Palvella Therapeutics, Inc.

Good day and thank you for standing by. Welcome to Palbella's third quarter 2025 financial results and corporate update conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 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, today's conference is being recorded. I would like to hand the conference over to your speaker today. Bo Hanway, please go ahead.

Thank you, Operator. Good morning, and thank you for joining the Palvela Therapeutics third quarter 2025 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the investor section of our website at www.palvelatx.com. On today's call, you will first hear from Wes Coffin, our founder and chief executive officer, followed by Dr. Jeff Martini, our chief scientific officer, and Matt Korenberg, our chief financial officer. Wes will return for closing remarks before we open the line for Q&A. Before we begin, please note that today's remarks may include forward-looking statements regarding our development programs, regulatory strategy, commercial planning, and financial outlook. 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.

Thanks, Bohan, and good morning, everyone. As Palvella approaches our one-year anniversary as a public company next month, we've generated strong momentum on our mission to serve patients and families living with serious rare skin diseases, our strategy to develop and bring to patients the first FDA-approved therapy in each rare disease indication we pursue, and our vision to become the leading rare disease biopharmaceutical company addressing serious skin diseases with no FDA-approved therapies. First, I want to begin by highlighting our broadened rare disease pipeline, which now encompasses four serious rare skin diseases we're actively pursuing with cuturin-derived product candidates. as well as the leadership we've recruited to maximize our probability of achieving development, regulatory, and commercial success. A major driving factor motivating our decision to go public was to expand the reach and application of our innovative Keturin platform while strengthening the talent and capabilities required to reproducibly generate novel topical product candidates for serious rare diseases. In September, we were fortunate to recruit Dr. David Osborne to Palvella as our Chief Innovation Officer. David's deep product development and dermatology expertise is already strengthening our ability to extend the application of the Cuturin platform, as reflected in last week's announcement of Cuturin Pitavastatin. our second product candidate from the platform for the treatment of disseminated, superficial actinic porocaritosis. I am truly thrilled to work alongside David, given his stature in the field of dermatology and his proven track record of bringing approved medicines to patients in need. Building on the theme of leadership, another driving factor in becoming a public company is our vision to commercialize on a standalone basis in the U.S., uterine rapamycin for microcystic lymphatic malformations, and ultimately other mTOR-driven skin diseases. Earlier this year, we welcomed Ashley Klein to Palvela as our Chief Commercial Officer. Ashley previously led Dompe's U.S. business and oversaw the launch of Oxirvate, a novel topical therapy for neurotrophic keratitis, a rare and progressive disease with no prior FDA-approved treatment. Under Ashley's leadership, Oxervate generated more than $500 million in annual U.S. sales and has since gone on to achieve annual U.S. sales exceeding $1 billion. Since joining Palvella, Ashley has already been applying the strategies and tactics from that successful rare disease launch to accelerate and sharpen Palvella's U.S. commercial readiness ahead of a potential first-in-disease approval for ketorin rapamycin. Second, nearly a year into our public life, we have delivered on-time operational execution across our clinical programs. Our Phase III study of cuturin rapamycin and microcystic lymphatic malformations over-enrolled, and our Phase II study in cutaneous venous malformations completed enrollment last quarter, achieving full enrollment across multiple rare disease studies reflects both the urgency of the diseases we aim to address and the strength of our collaborations with leading expert clinicians who are driving progress towards new targeted therapeutic options for these patients. Third, we continue to see a largely untapped landscape of opportunity to drive meaningful patient impact and bring much needed innovation to rare skin diseases. Rare skin diseases represent a high unmet need, low competitive intensity corridor of the orphan disease universe, with nearly 600 identified and over 98% still lacking a first FDA-approved therapy. This underscores how early we are at Palvella and what we are capable of achieving through relentless pursuit of our vision. Nearly every week, Our scientific team uncovers additional serious rare skin diseases with no approved treatments, or we identify molecules with strong scientific potential that align with our development capabilities and the Q-Torin platform. This expanding landscape underscores the significant opportunity to replicate and extend the progress we have achieved with Q-Torin rapamycin and Q-Torin pitavastatin across additional underserved diseases. With both a compelling late-stage pipeline and a versatile platform in place, Palvella continues to execute with urgency, discipline, and capital efficiency on our vision of building the leading rare disease biopharmaceutical company focused on addressing serious rare skin diseases. Our management team has worked diligently for years to position Palvella for the four milestones you see listed on this slide. From the earliest days of developing Keturon rapamycin, I viewed its clinical and commercial potential as a pipeline in a product with the ability to eventually address multiple skin diseases driven by overactivation of the mammalian target of rapamycin or mTOR pathway. That has come into clear view in 2025. After a thorough and systematic vetting process by our R&D team, including extensive interactions with leading KOLs, we were excited to announce in September our development of ketorin rapamycin for clinically significant angiokeratomas, our third clinical indication, as seen in panel number one on the slide. Like microcystic lymphatic malformations, angiokeratomas are a type of lymphatic malformation and recent publications indicate they are similarly driven by overactivation of the mTOR pathway. Importantly, growing real-world evidence also supports the use of rapamycin in addressing this disease. Our medical collaborators have highlighted that while some angiokeratomas can be managed today, a substantial subset of patients experience chronically debilitating and intractable disease for which interventional approaches such as electrocautery or surgery are often infeasible or highly undesirable due to anatomical location or other clinical factors. This creates a clear opportunity for a targeted topical therapy that could potentially become a first-line standard of care approach for these patients. And as is the case with many rare diseases I've worked on over the last decade, Both my view and Paul Vela's view is that the true burden of angiocaritomas and their impact on quality of life is often underestimated. Paul Vela will work stridently to ensure that the voice of angiocaritoma patients is heard at the FDA and incorporated into our clinical studies as we strive to serve these patients. Moving to number two, last week, alongside our collaborator, Dr. Keith Cho, Chair of Dermatology at Yale School of Medicine, we unveiled our second program from the Cuturin platform, Cuturin Pitavastatin for Disseminated Superficial Actinic Porokeratosis, a rare chronic and precancerous skin disease with no FDA-approved therapies. Recent breakthrough discoveries on the genetics and biology of porokeratosis by Dr. Choate enabled the development of cuturin pitavastatin as the first potential pathogenesis-directed therapy for disseminated superficial actinic porokeratosis. Dr. Choate's discoveries demonstrated the causal role of the mevalonate pathway, the same pathway potently inhibited bipetavastatin, a next-generation mevalonate pathway inhibitor, and support a topical approach with cuturin that delivers drug to the pathogenic epidermal and dermal tissue where the disease originates and manifests. we conducted an extensive screen and comparative evaluation of mevalonate pathway inhibitors and pitavastatin emerged as the optimal agent based on its potency, skin pharmacokinetics, and physiochemical properties that support an on-target, in-tissue therapeutic approach enabled by Q-Torin. Moving to our clinical programs, under number three, adults and children with cutaneous and venous malformations live with a genetic progressive vascular disease that can lead to thrombosis, bleeding, functional impairment, and significant disfigurement. No FDA-approved therapy exists to slow the progression of their disease or improve their clinical outcomes, relegating patients to rely on interventional approaches such as laser and sclerotherapy that often carry high recurrence rates and do not address the underlying biology. In the third quarter, we announced full enrollment of our phase two TOIVA study of cuturin rapamycin in this indication, and we remain on track next month to announce top line data from this phase two proof of concept study evaluating cuturin rapamycin for cutaneous VMs. And finally, number four, our phase three SELVA study will soon conclude with a top line readout next quarter. The study over-enrolled, which was driven by the dedication of our clinical investigators and the strong execution of the Pulvella Clinical Operations Team. This program benefits from multiple FDA designations, including breakthrough therapy, fast-track, and orphan drug designation, which reflect the seriousness of microcystic lymphatic malformations and the potential of cuturin rapamycin to address a significant unmet medical need. While we await phase three top line data next quarter, we are advancing NDA preparation and commercial readiness activities in parallel to ensure we are fully prepared for the next exciting stage. Across all of our rare disease indications, our objective is clear. Upon potential regulatory approval, we want to establish keturin, rapamycin, and keturin-petavastatin as first line standard of care therapies for these patients. The next 18 months will be a catalyst-rich period for Palvella. Our primary objective for cuturin rapamycin is achieving FDA approval, and we are executing with urgency towards that goal. In parallel, we are expanding the clinical reach of cuturin rapamycin across multiple mTOR-driven skin diseases, including cutaneous VMs, clinically significant angiocaritomas, and additional high unmet need indications that we have mapped and plan to announce consistent with cuturin rapamycins pipeline in a product strategy. In addition, cuturin pitavastatin is nearing completion of formulation development and remains on track to enter the clinic in the second half of 2026. And our excitement is growing for the additional pipeline programs represented on the bottom of the slide. Multiple molecules are in various stages of testing with the Keturin platform, and our objective is to have a steady cadence of novel Keturin product candidates emerging from the platform. The Palvella management team are energized and focused to deliver strong results on these anticipated value-creating milestones. Turning to our clinical programs. Palvella is pioneering therapeutic development in cutaneous venous malformations, a disease where no FDA-approved treatments exist today and where the cutaneous manifestations have been well documented to be particularly challenging to treat. We are pursuing this indication based on the underlying biology, which supports a central role of mTOR pathway activation in driving the disease, as well as the many published studies of systemic rapamycin that demonstrate clinical benefit in these patients. Our Phase II single-arm baseline-controlled TOIVA study in this indication is now fully enrolled, with strong participation from several leading vascular anomaly centers, many of whom also collaborate with us on our microcystic lymphatic malformation programs. Because cutaneous venous malformations represent a new disease state for therapeutic development, the study includes no statistical hierarchy and therefore no designated primary endpoint. This structure is intentional and appropriate for a proof-of-concept study, allowing us to more fully understand the effect size across a range of clinician-reported and patient-reported outcome measures before selecting the most meaningful endpoints for a potential Phase III. We also selected a single-arm baseline control design given the well-established natural history of cutaneous venous malformations, which shows no spontaneous improvement and makes each patient an appropriate internal control. Overall, TOEVA Stage 2 proof-of-concept study design will enable Paul Vela to evaluate the safety and tolerability of keturin rapamycin in this new disease state while also assessing efficacy across multiple clinician and patient reported outcomes. In framing the objectives of our Phase II TOIVA study, it is essential to recognize the magnitude of the unmet medical need in cutaneous venous malformations. These lesions are genetic, chronic, and often progressive, and the cutaneous manifestations can be particularly debilitating, frequently painful, disfiguring, and prone to bleeding, clotting, or recurrent thrombotic events. Patients and clinicians consistently express the need for less invasive, more durable treatment options that can meaningfully alter the course of the disease. From a pharmacotherapy standpoint, there are no FDA-approved treatments. Current interventions, including laser, sclerotherapy, and other procedural approaches are invasive, offer limited durability, and are associated with high recurrence rates and the need for repeated procedures. Importantly, these approaches are not disease modifying, and many patients ultimately exhaust these procedural options. Against this backdrop, our Phase 2 study is designed first to evaluate the safety and tolerability of ketoran rapamycin, an especially important consideration given the invasive nature and limited durability of current care. On the efficacy side, this is a proof-of-concept study intended to identify one or more endpoints that could ultimately serve as Phase 3 primary endpoints. We will evaluate whether ketoran rapamycin provides evidence of clinical improvement or demonstrates the ability to slow the progression of these cutaneous lesions, something current treatments have not been shown to consistently achieve. Our internal threshold for establishing efficacy is observing approximately 30% of patients with evidence of clinical improvement. And similar to our microcystic LM Phase II program, we will assess whether cuturin rapamycin demonstrates a time-dependent pharmacologic effect consistent with its targeted mechanism of action. Taken together, this study is designed to establish the foundation for a potential Phase III program and ultimately a first-in-disease therapy for patients living with a lifelong genetically-driven condition that today has no durable non-invasive treatment options. Turning to our lead program in microcystic lymphatic malformations, we continue to advance what has the potential to become the first FDA-approved therapy for this serious lifelong disease. Our Phase III Selva trial remains on track, and we expect to report top-line data in the first quarter of 2026. We recently received the second year of funding from the FDA's Orphan Drug Grant Program following FDA's review of our annual performance progress report. which we believe is important evidence of FDA's ongoing support of our Phase III single-arm baseline-controlled study design and selected endpoints. We remain on track for a planned NDA submission in the second half of 2026, supported by the recent strengthening of our regulatory affairs leadership team with the addition of Shama Muniz. Our NDA team and strategy, including our outside regulatory advisors, have been constructed to drive excellence throughout the registration and review process. Upon successful NDA submission and potential acceptance, we anticipate being the beneficiaries of the various features of the Breakthrough and Fast-Track designations that we've been granted, including rolling submission, priority review, and more frequent communications with our FDA collaborators. Commercially, our prevalence estimates continue to substantiate an estimated more than 30,000 diagnosed patients in the U.S. with microcystic lymphatic malformations. These estimates are grounded in both claims-based epidemiologic analysis and a published real-world occurrence study supporting a multibillion-dollar total addressable market, which is currently uncontested given the absence of FDA-approved therapies. And in parallel with our clinical and regulatory progress, we are accelerating our transition towards being a commercial stage company while proactively building out our commercial and medical affairs organizations in preparation for an anticipated standalone U.S. launch in 2027. In terms of how we view the commercial opportunity for Ketur and Rapamycin, our objective is to first secure FDA approval for the estimated more than 30,000 U.S. patients with microcystic lymphatic malformations. Then over time, we aim to grow the pool of potential addressable patients for ketur and rapamycin by a factor of more than 10x. We intend to do this by first adding cutaneous venous malformations to our label, followed by a plan to further add our third indication, clinically significant angiokeratomas to the label. We will then continue to expand into additional future indications over time, which could add more than 200,000 potential patients to the pool of potential addressable patients for ketorin rapamycin. Importantly, from a regulatory perspective, we anticipate this can be accomplished through serial supplemental NDA or S-NDA submissions, offering a more efficient and streamlined pathway than traditional de novo NDA submissions. Overall, we believe ketorin rapamycin has clear and compelling pipeline and a product potential across many mTOR-driven skin diseases. I'd like to now turn the call over to Dr. Jeff Martini, our Chief Scientific Officer, to review our earlier stage rare disease pipeline programs.