Talphera, Inc.

Welcome to the Telfera Second Quarter 2025 Financial Results Conference call. This call is being webcast live via the events page of the Investors section of Telfera's website at .telfera.com. You may listen to a replay of this webcast by going to the Investors section of Telfera's website. I would now like to turn the call over to Rafi Azadorian, Telfera's Chief Financial Officer.

Thanks, Andrew, and thank you for joining us on the call today. Today we announced our Second 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, Telfera's Chief Medical Officer. Before we begin, I want to remind listeners that during this call we will likely make 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 be found on our website within the Investors section. I'll now hand the call to Vince.

Thanks Rafi. Good afternoon and thank you to everyone joining our call today. We're excited about the progress made this past quarter, specifically in the acceleration of the Nephro Study enrollment. At the end of last year, upon the announcement of Dr. Shaquille Aslam becoming the Chief Officer of Telfera, we embarked on a restructuring of the Nephro clinical study, which included changing the target profile of our clinical sites, approaching the FDA with various study protocol changes, including the reduction of the study size from 166 to 70 patients, and adjusting internal processes to ensure acceleration of study enrollment with the goal of completing the study by the end of 2025. I'm very pleased to inform you that we now have evidence that all of these changes were indeed the appropriate adjustments, and we're confident that we're on the right path to achieve our goals. We have seen a strong acceleration of the enrollment rate over the last six weeks from the first three sites with our new target profile. This target profile includes a Nephrologist Principal Investigator and the institution screening patients at medical ICUs. As a result, the number of total enrolled patients has more than doubled since May. These sites, combined with six additional new target profile sites that are expected to begin enrolling over the rest of this quarter, should keep us on plan to complete the study by the end of this year. Dr. Aslam and I have recently returned from a visit with many of the new study teams at their respective locations. In addition to observing their study engagement, I'm also highly encouraged by the eagerness of these institutions to have Nephamostat available if approved. In their words, Nephamostat, based on its profile and use in other countries, will be a preferred anticoagulant for CRRT. While we still need to complete the study, this feedback from these investigators continues to strengthen my belief that Nephamostat, if approved, will become a primary product in the market for CRRT anticoagulation. The addition of more of the right clinical study sites and principal investigators has been critical to achieving the increased enrollment rates. As a reminder, the new site profile concentrates specifically on one, the type of intensive care unit where the study will be performed, for example, medical ICUs instead of surgical or cardiothoracic ICUs where many of the legacy sites were focused. Two, the specialty of the principal investigator, specifically a nephrologist as a primary lead for selecting patients to enroll compared to an intensivist or other specialist, which were the specialties of the legacy site PIs. And three, the efficiency of the administration to initiate a new study at their institution. Dr. Aslam identified these characteristics after his review and learnings from assessing the initial sites as critical to successful and timely enrollment. In addition to the acceleration in enrollment at existing new profile sites and the institutional interest in joining the study as we add new sites, we believe there are other tailwinds supporting the market potential of Nephamostat. These include one, advancing a compassionate use IDE. As stated on our last call, we have been approached by multiple institutions and are discussing using the nephamostat under a compassionate use IDE for a specific patient population that does not do well with other available anticoagulants for CRRT. And two, continued shortages of citrate and potential supply chain issues with heparin. Healthcare providers are inquiring about the timely availability of nephamostat given the recurrent heparin and citrate shortages. Now before I turn the call over to Dr. Aslam to provide some additional details, let me remind you that if approved, NIAD would become the only FDA approved regional anticoagulant for use during continuous renal replacement therapy. This is important in that there are many disadvantages to the currently used products, heparin, which is systemic in nature, and citrate, which is being used off label. I'll now hand the call over to Dr. Aslam.

Thank you, Vince, and good afternoon to

all. The acceleration and enrollment rate is exciting, and the new site engagement has been excellent as we shift away from the legacy sites to the new target profile sites previously described. We now have a total of seven sites that are actively screening. We have four legacy or old profile sites and three new target profile sites. These new sites have enrolled over 90% of the 15 patients to date. Importantly, the enrollment rate from these three new sites has been impressive and has validated our strategy of changing the target site profile. These sites have enrolled nine patients over the last six weeks, which was in line with our enrollment forecast. We terminated one legacy site because of its low screening numbers and failure to enroll any subjects. We expect to add six new sites over the course of the third quarter, all with the new profile. As a matter of fact, a couple of them were recently activated and will begin enrolling shortly. This gives me confidence that the relaunch of the NAFRO study with significant protocol changes and a pivot to the sites with a different profile has been successful. We expect the study enrollment rate to accelerate further with the addition of the six new sites with a similar profile over the current quarter. As these are large academic institutions with

CRRT volumes higher than the legacy sites. As we mentioned on our last call, we continue to advance

our compassionate use IDE with a large institution. Physicians at this institution see an immediate and compelling need for a subset of patients with contraindications to currently available anticoagulants and need an alternative. We are in the process of submitting a compassionate use IDE to the FDA. This is an opportunity to provide an alternative to these patients who cannot receive the currently available anticoagulants and as a result, clot their CRRT circuits frequently. We do not have a timeline finalized, but we wanted to share this information as 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 no FDA approved regional anticoagulant on the market. We will provide more information on the progress of this compassionate use IDE submission.

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 NFAMSTAT 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 NFAMSTAT's track record of efficacy and safety, minimizing the clinical risk. The trial design has been agreed with the FDA, including broader inclusion criteria in 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 is always commercial risk, we believe this is mitigated given the disadvantages of the products currently being used for anticoagulation of the CRRT circuit, namely heparin and citrate. As you heard from Dr. Aslam, there is 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. We continue to focus on our efficiency while accelerating the enrollment in our clinical study. Accordingly, we are reducing the previously communicated 2025 expected cash operating expense guidance to now be in the range of $16 to $17 million, which includes the estimated expenses related to executing and targeting completion of the NEPHRO CRRT registrational trial by the end of the year. This is a reduction from the $17 million to $19 million range provided last quarter. Our cash operating expenses, or combined R&D and SG&A expenses, for the second quarter of 2025 totaled $3.7 million compared to $4.3 million for the second quarter of 2024. Excluding non-cash, stock-based compensation expense, these amounts were $3.5 million for the second quarter of 2025 compared to $4 million for the second quarter of 2024. The decrease in cash operating expenses in the second quarter of 2025 was primarily due to reductions in personnel expense and other general and administrative expenses. Our cash balance at June 30, 2025, was $6.8 million, including the proceeds from the first tranche of financing that closed on April 2. As a reminder, the financing was structured in three equal tranches, with the first tranche received at the initial closing and the two additional tranches committed upon achieving an enrollment of 17 patients and 35 patients, and with the stock trading above 73 cents per share following the announcement of each milestone. The expected proceeds from the closing of the two additional tranches combined with the $6.8 million in cash at June 30, 2025, should support the company through the 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. Should you have a question, please press the star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speaker phone, please lift the handset before pressing any keys. One moment, please, for your first question.

Your first question is from Ed R. C. from West Park Capital. Please go ahead. Hi, guys.

Hope all is well and congrats on the progress with NAFRO enrollment as well as the expense run rate. One major question and perhaps a follow up. Just trying to get a better sense for, you know, given all the detail that you've provided now on the acceleration with these new profile sites, I just wanted to get a better sense for the acceleration that you expect to get to the 70 enrollment target by year end, given that the last six weeks saw nine patients enrolled. Maybe just talk through the kind of arc that you're expecting through the remainder of the third quarter and into the fourth quarter. Thanks.

Hey, Ed, this is Vince and congratulations to you on your new position and welcome to the call. I can help answer that. The rates of enrollment are significantly increasing, obviously, with the new sites the new sites. If you do the math, you look at the nine sites that are going to come on board within the next month and a half with our target profile. For an average of four months, September through December, we need a total of 55 patients. That's about one and a half patients per site per month. Our current run rate in just the last six weeks is higher than that. We're not seeing an arc or change to the run rate. As a matter of fact, it will be a little bit lower on a per site basis. The key is just getting these sites up and running. We've had two, as Dr. Abso mentioned, of the next six with the new profile just come on board as of really yesterday. Their enrollment should start here shortly. Even without any enrollment through the balance of August, if we just assume everyone's on September and starts enrolling, again, it'll be a flat run rate to what we've seen historically with these three new profile sites. We're not talking about an acceleration on a per site basis, although that might happen. We're just talking about producing what they already are.

Okay, great. That's helpful. And then just wondering, you mentioned this program where you're providing the products for sites that would like to try it, as you mentioned, given all the issues, especially now with the use and provisioning of heparin and citrates. Is there any opportunity, given their use, I would assume, more than one site or facility, to leverage the data that they have, perhaps not for approval, but perhaps for future publication and to buttress commercial uptake?

Yeah, I'll start with it's an excellent question on the background of it. And then Dr. Razz can certainly comment about why these sites, one in particular that we're moving down this path with fairly rapidly is important and the requirements to actually capture data with compassionate use. So while we've been at a number of different CRRT meetings over the course of last year and up to date this year, we continuously get approached by experts in the field at certain institutions whose patient profiles might be unique to their particular situation. And while we can't satisfy everyone for compassionate use, there are one or two that we are heading down this path with in a fairly aggressive fashion based off of their ability to handle the requirements on their side, because there are requirements on their side, and the fact that their patient population is unique, meaning that it doesn't really overlap what we're doing in our current study. So Dr. Aslin, I'll turn it over to you about what those types of patient profiles might look like at these institutions, why these people are requesting Nfamastat and the requirements they might have regarding data capture, etc.

Absolutely, thanks Vince. And congratulations Ed. So absolutely, you're absolutely right. So the data that we collect from these patients, although this will not be part of our efficacy data set, however our larger data set that will contain safety data from every patient who ever got exposed to Nfamastat, this data set will be part of our submission for safety reasons. And obviously this will be used as a publication to highlight that in patients who currently are not suitable or eligible to receive either heptarin or citrate can actually safely and effectively receive Nfamastat for CRT and degradation. So these patients that we are providing compassionate use Nfamastat are patients who get chemotherapy and as a result, their bone marrow is severely compromised. So they have very low platelet counts and that indicates the use of heptarin. And because of low white blood cell count, these patients also get infected and go into sepsis and can end up having liver dysfunction and which contraindicates the use of citrate. So these sites are really struggling with these patients because they cannot give them two of the commonly used agents on the market right now, one obviously citrate being of liver use. And they clot very, very frequently because cancer increases your risk of blood clotting. So this is a very specific patient population which cannot be captured in our clinical study at this point, but it is a big unmet need in that population. And so the data that we use there will be very helpful for our commercial needs as we get to the approval of Nfamastat.

Does that answer your question, Ed?

Yes, that is helpful, Coler, I appreciate that. And again, congrats

on the progress. Thank you.

Your next question is from James Malloy from Alliance Global Partners. Please go ahead.

Hey guys, thanks. I was wondering if you could walk through the heptarin and citrate shortages you guys mentioned earlier in the call. So what's the status on that? How long has that been going on for and what do you think, what's the expectation for that to resolve? And then on the second tranche when you hit 17, does the fact that it looks like a long road to go to get to 73 cents from here, does that preclude that cash coming in? Or do you think the investors will waive that requirement?

Yeah, good questions, James. So I'll start on the first one with the supply chain issues that we continue to hear about or watch and observe with heptarin and citrate. So look, heptarin is episodic. There's been a well-documented set of historical challenges with the supply chain there and they continue to happen each year at different periods of time. So the dependency on it becomes difficult because that supply chain isn't always well supplied. Citrate we often get, we've had a lot this year, sites telling us they're running low or running out. I can't tell you the reasons for that particular shortage. Maybe manufacturing issues at certain plants as well as other maybe supply chain issues. But we know citrate's used not just for CRT, it's used in other areas like banks, et cetera. So there's demand for the product in and outside of CRT. So when you combine the both, each year that we've been involved with this project or this disease state, this therapeutic area, we continue to hear challenges with both. Sometimes they are fixed faster than others. I think the takeaway is that the users of these products for CRT are always on edge about the The next question was related to the financings. Rafi?

Yeah. Hey, Jay. So we'll clearly need capital to get to the PMA filing. And the question about the two conditions that are obligations for the investors to fund are obviously the 17 and 35 patients and then the stock price. We'll see, right? We'll see what happens after we attend or announce, I should say, the enrollment of the patients at 17, which should be coming here pretty shortly. But what we do know is the investors do have the right to waive those. And when we are in discussions with them, the overwhelming majority were really just focused on the 17 patient milestone and less so on the stock price. So we'll have to certainly have discussions with them if we don't achieve that 73 cents. But they have the right to waive. And the interest really is focused on the milestone of the 17 patients because that was their most, that's what they really wanted us to see, to see if we can get that acceleration and the momentum that we now have.

Understood. And kudos to Dr. Oslom for rejiggering the trial design and getting the, getting it back moving. Since the next plan is a minimum tuition. Thank you. Actually, I guess you're right. Just a quick question. What are the main components of the OpEx that drives down sort of the numbers looking at, if you just run the numbers you had in the current quarter out, you're well below that 16 to 17 million OpEx for the year. Do we anticipate a bump here in the second half?

We do. Yes. It'll bump up. Maybe we're being a little conservative, but it'll bump up because of the enrollment that's increasing now, has just recently increased and is increasing as we head into the third and the fourth

quarter. Got it. Thank you very much. Thanks, James. Okay. Your next question is

from Naz Ramen from Maxim Group. Please go ahead.

Hi, everyone. Congrats on the progress and thank you for taking my questions. I only have a couple. The first one is on the new sites and initiations. Obviously, previously you had quite a bit of logistical administrative issues on the set of initiations. I guess at this point, what kind of gives you confidence that you could have the new sites up and running and rolling basically by the third quarter to reach the end of 2025 completion? That's my first question.

Yeah, I'll turn that over to Shaquille because Shaquille has done an outstanding job on vetting these institutions before moving into the contracting process. Shaquille, maybe you can comment on that vetting process and what we've actually seen in performance of the administrative advancements.

Absolutely. Thank you, Naz. When we were looking at new sites, one of the criteria we used was how quickly can they get their sites up and running. There are some historical data on those sites on their paperwork timelines. In addition to that, some of these sites which were very, comforting for us to know was they had their internal benchmarks on how long it takes for them to actually from start initiation of the paperwork to open for enrollment. Some of these sites had that benchmark at 90 days or 120 days. Three to four months was their own timeline and got reprimanded or penalized if they were foregoing outside of that timeline. That was very helpful for some of these sites. In addition, as Vince mentioned, we had improved some of our internal processes, how we managed contracting process with them. We were very, very, very hands-on. We turned things around very, very quickly. We got external resources groups to help us with all paperwork. The reality is that we are very close to activating all sites by the end of this quarter. Every day we are reaching out to start these initiation visits, get the dates for them. We have very high level of confidence by the end of this quarter. We will have all nine sites with our target profile up and running and rolling. Some of these new sites are coming on board. They are really large volume sites. As Vince mentioned, the rate of enrollment may not accelerate in our current sites. Although, I think with time as they get more comfortable with patients and the clinical trials, it will likely accelerate a bit. Some of the new sites are coming in. Their rate is, I expect, to be much higher than the current new target profile sites.

I think, Naz, what I will add to that is it is important. None of these sites are starting from scratch right now. I want to emphasize what Shaquille said. We are way down the path. As a matter of fact, of the next six sites with the new profile, two have already been activated as of last week and this week. They should start enrollment imminently here this month. That leaves us just with a balance of four more sites that we have already got CTAs agree to, budgets agreed to. We get the SIVs, which are site initiation visits, scheduled all here to get completed by the end of this quarter. We are not starting from scratch on any of these. If anything, we are on the last leg of the sprint.

That was very helpful. My next question is kind of on patient enrollment. Once again, obviously you have cross-corrected for some of the sites, you have basically been running the study for just the literal over a year at this point. What has been the trepidation from the different sites or patients from enrolling in the trial? Has it been the fact that a lot of these patients and investigators have been concerned about enrolling them or the patients they did not agree to enroll in the trial or the families? The most recent initiations or the most recent enrollments, have they more been a function of the new sites, have they been more effective in understanding the FAMSAT or has it been more of a function of the fact that there have been these shortages so these investigators decided, okay, why not enroll into this network study?

Shaquille, I will start with the first part of it and maybe talk about the characteristics of the new sites. Supply really has not been an issue. The original sites that we inherited when we assumed this program from the previous owner of the company, those original sites were sites that that company had a relationship with based off of their previous development program in the ICU. That product was a vasopressor. That product utilized PIs that were typically intensivists and that study typically with those intensivists pulled patients from surgical ICUs which aren't really the patient populations we'll see for CRRT. These were very good sites, very good investigators, very good people for that disease state of vasopressor and I believe they felt because they were intensivists in an ICU, there would be an easy cross to a CRRT study and that was basically every site that we inherited. Dr. Asim came in, evaluated the sites and quickly based off his experiences as a nephrologist and involvement with CRRT diagnosed the fact that while these are great institutions and very talented PIs in medical centers, for a study in CRRT it would need to shift the specialties with nephrology who were pulling patients from the medical ICU. So the original sites, while they were inherited, really weren't the right maps for this study moving forward. With Dr. Asim's expertise intervening, he changed that profile. Dr. Asim, you can comment on why this acceleration lately, maybe you can talk about other metrics you're seeing and why you feel the patient enrollment is occurring.

Absolutely, thanks Vince. So as Vince mentioned, our previous sites, they were great sites but they were really not very productive for this particular indication and primarily because of their patient population that they were screening, had a lot of cardiac failure, heart failure and they were post-operative cardiac surgery patients and most of those patients who had kidney failure also had heart failure and they were being treated with heparin for ECMO and other extracorporeal therapies. So they had systemic heparin for other indications. So that was our biggest challenge that there were really very few patients consenting per month. So because of very early look at those patients and they were not qualifying. And secondly, with my bias perhaps is that nephrologists feel very close to CRRT as opposed to intensivists because intensivists are generally pulmonary critical care people and they have focus on lungs and oxygenation and ventilator and even when they run CRRT, the CRRT is like a little bit of you know perhaps side business for them. Their CRRT is not their main focus. Whereas nephrologists, you know that's the only reason they're seeing those patients just to manage CRRT. So they are very close to this lack of any proper anticoagulants in this in CRRT use and they deal with the complications of CRRT and decoagulation all the time. The patients are bleeding or the circuits are clotting and they have to send their nurses you know swap those circuits three to four times a day. So that's what's my bias that if we have these nephrologists they will take more ownership of the study and enroll these patients because they are really really desperate to get some new agent and choices in anticoagulant therapy. So both have both of them have worked out. We are looking at over the last six weeks or so our consent rates looking at patients you know who are who are passing the first screening has really significantly increased like almost skyrocketed and many of these patients are now being enrolled in the study. So I think it really comes down to how passionate the PIs are to get into this indication and get their hands and access to nephamostat and also if they have the right patient to choose from and I think that's what's happening with our new sites and new PIs. I do not believe that this is really due to although there is you know current if you go to the FDA's website they will list their listing happening as still one of the drugs which are in short supply because there's always problems with raw materials manufacturing and short half-life and shelf life and all that. So that's still ongoing but I don't think that's what's causing a spike or acceleration or enrollment. I think it really is the interest and enthusiasm by the PIs and the sites.

Got it that

was very helpful thank you. Sure thanks.

Ladies and gentlemen as a reminder should you have any questions please press the star key

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We will pause moment for further questions.

There

are no further questions at this time

please proceed with closing remarks.

Thanks Andrew again thank you for joining our second quarter earnings call. As you can tell we're very excited about the progress we've made all with the goal of completing an FRO trial this year in 2025 with FDA approval of NIAD in 2026. We'll continue to manage our cash prudently and we look forward to providing additional updates on our progress in the future. That concludes our call and thank you for your interest in our company. Have a great day.

Ladies and gentlemen this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.