Q1 2025 Talphera Inc Earnings Call

Unknown Executive: Welcome to the Talphera first quarter 2025 financial results conference call. This call is being webcast live via the events page of the investor sections of Talphera's website at www.talphera.com. You may listen to a replay of this webcast by going to the investor section of Talphera's website.

Welcome to the Pillsbury I'll first quarter 'twenty 25 financial results Conference call. This call is being webcast live by Eddie events page of the investors section of those various websites are triple Dolby adult there. That's caught you may listen to or you play this webcast by going to the investors section of dose.

Ralph Yes: Paris website, I would now like to turn the call over to Ralph Yes, the Dorian they'll first chief financial Officer.

Raffi Asadorian: I would now like to turn the call over to Raffi Asadorian, Talphera's Chief Financial Officer. Thank you for joining us on the call today. Today, we announced our first quarter 2025 financial results and associated business updates in a press release.

Ralph Yes: Thank you for joining us on the call today today, we announced our first quarter 2025 financial results and associated business updates and a press release.

Raffi Asadorian: With me today are Vince Angotti, our Chief Executive Officer, and Dr. Shakil Aslam, Talphera's Chief Medical Officer. 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.

Ralph Yes: With me today are Vince and Gaudy, our Chief Executive Officer and Dr. Shaquille Aslib.

Ralph Yes: Healthier Welfarist Chief Medical Officer.

Speaker Change: 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 tell Farah. Please.

Raffi Asadorian: Please refer to our press release in addition to the company's periodic current and annual reports filed with the SEC 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.

Speaker Change: Please refer to our press release in addition to the company's periodic current and annual reports filed with the ICC for.

Speaker Change: 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.

Vincent Angotti: I'll hand the call to Vincent. Thanks, Raffi.

Speaker Change: I'll hand, the call the beds.

Speaker Change: Thanks, Rafi and good afternoon, and thank you to everyone joining our call today.

Vincent Angotti: Good afternoon, and thank you to everyone joining our call today. It's only been about six weeks since our last call, so we're gonna keep our prepared remarks brief. We began 2025 with strong momentum with a focus on the execution of our NEFRO-CRRT trial that resulted in the approval from the FDA on a significantly decreased study size. The removal of certain exclusion criteria and the activation of additional high-volume sites to accelerate enrollment. In addition, a pipe financing was also completed. As detailed on our year-end call, we made tremendous progress with the study protocol changes, highlighted by the reduction in the size of the study to 70 patients from 166.

Speaker Change: It's only been about six weeks since our last call. So we're going to keep our prepared remarks brief.

Speaker Change: We began 2025 with strong momentum with a focus on the execution of our Metro E. R. R. T trial that resulted in the approval from the FDA on a significantly decreased the study size.

Speaker Change: The removal of certain exclusion criteria and the activation of additional high volume sites to accelerate enrollment.

Speaker Change: In addition, the pipe financing was also completed.

As detailed on our yearend call, we made tremendous progress with the study protocol changes.

Speaker Change: Highlighted by the reduction in the size of the study to 70 patients from 166.

Vincent Angotti: This certainly helps with shortening the time to complete the study, but importantly, so does adding more of the right clinical study sites and principal investigators. As a reminder, we've been focused on the new site profile, specifically one, the type of intensive care unit where the study will be performed, for example, medical ICUs instead of surgical or cardiothoracic ICUs. Two, the specialty of the principal investigator, again specifically a nephrologist as a primary lead for selecting patients to enroll compared to an intensivist or other specialist. and three, the efficiency of the administration to initiate a new study at their institution.

Speaker Change: This certainly helps with shortening the time to complete the study, but importantly, so does adding more of the right clinical study sites and principal investigators.

Speaker Change: As a reminder, we've been focused on the new site profile.

Speaker Change: Specifically one.

Speaker Change: With intensive care unit, where the study will be performed for example, medical icu's instead of surgical or cardio thoracic icu's.

To the specialty of the principle investigator again, specifically a nephrologist as a primary lead for selecting patients to enroll compared to an intensivist or other specialist.

Speaker Change: And three.

Speaker Change: Wyszynski of the administration to initiate a new study at their institution.

Vincent Angotti: Dr. Aslam identified these site characteristics after his review and learnings from assessing the initial sites as critical, successful, and timely enrollment. Our new site target profile, focused on medical ICUs and nephrologists as principal investigators, is proving to make a real difference in engagement and activity at each of the sites, including a more efficient contracting process compared to our legacy sites. All supporting our belief that we're engaging with the right institutions and investigators to allow us to complete the study by the end of the year. Adding these new sites is key to achieving that success. And so far this year, we've added three new sites that are activated and screening patients, with five more expected by mid-year.

Speaker Change: Dr. Azlon identified the site characteristics. After his review and learnings from assessing the initial sites as critical successful and timely enrollment.

Speaker Change: Our new site target profile focused on medical ICU as a nephrologist as principal investigators is proving to make a real difference in engagement and activity at each of the sites, including a more efficient contracting process compared to our legacy sites all supporting our belief that we're engaging with them.

Speaker Change: Right institutions and investigators to allow us to complete the study by the end of the year.

Speaker Change: Adding these new sites is key to achieving that success.

Speaker Change: So far this year, we've added three new sites that are activated and screening patients with five more expected by mid year.

Vincent Angotti: All eight of these sites, plus others. which were having contracting discussions fit our new target site profile, including a much more efficient process to finalize contracting compared to the legacy site.

Speaker Change: All eight of these sites plus others, which were having contracting discussions fit our new target site profile, including a much more efficient process to finalize contracting compared to the legacy sites.

Vincent Angotti: In addition to adding new sites, we believe there are other favorable trends and activities that could support the adoption of the Famistat if approved. These include, first, exploring a compassionate use IDE when we have been approached by multiple institutions and are discussing using the Famistat under a compassionate use IDE for a specific patient population that does not do well with other available anticoagulants. And second, continued shortages of citrate supply and potential supply chain issues with heparin. Health care providers are inquiring about the timely availability of nifamistat given the recurrent heparin and citrate shortages.

In addition to adding new sites. We believe there are other favorable trends and activities that could support the adoption of the families that if approved.

Speaker Change: These include first exploring a compassionate use I E. When we have been approached by multiple institutions and are discussing using the famous that under a compassionate use I D for specific patient populations, but does not do well with other available anti coagulants.

Speaker Change: And second continued shortages of citrate supply and potential supply chain issues with heparin.

Speaker Change: Healthcare providers are enquiring about the timely availability of families start given the recurrent heparin and citrate shortages.

Vincent Angotti: Dr. Aslan will provide some more information on this. as well as around the ongoing contracting with the new site. will not be providing clinical study enrollment updates until we attain the 17 patient mark, which is the milestone to achieve the next tranche of finance.

Speaker Change: Dr. Adam will provide some more information on this as.

Speaker Change: As well as around the ongoing contracting with the new sites.

Speaker Change: We will not be providing clinical study enrollment updates until we obtain the 17 patient Mark which is the milestone to achieve the next tranche of financing.

Vincent Angotti: Before I turn the call over to Dr. Aslam to provide some additional details on clinical activities. Let me remind you that if approved.

Speaker Change: Before I turn the call over to Doctor asked him to provide some additional details on our clinical activities.

Speaker Change: We remind you that if approved <unk>.

Vincent Angotti: NIAID would become the only FDA-approved regional anticoagulant for use during continuous renal replacement therapy. There are many disadvantages to the currently used products, heparin, which is systemic in nature, and citrate, which is being used off label. Through conversations with many nephrologists, we believe that NIAID would fill a significant unmet medical need during renal replacement therapy.

Speaker Change: <unk> would become the only FDA approved regional anti coagulate for use during continuous renal replacement therapy.

Speaker Change: There are many disadvantages to the currently used products heparin, which is systemic in nature and citrate, which is being used off label.

Speaker Change: Through conversations with many Nephrologists, we believe that NIAID would fill a significant unmet medical need joining renal replacement therapy.

Shakil Aslam: I'll now hand the call over to Dr. Aslam. Thank you. The new site engagement has been promising, as expected, as we shift away from the profile of the legacy sites to new target profiles previously designed. To provide some clarity on the sites, we now have a total of eight actively screening Four legacy or old profile sites and four new target profiles. three of which just recently started. We expect to add five additional sites by mid-year, all with a new target. The four legacy sites are not expected to make a significant contribution to the study, so the overwhelming majority of the study enrollment will be coming from the new.

Doctor atom: Now I'll hand, the call over to Doctor atom.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Thank you Vince the new site engagement has been promising as expected as we shift away from the profile.

Speaker Change: The legacy sites, two new target profile as previously described.

Speaker Change: To provide some clarity on the sites. We now have a total of eight actively screening sites.

Speaker Change: For legacy at old profile sites, and four new target site.

Speaker Change: Gotta get profile sites New York.

Speaker Change: Which just recently started screening.

Speaker Change: We expect to add five additional sites by mid year, all with the new target site profile.

Speaker Change: The four legacy sites I would not expect it to make a significant contribution to this study. So the overwhelming majority of the study enrollment will be coming from the new sites.

Shakil Aslam: The five new expected sites are currently reviewing the clinical trial agreement. and Related Budgets for the As a reminder, administrative efficiency was one of the key criteria of CISO. and this has proven to be helpful. These sites are all large academic institutions. and most have higher TRRD. than any of the like. We expect to have all these sites activated and screening patients before our next quarter.

Speaker Change: And the five new expected sites are currently reviewing the clinical trial agreements.

Speaker Change: And related to budget for the study.

Speaker Change: And have advanced far more quickly than any of the legacy sites.

Speaker Change: As a reminder, our new state of efficiency was one of the key criterion of site selection.

Speaker Change: This has proven to be helpful.

Speaker Change: Besides that all large academic institutions and most have higher volumes.

Speaker Change: Volumes than any of the legacy sites.

Speaker Change: We expect to have all these sites activated and screening patients before our next quarterly call.

Shakil Aslam: I would like to now provide some details about the Compassionate Use IDE we are exploring at the request of a large institution in the South. The physicians see an immediate and compelling need for a subset of specific patients that do not do well with currently used antidepressants. and Neid Ennard. We have had several discussions with this institution on potentially going to the FDA to request a compassionate use IDE for these.

Speaker Change: I would like to now provide some detail about the compassionate use.

Speaker Change: We are exploring at the request of a large institution in the South east.

Speaker Change: The physician see an immediate and compelling need for the subset of specific patients that do not move out but currently used anticoagulants.

Speaker Change: And need and alternatives.

Speaker Change: We have had several discussions with this institution on potentially going to the FDA to request a compassionate use IV for these patients.

Shakil Aslam: This is an opportunity to provide something to patients who have no other alternative during CRRT. And we are exploring the best approach to try to help these patients and their healthcare providers.

Speaker Change: This is an opportunity to provide something to patients who have no. Other alternative during CRD and we are exploring the best approach to try to help these patients and their health care providers.

Shakil Aslam: We do not have a timeline set, but wanted to share this information. And this was not the first such request we have had. It is evident that the current anticoagulants for CRRT are not ideal products. and there is currently no FDA approved regional anticoagulant on the market.

Speaker Change: We do not have a timeline set but wanted to share. This information at this was not the first such requests we have had it is evident that the current anticoagulants by CRT are not ideal products and there is currently no FDA approved regional anti coagulant on the market.

Shakil Aslam: We will provide more information on the Compassionate Youth ID. As we advance.

Speaker Change: We will provide more information on the compassionate use IV as we advance these discussions.

Vincent Angotti: And with that, I'll turn the call back over to Vince.

Speaker Change: And with that I'll turn the call back over to Vince.

Vincent Angotti: Thank you, Dr. Aslam. Before I hand the call over to Raffi, I want to reiterate our belief that the three critical risk elements Clinical, Regulatory, and Commercial for the NEPHRO program are low for a number of reasons. First, with over 30 years of use as an anticoagulant during CRRT in Japan and South Korea. We know Nifamistat's track record of efficacy and safety, minimizing the clinical risk. The trial design has been agreed with the FDA, including broader inclusion criteria and a reduced number of patients, all of which help minimize study execution risk. Second, we have a clear regulatory path, including breakthrough designation from the FDA, which has provided us with efficient access to the agency, leading to quick review and response time.

Vince: Thank you Doctor, Iceland before I hand, the call over to Rafi I want to reiterate our belief that the three critical risk elements.

Speaker Change: Nicole.

Speaker Change: Regulatory and commercial for the NEF for a program for low for a number of reasons.

Speaker Change: First with over 30 years of use as an anti coagulate during C. R. R T in Japan, and South Korea.

Speaker Change: We know in a famous that's track record of efficacy and safety.

Speaker Change: Minimizing the clinical risk.

Speaker Change: The trial design has been agreed with the FDA, including broader inclusion criteria and a reduced number of patients all of which helped minimize study execution risk.

Speaker Change: Second we have a clear regulatory path, including breakthrough designation from the FDA, which has provided us with efficient access to the agency.

Speaker Change: Leading to a quick review and response times.

Vincent Angotti: Lastly, while we know there's always commercial risk. We believe this is mitigated given the disadvantages of the products currently being used for anti-coagulation of the CRRT circuit, namely, heparin and citrate. As you heard from Dr. Aslam, there's a clear need for an FDA-approved regional anticoagulant.

Speaker Change: Lastly, while we know Theres always commercial risk. We believe this has mitigated given the disadvantages of the products currently being used for anti coagulation of the C. R. R T circuit.

Speaker Change: Namely heparin and citrate.

Speaker Change: As you heard from Doctor, Arizona, Theres, a clear need for an FDA approved regional anti coagulate.

Raffi Asadorian: I'll now hand the call over to Raffi for a financial update. Thank you, Vince. As mentioned, we have been highly focused on delivering a completed DEFRA study by the end of this year. To support achievement of this objective, we continue to reduce our operating expenses. Accordingly, we are reducing the lower end of our previously communicated 2025 expected cash operating expense guidance to now be in the range of $17 million to $19 million. Are cash operating expenses or combined R&D and SG&A expenses for the first quarter of 2025 totaled $2.9 million compared to $4.2 million for the first quarter of 2024?

Rafi: I'll now hand, the call over to Rafi for financial update.

Rafi: Thank you Vince as mentioned, we have been highly focused on delivering a completed <unk> study by the end of this year.

Rafi: To support achievement of this objective we continue to reduce our operating expenses. Accordingly, we are reducing the lower end of our previously communicated 2025 expected cash operating expense guidance to now be in the range of $17 billion to $19 billion.

Rafi: Our cash operating expenses or combined R&D and SG&A expenses for the first quarter of 2025 totaled $2 $9 million compared to $4 $2 billion for the first quarter of 2024.

Raffi Asadorian: Excluding non-cash, stock-based compensation expense, these amounts were $2.7 million for the first quarter of 2025, compared to $3.9 million for the first quarter of 2024. Decrease in cash operating expenses in the first quarter of 2025 was primarily due to reductions in personnel expense and other general and administrative expenses. Our cash balance at March 31, 2025 was $5.4 million or $9.8 million on a pro forma basis for the financing that closed on April 2. As a reminder, the financing was structured in three equal tranches of $4.925 million, with the first tranche received at the initial closing.

Rafi: Excluding noncash stock based compensation expense. These amounts were $2 $7 million for the first quarter of 2025 compared to $3 $9 million for the first quarter of 2024.

Rafi: Decrease in cash operating expenses in the first quarter of 2025 was primarily due to reductions in personnel expense and other general and administrative expenses.

Rafi: Our cash balance at March 31, 2025 was $5 $4 million or $9 $8 million on a pro forma basis for the financing that closed on April 2nd.

Rafi: As a reminder, the financing was structured in three equal tranches of $495 million with the first tranche received at the initial closing.

Raffi Asadorian: in the two additional tranches based on achieving an enrollment of 17 patients and 35 patients and with the stock trading above $0.73 per share. In total, the $14.8 million commitment is expected to be achieved later this year as we expect acceleration in enrollment rates given all the changes made to the Nefro CRRT study and the new sites that are coming online. This financing combined with the $5.4 million cash at March 31, 2025 should support the company through completion of the study anticipated by the end of the year.

Rafi: And the two additional tranches based on achieving an enrollment of 17 patients in 35 patients and with the stock trading above 73 per share.

Rafi: In total the $14 8 million dollar commitment is expected to be achieved later this year as we expect acceleration in enrollment rates given all the changes made to the <unk> study and the new sites that are coming online.

Rafi: This financing combined with the $5 4 million in cash at March 31, 2025 should support the company through completion of this study anticipated by the end of the year.

Vincent Angotti: I'll now turn the call back to Vincent. Thank you, Raffi.

Vince: I'll now turn the call back to Vince.

Unknown Executive: And I'd like to open the line for any questions you might have. Operator. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press start and the number 1 on your telephone keypad. And if you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star to the number 1 on your telephone keypad.

Vince: Thank you Rafi.

Vince: Like to open the line for any questions you might have.

Rafi: Operator.

Rafi: Thank you, ladies and gentlemen, I will now begin the question and answer session. If you would like to ask a question. Please press Star then the number one on your telephone keypad and if you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again. Please.

Rafi: Please press Star then the number one on your telephone keypad.

James Molloy: We have a question from James Molloy from Alliance Global Partners. Your line is open. Yes. Hi, guys.

Speaker Change: We have a question from James Molloy from Alliance Global Partners. Your line is open.

Rafi: Yes, hi, guys, it's Matt on for Jim.

Matt: It's Matt on for Jim. I was just wondering if the broader enrollment criteria have started to increase enrollment and if you've seen any of that and if you could get some color there. Thank you.

Rafi: Just wondering.

Rafi: <unk>.

Rafi: Broader enrollment criteria have started to train late in Q increased enrollment and if you've seen any of that and if you could give some color there. Thank you.

Vincent Angotti: Sure, well, I'll make a brief quick comment on the fact that we're not given any specifics on enrollment. I think Shakil can comment to you about how the broader criteria has increased the activity at the sites, not only the previous sites, but in particular the new sites moving forward.

Rafi: Sure well I'll make a brief quick comment on the fact that we're not giving any specifics on enrollment I think shaquille can comment to you about how the broader criteria has increased the activity at the sites.

Dr. Roslyn: Not only the previous sites, but in particular, the new sites moving forward Dr. Roslyn.

Shakil Aslam: Dr. Aslam? Yes, thanks, Vince. So absolutely. So the we have seen more activity, more patients passing through the first stage of their screening, which were previously being rejected because of not meeting some of the broader eligibility criteria. So, in terms of activity, we definitely seen increase in activity at our older sites as well as new. Unfortunately, that has not yet translated into new patients from our legacy. We are hoping that once we get all the new sites up and running, those expanded criteria will definitely yield higher numbers of eligible patients going forward. All right, got it.

Dr. Roslyn: Yes, Thanks Vince.

Rafi: Absolutely.

Rafi: So we.

Rafi: We have seen more activity more patients.

Rafi: Well I think through the first stage of their screening which were previously being.

Rafi: Rejected because of not meeting some of the broader liability criteria.

Rafi: So in terms of activity, we definitely see an increase in activity yet.

Rafi: Older sites as well as new sites.

Rafi: Unfortunately that has not yet translated into new patients from.

Rafi: Our legacy sites and we are hoping that a bunch of you'll get all the new sites up and running those to the expanded quite T J will indefinitely.

Rafi: The higher number yourself eligible patients going forward.

Speaker Change: Alright got it. Thank you guys for taking our question.

Shakil Aslam: Thank you guys for taking our questions. Shakil, I think you can also add a little color to that, that for the legacy sites outside of just the enrollment criteria that was expanded, there may have been other things impeding them from enrolling, again, on the legacy sites only. Right, absolutely. So that has been the issue with the types of patients that these sites have access to. So many of these patients continue to be coming from surgical ICUs, or cardiothoracic ICUs. So, although those broader inclusion criteria did give them with more flexibility in terms of when to enroll these patients and which patients would qualify, however, because of their overall dependence.

Speaker Change: Sure.

Speaker Change: So to I think it can also add a little color to that that for the legacy sites outside of just the enrollment criteria that was expanded there may have been other things competing them from enrolling again on the legacy sites only.

Speaker Change: Right, absolutely so that has been the issue.

Speaker Change: The types of patients that.

Rafi: These sites have access to.

Rafi: Many of these patients continued to be.

Rafi: Stemming from surgical ICU plastic icu's, so although those broad inclusion criteria did give them more flexibility in terms of when to enroll those patients and which patients.

Rafi: Would qualify.

Rafi: However, because of that.

Rafi: Overall dependence on this.

Shakil Aslam: Targeted Group where the background use of heptane is very high. It hasn't materialized as... But I think in the new sites that we have. different target patient populations. Those criteria will definitely give us a high.

Rafi: Target population.

Rafi: Background to use up happening is very high it hasn't materialized as much.

Rafi: But I think in the new sites that we have.

Rafi: Different target patient populations those criteria, we'll definitely give us a higher yield.

Rafi: Yeah.

Unknown Executive: Operator, no questions at this time.

Rafi: Operator.

Vincent Angotti: I would now like to turn the conference back to Vince. Please go ahead. Thank you, Chloe.

Speaker Change: This time I would now like to turn the conference back to James. Please go ahead.

Vincent Angotti: Again, thank you for joining our first quarter earnings call. We're excited about the progress we've made in continued alignment with the FDA, again, with the goal of completing the NAFRO trial this year in 2025, with an approval of NIAID targeted for 2026. Again, we look forward to providing additional updates on our progress. And thank you for joining us.

James Molloy: And again, thank you for joining our first quarter earnings call. We're excited about the progress we've made in continued alignment with the FDA.

James Molloy: Again with the goal of completing the macro trial. This year in 2025 with an approval of my targeted for 2026 again, we look forward to providing additional updates on our progress and thank you for joining us that concludes our call.

Unknown Executive: That concludes our call. This concludes today's conference. Thank you for participating. You may now disconnect.

James Molloy: This concludes this concludes today's conference. Thank you for participating you may now disconnect.

James Molloy: [music].

James Molloy: Yeah.

James Molloy: [music].