Palvella Therapeutics, Inc.

Good day, and thank you for standing by. Welcome to the Palvela Second Quarter 2025 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bohan Wei, Vice President of Corporate Development. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining the Palvela Therapeutics Q2 2025 Financial Results and Corporate Update Call. As a reminder, our press release detailing today's announcements can be found in the Investors section of our website at www.palvelatx.com. On today's call, we are joined by Wes Koppenen, our Chief Executive Officer. Jeff Martini, our Chief Scientific Officer, and Matt Korenberg, our Chief Financial Officer. Before we begin, please note that today's remarks may include forward-looking statements regarding our development programs, regulatory 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. And now I'll turn the call over to Wes.

Thank you, Bohan. Good morning, everyone. And thank you all for joining today's call. Paul Vela is now nine months into our journey as a publicly traded company. And I want to state at the outset of this call that the Paul Vela management team and I are as energized as we've ever been about executing on our vision of building an enduring rare disease biopharmaceutical company that is the leader in developing and commercializing therapies for serious genetic skin diseases with no FDA-approved therapies. Our substantial progress in the second quarter of this year on our late-stage rare disease pipeline and our QTOREN platform pipeline development positions us for what I believe will be a transformative period over the next several months. Between now and the end of Q1 2026, we have four anticipated high impact milestones, each of which we're making significant progress against. Number one, microcystic lymphatic malformations. Microcystic lymphatic malformations are a serious, rare, chronically debilitating, and lifelong monogenic disease. There are unfortunately no FDA approved therapies for these patients. The genetics, disease biology, pathogenic tissue of interest, and natural history of microcystic lymphatic malformations have all been well characterized, making the disease an ideal disease target for Pulvella to pursue. The PI3K genetic mutation biologically results in the hyperactivation of the mammalian target of rapamycin or mTOR pathway, which ultimately produces malformed vessels that protrude through the skin as pictured here. We'll provide an update today on our phase three selva study of cuturin rapamycin. Pulvella is breakthrough innovation designed to selectively inhibit the causative mTOR pathway in the pathogenic skin tissue in microcystic LMs. This program has received FDA's breakthrough therapy, fast track, and orphan drug designations for the treatment of microcystic LMs. In Q2, We announced that we exceeded our original target of 40 by enrolling 51 subjects, and we now remain on track to announce top line results in Q1 of 2026. Moving to number two, cutaneous venous malformations. The disease pathology of cutaneous venous malformations is similarly driven by the mTOR pathway, typically caused from mutations in either TIE2 or PIK3CA which leads to the disfiguring presentation of malformed veins in the skin, veins which can bleed, thrombose, ulcerate, and due to the disease's proliferative nature, become increasingly problematic over the disease course. There are unfortunately no FDA approved therapies for these patients. Our phase two proof of concept study of cuturin rapamycin, called TOIVA, continues enrollment at leading vascular anomaly centers across the US and we anticipate top-line results in Q4 of this year. Importantly, if approved, we believe, based on market research, that ketorin rapamycin has the potential to be first-line therapy and standard of care for patients with both microcystic lymphatic malformations and cutaneous venous malformations. Moving to number three, our objective to expand ketorin rapamycin into a third rare disease clinical indication. The scientific evidence continues to clearly point to cuturin rapamycin's potential to be a pipeline in a product with clinical and commercial potential that extends beyond its potential in microcystic lymphatic malformations and cutaneous venous malformations and to additional vascular anomalies, genodermatoses, nonvascular neoplasms, and other clinical indications. In the second quarter, we made substantial progress on this objective, thanks in large part to thoughtful input from our medical and scientific advisors, many of whom we've had relationships with for nearly a decade. We remain on track to announce the third clinical indication before the end of this calendar year. Notably, an indication expansion strategy on our established lead product, cuturin rapamycin, could enable entry into a new rare disease clinical indication and an attractive new orphan commercial market and do so at a lower cost and a shorter time period when compared to the more traditional approach of starting a de novo pipeline program from concept. As a management team, we continue to proactively identify avenues for recognizing time to market and cost to market efficiencies which could result in FDA-approved therapies for rare disease patients sooner, and for shareholders, a reduced capital intensity business model when compared to strategies employed by other biotech companies. Moving to number four, our next Kutoran platform program. Our Kutoran platform originated from many years of our internal R&D efforts, and we believe Kutoran represents an exciting internal product development engine which can reproducibly generate novel patented topical product candidates. The second product candidate from the Keturin platform will be for a serious rare skin disease with no FDA approved therapies. In the second quarter of this year, we achieved important key preclinical development milestones and announcement of this program is planned for the second half of 2025. Similar to our indication expansion strategy on cuturin rapamycin, we believe that by leveraging our established in-house cuturin platform, this could enable entry into a new rare disease clinical indication and an attractive new orphan commercial market at a lower cost and a shorter time period when compared to the aforementioned traditional approach of starting a de novo preclinical pipeline program from concepts. Taken together, these four near-term high-impact milestones establish a steady cadence of clinical and pipeline milestones between now and the end of Q1 2026, setting the stage for a transformative period for Pauvela. Momentum remains strong for cuturin rapamycin for microcystic lymphatic malformations with key milestones achieved in the second quarter of this year. We successfully completed enrollment in the phase three SELVA trial in June with 51 subjects, exceeding our original goal of 40 subjects by more than 25%. This milestone was made possible thanks to the dedicated efforts of our phase three investigators and their research coordinators, our patient advocacy collaborators, the Paul Vela Clinical Operations Team, led by my colleagues Kathy Goen and Emily Cook, and most importantly, the patients living with microcystic lymphatic malformations. With enrollment complete, the focus of our clinical operations team is to ensure participant compliance while maintaining the highest data quality standards ahead of the anticipated first quarter 2026 top-line readout. In parallel, we advanced multiple value-building initiatives for the ketorin rapamycin for microcystic LMs program in the second quarter. On the regulatory front, we received the first proceeds from our FDA Orphan Products Grant to support the Phase III SELVA trial. As background, Pavela's Phase III Baseline-Controlled Single-Arm Study underwent a rigorous grant review process at FDA, and we were pleased to be one of seven awardees in last year's grant cycle, which, over the life of the grant, could contribute up to $2.6 million in non-dilutive FDA funding. We've also started accelerating NDA activities in anticipation of the phase three data in Q1 2026, and our strong desire to expedite our program to NDA submission and potential FDA approval, assuming a positive phase three study. Importantly, from a regulatory oversight perspective, the Division of Dermatology and Dentistry continues to be led by Dr. Jill Lindstrom, a dermatologist and the division director. While there continues to be changes across FDA, there's been consistency for Paul Vela in terms of number one, the Dermatology and Dentistry Division's regulation of our program, and number two, the leadership of that division, in this case, Dr. Lindstrom. We have had a significant presence and visibility at major scientific meetings in the second quarter of this year. We were honored to have our long-time collaborator, Dr. Amy Paller, Chair of Dermatology at Northwestern, present the phase three SELVA study design, as well as the phase two results at the 15th World Congress of Pediatric Dermatology. We also had a poster featured at the 82nd Annual Meeting of the Society of Investigative Dermatology, which summarized a rigorous claims-based method for estimating the diagnosed prevalence and annual incidence of microcystic lymphatic malformations in the U.S. The results of this analysis confirm Paul Vela's prior diagnosed U.S. prevalence estimates, which indicate a multi-billion dollar total addressable market opportunity in the United States. Finally, in our last earnings call, we outlined our search for a chief commercial officer while noting the desire to recruit a proven leader with experience launching novel therapies that were first to market in serious rare diseases. I was thrilled and our entire team was thrilled to recruit Ashley Klein as our chief commercial officer. Ashley is a proven commercial executive in the rare disease space. She is best known for leading the US launch of Oxirvate, a first in disease topical therapy for neurotrophic keratitis, a rare eye disease which previously had no FDA-approved therapies. Under Ashley's leadership, Oxervase surpassed $500 million in annual U.S. sales by year five of launch and achieved early profitability through an innovative, capital-efficient, and high-touch launch strategy that emphasized high-impact physician outreach and education, and ultimately establishing that launch as one of the top-performing non-oncology orphan drugs of the past decade. Ashley brings a dynamic, results-driven, and importantly, patient-oriented approach, making her an excellent fit for Pulvella. We look forward to many and significant continued contributions from Ashley on cuturin rapamycin and our other rare disease programs. Momentum also continues to build for our cuturin rapamycin for cutaneous venous malformations program. Beginning with our Phase II TOIVA study, we're pleased to have excellent study leadership in place with Dr. Megha Talvson, a pediatric dermatologist from the Mayo Clinic, who is serving as our principal investigator. Jeff Martini and I spoke earlier this week with Dr. Talvson, and she reiterated the debilitating nature of cutaneous venous malformations, including the bleeding, disfigurement, and proliferative nature of the disease that can significantly impact patient quality of life. Our ongoing phase two study is a proof of concept study with no statistical hierarchy of endpoints. The study is designed to enroll approximately 15 patients. All sites are now active and recruiting patients, including our most recently activated site, Johns Hopkins University, a leading vascular anomaly center who I spoke with earlier this week. Assuming completion of enrollment later this quarter, We remain on track to deliver top line data in the fourth quarter of 2025. From a regulatory standpoint, this program benefits from the previously granted FDA fast track designation, reflecting both the seriousness of the disease and the urgent need for effective therapies. For all of our rare disease programs, in parallel to our clinical development efforts, we also conduct rigorous prospective epidemiologic studies to understand the number of patients afflicted with these rare diseases we hope to treat. In collaboration with key opinion leaders in venous malformations, we completed a nationally representative, blinded, real-world observational study estimating the US annual prevalence of cutaneous VMs. With findings submitted to a peer-reviewed journal, we continue to estimate that greater than 75,000 patients in the US have venous malformations, either cutaneous only or mixed cutaneous and internal disease. With that, I will now hand it over to our Chief Scientific Officer, Dr. Jeff Martini. Jeff?