Q2 2026 Palvella Therapeutics Inc Earnings Call

August 4, 2026

Operator: Good day, and thank you for standing by. Welcome to the Palvella Therapeutics Q2 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Marcy Nanus, Vice President of Investor Relations and Corporate Affairs.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press *11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your first speaker today. Marcie Nanez, Vice President of Investor Relations, Incorporate Affairs.

Speaker #2: Thank you, operator. Good morning, and thank you for joining the Palvella Therapeutics Q4 2026 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the Investor section of our website, at www.palvellatx.com.

Marcy Nanus: Thank you, operator. Good morning, and thank you for joining the Palvella Therapeutics Q2 2026 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the investor section of our website at www.palvellatx.com. On today's call, I am joined by Wes Kaupinen, our Founder and Chief Executive Officer, Dr. Jeff Martini, our Chief Scientific Officer, and Matt Korenberg, our Chief Financial Officer. Before we begin, please note that today's remarks may include forward-looking statements regarding our development programs, regulatory strategy, commercial planning, and financial outlook. 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. Now, I'll turn the call over to Wes.

Speaker #2: On today's call, I am joined by Wes Coppinen, our founder and Chief Executive Officer, Dr. Jeff Martini, our Chief Scientific Officer, and Matt Korenberg, our Chief Financial Officer.

Speaker #2: 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. These statements are based on current assumptions and are subject to risk and uncertainties that could cause actual results to differ materially.

Speaker #2: Please refer to our SEC filings for a full discussion of these risk factors. And now, I'll turn the call over to Wes.

Speaker #3: Thanks, Marcie. Good morning, everyone, and thank you for joining us. The second quarter marked the culmination of many years of work to pioneer and accelerate the development of Q4 and rapamycin through two successful clinical studies in microcystic lymphatic malformations, a serious rare chronically debilitating lifelong genetic disease for which there are no FDA-approved therapies.

Wes Kaupinen: Thanks, Marcy. Good morning, everyone, and thank you for joining us. The Q2 marked the culmination of many years of work to pioneer and accelerate the development of QTORIN rapamycin through two successful clinical studies in microcystic lymphatic malformations, a serious, rare, chronically debilitating lifelong genetic disease for which there are no FDA-approved therapies. During the quarter, we achieved three important milestones. First, the compelling safety and efficacy results from our phase III SELVA study supported an in-person pre-NDA meeting with the FDA. Second, following that meeting, FDA granted Palvella rolling review, a feature available under Fast Track and Breakthrough Therapy designation that is intended to expedite review and help bring important new therapies to patients earlier by allowing FDA to begin reviewing completed sections of the NDA before the full application is submitted.

Speaker #3: During the quarter, we achieved three important milestones. First, the compelling safety and efficacy results from our Phase III Selva study supported an in-person pre-NDA meeting with the FDA.

Speaker #3: Second, following that meeting, FDA granted Palvella rolling review. A feature available under fast-track and breakthrough therapy designation that is intended to expedite review and help bring important new therapies to patients earlier by allowing FDA to begin reviewing completed sections of the NDA before the full application is submitted.

Speaker #3: And third, thanks to the exceptional execution of the Palvella team, we completed the submission of the first module of our NDA. These milestones have brought us meaningfully closer to achieving our most important near-term corporate objective: securing FDA approval for Q4 and rapamycin.

Wes Kaupinen: And third, thanks to the exceptional execution of the Palvella team, we completed the submission of the first module of our NDA. These milestones have brought us meaningfully closer to achieving our most important near-term corporate objective, securing FDA approval for QTORIN rapamycin. I am pleased to report today that, number one, we remain on track to complete our NDA submission in H2 of this year. And number two, we also remain on track for potential FDA approval in H1 2027. In terms of launch readiness, we have continued assembling the leadership required to support a successful US launch. We've recruited commercial and medical affairs leaders with deep experience in rare disease and dermatology launches, and I'm pleased to report that team has rapidly advanced key pre-launch activities.

Speaker #3: I am pleased to report today that, number one, we remain on track to complete our NDA submission in the second half of this year and, number two, we also remain on track for potential FDA approval in the first half of 2027.

Speaker #3: In terms of launch readiness, we have continued assembling the leadership required to support a successful U.S. launch. We've recruited commercial and medical affairs leaders with deep experience in rare disease and dermatology launches, and I'm pleased to report that the team has rapidly advanced key pre-launch activities.

Speaker #3: In parallel, under the leadership of our Chief Scientific Officer, Dr. Jeff Martini, significant progress continues to be made across our late-stage pipeline and Q4 platform.

Wes Kaupinen: In parallel, under the leadership of our Chief Scientific Officer, Dr. Jeff Martini, significant progress continues to be made across our late-stage pipeline and QTORIN platform. This includes our QTORIN rapamycin programs in cutaneous venous malformations and clinically significant angiokeratomas, both of which have been granted Fast Track designation by the FDA, as well as our QTORIN pitavastatin program in disseminated superficial actinic porokeratosis. Palvella stands today with both a late-stage rare disease pipeline and an internal product development engine powered by the QTORIN platform, designed to repeatably bring first-in-disease therapies to rare disease communities with significant unmet need and no approved treatment options today. We are developing therapies for four serious rare skin diseases and vascular malformations that have been overlooked despite significant unmet need. These diseases have historically been underappreciated, not because their clinical burden is misunderstood, but because their true prevalence and incidence have been poorly characterized.

Speaker #3: This includes our Q4 and rapamycin programs in cutaneous venous malformations and clinically significant angiokeratomas, both of which have been granted Fast Track designation by the FDA, as well as our Q4 and patavastatin program in disseminated superficial actinic porokeratosis.

Speaker #3: Palvella stands today with both a late-stage rare disease pipeline and an internal product development engine powered by the Q4 platform. Designed to repeatably bring first-in-disease therapies to rare disease communities with significant unmet need and no approved treatment options today.

Speaker #3: We are developing therapies for four serious rare skin diseases and vascular malformations that have been overlooked, despite significant unmet need. These diseases have historically been underappreciated, not because their clinical burden is misunderstood, but because their true prevalence and incidence have been poorly characterized.

Speaker #3: On the top row are data-driven epidemiologic work indicates that these indications, each may represent multibillion-dollar total addressable markets in the U.S., based on estimated diagnosed U.S.

Wes Kaupinen: On the top row, our data-driven epidemiologic work indicates that these indications each may represent multibillion-dollar total addressable markets in the US, based on estimated diagnosed US prevalence and the expectation for orphan pricing at launch. An estimated greater than 30,000 patients with microcystic LMs, greater than 75,000 patients with cutaneous venous malformations, greater than 50,000 with clinically significant angiokeratomas, and greater than 50,000 patients estimated with disseminated superficial actinic porokeratosis. In the middle row, at Palvella, we focus exclusively on diseases with no FDA-approved treatments and the potential for Palvella to pioneer first-in-disease therapies. We believe such a strategy is advantageous when compared to a more conventional biotech approach of pursuing incremental differentiation in competitive markets with well-resourced, entrenched incumbents.

Speaker #3: prevalence and the expectation for orphan pricing at launch. An estimated greater than 30,000 patients with microcystic LMs, greater than 75,000 patients with cutaneous venous malformations, greater than 50,000 with clinically significant angiokeratomas, and greater than 50,000 patients estimated with disseminated superficial actinic porokeratosis.

Speaker #3: In the middle row, at Palvella, we focus exclusively on diseases with no FDA-approved treatments, and the potential for Palvella to pioneer first-in-disease therapies. We believe such a strategy is advantageous when compared to a more conventional biotech approach of pursuing incremental differentiation in competitive markets with well-resourced, entrenched incumbents.

Speaker #3: For each of the diseases you see listed here, we believe assuming continued clinical and regulatory execution that we're on a trajectory to potentially introduce the first FDA-approved therapies for each of these indications.

Wes Kaupinen: For each of the diseases you see listed here, we believe, assuming continued clinical and regulatory execution, that we're on a trajectory to potentially introduce the first FDA-approved therapies for each of these indications. Finally, physician market research further reinforces the potential for an attractive uptake curve at launch. Across all four indications, more than 80% of physicians surveyed indicated they would consider the QTORIN product candidate targeted for that indication as a first-line therapy if approved. Moving to QTORIN rapamycin. QTORIN rapamycin was designed as a pipeline and a product. One product candidate with the potential to address multiple rare diseases in which hyperactivated mTOR signaling is a central pathogenic driver. We are now executing on that strategy across several indications. In the last couple of years, we've expanded the program from microcystic lymphatic malformations into cutaneous venous malformations and clinically significant angiokeratomas.

Speaker #3: Finally, physician market research further reinforces the potential for an attractive, uptake curve at launch across all four indications more than 80% of physician-surveyed indicated they would consider the Q4 product candidate targeted for that indication as a first-line therapy if approved.

Speaker #3: Moving to Q4 and rapamycin, Q4 and rapamycin was designed as a pipeline and a product—one product candidate with the potential to address multiple rare diseases in which hyperactivated mTOR signaling is a central pathogenic driver.

Speaker #3: We are now executing on that strategy across several indications, and the last couple of years we've expanded the program from microcystic lymphatic malformations into cutaneous venous malformations and clinically significant angiokeratomas.

Speaker #3: We anticipate potential FDA approval for Q4 and rapamycin in cutaneous venous malformations in 2029 and clinically significant angiokeratomas in 2031, creating the potential for two significant indication expanses while the microcystic LM launch is still in its early years.

Wes Kaupinen: We anticipate potential FDA approval for QTORIN rapamycin in cutaneous venous malformations in 2029 and clinically significant angiokeratomas in 2031, creating the potential for two significant indication expansions while the microcystic LM launch is still in its early years. Later this year, we expect to announce a fourth indication with additional indications beyond the fourth indication already in planning by our R&D team. Overall, our pipeline and a product strategy provides a highly efficient path to expand QTORIN rapamycin across multiple mTOR-driven skin diseases. Under our current development plan, potential approvals in multiple indications could expand QTORIN rapamycin's addressable US patient population for more than 30,000 patients with microcystic lymphatic malformations to more than 300,000 patients across multiple mTOR-driven indications.

Speaker #3: Later this year, we expect to announce a fourth indication with additional indications beyond the fourth indication already in planning by our R&D team. Overall, our pipeline and a product strategy provides a highly efficient path to expand Q4 and rapamycin across multiple mTOR-driven skin diseases.

Speaker #3: Under our current development plan, potential approvals in multiple indications could expand Q4 and rapamycin's addressable U.S. patient population from more than 30,000 patients with microcystic lymphatic malformations to more than 300,000 patients across multiple mTOR-driven indications.

Wes Kaupinen: Our approach to launch readiness is informed by learnings from successful first-in-disease orphan drug launches, including OXERVATE, VYJUVEK, and TEPEZZA, which demonstrate how focused early execution across a small number of critical areas can meaningfully shape adoption. First, we have recruited experienced rare disease and dermatology leaders across commercial and medical affairs functions who are already executing pre-launch activities in the field. Second, the strength and consistency of our clinical data, together with physician market research that indicates strong interest in first-line use, support the potential for QTORIN rapamycin to become the first approved therapy for microcystic LMs, and if approved, a potential first-line treatment and future standard of care. Third, our teams are actively engaging physicians, including specialists at vascular anomaly centers, to deepen disease education and prepare treatment centers for a potential launch.

Speaker #3: Our approach to launch readiness is informed by learnings from successful first-in-disease orphan drug launches, including Oxfordate, Vygivec, and Tepezza, which demonstrate how focused early execution across a small number of critical areas can meaningfully shape adoption.

Speaker #3: First, we have recruited experienced rare disease and dermatology leaders across commercial and medical affairs functions, who are already executing pre-launch activities in the field.

Speaker #3: Second, the strength and consistency of our clinical data together with physician market research that indicates strong interest in first-line use support the potential for Q4 and rapamycin to become the first approved therapy for microcystic LMs and, if approved, a potential first-line treatment and future standard of care.

Speaker #3: Third, our teams are actively engaging physicians, including specialists at vascular anomaly centers, to deepen disease education and prepare treatment centers for a potential launch.

Wes Kaupinen: Fourth, we are building the patient services infrastructure required to support patient access coverage and treatment initiation following a potential approval. Finally, our balance sheet significantly strengthened in the first quarter through a $230 million capital raise allows us to invest ahead of approval and build commercial readiness with urgency and strength. We are deeply grateful to the leading biotechnology investors who participated in that financing and whose support is enabling us to advance our mission of bringing QTORIN rapamycin and other QTORIN programs to patients. Taken together, these initiatives are designed to ensure that if approved, QTORIN rapamycin reaches pediatric and adult patients living with microcystic lymphatic malformations as quickly and effectively as possible. The core of Palvella's commercial and medical affairs leadership team is now assembled.

Speaker #3: Fourth, we are building the patient services infrastructure required to support patient access, coverage, and treatment initiation following a potential approval. Finally, our balance sheet significantly strengthened in the first quarter through a $230 million capital raise allows us to invest ahead of approval and build commercial readiness with urgency and strength.

Speaker #3: We are deeply grateful to the leading biotechnology investors who participated in that financing and who support is enabling us to advance our mission of bringing Q4 and rapamycin and other Q4 programs to patients.

Speaker #3: Taken together, these initiatives are designed to ensure that if approved, Q4 and rapamycin reaches pediatric and adult patients living with microcystic lymphatic malformations as quickly and effectively as possible.

Speaker #3: The core of Palvella's commercial and medical affairs leadership team is now assembled. We have recruited an exceptional team of leaders with deep experience across rare disease, dermatology, medical affairs, market access, sales, marketing, and successful orphan drug launches, while continuing to add talented professionals at all levels of the organization.

Wes Kaupinen: We have recruited an exceptional team of leaders with deep experience across rare disease, dermatology, medical affairs, market access, sales, marketing, and successful orphan drug launches, while continuing to add talented professionals at all levels of the organization. They understand the critical requirements of a first-in-disease launch, building disease awareness, educating physicians, supporting patient identification, preparing treatment centers, establishing access pathways, and enabling seamless treatment initiation following a potential approval. Our senior leaders and I remain deeply involved in recruiting and selecting these teams, and we've augmented our own efforts by engaging world-class executive search firms to help us attract the very best talent. We have also increased our planned sales force at launch to approximately 40 sales reps, at the upper end of our prior guidance.

Speaker #3: They understand the critical requirements of a first-in-disease launch, building disease awareness, educating physicians, supporting patient identification, preparing treatment centers, establishing access pathways, and enabling seamless treatment initiation following a potential approval.

Speaker #3: Our senior leaders and I remain deeply involved in recruiting and selecting these teams, and we've augmented our own efforts by engaging world-class executive search firms to help us attract the very best talent.

Speaker #3: We have also increased our planned sales force at launch to approximately 40 sales reps, at the upper end of our prior guidance. We believe this additional investment will strengthen field coverage, physician education, patient identification, and access support from day one, ultimately helping pediatric and adult patients who may potentially benefit from Q4 and rapamycin, if approved, to access treatment as efficiently as possible.

Wes Kaupinen: We believe this additional investment will strengthen field coverage, physician education, patient identification, and access support from day one, ultimately helping pediatric and adult patients who may potentially benefit from QTORIN rapamycin, if approved, to access treatment as efficiently as possible. Overall, I am grateful to work alongside Ashley, Jen, Kent, Vimal, and Peter, and the exceptional team they are continuing to build to advance the Palvella mission. Together, they bring passion, thoughtfulness, and deep collective commercial and medical experience to a shared ambition, making the potential launch of QTORIN rapamycin the best launch any of us have been a part of for patients, physicians, and for the broader microcystic LM community. We believe QTORIN rapamycin has the potential to become the first approved therapy, a first-line treatment, and ultimately, a future standard of care for microcystic LMs based on three important attributes.

Speaker #3: Overall, I am grateful to work alongside Ashley, Jen, Kent, Vamal, and Peter, and the exceptional team they are continuing to build to advance the Palvella mission.

Speaker #3: Together, they bring passion, thoughtfulness, and deep collective commercial and medical experience to a shared ambition, making the potential launch of Q4 and rapamycin the best launch any of us have been a part of for patients, physicians, and for the broader microcystic LM community.

Speaker #3: We believe Q4 and rapamycin has the potential to become the first approved therapy—a first-line treatment—and ultimately a future standard of care for microcystic LMs based on three important attributes: first, Q4 and rapamycin is designed to address the causal mTOR pathway directly within the pathogenic tissue of interest.

Wes Kaupinen: First, QTORIN rapamycin is designed to address the causal mTOR pathway directly within the pathogenic tissue of interest. This targeted, localized approach could be particularly compelling in a lifelong disease that may require chronic treatment. Second, the phase III SELVA study delivered highly compelling results. The study met its primary endpoint, key secondary endpoint, and all four pre-specified secondary endpoints with high statistical significance, with 95% of patients demonstrating improvement on the primary endpoint at week 24. Third, QTORIN rapamycin demonstrated a favorable safety profile. That profile is especially meaningful when contrasted with invasive procedures and off-label systemic approaches that carry substantial treatment burden, monitoring requirements, and tolerability limitations.

Speaker #3: This targeted localized approach could be particularly compelling in a lifelong disease that may require chronic treatment. Second, the Phase III salva study delivered highly compelling results.

Speaker #3: The study met its primary endpoint, key secondary endpoint, and all four pre-specified secondary endpoints with high statistical significance, with 95% of patients demonstrating improvement on the primary endpoint at week 24.

Speaker #3: Third, Q4 and rapamycin demonstrated a favorable safety profile that is especially meaningful when contrasted with invasive procedures and off-label systemic approaches that carry substantial treatment burden, monitoring requirements, and tolerability limitations.

Speaker #3: Taken together, the therapeutic approach—the consistency and strength of the Salva results and the favorable safety profile—provide what we believe is a foundation for Q4 and rapamycin to become the first approved therapy for microcystic LMs and, if approved, to establish a new first-line standard of care for pediatric and adult patients living with this serious, lifelong disease.

Wes Kaupinen: Taken together, the therapeutic approach, the consistency and strength of the SELVA results, and the favorable safety profile provide what we believe is a foundation for QTORIN rapamycin to become the first approved therapy for microcystic LMs, and if approved, to establish a new first-line standard of care for pediatric and adult patients living with this serious lifelong disease. Additional pre-launch activities are accelerating. In terms of physician engagement, we have already engaged more than 200 of our initial 400 target clinics, while our broader reach extends well beyond that group through a meaningful presence at major medical congresses, vascular anomaly meetings, and other scientific forums. Together, these efforts are deepening physician understanding of microcystic lymphatic malformations, including the underlying genetics, the causal role of mTOR signaling, and the importance of timely diagnosis and treatment, while strengthening engagement within the vascular anomaly and dermatology communities.

Speaker #3: Additional pre-launch activities are accelerating in terms of physician engagement. We have already engaged more than 200 of our initial 400 target clinics. While our broader reach extends well beyond that group through a meaningful presence at major medical congresses, vascular anomaly meetings, and other scientific forums.

Speaker #3: Together, these efforts are deepening physician understanding of microcystic lymphatic malformations, including the underlying genetics, the causal role of mTOR signaling, and the importance of timely diagnosis and treatment, while strengthening engagement within the vascular anomaly and dermatology communities.

Speaker #3: We are also building what we believe can become a best-in-class patient services organization. We made the strategic decision to internalize our core patient support services, giving Palvella greater ownership of the patient experience and tighter coordination across patient access, reimbursement, and treatment initiation.

Wes Kaupinen: We are also building what we believe can become a best-in-class patient services organization. We made the strategic decision to internalize our core patient support services, giving Palvella greater ownership of the patient experience and tighter coordination across patient access, reimbursement, and treatment initiation. Our leadership team and initial hires bring deep, recent experience launching a first-in-disease therapy for a serious rare skin disease, and we are actively expanding the team with additional top talent. Our recent payer research confirms our earlier payer findings. Payers consistently recognize microcystic LMs as a serious rare vascular malformation with substantial unmet need and no FDA-approved therapies available today. Against that backdrop, our research indicates Orphan Drug pricing ranges are likely to be well-supported with a favorable outlook for patient access and reimbursement. Finally, we're executing from a position of financial strength with approximately $250 million in cash.

Speaker #3: Our leadership team and initial hires bring deep, recent experience launching a first-in-disease therapy for a serious rare skin disease and we are actively expanding the team with additional top talent.

Speaker #3: Our recent payer research confirms our earlier payer findings. Payers consistently recognize microcystic LMs as a serious rare vascular malformation with substantial unmet need and no FDA-approved therapies available today.

Speaker #3: Against that backdrop, our research indicates orphan drug pricing ranges are likely to be well supported, with a favorable outlook for patient access and reimbursement.

Speaker #3: Finally, we're executing from a position of financial strength with approximately $250 million in cash at the end of the quarter we are well capitalized through a potential FDA approval and a successful standalone commercial launch.

Wes Kaupinen: At the end of the quarter, we are well-capitalized through a potential FDA approval and a successful standalone commercial launch. As I mentioned earlier, our NDA submission remains on track for H2 2026. Our application is supported by Breakthrough Therapy Designation, Fast Track Designation, Orphan Drug Designation, and an FDA Orphan Products Grant. We're pursuing approval through the 505(b)(2) regulatory pathway, which allows us to leverage FDA's prior findings for rapamycin while supporting our application with the robust clinical data generated through our own development program. Our evidence package includes the positive phase III and phase II studies, as well as real-world clinical evidence, and we intend to seek a broad label and traditional full approval.

Speaker #3: As I mentioned earlier, our NDA submission remains on track for the second half of 2026. Our application is supported by breakthrough therapy designation, fast-track designation, orphan drug designation, and an FDA orphan product grant.

Speaker #3: We're pursuing approval through the 505(b)(2) regulatory pathway, which allows us to leverage the FDA's prior findings for rapamycin, while supporting our application with the robust clinical data generated through our own development program.

Speaker #3: Our evidence package includes the positive Phase III and Phase II studies as well as real-world clinical evidence, and we intend to seek a broad label and traditional full approval.

Speaker #3: Before moving on, I'd like to recognize and thank our NDA team, including our Head of Regulatory Affairs, Sean Mamounim, for their unwavering commitment to delivering a high-quality NDA submission.

Wes Kaupinen: Before moving on, I'd like to recognize and thank our NDA team, including our Head of Regulatory Affairs, Shama Munim, for their unwavering commitment to delivering a high-quality NDA submission and for executing with urgency, discipline, and meticulous attention to detail. Their work reflects what makes Palvella special, a shared commitment to the patients and families we serve, a deep sense of purpose, and an unwavering determination to achieve a potential near-term FDA approval and bring QTORIN rapamycin to patients as quickly as possible. With that, I'll turn the call over to Jeff to discuss our rare disease pipeline programs.

Speaker #3: And for executing with urgency, discipline, and meticulous attention to detail. Their work reflects what makes Palvella special: a shared commitment to the patients and families we serve, a deep sense of purpose, and an unwavering determination to achieve a potential near-term FDA approval and bring Q4 and rapamycin to patients as quickly as possible.

Speaker #3: With that, I'll turn the call over to Jeff to discuss our rare disease pipeline programs.

Speaker #1: Thank you, Wes. As you've heard this morning, Palvella has built tremendous momentum across the business. I'm very excited about the pipeline, including the data we have presented over the last quarter from both Salva and TOIVA, the progress we are making in our clinically significant angiokeratoma and DSAP programs, and the additional new program announcements later this year.

Jeff Martini: Thank you, Wes. As you've heard this morning, Palvella has built tremendous momentum across the business. I'm very excited about the pipeline, including the data we have presented over the last quarter from both SELVA and TOIVA, the progress we are making in our clinically significant angiokeratoma and DSAP programs, and the additional new program announcements later this year. During the past quarter, we continued to strengthen our scientific presence at the major congresses, helping us expand disease awareness, deepen relationships with the treating community, and support launch readiness. I want to highlight our participation at the ISSVA World Congress in May, where Palvella served as a platinum sponsor. Dr. Jim Treat delivered a late-breaking presentation that included results from both our phase III SELVA study in microcystic lymphatic malformations and our phase II TOIVA study in cutaneous venous malformations. I'll begin with our lead program in microcystic lymphatic malformations.

Speaker #1: During the past quarter, we continued to strengthen our scientific presence at the major congresses, helping us expand disease awareness, deepen relationships with the treating community, and support launch readiness.

Speaker #1: Our vinyl highlighted our participation at the ISFO World Congress in May, where Palvella served as a platinum sponsor. Dr. Jim Treat delivered a late-breaking presentation that included results from both our Phase III SALVA study in microcystic lymphatic malformations and our Phase II TOIVA study in cutaneous venous malformations.

Speaker #1: I'll begin with our lead program in microcystic lymphatic malformations. Before reviewing the data, I want to put these results in context. Microcystic lymphatic malformations is a serious condition that often presents in childhood and persists throughout a patient's life.

Jeff Martini: Before reviewing the data, I want to put these results in context. Microcystic lymphatic malformations is a serious condition that often presents in childhood and persists throughout a patient's life. These lesions cause leaking, bleeding, recurrent infections, and substantial physical and emotional burden during some of the most formative years of a child's life. As a reminder, our previously reported phase III SELVA study results demonstrated that 95% of patients improved on the MLM IGA, our primary endpoint. At ISSVA, Dr. Jim Treat presented the new analysis shown here, focused on children aged 6 to 11. What we observed was a rapid, large magnitude treatment effect that was consistent across all 13 children studied. By week 24, the mean MLM IGA improvement was 2.46 points, and every child in this cohort was rated as either much improved or very much improved.

Speaker #1: These lesions cause leaking, bleeding, recurrent infections, and substantial physical and emotional burden during some of the most formative years of a child's life. As a reminder, our previously reported Phase III SALVA study results demonstrated that 95% of patients improved on the MLM IGA, our primary endpoint.

Speaker #1: At ISFA, Dr. Jim Treat presented the new analysis shown here, focused on children age 6 to 11. What we observed was a rapid, large-magnitude treatment effect that was consistent across all 13 children studied.

Speaker #1: By week 24, the mean MLM IGA improvement was 2.46 points, and every child in this cohort was rated as either much improved or very much improved.

Speaker #1: The photograph shown here helped bring those numbers to life. The illustrate not only the magnitude of improvement that can be achieved with continued treatment, but also what that improvement may mean for a child living every day with a visible symptomatic lifelong disease.

Jeff Martini: The photographs shown here help bring those numbers to life. They illustrate not only the magnitude of improvement that can be achieved with continued treatment, but also what that improvement may mean for a child living every day with a visible, symptomatic, lifelong disease. Importantly, every patient in this cohort elected to continue treatment in the treatment extension, further supporting the potential role of QTORIN rapamycin in the chronic management of this disease. One key objective of SELVA was to better understand the natural variability of the disease and place the observed treatment response in that context. SELVA incorporated an innovative trial design with input from clinicians, patients, and regulatory experts. Before treatment began, patients completed an 8-week run-in period, allowing us to prospectively assess changes in the disease without treatment in the same patients.

Speaker #1: Importantly, every patient in this cohort elected to continue treatment in the treatment extension, further supporting the potential role of Q4 and rapamycin in the chronic management of this disease.

Speaker #1: One key objective of salva was to better understand the natural variability of the disease and place the observed treatment response in that context. Salva incorporated an innovative trial design with input from clinicians, patients, and regulatory experts.

Speaker #1: Before treatment began, patients completed an eight-week run-in period, allowing us to prospectively assess changes in the disease without treatment in the same patients, within the same patients.

Speaker #1: Photographs from both the run-in and treatment periods were then evaluated through a pre-specified blinded independent review. During the untreated run-in period, disease severity remained essentially unchanged, with a mean change in the MLM MCSS of negative 0.1.

Jeff Martini: Photographs from both the run-in and treatment periods were evaluated through a pre-specified blinded independent review. During the untreated run-in period, disease severity remained essentially unchanged, with a mean change in the MLM MCSS of -0.1. This demonstrates that the disease did not spontaneously improve during the observation period. The MLM MCSS was a key secondary endpoint in SELVA, and the improvement observed during treatment was highly statistically significant. Following 24 weeks of treatment with QTORIN rapamycin, the blinded mean MLM MCSS improved by 3.4 points, representing 48% of the maximum potential improvement from baseline. Importantly, this design allowed us to contrast disease stability without treatment with the marked improvement observed after treatment, all based on blinded independent assessment. We believe these findings provide objective confirmation that the improvements observed in SELVA resulted from QTORIN rapamycin and further strengthen the overall body of evidence supporting the program.

Speaker #1: This demonstrates that the disease did not spontaneously improve during the observation period. The MLM MCSS was a key secondary endpoint in salva, and the improvement observed during treatment was highly statistically significant.

Speaker #1: Following 24 weeks of treatment with Q4 and rapamycin, the blinded mean MLM MCSS improved by 3.4 points, representing 48% of the maximum potential improvement from baseline.

Speaker #1: Importantly, this design allowed us to contrast disease stability without treatment with the marked improvement observed after treatment, all based on blinded independent assessment. We believe these findings provide objective confirmation that the improvements observed in SALVA resulted from Q4 and rapamycin, and further strengthen the overall body of evidence supporting the program.

Speaker #1: Cutaneous venous malformations represent a significant unmet need, with more than 75,000 diagnosed patients in the United States and, importantly, no FDA-approved therapies. Recent publications continue to identify seromes or rapamycin as the most established medical therapy for internal venous malformations, reinforcing the rationale for Q4 and rapamycin.

Jeff Martini: Cutaneous venous malformations represents a significant unmet need, with more than 75,000 diagnosed patients in the United States and importantly, no FDA-approved therapies. Recent publications continue to identify sirolimus or rapamycin as the most established medical therapy for internal venous malformations, reinforcing the rationale for QTORIN rapamycin. As a reminder, our phase II TOIVA study demonstrated that 73% of patients improved on the CVM IGA, more than twice our predefined success threshold. Based on the positive data from TOIVA, our immediate priority is initiating the phase III study. The planned next steps are clear. We expect to meet with FDA at our end of phase II meeting to review the TOIVA data and finalize the pivotal study design. We will initiate the phase III study, and we remain on track to do so in Q4.

Speaker #1: As a reminder, our Phase II TOIVA study demonstrated that 73% of patients improved on the CVM IGA more than twice our predefined success threshold.

Speaker #1: Based on the positive data from TOIVA, our immediate priority is initiating the Phase III study. The planned next steps are clear. First, we expect to meet with FDA at our end of Phase II meeting to review the TOIVA data and finalize the pivotal study design.

Speaker #1: We will then initiate the Phase III study, and we remain on track to do so in the fourth quarter. Before moving to the ISFA data, I want to take a moment to address our breakthrough therapy designation request.

Jeff Martini: Before moving to the ISSVA data, I want to take a moment to address our Breakthrough Therapy designation request. At the time of our submission, we included 12-week data, and FDA did not grant the designation based on our initial package. This does not impact the path forward in cutaneous venous malformations that I just laid out. We remain on track and enthusiastically committed to pursuing an approval in the CVM indication as quickly as possible. That said, we now have the complete 24-week efficacy data set and the final phase II qualitative report, both of which will be reviewed at our planned end-of-phase II meeting. Following our upcoming FDA interaction, we believe these additional data can support a substantially stronger Breakthrough Therapy designation resubmission package following the initiation of the phase III CVM study.

Speaker #1: At the time of our submission, we included 12-week data and FDA did not grant the designation based on our initial package. This does not impact the path forward in cutaneous venous malformations that I just laid out.

Speaker #1: We remain on track and enthusiastically committed to pursuing an approval in the CVM indication as quickly as possible. That said, we now have the complete 24-week efficacy data set and the final Phase II qualitative report, both of which will be reviewed at our planned end-of-Phase II meeting.

Speaker #1: Following our upcoming FDA interaction, we believe these additional data can support a substantially stronger Breakthrough Therapy Designation resubmission package following the initiation of the Phase III CVM study.

Speaker #1: Turning to the ISFA presentation, I want to review the additional data that Dr. Treat highlighted during his late-breaking presentation. He presented results for two key clinical signs of disease: lesion height, or engorgement, and overall appearance.

Jeff Martini: Turning to the ISSVA presentation, I want to review the additional data that Dr. Treat highlighted during his late-breaking presentation. He presented results for two key clinical signs of disease, lesion height or engorgement, and overall appearance. Both are important manifestations of disease burden and arise directly from abnormal dilated venous channels within the skin. These visible manifestations can cause physical discomfort, interfere with daily activities, and create a meaningful burden for patients. Improvements in both measures were evident at week 4, were statistically significant at every assessed time point, and continued to improve through week 24. The continued improvement through week 24 suggests that patients derive increasing benefit with exposure to drug over time. That is an important profile for a chronic disease in which long-term treatment is likely required.

Speaker #1: Both are important manifestations of disease burden and arise directly from abnormal, dilated venous channels within the skin. These visible manifestations can cause physical discomfort, interfere with daily activities, and create a meaningful burden for patients.

Speaker #1: Improvements in both measures were evident at week 4, were statistically significant at every assessed time point, and continued to improve through week 24. The continued improvement through week 24 suggests that patients derive increasing benefit with exposure to the drug over time.

Speaker #1: That is an important profile for a chronic disease in which long-term treatment is likely required. After reviewing the clinical data from TOIVA, I also spent time reading through the qualitative interviews from the 24-week study.

Jeff Martini: After reviewing the clinical data from TOIVA, I also spent time reading through the qualitative interviews from the 24-week study. For me, those interviews brought the data to life. I was genuinely moved by the impact QTORIN rapamycin had, and I want to share one of those quotes that particularly stood out to me, and there are many others like it. "It's definitely had a big impact. It's a lot easier to focus on school and have fun, hang out with friends, and be in the moment when I'm not in as much pain." We look forward to submitting these 24-week data and qualitative findings to FDA and reviewing them at our planned end of phase II meeting to inform and support finalization of the phase III study design. We're also very excited about our clinically significant angiokeratoma program.

Speaker #1: For me, those interviews brought the data to life. I was genuinely moved by the impact Q4 and rapamycin had, and I want to share one of those quotes that particularly stood out to me, and there are many others like it.

Speaker #1: It's definitely had a big impact. It's a lot easier to focus on school and have fun, hang out with friends, and be in the moment when I'm not in as much pain.

Speaker #1: We look forward to submitting these 24-week data and qualitative findings to FDA and reviewing them at our planned end of Phase II meeting to inform and support finalization of the Phase III study design.

Speaker #1: We're very excited about our clinically significant angiokeratoma program. This represents another natural extension of the Q4 and rapamycin pipeline and product strategy, addressing a serious, rare lymphatic malformation affecting more than 50,000 diagnosed patients in the United States, with no FDA-approved therapies.

Jeff Martini: This represents another natural extension of the QTORIN rapamycin pipeline in a product strategy addressing a serious rare lymphatic malformation affecting more than 50,000 diagnosed patients in the United States with no FDA-approved therapies. The first patients were dosed in April, and our phase II LOTU study is evaluating QTORIN rapamycin in up to 15 patients. We look forward to presenting data from the study in H2 2027. We've also seen strong enthusiasm from investigators at leading vascular anomaly and dermatology centers. Last week, an independent KOL call featuring Dr. Mercurio and Greg Savanavey further highlighted the significant unmet need and limitations of current treatment options. This is consistent with our physician research, in which 96% of surveyed physicians indicated that they would incorporate QTORIN rapamycin into their practice.

Speaker #1: The first patients were dosed in April, and our Phase II Q4-2 study is evaluating Q4 and rapamycin in up to 15 patients. We look forward to presenting data from the study in the second half of 2027.

Speaker #1: We have also seen strong enthusiasm from investigators at leading vascular anomaly and dermatology centers. Last week, an independent KOL call featuring Dr. Mercurio and Greg Savanave further highlighted the significant unmet need and limitations of current treatment options.

Speaker #1: This is consistent with our physician research, in which 96% of surveyed physicians indicated that they would incorporate Q4 and rapamycin into their practice. Importantly, we expect this program to follow a supplemental NDA pathway, providing another potential opportunity to efficiently expand Q4 and rapamycin following an initial approval.

Jeff Martini: Importantly, we expect this program to follow a supplemental NDA pathway, providing another potential opportunity to efficiently expand QTORIN rapamycin following an initial approval. When we consider the scientific rationale, investigator enthusiasm, physician interest, and potential supplemental NDA pathway, we believe this represents another important opportunity to address a serious rare disease with substantial unmet need. One of the capabilities we take great pride in is how closely our scientific team tracks advances across rare diseases. Through our network of medical and scientific experts, we are often among the first to hear about important scientific breakthroughs and emerging changes in clinical practice. We have also incorporated AI-enabled tools to continuously monitor developments in the scientific literature, intellectual property landscape, as well as patterns of off-label systemic drug use.

Speaker #1: When we consider the scientific rationale investigator enthusiasm, physician interest, and potential supplemental NDA pathway, we believe this represents another important opportunity to address a serious rare disease with substantial unmet need.

Speaker #1: One of the capabilities we take great pride in is how closely our scientific team tracks a network of medical and scientific experts. We are often among the first to hear about important scientific breakthroughs and emerging changes in clinical practice.

Speaker #1: We have also incorporated AI-enabled tools to continuously monitor developments in the scientific literature intellectual property landscape, as well as patterns of off-label systemic drug use.

Speaker #1: Together, these efforts deepen our understanding of disease biology and unmet need, and help us to identify new opportunities for the Q4 platform. New literature published this quarter adds to the growing evidence around both the substantial unmet need in clinically significant angiokeratomas and the potential role of Q4 and rapamycin.

Jeff Martini: Together, these efforts deepen our understanding of disease biology and unmet need and help us to identify new opportunities for the QTORIN platform. New literature published this quarter adds to the growing evidence around both the substantial unmet need in clinically significant angiokeratomas and the potential role of QTORIN rapamycin. These reports highlight that angiokeratomas can develop and proliferate during childhood and adolescence and may cause persistent bleeding, pain, pruritus, hyperkeratosis, and substantial disease burden. The literature also underscores the limitations of current treatment, which remains largely dependent on destructive procedures while identifying rapamycin as a potential therapeutic option. Together, these independent publications strengthen the scientific foundation for our QTORIN rapamycin program as we continue advancing this important indication. Turning to DSAP, this remains a highly compelling program targeting a chronic, progressive, precancerous skin disease with no FDA-approved therapies.

Speaker #1: These reports highlight that angiokeratomas can develop and proliferate during childhood and adolescence and may cause persistent bleeding, pain, pruritus, hyperkeratosis, and substantial disease burden.

Speaker #1: The literature also underscores the limitations of current treatment, which remains largely dependent on destructive procedures, while identifying rapamycin as a potential therapeutic option. Together, these independent publications strengthen the scientific foundation for our Q4 and rapamycin program as we continue advancing this important indication.

Speaker #1: Turning to DSAT, this remains a highly compelling program targeting a chronic, progressive, precancerous skin disease with no FDA-approved therapies. Q4 and PATAVISTATIN is designed to be the first pathogenesis-directed therapy for DSAT by targeting the causal melaninate pathway, and we remain on track for Phase II initiation in the fourth quarter of 2026.

Jeff Martini: QTORIN pitavastatin is designed to be the first pathogenesis-directed therapy for DSAP by targeting the causal mevalonate pathway, and we remain on track for phase II initiation in Q4 2026. We also continue to see strong patient interest in this program, which underscores both the unmet need and the potential opportunity. We've already received a high level of inbound interest from patients seeking to participate in the study. The quotes on this slide are particularly powerful. One patient shared, "Thank you for doing the work you're doing. Our lives go dark after having this. It mentally and physically takes a toll. Life cannot be enjoyed the way it once was." Another said, "Looking for a breakthrough. This has been devastating." These statements highlight both the significant burden of disease and the strong desire for an effective FDA-approved treatment option.

Speaker #1: We also continue to see strong patient interest in this program, which underscores both the unmet need and the potential opportunity. We've already received a high level of inbound interest from patients seeking to participate in the study.

Speaker #1: The quotes on this slide are particularly powerful. One patient shared, "Thank you for doing the work you're doing. Our lives go dark after having this.

Speaker #1: "It mentally and physically takes a toll. Life cannot be enjoyed the way it once was." Another said, "Looking for a breakthrough. This has been devastating." These statements highlight both the significant burden of disease and the strong desire for an effective, FDA-approved treatment option.

Speaker #1: With that, I'll turn the call over to Matt to review our financial results.

Jeff Martini: With that, I'll turn the call over to Matt to review our financial results.

Speaker #2: Thanks, Jeff. As of June 30, 2026, Palvella had approximately $251 million in cash, providing a significant financial flexibility to invest in maximizing the potential launch of the company's first commercial product, if approved.

Matt E. Korenberg: Thanks, Jeff. As of 30 June 2026, Palvella had approximately $251 million in cash, providing a significant financial flexibility to invest in maximizing the potential launch of the company's first commercial product if approved. In addition, our balance sheet provides sufficient capital to advance our entire pipeline during what we believe will be one of the most catalyst-rich periods in Palvella's history. Our strong cash position is a result of the successful financing completed in February. While our original objective was to raise $150 million, we ultimately raised $230 million, allowing us to invest in multiple high-return initiatives designed to de-risk and strengthen our commercial launch. Partially, we have expanded our launch plans, including increasing our expected field force to approximately 40 sales reps and investing in several high-impact marketing and disease awareness initiatives.

Matt Korenberg: Thanks, Jeff. As of 30 June 2026, Palvella had approximately $251 million in cash, providing a significant financial flexibility to invest in maximizing the potential launch of the company's first commercial product if approved. In addition, our balance sheet provides sufficient capital to advance our entire pipeline during what we believe will be one of the most catalyst-rich periods in Palvella's history. Our strong cash position is a result of the successful financing completed in February. While our original objective was to raise $150 million, we ultimately raised $230 million, allowing us to invest in multiple high-return initiatives designed to de-risk and strengthen our commercial launch. Partially, we have expanded our launch plans, including increasing our expected field force to approximately 40 sales reps and investing in several high-impact marketing and disease awareness initiatives.

Speaker #2: In addition, our balance sheet provides sufficient capital to advance our entire pipeline during what we believe will be one of the most catalyst-rich periods in Palvella’s history.

Speaker #2: Our strong cash position, it's a result of the successful financing completed in February. While our original objective was to raise $150 million we ultimately raised $230 million, allowing us to invest in multiple high-return initiatives designed to de-risk and strengthen our commercial launch.

Speaker #2: Commercially, we have expanded our launch plans, including increasing our expected field force to approximately 40 sales reps, and investing in several high-impact marketing and disease awareness initiatives.

Speaker #2: Within medical affairs, we've begun hiring medical science liaisons earlier than originally anticipated, and now plan to build a larger team than initially envisioned. I've been personally involved in the recruiting process and have met every candidate that we've hired.

Matt E. Korenberg: Within medical affairs, we've begun hiring medical science liaisons earlier than originally anticipated and now plan to build a larger team than initially envisioned. I've been personally involved in the recruiting process and have met every candidate that we've hired. I'm incredibly impressed with the quality of the candidates we've been able to hire, including individuals with rare disease experience at Horizon, Disc Medicine, and other rare disease companies. Collectively, these commercial and medical affairs investments are intended to improve the initial launch performance and to deliver drug to patients sooner. As a result of these incremental investments, we expect our targeted 2026 cash spend to increase modestly. We're now expecting approximately $85 to $95 million in cash expenses this year.

Matt Korenberg: Within medical affairs, we've begun hiring medical science liaisons earlier than originally anticipated and now plan to build a larger team than initially envisioned. I've been personally involved in the recruiting process and have met every candidate that we've hired. I'm incredibly impressed with the quality of the candidates we've been able to hire, including individuals with rare disease experience at Horizon, Disc Medicine, and other rare disease companies. Collectively, these commercial and medical affairs investments are intended to improve the initial launch performance and to deliver drug to patients sooner. As a result of these incremental investments, we expect our targeted 2026 cash spend to increase modestly. We're now expecting approximately $85 to $95 million in cash expenses this year.

Speaker #2: I'm incredibly impressed with the quality of the candidates we've been able to hire, including individuals with rare disease experience at Horizon, Disc Medicine, and other rare disease companies.

Speaker #2: Collectively, these commercial and medical affairs investments are intended to improve the initial launch performance and to deliver drug to patients sooner. As a result of these incremental investments, we expect our targeted 2026 cash spend to increase modestly.

Speaker #2: We're now expecting approximately $85 to $95 million in cash expenses this year. As we reflect back on our plans from earlier this year, and the subsequent changes following our positive Phase III SELVA data and the subsequent successful financing, we now have more resources on the commercial and medical fronts, our plans for pipeline expansion are accelerating, and we plan to increase our resources during our commercial marketing of Q4 and rapamycin, if approved.

Matt E. Korenberg: As we reflect back on our plans from earlier this year and the subsequent changes following our positive phase III SELVA data and the subsequent successful financing, we now have more resources on the commercial and medical fronts. We plan to increase our resources during our commercial marketing of QTORIN rapamycin, if approved. Factoring in all of these changes, we still expect to go into our launch with more capital on the balance sheet than originally expected to support the business. With that, I can turn the call back over to Wes for some additional comments prior to opening the line for questions.

Matt Korenberg: As we reflect back on our plans from earlier this year and the subsequent changes following our positive phase III SELVA data and the subsequent successful financing, we now have more resources on the commercial and medical fronts. We plan to increase our resources during our commercial marketing of QTORIN rapamycin, if approved. Factoring in all of these changes, we still expect to go into our launch with more capital on the balance sheet than originally expected to support the business. With that, I can turn the call back over to Wes for some additional comments prior to opening the line for questions.

Speaker #2: Factoring in all of these changes, we still expect to go into our launch with more capital on the balance sheet than originally expected to support the business.

Speaker #2: With that, I can turn the call back over to Wes for some additional comments prior to opening the line for questions.

Speaker #3: Thanks, Matt. In closing, what sets Palvella apart is both our exceptional team and our repeatable model for identifying, developing, and commercializing first in a disease therapies for serious rare diseases previously thought to be untreatable.

Wes Kaupinen: Thanks, Matt. In closing, what sets Palvella apart is both our exceptional team and our repeatable model for identifying, developing, and commercializing first-in-disease therapies for serious rare diseases previously thought to be untreatable. Our model is unique. We focus on high unmet need, commercially attractive rare diseases with well-understood biology, emerging human proof-of-concept data that signals the potential for clinical benefit and meaningful unmet need. We then apply the QTORIN platform to develop targeted, localized therapies designed to optimize the risk-benefit profile while generating new and durable intellectual property. What gives me the greatest confidence in Palvella's future is the team executing this strategy. I have the privilege of working alongside a highly dedicated team of colleagues every day who bring deep scientific, clinical, regulatory, commercial, and operational expertise together with an extraordinary work ethic, a strong sense of urgency, and an unwavering commitment to patients.

Speaker #3: Our model is unique. We focus on high unmet need, commercially attractive rare diseases with well-understood biology and emerging human proof-of-concept data that signal the potential for clinical benefit and address meaningful unmet need.

Speaker #3: We then apply the Q4 platform to develop targeted localized therapies designed to optimize the risk-benefit profile while generating new and durable intellectual property. What gives me the greatest confidence in Palvella's future is the team executing this strategy.

Speaker #3: I have the privilege of working alongside a highly dedicated team of colleagues every day who bring deep scientific, clinical regulatory, commercial, and operational expertise.

Speaker #3: Together with an extraordinary work ethic, a strong sense of urgency, and an unwavering commitment to patients. Together, those capabilities enable us to advance innovative therapies toward FDA approval with greater speed, discipline, and capital efficiency than traditional drug development approaches.

Wes Kaupinen: Together, those capabilities enable us to advance innovative therapies toward FDA approval with greater speed, discipline, and capital efficiency than traditional drug development approaches. Our goal remains clear: to serve patients with serious rare skin diseases and vascular malformations for which there are no FDA-approved therapies, while building Palvella into the leading rare disease biopharmaceutical company in this field. I'd like to thank our employees, patients, advocacy partners, external collaborators, and our shareholders for their continued trust and support. With that, operator, we will now open the line for questions.

Speaker #3: Our goal remains clear: to serve patients with serious rare skin diseases and vascular malformations for which there are no FDA-approved therapies, while building Palvella into the leading rare disease biopharmaceutical company in this field.

Speaker #3: I'd like to thank our employees, patients, advocacy partners, external collaborators, and our shareholders for their continued trust and support. With that, operator, we will now open the line for questions.

Speaker #4: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question you will need to press *11 on your telephone.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Alexa Diemer at Cantor Fitzgerald.

Speaker #4: And wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Speaker #4: Our first question comes from Alexa Demer at Canter Fitzgerald.

Speaker #5: Hi guys, this is Alexa Demer on for Josh and congrats on a great quarter. So perhaps you could elaborate a bit more about your ongoing efforts to identify MLM patients and then are your recent findings in line with the initial estimates of around 30,000 diagnosed patients?

Alexa Diemer: Hi, guys. This is Alexa Diemer on for Josh, congrats on a great quarter. Perhaps you could elaborate a bit more about your ongoing efforts to identify MLM patients, are your recent findings in line with the initial estimates of around 30,000 diagnosed patients? Thanks so much.

Alexa Deemer: Hi, guys. This is Alexa Diemer on for Josh, congrats on a great quarter. Perhaps you could elaborate a bit more about your ongoing efforts to identify MLM patients, are your recent findings in line with the initial estimates of around 30,000 diagnosed patients? Thanks so much.

Speaker #5: Thanks so much.

Wes Kaupinen: Great, Alexa. Thanks for being on, thanks for the questions. I can confirm that our recent findings are in line with previous estimates. Last year, we published a claims analysis at a medical congress that indicated somewhere between 45,000 and 95,000 diagnosed MLM patients in the US. Importantly, in that analysis that's published, there was also an estimated annual incidence of 1,500 or more newly diagnosed patients that will come into that pool. We like to be conservative in our approach on epi, we can confirm that we believe there's greater than 30,000 diagnosed patients in the United States with microcystic lymphatic malformations. Appreciate you asking the question in terms of patient identification. The key there is to have your team in the field. We know where a lot of these patients are concentrated.

Speaker #3: Great. Alexa, thanks for being on and thanks for the questions. I can confirm that our recent findings are in line with previous estimates. Last year, we published a claims analysis at a medical congress that indicated somewhere between 45,000 and 95,000 diagnosed MLM patients in the US.

Speaker #3: Importantly, in that analysis that's published, there was also an estimated annual incidence of 1,500 or more newly diagnosed patients that will come into that pool.

Speaker #3: We like to be conservative in our approach on EPI. So we can confirm that we believe there's greater than 30,000 diagnosed patients. In the United States, with microcystic lymphatic malformations, and appreciate you asking the question in terms of patient identification.

Speaker #3: The key there is to have your team in the field. We know where a lot of these patients are concentrated. This is a market that has experienced organic market development as a function of vascular anomalies centers.

Wes Kaupinen: This is a market that has experienced organic market development as a function of vascular anomaly centers emerging over the last 20 years that have high patient volumes. We know where those centers are. We know who the physicians are that take care of these patients, we're making efforts to be in front of those physicians at their sites, also with a strong presence at medical congresses as well.

Speaker #3: Emerging over the last 20 years, that have high patient volumes. We know where those centers are. We know who the physicians are that take care of these patients.

Speaker #3: And so we're making efforts to be in front of those physicians at their sites, but also with a strong presence at medical congresses as well.

Speaker #5: Thanks so much.

Alexa Diemer: Thanks so much

Alexa Deemer: Thanks so much

Speaker #4: Our next question comes from Whitney Ajeng at Kennecourt Genuity.

Operator: Our next question comes from Whitney Ijem at Canaccord Genuity.

Speaker #5: Hey, good morning, guys. Thanks for taking the questions. Just first one on DSEP Phase II. Can you remind us of the target enrollment for that study?

Whitney Ijem: Hey, good morning, guys. Thanks for taking the questions. Just first one on DSAP phase II. Can you remind us of the target enrollment for that study? Sorry if I missed it. It was juggling calls. I guess just given your comments on demand there so far, is there a scenario where that program could proceed more quickly than the angiokeratoma program, just as we think about cadence of data readouts next year?

Speaker #5: Sorry if I missed it. It was juggling calls. And I guess just given your comments on demand there so far, is there a scenario where that program could proceed more quickly than the Angiocheratoma program, just as we think about cadence of data readouts next year?

Speaker #3: Yeah, thanks for those questions. Whitney, I'll start off with some comments and then ask Jeff to also add additional color. So on the DSEP Phase II study, we expect that to be about a 15-patient Phase II study.

Wes Kaupinen: Yeah. Thanks for those questions, Whitney. I'll start off with some comments and then ask Jeff to also add additional color. On the DSAP phase II study, we expect that to be about a 15-patient phase II study. Will it proceed more quickly than angio? To speak about angio for one minute, we did start that trial ahead of original expectations. That trial started in the H1 of this year. Originally, expectations for that were H2 of this year. Our clinical operations team has done a great job engaging sites, screening patients, making sure we're getting the right patients into the study, that study is anticipated to read out in the H2 of next year.

Speaker #3: Will it proceed more quickly than Angio? To speak about Angio for one minute, we did start that trial ahead of original expectations. That trial started in the first half of this year, originally expectations for that were second half of this year.

Speaker #3: Our clinical operations team has done a great job engaging sites screening patients, making sure we're getting the right patients into the study. And that study is anticipated to read out in the second half of next year.

Speaker #3: We'll firm up timelines in terms of the DSEP readout. Around the time of initiation of the Phase II study, which we expect to be sometime in the second half of this year.

Wes Kaupinen: We'll firm up timelines in terms of the DSAP readout around the time of initiation of the phase II study, which we expect to be sometime in the H2 of this year.

Whitney Ijem: Got it. That's helpful. Just quick follow-up. We conducted a physician survey recently, I guess from the feedback of that survey, there was about 60% of patients on average of the MLM patients managed by z-docs who were actively seeking treatment for their MLM, with the main reasons why patients were not seeking treatment being just comments around not bothersome or asymptomatic, et cetera. I'm just curious, as you think about the greater than 30,000 number, is that focused specifically on those patients who would be thought to be symptomatic enough to be seeking treatment? Or how should we think about that headed into launch? Thanks.

Speaker #5: Got it. That's helpful. And then just quick follow-up. We conducted a KO or a physician survey recently, and I guess from the feedback of that survey, there was about 60% of patients on average of the MLM patients managed by Z-Stox who were actively seeking treatment for their MLM with the main reasons why patients were not seeking treatment being just kind of like comments around not bothersome or asymptomatic, et cetera.

Speaker #5: So I'm just curious, as you think about the greater than 30,000 number, is that focused specifically on those patients who would be kind of thought to be symptomatic enough to be seeking treatment, or how should we kind of think about that headed into launch?

Speaker #5: Thanks.

Speaker #3: Yeah. So our claims data show that there was 45 to 95,000 patients in clinical medicine, Whitney. We've said greater than 30,000 to be conservative.

Wes Kaupinen: Yeah. Our claims data show that there was 45,000 to 95,000 patients in clinical medicine, Whitney. We've said greater than 30,000 to be conservative. We know now, as of about 10 years ago, that there's been discoveries around the genetics and the causal biology of this disease. Microcystic lymphatic malformations are a proliferative disease that is progressive in nature. Patients who may have less burden from their daily disease, we believe are also very good candidates for QTORIN rapamycin if approved. I think some of the data that Jeff showed earlier around pediatric patients who may be earlier in their disease cycle, those patients had very good responses. We think that that approach applies to patients who may be less burdensome from a symptom perspective, because if the disease goes untreated, it will predictably proliferate and progress and become more problematic.

Speaker #3: We know now, as of about 10 years ago, that there's been discoveries around the genetics and the causal biology of this disease. So microcystic lymphatic malformations are a proliferative disease that has progressive in nature.

Speaker #3: So patients who may have less burden from their daily disease we believe are also very good candidates for ketorin rapamycin if approved. I think some of the data that Jeff showed earlier around pediatric patients who may be earlier in their disease cycle and those patients had very good responses, and we think that that approach applies to patients who may be less burdensome from a symptom perspective because if the disease in less goes untreated, it will predictably proliferate and progress and become more problematic.

Speaker #3: So that will be the approach that our medical affairs team takes, our commercial team. This is an approach that we've derived from our interactions with the thought leaders such as Jim Treat and Children's Hospital of Philadelphia, Mike Kelly, at the Cleveland Clinic.

Wes Kaupinen: That will be the approach that our medical affairs team takes, our commercial team. This is an approach that we've derived from our interactions with the thought leaders such as Jim Treat at Children's Hospital of Philadelphia, Mike Kelly at the Cleveland Clinic.

Whitney Ijem: Great. Thanks.

Speaker #5: Great. Thanks.

Operator: Our next question comes from Ritu Baral at TD Cowen.

Speaker #4: Our next question comes from Ratu Baral at TD Cowan.

Speaker #6: Good morning, guys. Thanks for taking the question. Wes, I wanted to ask about the deployment strategy of the 40 rep that you mentioned across the vascular anomaly clinics.

Ritu Baral: Good morning, guys. Thanks for taking the question. Wes, I wanted to ask about the deployment strategy of the 40 reps that you mentioned across the vascular anomaly clinics. Do you guys currently have an estimate of how many identified vascular anomaly clinics there are either now or at the time of the commercial launch, since you mentioned more opening up? What percentage of the 35,000 conservatively diagnosed and documented patients are at the centers versus your strategy in the community setting? How much that drove the expansion of the rep number that you mentioned. I've got a follow-up about your hub.

Speaker #6: Do you currently have an estimate of how many identified vascular anomaly clinics there are, either now or at the time of the commercial launch, since you mentioned more are opening up?

Speaker #6: What percentage of the 35,000 conservatively diagnosed and documented patients are at the centers versus your strategy in the community setting? And how much that drove these sort of expansion of that the rep number that you mentioned?

Speaker #6: And then I've got a follow-up about your hub.

Wes Kaupinen: Great. Hey, Ritu. Thanks for the questions. To address your question on where the reps will be focused, we think of our market as 3 tiers. That first tier is about 400 centers. Those 400 centers, we estimate based on claims data, have about 15,000 or more MLM patients under their management. Of those 400 centers, we'd say about half of those are going to be vascular anomalies centers. There's an excellent publication from Dr. Sally Cohen Kutter that talks about the emergence of vascular anomaly centers from a few years ago, and we've been able to leverage that publication. Reps will also, in addition to that, what we'll call the tier 1, which is the high volume centers, we will also have personal promotion with the reps into our tier 2 and our tier 3. All segments of the market will receive personal promotion.

Speaker #3: Great. Hey, Ratu, thanks for the questions. To address your question on where the reps will be focused, we think of our market as three tiers.

Speaker #3: That first tier is about 400 centers. Those 400 centers, we estimate based on claims data, have about 15,000 or more MLM patients under their management.

Speaker #3: Of those 400 centers, we'd say about half of those are going to be vascular anomalies centers. There's an excellent publication from Dr. Sally Cohen-Cutler that talks about the emergence of vascular anomaly centers from a few years ago and we've been able to leverage that publication.

Speaker #3: Reps will also in addition to that, what we'll call the tier one, which is the high volume centers, we will also have personal promotion with the reps into our tier two and our tier three.

Speaker #3: So all segments of the market will receive personal promotion I mentioned Peter van Leesen earlier on this call. Peter has a lot of experience in digital marketing.

Wes Kaupinen: I mentioned Peter Finlayson earlier on this call. Peter has a lot of experience in digital marketing. He's brought on two new hires who have just started, who are both very impressive. We are going to be deploying digital marketing approaches across not only that tier 1 of 400 centers, but also the tier 2 and the tier 3. In addition to personal promotion through the reps, we expect to be building an inside sales team. This is an approach and strategy that Ashley had at Dompé through the launch of OXERVATE, that she has described as a high return on investment activity in an orphan launch. Under Kent Taylor's leadership, we're starting to assemble that team as well. I think Matt covered it with his comments, which is just to say we're very well-resourced for the launch.

Speaker #3: He's brought on two new hires who have just started, who are both very impressive. And so we are going to be deploying digital marketing approaches across not only that tier one of 400 centers, but also the tier two and the tier three.

Speaker #3: In addition to personal promotion through the reps, we expect to be building an inside sales team strategy that Ashley had at Dompé through the launch of Oxfordate that she has described as a high return on investment activity in an orphan launch.

Speaker #3: And so under Kent Taylor's leadership, we're starting to assemble that team as well. I think Matt covered it with his comments, which is just to say we're very well resourced for the launch.

Speaker #3: We continue to be disciplined in our capital allocation. But by deploying more reps at launch, a slightly larger medical team, and a very strong marketing team, we think that sets us up for early launch success.

Wes Kaupinen: We continue to be disciplined in our capital allocation. By deploying more reps at launch, a slightly larger medical team, and a very strong marketing team, we think that sets us up for early launch success.

Speaker #6: Great. And then on the hub and specifically reimbursement support plans that you have, what's the size of the force in the hub that you currently plan on being available to patients and to practices to help?

Ritu Baral: Great. On the hub and specifically reimbursement support plans that you have, what's the size of this force in the hub that you currently plan on being available to patients and to practices to help? As you think about your pricing and your first insurance conversations, do you have a sort of list of likely suspects for either prior authorizations or potentially even, obviously, unapproved step-throughs that you think insurance may utilize?

Speaker #6: And as you think about your pricing and your first insurance conversations, do you have a sort of list of likely suspects for either prior authorizations or potentially even obviously unapproved step-throughs that you think insurance may utilize?

Speaker #3: Yeah, thanks for the question. We have just recently brought on our leader for the Patient Services team—his name is Matt Giordano. Matt was previously at Krystal Biotech.

Wes Kaupinen: Yeah, thanks for the question. We've just recently brought on our leader for the patient services team. His name is Matt Giordano. Matt was previously at Krystal Biotech. He's working closely with Jennifer McDonough, who was also previously at Krystal. We're in the process of ensuring that that team is appropriately sized. Similar to our guidance of 20 to 40 reps and how we landed on 40, our internal thinking is to make sure that that team is resourced at the high end of the range. We look forward to coming back with specifics on the size of that team. On your second question, our payer research, thanks for flagging that question. We mentioned our payer research. We tested for that, Ritu.

Speaker #3: He's working closely with Jennifer McDonough, who was also previously at Crystal. We're in the process of ensuring that that team is appropriately sized. Similar to our guidance of 20 to 40 reps and how we landed on 40, our internal thinking is to make sure that team is resourced at the high end of the range.

Speaker #3: So we look forward to coming back with specifics on the size of that team. On your second question, our payer research thanks for flagging that question.

Speaker #3: We mentioned our payer research. We tested for that, Ratu We would not expect at this point in time to have step-throughs of unapproved therapies.

Wes Kaupinen: We would not expect at this point in time to have step-throughs of unapproved therapies when there is the presence, if we're approved, of a drug that has 95% efficacy in phase III and is taking this on target, addressing the causal mTOR pathway, and in tissue doing it in the skin approach. We don't anticipate that based on our recent payer research.

Speaker #3: When there is the presence—if we're approved for a drug that has 95% efficacy in phase three, and is targeting the pathway, addressing the causal intracellular pathway, and in tissue, doing it through the skin approach.

Speaker #3: So we don't anticipate that based on our recent payer research.

Ritu Baral: Would prior ops really just be diagnosis?

Speaker #6: Would prior auths really just be diagnosis?

Speaker #3: Yeah. We'll have some of that research that we're continuing to do. Oftentimes, payers in rare diseases can request prior auths. The key is to have that mapped out and have your patient access team and payer team be able to seamlessly navigate those prior auths.

Wes Kaupinen: Yeah, we'll have some of that research that we're continuing to do. Oftentimes, payers in rare diseases can request prior ops. The key is to have that mapped out and have your patient access team and payer team be able to seamlessly navigate those prior ops. I think there's a lot of precedent from the three precedents we mentioned, TEPEZZA, VYJUVEK, and OXERVATE, that we can model.

Speaker #3: And I think there's a lot of precedent from the three precedents we mentioned—PESAVY, GiveX, and OxforDate—that we can model.

Speaker #6: Our next question comes from NML Samimi at Stifel.

Operator: Our next question comes from Annabel Samimy at Stifel.

Annabel Samimy: Hi, all. Thanks for taking my question. Congratulations on the progress. You talked a lot about the MLM population size. Have you done the same for CVM, and what are the prospects for orphan designation for that indication? Is CVM a lot larger than the 75,000 that you've cited? Separately, for MLM, I know that you have an OLE study ongoing. Is any of that data needed for completion of the filing? What can we expect as far as data trickling out from that study and just additional data releases through the year? Thank you.

Speaker #7: Hi all. Thanks for taking my question. Congratulations on the progress. So you talked a lot about the MLM population size. Have you done the same for CVM?

Speaker #7: And what are the prospects for orphan designation for that indication? Is CVM a lot larger than the 75K that you've cited? And then separately, for MLM, I know that you have an OLE study ongoing.

Speaker #7: Is any of that data needed for completion of the filing? What can we expect as far as data trickling off from that study? And just additional data releases through the year.

Speaker #7: Thank you.

Speaker #3: Yeah. Hey, Annabelle. Thanks for the questions. Really appreciate you asking about the size of the CVM market. What I've found from my time at InzMed and Palvella is that within what's in the literature is generally unreliable in terms of estimating EPI.

Wes Kaupinen: Yeah. Hey, Annabel. Thanks for the questions. Really appreciate you asking about the size of the CVM market. What I've found from my time at Insmed and Palvella is that what's in the literature is generally unreliable in terms of estimating epi. We take data-driven approaches through real-world occurrence studies, through claims analyses to really appropriately size these markets. There's a recent publication in Orphanet Journal of Rare Diseases with Jack Gallagher as the first author that estimates that there's 135,000 cutaneous venous malformation patients in the United States. Again, applying some conservatism. On our corporate deck, we talk about greater than 75,000. What we do know about venous malformations is that it is the most common type of vascular malformation. More common than microcystic lymphatic malformations, for example, or more common than other forms of vascular malformations. Your question around Orphan Designation.

Speaker #3: So we take data-driven approaches through real-world occurrence studies, through claims analyses, to really appropriately size these markets. There's a recent publication in Orphanet Journal of Rare Diseases, with Jack Gallagher as the first author, that estimates there are 135,000 cutaneous venous malformation patients in the United States.

Speaker #3: Again, applying some conservatism in our corporate deck, we talk about greater than 75,000. What we do know about venous malformations is that it is the most common type of vascular malformation.

Speaker #3: More common than microcystic lymphatic malformations, for example, or more common than other forms of vascular malformations. Your question around orphan designation, we do intend to pursue orphan designation for that indication.

Wes Kaupinen: We do intend to pursue Orphan Designation for that indication. I'll pass it over to Jeff to talk about the OLE data and what will be incorporated in the filing, as well as some of the additional opportunities to share data from the SELVA study.

Speaker #3: And then I'll pass it over to Jeff to talk about the OLE data and what will be incorporated into the filing, as well as some of the additional opportunities to share data from the Selva study.

Speaker #5: Thank you, Ash. Thank you, Annabelle, for the question. Yes. We do have the ongoing open label extension study. As part of Selva, so the patients that completed efficacy had the opportunity to stay on drug.

Jeff Martini: Thanks, Wes. Thank you, Annabel, for the question. Yes, we do have the ongoing open label extension study as part of SELVA, so the patients that completed efficacy had the opportunity to stay on drug, and they remain on drug at this time. We are going to be planning to submit a data cut from that as part of our safety update to the FDA after the original NDA goes in, we're actively planning that now. We are having a large medical affairs and medical congress presence this summer and next year. We're planning all those activities now. We continue to do new data cuts, continue to have different ways for analyzing data, including some of the long-term safety data, PK, and other data will be coming out at future medical congresses.

Speaker #5: And they remain on drug at this time. And we are going to be planning to submit a data cut from that as part of our safety update to the FDA after the original NDA goes in.

Speaker #5: So we're actively planning that now. We are having a large medical affairs and medical congress presence this summer and next year. We're planning all those activities now.

Speaker #5: So we continue to do new data cuts, and continue to have different ways we're analyzing data, including some of the long-term safety data and PK. Other data will be coming out at future medical congresses.

Speaker #6: Got it. And if I could just ask for a follow-up on CVM, what are your expectations at this point for what a Phase 3 trial design will look like?

Annabel Samimy: Got it. If I could just ask for a follow-up on CVM. What are your expectations at this point for what a phase III trial design will look like? If you have to have a placebo control arm, what are your prospects for enrollment now that the data is out and they see that this is a very effective drug?

Speaker #6: And if you have to have a placebo control arm, what are your prospects for enrollment now that the data is out and they see this is a very effective drug?

Speaker #3: Yeah, thanks for that question. We're meeting with the FDA. We plan to meet with them in the coming months here to have an end-of-Phase 2 meeting and to align on a Phase 3 study design.

Wes Kaupinen: Yeah. Thanks for that question. We're meeting with the FDA. We plan to meet with them in the coming months here to have a phase II meeting and to align on a phase III study design. Annabel, I think whether that ends up being a placebo-controlled study or a non-placebo-controlled study, based on all the analysis we've done of the phase II data, including some of these patient qualitative interviews that Jeff referenced, we think that we will demonstrate a robust and strong treatment effect of QTORIN rapamycin, based again on the phase II results, but also the acceptance of rapamycin's role in this as a targeted therapy addressing the underlying mTOR driver for these venous malformations. We expect to have FDA approval based on the internal modeling that we've done of various study designs, Annabel, in the 2029 timeframe for cutaneous venous malformations.

Speaker #3: Annabelle, I think whether that ends up being a placebo-controlled study or a non-placebo-controlled study, based on all the analysis we've done, of the phase two data, including some of these patient qualitative interviews that Jeff referenced, we think that we will demonstrate a robust and strong treatment effect of ketor and rapamycin based, again, on the phase two results, but also the acceptance of rapamycin serolimus as a targeted therapy addressing the underlying mTOR driver for these venous malformations.

Speaker #3: We expect to have FDA approval, based on the internal modeling that we've done of various study designs, Annabelle, in the 2029 timeframe for cutaneous venous malformations.

Speaker #6: Our next question comes from Greg Suvenaway at Mizuho.

Operator: Our next question comes from Greg Suvanaij at Mizuho.

[Analyst] (Mizuho): Hello, this is Ryan on for Greg today. Thanks for taking the question. Maybe just the first question focusing on angiokeratomas, maybe for Jeff. Can you talk a little bit how LOTU's coming along and maybe talk a little bit about some of the overlap in both the etiology and the symptomology in angiokeratomas relative to the more advanced programs in MLM and CVMs? Maybe just as a second question for Wes, what's your sense of investor interest in the angiokeratoma program so far and the level of awareness that investors have regarding overlap with these other conditions? Thank you.

Ryan J. Ries: Hello, this is Ryan on for Greg today. Thanks for taking the question. Maybe just the first question focusing on angiokeratomas, maybe for Jeff. Can you talk a little bit how LOTU's coming along and maybe talk a little bit about some of the overlap in both the etiology and the symptomology in angiokeratomas relative to the more advanced programs in MLM and CVMs? Maybe just as a second question for Wes, what's your sense of investor interest in the angiokeratoma program so far and the level of awareness that investors have regarding overlap with these other conditions? Thank you.

Speaker #8: Hello. This is Ryan on for Greg today. Thanks for taking the question. Maybe just the first question focusing on angiokeratomas, maybe for Jeff. Can you talk a little bit about how low two is coming along and maybe talk a little bit about some of the overlap in both the etiology and the symptomology in angiokeratomas relative to the more advanced programs in MLM and CVMs?

Speaker #8: And then maybe just as a second question for Wes, what's your sense of investor interest in angiokeratoma program so far and the level of awareness that investors have regarding overlap with these other conditions?

Speaker #8: Thank you.

Speaker #5: Thanks for the question, Ryan. This is Jeff. So the status is we've started the study. We started it earlier than originally planned. It's gone really well.

Jeff Martini: Thanks for the question, Ryan. This is Jeff. The status is we've started the study. We started it earlier than originally planned. It's gone really well. I've had the opportunity to train all the clinicians on the study design and the endpoints. I could say anecdotally, there's a lot of enthusiasm for this trial. There's a lot of unmet need, and they're seeing these patients in their clinic, and they're not wanting to do some of the destructive procedures that I talked about. They're destructive, they're painful, and the disease often comes back. That kind of goes into the second part of your question about the symptoms and the overlap. We started the program in angiokeratomas because of the unmet need, but also because of the fact that there's a lot of biological and clinical overlap with the microcystic lymphatic malformations program.

Speaker #5: I've had the opportunity to train all the clinicians on the study design and the endpoints. And I could say anecdotally, there's a lot of enthusiasm for this trial.

Speaker #5: There's a lot of unmet need and they're seeing these patients in their clinic. And they're not wanting to do some of the destructive procedures that I talked about.

Speaker #5: They're destructive. They're painful. And the disease often comes back. And that kind of goes into the second part of your question about the symptoms and the overlap.

Speaker #5: We started the program in angiokeratomas because of the unmet need, but also because of the fact that there's a lot of biological and clinical overlap with the microcystic lymphatic malformations program.

Speaker #5: Angiokeratomas are a type of isolated lymphatic malformations. They have some of the same molecular markers. There's some differences with microcystic lymphatic malformations. There's bleeding as much more common in angiokeratomas.

Jeff Martini: Angiokeratomas are a type of isolated lymphatic malformations. They have some of the same molecular markers. There's some differences with microcystic lymphatic malformations. There's bleeding is much more common in angiokeratomas. Overall, very symptomatic disease, significant unmet need, and we're seeing a lot of investigator interest as well as patient interest in the trial.

Speaker #5: But overall, it's a very, very symptomatic disease, with significant unmet need. We're also seeing a lot of interest from investigators as well as from patients in the trial.

Speaker #3: Yeah, Ryan, thanks for both your questions. I'd say the level of awareness of these rare diseases that have no approved therapies is generally low.

Wes Kaupinen: Yeah, Ryan, thanks for both your questions. I'd say the level of awareness of these rare diseases that have no approved therapies is generally low. That's been my experience both at Palvella and at Insmed. I think where you start to see the level of awareness rise is when you run these studies, particularly phase II studies. If you're fortunate enough like we've been fortunate in microcystic LM and CVMs to demonstrate a strong treatment effect, I think investor awareness rises over time. We do like to use the opportunity on these earnings calls to educate. Jeff did a great job, I thought, walking through the three papers in angiokeratomas and also the quotes that he had for patients who are interested in the porokeratosis program.

Speaker #3: That's been my experience both at Palvella and at InzMed. I think where you start to see the level of awareness rise is when you run these studies particularly phase two studies and if you're fortunate enough, like we've been fortunate in microcystic LM and CVMs, to demonstrate a strong treatment effect, I think investor awareness rises over time.

Speaker #3: We do like to use the opportunity on these earnings calls to educate. Jeff did a great job. I thought walking through the three papers in angiokeratomas and also the quotes that he had for patients who are interested and the porokeratosis program.

Speaker #3: So it's incumbent upon us to drive this disease state awareness with all of our stakeholders, but also execute these studies on a timely basis with urgency, advance our therapies, get them to patients who currently have nothing.

Wes Kaupinen: It's incumbent upon us to drive this disease state awareness with all of our stakeholders, but also execute these studies on a timely basis with urgency, advance our therapies, get them to patients who currently have nothing.

[Analyst] (Mizuho): Great. Then maybe just as a last question from me, can you talk about the pursuit of the Platform Technology Designation for QTORIN? What sort of data package you're going to put together for that, and how is that going to benefit both the ongoing programs and the programs that you plan to announce here?

Ryan J. Ries: Great. Then maybe just as a last question from me, can you talk about the pursuit of the Platform Technology Designation for QTORIN? What sort of data package you're going to put together for that, and how is that going to benefit both the ongoing programs and the programs that you plan to announce here?

Speaker #8: Great. And then maybe just as a last question for me, can you talk about the pursuit of the platform designation for ketorin? What sort of data package you're going to put together for that?

Speaker #8: And how is that going to benefit both the ongoing programs and the programs that you plan to announce here?

Speaker #3: Yeah. Thanks, Ryan, for the question. We followed others who have secured this FDA's platform designation. And similar to some of these other designations that we've secured, our interpretation is that the platform designation can serve to expedite therapies to patients.

Wes Kaupinen: Yeah. Thanks, Ryan, for the question. We followed others who have secured this FDA's Platform Designation. Similar to some of these other designations that we've secured, our interpretation is that the Platform Designation can serve to expedite therapies to patients. Platform Designation should be available to Palvella in terms of submitting an application after our first approval for QTORIN rapamycin in microcystic lymphatic malformations. We believe the beneficiary of the Platform Designation would be future QTORIN product candidates, such as QTORIN pitavastatin, as well as the third product candidate that we're going to announce later this year. We'll exit this year with QTORIN rapamycin, QTORIN pitavastatin, and a third product candidate.

Speaker #3: So platform designation should be available to Palvella in terms of submitting an application after our first approval for ketor and rapamycin in microcystic lymphatic malformations.

Speaker #3: We believe the beneficiary of the platform designation would be future ketorin product candidates, such as ketor and patavastatin, as well as the third product candidate, that we're going to announce later this year.

Speaker #3: So we'll exit this year with ketor and rapamycin, ketor and patavastatin, and a third product candidate each of those formulations have similar characteristics in terms of the anhydrous gel base and in terms of some of the excipients release characteristics, penetration characteristics.

Wes Kaupinen: Each of those formulations have similar characteristics in terms of the anhydrous gel base and in terms of some of the excipients release characteristics, penetration characteristics. We're excited to secure that first FDA approval in H1 of next year, and then have a collaborative dialogue with the FDA about our eligibility for a Platform Designation.

Speaker #3: So we're excited to secure that first FDA approval in the first half of next year. And then have a collaborative dialogue with the FDA about our eligibility for a platform designation.

Speaker #6: Our next question comes from Ryan Deschner at Raymond James.

Operator: Our next question comes from Ryan Deschner at Raymond James.

Speaker #7: Hi, good morning. Two quick questions for me. One, have your expectations for what a potential label might look like in MLM evolve since your pre-NDA meeting with FDA in terms of age cutoff or otherwise?

Ryan Deschner: Hi, good morning. Two quick questions for me. One, have your expectations for what a potential label might look like in MLM evolved since your pre-NDA meeting with FDA in terms of age cutoff or otherwise? Did regulators cite specific areas from your initial CVM data package that need to be addressed or strengthened with more mature data in order to be granted or reconsidered for Breakthrough Designation? Thanks.

Speaker #7: And did regulators cite specific areas from your initial CVM data package that need to be addressed or strengthened with more mature data in order to be granted or reconsidered for breakthrough designation?

Speaker #7: Thanks.

Speaker #3: Yeah. Thanks for the questions, Ryan. No changes. In the label, conversations as a result of the pre-NDA meeting. We're going to pursue a broad label for microcystic lymphatic malformations.

Wes Kaupinen: Thanks for the questions, Ryan. No changes in the label conversations as a result of the pre-NDA meeting. We're going to pursue a broad label for microcystic lymphatic malformations, and we believe that should include patients at pediatric ages. We think that's best for patients, and we think we have strong data to support that as part of our NDA data package. In terms of your question on the data package for cutaneous venous malformations, I think Jeff highlighted it nicely earlier, which is we'd like to submit more patient experience data. We'd like to submit patient interview transcripts. We think those will be additive to the CVM data package. They help regulatory agencies interpret the effect sizes and what those effect sizes really meant to patients.

Speaker #3: And we believe that should include patients at pediatric ages. We think that's best for patients. And we think we have strong data to support that as part of our NDA data package.

Speaker #3: In terms of your question on the data package for cutaneous venous malformations, I think Jeff highlighted it nicely earlier, which is we'd like to submit more patient experience data we'd like to submit patient interview transcripts we think those will be additive to the CVM data package.

Speaker #3: They help regulatory agencies interpret the effect sizes and what those effect sizes really meant to patients. So this was a smart approach that Jeff implemented—to do these qualitative interviews to understand disease burden at baseline, but also to understand whether there was a change in disease burden following 12 weeks of therapy.

Wes Kaupinen: This was a smart approach that Jeff implemented to do these qualitative interviews to understand disease burden at baseline, but also understand whether there was a change in disease burden following 12 weeks of therapy. Those will be core to a future breakthrough resubmission package as well as that 24-week data, which James Treat presented at ISSVA and Jeff highlighted on this call.

Speaker #3: So those will be core to a future breakthrough resubmission package, as well as that 24-week data which Jim Chery presented at ISVA and Jeff highlighted on this call.

Speaker #7: Thanks, Wes.

Ryan Deschner: Thanks, Wes.

Speaker #6: Our next question comes from Sam Slutsky at Lifesci Capital.

Operator: Our next question comes from Sam Slutsky at Left Side Capital.

Sam Slutsky: Hey, thanks for taking the questions. Just real quick, any updates on how you're thinking about pricing analogs for MLMs? Can you just remind us on kind of extended body surface area in MLM patients and expectations for tube size and what it could cover, et cetera?

Speaker #4: Hey, thanks for taking the questions. Just real quick, any updates on how you're thinking about pricing analogs for MLMs? And then can you just remind us on the extended body surface area in MLM patients and kind of expectations for tube size and what it could cover, etc.?

Speaker #3: Yeah. Hey, Sam, thanks for the question. On pricing analogs, we have three of those listed in our corporate deck. Tapezza, Oxfordvate, and Ericase, we've got to do a pricing range of $100 to $200,000 per patient.

Wes Kaupinen: Yeah. Hey, Sam. Thanks for the question. On pricing analogs, we have three of those listed in our corporate deck. TEPEZZA, OXERVATE, and MYALEPT, we've guided to a pricing range of $100,000 to $200,000 per patient per year in microcystic lymphatic malformations. I mentioned that we've done recent payer research. We can confirm that we would expect to have strong payer coverage in those pricing ranges of $100,000 to $200,000 per patient per year, and we'll come back to the market closer to the time of FDA approval with our launch price. On your second question, we'll pass it over to Jeff.

Speaker #3: Per year. In microcystic lymphatic malformations, I mentioned that we've done recent payer research. We can confirm that we would expect to have strong payer coverage in those pricing ranges of $100,000 to $200,000 per patient per year.

Speaker #3: And we'll come back to the market closer to the time of FDA approval with our launch price. On your second question, we'll pass it over to Jeff.

Speaker #8: Thanks, Sam, for the question on BSA and tube size. So microcystic lymphatic malformations are caused by somatic mutations in PIK3CA, which lead to MTOR overactivating and driving the disease.

Jeff Martini: Thanks, Sam, for the question on BSA and tube size. Microcystic lymphatic malformations are caused by somatic mutations in PIK3CA, which lead to mTOR overactivating it and driving the disease. Because they're somatic in nature, they tend to be very localized in nature, usually in areas of high lymphatic density, often in the trunk or the groin area. As a result, the size of them is usually between 9 centimeters squared and 200 centimeters squared are the majority of patients with lymphatic malformations. They can be larger, but that's less common. We've typically dosed the patients according to lesion size and not BSA, although we do have that data. For lesion size, one actuation of our pump is enough to cover up to 200 centimeters squared.

Speaker #8: And because they're somatic in nature, they tend to be very localized in nature. Usually in areas of high lymphatic density, often in the trunk or the groin area.

Speaker #8: As a result, the size of them is usually between 9 centimeters squared and 200 centimeters squared in the majority of patients with lymphatic malformations.

Speaker #8: They can be larger, but that's less common. So we've typically dosed the patients according to lesion size and not BSA, although we do have that data.

Speaker #8: But for lesion size, one actuation of our pump is enough to cover up to 200 centimeters squared. So the product will be provided in a pump, which is enough to cover one actuation of the pump for a 30-day supply.

Jeff Martini: The product will be provided in a pump, which is enough to cover give one actuation of the pump for a 30-day supply.

Speaker #6: Our next question comes from Danielle Brill at Truist.

Operator: Our next question comes from Danielle Brill at Truist.

Speaker #5: Hey, guys. This is Alex on for Danielle. Thanks for the question. Question on the upcoming end of phase two in CVM. Based on your experience with MLM, how does the presence of breakthrough designation impact the content and the tone of the end of phase two meeting, specifically how the FDA approaches whether or not a placebo arm is necessary?

[Analyst] (Truist): Hey, guys. This is Alex on for Danielle. Thanks for the question. Question on the upcoming end of phase II in CVM. Based on your experience with MLM, how does the presence of Breakthrough designation impact the content and the tone of the end of phase II meeting, specifically how the FDA approaches whether or not a placebo arm is necessary? Just curious if the lack of Breakthrough designation changes your calculus for how you approach the upcoming end of phase II meeting. Thanks so much.

Alex Nackenoff: Hey, guys. This is Alex on for Danielle. Thanks for the question. Question on the upcoming end of phase II in CVM. Based on your experience with MLM, how does the presence of Breakthrough designation impact the content and the tone of the end of phase II meeting, specifically how the FDA approaches whether or not a placebo arm is necessary? Just curious if the lack of Breakthrough designation changes your calculus for how you approach the upcoming end of phase II meeting. Thanks so much.

Speaker #5: Just curious if the lack of breakthrough designation changes your calculus for how you approach the upcoming end-of-Phase 2 meeting. Thanks so much.

Speaker #3: Yeah, Alex, thanks for the question. The absence of breakthrough does not impact how we think about the end of phase two meeting. We have a drug that in phase two had a large effect size and a serious rare progressive disease where there's no FDA-approved therapies.

Wes Kaupinen: Yeah, Alex, thanks for the question. The absence of Breakthrough does not impact how we think about the end of phase II meeting. We have a drug that in phase II had a large effect size in a serious rare progressive disease where there's no FDA-approved therapies. I think one of the keys for the end of phase II meeting, in addition to stepping through that data and some of the newer data that Jeff has aggregated that the FDA hasn't seen, is for the FDA to have an exchange with our key opinion leaders who treat these patients today and be able to hear their input on what they think is the most appropriate study design for a phase III study.

Speaker #3: I think one of the keys for the end-of-Phase-Two meeting, in addition to stepping through that data and some of the newer data that Jeff has aggregated that the FDA hasn't seen, is for the FDA to have an exchange with our key opinion leaders who treat these patients today and be able to hear their input on what they think is the most appropriate study design for a Phase Three study.

Speaker #3: We do know, thanks to the Fugino publication out of Japan, that there is no documented spontaneous regression in this disease. And so, that will be a key point of discussion for our regulatory interactions.

Wes Kaupinen: We do know, thanks to the Fujino publication out of Japan, that there is no documented spontaneous regression in this disease, that will be a key point of discussion for our regulatory interactions. As you and others have gathered, we have a very collaborative relationship with the agency. We're grateful in MLM for Breakthrough, Fast Track, Orphan designations, Orphan Products Grant. We have Fast Track in CVM and angiokeratomas. We're looking forward to working collaboratively to align on the right study design that efficiently brings this drug to patients.

Speaker #3: And as you and others have gathered, we have a very collaborative relationship with the agency we're grateful in MLM for breakthrough, fast track, orphan designations, orphan product grant.

Speaker #3: We have fast track in CVM and angiokeratomas. So we're looking forward to working collaboratively to align on the right study design that efficiently brings this drug to patients.

Speaker #5: Thanks so much.

[Analyst] (Truist): Thanks so much.

Alex Nackenoff: Thanks so much.

Speaker #6: This concludes the question and answer session. I would now like to turn it back to Wes Coppinen for closing remarks.

Operator: This concludes the question and answer session. I would now like to turn it back to Wes Kaupinen for closing remarks.

Wes Kaupinen: Great. Thank you, operator. Thank you to everyone for your participation on today's call and for your continued strong interest in what we're building at Palvella. We look forward to updating you on our continued progress as we work to bring first-in-disease therapies to patients living with serious rare skin diseases and vascular malformations. Operator, you may now conclude the call.

Speaker #3: Great. Thank you, operator. And thank you to everyone for your participation on today's call and for your continued strong interest in what we're building at Palvella.

Speaker #3: We look forward to updating you on our continued progress as we work to bring first-in-disease therapies to patients living with serious rare skin diseases and vascular malformations.

Q2 2026 Palvella Therapeutics Inc Earnings Call

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