Talphera, Inc.

Welcome to the Tal Fera first quarter 2025 Financial Results Conference call. This call is being webcast live via the events page of the investor sections of Tal Fera's website at .talfera.com. You may listen to our replay of this webcast by going to the investor section of Tal Fera's website. I would now like to turn the call over to Raffia Sodorian, Tal Fera's Chief Financial Officer.

Thank you for joining us on the call today. Today we announced our first quarter 2025 Financial Results and Associated Business Updates in a press release. With me today are Vince Angati, our Chief Executive Officer, and Dr. Shaquille Aslam, Tal Fera's Chief Medical Officer. Before we begin, I want to remind listeners that during this call, we will likely make statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of Tal Fera. Please refer to our press release in addition to the company's periodic, current, and annual reports filed with the SEC for a discussion of the risks associated with such forward-looking statements. These documents can also be found on our website within the investor section.

I'll

now hand the call to Vince.

Thanks Raffi. Good afternoon and thank you to everyone joining our call today. It's only been about six weeks since our last call, so we're going to keep our prepared remarks brief. We began 2025 with strong momentum with a focus on the execution of our NEPHRO CRRT trial that resulted in the approval from the FDA on a significantly decreased study size, the removal of certain exclusion criteria, and the activation of additional high-volume sites to accelerate enrollment. In addition, a pipe financing was also completed. As detailed on our year-end call, we made tremendous progress with the study protocol changes, highlighted by the reduction in the size of the study to 70 patients from 166. This certainly helps with shortening the time to complete the study, but importantly, so does adding more of the right clinical study sites and principal investigators. As a reminder, we've been focused on the new site profile, specifically, one, the type of intensive care unit where the study will be performed, for example, medical ICUs instead of surgical or cardiothoracic ICUs. Two, the specialty of the principal investigator, again, specifically, a nephrologist as a primary lead for selecting patients to enroll compared to an intensivist or other specialist. And three, the efficiency of the administration to initiate a new study at their institution. Dr. Aslam identified these site characteristics after his review and learnings from assessing the initial sites as critical, successful, and timely enrollment. Our new site target profile, focused on medical ICUs and nephrologists as principal investigators, is proving to make a real difference in engagement and activity at each of the sites, including a more efficient contracting process compared to our legacy sites, all supporting our belief that we're engaging with the right institutions and investigators to allow us to complete the study by the end of the year. Adding these new sites is key to achieving that success. And so far this year, we've added three new sites that are activated and screening patients, with five more expected by mid-year. All eight of these sites plus others, which we're having contracting discussions, fit our new target site profile, including a much more efficient process to finalize contracting compared to the legacy sites. In addition to adding new sites, we believe there are other favorable trends and activities that could support the adoption of the Famistat if approved. These include, first, exploring a compassionate use IDE. We have been approached by multiple institutions and are discussing using the Famistat under compassionate use IDE for a specific patient population that does not do well with other available anticoagulants. And second, continued shortages of citrate supply and potential supply chain issues with heparin. Healthcare providers are inquiring about the timely availability of the Famistat, given the recurrent heparin and citrate shortages. Dr. Azen will provide some more information on this, as well as around the ongoing contracting with the new sites. We'll not be providing clinical study enrollment updates until we attain the 17-patient mark, which is the milestone to achieve the next tranche of financing. Before I turn the call over to Dr. Azenlem to provide some additional details on clinical activities, let me remind you that if approved, NIAD would become the only FDA-approved regional anticoagulant for use during continuous renal replacement therapy. There are many disadvantages to the currently used products, heparin, which is systemic in nature, and citrate, which is being used off-label. Through conversations with many nephrologists, we believe that NIAD would fill a significant unmet medical need during renal replacement therapy. I'll now hand the call over to Dr. Azenlem.

Thank you, Vince. The new site engagement has been promising, as expected, as we shift away from the profile of the legacy sites to new target profiles previously described. To provide some clarity on the sites, we now have a total of eight actively screening sites. Four legacy are old profile sites and four new target site, new target profile sites, three of which just recently started screening. We expect to add five additional sites by mid-year, all with the new target site profile. The four legacy sites are not expected to make a significant contribution to the study, so the overwhelming majority of the study enrollment will be coming from the new sites. The five new expected sites are currently reviewing the clinical trial agreements and related budgets for the study, and have advanced far more quickly than any of the legacy sites. As a reminder, administrative efficiency was one of the key criterion of site selection, and this has proven to be helpful. These sites are all large academic institutions, and most have higher CRRT volumes than any of the legacy sites. We expect to have all these sites activated and screening patients before our next quarterly call. I would like to now provide some details about the compassionate use IDE we are exploring at the request of a large institution in the Southeast. The physicians see an immediate and compelling need for a subset of specific patients that do not do well with currently used anticoagulants, and need an alternative. We have had several discussions with this institution on potentially going to the FDA to request a compassionate use IDE for these patients. This is an opportunity to provide something to patients who have no other alternative during CRRT, and we are exploring the best approach to try to help these patients and their healthcare providers. We do not have a timeline set, but wanted to share this information, and this was not the first such request we have had. It is evident that the current anticoagulants for CRRT are not ideal products, and there is currently no FDA approved regional anticoagulant on the market. We will provide more information on the compassionate use IDE as we advance these discussions.

And with that, I'll turn the call back over to Vince.

Thank you, Dr. Aslam. Before I hand the call over to Rafi, I want to reiterate our belief that the three critical risk elements, clinical, regulatory, and commercial, for the NEPHRO program are low for a number of reasons. First, with over 30 years of use as an anticoagulant during CRRT in Japan and South Korea, we know the Famistats track record of efficacy and safety, minimizing the clinical risk. The trial design has been agreed with the FDA, including broader inclusion criteria and a reduced number of patients, all of which help minimize study execution risk. Second, we have a clear regulatory path, including breakthrough designation from the FDA, which has provided us with efficient access to the agency, leading to quick review and response times. Lastly, while we know there's always commercial risk, we believe this is mitigated given the advantages of the products currently being used for anticoagulation of the CRRT circuit, namely heparin and citrate. As you heard from Dr. Aslam, there's a clear need for an FDA-approved regional anticoagulant. I'll now hand the call over to Rafi for a financial update.

Thank you, Vince. As mentioned, we have been highly focused on delivering a completed NEPHRO study by the end of this year. To support achievement of this objective, we continue to reduce our operating expenses. Accordingly, we are reducing the lower end of our previously communicated 2025 expected cash operating expense guidance to now be in the range of $17 million to $19 million. Our cash operating expenses, or combined R&D and SG&A expenses for the first quarter of totaled $2.9 million compared to $4.2 million for the first quarter of 2024. Excluding non-cash, stock-based compensation expense, these amounts were $2.7 million for the first quarter of 2025 compared to $3.9 million for the first quarter of 2024. Decrease in cash operating expenses in the first quarter of 2025 was primarily due to reductions in personnel expense and other general and administrative expenses. Our cash balance at March 31, 2025 was $5.4 million or $9.8 million on a pro forma basis for the financing that closed on April 2nd. As a reminder, the financing was structured in three equal tranches of $4.925 million, but the first tranche received at the initial closing. And the two additional tranches based on achieving an enrollment of 17 patients and 35 patients and with the stock trading above $0.73 per share. In total, the $14.8 million commitment is expected to be achieved later this year as we expect acceleration and enrollment rates given all the changes made to the NEPHRO CRRT study and the new sites that are coming online. This financing combined with the $5.4 million cash at March 31, 2025 should support the company through completion of the study anticipated by the end of the year. I'll now turn the call back to Vince.

Thank you, Rafi. And I'd like to open the line for any questions you might have. Operator?

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask the question, please press start and the number one on your telephone keypad. And if you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press start

and the number one on your telephone keypad. We have a question from James Molley from Alliance Global Partners.

Your line is open.

Yes, hi, guys. It's Matt on for Jim. I was just wondering if the broader enrollment criteria have started to translate

into increased enrollment and if you've seen any of that and if you could give some color there. Thank you.

Sure. Well, I'll make a brief quick comment on the fact that we're not given any specifics on enrollment. I think Shaquille can comment to you about how the broader criteria has increased the activity at the sites, not only the previous sites, but in particular the new sites moving forward. Dr. Aslam?

Yes. Thanks, Vince. So, absolutely. So, we have seen more activity, more patients passing through the first stage of their screening, which were previously being rejected because of not meeting some of the broader eligibility criteria. So, in terms of activity, we definitely seen increase in activity at our older sites as well as new sites. Unfortunately, that has not yet translated into new patients from our legacy sites. We are hoping that once we get all the new sites up and running, those expanded criteria will definitely yield higher numbers of eligible patients

going forward.

All right. Got it. Thank you guys for taking our questions.

Shaquille,

I think you can

also add a little color to that, that for the legacy sites outside of just the enrollment criteria that was expanded, there may have been other things impeding them from enrolling, again, on the legacy sites only.

Right. Absolutely. So, that has been the issue with the types of patients that these sites have access to. So, many of these patients continue to be coming from surgical ICUs or cardiac thoracic ICUs. So, although those broader inclusion criteria did give them with more flexibility in terms of when to enroll these patients and which patients would qualify. However, because of their overall dependence on this target population where the background happiness is very high, it hasn't materialized as much. But I think in the new sites that we have different target patient populations, those criteria

will definitely give us a higher yield. Operator?

No questions at this time. I would now like to turn the conference back to Vince. Please go ahead.

Thank you, Chloe. Again, thank you for joining our first quarter earnings call. We're excited about the progress you've made in continued alignment with the FDA, again, with the goal of completing an Afro trial this year in 2025 with an approval of NIED targeted for 2026. Again, we look forward to providing additional updates on our progress. And thank you for joining us. That concludes our call.

This concludes today's conference. Thank you for participating. You may now disconnect.