Q1 2025 Palvella Therapeutics Inc Earnings Call
Okay.
Operator: Good day and thank you for standing by.
Speaker Change: Good day, and thank you for standing by and welcome to probably all of US first quarter 2025 financial results and corporate update conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during a special need to press star one on your telephone you will then hear an automated message revising your hand is raised to withdraw your question.
Operator: Welcome to Palvella's first quarter 2025 financial results and corporate update conference call. At this time, all participants are in a listen-only mode.
Operator: After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.
Operator: Please be advised today's conference is being recorded.
Please press Star one again, please be advised today's conference is being recorded I would now.
Bohan Wei: I would like to turn the conference over to your speaker today. Bohan Wei, please go ahead. Thank you, operator.
Speaker Change: I'd like to turn the conference over to discrete today behind White. Please go ahead.
Bohan Wei: Good morning and thank you for joining the Palvella Therapeutics Q1 2025 Financial Results and Corporate Update Call. As a reminder, our press release summarizing today's updates is available under the investor section of our website at www.palvellatx.com.
Speaker Change: Thank you operator good morning.
And thank you for joining the Cabela Therapeutics, Q1, 2025 financial results and corporate update call.
Speaker Change: As a reminder, our press release summarizing today's update is available under the investors section of our website at Www Dot have I'll, let TX dot com.
Bohan Wei: On today's call, we are joined by Wes Coffinan, our Chief Executive Officer, Jeff Martini, our Chief Scientific Officer, and Matt Korenberg, our Chief Financial Officer. Before we begin, please note that today's remarks may include forward-looking statements regarding our development programs, regulatory plans, commercial outlook, and financial performance. These statements are based on current assumptions and subject to risks and uncertainties that may cause actual results to differ.
Speaker Change: Today's call. We are joined by West Kaufmann, Our Chief Executive Officer, Jeff Martini, Our Chief Scientific Officer and Matt.
Matt Kornberg: Kornberg Chief Financial Officer.
Matt Kornberg: Before we begin please note that today's remarks may include forward looking statements regarding our development programs regulatory plans and commercial outlook and financial performance.
Matt Kornberg: Humans are based on current assumptions and subject to risks and uncertainties that may cause actual results to differ please refer to our filings with the SEC for more information.
Bohan Wei: Please refer to our filings with the SEC for more information.
Wes Coffinan: And now, I'll turn the call over. Thank you, Bohan. Good morning, everyone. Thank you all for joining us today.
Wes: Now I'll turn the call over to Wes.
Thank you Bob and good morning, everyone and thank you all for joining us today.
Wes Coffinan: This past Monday morning, the Palvella team, including our scientific and clinical collaborators, investors, senior advisors, board members, and family members converged on New York City for the ringing of NASDAQ's opening bell. Palvella becoming a publicly traded company approximately five months ago is an important milestone for the company and it is a testament to Palvella's vision of building the leading rare disease biotech company focused on serious genetic skin diseases with no FDA approved therapy. It is also a testament to our mission, which is to relentlessly serve those rare disease patient populations who have historically been neglected, and to our strategy, which is to focus our therapeutic development efforts, and eventually our commercial efforts, exclusively on those diseases with no FDA-approved therapy.
Speaker Change: This past Monday morning, the Paul Dell, let team, including our scientific and clinical collaborators investors senior adviser as board members and family members converged on New York City for the ranking of Nasdaq's opening Bell.
Speaker Change: Called Bella, becoming a publicly traded company approximately five months ago is an important milestone for the company and it is a testament to <unk> vision of building the leading rare disease biotech company focused on serious genetic skin diseases with no FDA approved therapies.
Speaker Change: It is also a testament to our mission, which is to relentlessly serve those rare disease patient populations, who have historically been neglected and to our strategy, which is to focus our therapeutic development efforts and eventually our commercial efforts exclusively on those diseases with no FDA approved.
Wes Coffinan: We want to be first for patients. Becoming public is furthermore a testament to the Palvella management team who have turned mere concepts into breakthrough designated medicines while turning the challenges of drug development and rare complex diseases into triumphs. The collective sentiment at NASDAQ that day was that our substantial progress to date, including both developing a late-stage pipeline with Ketorin-Rapamycin and a compelling platform with Ketorin is truly only the beginning for Palvella.
Speaker Change: Therapies.
Speaker Change: We want to be first for patients.
Speaker Change: The comment public as Furthermore, a testament to the <unk> management team, who have turned mirror concepts into breakthrough designated medicines, while turning the challenges of drug development in rare complex diseases in two trials the collective sentiment at NASDAQ that day was that our substantial progress to do.
Speaker Change: Right.
Speaker Change: Putting both developing our late stage pipeline.
Speaker Change: With Quito and Rapamycin.
Speaker Change: And a compelling platform with Q2 arm is truly only the beginning for <unk>. Our hope is to return to NASDAQ1 day in the near future to.
Wes Coffinan: Our hope is to return to NASDAQ one day in the near future. celebrate the first regulatory approval of Ketorin 3.9% rapamycin anhydrous gel, a milestone we believe we're even closer to achieving based on today's exciting update that we have exceeded our enrollment target of 40 patients in the landmark Selva phase 3 study of Ketorin rapamycin to the treatment of microcystic lymphatic malformation.
Speaker Change: To celebrate the first regulatory approval of Keytruda and three 9% Rapamycin anhydrous Joe.
Speaker Change: A milestone we believe we're even closer to achieving based on today's exciting update that we have exceeded our enrollment target of 40 patients in the landmark Silva Phase III study of key turn rapamycin to the treatment of Microsoft's tick lymphatic malformations.
Wes Coffinan: Four quarters, four anticipated high-impact milestones. Moving left to right, microcystic lymphatic malformations are a serious, rare, chronically debilitating, and lifelong monogenic disease. The genetics, disease biology, target skin tissue, and natural history of microcystic lymphatic malformations have all been well characterized. Genetically, they're caused by PI3K mutations. Biologically, the PI3K mutation results in the hyperactivation of the mTOR pathway, which ultimately produces malformed vessels that protrude through the skin, as you can see from the picture here on the slide. The target skin tissue is the dermis, which is the site of disease origin of cystic lymphatic malformation. From a natural history perspective, the disease is present at birth, has no spontaneous regression, and is proliferative and progressive.
Speaker Change: Yeah.
Speaker Change: Four quarters for anticipated high impact milestones moving left to right.
Speaker Change: Microcyst take lymphatic malformations are a serious rare chronically debilitating and lifelong monogenic disease, the genetics disease biology target skin tissue and natural history of Microsystems lymphatic malformations have all been well characterized genetically they're caused by <unk>.
Speaker Change: <unk> biologically the <unk> three K mutation results in the hyper activation of the inventory pathway, which ultimately produces now foreign vessels that protrude through the skin as you can see from the picture here on the slide.
Speaker Change: The target skin tissue as the dermis, which is the site of disease origin, just take lymphatic mapping formations from our natural history perspective, the diseases present at birth is no spontaneous regression and as proliferative and progressive.
Wes Coffinan: The major clinical burden to these patients is referred to as lymphorrhea, which is the leaking or discharge of internal lymphatic fluid onto the skin or into the soft tissues. The result of this is that these patients are at persistent risk of serious infections, including acute cellulitis, which can cause repeated hospitalizations.
Speaker Change: The major clinical burden to these patients is referred to as Lymphuria, which is the weakening or discharge of internal lymphatic fluid onto the skin or into the soft tissues. As a result of this is that these patients are at persistent risk of serious infections, including acute cellulitis, which can cause repeated hospital.
Wes Coffinan: There are, unfortunately, no FDA-approved therapies for these patients. We'll provide an update today on our Phase 3 CELVA study of Ketorin rapamycin, which has received FDA's Breakthrough Therapy, Fast-Track, and Orphan Drug designations.
Speaker Change: <unk>.
Speaker Change: There are unfortunately, no FDA approved therapies for these patients we will provide an update today on our phase III <unk> study with Keytruda and Rapamycin, which has received FDA breakthrough therapy fast track and orphan drug designations, we anticipate top line results from this study in Q1.
Wes Coffinan: We anticipate top-line results from the study in Q1, 2020. Moving to cutaneous venous malformations, the disease pathology of cutaneous venous malformations is similarly driven by the mTOR pathway, caused by mutations in either PI3K or TI2, which leads to overactivated mTOR signals. Cutaneous venous malformations are a serious disease and they're characterized by dysregulated growth of malformed veins in the skin, which can cause functional impairment and bleed. Because of the genetic driver of the disease, cutaneous venous malformations continue to grow over time and do not spontaneously regress.
Speaker Change: 2026.
Speaker Change: Moving to cutaneous venous malformations, the disease pathology of cutaneous venous malformations is similarly, driven by the inventory pathway caused by mutations in either <unk> or tie too which leads to over activated them towards signalling.
Speaker Change: Cutaneous peanuts malformations are a serious disease and they're characterized by dis regulated growth of malformed games in the skin, which can cause functional impairment and bleed.
Speaker Change: Because of the genetic driver of the disease cutaneous venous malformations continue to grow over time and do not spontaneously regress.
Wes Coffinan: There are unfortunately no FDA approved therapies for patients afflicted with cutaneous venous malformations. We'll update today on our Phase 2 TOIVA study of Ketorin rapamycin, which has received FDA's fast track designation, and we anticipate the study will report top line results in Q4 of 2025. Importantly, if approved, we believe, based on market research, that cutorine rapamycin has the potential to be first-line therapy and standard of care for patients with both microcystic lymphatic malformations and cutaneous venous malformation. Our pipeline beyond our two lead programs in microcystic LMs and cutaneous venous malformations continues to make tangible progress under the strong leadership of our Chief Scientific Officer, Dr. Jeff Martini.
Speaker Change: There are unfortunately, no FDA approved therapies for patients afflicted with cutaneous Phoenix malformations.
Speaker Change: Well update today on our phase III toy the study of Keytruda and Rapamycin, which has received FDA fast track designation and we anticipate the study will report topline results in Q4 of 2025.
Speaker Change: Importantly, if approved we believe based on market research that couture and Rapamycin has the potential to be first line therapy and standard of care for patients with both micro cystic lymphatic not formations and cutaneous venous malformations.
Speaker Change: Our pipeline beyond our two lead programs and micro assistant LMS and cutaneous venous malformations continues to make tangible progress under the strong leadership of our Chief Scientific Officer, Dr. Jeff Martini.
Wes Coffinan: In the third panel on this slide, we truly believe Ketorin rapamycin can represent a pipeline and a product with clinical and commercial potential that extends well beyond microcystic lymphatic malformations and cutaneous venous malformations.
Speaker Change: And the third panel on this slide we truly believed could turn rapamycin can represent a pipeline in a product with clinical and commercial potential that extends well beyond microsystems lymphatic mapping patients in cutaneous venous malformations.
Wes Coffinan: We anticipate unveiling our third target clinical indication for Ketorin rapamycin in the second half of this year. Moving to the fourth panel, we also anticipate unveiling our next Ketorin program in the second half of this year, which would be our second product candidate from the Ketorin platform after Ketorin rapamycin. We see both our next Cutorin rapamycin indication and our next Cutorin platform program as key near-term value drivers for Palvella.
Speaker Change: We anticipate unveiling our third target clinical indication for key turn rapamycin in the second half of this year.
Speaker Change: Moving to the fourth panel, we also anticipate unveiling our next <unk> program in the second half of this year, which would be our second product candidate from the couture and platform after Quito and Rapamycin.
Speaker Change: We see both our next Q torn rapamycin indication and our next few tour and platform program as key near term value drivers for Cabelas, Dr. Martina and will provide updates on our progress on both programs on this call.
Wes Coffinan: Dr. Martini will provide updates on our progress on both programs on this call. Our strong momentum at Palvella is highlighted first by what's presented at the top of the slides. We have now exceeded our enrollment goal of 40 patients in our landmark Phase 3 study evaluating Ketorin rapamycin for the treatment of microcystic LM. On our phase two TOIVA study of cutorin rapamycin for the treatment of cutaneous VMs, we now have six sites open and enrolling and top line readout is anticipated in Q4 2025. We recently participated in the Society of Investigative Dermatology and the International Society for the Study of Vascular Anomalies meetings, where we gathered new insights and deepened our relationships with scientific and clinical leaders in the field.
Speaker Change: Our strong momentum at Pollo, the Ela as highlighted <unk>.
Speaker Change: By what's presented at the top of the slides we have now exceeded our enrollment goal of 40 patients and our landmark phase III study evaluating Quito and Rapamycin for the treatment of Microcyst Gal apps.
Speaker Change: On our phase two toilets study of key torn rapamycin for the treatment of cutaneous Vms, we now have six sites open and enrolling and topline readout as anticipated in Q4 2025.
Speaker Change: We recently participated in a society of investigative dermatology and the International Society for the study of vascular anomalies meetings, where we gather new insights and deepened our relationships with scientific and clinical leaders in the field.
Wes Coffinan: From an organizational standpoint, we've added Jason Burdett to our executive team as SVP of CMC and Technical Operations. Jason brings 30 years of experience in global pharmaceutical development, technical operations, and supply chain to Palvella, and we're thrilled to have him on our senior team as we approach planned NDA submission next year and, if approved, standalone U.S. commercialization in 2027.
Speaker Change: From an organizational standpoint, we've added Jason Berg to add to our executive team as SVP of CMC and technical operations. Jason brings 30 years of experience in global pharmaceutical development technical operations and supply chain to Paul Vela and we're thrilled to have them on our senior team as we approach.
Speaker Change: <unk> planned NCA NDA submission next year, and if approved Standalone U S commercialization in 2027.
Wes Coffinan: We also continue to make progress on our search for an exceptional Chief Commercial Officer with that higher plan for the second half of this year. For this position, we're seeking a proven leader with experience launching novel therapies that were first to market in serious rare diseases. In addition to the proven experience commercializing in rare diseases consistent with Palvella's historical and current model of operating with capital efficiency, we are seeking to recruit a leader who can lead a launch in a thoughtful and capital-efficient manner.
Speaker Change: We also continue to make progress on our search for an exceptional chief commercial officer with that higher planned for the second half of this year for this position, we're seeking a proven leader with experience launching novel therapies that were first to market in serious rare diseases. In addition to the proven.
Experience commercializing in rare diseases, consistent with <unk> historical and current model of operating with capital efficiency. We are seeking to recruit a leader who can lead to launch in a thoughtful and capital efficient manner. We look forward to keeping everyone updated on our progress and we've also expanded our intellectual.
Wes Coffinan: We look forward to keeping everyone updated on our progress.
Wes Coffinan: And we've also expanded our intellectual property portfolio with the issuance of our fifth U.S. patent with anticipated claims from that patent into 2038.
Speaker Change: Property portfolio with the issuance of our fifth U S patent with anticipated claims from that pattern into 2038.
Wes Coffinan: Moving to our lead program, Ketorin rapamycin for the treatment of microcystic lymphatic malformations. I'm pleased to share thanks to the dedicated efforts of our phase three investigators and the research coordinators at clinical trial sites, our patient advocacy collaborators, the highly committed Pallvella clinical operations team, and most of all the patients living with microcystic lymphatic malformations that we have exceeded enrollment of 40 patients in our pivotal phase three trial evaluating Ketorin rapamycin in patients with microcystic lymphatic malformations. The study has generated strong interest with all 13 sites, including institutions such as Stanford University, the Cleveland Clinic, Children's Hospital of Philadelphia, the Mayo Clinic, to name a few, all enrolling patients in this study.
Speaker Change: Moving to our lead program <unk> Rapamycin for the treatment of Microsystems lymphatic math formations I am pleased to share. Thanks to the dedicated efforts of our phase III investigators and the research coordinators at clinical trial sites are patient advocacy collaborators the highly committed Paul Dell our clinical operations.
Speaker Change: <unk> team and most of all the patients living with Microsystems lymphatic malformations that we've exceeded enrollment of 40 patients in our pivotal phase III trial evaluating future on rapamycin and patients with Microsystems gallons.
Speaker Change: This study has generated strong interest with all 13 sites, including institutions, such as Stanford University, The Cleveland Clinic Children's Hospital of Philadelphia, The Mayo clinic to name a few.
Speaker Change: All enrolling patients into this study.
Wes Coffinan: In terms of concluding enrollment, we are anticipating closing study enrollment in June after all pending enrolled patients have completed screening. As a result of the diligent efforts and commitment from investigators and sites beyond these pending enrolled patients, there is additional potential for more patients to enter the study. We believe that it is in Palvella's best interest to honor the site's work and their relationships with patients and accommodate additional patients into the study in a timely manner. At the same time, now that we've exceeded our enrollment target of 40 patients, our goal is to bring the Phase 3 trial to an orderly close while communicating closely and clearly with our study investigators and sites on defined study closure timelines.
Speaker Change: In terms of concluding enrollment we anticipating closing study enrollment in June after all pending enrolled patients have completed screening.
Speaker Change: As a result of the diligent efforts and commitment from investigators and sites beyond these pending enrolled patients there is additional potential for more patients to enter the study.
Speaker Change: We believe that is in <unk> interest to honor the sites work and their relationships with patients and accommodate additional patients into this study in a timely manner.
Speaker Change: At the same time now that we have exceeded our enrollment target of 40 patients. Our goal is to bring the phase III trial to an orderly close while communicating closely and clearly with our study investigators and sites on defined at study closure timelines.
Wes Coffinan: As you can see from the graphic at the bottom of the slide, if patients meet study eligibility criteria, they are then enrolled into the study. Patients first move through an 8-week baseline period, before moving to the efficacy evaluation period of 24 weeks, followed by the treatment extension period of 24 weeks.
Speaker Change: As you can see from the graphic at the bottom of slide if patients meet study eligibility criteria. Today are then enrolled into the study.
Speaker Change: Martin first move through an eight week baseline period before moving to the efficacy evaluation period of 24 weeks followed by the treatment extension period of 24 weeks, we look forward to providing more detail on final patient enrollment numbers at the time of achieving full enrollment in the near future.
Wes Coffinan: We look forward to providing more detail on final patient enrollment numbers at the time of achieving full enrollment in the near future. Overall, we are pleased that we've been able to accomplish our Phase 3 study enrollment goals while remaining on track to report top-line data in the first quarter of 2026.
Speaker Change: Overall, we are pleased that we've been able to accomplish our phase III study enrollment goals, while remaining on track to report topline data in the first quarter of 2026. In addition, as you'll hear from our CFO, Matt Kornberg later in this call. We are also staying on track for our 2025 cash.
Wes Coffinan: In addition, as you'll hear from our CFO Matt Korenberg later in this call, we are also staying on track for our 2025 cash expense and long-term cash runway.
Speaker Change: Expense and long term cash runway forecast.
Wes Coffinan: Moving to our regulatory overview, we've all been carefully monitoring the recent and ongoing changes at FDA and the Palvella Management Team will continue to remain vigilant in doing so along with our regulatory advisors. For Palvella's Cutorin rapamycin, we wanted to provide additional clarity that our program is regulated by the Division of Dermatology and Dentistry, which is within the Center for Drug Evaluation Research, or CDER, which you can see listed at the top of this slide. Importantly, the Division of Dermatology and Dentistry continues to be led by Dr. Jill Lindstrom, a dermatologist and the Division Director who began as Director of the Division in late 2023 and continues in that role today.
Speaker Change: Yeah.
Speaker Change: Moving to our regulatory overview, we've all been carefully monitoring the recent and ongoing changes at FDA and the <unk> management team will continue to remain vigilant in doing so along with our regulatory advisors.
Speaker Change: For Paul Dallas, <unk> Rapamycin, we wanted to provide additional clarity that our program is regulated by the division of dermatology and dentistry, which is within the center for drug evaluation research, where Cedar, which you can see listed at the top of this slide.
Accordingly, the division of Dermatology and Dentistry continues to be led by Dr. Jim Lindstrom, a dermatologist in the Division director, who began as director of the Division in late 2023 and continues in that role today.
Wes Coffinan: Due to our plan 505B2 pathway for our NDA submission, we anticipate division level leadership, in this case Dr. Lindstrom, would be responsible for the NDA review and approval decision. So while there have been many changes across the FDA that we've all read about and that we continue to track, there has, by contrast, been consistency for Palvella in terms of, number one, the division regulating Palvella's program, dermatology and dentistry, and number two, the leadership of that division, in this case, Dr. LeBaron. As a reminder, assuming positive Phase 3 data, we anticipate that our program could potentially be expedited as a result of some of the designations we've achieved over the years.
Speaker Change: Due to our planned 505 btu pathway for our NDA submission, we anticipate deliberate division level leadership in this case, Dr. Lindstrom would be responsible for the NDA review and approval decision.
Speaker Change: So while there have been many changes across the FDA that we've all read about and that we continue to track their hand as by contrast, and consistency for called Ela in terms of number one the division regulating pull those program dermatology in dentistry and number two the leadership of that Division and this case Dr. Lindstrom.
Speaker Change: As a reminder, assuming positive phase III data, we anticipate that our program could potentially be expedited as a result of some of the designations we've achieved over the years and.
Wes Coffinan: In Q4 of 2023, we were awarded FDA's Breakthrough Therapy Designation based on the results from our Phase 2 Baseline Controlled Single-Arm Study of 12 patients. Breakthrough Therapy designation was added to our previously granted Fast-Track and Orphan Drug designation. Additionally, out of 51 applications received by FDA's Orphan Products Grants Program in fiscal year 2024, Palvella's Phase III Selva trial was one of just seven clinical programs and the only Phase III study to be named an awardee of a non-dilutive FDA grant. In our case, we anticipate up to $2.6 million from the FDA over multiple years in non-dilutive funding to support the Phase III study.
Speaker Change: In Q4 of 2023, we were awarded Fda's breakthrough therapy designation based on the results from our phase two baseline controlled single arm study of 12 patients.
Speaker Change: Through therapy designation was added to our previously granted fast track and orphan drug designations. Additionally out of 51 applications received by Fda's orphan products grants program in fiscal year 2024, <unk> Phase III Silva trial was one of just seven clinical programs in the.
Speaker Change: The only phase III study to be named an awardee of a non dilutive FTA grants in our case, we anticipate up to $2 6 million from the FTA over multiple years and non dilutive funding to support the phase III study.
Wes Coffinan: Moving to the bottom of the slide, in terms of the regulatory environment for our other planned pipeline programs, the Palvella team is closely monitoring emerging regulatory frameworks. including a newly proposed plausible mechanism accelerated approval pathway for certain rare diseases that has been publicly highlighted at a conceptual level by Commissioner Dr. Marty McCary. We were encouraged by the comments about the need to expedite therapies to patients living with rare, ultra-rare, and oftentimes serious diseases, and we will continue to follow updates from FDA on these new pathways and their potential relevance to our earlier stage program.
Speaker Change: Moving to the bottom of this slide in terms of the regulatory environment for our other planned pipeline programs called Ela team is closely monitoring emerging regulatory frameworks, including a newly proposed plausible mechanism accelerated approval pathway for certain rare diseases.
Speaker Change: It has been publicly highlighted at a conceptual level by commissioner Dr. Marty Macquarrie, we were encouraged or provide the comments about the need to expedite therapies to patients living with rare ultra rare and oftentimes serious diseases and we will continue to follow updates from FDA on these new pathways.
Speaker Change: And their potential relevance to our earlier stage programs.
Wes Coffinan: I'd like to now turn to the commercial opportunity, We See Ahead for Ketorin Rapid.
Speaker Change: I'd like to now turn to the commercial opportunity. We see ahead for key turn Rapamycin.
Wes Coffinan: As a reminder, at a high level, Palvella firmly believes that the opportunity to develop and commercialize in serious rare diseases where Palvella can introduce the first FDA-approved therapy can represent very attractive commercial opportunities. especially considering the lower competitive intensity dynamics in these markets compared to more conventional and competitive rare disease markets which are already well served as a function of having existing approved therapies in most cases.
Speaker Change: As a reminder, at a high level, Paul Bellis firmly believes that the opportunity to develop and commercialize and serious rare diseases, where Paul Delek and introduce the first FDA approved therapy can represent very attractive commercial opportunities, especially considering the lower competitive intensity dynamics in these.
Speaker Change: <unk> compared to more conventional and competitive rare disease markets, which are already well served as a function of having existing approved therapies. In most cases as this slide shows from Microsystems lymphatic malformations are recent epidemiology study conducted by multi.
Wes Coffinan: As this slide shows, for microcystic lymphatic malformations, a recent epidemiology study conducted by a multidisciplinary team that leveraged an extensive medical claims database resulted in the following estimates. In terms of estimated diagnosed U.S. prevalence of microcystic LMs, the study indicated that there could be greater than 44,000 diagnosed U.S. patients. figures that are largely in line with Paul Vella's previous efforts. In terms of estimated annual incidence of microcystic LMs, the study indicated that there could be 1,500 or more new microcystic LM cases per year.
Speaker Change: Scenario team that leverage <unk> extensive medical claims database resulted in the following estimates in terms of estimated diagnose U S prevalence of Microsystems LMS. The study and have indicated that there could be greater than 44000 diagnosed <unk> patients figures that are largely in line with Paul.
Speaker Change: As previous estimates in terms of estimated annual incidence of Microsystems LMS. The study indicated that there could be 500 or more new microsystems <unk> cases per year.
Wes Coffinan: When taking these prevalence and incidence estimates and overlaying them with anticipated orphan pricing levels, the data supports that microcystic lymphatic malformations could be a multi-billion dollar total addressable market in the United States. Importantly, the poster also indicated that about one-third of diagnosed patients are currently managed at vascular anomaly centers, which are already established centers of excellence for diagnosing and treating microcystic lymphatic malformations and other vascular malformations.
Speaker Change: When taking these prevalence and incidence estimates and overlaying them with anticipated orphan pricing levels. The data supports that microsystems lymphatic malformations could be a multibillion dollar total addressable market in the United States Importantly, the posts are also has also indicated that about one third of diagnosis.
Speaker Change: <unk> are currently managed at vascular anomalies centers, which are already establish centers of excellence for diagnosing and treating microsystems lymphatic malformations and other vascular malformations, we look forward to providing more information related to the commercial opportunity and <unk> commercial planning as we onboard.
Jeff Martini: We look forward to providing more information related to the commercial opportunity and Palvella's commercial planning as we onboard a chief commercial officer in the coming With that, I'll turn it over to our Chief Scientific Officer, Dr. Jeff Martini. Thank you, Wes.
Speaker Change: A chief commercial officer in the coming months with that I'll turn it over to our Chief Scientific Officer, Dr. Jeff Martini.
Jeff Martini: In April, I had the opportunity to represent Palvella at the International Society for the Study of Vascular Anomalies, or ISVA, conference in Paris, the leading global scientific and medical forum focused on vascular malformations, including microcystic lymphatic malformations and cutaneous venous malformations. While there, I met with many of the field's foremost clinicians to discuss our two lead indications, MLMs and CVMs, as well as other serious rare skin diseases that may be strong candidates for Ketorin rapamycin and future Ketorin-based therapies. Several themes emerged that reinforced the direction we're headed. First, the field is clearly moving towards targeted therapeutic approaches based on the underlying genetic drivers of each vascular anomaly.
Speaker Change: Thank you S. In April I had the opportunity to represent <unk> at the International Society for the study of vascular anomalies or <unk> conference in Paris, the leading global scientific and medical forums focused on vascular malformations, including micro cystic lymphatic malformations and cutaneous venous malformations.
Speaker Change: While there I met with many of the fields foremost clinicians to discuss our two lead indications mlm's with CBS as well as other serious rare skin diseases that may be strong candidates for <unk> and future <unk> based therapies.
Speaker Change: Several themes emerge that reinforce the direction we're headed.
Speaker Change: <unk>.
Speaker Change: The field is clearly moving towards targeted therapeutic approaches based on the underlying genetic drivers of each vascular anomaly second theres, a real need for therapies that can improve efficacy, while reducing the systemic side effects associated with current treatments. Many of which were originally developed for internal infiltrative diseases right.
Jeff Martini: Second, there is a real need for therapies that can improve efficacy while reducing the systemic side effects associated with current treatments, many of which were originally developed for internal infiltrative diseases rather than localized cutaneous lesions. And third, there's a significant opportunity to expand treatment options across a broader spectrum of cutaneous vascular malformations, both within and outside the mTOR pathway, which we are actively pursuing as part of our pipeline expansion activities. These insights continue to support the potential. Torrent platform and help guide how we prioritize future indications within our development strategy.
Speaker Change: Other than localized cutaneous lesions and third there is a significant opportunity to expand treatment options across a broader spectrum of cutaneous vascular malformations, both within and outside the <unk> pathway, which we are actively pursuing as part of our pipeline expansion activities.
Speaker Change: These insights continued to support the potential of <unk>.
Speaker Change: Torrent platform and help guide, how we prioritize future indications within our development strategy.
Jeff Martini: Moving on to our clinical trial for cutaneous venous malformations. Our TOIVA study in CVMs is actively enrolling. This single arm baseline control trial includes patients age six and over and evaluates both clinician and patient reported outcomes. The purpose of the study is to one, evaluate safety and tolerability and two, determine which endpoints are most sensitive to change with cutorum rapamyza. We currently have six sites open, five of which came online in the past two months. Top-line data from Toiba are expected in the fourth quarter of this year.
Speaker Change: Moving on to our clinical trial cutaneous venous malformations or toy study and Cvs is actively enrolling this single arm baseline control trial includes patients aged six and over and evaluates both clinician and patient reported outcomes. The purpose of this study is to one evaluate.
Speaker Change: Safety, and Tolerability and to determine which endpoints are most sensitive to change with guitar Rapamycin. We currently have six sites are open fiber, which came online in the past two months top line data from <unk> are expected in the fourth quarter of this year.
Jeff Martini: As we continue to build momentum behind our LEAD programs, we're very focused on expanding our Ketorin platform through two distinct development tracks. First, we are advancing additional indications for Ketorin rapamycin itself. Based on what we've seen in the clinic and through ongoing dialogue with experts in the field, we view Ketorin rapamycin as a pipeline in a product. We've identified several diseases that fit the stringent Polvella criteria of serious, rare skin diseases that lack FDA-approved therapies and where mTOR dysregulation is a key driver of the disease pathology. These opportunities fit directly within Pavela's development strategy and offer the potential to further extend the impact of our lead assets.
Speaker Change: Yes.
Speaker Change: As we continue to build momentum behind our lead programs, we're very focused on expanding <unk> platform through two distinct development tracks first we are advancing additional indications for <unk> rapamycin itself based on what we've seen in the clinic and through ongoing dialogue with experts in the field, we view turnaround.
Speaker Change: And as a pipeline in a product we have identified several diseases that fit the stringent <unk> criteria of serious rare skin diseases that lack FDA approved therapies and were aimed towards this regulation is a key driver of the disease pathology.
Speaker Change: These opportunities fit directly within <unk> development strategy and offer the potential to further extend the impact of our lead asset.
Jeff Martini: Second, we're progressing a novel, Ketorin-based program that delivers a different therapeutic agent, or API. This effort is being guided by our close collaboration with many of the world's leading rare skin disease experts, clinicians who frequently see the limitations of current therapies, and who help us identifying promising targets both on, based on both biology and real-world treatment experience, including off-label use of systemic drugs. Internally, each candidate is rigorously evaluated through our disease selection process, which links biological rationale with commercial viability and alignment with Palvella's mission. Both programs, our next Ketorin-rapamycin indication, and our novel Ketorin asset, have identified lead diseases, and the latter has progressed to defined target molecules.
Speaker Change: Second we're progressing a novel <unk> based program that delivers a different therapeutic agent or API. This effort is being guided by our close collaboration with many of the worlds, leading rare skin disease experts clinicians, who frequently see the limitations of current therapies and who help us identifying promising targets both on.
Speaker Change: Based on both biology, and real world treatment experiencing experience, including off label use of systemic drugs internally each candidate as rigorously evaluated through our disease selection process, which links biological rationale with commercial viability and alignment with <unk> mission.
Speaker Change: Both programs are in execute our rapamycin indication and our novel <unk> asset have identified lead diseases and the latter has progressed to defined target molecules importantly, both are tracking towards potential fast track and breakthrough therapy designation eligibility and remain on schedule to be announced in the second half of this.
Jeff Martini: Importantly, both are tracking towards potential fast track and breakthrough therapy designation eligibility, and remain on schedule to be announced in the second half of this year.
Matt Korenberg: With that, I'll turn it over to Matt to provide a financial update. Thanks, Jeff. Before I turn to my financial comments, I first wanted to touch on one last point on Jeff's slide. In addition to all the key criteria that Jeff mentioned for choosing new products to develop, we also focus on diseases and programs that align with our capital efficient approach. For our next Q-Torin molecule, we're targeting generating phase 2 proof-of-concept data within two and a half years and for less than $10 million of clinical spend. We believe this approach allows Pelvella to deliver maximum benefit for both patients and value for investors.
Speaker Change: This year.
Speaker Change: With that I'll turn it over to Matt to provide a financial update.
Matt Kornberg: Thanks, Jeff.
Matt Kornberg: Before I turn to my financial comments I first wanted to touch on one last point on Jeff Slide.
Matt Kornberg: In addition to all the key criteria that Jeff mentioned for choosing new products to develop we also focus on diseases and programs that align with our capital efficient approach.
Matt Kornberg: For our next <unk> molecule, we're targeting generating phase II proof of concept data within two and a half years and for less than $10 million of clinical spend. We believe this approach allows <unk> to deliver maximum benefit for both patients and value for investors.
Matt Korenberg: Turning now to the financials, Palvella remains in a strong financial position, allowing us to continue confidently on our path towards successfully developing and commercializing drugs to treat rare diseases. Cashing cash equivalents as of March 31, 2025 were $75.6 million. We're fortunate to have two years of cash runway remaining following the oversubscribed pipe financing we completed in connection with our reverse merger at the end of 2024. led by BVF partners and Fraser Life Sciences and with participation from our major existing investors plus a roster of new investors, the financing combined with existing cash provided Palvella with a clear cash runway into the second half of 2027.
Matt Kornberg: Turning now to the financials <unk> remains in a strong financial position, allowing us to continue confidently on our path towards successfully developing and commercializing drugs to treat rare diseases.
Matt Kornberg: Cash and cash equivalents as of March 31, 2025.
Matt Kornberg: $75 6 million.
Matt Kornberg: We're fortunate to have two years of cash runway remaining following the oversubscribed type financing we completed in connection with a reverse merger at the end of 2024 led.
Matt Kornberg: Led by Bvs partners, and Frazier life Sciences, and with participation from our major existing investors plus a roster of new investors the financing combined with existing cash provided <unk> with a clear cash runway into the second half of 2027.
Matt Korenberg: Our current funding covers our major upcoming milestones, including the completion of our Phase III microcystic LM trial, completion of our Phase II cutaneous venous malformations trial, submission of the microcystic LM NDA filing and pre-commercialization efforts, as well as the addition of two new programs to the pipeline.
Matt Kornberg: Our current funding covers our major upcoming milestones, including the completion of our phase III Microsystems L. M trial completion of our phase II cutaneous venous malformations trial submission of the Microsystems, <unk> NDA filing and pre commercialization efforts as well as the addition of two new programs to the pipeline.
Matt Korenberg: Our cash spend and financial results for Q1 2025 were in line with our expectations, and I'll briefly review the results reported in this morning's press release. Research and development expenses were $4.1 million for Q1 2025 as compared to just under $1 million for the comparable period in 2024 with the increase driven primarily by the expenses associated with our microcystic LM and cutaneous VM clinical trials. General and administrative expenses were $3.8 million per Q1 2025, as compared to $800,000 for the comparable period in 2024. The increase here was driven by public company costs and the costs associated with our increased headcount.
Matt Kornberg: Our cash spend and financial results for Q1 2025 were in line with our expectations and I will briefly review the results reported in this morning's press release.
Matt Kornberg: Research and development expenses were $4 1 million for Q1, 2025 as compared to just under $1 million for the comparable period in 2024 with the increase driven primarily by the expenses associated with our Microsystems L M and cutaneous VM clinical trials.
Matt Kornberg: General and administrative expenses were $3 8 million for Q1 2025 as compared to 800000 for the comparable period in 2024. The increase here was driven by public company costs and the costs associated with our increased head count.
Matt Korenberg: Our net loss was $8.2 million or $0.74 per diluted share for Q1 2025 compared to a net loss of $2.7 million or $1.54 per diluted share for the comparable period in 2020. We remain on track to end the year with at least $55 million in cash and cash equivalents based on our current strategic operating plan. Our cash spend for 2025 remains on track for approximately $30 million in total cash spend.
Matt Kornberg: Our net loss was $8 2 million or <unk> 74 per diluted share for Q1, 2025 compared to a net loss of $2 7 million or $1 54 per diluted share for the comparable period in 2024.
Matt Kornberg: We remain on track to end the year with at least $55 million in cash and cash equivalents based on our current strategic operating plan.
Matt Kornberg: Our cash spend for 2025 remains on track for approximately $30 million in total cost cash spend.
Wes Coffinan: With that, I'll turn the call back over to Wes for some closing remarks before we open up the call for questions. Great. Thank you, Matt.
West Kaufmann: With that I'll turn the call back over to West for some closing remarks before we open up the call for questions.
Speaker Change: Great. Thank you Matt looking ahead, Paul Vela has a clear set of four high impact milestones, we expect topline data from our phase III <unk> study in Q1 2026, we expect topline data from our phase II to IV study in Q4 2002.
Wes Coffinan: Looking ahead, Palvella has a clear set of four high-impact miles. We expect top-line data from our Phase III Selva Study in Q1, 2026. We expect top-line data from our Phase II Toiva Study in Q4, 2025. And we have planned to announce two new Q-Torin programs in the second half of this year, an additional Q-Torin rapamycin indication, and a novel product from our Q-Torin platform. NDA preparation is underway and we're actively building towards commercialization, if approved, including the planned addition of a Chief Commercial Officer later this year.
Speaker Change: 25, and we have planned to announce two new <unk> programs in the second half of this year and additional <unk> rapamycin indication and a novel product from our <unk> platform.
Speaker Change: NDA preparation is underway and we're actively building towards commercialization if approved including the planned addition of a chief commercial officer later this year.
Wes Coffinan: In closing, Palvella is positioned for a transformative year ahead.
Speaker Change: In closing Paul Zeller is positioned for a transformative year ahead, and we want to thank everyone for attending today's call. We will now open the line for questions.
Wes Coffinan: And we want to thank everyone for attending today's call.
Operator: We'll now open the line for questions. Thank you. Ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone. If your question has been answered or you wish to move yourself from the queue, please press star 11 again.
Speaker Change: Thank you ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone. If your question has been answered or you wish to move yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
Operator: We'll pause for a moment while we compile our Q&A roster.
Ritu Bharl: Our first question comes from Ritu Bharl with TD Cowen, your line is open. Good morning, guys. Thanks for taking the question.
Speaker Change: Our first question comes from Ritu <unk> with TD Cowen Your line is open.
Speaker Change: Good morning, guys. Thanks for taking the question.
Wes Coffinan: Wes, I wanted to ask you about target enrollment for Phase 3 MLM. Is there a soft target enrollment you have in mind beyond the 40? I know you mentioned keeping the relationships with the KOLs and patients, which is very important. But I'm wondering if there may be some additional powering targets or important subpopulations worth exploring with a bigger N, and then I have a manufacturing-related follow-up. Great.
Speaker Change: Wednesday.
Speaker Change: Ask you about.
Speaker Change: Target enrollment for phase III and the land is there a soft target enrollment you have in mind beyond the 40, I know you mentioned keeping the relationships with the Kols and patients which is very important I'm wondering if there may be some additional.
Speaker Change: Powering targets or important subpopulation is worth exploring with the bigger and and then I have a manufacturing related follow up.
Wes Coffinan: Hey, Ritu. Thanks for being on today's call. To answer your first question, the target enrollment has always been 40 patients enrolled into the study, so we were really pleased with the demand that we saw from all of our clinical study sites, all 13 have enrolled patients.
Speaker Change: Great Hey, retail thanks for being on today's call to answer. Your first question. The target enrollment has always been 40 patients enrolled into this study so.
Speaker Change: So we were really pleased with the demand that we saw from all of our clinical study sites all 13.
Jeff Martini: I'll ask Jeff to briefly comment as it relates to your question around powering and subpopulations. Yeah, so, Ritu, thanks for the question.
Speaker Change: Have enrolled patients.
Speaker Change: I'll ask Jeff to briefly comment as it relates to your question around powering and sub populations.
Jeff Martini: This is Jeff. So we designed the study based on the efficacy results that we observed in Phase 2. In that study, all 12 patients were in the top two categories of that 7-point change scale, much improved or very much improved. Based on the results, with 40 patients or more, we're greater than 99% powered into the Phase 3 study, and those assumptions remain on track. Got it.
Speaker Change: Yes, so materially.
Jack: A question. This is Jack so we designed the study based on the efficacy results that we observed in phase two in.
Jack: In that study all 12 patients were in the top two categories of about seven point change scale much improved or very much improved and based on the results with 40 patients or more were greater than 99% powered.
Jack: Into the phase III study in those assumptions remain on track.
Ritu Bharl: And you know what, I changed my mind.
Jack: Got it.
Jack: Thanks.
Ritu Bharl: My follow up question is going to be on something different. How does your poster impact the way that the company is looking at the TAM for MLM? Like, if the incidence of MLM is higher than expected, you know, how will this, is this I mean, I know you don't have a chief commercial officer yet, but Wes, given your background, how is this changing your plan in your head on how to target these patients and those, I believe, 142 or 150 ish vascular anomaly centers?
Speaker Change: I changed my mind My follow up question is can be awesome. Thank you Brett how did your poster.
Speaker Change: Impact the way that the company is looking at the Tam for MLM like if the incidents of MLM as higher than expected.
Speaker Change:
Speaker Change: Well this is this.
Speaker Change: I mean, I know you don't have chief commercial officer, yet, but west given your background.
Speaker Change: This changing your plan and your head on how to target these patients and those.
Speaker Change: 142, or 150 ish vascular anomaly centers. Thanks.
Wes Coffinan: Thanks. Great. Well, thanks, Ritu. As you well know, Ritu and others on this call, in these rare diseases where there's no approved therapies, there's really an obligation by the innovator in the space, in this case Palvella, to do prospective methodical work to try to really understand what the prevalence and incidents are of these patient populations. From our perspective, Ritu, just a little bit of history, we had done a real-world occurrence study that's published in the Orphan and Adrenal Rare Diseases that estimated that there could be upwards of 80,000 microcystic or mixed patients. We followed that with a claims analysis last year, which suggested that there's around 40,000 diagnosed patients in the U.S.
Speaker Change: Great well thanks for too.
Speaker Change: As you well know ritu and others on this call in these rare diseases, where there is no approved therapies theres really an obligation by the innovator in the space in this case, Paul Dell on to do prospective.
Speaker Change: <unk> will work to try to really understand what the.
Speaker Change: Once an incidence are of these patient populations from our perspective or to just a little bit of history.
Speaker Change: We had done a real world of current study that's published an orphanage Arnold rare diseases that estimated that there could be upwards of 80000.
Speaker Change: Microcyst incur mixed patients, we followed that with the claims analysis.
Speaker Change: Last year, which suggested that there is around 40000 diagnosed.
Wes Coffinan: So, to answer your question on the prevalence side, we think the numbers from the poster are largely in line with what we've been guiding on U.S. diagnosed prevalence. We've been guiding greater than 30,000 diagnosed U.S. patients. What is new, and I'm glad you asked the question, is there hadn't been any rigorous work done around estimated annual incidents of microcystic lymphatic malformations. So Matt and the team are working with our commercial consultants to really closely evaluate our market model to reflect that there could be 1,500 or more new patients coming into that eventual total addressable pool of patients that can be addressed with Ketorin rapid.
Speaker Change: Patients in the U S. So to answer your question on the prevalence side, we think the numbers from the poster are largely in line with what we've been guiding on U S diagnosed prevalence.
Speaker Change: We've been guiding greater than 30000 diagnosed <unk> patients.
Speaker Change: What is new and I'm glad you asked the question.
Speaker Change: Is there hadn't been any rigorous work done around estimated annual incidents of Microsystems lymphatic malformations, So Matt and the team are working with our commercial consultants to really closely evaluate our market model to reflect that there could be 500 or more.
Speaker Change: New patients coming into that eventual total addressable pool of patients that can be addressed with Quito and rapamycin.
Wes Coffinan: On the on the targeting question, we've certainly wanted to understand, given that there are established Centers of excellence, these vascular anomaly centers, we think that that's favorable as we think about commercial dynamics is that these centers of excellence in place. So we want to understand from this analysis approximately how many patients with diagnosed microcystic LMs are currently within those about 150 centers. We estimate, as you see from the poster, that about a third of those, so greater than 10,000, somewhere perhaps between 10 and 15,000 are in these vascular anomaly centers. We do think, and we've got a lot more work to do from a commercial planning perspective, but we do think that that concentration of patients should provide efficiencies for how we think about building out commercial and medical infrastructure in the United States.
Speaker Change: On the on the targeting question we've.
Speaker Change: Certainly wanted to understand given that there are established centers of excellence. These vascular anomalies centers, we think that thats favorable as we think about commercial dynamics of these centers of excellence in place. So we wanted to understand from this analysis approximately how many patients.
Speaker Change: With diagnosed Microsystems LMS are currently within those about 150 centers.
Speaker Change: We estimate as you see from the poster that about a third of those so greater than 10000 somewhere perhaps between 10 and 15000 are in these vascular anomalies centers.
Speaker Change: We do think we've got a lot more work to do from a commercial planning perspective, but we do think that that concentration of patients.
Speaker Change: Should provide efficiencies for how we think about building, our commercial and medical infrastructure in the United States.
Ritu Bharl: Thank you.
Annabelle Sammy: One moment for our next question. Our next question comes from Annabelle Sammy with Stiefle, your line is open. Hi all, thanks for taking my question. Actually, just following on Ritu's questions about the commercial side and the infrastructure you might need, so clearly you've identified that one-third of the patients are sitting in these centers, but that, you know, follows that two-thirds are not sitting at those centers, and so does that require a larger infrastructure than you may have anticipated? Are you going to stick with just targeting the 142 centers and doing separate outreach to bring people into those.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Yes.
Annabel: Our next question comes from Annabel <unk> with Stifel. Your line is open.
Annabel: Hi, Thanks for taking my question actually just following on <unk>.
Speaker Change: Two questions about the commercial side.
Speaker Change: And the infrastructure you might need so clearly you've identified that one third.
Speaker Change: Of the patients are sitting in these centers.
Speaker Change: But.
Speaker Change: That follows that two thirds are not sitting at those centers.
Speaker Change: And so does that require a larger infrastructure than you may have anticipated or are you going to stick with just targeting.
Speaker Change: Yeah.
Speaker Change: 142 centers and getting separate outreach to bring people into those.
Annabelle Sammy: And then, if I can follow on the payer side, I guess you've said in the past that pricing is really going to depend on the results of the trial. And it's rare that you see 100% efficacy, no less carrying that into phase 3. But, you know, when you think about pricing, have you established thresholds of efficacy for various price ranges? Like, say, for example, 70% reduction will get you X and 90% reduction will get you Y. Or is it still kind of nebulous in that range? Like, what do we need to see to see, like, really clear, rare orphan pricing?
Speaker Change: And then if I can.
Speaker Change: Follow on the on the <unk>.
Speaker Change: Her side.
Speaker Change: I guess, Steve said in the past that pricing is really going to depend on the results of the trial.
Speaker Change: It's rare that you see 100% efficacy no loss carry them into phase III.
Speaker Change: But when you think about pricing have you established thresholds of efficacy for various price ranges like say for example, a 70% reduction I'll get to ask at 90% reduction we will get to you why.
Speaker Change: Or is it.
Speaker Change: I'll kind of nebulous in that range.
Speaker Change: What do we need to see to see like really clear.
Wes Coffinan: Thanks.
Speaker Change: <unk> orphan pricing.
Wes Coffinan: Thanks for the question, Annabelle. So to answer your first question, we think that it's a very attractive commercial dynamic to have to have greater than an estimated 10,000 patients concentrated in about 150 centers. So right now, as we stand today, and this is all pending, bringing in a chief commercial officer who's going to refine our plan. We think that that's favorable. The second area, and we're doing more digging on this with some of our consultants, is that beyond those 150 vascular anomaly centers, there's a second wave of academic medical centers that do have a fairly significant patient load.
Speaker Change: Yes.
Speaker Change: Yes. Thanks for the question Annabel So to answer your first question.
Speaker Change: We think that it's a very attractive commercial dynamics tab to have greater than an estimated 10000 patients concentrated in about 150 centers. So right now as we stand today and this is all pending bringing in a chief commercial officer.
Speaker Change: Who's going to refine our plan, we think that that favorable the second.
Speaker Change: Area, and we're doing more and more digging on this with some of our consultants is that beyond those 150 vascular nominally centers, there's a second wave of academic medical centers.
Speaker Change: That you have fairly significant patient load.
Wes Coffinan: So we think that we can also efficiently go after not just the 150 established vascular anomaly centers, but that second wave of academic medical centers that has a higher concentration of patients. So that's going to be the second wave. And then obviously, from a targeting perspective, those physicians and sites that maybe only have, call it one patient that's diagnosed, we will pursue those in a capital efficient and thoughtful manner. And there are some strategies that have been articulated by our commercial advisors in terms of how to go after that smaller percentage of the market. On the payer front, we can share that we've engaged very experienced pricing and reimbursement advisors with deep experience in the rare disease space, having worked closely with companies like Crystal Biotech.
Speaker Change: So we think that we can also efficiently go after not just the 150.
Speaker Change: Establish vascular anomalies centers, but that second wave of academic medical centers that has a higher concentration.
Speaker Change: Patients so that's going to be the second wave and then and then obviously from a targeting perspective.
Speaker Change: Those physicians in sites that may be only have call. It one patient it's diagnosed those.
Speaker Change: We will pursue those in a capital efficient and thoughtful manner and there are some strategies that have been articulated by our commercial advisors in terms of how to go after that smaller and smaller percentage of the market.
Speaker Change: On the payer front.
Speaker Change: We can share that we've engaged very experienced.
Speaker Change: Pricing and reimbursement advisors with deep experience in the rare disease space, having worked closely with companies like.
Wes Coffinan: There's a lot of things we believe that go into pricing, but most importantly, let's just talk about the fundamentals of microcystic LMs. Number one, this is a serious, rare genetic disease, where when these patients have incidents of lymphorrhea, they can be hospitalized, they can have acute cellulitis, sepsis, so we're talking about a very serious disease and one that we think payers should be motivated to see these patients do better. Number two, there are no FDA-approved therapies. I think precedents will show that companies that launch in diseases where there are no FDA-approved therapies are able to...
Speaker Change: Crystal biotech Theres a lot of things, we believe that go into pricing, but most importantly, let's just talk about the fundamentals of Microsystems LMS number. One this is a serious rare genetic disease, where when these patients have incidence of lymphuria. They can be hospitalized they can have acute cellulitis sepsis.
Speaker Change: So we're talking about a very serious disease and one that we think payers should be motivated to see these patients do better number two there are no FDA approved therapies I think precedents will show that companies that launch in diseases, where there are no FDA approved therapies are able to.
Wes Coffinan: command orphan pricing, when you have those two dynamics. At this point in time, we have not established thresholds of efficacy and what the resulting pricing range would be. In my experience, typically, what we would do is we would take the totality of the Phase 3 data, and then we would work closely with our pricing advisors and do some third-party sort of blinded payor work to help then establish what we think the price point would be for Ketor and Rapamycin in the U.S. So, as we sit here today in May of 2025, we're about two years away from commercialization.
Speaker Change: The command orphan pricing when you have those two dynamics.
Speaker Change: At this point in time, we have not established thresholds of efficacy and what the resulting price pricing range would be.
Speaker Change: In my experience typically what we would do is we would take the totality of the phase III data.
Speaker Change: And then we would work closely with our pricing advisors and do some third parties are in a blinded payer work to.
Speaker Change: To help Dennis establish what we think.
Speaker Change: The price point would be for Quito and Rapamycin. The U S. So as we sit here today in May of 2025, where we're about two years away from commercialization.
Wes Coffinan: I think the most important factor on making sure that we have an exceptional commercial launch, if we're approved, is securing the right leader that's done this before, done it successfully, and can guide these really important decisions, Annabelle, that you're asking about.
Speaker Change: The most important factor on making sure that we have an exceptional commercial launch if we're approved.
Speaker Change: Is securing the right leader Thats done this before done it successfully and can guide these really important decisions annabel that youre asking about on this call.
Annabelle Sammy: Great. Thank you so much.
Speaker Change: Great. Thank you so much.
Louise Chen: Thank you everyone. One moment for our next question. Our next question comes from Louise Chen with Scotia Bank. Your line is open. Hi, thanks for taking my questions here and congratulations on all the progress this quarter. So I wanted to ask you how you think about the market size of the two assets that you will disclose later this year versus the MLM and CVM opportunity. And then do you plan to commercialize your pipeline on your own? I know there's only a few centers to target in the second wave of centers that you mentioned, but would you consider a global partner to help you in the U.S.
Speaker Change: One moment for our next question.
Louise Chen: Our next question comes from Louise Chen with Scotiabank. Your line is open.
Louise Chen: Hi, Thanks for taking my questions here and congratulations on all the progress this quarter. So I wanted to ask you. How you think about the market size and the two assets that you will disclose later this year versus the MLM and CB and opportunity and then do you plan to commercialize your pipeline on your own I know there.
Louise Chen: Only a few centers to target.
Louise Chen: And the second wave of centers that you mentioned, but would you consider a global partner to help you in the U S and outside the U S. Thank you.
Wes Coffinan: and outside the U.S.? Thank you. Yeah, great. So on your on your second question, Louise, and thanks for being on the call.
Speaker Change: Yeah, great. So on your on your second question Louise Thanks for being on the call and your second question, we are going to prioritize Standalone U S launch.
Wes Coffinan: On your second question, we are going to prioritize standalone US launch for all of our products in the rare genetic skin disease space. I think we've all seen there's been a number of successful rare disease launches, we're going to do everything we can to learn from those launches, what are the best practices and incorporate them into our launch. In terms of outside the United States, those are valuable markets, we believe for guitar and rapamycin as well. We'll look as any thorough company would do at both standalone launches in Europe and Japan. We'll also look at partnering, I think where we stand today, we want to stick with our core competencies, which is really focusing on resources on the US.
Speaker Change: For all of our products in the rare genetic skin disease space I think we've all seen there's been a number of successful rare disease launches, we're going to do everything we can to learn from those launches what are the best practices and incorporate them into our launch in terms of outside the United States. Those are valuable markets, we believe for <unk>.
Speaker Change: Rapamycin as well.
Speaker Change: We will look as any thorough company would do at both Standalone launches in Europe and Japan.
Speaker Change: We'll also look at partnering I think where we stand today, we want to stick with our core competencies, which is really focusing on resources on the U S. So.
Wes Coffinan: So it's most likely that we'll prioritize partnering those those markets. But again, I think if we're doing this in a thorough way, we'll look at both launching alone and partnering, albeit with the bias to leverage others footprint in places like Europe and Japan to launch.
Speaker Change: So it's most likely that we will prioritize partnering those those markets, but again I think if we're doing this in a thorough way we will look at both launching alone and partnering albeit with the bias to leverage other's footprint in places like Europe, and Japan to launch.
Wes Coffinan: In terms of how we think about our next indications for Ketorin rapamycin, as well as our next Ketorin platform, maybe we'll just start with the criteria of serious, rare, and nothing approved. We really want to be first. That is part of the fiber of this company and the entire management team is being first for these patients. We also think that has the benefit of, by definition, being commercially attractive. Just to give a little bit of guidance, so we're answering your question. Typically, we prioritize those diseases that are rare, not ultra-rare. So it's unlikely that you'll see us in these ultra-rare indications with less than 2,000 patients.
Speaker Change: In terms of how we think about.
Speaker Change: Our next.
Speaker Change: Next indications for keto Arne Rapamycin as well as our <unk> platform.
Speaker Change: Maybe we'll just start with the criteria of the serious rare and nothing approved we really want to be first that as part of the fiber of this company and the entire management team is being first for these patients. We also think that has the benefit of by definition being commercially attractive.
Just to give a little bit of guidance. So we're answering your question typically we prioritize those diseases that are rare not ultra rare.
Speaker Change: Its unlikely that Youll see us in.
Speaker Change: These ultra rare indications with call it less than 2000 patients.
Wes Coffinan: We tend to gravitate towards those diseases that have 10,000 or more patients.
Speaker Change: We tend to gravitate towards those diseases that have 10000 or more patients we think that those.
Wes Coffinan: We think that those are commercially attractive in nature and look forward to providing you and everyone else with more detail when Jeff makes his big reveal later this year. Thank you.
Speaker Change: Our commercially attractive nature and look forward to providing you and everyone else with more detail.
Speaker Change: Jeff makes us big reveal later this year.
Angela Crane: One moment for our next question. Our next question comes from Angela Crane with Canaccord Genuity. Your line is open. Congrats on the quarter. This is actually true on Kim on for Whitney. Thanks for taking our question. Maybe just a quick one from us on phase three. It was very encouraging to see the enrollment has completed so quickly. And so, any additional color on how many of those patients are between the 3 to 5 year old range and as a follow up, can you remind us how you intend to use that data? Whether you'll be submitting a cut of that data concurrently with the initial filing, or do you expect that they will be submitted at a later date for potential label expansion?
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Andrew <unk> with Canaccord Genuity. Your line is open.
Speaker Change: Okay.
Speaker Change: Congrats on the quarter. This is actually two on Kim on for Whitney. Thanks for taking my question, maybe just a quick one from us on phase III is very encouraging to see the enrollment is completed so quickly and so any additional color on how many of those patients are between the three to five year old range and as a.
Speaker Change: A follow up can you remind us how you intend to use that data whether you'll be submitting a cut of that data concurrently with the initial filing or do you expect that there'll be submitted at a later date for a potential label expansion. Thanks, so much.
Angela Crane: Thanks so much.
Wes Coffinan: Juwan, thanks for your comments about the efforts of our clinical operations team and sites and investigators. We're similarly encouraged to have exceeded our enrollment target. We look forward to providing much more information at the point of full enrollment and beyond in terms of the breakout of the patients who are greater than six as well as this additional cohort of three to five year olds. To answer your question from a regulatory perspective, we are going to concurrently include data from three to five year olds in our NDA submission. We think that that's the best strategy, assuming that we're seeing a consistent safety and efficacy profile between those two cohorts, the three to five year olds, and then the six and above.
Speaker Change: Chuan. Thanks for your comments about the efforts of our clinical operations team and sites and investigators.
Speaker Change: Similarly encouraged to have exceeded our enrollment target.
Speaker Change: We look forward to providing much more information at the point of full enrollment and beyond in terms of the breakout.
Speaker Change: The patients who are greater than six as well as this additional cohort of three to five year olds to answer your question from a regulatory perspective.
Speaker Change: We're going to concurrently include data from three to five year olds in our NDA submission, we think that thats.
Speaker Change: The best strategy, assuming that we are seeing a consistent safety and efficacy profile between those those two cohorts the three to five year olds, and then the six and above and so the strategy there would be to concurrently submit that data keep our NDA timelines on track and obviously the goal here is to one be able to serve patients.
Wes Coffinan: And so the strategy there would be to concurrently submit that data, keep our NDA timelines on track, and obviously the goal here is to, one, be able to serve patients with this disease down to the age of three, but two, getting that broader label should enrich the commercial opportunity because we're able to dose patients from three to five. And as we've seen from the poster at SID, there's about 1,500 new patients coming into the pool per year. Great, thanks so much.
Speaker Change: With this disease down to the age of three but to getting that broader label should enrich the commercial opportunity because we're able to dose patients.
Speaker Change: From three to five and as we've seen from the poster at <unk> side, Theres about 500, new patients coming into the pool per year.
Speaker Change: Okay.
Speaker Change: Great. Thanks, so much.
Ananda Ghosh: One moment for our next question. Our next question comes from Ananda Ghosh with AC Wainwright. Your line is open. Hi, good morning. Maybe, you know, switching gears, I just wanted to get, you know, both MLMs and CVMs are, have been notoriously defined as, you know, as like the patient with, you know, a lot of heterogeneity in terms of, you know, the disease pathogenesis as well as in terms of, you know, the way they respond to the drugs.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from Amanda <unk> with H C. Wainwright Your line is open.
Amanda: Hi, good morning.
Speaker Change: Switching gears I just wanted to get both MLM Cvs. So are have been previously defined as you know.
Speaker Change: Make the patient.
Speaker Change: A lot of heterogeneity in terms of the disease pathogenesis Olympic time, so I'm going to read the response of the drugs. So how if you can if you can shed light on that.
Wes Coffinan: So how, you know, if you can, if you can shed light on the recruitment, the patient recruitment aspect in terms of, you know, what, what were the screening techniques you have used to maximize the, you know, the, the utility of the phase three, that will be very helpful, as well as for the trivalent. Yeah, thanks for the question. In terms of patient screening for the phase three study, we've enriched that study for patients that are that are determined to be moderate to severe at baseline. That's important having patients in the trial that are that are less severe.
Speaker Change: The recruitment.
Speaker Change: The patient recruitment aspect in terms of what.
Speaker Change: The screening techniques you have used to maximize the.
Speaker Change: If you do have the phase III as well as for the driver.
Speaker Change: Yes. Thanks for the question in terms of patient screening for the phase III study.
Speaker Change: And rich that study for patients that are that are determined to be moderate to severe at baseline that's important having patients in the trial that are that are less severe it can be hard to show a delta or separation show a treatment effect. So that's one point of enrichment. We also have a number.
Wes Coffinan: It can be hard to show a delta or separation, show a treatment effect. So that's one point of enrichment. We also have a number of techniques or controls in our protocol to make sure that we're getting the right patients into the study in these rare disease studies where you have sample size, like ourselves, a study of 40 or more patients. Every patient counts. So we go to great lengths in all of our rare disease studies to to have strict criteria, as Jeff mentioned, as it relates to patient inclusion, exclusion.
Speaker Change: Of techniques or controls in our protocol to make sure that we're getting the right patients into the study and these rare disease studies, where you have sample size like ourselves a study of 40 or more patients ever.
Speaker Change: Every patient counts. So we go to great lengths and all of our rare disease studies to to have strict criteria as Jeff mentioned as it relates to patient inclusion exclusion on.
Jeff Martini: on the Phase II TOIVAS study.
Jeff Martini: I'll pass it over to Jeff to talk about how we're optimizing for the right patient population for that trial.
Speaker Change: On the phase II toilet study I'll pass it over to Jeff to talk about how we're optimizing for the right patient population for that trial.
Jeff Martini: Thank you, Wes.
Jeff Martini: So, as a reminder, the Phase II TOIVAS study is our first study in this disease. We'll be looking at safety and efficacy, and then looking at a number of different endpoints to see how the patients potentially respond to treatment. We're repeating a lot of what we did in MLM, which was successful, which was, number one, training all the clinicians as they start the study. I'm involved in training all those clinicians. The patients that are of moderate or worse severity, so we've been rich for disease severity there. And then they go through, as well, an external third-party check just to confirm eligibility and make sure these are the right patients for the trial.
Jeff: Thank you Ross.
Speaker Change: So as a reminder, the phase III <unk> study is our is our first study in this disease where.
Speaker Change: We will be looking at safety and efficacy and then looking at a number of different end points to see how their.
Speaker Change: Patients potentially respond to treatment.
Speaker Change: Repeating a lot of what we did in MLM, which was successful which was number one training all the clinicians as they.
Speaker Change: Start the study I'm involved in training all of those clinicians.
Speaker Change: The patients that are moderate or worse severity. So we've been rich for disease severity. There and then they go through as well and external third party, Chuck just to confirm eligibility and make sure the right patients for the trial.
Wes Coffinan: Great, thank you.
Speaker Change: Great. Thanks.
Dev Prasad: One moment for our next question. Our next question comes from Dev Prasad with Lucid Capital Markets. Your line is open. Hi, thank you for taking my question. Could you talk about steps and timeline to NDA submission once top-line data is released in first quarter of next year? Additionally, do you need to do some additional work around 505B2 submission package? Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from <unk> Prasad with Lucid capital markets. Your line is open.
Speaker Change: Hi, Thank you for taking my question.
Speaker Change: Could you talk about steps and timeline to NDA submission.
Speaker Change: One stop blended basis at least in the first quarter of next year.
Speaker Change: <unk> do you need to do some additional work around platelet might be two submission package.
Wes Coffinan: Yeah, hey, thanks, Deb, for those questions. So our goal after top line data in Q1 of 2026, that data will be presented on a top line basis to the FDA, and then we expect to submit the NDA in the second half. of 2026. That puts us on an approval trajectory, assuming those timelines are met or exceeded, which is our goal of having the drug approved in Q2 of 2027. So, top-line dev, Q1 of next year, and then second half of next year to have that NDA submitted. We will, as we're modeling this out and looking at timelines, we will be eligible for priority review.
Speaker Change: Yeah, Hey, Thanks, Deb for those questions. So our goal after topline data in Q1 of 2026 that data we'll present it would be presented.
Speaker Change: On a topline basis to the FDA and then we expect to submit the NDA in the second half of.
Speaker Change: Of 2026.
Speaker Change: That puts us on an approval trajectory assuming those timelines are met or exceeded which is our goal of having the drug approved in Q2 of 2027. So topline Dev Q1 of next year and then second half of next year to have that NDA submitted we will as we are modeling.
Speaker Change: This out.
Speaker Change: Looking at timelines, we will be eligible for priority review, that's as a function of both breakthrough designation and fast track designation. So we expect potentially a six month priority review basically it's based on having those designations in hand in terms of the 505 Btu pathway.
Wes Coffinan: That's a function of both breakthrough designation and fast-track designation. So, we expect potentially a six-month priority review based on having those designations in hand. In terms of the 505B2 pathway, that's really a pathway that's designed to streamline the review process. We're able to reference existing data. In our case, the reference listed drug is oral hapamycin or oral sirolimus. So, we've had the right advisors assembled who are familiar with 505B2 submissions, have done those before many times, and done them successfully. And we expect to work closely with those advisors so that we have a detailed list of every item that needs to be submitted in the 505B2 pathway.
Speaker Change: That's really a pathway that's designed to streamline the review process, we're able to reference existing data in our case the reference listed drug.
Speaker Change: Is oral rapamycin or oral sirolimus. So we've got to have the right advisors assembled who are familiar with 505, two submissions have done those before many times and done them successfully and we expect to work closely with those advisers. So that we have a detailed list of ever.
Speaker Change: <unk> item that needs to be submitted in the <unk> pathway.
Wes Coffinan: But overall, we think that having 505B2 augment, breakthrough, fast-track, and orphan is favorable for the program.
Speaker Change: But overall, we think that having 505 to augment breakthrough fast track and orphan.
Speaker Change: Is favorable for the program.
Dev Prasad: Good, thank you.
Speaker Change: Good thank you.
Catherine Novak: One moment for our next question. Our next question comes from Catherine Novak with Jones Trading. Your line is open. Hi, Morning, thanks for taking my question. I just want to ask a little bit about the difference between the scales, phase 2, phase 3, the physicians not have to reference photos in phase 2 and as well. Do you have confirmation from the FDA that this new scale satisfies the need for static measures of as well as the improvement relative to baseline? Great.
Speaker Change: And remember for next question.
Speaker Change: The next question comes from Katherine Nowak with Jones trading your line is open.
Speaker Change: Hi, Good morning, Thanks for taking my question I, just wanted to ask a little bit about the difference between the scale of <unk>.
Speaker Change: <unk> phase III.
Speaker Change: The decision to not have to reference photos in phase two and as well do you have confirmation from the FDA that this new scale satisfies the need for.
Speaker Change: Static measures as well as the.
Speaker Change: Relative to baseline thanks.
Wes Coffinan: So, to answer your first question, in Phase 2, physicians were able to access the photos that were baseline photos, but they were not required to in the protocol. Given that we extended, Catherine, treatment duration from 12 weeks to 24 weeks, we felt that the addition to the protocol of requiring the physicians at that primary endpoint visit, which is a live clinician assessment at 24 weeks, to reference back to that baseline photo, we think that that added an important layer of objectivity to that assessment. So, that was a change that we supported and we think strengthened the data.
Speaker Change: Great. So to answer your first question in phase two.
Speaker Change: <unk>, we're able to access the photos that were baseline photos.
Speaker Change: But they were not required to and the protocol given that we extended Catherine treatment duration from 12 weeks to 24 weeks.
Speaker Change: We felt that the addition to the protocol of requiring the physicians at that primary endpoint visit which is alive clinician to clinician assessment.
Speaker Change: At 24 weeks two to reference back to that baseline photo we think that that added a an important layer of objectivity to that assessment.
Speaker Change: So that was a change that that we supported and we think strengthen the data. It also helps to mitigate recall bias when a physician is trying to recall what our patients.
Jeff Martini: It also helps to mitigate recall bias when a physician is trying to recall what a patient's status was or lesion severity was 24 weeks ago.
Speaker Change: Status was or lesion severity was.
Jeff Martini: Jeff, I'm going to pass it over to you to answer the second part of Catherine's question. Thank you, Catherine. This is Jeff. So, we've had extensive, you know, conversations with the FDA on the primary endpoints. Starting with the breakthrough therapy designation, we presented the clinician interviews from the trial as well as clinician testimonies, and this was the most sensitive endpoints. Subsequent to that meeting, we did apply for the FDA breakthrough therapy designation, and that was, or sorry, not breakthrough, the FDA Orphan Drug Grant, which we were awarded, and overall, we are aligned on the endpoints with the FDA.
Speaker Change: 24 weeks ago.
Jeff: Jeff I'm going to pass it over to you to answer the second part of Catherine's question.
Speaker Change: Thank you Catherine Jeff So we've had extensive conversations with the FDA on the primary endpoints star.
Speaker Change: Starting with the breakthrough therapy designation, we presented the clinician interviews from the trial as well as clinician testimonies and this was the most sensitive endpoints subsequent to that meeting.
Speaker Change: We did apply for the FDA breakthrough therapy designation and.
Speaker Change: No that's great.
Speaker Change: Orphan drug grant, which we were awarded.
Speaker Change: And overall, we are aligned on the endpoints with the FDA.
Speaker Change: Okay.
Jeff Martini: Got it. And then, you know, I think you just you had disclosed your power and assumptions that it could detect a .5 point change on the scale. Is that correct? Um Is that? Yeah, that is correct. Or, you know, what, to what extent would an improvement be considered meaningful to these patients? Yeah, so Catherine, on that question, in rare diseases, typically, you're not defining minimal clinically important differences on a pre specified basis, I think what you're referencing on the 0.5 improvement. is what we would need to see to achieve the lower threshold of statistical significance.
Speaker Change: Got it.
Speaker Change: And then.
Speaker Change: I think you had disclosed your powering assumption that could.
Speaker Change: Could detect a point.
Steve: Good point Steve.
Speaker Change: And on the scale of that correct.
Speaker Change:
Speaker Change: Is that yes that is correct Paul.
Speaker Change: Hi.
Speaker Change: But to what extent would it improvement be considered meaningful to these patients.
Speaker Change: Yes, so catherine on that question and rare diseases, typically youre not defining <unk>.
Speaker Change: Minimal clinically important differences.
Speaker Change: On a pre specified basis I think what you are referencing on the 0.5 improvement.
Speaker Change: Is what we would need to see.
Speaker Change: To achieve the lower threshold of statistical significance, So zero on our scale, which goes from negative three very much worse to plus three very much improved zero is no change with 40 patients in the study if the mean changes 0.5, which would be significantly below what we saw in <unk>.
Catherine Novak: So zero on our scale, which goes from negative three, very much worse, to plus three, very much improved. Zero is no change. With 40 patients in the study, if the mean change is 0.5, which would be significantly below what we saw in phase two, which was about a 2.42 average change, with a standard deviation that's higher than what we assumed in phase two, we'd still be at a threshold of achieving statistical significance according to our bias. Okay, got it. Thanks. That's helpful.
Speaker Change: As to which was about a 2.42 average change.
Speaker Change: With a standard deviation that's higher than what we assumed in phase two we'd still be at a threshold of achieving statistical significance. According to our bias statistical assumptions.
Okay.
Speaker Change: Okay got it thanks that's helpful.
Operator: And I'm not showing any further questions at this time, and as such, this does conclude today's presentation. You may now disconnect and have a wonderful day. Thanks for watching!
Speaker Change: And I'm not showing any further questions at this time and as such this does conclude today's presentation. You may now disconnect and have a wonderful day.
Speaker Change: Yeah.
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Speaker Change: Okay.