Q1 2025 Tivic Health Systems Inc Earnings Call

Operator: Welcome to Tivic Health Systems first quarter 2025 financial results and operational update conference call. This call has been pre-recorded and the questions you have submitted in advance will be answered following the prepared remarks. This call is being webcast and the replay will be available on the IR section of the company's website for three months.

Welcome to traffic Health systems first quarter 2025 financial results and operational update conference call. This call has been prerecorded and our questions. You'll have submitted in advance will be answered following their prepared remarks.

Call is being webcast and a replay will be available on the IR section of the company's website for three months before we begin let me remind you that during today's call management will make various forward looking statements investors. Your question that these forward looking statements are based on current expectations and are subject to risks in them.

Operator: Before we begin, let me remind you that during today's call, management will make various forward-looking statements. Investors are questioned that these forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those indicated in our forward-looking statements.

Certainties that could cause actual results or outcomes to differ materially from those indicated in our forward looking statements. Please read the safe Harbor statement contained in the press release terrific House issued today as well as the risk factors contained in <unk> filings with the SEC, including it.

Operator: Please read the safe harbor statement contained in the press release Tivic Health issued today, as well as the risk factors contained in Tivic Health's filings with the SEC, including its annual report on Form 10-K of the year end December 31, 2024, and the Form 10-Q to be filed with the SEC today, as well as other companies' SEC filings.

The annual report on Form 10-K as of year end December 31st 'twenty 'twenty, four and the Form 10-Q to be filed with the SEC today as well as other company's SEC filings on today's call. We have terrific health Chief Executive Officer, Jennifer Ernest interim Chief.

Operator: On today's call, we have Tivic Health's Chief Executive Officer, Jennifer Ernst, Interim Chief Financial Officer, Lisa Wolf, and Chief Operating Officer and President of Tivic Biopharma, Michael Hanley.

Speaker Change: Financial Officer, Lisa Wolf, and Chief operating officer, and President of tragic Biopharma.

And now let me turn the call over to Jennifer Ernest.

Jennifer Ernst: Now, let me turn the call over to Jennifer Ernst. Thank you to the moderator for that introduction and welcome to both the investors that are listening today and to those that are listening at another time. I'm Jennifer Ernst, CEO of Tivic Health, and it is my absolute pleasure to be here with you today to share some of the perspectives on our first quarter of 2025. There's really no doubt in my mind that this will be one of the defining moments in Tivic's history. In recent months, we have catalyzed an aggressive reinvention of Tivic. It's tempting to point to a single event or a quarter, but really what we're reporting on today is the culmination of work undertaken and hard-fought battles we've had along the way.

Jennifer Ernest: Thank you to the operator for that introduction and welcome to both the investors that are listening in today and those that are listening that another time.

Jennifer Ernest: Jennifer Ernst Ceos, typically and it is my absolute pleasure to be here with you today to share some of the perspectives on our first quarter of 2025.

Jennifer Ernest: There's really no doubt in my mind that this will be one of the defining moment intermix history.

Speaker Change: In recent months, we have capitalized on aggressive reinvention of Tonight.

Speaker Change: It's something to point to a single event or a quarter, but really what we're reporting on today is the culmination of work undertaken and hard fought battles we've had along the way.

Jennifer Ernst: that brought us to a point where we could transform the company. Last year, we were a single product company selling over-the-counter into a crowded direct-to-consumer marketplace. today and going forward. We are a diversified immunotherapeutic. We are building on our history in immunology with a clinical pipeline and product candidates that focus on diseases where immune system dysregulation plays a central role. In lay terms, when the immune system isn't functioning properly, health suffers. And we have ways to address both the overactive and underactive immune system. In February, we secured exclusive worldwide rights to a late-stage immunomodulatory drug candidate called Entelomod.

Jennifer Ernest: That brought us to a point, where we could transform the company.

Jennifer Ernest: Last year, we were a single product company selling over the counter into a crowd of direct to consumer marketplace today.

Jennifer Ernest: Today and going forward.

Jennifer Ernest: We are a diversified immuno therapeutics company.

Jennifer Ernest: Building on our history in immunology with our clinical pipeline.

Jennifer Ernest: And product candidates that focus on diseases, where immune system dysregulation plays a central role.

Jennifer Ernest: And later on when the immune system is functioning properly health suffers and we have ways to address both the overactive and underactive immune systems.

Jennifer Ernest: Yeah.

Jennifer Ernest: Yes.

Jennifer Ernest: In February we secured exclusive worldwide rights to a late stage immuno modulator of drug candidate called and told them hard.

Jennifer Ernst: We also secured options on rights to its derivative and to last.

Jennifer Ernest: We also secured options on Reits with derivatives and Alaska.

Jennifer Ernst: Today I'm joined by Michael Handley, our new Chief Operating Officer and President of Tivic Biopharma. Mike joined us from Satara Biopharma and has previously launched 17 new drugs. including those that we hope Entolomot and Entolasto will supplant. So shortly I'll be asking him to provide more details about the licensed compounds, showcasing the value creation opportunity that these represent for Tivic investors. We have rapidly begun advancing the telemagnet along its commercialization pathway. For clarity, phase three trials are already complete under the FDA's animal pathway rules. meaning that we believe we are poised to move this rapidly forward.

Speaker Change: And today I'm joined by Michael handling, our new Chief operating officer, and President topic Biopharma.

Jennifer Ernest: Mike joined US from center of Biopharma and has previously launched 17 new drugs.

Jennifer Ernest: Including those that we hope and tell them I didn't have to Alaska will supplant.

Jennifer Ernest: So surely I'll be asking him to provide more details about the license compounds showcasing the value creation opportunity that these represent certificate investors.

Jennifer Ernest: We have rapidly began to advancing and tell them all along its commercialization pathway.

Jennifer Ernest: For clarity phase III trials are already complete under the Fda's animal pathway goals.

Jennifer Ernest: Meaning that we believe we are poised to move as rapidly forward.

Jennifer Ernst: Just this week we announced that we have entered into a manufacturing validation agreement for GMP production and scale-up. with Intolimod fully validated for treatment of acute radiation syndrome, the first indication that we'll be pursuing. Entering GMP manufacturing is an inflection point that represents the transition from clinical to commercialization phase. It is also the necessary first step in preparing the application to the FDA.

Jennifer Ernest: Just this week, we announced that we have entered into a manufacturing validation agreement for G. M T production and scale.

Jennifer Ernest: Within polymer on fully validated for treatment of acute radiation syndrome. The first indication that we'll be pursuing.

Jennifer Ernest: Entry in GMP manufacturing is an inflection point that represents to transition from clinical to commercialization phase.

Jennifer Ernest: It is also the necessary first step in preparing the application to the F D. A.

Jennifer Ernst: So today, the licensing agreement will be our first. but it's not the only focus for the company. The immunomodulatory effects of entolamide and entelast are highly complementary. to the work we are advancing in non-invasive vagus nerve stimuli.

Jennifer Ernest: So today the licensing agreement will be our focus, but it's not the only focus for the company the.

Jennifer Ernest: Immuno modular Tory effects within told a lot of that's Alaska are highly complementary.

Jennifer Ernest: The work we are advancing in noninvasive vagus nerve stimulation.

Jennifer Ernst: I expect to hear or share more about the Vegas Nerve Stimulation Program next quarter. We now have, as a company, the scientific foundation that we believe will enable us to seize opportunities to address diseases caused by either under or overactive immune Importantly in this context, we've also signed an $8.4 million tranched funding agreement that is designed to enthuse capital at critical inflection points while allowing the company to build market value. Structurally, we've taken an approach that offers investors less dilution while we continue to accelerate the transformation of the company into high-value markets.

Jennifer Ernest: I expect to hear a share more about the vagus nerve stimulation program next quarter.

Jennifer Ernest: We now have as a company the scientific foundation.

Jennifer Ernest: We believe will enable us to seize opportunities to address diseases caused by either under or overactive immune systems.

Jennifer Ernest: Importantly in this context, we've also signed an $8 4 million Tranched funding agreement. This design sense use capital at critical inflection points, well, allowing the company to build market value.

Jennifer Ernest: Structurally we've taken an approach that offers investors less dilution, while we continue to accelerate the transformation of the company as a high value market.

Jennifer Ernst: Shortly, I will turn this call over to Lisa Wolf, our interim CFO, to review our Q1 financial performance. But before doing so, just a few more comments on how we have navigated a significant strategic transition. Our priority has been on enhancing shareholder value and utilizing our resources to prioritize the assets that hold the greatest potential to deliver substantial return. That meant in Q1, we invested in securing and operationalizing the biopharmaceutical assets and supporting the clinical research in non-invasive vagus nerve stimulation. In order to manage our resources, our Board of Directors and the leadership of Tivic made the strategic choice to significantly reduce advertising into our D2C product clear-up.

Speaker Change: Shortly I will turn the call over to Lisa Wolfe, our interim CFO to review, our Q1 financial performance.

Jennifer Ernest: Before doing so just a few more comments.

Jennifer Ernest: And how we have navigated a significant strategic transition.

Jennifer Ernest: Our priority has been on enhancing shareholder value and utilizing our resources to prioritize the assets that holds the greatest potential to deliver substantial returns.

Jennifer Ernest: That means in Q1, we invested in securing and operationalize in the biopharmaceutical assets supporting the clinical research and noninvasive noninvasive vagus nerve stimulation.

Jennifer Ernest: In order to manage our resources, our board of directors and the leadership of David made the strategic choice.

Jennifer Ernest: Mifid gently reduce advertising and towards D to C products clear up.

Jennifer Ernst: At the time we were under NASDAQ review, and the world at large is facing high economic uncertainty, we believed this was the right decision. It allowed us to set the transformation in motion without taking in capital under ownership. Decreasing advertising spend, though, did have a commensurate impact on revenue. Investors should expect that we will continue to endeavor to manage the capital of the company in ways that offer the best opportunities for return.

Jennifer Ernest: At the time, we were under NASDAQ review in the World at large it's facing high economic uncertainty.

Jennifer Ernest: We believe this was the right decision it allowed us to start the transformation emotion without taking in capital under onerous terms.

Jennifer Ernest: Decrease in advertising spend though didn't have the commensurate impact on revenue.

Jennifer Ernest: So you should expect that we will continue to endeavor to manage the capital of the company in ways that offer the best opportunity for return.

Lisa Wolf: And with that, I'd like to hand this section, next section over to Lisa. Thank you, Jennifer. For ease of listening, all of the financial metrics I'll be reporting compare the first quarter ended March 31, 2025 to the prior year quarter ended March 31, 2024, unless otherwise stated. Revenue net of returns totaled $70,000 compared to $334,000 in the year ago quarter. The decline was primarily due to a decrease in unit sales of 81% associated with reductions in our overall marketing spend. We intentionally reduced our advertising spend by 92% in order to focus our capital resources into this DTERA licensing agreement.

Lisa Wolfe: And with that I'd like to hand, the section next section over to Lisa.

Lisa Wolfe: Thank you Jennifer for ease of listening all of the financial metrics I'll be reporting compare the first quarter ended March 31, 'twenty 'twenty five to the prior year quarter ended March 31, 2024, unless otherwise stated.

Lisa Wolfe: Revenue net of return totaled 70000 compared to 334000 in the year ago quarter. The.

Lisa Wolfe: The decline was primarily due to a decrease in unit sales of 81% associated with reductions in our overall marketing spend we intentionally reduced our advertising spend by 92% in order to focus our capital resources into the the Terra licensing agreement.

Lisa Wolf: Cost of sales decreased to $20,000 from $167,000 in the year-ago quarter, primarily due to the 81% decrease in unit sales. Gross margins increased from 50% to 72% as we reduced our product support and fulfillment costs. Operating expenses remain flat at $1.6 million for the first quarter of 2025 compared with the same period in 2024. We plan to increase our research and development investments in our vagus nerve platform and clinical applications and to advance the development of Tivic's licensed TLR5 agonist programs, specifically in entolamide and entolastate. Net loss for the quarter remained flat at $1.5 million for the first quarter of 2025 compared with the first quarter of 2024.

Lisa Wolfe: Cost of sales decreased to 20000 from 167000 in the year ago quarter, primarily due to the 81% decrease in unit sales.

Lisa Wolfe: Gross margin increased from 50% to 72% as we've reduced our product support and fulfillment costs.

Lisa Wolfe: Operating expenses remain flat at one 6 million for the first quarter 2025, compared with the same period in 2024.

Lisa Wolfe: We plan to increase our research and development investment and our vagus nerve platform and clinical applications and to advance the development of Tibet licensed Taylor, five agonist program, specifically and Palomar and into Alaska.

Lisa Wolfe: Net loss for the quarter remained flat at one 5 million for the first quarter of 2025 compared with the first quarter of 2024.

Lisa Wolf: At March 31, 2025, cash and cash equivalents totaled $669,000 compared with $2 million at December 31, 2024. The company had working capital of $520,000 at March 31, 2025. We have no debt as of the end of the first quarter of 2025. Subsequent to the end of the quarter, we raised net proceeds of $1.7 million pursuant to the Equity Distribution Agreement, or ATM, program. In March, we secured a $25 million equity line of credit. Our first drawdown is expected to take place in the second quarter. Generally, the funds will be used to support advancing Tivic's clinical and pre-commercial activities.

Lisa Wolfe: At March 31, 2025, cash and cash equivalents totaled 669000, compared with 2 million at December 31, 'twenty 'twenty four.

Lisa Wolfe: The company had working capital of 520000 at March 31 2025.

Lisa Wolfe: We have no debt as of the end of the first quarter of 2025.

Lisa Wolfe: Subsequent to the end of the quarter, we raised net proceeds of $1 7 million pursuant to the equity distribution agreement or ATM program.

Lisa Wolfe: In March we secured a 25 million equity line of credit.

Lisa Wolfe: Our first draw down is expected to take place in the second quarter.

Lisa Wolfe: Generally the funds will be used to support advancing to the clinical and pre commercial activities.

Lisa Wolf: On May 9th, we entered into an $8.4 million strategic financing with an investor that provides the critical funds needed to support the company's transformation. We believe these funds, along with the other sources of capital currently available, such as the equity line of credit, will be sufficient to fund the company through GMP manufacturing validation for Intolimod, a key value inflection point.

Lisa Wolfe: On may 9th we entered into an $8 4 million strictly just financing with an investor that provides critical funds needed to support the company's transformation.

Lisa Wolfe: We believe these funds along with the other sources of capital currently available such as the equity line of credit will be sufficient to fund the company for GMP manufacturing validation Gorontalo Mod are key value inflection point.

Jennifer Ernst: With that, I will turn the call back over to Jennifer. Thank you, Lisa. And as I said earlier, today is focused on sharing more information about the TLR5 biologic program that we have initiated through this licensing agreement with Katerra BioPharm.

Lisa Wolfe: With that I will turn the call back over to Jennifer.

Jennifer Ernest: Thank you Lisa.

Lisa Wolfe: And as I said earlier today is focused on sharing more information about the T. L. R. Five biologic program that we have initiated through this licensing agreement was the chair of Biopharma.

Jennifer Ernst: This is a big move for the company. It's also an opportunity to dramatically accelerate the value creation. And for that reason, I want to provide investors more color and insight on the opportunity, the structure of the engagement with Statera, and with our financing partners, as well as the commercial roadmap.

Lisa Wolfe: This is a big move for the company.

Lisa Wolfe: Also an opportunity to dramatically accelerate the value creation.

Lisa Wolfe: And for that reason I wanted to provide investors more color and insight on the opportunity the structure of the engagement was to Tara.

Lisa Wolfe: And with our financing partners as well as the commercial roadmap.

Jennifer Ernst: As I turn this over to Michael in a few moments to provide more depth on the scientific perspective and Intellimod's history. Briefly, we have licensed an asset that has had over $140 million. invested previously by agencies such as the DOD, Department of Defense, DARPA, the Defense Advanced Research Program Agency, NASA, and BARDA. The agency focused on countermeasures for, among other threats, radiological and nuclear threats. It's no wonder, then, that senior officials at the White House and FDA welcomed our briefing a few weeks ago and showed positive indications to help this important drug candidate move forward for utilization by the U.S.

Lisa Wolfe: As I turn this over to Michael and see a moment to provide more depth on the scientific personnel perspective and in telematics history.

Speaker Change: Briefly we have licensed announced that that has had over $140 million $140 million.

Lisa Wolfe: Invested previously.

Lisa Wolfe: Such as the D O D Department of Defense DARPA. The Defense Advanced Research program Agency, NASA and BARDA. The agency focused on countermeasures for among other threats radiological and nuclear threats.

Lisa Wolfe: It's no wonder them, but senior officials at the White House and F. D. A welcomed our brief in a few weeks ago and showed positive indications to help this important drug candidate look forward for utilization by the U S and our allies.

Jennifer Ernst: and our allies.

Jennifer Ernst: Now, how this came to be. Tivic has been searching for an asset to bring into the company that would complement the emerging immunomodulatory effects that we are seeing from our BNS program, one that would provide disproportionate value creation opportunity for our investors. At the same time, Satara Biopharma had been looking for a partner that had the requisite commercial infrastructure and experience, including the NASDAQ listings, to provide returns to shareholders. For clarity, Satara wasn't simply looking for an exit strategy, but a partnership, a partnership that could provide long-term value creation for their shareholders. So it truly was one of those rare occasions when two parties' needs and strategic interests were perfectly aligned, and we believe the combination of our scientific and clinical resources has potential to offer significant synergy in the market over time.

Lisa Wolfe: Now how this came to be so.

Lisa Wolfe: If it has been searching for in house that they bring into the company that would complement the emerging among immuno modulator effects.

Lisa Wolfe: We are seeing from our VNS program.

Lisa Wolfe: And that will provide disproportionate value creation opportunity for our investors.

Speaker Change: At the same time, the Terra Biopharma had been looking for a partner that had the requisite commercial infrastructure and experience, including the NASDAQ listing to provide returns to shareholders.

Speaker Change: For clarity the Terra wasn't simply looking for an exit strategy, but a partnership a partnership that could provide long term value creation for their shareholders.

Speaker Change: So it truly was one of those rare occasion.

Speaker Change: When two parties needs and strategic interests were perfectly aligned and we believe the combination of our scientific and clinical resources has potential to offer significant synergy in the market over time.

Jennifer Ernst: The licensing agreement we entered into allows Tivic to flexibly advance in Tolomod for acute radiation syndrome and other indications. as well as for Entelast, a derivative Entelamide. Entelast is to respond to changes in market conditions and to utilize capital as appropriate. As the program progresses, Satara will receive additional payments in equity or cash for milestones and royalties, giving them the long-term value creation opportunity that they were looking for. We are also able to expand the license as we conduct a complete clinical validation of Entolomide's use for additional indications. For example, after signing the initial agreement for entolamide for acute radiation syndrome, we expanded our license to include the neutropenia indication.

Speaker Change: Oh, the licensing agreement, we entered into allows to Vic to flexibly advance in whole Ahmad for acute radiation syndrome and other indications.

Speaker Change: As well as for infill last of a derivative and sell them on lots of us to respond to changes in market conditions and to utilize capital as appropriate.

Speaker Change: As the program progresses, so terra will receive additional payments and equity or cash for milestones and royalties given that in the long term value creation opportunity that they were looking for.

Speaker Change: We're also able to expand the license as we conduct a complete clinical validation of the tolling model used for industrial indications.

Speaker Change: For example, after signing the initial agreement for Untold I'm on for acute radiation syndrome, we expanded our license to include the neutropenia indication.

Jennifer Ernst: Net, I want investors to understand this is an opportunity that has very long legs. It's not a one-off.

Speaker Change: No I want investors to understand that this is not this is an opportunity that has very long legs. It's not a one off it is a significant strategic shift in the company and fundamentally it's a new foundation for growth.

Jennifer Ernst: It's a significant strategic shift in the company, and fundamentally it's a new foundation for growth. So at the time of signing the agreement, we thought that Tivic's valuation did not fully reflect the opportunity with our BNS portfolio. And likewise, since Tara felt that as an OTC company, it could not get the market credit it deserves to be asked for. So I am thrilled about the opportunity to now be bringing these forward under our NASDAQ company, and I'm thrilled about the progress we are making. Tivic is a much better position and stronger company as a result.

Speaker Change: So at the time of signing the agreement we felt the topix valuation did not fully reflect the opportunity with our BNS portfolio and likewise, the tariff up it doesn't OTC company it could not get the market credit it alerts the assets.

Speaker Change: So I am thrilled about the opportunity to now be bringing these forward under under our NASDAQ company and I'm thrilled about the progress we are making.

Speaker Change: Civic is a much better position and stronger company as a result.

Jennifer Ernst: Now, I would be remiss, though, if I didn't point out that having Michael Handley, the former CEO of Teterra Biopharma, join us in a dual role as Chief Operating Officer and President of Biopharma. gave both me and the rest of the board, let's just say a level of enthusiasm that really sealed the deal. So, to introduce Mike, he brings the Tivic hands-on experience launching 17 FDA-approved drugs, as well as experience in neuromodulation, like that in our bioelectronics portfolio. It truly is a rare combination, one that I and our team has well. Importantly, out of his impressive track record, one particularly important piece of information.

Speaker Change: Now I would be remiss, though if I didn't point out that having Michael Hadley, former Ceos to Terra biopharma join us in a dual role of Chief operating officer and President of Biopharma.

Speaker Change: They're both me and the rest of the board of let's just say a level of enthusiasm that really sealed the deal.

Speaker Change: So to introduce Mike he brings with it a hands on experience launching 17 FDA approved drugs.

Speaker Change: As well as experience in Neuromodulation like that in our bio electronics portfolio. It truly is a rare combination one that I and our team as well sometimes.

Speaker Change: Now importantly out of his impressive track record, one, particularly important piece of information.

Jennifer Ernst: Michael was directly involved in developing and launching the two drugs that are currently approved for the indications we are targeting with Entolomib. So yeah, there are approved drugs and a multi-billion dollar category. But none of the approved drugs offer the suite of benefits that Entolomide and Entolasta have demonstrated in clinical trials. from his role at Scotera, he saw an opportunity for significant improvements in treatment, not only for acute radiation syndrome, but also for a host of other diseases involving suppressed immune activity.

Speaker Change: Michael was directly involved in developing and launching the two drugs that are currently approved for the indications we are targeting with and told them up.

Speaker Change: So yeah, there are approved drugs and a multibillion dollar category.

Speaker Change: But none of the approved drugs offers a suite of benefits and untold them out and that's Alaska demonstrated in clinical trials.

Speaker Change: So from his role at the Terra he saw an opportunity for significant improvements in treatment not only for acute radiation syndrome, but also for a host of other diseases involving suppressed immune activity.

Speaker Change: Diseases that can be caused by radiation exposure, obviously medical or otherwise.

Speaker Change: From certain medications.

Speaker Change: <unk> genetics, and even simply from getting old.

Michael Hanley: This is a good place to turn the call over to Michael to provide more information on the history and scientific aspects of the drugs and ptolomide and enthalasmosis. after which I will briefly touch on our BNS program.

Speaker Change: So that's what I think is a good place for me to turn the call over to Michael.

Speaker Change: Are they buying more information on the history of scientific aspects of the drugs and told them at and philosophy.

Speaker Change: After which I will briefly touch on our BNS program.

Michael Hanley: Michael, you ready to take it away? Jennifer, thank you so much for your kind and warm introduction. I can't tell you how excited I am to be a part of the Tivic team. and also to take part in the Tivic First Quarter Conference Call. I'm already engaged in advancing Tivic's newest clinical assets, and I'm confidently anticipating the commercialization of Tivic's first TLR5 drug candidate, Intolimod, and I'll walk us through the proposed steps today.

Michael: Michael why don't you take it away.

Michael: Jennifer Thank you so much for your kind of warm introduction.

Michael: Can't tell you how excited I am to be a part of it to the team.

Michael: And also to take part in the first quarter conference call I'm already engaged in advancing to the newest clinical assets.

Michael: Confidently anticipating the commercialization of generics first chill arc, five drug candidates and Telemark and I'll walk us through the proposed steps today.

Michael Hanley: First, some background. The Toll-Like Receptor 5, or TLR5 as we've been calling it, is a unique receptor that can be targeted by therapies to modulate the immune system. As we all know, the immune system has a broad range of effects on many diseases, and if not working properly, can result in patient sickness or death. In the case of radiation exposure, either medical radiation for the treatment of cancer or nuclear radiation exposure, there are two cells in the bodies that are significantly affected by ionizing radiation. The first to be affected is the hemopoietic cells in your bone marrow.

Michael: First some background.

The toll like receptor five or TLO or five years, we've been calling it as a unique receptor that can be targeted by therapies to modulate the immune system.

Michael: As we all know the immune system has a broad range of effects on many diseases and it's not working properly can result in patient sickness or death.

Michael: In the case of radiation exposure, either medical radiation or treatment for the treatment of cancer or nuclear radiation exposure. There are two cells in our bodies that are significantly affected by ionizing radiation.

Michael: The first to be affected is the hematopoietic cells and your bone marrow.

Michael Hanley: These are cells that produce your white blood cells to fend off infections. The second cells that are typically targeted by radiation are gastrointestinal cells that line your intestine. These are responsible for nutrient absorption. If either of these cells are damaged or destroyed, an individual will not be able to fight off infections or absorb nutrients, eventually resulting in the patient's. This is where our TLR5 agonist, Intolimod, and its next generation version, Intolasta, both drugs that activate the TLR5 receptor, in turn, activate several key pathways that protect and stimulate the hematopoietic cells in the bone marrow and also protect the GI endothelial cells from dying.

Michael: These are cells that produce your white blood cells to fend off infections. The second shell, so typically targeted by radiation or gastrointestinal solves the pioneering trusted ease.

Michael: These are responsible for nutrients option. If you have these cells are damaged or destroyed an individual might be able to fight off infections or absorb nutrients. Eventually result in patient stuff.

This is where our chill or five agonist phentolamine and its next generation version into Alaska, both drugs that activated to tailor five receptor in turn activate several key pathways that protect and stimulate the hemo product shelf in the bone marrow and also protect the Gi endothelial cells from dying.

Michael Hanley: In acute radiation syndrome, or ARS as we've been calling it, which is our first targeted indication and is used in biodefense applications, the body is exposed to lethal levels of ionizing radiation. This is typically due to nuclear detonations or nuclear fallout. Now the U.S. government maintains what is called a national stockpile of emergency use products. This means that Intolimod, as an ARS countermeasure, could be of interest to the U.S. federal, state, and local governments, as well as some of our U.S. allied governments.

Michael: And acute radiation syndrome or E. R. S of freedom client, which was our first targeted indication and is used in biodefense applications. The body is exposed lethal levels of ionizing radiation.

Michael: This is typically due to nuclear detonations or nuclear fallout.

Michael: Now the U S government maintains what is called a national stockpile of emergency use products. This means that in total mod as a matter of countermeasure could be of interest to the U S Federal state and local governments as well as some of our U S allies governments.

Michael Hanley: Now turning to Intolomob's mechanism of action. Intolimod is a bioengineered derivative of the flagellin protein. It was designed to retain its specific TLR5 activity while increasing its stability, reducing its immunogenicity, or risk of adverse immune response. and enabling high-yield production or commercialization.

Michael: Now turning to <unk> mechanism of action.

Michael: And told them out as a bioengineered derivative of the flagellin protein. There was designed to retain its specific teal or five activity, while increasing its stability, reducing its immunogenicity or risk of adverse immune responses and enabling high yield production.

Or commercialization.

Michael Hanley: Manufacturing. Radiation exposure, weather caused by medical treatment. or from warfare scenarios results in damage to bone marrow and GI cells and eventually cell death. This is primarily due to the loss of p53 function. The p53 gene is a crucial tumor suppressor that aids in maintaining cellular health by regulating the cell cycle. It also facilitates DNA repair and induces apoptosis in response to severe DNA damage. Without this tumor suppressing effect, cancer cells are allowed to continue their abnormal proliferation despite the DNA damage they may have. The result typically leads to patient death. Now, Intolimidex, by stopping the process and making it an anti-apoptosis...

Michael: Manufacturing.

Michael: Radiation exposure, whether caused by medical treatments or for more first scenarios results in damage to bone marrow and Gi cells and eventually sell Beth. This is primarily due to the loss of P 53 function.

Michael: The P 53 gene because of crude crucial tumor suppressor that AIDS in maintaining cellular health by regulating cell cycle.

Michael: It also facilitates DNA repair.

Michael: And induces a participant response to severe DNA damage.

Michael: Without this tumor suppressing effect cancer cells are allowed to continue their abnormal Clifford ocean. Despite the DNA damage that may have.

Michael: The resulting the result, typically leads to patient deaths now and told them it acts by stopping the process of making it.

Michael: Hey, a pop ptosis.

Michael Hanley: In other words, it inhibits the cells from killing themselves and providing critical action in suppressing the p53 gene.

Michael: In other words, it inhibits the cells from killing themselves and providing critical.

Michael: Action in suppressing the P 53 gene.

Michael Hanley: There are currently several approved treatments for ARS on the market, as Jennifer referred to. However, they come with some limitations.

Speaker Change: There are currently several approved treatments for us on the market as Jennifer referred to however, they come with some limitations we.

Michael Hanley: We believe Intelimod is a superior product candidate for the following reasons. First, it is the only drug that protects the bone marrow and the GI tract. Second, it's the only drug that can also be used prophylactically or as a preventative treatment and said as only as a therapeutic treatment.

Speaker Change: We believe in Telemark is a superior product candidate for the following reasons first it is the only drug that protects the bone marrow and the Gi tract.

Speaker Change: Second it's showing drug that can also be used prophylactically or as a preventative treatment instead, it's only as a therapeutic treatment.

Michael Hanley: Let's talk about intolerance development. Since it is not feasible or ethical to test the efficacy of intolerant on humans, i.e. exposing them to radiation, it has been developed under the FDA's animal rule. The animal rule authorizes companies like Tivic to test a drug in animals and not humans. Consequently, the FDA will only rely on data from animal studies or efficacy data to provide evidence of the product's effectiveness. under circumstances where there is reasonably well-understood mechanisms of action for the product, in this case, intolerant. In terms of data, a pivotal efficacy study was conducted in 179 non-human primates.

Speaker Change: Let's talk about enrollments development.

Speaker Change: So it is not feasible or ethical to test the efficacy of installing it on humans I E you're exposing them to radiation.

Speaker Change: It has been developed under the Fda's animal rule, the animal rule authorizes companies like <unk> to test the drug in animals and not humans.

Speaker Change: Consequently, the FDA will only rely on data from animal studies for efficacy data to provide evidence of the product's attractiveness.

Speaker Change: Under circumstances, where there is reasonably well understood mechanism of action for the product in this case in polymer.

Speaker Change: In terms of data a pivotal efficacy study was conducted in 179 non human primates demonstrated with a high degree of statistical significance that a single injection of <unk> administered 25 hours after exposure about 70% lethal dose of radiation improved the animals.

Michael Hanley: It demonstrated with a high degree of statistical significance that a single injection of entalamide administered 25 hours after exposure of a 70% lethal dose of radiation improved the animal's survival by nearly three-fold compared to the control group who did not receive the drug. Dose dependence of intolerance efficacy was demonstrated with doses above the minimal efficacious dose. This established a plateau at approximately 75% survival at 60 days after lethal radiation. which compared to 27.5% survival rate for the placebo group, the group that doesn't receive the drug.

Speaker Change: Survival by nearly three fold compared to the control group, who did not receive the drug.

Speaker Change: Dose dependence of intolerance efficacy was demonstrated with doses above the minimal efficacious dose.

Speaker Change: This established a plateau at approximately 75% survival at 60 days after lethal radiation.

Speaker Change: Which compared to 27.5% survival rate for the placebo group the group that doesn't received the drug.

Michael Hanley: With respect to safety data in humans, there are data for more than 230 human patients in which Intolimedia has been tested. Of these, 150 were healthy human subjects. In these subjects, they demonstrated the safety profile and established the dose-dependent effect of Intolimod on efficacy biomarkers in humans. A phase one open-label dose escalation trial of intolerant was conducted in 26 patients with advanced cancer in the United States. The data for the U.S. study were presented at the annual meeting of the American Society of Clinical Oncology, ORASCO. And in two cancer oncology studies, more than 60 cancer patients were administered Intolimod and showed a statistical increase in white blood cell count, which is a distinct biomarker of what Intolimod is doing.

Speaker Change: With respect to safety data in humans, there are data for more than 230, human patients and which should tell them. It has been tested.

Speaker Change: Of these 150 worst healthy human subjects.

Speaker Change: And these subjects they demonstrated the safety profile and establish the dose dependent effect of <unk> on efficacy biomarkers in humans.

Speaker Change: A phase one open label dose escalation trial of <unk> was conducted in 26 patients with advanced cancer in the United States.

Speaker Change: Data for the U S study were presented at the annual meeting of the American Society of clinical oncology or <unk>.

Speaker Change: And then two cancer oncology studies more than 60 cancer patients who are administered in total and showed a statistical increase in white blood cell count, which is a distinct biomarker of what <unk> is doing.

Michael Hanley: This demonstrates the efficacy of the drug. Additionally, which was observed and is expected, were a few transient adverse effects. There were a mild decrease in blood pressure, a slight elevation in the liver enzyme, and a transient to mild to moderate flu-like symptoms, which go away after a few hours.

Speaker Change: This demonstrates the efficacy of the drug Additionally, which was observed and as expected were a few transient adverse effects. There a mild decrease in blood pressure, a slight elevation of liver enzymes and a transient mild to moderate flu like symptoms, which go away after a few hours.

Michael Hanley: In addition to the ARS indication, it is believed that Entelmod and Entelasta will have utility in treating the following human ailments. Neutropenia, as Jennifer pointed out earlier, which is characterized by abnormally low concentration of neutrophils in the blood and serves as the primary defense against infection. Neutropenia has a wide range of causes, from genetics to cancer treatments and age. Currently, it's an unmet medical need that continues to grow worldwide. The treatment market is expected to reach $20 billion by 2029.

Speaker Change: In addition to the Arris indication. It is believed that in <unk> and <unk> will have utility in treating the following human elements neutropenia as Jennifer pointed out earlier, which is characterized by abnormally low concentration of neutrophils in the blood and serves as the primary defense against infections.

Speaker Change: Neutropenia as a wide range of causes from generics to cancer treatments and age.

Speaker Change: Currently.

Speaker Change: Met medical need that continues to grow worldwide. The treatment market is expected to reach $20 billion by 2029.

Michael Hanley: Also, Intolimod can be used for the treatment of lymphocyte exhaustion, which is seen in all patients that have been treated with chemotherapy and radiation. This is additionally a multibillion dollar market.

Speaker Change: Also in <unk> can be used for the treatment of lymphocyte exhaustion, which you've seen in all patients that had been treated with chemotherapy and radiation.

Speaker Change: Additionally, a multibillion dollar market.

Michael Hanley: Another indication that may be pursued is immunosenescence. or the slow inactivation of the immune system as one ages. In a phase two clinical trial conducted at the Mayo Clinic, it was demonstrated that a single dose of Intolimod helped activate the immune system in a geriatric population who had a suboptimal immune response. The condition will eventually affect every living person as they become older. All of us are susceptible to immunosynovitis.

Speaker Change: Another indication that may be pursued as immuno senescence or the slow and activation of immune system is one agents in a phase II clinical trial conducted at the Mayo clinic. It was demonstrated that a single dose of <unk> helped to activate the immune system in a geriatric population.

Speaker Change: Who had a suboptimal immune response the condition will eventually affect every living person as they become over all of us are susceptible to Nino senescence.

Michael Hanley: This is why we're excited about the potential of both Intalamide and Intalassa to help patients overcome a number of immune dysfunction illness. and its cause for great excitement.

Speaker Change: This is why we are excited about the potential of both <unk> and <unk> to help patients overcome a number of immune dysfunction illnesses and its cause for great excitement.

Jennifer Ernst: With that, I'll turn it back over to Jennifer for her final remarks. Jennifer? Thank you, Michael. I truly hope that this last section you covered helps our investors understand the significant potential opportunity with the TLR-5 program within Toll-a-Mod and Intel Labs.

Speaker Change: With that I'll turn it back over to Jennifer for her final remarks Jenifer.

Jennifer Ernest: Thank you Michael.

Jennifer Ernest: I truly hope that this last section you covered it helps us it helps our investors understand the significant potential opportunity with the T. L. R. Five program within told him ordinance Alaska.

Jennifer Ernst: I think it's important to also add that the FDA granted fast-track status to entolamide and orphan drug status for ARF. We recently met with senior leadership at the FDA, who confirmed these opportunities and opportunities for additional accelerated pathways and potentially emergency use designations, both in the U.S. and under export control outside the U.S. In terms of the progress you mentioned, yesterday we announced our GMP manufacturing validation for entolamide, and for clarity's sake, I want to underscore that the drug itself has already been validated in the type of studies that Michael went over. It's been validated for acute radiation syndrome through phase 3 trials under the animal rule.

Jennifer Ernest: I think it's important to also add that the FDA granted fast track status to a whole lot in orphan drug status for a R. S.

Jennifer Ernest: We recently met with senior leadership at the F. D. A confirms these opportunities and opportunities for additional accelerated pathways.

Jennifer Ernest: And potentially emergency use designation both in the U S and under export control outside the U S.

Jennifer Ernest: In terms of the progress you mentioned yesterday, we announced our GMP manufacturing validation for Untold Ahmad and for clarity sake, I want to underscore that the drug itself has already been validated and the type of studies that Michael Wendover.

Jennifer Ernest: Validated for acute radiation syndrome through phase III trials under the animal rule.

Jennifer Ernest: Yeah.

Jennifer Ernst: Filing the biological licensing application of BLA with the FDA, however, requires us to also validate the manufacturing process itself, which is what we announced and are now undertaking. Given Scorpius's team's significant experience in biological manufacturing, we have a very high level of confidence in this collaboration and a successful outcome. But to set context, once the manufacturing process is validated, we will then need to secure bioequivalency data and one year of stability data before filing the complete VLA with the FDA. We will obviously be communicating as each of those milestones are completed.

Jennifer Ernest: Finally in the biological license application or BLA with the FDA. However requires us also validate the manufacturing process itself, which is what we announced on enel undertaking.

Speaker Change: Kevin Scorpius team significant experience in biological manufacturing, we have a very high level of confidence in this collaboration and they'd successful outcomes.

Speaker Change: But to set context once the manufacturing process is validated we will then need to secure a bioequivalence data in one year of stability data before filing the complete BLA with the FDA.

Speaker Change: We will obviously be communicating as each of those milestones are completed.

Jennifer Ernst: I do promise I will briefly speak to our VNS program. I don't want to give investors the impression that our VNS program is no longer a focus. While we have reduced investment in clear-ups... We're so deeply committed to the non-invasive DNS work that we have initiated. Our prior studies of our non-invasive vagus nerve stimulation methods have already shown exciting results related to biological changes in autonomic, cardiac, and central nervous We are currently receiving positive signals out of the second study that these effects effects that were strong by any standard when we first reported them can be further optimized.

Carlos: Thank you Carlos I would briefly speak to our VNS program I don't want to.

Speaker Change: Given doctor the impression that our VNS program is no longer a focus while we have reduced investment and clear up.

Carlos: We are still deeply committed to the noninvasive Vietnam work that we have initiated.

Carlos: Our prayers of our noninvasive vagus nerve stimulation methods have already shown exciting results related to biological changes in autonomic cardiac and central nervous systems.

Carlos: We are currently receiving positive signals out of the second study that these effects.

Carlos: The fact that were strong by any standard when we first reported them can be further optimized.

Jennifer Ernst: within the ongoing clinical work that we are doing at the Feinstein Institute. It goes between the Feinstein Institute and we expect. Based on some of the early positive results that we got from the Feinstein Institute, we opted to add additional work, increasing the robustness and completeness of the data. This did slightly delay our readouts. We expect that all phases of the optimization study will be complete in another month or so, which means you can expect to hear complete data readouts coming out over the summer.

Carlos: Within the ongoing clinical work that we're doing at the Feinstein Institute.

Carlos: It goes between the Feinstein Institute and we expect.

Carlos: Based on some of the early positive results that we got from the Feinstein Institute, we opted to add additional work increasing the robustness and completeness of the data. This did slightly delay our readouts, we expect that all phases of the optimization study will be complete in another month or so which means you can expect to hear a complete data read.

Carlos: [noise] outs coming out over the summer.

Jennifer Ernst: We expect to provide a more comprehensive report this summer, and I will focus then on the next call on more of the key data showing the true advancements in the state of the art in vagus nerve stimulation. The product candidates that will be emerging from this program are expected to be highly differentiated from the wellness products that are seen in market today. offering instead medically sound, clinically validated, robust alternatives to implanted vagus nerve stimulation devices.

Carlos: We expect to provide a more comprehensive report this summer and I will focus then on the next call on one of the key data showing the two announcements in the state of the art and vagus nerve stimulation.

Carlos: The product candidates that are will be emerging from this program are expected to be highly differentiated highly differentiated from the wellness products that are seeing the market today.

Carlos: Offering instead medically found clinically validated validated.

Carlos: Robust alternatives to implanted vagus nerve stimulation devices.

Yeah.

Carlos: Yeah.

Jennifer Ernst: So, in closing... We are aggressively accelerating the strategic transformation of Tivic into a diversified immunotherapeutics company. with both late and early-stage treatments in the pipeline. We have a robust pipeline for addressing both over and under active immune systems. This is a very unique position in the market. We believe we have access to sufficient capital to meet our near-term and strategic priorities and are well aligned with our financing partners for building long-term value. And in the short term, we have a number of catalyst opportunities as we move Entalamide towards commercialization and enter additional clinical trials for both the Biologic and our BNS Bioelectronics product candidates.

Carlos: So in closing.

Carlos: We are aggressively accelerating the strategic transformation of civic Intertek, Our society immuno Therapeutics company.

Carlos: Both late and early stage treatments in the pipeline.

Carlos: We have a robust pipeline for addressing both over M underactive immune systems.

Carlos: Our unique position in the market.

We believe we have access to sufficient capital to meet our near and near term and strategic priorities and are well aligned with our financing partners for building long term value and in the short term, we have a number of catalysts opportunities as we move in polymer towards commercialization.

Carlos: And then for additional clinical trials for both the biologic and our VNS via electronic product candidates.

Jennifer Ernst: We will, in the near future, be sending out our Annual General Meeting Announcements, and at the Annual General Meeting, investors will have an opportunity to vote on several measures that are associated with this strategic transformation. I hope that we will be looking forward to your support.

Carlos: We will in the near future be sending out our annual general meeting announcements and at the annual General meeting investors will have an opportunity to vote on this vote on several measures that are associated with this strategic transformation.

Carlos: I hope that we will be looking forward to your support.

Jennifer Ernst: Now we view 2025 as a year of tremendous opportunity, one with a number of key milestones that will be coming in the second half of the year. We look forward to reporting to you as we move the company increasingly into the new areas. Delivering what we expect will be life-changing treatments for patients in need and strong value creation for shareholders.

Carlos: Now we view 2025 is a year of tremendous opportunity when it was a number of key milestones that will be coming in the second half of the year.

Carlos: We look forward to reporting to you as we move the company increasingly into the new areas delivering what we expect will be life changing treatments for patients in need and.

Carlos: And strong value creation for shareholders.

Jennifer Ernst: And with that, I'd like to say thank you for the time you've taken today, and have a very good rest of your day.

Carlos: And with that I'd like to say, thank you for the time you've taken today.

Carlos: And that's a very good rest of your day.

Operator: Thank you.

Carlos: Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.

Operator: This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.

Okay.

Carlos: Okay.

Carlos: Okay.

Carlos: Okay.

Carlos: [music].

Yeah.

Carlos: Okay.

Carlos: [music].

Operator: For more information, call 1-800-422-8443 For more information, call 1-800-422-8443

Carlos: Okay.

Carlos: [music].

Carlos: Okay.

Carlos: Okay.

Carlos: Yeah.