the FDA and we will have a discussion with them.
Josh Shimmer: About which is the right endpoint percutaneous munis malformations.
Josh Shimmer: Okay. Thank you.
Josh Shimmer: Okay.
Speaker Change: And our next question will come from re to Barbara with TV Cowen Your line is open.
Josh Shimmer: Hi, This is Joshua fleishman on the line for it too thanks for taking my question.
Josh Shimmer: How should we think about the new tour and Rapamycin indication and the new <unk> product announcements in the second half of this year and should we expect for the candidate molecule to have similar pharmacological characteristics to rapamycin. Thank you.
Josh Shimmer: Okay.
Josh Shimmer: Yes, Josh Thanks for those questions. So as we've said consistently we think Q2, our and Rapamycin truly is a pipeline in a product.
Josh Shimmer: Certainly supported by the pioneering work by folks like Dr. Joyce Tang and others, who have shown that <unk> is a key driver.
Josh Shimmer: Of many genetic skin diseases.
Josh Shimmer: Look forward in the second half of this year.
Speaker Change: Unveiling that next Quito and Rapamycin indication, there's a number of indications currently under evaluation.
Speaker Change: We typically gravitate to those indications that are serious.
Speaker Change: That are rare and where there is currently no FDA approved therapy.
Speaker Change: So we're working through a number of different indications with our Kols, our scientific partners doing <unk>.
Speaker Change: Commercial work in parallel.
Speaker Change: But you can expect to see us stay in that high unmet need corridor, where were unambiguous Lee helping patients that today don't have therapies or have approaches that are inadequate in nature.
Speaker Change: In terms of our <unk> program.
Speaker Change: Way to think about that Josh and thanks for the question.
Speaker Change: Similarly, we really start with the disease start with the end in mind. So we look to identify diseases that are serious rare genetic nothing approved.
Speaker Change: We strongly prefer those diseases that have well characterized genetics.
Speaker Change: <unk> characterized biology, we think by doing so that that increases our probability of success and so it's really linking the disease.
Speaker Change: With a molecule that we can formulate with Q <unk> and bringing at that targeted topical <unk> enabled administration.
Speaker Change: Patients with a serious rare genetic skin disease.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: Okay.
Speaker Change: And our next question comes from Whitney I, Jim with Canaccord. Your line is open.
Whitney I: Hey, guys. Thanks for taking the question.
Whitney I: First is a follow up on the dosing question can you I guess remind.
Whitney I: Reminder, about lesion size, and therefore dosing differences between MLM and Cvs.
Whitney I: And I guess to what given youll have that CGM data.
Whitney I: By the time, you have the phase II data to what extent might any differences there play into your pricing discussion in your melon indication.
Jeff Martini: Hey, Randy Thanks for the question, Jeff will follow up.
Speaker Change: So one actuation of the pump gives enough dose to cover approximately 200 centimeter square wed like to refer that is roughly the size of a human adult foot.
Speaker Change: And for our clinical trials, we allow up to 400 centimeter squared in these trials.
Speaker Change: Most of the patients we believe fall into 200 centimeter square, but we'll be looking at the data from our trials to look at the actual.
Speaker Change: Average size of these lesions.
Speaker Change: Got it Okay and then.
Speaker Change: I guess another follow up on the next key torn rapamycin indication in the <unk> program in General what is included in the current cash guidance as it relates to progress with those new program.
Speaker Change: Yes, Thanks Whitney Matt.
Speaker Change: Yeah.
Speaker Change: Whitney.
Speaker Change: As I mentioned in my prepared remarks, we feel like we've got sufficient funding to quote unquote add those two programs to the pipeline what we see that is.
Speaker Change: Covering is the.
Speaker Change: Identification of the disease is west covered.
Speaker Change: As well as formulation of the product.
Speaker Change: For the new product and obviously Q2 on Rapamycin exists.
Speaker Change: The form we needed already.
Speaker Change: And then designing and getting the trial started for each of those two different indications so.
Speaker Change: Really just getting it in.
Speaker Change: In the clinic and ready to go for the clinic is kind of what's covered there.
Speaker Change: Perfect really helpful. Thanks, so much.
Whitney I: Thanks Whitney.
Speaker Change: And the next question comes from Annabel <unk> with Stifel. Your line is open.
Annabel: Hi, Thanks for taking my question.
Speaker Change: I'm wondering if you can.
Speaker Change: Just help us understand the powering of the trial.
Speaker Change: What is required for statistical significance and more importantly, what is required for clinical meaningfulness and I'm thinking more in terms of payers.
Speaker Change: To really capture that premium pricing that youre looking for.
Speaker Change: In light of some off label usage Rapamycin. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah, Great Annabel thanks for those questions from a payer perspective to begin with your last comment.
Speaker Change: We do expect specialty pricing in line with other orphan therapies that are first in disease, we think there'll be favorable payer and reimbursement dynamics because there are no FDA approved therapies and really there is no alternatives for these patients.
Speaker Change: And as the FDA has acknowledged this is a serious rare and genetic lifelong disease.
Jeff Martini: I will answer the question in terms of clinical Meaningfulness, and then pass it over to Jeff to talk through statistical significance. There are no from a regulatory perspective, there are no pre specified thresholds.
Jeff Martini: For clinical Meaningfulness really importantly, just as we did in the phase II study, we have implemented prospectively. These patient qualitative interviews. This very rich data that we're able to capture in this study where patients are interviewed at baseline and then they are interviewed.
Jeff Martini: At the at the end of end of treatment, which is week 24.
Jeff Martini: And really that data that will augment many of the statistical endpoints that we're capturing.
In the phase III, but wanted to make sure. We address that there is no pre special pre specified clinical meaningful threshold from a regulatory perspective, Jeff will walk now through.
Jeff Martini: The phase two results on the CGI.
Jeff Martini: Clinician global impression of change, which really informed our phase III powering.
Jeff Martini: Is powered on that endpoint, which we call the Microsystems lymphatic malformation, Iga, which shares many similarities to the phase III <unk> Jeff.
Jeff Martini: So in the phase two study with 12 patients all patients were either a plus two or plus three on the CGI C. Those are the two highest categories with an average of 242 points.
Jeff Martini: And that of course highly statistically significant we use that data to power our phase III. The statistics, there is a task comparing back to zero.
Jeff Martini: Since each patient serves as their own control.
Based on the all 12 patients being a plus two or plus three with 40 patients that gives us greater than 99% powered in our phase III study we have also.
Jeff Martini: Documented what our minimum effect size to be statistically significant is based on a very conservative standard deviation.
Jeff Martini: <unk> greater than about <unk> five on that scale should be statistically significant.
Speaker Change: Great. Thank you.
Speaker Change: Thanks Annabel.
Speaker Change: And the next question comes from Louise Chen with Scotiabank. Your line is open.
Louise Chen: Hi, congratulations on all the progress and thanks for taking my questions. So just two quick commercial questions for you. If your products are approved do you think physicians will test patients for their <unk> mutation or just treat patients with GBM and ml am.
Louise Chen: And then the second thing is just what type of support program do you plan to have for your patients and physicians to help drive uptake and get coverage for keto rapamycin. Thank you.
Speaker Change: Yes, Louise Thanks for those questions on the first question typically microcyst take lymphatic malformations.
Speaker Change: And cutaneous VNS malformations are diagnosed clinically.
Speaker Change: And they are done so without the need for a genetic test.
Speaker Change: So I wanted to make sure to address that upfront that these are clinical diagnosis diagnoses. They typically do occur.
Speaker Change: In these vascular anomaly center is about 150 of those in the United States.
Speaker Change: In terms of your second question and I had the good fortune of working at <unk>.
Speaker Change: On a pre commercial basis when their launch on air case, we want to make sure we take a very high touch approach commercially to serving this patient community and serving the physicians.
Speaker Change: We intend to do so by enlisting specialty pharmacies with experience in rare diseases.
Speaker Change: We will also have a patient services hub.
Speaker Change: Which we think is key to our successful commercial launch and most importantly, we are going to attract and recruit an exceptional leader with experience in launching rare diseases that have no approved therapies to help build this organization, we have a strong view here that success flow.
Speaker Change: <unk> from attracting.
Speaker Change: The right people. So that's a key point of focus for us here in 2025.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And our next question comes from Dev Prasad with loop capital markets. Your line is open.
Dev Prasad: Hi, Thanks for taking my question and congrats on the brokers.
Speaker Change: As shown on CGM.
Speaker Change: John you will be looking at number of endpoints in the phase II trial.
Speaker Change: So what would be the bar in terms of different efficacy end point of view, but you will be looking and.
Speaker Change: What type of data will give you confidence to move into next phase. Thank you.
Dev Prasad: Yes. Thanks for that question Dev in terms of our objectives for that study.
Speaker Change: Begins really with with safety and Tolerability, we will be looking at.
Speaker Change: Systemic absorption of Rapamycin and these patients will be looking at a local tolerability profile and then I think as Jeff highlighted well earlier.
Speaker Change: This is a rare disease that has not been extensively studied by any biotech company and so we're employing approach that looks very similar to the approach we employed and microsystems lymphatic malformations that involves designing a number of clinician and patient reported.
Speaker Change: Endpoints doing so in collaboration with key opinion leaders and experts in the disease as well as the FDA.
Speaker Change: And then at the end of this study understanding which of those endpoints is sensitive to detecting a treatment effect.
Speaker Change: Once we have that data top line will be Q4 of this year. We'll go through a very thorough analysis of both safety and efficacy and ultimately I think what's going to determine.
Speaker Change: Moving into phase III is knowing that Theres a primary endpoint that we can bring forward that's acceptable to the kols that's acceptable to the FDA.
Speaker Change: One in which it allows us to run a reasonably sized phase III study, that's 90% powered.
Speaker Change: So that's an analysis that we've undergone with micro <unk> will do so similarly with cutaneous Vms.
Speaker Change: I'm excited to certainly have Fda's collaboration here is a function of the fast track designation that they granted us last April.
Speaker Change: Great. Thanks for.
Speaker Change: Thank you.
Speaker Change: Thanks Steph.
Speaker Change: And the next question comes from Catherine Nowak with Jones trading your line is open.
Catherine Nowak: Hi, good morning, Thanks for taking my questions just one more on cutaneous vino small formations in the phase two study do you anticipate breaking down efficacy by whether patients have picked HCA are tied to activating mutations.
Catherine Nowak: Could this make any difference in your decisions for the target commercial patient population. Thanks.
Speaker Change: Hey, Katherine Thanks for the question.
Speaker Change: I'll respond first and then ask Jeff to chime in as well.
Speaker Change: We've seen as Jeff highlighted earlier from studies from doctors, Sharon and others in Europe. The use of systemic rapamycin, primarily for internal VNS malformations and in those studies.
Speaker Change: There has been a preliminary clinical benefit recognized across both.
Speaker Change: The <unk> mutation as well as the tie to mutation and Jeff Slide shows how tight does activate the <unk> pathway. So ultimately are.
Speaker Change: Our hypothesis is that Quito, and Rapamycin will be therapeutically active in both mutation types.
Speaker Change: And then just to add to that we will be attempting to collect genetic data from these patients and then ultimately doing further analysis to see if there is any difference in response.
Speaker Change: We don't anticipate that based on the data that we went through today, but it's important that we do that analysis.
Speaker Change: Yeah.
Speaker Change: Got it and then thank.
Speaker Change: Thinking about duration of treatment and Microsystems. After FDA approval do you anticipate this is something where patients are going to require chronic treatment or they treated until remission and monetary sorry correct.
Speaker Change: Thanks.
Speaker Change: Okay.
Speaker Change: Yes, thanks, Katherine in terms of treatment duration for Microsystems lymphatic malformations of what we know from the our understanding of the genetics and biology of the disease as well as our extensive interactions with key opinion leaders.
Speaker Change: Is that when therapy has withdrawn its very likely that the disease returns, including the clinical burdens highlighted earlier like lymphuria like.
Speaker Change: Like bleeding. So we do think given the genetic basis of the disease that there will be a chronic dosing regimen and microsystems lymphatic malformations.
Speaker Change: Okay.
Speaker Change: Got it. Thanks, thanks, so much for taking my question.
Catherine Nowak: Yeah. Thanks Catherine.
Wes Koppinen: I show no further questions at this time I would now like to turn the call back to Wes for closing remarks.
Thank you operator.
Wes Koppinen: Closing I speak for the entire Paul valid team when stating that we are energized to be a public company and to have the opportunity to execute on our mission strategy and vision, we would like to thank everyone for joining today's call and we look forward to keeping you updated on Paul dollars ongoing progress. Thank you.
Wes Koppinen:
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Yes.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Okay.
Wes Koppinen: Okay.