Q3 2025 Palvella Therapeutics Inc Earnings Call

Speaker #1: After the speakers' presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press *11 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press *11 again. Please be advised today's conference is being recorded. I would now like to end the conference over to your speaker today, Bo Hanhui.

Speaker #1: Please go

Speaker #1: ahead. Thank you,

Speaker #2: Operator: Good morning, and thank you for joining the Palvella Therapeutics third quarter 2025 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the investors' section of our website at www.palvellatx.com.

Speaker #2: On today's call, you will first hear from Wes Kaufman, our founder and chief executive officer. Followed by Dr. Jeff Martini, our chief scientific officer.

Speaker #2: And Matt Korenberg, our chief financial officer. Wes will return for closing remarks before we open the line for Q&A. Before we begin, please note that today's remarks may include forward-looking statements regarding our development programs, regulatory strategy, commercial planning, and financial outlook.

Speaker #2: These statements are based on current assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our SEC filings for a full discussion of these risk factors.

Speaker #2: And now, I'll turn the call over to Wes.

Speaker #1: Thanks, Bo Han, and good morning, everyone. As Palvella approaches our one-year anniversary, as a public company next month, we've generated strong momentum on our mission to serve patients and families living with serious rare skin diseases, our strategy to develop and bring to patients the first FDA-approved therapy in each rare disease indication we pursue, and our vision to become the leading rare disease biopharmaceutical company addressing serious skin diseases with no FDA-approved therapies.

Speaker #1: First, I want to begin by highlighting our broadened rare disease pipeline, which now encompasses four serious rare skin diseases we're actively pursuing with Qtorin-derived product candidates.

Speaker #1: As well as the leadership we've recruited to maximize our probability of achieving development, regulatory, and commercial success. A major driving factor motivating our decision to go public was to expand the reach and application of our innovative Qtorin platform while strengthening the talent and capabilities required to reproducibly generate novel topical product candidates for serious rare diseases.

Speaker #1: In September, we were fortunate to recruit Dr. David Osborne to Palvella as our chief innovation officer. David's deep product development and dermatology expertise is already strengthening our ability to extend the application of the Qtorin platform as reflected in last week's announcement of Qtorin-Petavistatin, our second product candidate from the platform for the treatment of disseminated, superficial, actinic porokeratosis.

Speaker #1: I am truly thrilled to work alongside David, given his stature in the field of dermatology and his proven track record of bringing improved medicines to patients in need.

Speaker #1: Building on the theme of leadership, another driving factor in becoming a public company is our vision to commercialize on a standalone basis in the US, Qtorin rapamycin for microcystic lymphatic malformations and ultimately other mTOR-driven skin diseases.

Speaker #1: Earlier this year, we welcomed Ashley Kline to Palvella as our chief commercial officer. Ashley previously led Dompe's US business and oversaw the launch of Oxervaid, a novel topical therapy for neurotrophic keratitis.

Speaker #1: progressive disease with no prior FDA-approved treatment. Under Ashley's leadership, A rare and Oxervaid generated more than $500 million in annual US sales and has since gone on to achieve annual US sales exceeding $1 billion.

Speaker #1: Since joining Palvella, Ashley has already been applying the strategies and tactics from that successful rare disease launch to accelerate and sharpen Palvella's U.S. commercial readiness ahead of a potential first-in-disease approval for Qtorin rapamycin.

Speaker #1: Second, nearly a year into our public life, we have delivered on-time operational execution across our clinical programs. Our phase three study of Qtorin rapamycin and microcystic lymphatic malformations over-enrolled in our phase two study in cutaneous venous malformations completed enrollment last quarter.

Speaker #1: Achieving full enrollment across multiple rare disease studies reflects both the urgency of the diseases we aim to address and the strength of our collaborations with leading expert clinicians who are driving progress toward new targeted therapeutic options for these patients.

Speaker #1: Third, we continue to see a largely untapped landscape of opportunity to drive meaningful patient impact and bring much-needed innovation to rare skin diseases. Rare skin diseases represent a high unmet need, low competitive intensity corridor of the orphan disease universe.

Speaker #1: With nearly 600 identified and over 98% still lacking a first FDA-approved therapy. This underscores how early we are at Palvella in what we are capable of achieving through relentless pursuit of our vision.

Speaker #1: Nearly every week, our scientific team uncovers additional serious rare skin diseases with no approved treatments or we identify molecules with strong scientific potential that align with our development capabilities and the Qtorin platform.

Speaker #1: This expanding landscape underscores the significant opportunity to replicate and extend the progress we have achieved with Qtorin rapamycin and Qtorin-Petavistatin across additional underserved diseases.

Speaker #1: With both a compelling late-stage pipeline and a versatile platform in place, Palvella continues to execute with urgency, discipline, and capital efficiency on our vision of building the leading rare disease biopharmaceutical company focused on addressing serious rare skin diseases.

Speaker #1: Our management team has worked diligently for years to position Palvella for the four milestones you see listed on this slide. From the earliest days of developing Qtorin rapamycin, I viewed its clinical and commercial potential as a pipeline and a product with the ability to eventually address multiple skin diseases driven by over-activation of the mammalian target of rapamycin or mTOR pathway.

No FDA approved, therapy exists to slow the progression of their disease or improve their clinical outcomes. Relegating patients to rely on Interventional approaches such as laser and sclerotherapy that often carry High recurrence rates and do not address the underlying biology.

In the third quarter, we announced full enrollment of our Phase 2 Toya, study of Quran rapamycin in this indication and we remain on track next month to announce Topline data from this Phase 2 proof of concept study, evaluating tutorial on rapamycin for cutaneous VMS.

And finally, number 4, our phase 3 cell of the study will soon conclude with a Topline readout. Next quarter, the study over enrolled which was driven by the dedication of our clinical investigators and the strong execution of the palla clinical operations team. This program benefits from multiple FDA designations, including breakthrough therapy FasTrak and orphan drug designation which reflect the seriousness of microcystic, lymphatic formations and the potential of Quran rapamycin to address a significant unmet medical need

While we await phase 3 Topline data. Next quarter, we are advancing NDA preparation and Commercial Readiness and activities. In parallel, to ensure we are fully prepared for the next exciting stage. Across all of our rare disease indications. Our objective is clear upon potential regulatory approval. We want to establish Quran rapamycin and tutoring pitavastatin. As first line standard of care therapies for these patients

The next 18 months will be a catalyst Rich period for Paula. Our primary objective for Quran, rapamycin is achieving FDA approval and we are executing with urgency towards that goal. In parallel. We are expanding the clinical reach of Quran rapamycin across. Multiple mtor driven skin diseases, including cutaneous, VMS, clinically significant angiokeratomas and additional high amount need indications that we have mapped and planned to announce consistent with Quran rapamycin.

In addition to Torme pabustan is nearing completion of formulation development, and remains on track to enter the clinic in the second half of 2026.

And our excitement is growing for the additional pipeline programs represented on the bottom of the slide, multiple molecules are in various stages of testing with the Quran platform. And our objective is to have a steady Cadence of Novel, Quran product candidates, emerging from the platform, the Pula management team are energized and focused to deliver strong results on these anticipated value creating milestones

Turning to our clinical programs Paula is pioneering therapeutic development in cutaneous, venous malformations a disease where no FDA approved treatments exist today. And where the cutaneous manifestations have been, well, documented to be particularly challenging to treat. We are pursuing this indication based on the underlying biology, which supports a central role of mtor pathway activation and driving the disease as well as the many published studies of systemic, repam mice in the demonstrate clinical benefit in these patients,

Our Phase 2 single arm Baseline. Controlled toy. The study in this indication is now fully enrolled with strong participation from several leading vascular anomaly centers. Many of whom also collaborate with us on our microcystic. Lymphatic malformation program

Because cutaneous venous malformations represent a new new disease state for therapeutic development, the study includes no statistical hierarchy and therefore no designated primary endpoint. This structure is intentional and appropriate for a proof of concept study, allowing us to more fully understand the effect size across a range of clinician reported and patient reported outcome measures before selecting the most meaningful endpoints for a potential phase 3.

We also selected a single our Baseline control design, given the well-established, natural history of cutaneous venous malformation, which shows no spontaneous Improvement and makes each patient an appropriate internal control.

Overall, tovo stays to proof of concept. Study design will enable Paul Bella to evaluate the safety and tolerability of ktor and rapamycin in this new disease State while. Also, assessing efficacy across multiple clinician and patient, reported outcomes.

Often, the progressive and cutaneous manifestations can be particularly debilitating, frequently painful, disfiguring, and prone to bleeding, clotting, or recurrent thrombotic events. Patients and clinicians consistently express the need for less invasive, more durable treatment options that can meaningfully alter the course of the disease from a pharmacotherapy standpoint. There are no FDA-approved treatments currently available; interventions, including laser sclerotherapy and other procedural approaches, are invasive, offer limited durability, and are associated with high recurrence rates and the need for repeated procedures. Importantly, these approaches are not disease-modifying in many patients, ultimately exhausting these procedural options. Against this backdrop, a Phase 2 study is designed first to evaluate the safety and tolerability of rapamycin.

And especially important is the consideration given the invasive nature and limited durability of current care.

On the efficacy side. This is a proof of concept, study intended to identify 1 or more endpoints that could ultimately served as phase. 3 primary endpoints, we will evaluate whether tetoron rapamycin provides evidence of clinical Improvement or demonstrates. The ability to slow the progression of these cutaneous lesions. Something current treatments have not been shown to consistently achieve.

Our internal threshold for establishing advocacy is obviously 30% of patients with evidence of clinical Improvement, and similar to our microcystic. LM Phase 2 program. We will assess whether Quran rapamycin demonstrates a Time dependent pharmacologic effect consistent with its targeted mechanism of action.

Taken together, this study is designed to establish the foundation for a potential phase 3 program, and ultimately a first in disease therapy for patients, living with a lifelong. Genetically driven condition that today has no durable non-invasive treatment options.

Turning to our lead program in microcystic. Lymphatic malformation we continue to to advance what has the potential to become the first FDA approved therapy for this serious lifelong disease, our phase 3 Salvatore remains on track and we expect to report Topline data in the first quarter of 2026. We recently received the second year of funding from the fda's orphan. Drug grant program, following fda's review of our annual performance progress report

Which we believe is important evidence that fda's ongoing support of our phase 3 single arm Baseline, controlled study design and selected endpoints.

We remain on track for a planned, NDA submission in the second half of 2026 supported by the re recent strengthening of our Regulatory Affairs leadership team with the addition of shama Muna.

Our NDA team and strategy, including our outside regulatory advisors have been constructed to drive Excellence throughout the registration and review process.

Upon successful, NDA submission and potential acceptance. We anticipate being the beneficiaries of the various features of the Breakthrough and FasTrak designations that we've been granted, including rolling submission priority review and more frequent Communications with our FDA collaborators

Commercially our prevalence estimates, continue to substantiate, an estimated more than 30,000 diagnosed patients.

In the US with microcystic. Lymphatic malf fors. These estimates are grounded in both claims-based, epidemiologic analysis and a published. Real world occurrence. Study supporting a multi-billion dollar total addressable Market, which is currently on contested given the absence of FDA approved Therapies.

And in parallel with our clinical and Regulatory progress, we are accelerating our transition towards being a commercial Stage Company. While proactively building out our commercial and medical Affairs, organizations in preparation for an anticipated, Standalone us launched in 2027.

In terms of how we view the commercial opportunity for Quran Rapa Mason. Our objective is to First secure FDA approval for the estimated more than 30,000 us, patients with microcystic, lymphatic malformations. Then over time, we aim to grow the pool of potential, addressable patients, for Quran rapamycin, by a factor of more than 10x.

We intend to do this by first adding cutaneous. Venous malformations to our label, followed by a plan. To further, add our third indication, clinically significant angio to the label. We will then continue to expand into additional future indications over time which could add more than 200,000 potential patients to the pool of potential, addressable patients for keor and rapamycin.

Accomplished through serial supplemental NDAs or sNDAs, offering a more efficient and streamlined pathway than traditional de novo NDA submissions overall. We believe Ktor and rapamycin have a clear and compelling pipeline and product potential across many mTOR-driven skin diseases.

I'd like to now turn the call over to Dr. Jeff Martini, our chief scientific officer to review our earlier stage rare disease pipeline programs.

Thank you, s.

The first pipeline program that we announced in September is clinically significant angio.

Our goal here is aligned with our strategy of being first for these patients. Angio are superficial, isolated lymphatic malformations that can bleed, cause pain, and interfere with daily life. Every day, friction from clothing or movement can lead to recurrent bleeding, which is not only disruptive but also distressing for patients.

This is a persistent Progressive disease, lesions, often enlarged and increase in number over time with no natural tendency to progress.

Biologically, these changes are driven by increased VEGF and mTOR signaling, which provide a strong scientific rationale for targeting VEGF, as well as mTOR inhibition. Additionally, there is real-world evidence supporting rapid MEK inhibition as a targeted therapeutic approach.

The unmet need is significant. We estimate there are more than 50,000 individuals.

In the United States living with clinically significant disease, across subtypes such as 4, dice solitary, Molly. And circumscriptum currently. There are no FDA approved pharmacologic therapies. Care. Today is centered on destructive and non-specific procedures like laser therapy, Electro surgery, cryotherapy, and surgical excision.

Approaches that can be painful, require repeat sessions, and are particularly challenging for patients with multifocal disease or lesions in insensitive locations.

Clinicians consistently describe a clear need for a predictable, non-destructive, and targeted therapeutic option that can reduce the debilitating symptoms of the disease and offer a practical solution for patients with multiple lesions.

We believe clinically significant angrier atomos represents an important opportunity for us to wrap a mea and we look forward to applying our rare disease development expertise to address this. Funders served patient population.

Angiokeratomas is a place where the pipeline in a product strategy. Lets us move quickly and efficiently. We are we are leveraging several established elements of the Quran rapamycin program including using the same product formulation from our 2 ongoing trials.

We have existing clinical drug Supply, ready to be deployed and open IND with the FDA division of Dermatology and D dentistry. And we have existing intellectual property coverage. Our next regulatory step is an FDA meeting in the first half of 2026. We plan to discuss the proposed, Phase 2, design confirm whether eligibility for expedited programs. Such as FasTrak is appropriate and aligned on longer term plans including a plan supplemental NDA. If approval is achieved in microscopic, lymphatic malformations or in continuous speeds malformations.

The plan clinical study would initiate in the second half of 2026. We are planning a single arm Baseline controlled trial in Rolling 10 to 20 patients, given the clinical overlap with microcystic. Lymphatic malformations, we expect that efficacy at points from Sylva. Could be applicable here as well. The goal is straightforward, initiate Phase 2 clinical trial in the second half of 2026, using the same topical platform, the same manufacturing and a regulatory path that builds on what we have already established.

Our second new clinical program that we announced last week, focuses on disseminated superficial, actinic poor cartoons for dsap. A chronic progressive pre-cancerous skin. Condition. Patients live with visible extensive. Lesions, that can cause burning persistent itch and disfigurement all of, which significantly impact quality of life. Importantly, there is also a well documented risk of malignant transfer.

Information to non-melanoma skin, cancers, including squeamish cell carcinoma.

From a biological standpoint dsap is driven by autosomal, dominant mutations that disrupt the mevalonate pathway leading to the accumulation of toxic, intermediates and downstream Skin. Pathology

Clinically this manufa manifests as a persistent and Progressive disease, lesions, multiply and enlarged over time and no spontaneous regression.

Difficult to tolerate and impractical for patients with widespread disease.

The first clinical study targeting the inhibition of the mevalonic pathway was conducted by Keith Cho in 2020. Because there are no FDA-approved topical mevalonic inhibitors, he used an off-label compounded topical statin formulation, demonstrating that targeted topical inhibition of the metabolic pathway could meaningfully impact disease biology.

Since then, more than 20 independent studies have built on this Foundation further validating, the scientific rationale and clinical potential for a Target topical pathogenesis directed approach to despite this growing body of evidence patient outcomes remain poor unapproved and highly variable formulations. Continue to limit both access and reliability of treatment

This is the context for our tutorial and potaba and program which we designed to address Pac with a targeted topical approach suitable for chronic use.

Pabustan is a next generation, best-in-class statin with unique properties that make it ideally suited for this indication with Quran pabustan. We’ve optimized for pharmaceutical dynamics, skin penetration, and chemical stability, enabling sustained local drug exposure directly at the site of the disease while minimizing systemic absorption.

We believe this program has the potential to deliver the first pharmacologic therapy for de and to meaningfully improve outcomes for patients who currently have no viable treatment options.

DSAP is driven by a single, well-defined cause: loss of function mutations in the mevalonate pathway, leading to the loss of skin barrier integrity.

On the left, you can see how the primary germ line loss of function. Mutation plus a secondary post, iotic mutation in 1 of the 5 P enzymes interrupts, the pathway causing the buildup of toxic Upstream. Intermediates resulting in hypercars and loss of skin integrity.

This biochemical imbalance drives, the abnormal keratinocyte behavior that defines diesel.

On the right shown as the characteristic histologic feature of dsap called the coronoid Lamela caused by a mutant keratinous. Cyclone that expands upward from the basil layer of the epidermis. The reason this is important is that in order to achieve maximum therapeutic benefits, penetration deep into the skin is required to inhibit the root cause of the disease.

So by directly addressing the underlying mevalonate pathway, defect our approach with Quran pabustan is to be on Target and in tissue, by normalizing, cellular signaling and restoring healthy skin architecture in the skin attacking dsap at its root. Cause

We're executing an efficient and capital disciplined development plan to bring this therapy to patients as quickly as possible. We're working with the same FDA Dermatology division that guides Ktor Rapid ME, ensuring consistency and efficiency.

An FDA meeting in the first half of 2026 will focus on the phase, 2 design, and potential eligibility for expedited programs, with protocol drafting nearly complete and endpoint shaped by key opinions. And patience, we anticipate starting Phase 2 in the second half of 2026. The objective is straightforward. Begin Phase 2 in the second half of 2026 and advanced efficiently to proof of concept.

I will now hand it over to our CFO. Matt Corey to discuss this quarter's financials.

Thank you, Jeff.

Cavalo ended the quarter with $63.6 million in cash and equivalents as of September 30, 2025. This supports approximately one and a half years of runway, carrying us into the second half of 2027.

Total operating expenses for the period, including both R&D and GNA where 10.2 million consistent with our plans to drive the Selva and Toya. Studies. Expand the Quran platform and advanced commercial readiness.

Even with our full spending plan on our four development programs, we expect to exit 2025 with approximately $55 million in cash, which we believe will be sufficient to carry Pelvi through multiple data and regulatory milestones up and through a potential approval of Qura RAPAMYCIN in microcystic lymphatic malformations. I'll now turn the call back to West for closing remarks, followed by Q&A.

Thanks, Matt in summary, the Paul Vala team remains committed to disciplined execution on our rare disease pipeline programs and to committed to having a deep and unwavering serving of the patients with rare diseases.

We look forward to sharing clinical results and continuing to advance our mission and pipeline in the months ahead. Thank you all for joining us today.

If your question has been answered, you were seen with yourself from the queue. Please press star 1. 1 again, we'll pause for a moment while we compile, our Q&A roster.

Our first question comes from Josh Shimmer with caner, your line is open.

Okay, thanks for um, taking the questions first, on the Tova study recognizing that you're not necessarily framing the the Ken points to to focus on prospectively. How should we think about interpreting the data and what should we be thinking in terms of, um, perhaps a threshold effect that that you'd want to advance further into clinical development and then for the Perot keratosis indications, that we can share a little bit about the, um, the other ones that, uh, you're considering exploring down the road that per keratosis of my belly and then uh, linear Pro keratosis. I'm sure what those um, uh, what those lesions are are like and how it compares to dsap.

Great. Hey Josh, good morning and thanks for those questions.

Um, I'll start off by addressing your questions on the Tova trial before passing it over, uh, to Jeff to discuss the other subtypes of poor keratosis.

So in terms of interpreting the data uh for the Toya study we employed a development strategy here, that's very similar to the microcystic, LM development strategy Phase 2 study uh is single arm Baseline. Controlled we think that's an appropriate phase to construct given that there is no evidence of spontaneous Improvement in this disease. We're testing a number of different uh clinician and patient reported outcomes. Uh the goal there is to understand which of those end points are sensitive to detecting a treatment effect.

uh, and then understanding those effects sizes in terms of uh whether or not they're clinically meaningful,

Uh, we do have Pro's embedded uh, into the phase 2 study, which will inform clinical meaningfulness. We also have qualitative interviews, uh, similar to our Phase 2, micro LM study. So we can understand the experience of these patients, uh, in the, uh, in the fees to trial. So, ultimately to answer the second part of your question, we'd like to see approximately 30% of patients demonstrate, a clinical Improvement. Uh, the goal would be to see that type of improvement on 1 or more endpoints, uh, that we could, uh, credibly sit with our kol collaborators uh, in front of the FDA and recommend, uh, such an uh, 1 of those end points as a primary for phase 3.

Jeff. Do you want to address the question on proptosis? Yeah. Thanks Josh. Um, so as you mentioned our first indication that we'll be going after is DAP. This is the most common, uh, form of poor keratosis, but all forms of poor keratosis are caused by, uh, mutations in the mevalonate pathway, and they're all caused by primary germline mutations and secondary posts. I got a mutation, the difference in the different subtypes really is, is about that second secondary posts. I got a mutation. So my belly patients, uh, they haven't been mutation in in, uh, in that secondary mutation that occurs later in life, but it's, it's very focused. Uh, in area linear is a little bit, uh, different in the disease. Linear is an interesting 1 is that it occurs posts like, but um, in during the embryonic development, so that is the only subtype in which uh, occurs early in development in in children, and it often occurs along Blasco lines that gives it the name, uh, linear. So you'll see it has sort of this linear approach and it's really uh, characterized by

high rates of malignant transformation. Um, and it's also very symptomatic but all all forms of poor keratosis have those same mutations.

Uh, importantly, some of the published topical Statin cases, also show a preliminary s uh signal in linear and Mabley forms as well.

Thank you.

1 moment for our next question.

Our next question comes from R to borrow with TD cow and your line is open.

Data in the context of not really having any competition and any nuances that investors should keep in mind around the safety tolerability profile. Um,

when evaluating sort of the totality of data,

They were 2, good morning, and thanks for the questions. Uh, thanks for the both questions. I'll start, uh, with a response, uh, on FDA. Uh, so certainly, uh, many changes ongoing as we're all witnessing, an FDA, uh, in terms of the Dermatology division. Uh, we continue to have the same director of the Dermatology division that's been in place since, uh, late 2023. The director of that division is uh, Dr. Jill Lindstrom. She's a dermatologist, uh, by training and has been a great collaborator, I'd say to not just Paola, but to many companies, uh, developing novel therapies for rare disease. So, uh, we've seen stability, uh, in terms of, uh, her leadership of that, uh, division where in consistent, uh, contact with the FDA and continue to, uh, think that that's been a beneficial collaboration for, for Paula, um, as evidenced by the recent receipt.

Of the second year of the FDA orphan drug. Grant proceeds, we're very grateful for their non-dilutive Capital support of our ongoing phase 3, single armed, Baseline controlled study. Um in terms of the the Selva data, which we expect in q1 uh 2026, uh the goal there, of course is to uh, demonstrate statistical significance. On the primary endpoint, the primary endpoint as a reminder, is the microcystic lymphatic malformation. IGA it shares many similarities to the clinical Global impression of change, uh, that we had in Phase 2 uh by achieving a statistically significant result. We think that sets up for uh an NDA submission uh, under breakthrough and Fast Track, uh, designations uh, from a safety and tolerability perspective, I think that has to be framed relative to what's available to these patients today. Uh, which is either surgery, which is not durable and highly invasive.

Uh, sclerotherapy, uh, which is injection of chemotherapeutic Agents, like Leo mice and again with a number of shortcomings, uh, and also a high incidence of recurrence. So, uh, from a, a topical targeted approach with Quran and wrap and mice, and we think that that's a very attractive profile, uh, for for FDA, for clinicians for for patients again. Assuming, uh, that we demonstrate uh, success in in Phase 3, I think, 1 key point of focus, of course, will be uh, systemic absorption levels.

A rapamycin. Uh, we designed Quran to deliver drug to the dermis but also keep it retained uh in the dermis so that there's not high levels of systemic absorption. That's something we reported on in Phase 2 and obviously we're tracking closely in Phase 3 as well.

Got it. And if I could squeeze,

Follow up.

CA scale, um, West. I think you

mentioned in the,

I'm sorry, I think you mentioned. Um,

In your plans for the angiokeratoma indications that there was the potential to use. The Selva endpoint, does that refer to the IGA scale and how much will the cell the data in form the potential design of both the angio and the dsap? Um, proof of concept studies

Yeah great. So um there are you know shared characteristics for 2 between microcystic, lymphatic malformations and clinically significant angio both are a type of lymphatic malformation. And so in our preliminary discussions with our key opinion leaders, they have noted the application of many of the Selva end points, uh, or is likely relevant to clinically significant angio Jeff and his team have uh, drafted a phase 2 protocol. So that's underway.

There will also be, uh, clinician reported outcomes, both Dynamic, change, scales, and static scales that will be used in that Phase 2 trial. And uh, as we get closer to initiating that study, we look forward to sharing, uh, more with you and everyone else.

Great. Thanks for the, um, thanks for the caller.

Sure.

1 moment for our next question.

Our next question comes from Sam pesky with loose life cycle, your line is open.

Hey guys, this is Gorgon for Sam. Congrats on another great quarter, just a couple if you don't mind here. So for the 2, new programs, announced Quran rapine angio as well as Quran. P p a Statin and Dap, You Know, ba base case kind of seems strangely care Tomas, uh, Baseline controlled for a phase 2. But any color you can give on how the team is thinking about dap and you know, given the prior precedent set from MLM CBM, Phase 2 being uh Baseline controlled. How should we be thinking about this? And then just a another quick 1 here. So I'll keep touring Pita the Staten. Any guidance, the team can give on. When we can expect more granular product profile data you know just as it relates to and a skin engagement dermal, epidermal data Etc. Thanks.

Yeah. Hey gaurav, thanks for being on. Um, I'll take your last question first. So we expect to, uh, have some of that exciting data that we've been generating in the formulation development process, uh, to have that out, uh, publicly sometime in the first half of, uh, 2026 to answer your questions on, uh, trial design, uh, as it relates to the, uh, dap program. Uh, what we'll do there is very similar to what we've done with, uh, uh, are there other microcystic ULM and CVM programs as we'll sit down with the the real experts in the disease and uh ultimately land on a uh trial design. Uh that we think is going to inform, not only on safety uh but on efficacy and on endpoints that could be used for a pivotal uh phase 3 design as part of that. We look at uh single arm Baseline controlled studies, we look at Placebo controlled studies. Uh so we're still uh going through that evaluation process.

Process, uh, on DSAP. Um, and I look forward to coming back to everyone with, uh, more information. Jeff? Yeah. The only thing I would like to add to that is, you know, incorporating the voice of the patient into our clinical programs is really critical. We do that early on. So, prior to starting any of these clinical trials, we'd like to talk to patients and just, you know, understand the disease a little bit and in a lot of detail, and incorporate that into some of our, uh, patient-reported endpoints.

Great. Thanks guys.

1 moment for our next question.

Our next question comes from Whitney. Aim with K Court, annuity, your line is open.

Hey, guys, this is Angela on for Whitney. Thanks for taking your questions. Um, you mentioned DAP. So how should we think about the surface area that's, um, to be covered for DAP versus the other programs? And then of the FAA, about 50,000 patients, I've used estimated, how should we think about a range of severity of the surface area that's affected?

Yeah. Hey Angela, thanks for the questions. Um, in terms of the surface area, uh, there is some variability, uh, in the surface area that presents there can be patients with smaller dsap, lesions, and as, uh, you've seen from some of the Publications there can also be very extensive, uh, dsap lesions. What we typically do in our, uh, Phase 2 studies is we have trial inclusion exclusion criteria around lesion size. We try to make that somewhat consistent, uh, across the study population. We just think that that's uh, a smart way to approach clinical trial design, uh, to try to reduce uh, variability in a, in a phase 2 study. Uh in terms of your, your second question around the uh, greater than uh 50,000.

those will be uh, upon FDA approval rate candidates, uh, for Quran pavat

Thank you so much.

1 moment for our next question.

Our next question. Comes from Annabelle. Samuel stifel your line is open.

Good morning, team. This is Jack on for Annabelle. Thanks for taking our questions. So, um, two from us. On Selva, I know that your primary efficacy analysis is based only on the patients who are 6 years and older, but you're still enrolling 3- to 5-year-olds as well, who just won't be contributing to that primary.

How do you anticipate FDA will be that younger population given they won't be a part of the primary and if they aren't expected to be in the initial label, what additional work might you need to do to get them on um and then on QR and table and acknowledging that you still in to me with FDA

How do you foresee including the other poro keratosis subtypes in the clinical program do, do you think of the subtypes are sufficiently similar enough that you might be able to include a wider spectrum of disease in a potential pivotal after receiving Phase 2 proof of concept in dsap or are they more likely to be independent programs that will each require their own designated Phase 2 and phase 3 trials? Thanks?

Yeah, hey Jack, thanks for the questions. Uh, as it relates to Selva

Uh, obviously the objective for Paula, if we demonstrate, uh, safety and efficacy in the phase 3 study and and we're able to do. So not only in patients uh 6 years and above. But in that younger 3 to 5 year old patient population, we're going to strive to have a label uh that's 3 and above that would be the objective um if we're unable to attain that uh at FDA approval and let's say the uh the label results and initially being patient, 6 years and older. What we would anticipate is some additional uh, testing of Quran rapamycin in that younger population of patients who are 3 to 5 years old. So we want to do right by patients, uh, first and foremost, that's uh, completing the study uh, hopefully demonstrating safety and efficacy, then getting a label, uh, that's appropriate for, uh, even that younger population, if that's not achievable, uh, on the first pass of FDA,

Approval will work will continue in parallel to try to um, expand the label. I do think it's really important. Um, on this question to note that our KO Wells, uh really ardently supported, the concept of dosing younger patients and the 3 to 5 year old patient population intervening early before these lesions uh in Gorge. And in large over time could

To alter the natural history of the disease. So, uh, again, should we see, uh, the right sort of data in that younger patient population, we think we would have kol support from pediatric dermatologists and pediatric, hematologists oncologists, uh, to really advocate for, for that label.

In terms of the dsap program, uh, we're going to start uh the poorer ptosis program. Uh we're going to start with dsap. Uh that's going to be the initial uh, Phase 2 study. There are a couple different ways that we could pursue the development into these additional indications 1 is to uh, do a a basket study where you have multiple subtypes of poor keratosis, uh and alternative path is to run a separate study in, uh, linear and Mobility. Um, where we stand right now, our objective is to, uh, initiate this Phase 2 study, and hopefully demonstrate a signal. Um, in dsap, uh, if we see the signal and dap, uh, that's compelling, I think that opens up a number of opportunities to, um, accelerate development in these other indications.

Great. Thank you.

1 moment for our next question.

Our next question comes from Danielle bril with truist. Your line is open.

Hey, good morning. Thanks so much for the questions. First, as a follow-up on the CVM data and what to expect in terms of the endpoints that you'll disclose.

I have a question on dsap and the new Torme, um, Statin program. Can you just expand a little bit on the efficacy Improvement that? You're You're Expecting here over the compounded statins um based on a preliminary search it looks like they're they're somewhat efficacious, are there certain limitations that you believe you'll um be able to overcome with Quran. Thank you.

Yeah. Thanks Danielle. As it relates to the CVM data. Um what we anticipate is reporting on endpoints uh that we think would be viable end points uh in a potential phase 3 study. So end points that we would carry forward from uh Phase 2 and phase 3. Uh, we will likely report um, on endpoints that are both Global and static in nature. Some of the scales that we've, uh, included are Dynamic. Change scales, others are, uh, static, uh, severity scales. So those are, uh, scales that we've used in the MLM study in Phase 2 that we used in Phase 3. And I think that that's, uh, likely applicable to the to the phase, uh, 2 study for CVM as well on dsap. Uh, there's no hard data as it relates to, um, efficacy of compounded medications. Uh, what we do know from Dr. Cho and others is that they are oftentimes uh, not efficacious. There's not

Not only issues with access to treatment. Uh but Dr. Cho would characterize uh the outcomes often times with the compounded statins as uh having poor patient outcomes. There's quite a bit of inconsistency in formulation. Uh, there's quite a bit of, uh, batch to batch, uh, inconsistency, uh, in terms of concentrations, uh, uh type of vehicle that's used. We've done some patient level research as well uh to confirm that. So we're not only hearing that data from clinicians uh but also at the patient level as well. So uh I think just like we we showed in Phase 2 for microcystic LM. We thought that efficacy was transformational with ktor and rapamycin compared to what's available today for Physicians. Our goal in Dap. Uh would be to similarly with tutoring paired with paiva Statin which is a highly potent. Uh, mevalonate pathway inhibitor, showed transformational and and hopefully consistent efficacy uh, which we

Then we would want to reproduce in a Phase 3 study. Ultimately, the goal is FDA approval.

Okay, thank you so much.

1 moment for our next question.

Our next question comes from Ryan Dashner with Raymond James. Your line is open.

I congrats on a a busy quarter, uh, 2 questions for me. Um, 1, can you walk us through your thinking, uh, so the rationale and the cereal, supplemental indication strategy, and how that would work, um, in practice, uh, you know, Visa V basket, studies, um, and, and other routes. And then, now that your development pipeline has expanded. Meaningfully, you know, how much overlap are you expecting in terms of prescriber Base across MLM, CBM, angio, and dapps, thanks.

Hey Ryan, thanks for the questions. I'll pass it over to Jeff to discuss the cereal uh, supplemental NDA strategy. Yeah. Absolutely. Thanks Wes. Um, thanks Ryan for the questions, so the, the S and Des strategy, uh, is really, uh, based on, you know, having the first approved indication. So, for example, if if the, if if tomorrow map is approved in microcystic, lymphatic malf for all future programs, whether that be CVM or clinically significant angio keratin reference the data package, um, that we submit with the original snda. So really just allows us uh, allows more efficient review process, um, for the FDA.

Great Ryan on your second question, as it relates to uh overlap with the uh multiple indications that we're pursuing.

Uh, with approval of the Quran, Mason for microcystic, LM, that were not only going to, uh, promote to the vascular anomaly centers, but that our sales, marketing, and medical footprint will also be broadly covering, uh, dermatologists. So, by the time that we would achieve an approval, uh, in angio and also, uh, in DSAP, uh, that there would be, uh, major call point overlap and that there would be efficiencies from a sales force targeting point of view.

Got it. Thank you very much.

1 moment for our next question.

Our next question comes from Trevor. All right, with Oppenheimer, your line is open.

Hey, good morning. Uh, thanks for taking my question. Any questions on DAP? Um, can you provide any further details on how the current topical treatment of 5-FU proceeds? Just how painful or burdensome is the treatment course?

Yeah. Great. Trevor all um I'll kick it off and then pass it over to Jeff. So I actually uh received an email from a patient unsolicited uh last night talking about how aggressive topical 5 Fu which is a chemo agent is in this disease, we're also familiar uh with topical 5fu from some other uh, rare serious cancers. Uh that we've uh have been on our radar, uh, historically. So I'll pass it over to Jeff but essentially, it results.

In, uh, can can result in scabbing and peeling of the skin. It's a very, um, aggressive therapy. Uh, not very tolerable, uh, from a safety, uh, perspective and tolerability perspective to patients Jeff. Yeah, it's really 2 aspects. I'll focus on the first is sort of the, the biology and mechanistic impacts in the second is, is the the, the patients perception of, of, of what they receive. So first, um, 5fu is non-specific. It's a destructive technique. Um, it's also more superficial. So, um, in the 1, where I showed that the Deep, uh, Corno lamel, it's really important in order to prevent disease. Regression that, you need to have deep penetration to the basal layer of the epidermis. You don't typically get that with the 5fu, it's also non-specific. It's just destructive from the patients perspective. Um, when I spoke with Dr, toad about this. You know, he he said it's like lighting their skin on fire. It's, it's extremely painful irritable. Um, and then, you know, you will have a little bit of uh clearance over a few weeks but the disease

Will come right back because you don't hit that root cause of the disease.

Thank you for taking the question.

1 moment for our next question.

Our next question comes from Katherine Novak with Jones. Your line is open.

Hi. Um, good morning and thanks for.

Taking my questions. Um, you know, I think you've you've touched on this in the past but we're still getting questions on regarding IP on Ketone me other Ketone assets. Um, you know what IP patent protection do you have on these assets and you know how much protection comes from IP versus uh, Trade Secrets, specialized processes, Etc.

Yeah, hey Katherine, thanks for the question. Uh, we have a multi-layered strategy uh to address that topic 1 is IP, we have 6, granted patents in the United States. Uh, covering Quran wrap a me specifically, the anhydrous composition of rapamycin and other, uh, mour Inhibitors. Uh, we also have, uh, many layers of formulation and Manufacturing Trade Secrets, and then we are have been granted in microcystic lymphatic malformations, fda's orphan. Designation, which provides uh 7 years of of regulatory exclusivity upon approval, our claims on our patents. Go out uh through at least 2038 um our Trade Secrets uh could extend uh our exclusivity. Uh well beyond 2038 this continues to be an area uh that we significantly invest in.

Understood, and then just a little bit more on Toyo when it comes to how we should be thinking about waiting the specific outcomes. Um, you know, in the past, we've talked about fda's Pro, um, preference, um, when it comes to static versus Dynamic scales. So is that something that we should also be waiting when it comes to? Um, you know, when we see Tova Topline results,

Static, um, and dynamic endpoints. So, the goal is, in a, in a trial to have both uh, because it gives a, uh, you know, more wholesome um uh set of endpoints for from which the efficacy uh, from which the FDA can assess efficacy. So um, that's how we think about our Phase 2 study and any potential phase 3 study in CVM we'll have uh we would have in a phase 3. If we proceed, we would have static, uh, severity, scales uh likely have Dynamic changes.

Um, we would also have qualitative interviews, which Jeff mentioned. That's really important in rare disease drug development to make sure you're capturing the voice of the patient.

Okay. Um,

Thanks for taking my questions.

1 1 moment for our next question.

Our next question comes from Dev Prasad with Lucid Capital markets. Your line is open.

No question on commercialization. From our regulatory and commercialization perspective, what really is the major CNC or scale of milestone between now and the potential submission? How far along are you in preparing for commercial manufacturing at the launch?

Yeah, thanks for the questions Dev. Um, as you know, we recently hired Jason bet as our, uh, SVP of CMC and Technical operations. Uh, Jason as a long, uh, successful track record in manufacturing and Commercial manufacturing at scale. Uh, the CMC package is a key part of the fda's uh NDA review uh 1 of the key points of focus to address. Your question uh is of course the robustness of the uh stability data uh from uh drug product uh Manufacturing.

Uh, we have, uh, stability data on our clinical batches that goes out to more than, uh, 10 years. So I think that that's, uh, a really important data point and 1 that we've been um, frequently updating the FDA on. Uh, we also have multiple commercial manufacturers that we've we've scaled up with. I think it's key not to take uh single site risk. And so we have uh 2 groups that uh have very extensive.

Uh and positive uh regulatory histories, in terms of historical FDA inspections uh that we expect to be a part uh key part of our NDA submission strategy.

Great. Thank you. And I'm not showing any further questions at this time. And as such, this does conclude today's presentation, we thank you for your participation. You may now disconnect and have a wonderful day.