Talphera, Inc.

Welcome to the Telfaira first quarter 2024 financial results conference call. This call is being webcasted live via the events page of the investor section of Telfaira's website at www.telfaira.com. This call is the property of Telfaira, and any recording, reproduction, or transmission of this call without the express written consent of Telfaira is strictly prohibited. As a reminder, This webcast is being recorded. You may listen to a replay of this webcast by going to the investor section of Telfair's website. I would now like to turn the call over to Rafi Esadorian, Telfair's Chief Financial Officer. Please go ahead.

Thank you for joining us on the call today. This afternoon, we announced our first quarter 2024 financial results and associated business updates in a press release. This press release can be found within the Investors section of our website. With me today are Vince Angotti, our Chief Executive Officer, and Dr. Pam Palmer, TALFERA's Founder and Chief Medical Officer. Before we begin, I want to remind listeners that during this call, we will likely make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of Telfera. Please refer to our press release in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission for a discussion of the risks associated with such forward-looking statements. These documents can also be found on our website within the Investors section. at www.talfera.com. I'll now hand the call to Vince.

Thank you, Rafi. Good afternoon, and thank you for joining us on the call. Today, I'll provide a status update of our nephro CRRT study, evaluating the famistats use as an anticoagulant in the extracorporeal circuit. Later, we'll provide some other corporate updates, and Rafi will update you on the financial results for the quarter. And since our last call was just two months ago, we'll keep our prepared remarks brief so we can move directly to any questions you may have. Before we begin, I'm thrilled to welcome Dr. Shaquille Aslam to the Telferra team as our new Chief Development Officer, effective May 20th. Dr. Aslam has over 20 years of clinical research experience specializing in the field of nephrology. He'll support Dr. Palmer and the rest of the team in the development of NIAID and support the preparation of NIAID for commercialization. Dr. Asim joins us from Biocrist Pharmaceuticals, where he was the vice president, clinical development, nephrology, and rare diseases. He's held development roles at Angion, Fresenius, and Amgen, and was an assistant professor at Georgetown University Hospital for 11 years with a focus on clinical services with acute and chronic kidney disease, hypertension, renal transplantation, and other nephrological diseases. His extensive experience across industry and academia as a renal expert is impressive and is a true asset to our organization. Welcome, Dr. Aslan. Now, moving to our study update, as a reminder, this FDA-agreed registrational study will enroll only 166 patients at up to a limit of 10 sites. Once sites are activated, we expect enrollment and completion of the study will be rapid, particularly since the design of the study calls for the primary endpoint to be achieved within 24 hours for the patient completed after only 72 hours. We have finalized the negotiation of clinical trial agreements with five large academic institutions and just await these sites to finalize their internal administrative activities prior to beginning patient enrollment, which is expected to start this quarter. We're also advancing clinical trial agreements with the five remaining potential sites. The principal investigators inform us that they remain eager to initiate the nephro study and that they continue to believe the trial will be quickly enrolling. These PIs estimate that up to 80% of their patients currently on CRRT would meet the inclusion criteria in the study protocol, and they continue to support us in our efforts with their respective administrations to finalize their institution's requirements. Furthermore, the number of patients receiving CRRT continues to increase, as evidenced by our quantitative market research published in the journal Renal Failure, estimating the number of patients undergoing CRRT has increased by roughly a third since COVID and remains at this heightened level. Therefore, we don't believe patient availability will be a concern that limits enrollment. As stated in today's press release, as a result of the initial administrative delays, we expect that our previous guidance of having top line data available by September 30 will be revised. Once patients begin enrolling, we plan to provide an update on our expected study completion and PMA filing dates. Importantly, with the PI's feedback about rapid enrollment, a 24-hour primary endpoint, and 72-hour timeline for patient completion, we expect the timeline for a PMA filing will not be significantly delayed. And we plan to provide new estimates once we have better information available. Now separate from the NEFRO trial, We continue to make positive advancements in our manufacturing and related efforts for NIAID. All active ingredient and finished drug production to date have met our specifications. We are now in the process of collecting extended stability data on our GMP-grade product to support shelf life for commercial launch. Our manufacturing partners have done an excellent job achieving timelines, specifications, and the cost expectations we've set for them. We're excited to continue to work with them as we prepare for a commercial launch expected in 2025. To gain further insight beyond the market research already performed, we recently completed some additional qualitative market research with a group of nephrologists, intensivists, and pharmacy directors on the attributes of Nefamistat. These participants emphasized the Phamistats' strong safety profile over the past 30 plus years, particularly for patients with liver impairment or contraindications to heparin and citrate. Specifically, participants commented on the Phamistats' safety attributes, such as its ultra-short half-life, allowing it to be rapidly cleared from circulation and potentially avoiding unwanted complications seen with longer circulating agents. such as heparin and citrate. In addition, the research continues to support uptake of NIAID at a competitive price to the total cost of citrate anticoagulation. This total cost of citrate anticoagulation includes the cost of calcium and the required monitoring of calcium levels. Importantly, the additional market research reinforces our belief in the estimated peak market sales potential for NIAID, exceeding $200 million across CRRT and intermittent hemodialysis. Our initial focus is on CRRT, and the estimated peak market sales potential approximate half of this amount, or $100 million. On the IP front, we filed multiple patent applications for the NIAID product candidate in the U.S., and other major pharmaceutical jurisdictions worldwide. During and after study completion, we expect to continue to pursue additional patent rights to enhance our patent position. In addition to our focus on NIAID development during the quarter, we successfully closed on two separate transactions to fund this development. Two existing investors, led by Nantahala Capital Management, supported the company with $18 million in total proceeds, structured with $6 million at the first close earlier in the quarter, and $12 million in committed capital at the second closing after achieving the pivotal trial milestone. Importantly, Natha Hala remains supportive and committed to ensuring Telfera has adequate funding to reach PMA approval of NIAID. Given the potential extension in the original timeline, this support is highly appreciated. Also during the quarter, we agreed to partially monetize the Dissuvia royalty and milestone streams with Zoma royalty, which provided us with $8 million in cash to focus on NIAID development. This non-dilutive financing allows us to participate equally in certain royalties and the milestones after Zoma has achieved their specified return. And now before handing the call to Rafi, I wanted to mention that last week we received the court's order in the class action securities litigation granting our motion to dismiss with prejudice on all claims. We're pleased the court has granted the motion to dismiss and while it's taken a long time to receive this order and the plaintiffs have an opportunity to appeal the order with a higher court, we're happy with the outcome. Now I'll hand the call over to Rafi to take you through the details of our first quarter financial results.