Palvella Therapeutics, Inc.

Good day and thank you for standing by. Welcome to the Povella Therapeutics full year 2025 financial results 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'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Bohan Wei, Vice President of Corporate Development. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining the Palvela Therapeutics full year 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 Coffinan, 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 will turn the call over to Wes.

Thanks, Bohan. 2025 was a landmark year for Pallvella Therapeutics, one that brings us closer to recognizing our vision of building the leading rare disease biopharmaceutical company focused on developing and commercializing first-in-disease therapies for serious rare skin diseases and vascular malformations. Thanks to the efforts of the Pulvella team, our scientific and clinical collaborators, our patient advocacy partners, and the rare disease patients we serve, we achieved several value-creating milestones, including, number one, announcing positive Phase II data in cutaneous venous malformations, data which support the advancement of that program toward a near-term breakthrough therapy designation submission to FDA, and a pivotal Phase III study. Number two, surpassing our target enrollment in our phase three selva study in microcystic lymphatic malformations, this based on physician and patient demand, as well as strong execution from our clinical operations team. Number three, expanding our rare disease pipeline with the addition of two new programs, ketorin rapamycin for clinically significant angiokeratomas and ketorin pitavastatin for porokeratosis. Number four, adding top talent to our senior leadership team, including Dr. David Osborne as our chief innovation officer and Ashley Klein as our chief commercial officer. Number five, extending our collaboration with the FDA and specifically FDA's Office of Orphan Products Development, who in 2025 supported our Selva Phase III study with additional non-dilutive funding, Number six, expanding our IP portfolio with two U.S. patents for ketoran rapamycin, strengthening our multilayered exclusivity strategy. And number seven, capping 2025 by securing FDA's fast-track designation in clinically significant angiocaritomas, the third Paul Vela program which has been granted fast-track designation. This momentum, the results of focus and disciplined execution by the Palvela team, has carried into 2026, where earlier this year, we announced positive phase 3 data from our SELVA study in microcystic lymphatic malformations, results which we believe position ketorin rapamycin, if approved, to be a first-line standard of care therapy for individuals with microcystic lymphatic malformations. With a significantly strengthened balance sheet as the result of a $230 million financing announced earlier this quarter, Pulvella is now well-positioned to pursue a near-term FDA approval of cuturin rapamycin and microcystic lymphatic malformations, drive a successful standalone U.S. launch, and concurrently advance the rest of our rare disease pipeline. What makes Palvela stand apart from other companies begins with our corporate strategy of pursuing development and commercialization in serious rare diseases with no FDA-approved therapies. We believe that these diseases are unambiguously high unmet medical need. We intentionally focus on diseases where we are the pioneers in advancing therapies targeted to be first in disease for patients and families suffering from these rare diseases. Our goal is to apply our proprietary cuturin platform, our internal product development engine for reproducibly developing novel topical product candidates, In a focus subset of rare skin diseases and vascular malformations, which have clear biology and also the existence of human proof of concept data, which serves to validate a specific molecular approach. Evidence of this development strategy is microcystic lymphatic malformations, a well-defined disease caused by PI3K mutation where mTOR hyperactivation is driving the disease progression and in which rapamycin has a large growing foundation of real-world human clinical evidence upon which Pulvella can build. We are taking a similar approach in cutaneous venous malformations, angiokeratomas, and and disseminated superficial actinic prokeratosis, and we anticipate by year-end the addition of two new diseases to our pipeline, bringing the number of diseases we aim to treat to six. Overall, by taking the approach outlined on this slide, our aim is to reduce the time and capital required to achieve FDA approvals while entering uncontested markets. that have more favorable commercial dynamics when compared to more traditional and more competitive markets. With approximately 600 rare skin diseases, 98% of which do not have a single approved therapy, we see ample opportunity to grow our pipeline and repeat our focused rare disease development model. I want to take you through how our recent execution translates into multiple anticipated high impact milestones over the next 12 plus months. We entered 2026 exceptionally well positioned across both our lead program and our expanding pipeline. Starting with microcystic lymphatic malformations, we have positive phase three data in hand and are on track for NDA submission in the second half of 2026 with a potential FDA approval targeted for the first half of 2027. In cutaneous venous malformations following positive phase two data, we expect a breakthrough therapy designation decision in the second quarter of this year and plan to initiate a phase three study in the second half of this year. For clinically significant angiokeratomas, we have received FDA's fast track designation and are advancing towards initiation of our phase two study ahead of schedule. with the Phase 2 initiation now expected in the second quarter of this year versus our previous guidance of second half 2026. In DSAP, we have developed our cuturin-petavastatin formulation, filed IP, and we expect to initiate a Phase 2 study in the second half of 2026. And more broadly, we continue to expand the cuturin pipeline. with a fourth indication for cuturin rapamycin, expected to be announced in the second half of this year, and a new cuturin product candidate, our third, also expected to be announced in the second half of this year. This positions Paul Vela for a catalyst-rich period, including the potential for our first FDA approval, which we believe could create a streamlined and efficient pathway for indication expansion into other mTOR-driven skin diseases through planned supplemental NDA submissions. Let me now turn to our lead program, etorin rapamycin for microcystic lymphatic malformations. We believe microcystic lymphatic malformations represent a significant multi-billion dollar commercial opportunity based on an estimated population of more than 30,000 diagnosed patients in the U.S. according to claims analysis and published literature. Based on the Phase III SELVA results, the results from our Phase II study, and the market research we've conducted, we believe cuturin rapamycin, upon achieving potential FDA approval, is positioned to be first-line and standard of care therapy for microcystic lymphatic malformations, directly targeting the underlying disease biology through inhibition of the causative mTOR pathway and doing so in the pathogenic skin tissue of interest. Clinically, we have demonstrated a robust treatment effect across two prospective trials, along with a favorable safety and tolerability profile supporting efficacy and potential for long-term use in this patient population. With positive Phase III data now in hand, we are on track for an NDA submission in the second half of 26 and, if approved, potential FDA approval in the first half of 2027. I'd like to highlight our Phase III SELVA data, which we announced last month, Our team established base and upside cases grounded in what clinical study results could translate to meaningful improvement in patients' lives while supporting an attractive commercial opportunity. Selva exceeded our predefined upside case across every dimension. On the primary endpoint, the microcystic lymphatic malformation investigator global assessment, we observed a highly statistically significant outcome well above our upside case. Importantly, 95% of patients completing the efficacy evaluation period improved, and 86% were much improved or very much improved. The blinded key secondary endpoint, the MLM MCSS, was also highly statistically significant. From a safety perspective, ketorin rapamycin was well tolerated in both children and adults, supporting potential for chronic dosing across all ages. Importantly, retention in the study was exceptionally strong, with 98% of week 24 completers electing to roll into the extension period, supporting durability and continued treatment benefit. SELVA exceeded what we at Paul Vela had hoped to see, not just on efficacy, but on durability and safety. And ultimately, these results, we believe, translate into meaningful impact for patients of all ages diagnosed with microcystic lymphatic malformations. Turning to our regulatory progress, our planned NDA submission is on track. We recently submitted our pre-NDA meeting request to FDA's Division of Dermatology and Dentistry with the pre-NDA meeting anticipated in the second quarter of 2026. Notably, we are pursuing a traditional, full FDA approval based on clinical endpoints. which differs from an accelerated approval, which relies upon surrogate biomarkers that are likely to reasonably predict clinical outcomes. Providing a strong foundation for our NDA submission is both our Phase III cell data, which were highly statistically significant and clinically meaningful, as well as the results from our Phase II study. Our interactions with physician key opinion leaders in this disease and our understanding of the progressive nature of the disease suggest that early therapeutic intervention could alter the natural history of the disease. Therefore, it is our intent to pursue a label which includes patients age three and above. We have previously been granted breakthrough therapy, fast track, and orphan drug designations, and we plan to pursue a 505 pathway, which may enable us to leverage existing FDA findings and the established body of evidence for rapamycin as part of a more streamlined development and regulatory strategy. We continue to collaborate closely with the FDA's Office of Orphan Products Development, which in addition to providing non-diluted funding, intend to participate in our anticipated pre-NDA meeting with the review division in the second quarter of this year. These elements support a path towards NDA submission in the second half of 2026 and potential for FDA approval in first half of 2027. Turning to the commercial opportunity, we believe ketoran rapamycin is well positioned for a highly attractive orphan launch. Microcystic lymphatic malformations represent a serious, rare disease with high unmet medical need and currently no FDA-approved therapies available to physicians and patients. There is already a large diagnosed patient population with a meaningful percentage of patients concentrated in specialized vascular anomaly centers. We have also consistently experienced strong enthusiasm from key opinion leaders about the potential for ketor and rapamycin, many of whom participated in our phase three and phase two studies, and we believe this enthusiasm could contribute to a strong uptake curve following potential FDA approval. From a pricing and reimbursement perspective, we anticipate orphan pricing consistent with our previous guidance of 100,000 to 200,000 per patient per year. All of this is supported by positive phase 3 data, which indicate a favorable risk-benefit profile, particularly compared to the scarcity of therapeutic options available to these patients today, reinforcing the potential for ketorin rapamycin to become a first-line standard of care therapy for individuals with microcystic lymphatic malformations. We have made significant progress in building the foundation for a potential first half 2027 commercial launch. Starting with leadership, we have assembled a highly experienced commercial team. Last year, Ashley Klein joined Paul Vela as chief commercial officer, and we recently added Jennifer McDonough to lead market access and patient services. Ashley is a commercial veteran in the rare disease space. having previously led the launch of Oxirvate, a novel topical therapy for neurotrophic keratitis, and a therapy which now generates greater than $1 billion in U.S. sales a few short years after launch. Last week, we welcomed Jennifer McDonough to the Palvella team. Jennifer is widely regarded as a leading executive in rare disease market access and patient services. Her contributions were critical to the success of the launch of Vigevec from Crystal Biotech, a first-in-disease topical therapy for dystrophic epidermolysis bullosa, a serious rare genetic skin disease. In parallel, we are building out our medical affairs capabilities with the hiring of medical science liaisons already underway and active participation across the key medical meetings you see listed on the slide here. Importantly, we are also taking a robust approach to patient identification and market development. We estimate more than 30,000 diagnosed patients in the U.S., and importantly, approximately 1,500 new patients diagnosed each year. We're concentrating our initial efforts on the highest value centers in treating physicians with a specific focus on approximately 400 high-volume centers that we estimate represent approximately 50% of the diagnosed population in the U.S. Overall, we've recruited top talent and are making significant investments to ensure we are well-positioned for a successful U.S. launch of ketorin rapamycin in microcystic lymphatic malformations. Moving now to our Cutorin Rapamycin for Cutaneous Venous Malformations program, let me begin with some comments on the commercial opportunity in this disease. Venous malformations are the most common type of vascular malformation, and cutaneous venous malformations represent a large and underappreciated market opportunity with an estimated more than 75,000 diagnosed patients in the U.S. and currently no FDA-approved therapies. We reported positive Phase II data in December of 2025 with statistically significant results across several clinician and patient-reported outcomes. Specifically, 73% of patients demonstrated improvement on the CBM, Investigator's Global Assessment, with 67% rated as much improved or very much improved at Week 12. This suggests both a high responder rate and a large-magnitude treatment benefit in this initial phase two study. We are now swiftly advancing towards a phase three study with study design alignment expected mid-2026 and trial initiation plan for the second half of the year. In parallel, we're finalizing a breakthrough therapy designation application, this following a constructive preliminary advice meeting with the FDA earlier this quarter, in which our collaborator, Dr. Denise Adams, a prominent pediatric hematologist oncologist from Children's Hospital of Philadelphia, described the unmet need in cutaneous venous malformations, as well as her experience in the Phase II study. In addition to the phase two data, our breakthrough application will include both patient qualitative interviews capturing the meaningfulness of the therapy to their daily lives and a letter of support from the investigators who participated in the phase two study. We also importantly continue to generate additional data through the ongoing phase two treatment extension period with plans to present that data set at a medical meeting later this year. Overall, our cuturin rapamycin program in cutaneous venous malformations represents a compelling opportunity to expand into a larger second clinical indication for cuturin rapamycin and, assuming initial approval in microcystic lymphatic malformations, potentially advance through a streamlined supplemental NDA pathway. I will now hand the call over to Jeff, who will talk about our additional pipeline programs. Jeff?