Palvella Therapeutics Inc (PVLA) 2025 Q3 法說會逐字稿

Good day and thank you for standing by. Welcome to Palvella’s third quarter 2025 financial results and corporate update conference call. At this time, all participants are in a listen only mode. (Operator Instructions) Please be advised that this conference is being recorded.

I would now like to hand the conference over to your speaker today, Bohan Wei. Please go ahead.

Thank you, operator. Good morning and thank you for joining the Palvella 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 Investors section of our website at www.palvelatx.com. On today’s call, you will first hear from Wesley Kaupinen, 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 QTORIN 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 QTORIN 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 QTORIN platform as reflected in last week’s announcement of QTORIN Pitavastatin, our second product candidate from the platform for the treatment of disseminated superficial actinic chole keratosis.

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 US QTORIN rapamycin for Microcystic Lymphatic Malformations and ultimately other mTOR driven skin diseases.

Earlier this year, we welcomed Ashley Klein to Palvella as our Chief Commercial Officer. Ashley previously led Dompez US business and oversaw the launch of Oxervate, 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 US sales and has since gone on to achieve annual US 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 US Commercial readiness ahead of a potential first in disease approval for QTORIN rapamycin.

Second, nearly a year into our public life, we have delivered on time operational execution across our clinical programs. Our Phase three study of QTORIN 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 six hundred identified and over ninety eight percent 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 QTORIN platform.

This expanding landscape underscores the significant opportunity to replicate and extend the progress we have achieved with QTORIN rapamycin and QTORIN 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 QTORIN rapamycin, I viewed its clinical and commercial potential as a pipeline and a product with the ability to eventually address multiple skin diseases driven by over activation 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 QTORIN 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 over activation 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 Palvella’s view is that the true burden of Angiokeratomas and their impact on quality of life is often underestimated. Palvella will work stridently to ensure that the voice of angiokeratoma 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 QTORIN platform. QTORIN 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. Chode enabled the development of QTORIN Pitavastatin as the first potential pathogenesis directed therapy for disseminated superficial actinic porokeratosis.

Dr. Chode’s discoveries demonstrated the causal role of the mevalonate pathway, the same pathway potently inhibited by Pitavastatin, a next generation mevalonate pathway inhibitor and support a topical approach with QTORIN 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 QTORIN.

Moving to our clinical programs, under number three, adults and children with cutaneous 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 QTORIN rapamycin in this indication and we remain on track next month to announce top line data from this Phase II proof of concept study evaluating QTORIN rapamycin for cutaneous VMs.

And finally number four, our Phase three CELVA 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 Palvella 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 QTORIN rapamycin to address a significant unmet medical need. While we await Phase III 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 QTORIN, rapamycin and QTORIN, Pitavastatin as first line standard of care therapies for these patients. The next eighteen months will be a catalyst rich period for Palvella.

Our primary objective for QTORIN, rapamycin is achieving FDA approval, and we are executing with urgency towards that goal. In parallel, we are expanding the clinical reach of QTORIN rapamycin across multiple mTOR driven skin diseases, including cutaneous VMs, clinically significant Angiokeratomas and additional high unmet need indications that we have mapped and plan to announce consistent with QTORIN rapamycin’s pipeline and a product strategy.

In addition, QTORIN Pitavastatin is nearing completion of formulation development and remains on track to enter the clinic in the 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 QTORIN platform, and our objective is to have a steady cadence of novel QTORIN 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 program.

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, TOIVA’s Phase II proof of concept study design will enable Palvella to evaluate the safety and tolerability of QTORIN 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 II study is designed first to evaluate the safety and tolerability of QTORIN 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 III primary endpoints.

We will evaluate whether QTORIN 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 QTORIN 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 three SELVA trial remains on track, and we expect to report top line data in the 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 2026 supported by the recent strengthening of our regulatory affairs leadership team with the addition of Shyamamudan. 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 thirty thousand diagnosed patients in the US 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 QTORIN rapamycin, our objective is to first secure FDA approval for the estimated more than 30,000 US patients with Microcystic Lymphatic Malformations. Then over time, we aim to grow the pool of potential addressable patients for QTORIN 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 QTORIN rapamycin.

Importantly, from a regulatory perspective, we anticipate this can be accomplished through serial supplemental NDA or SNDA submissions offering a more efficient and streamlined pathway than traditional de novo NDA submissions. Overall, we believe QTORIN and 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.

Thank you, Wes. The first pipeline program that we announced in September is clinically significant angiokeratomas. Our goal here is aligned with our strategy of being first for these patients. Angiokeratomas are superficial Isolated Lymphatic Malformations that can bleed, cause pain, and interfere with daily life. Everyday friction from clothing or movement can lead to recurrent bleeding, which is not only disruptive but also distressing for patients.

This is a persistent progressive disease. Lesions often enlarge and increase in number over time with no natural tendency to regress. Biologically, these changes are driven by increased VEGF and mTOR signaling, which provide a strong scientific rationale for targeting VEGF and mTOR inhibition as well as real world evidence supporting rapamycin as a targeted therapeutic approach.

The unmet need is significant. We estimate there are more than fifty thousand individuals in The United States living with clinically significant disease across subtypes such as Fordyce, Solitary, Mibelli and Circumscriptum.

Currently, there are no FDA approved pharmacologic therapies. Care today is centered on destructive and nonspecific procedures like laser therapy, electrosurgery, cryotherapy and surgical excision. Approaches that can be painful, require repeat sessions and are particularly challenging for patients with multifocal disease or lesions in sensitive locations.

Clinicians consistently describe a clear need for a predictable, nondestructive and targeted therapeutic option, one that can reduce the debilitating symptoms of the disease and offer a practical solution for patients with multiple lesions. We believe clinically significant Angiokeratomas represents an important opportunity for QTORIN rapamycin and we look forward to applying our rare disease development expertise to address this underserved patient population.

Angiokeratomas is a place where the pipeline in a product strategy lets us move quickly and efficiently. We are leveraging several established elements of the QTORIN rapamycin program including using the same product formulation from our two ongoing trials. We have existing clinical drug supply ready to be deployed, an open IND with the FDA Division of Dermatology and Dentistry and we have existing intellectual property coverage.

Our next regulatory step is an FDA meeting in the 2026. We plan to discuss the proposed Phase II design, confirm whether eligibility for expedited programs such as Fast Track is appropriate and align our longer-term plans including a planned supplemental NDA if approval is achieved in Microcystic Lymphatic Malformations or in cutaneous venous malformations.

The planned clinical study would initiate in the 2026. We are planning a single arm baseline-controlled trial enrolling 10 to 20 patients. Given the clinical overlap with Microcystic Lymphatic Malformations, we expect that efficacy endpoints from Selva could be applicable here as well. The goal is straightforward. Initiate Phase II clinical trial in the 2026 using the same topical platform, the same manufacturing and a regulatory path that builds on what we have already established.

Our second new clinical program that we announced last week focuses on disseminated superficial actinic pore keratosis or DSAP, a chronic, progressive, precancerous skin condition. Patients live with visible extensive lesions that can cause burning, persistent itch and disfigurement, all of which significantly impact quality of life. Importantly, there is also a well-documented risk of malignant transformation to non-melanoma skin cancers including squamous cell carcinoma.

From a biologic standpoint, DSAP is driven by autosomal dominant mutations that disrupt the mevalonate pathway, leading to the accumulation of toxic intermediates and downstream skin pathology. Clinically, this manifests as a persistent and progressive disease. Lesions multiply and enlarge over time and no spontaneous regression.

The unmet medical need is substantial with an estimated fifty thousand individuals affected in The United States. Yet today, there are no FDA approved therapies. Current management relies on destructive procedures like laser surgery or off label top use of topical chemotherapeutic agents.

These approaches are painful, difficult to tolerate and impractical for patients with widespread disease. The first clinical study targeting the inhibition of the mevalonate pathway in DSAP was conducted by Keith Choate in 2020, who because there are no FDA approved topical mevalonate inhibitors use an off label compounded topical statin formulation, demonstrating that targeted topical inhibition of the mevalonate pathway could meaningfully impact disease biology.

Since then, more than 20 independent studies have built on this foundation, further validating the scientific rationale and clinical potential for a target topical pathogenesis directed approach. Despite this growing body of evidence, patient outcomes remain poor.

Unapproved and highly variable formulations continue to limit both access and reliability of treatment. This is the context for our QTORIN Pitavastatin program, which we designed to address DSAP with a targeted topical approach suitable for chronic use.

Petavastatin is a next generation best in class statin with unique properties that make it ideally suited for this indication. With QTORIN and Pitavastatin, we’ve optimized for pharmacodynamics, skin penetration and chemical stability, enabling sustained local drug exposure directly at the site of the disease while minimizing systemic absorption. We believe this program has the potential to deliver the first pharmacologic therapy for DSAP and to meaningfully improve outcomes for patients who currently have no viable treatment options.

DSAP is driven by a single well-defined cause, loss of function mutations in the mevalonate pathway leading to the loss of skin barrier integrity. On the left, can see how the primary germline loss of function mutation plus a secondary post zygotic mutation in one of the five key enzymes interrupts the pathway causing the buildup of toxic upstream intermediates resulting in hyperkeratosis and loss of skin integrity. This biochemical imbalance drives the abnormal keratinocyte behavior that defines DSAP.

On the right shown is the characteristic histologic feature of DSAP called the coronoid lamella caused by a mutant keratinocyte clone that expands upward from the basal layer of the epidermis. The reason this is important is that in order to achieve maximum therapeutic benefit, penetration deep into the skin is required to inhibit the root cause of the disease.

So by directly addressing the underlying mevalonate pathway defect, our approach with QTORIN Pitavastatin is to be on target and in tissue by normalizing cellular signaling and restoring healthy skin architecture in the skin attacking DSAP at its root cause. We’re executing an efficient and capital disciplined development plan to bring this therapy to patients as quickly as possible.

We’re working with the same FDA dermatology division that guides QTORIN rapamycin ensuring consistency and efficiency. An FDA meeting in the 2026 will focus on the Phase II design and potential eligibility for expedited programs.

With protocol drafting nearly complete and endpoint shaped by key opinion leaders and patients, we anticipate starting Phase II in the 2026. The objective is straightforward, begin Phase II in the 2026 and advance efficiently to proof of concept.

I will now hand it over to our CFO, Matt Korenberg to discuss this quarter’s financials.

Thank you, Jeff. Palvella ended the quarter with $63.6million in cash and equivalents as of September 30, 2025. This supports approximately one point five years of runway carrying us into the 2027. Total operating expenses for the period, including both R&D and G&A were $10.2million consistent with our plans to drive the CELVA and Toivo studies, expand the QTORIN platform and advanced commercial readiness.

Even with our full spending plan on our four development programs, we expect to exit 2025 with approximately $55million in cash, which we believe will be sufficient to carry Palvella through multiple data and regulatory milestones up and through a potential approval of QTORIN rapamycin in Microcystic Lymphatic Malformations.

I’ll now turn the call back to Wes for closing remarks followed by Q&A.

Thanks, Matt. In summary, the Palvella team remains committed to disciplined execution on our rare disease pipeline programs and committed to having a deep and unwavering serving of the patients with rare diseases. We look forward to sharing clinical results and continuing to advance our mission and pipeline in the months ahead. Thank you all for joining us today.

(Operator Instructions)

Josh Schimmer, Cantor.

Okay. Thanks for taking the questions. First on the TOIVA study, recognizing that you’re not necessarily framing the key endpoints to focus on prospectively, how should we think about interpreting the data? And what should we be thinking in terms of perhaps a threshold effect that you’d want to advance further into clinical development?

And then for the parakeratosis indications, maybe you can share a little bit about the other ones that you’re considering exploring down the road, the parakeratosis of the belly and then linear parakeratosis, I’m sure what those lesions are like and how it compares to DSAP?

Great. Hey, Josh, good morning and thanks for those questions. I’ll start off by addressing your questions on the TOIVA trial before passing it over to Jeff to discuss the other subtypes of parakeratosis. So in terms of interpreting the data for the TOIVA study, we employed a development strategy here that’s very similar to the microcystic LM development strategy. Phase II study is single arm baseline controlled.

We think that’s an appropriate Phase II construct given that there is no evidence of spontaneous improvement in this disease. We’re testing a number of different clinician and patient reported outcomes. The goal there is to understand which of those endpoints are sensitive to detecting a treatment effect and then understanding those effect sizes in terms of whether or not they’re clinically meaningful.

We do have PROs embedded into the Phase II study, which will inform clinical meaningfulness. We also have qualitative interviews similar to our Phase II Micro LM study, so we can understand the experience of these patients in the Phase II trial.

So ultimately, to answer the second part of your question, we’d like to see approximately thirty percent of patients demonstrate a clinical improvement. The goal would be to see that type of improvement on one or more endpoints that we could credibly sit with our KOL collaborators in front of the FDA and recommend such one of those endpoints as a primary for Phase III.

Jeff, do you want to address the question on parakeratosis?

Yes. Thanks, Josh. So as you mentioned, our first indication that we’ll be going after is DSAP. This is the most common form of parakeratosis. But all forms of parakeratosis are caused by mutations in the mevalonate pathway. And they’re all caused by primary germline mutations and secondary post zygotic mutations. The difference in the different subtypes really is about that secondary post zygotic mutation. So Mabella patients, they have a mutation in that secondary mutation that occurs later in life, but it’s very focused in area. Linear is a little bit different in the disease.

Linear is an interesting one in that occurs post zygotically but during embryonic development. So that is the only subtype in which occurs early in development in children. And it often occurs along blast co lines. That gives it the name linear. So you’ll see it has sort of this linear approach.

And it’s really characterized by high rates of malignant transformation and is also very symptomatic. But all forms of parakeratosis have those same mutations. Importantly, some of the published topical statin cases also show a preliminary signal in linear and mibelli forms as well.

Ritu Baral with TD Cowen.

Good morning, guys. Thanks for taking the question. Two for me. Wes, could you just address how your ongoing interactions with the FDA have been? Specifically, I think there’s a lot of client questions on stability of the review team, especially given some overlaps of your review team across all of your programs because of domain expertise on the agency side?

And then sort of the same question, but for the SELVA data, the Phase III SELVA data. Can you, I guess, the primary endpoint and maybe secondaries as well, but help us define what’s good data versus what’s home run data in the context of not really having any competition and any nuances that investors should keep in mind around the safety tolerability profile when evaluating sort of the totality of data?

Hey, Ritu. Good morning and thanks for the questions. I’ll start with a response on FDA. So certainly many changes ongoing as we’re all witnessing at FDA. In terms of the dermatology division, we continue to have the same Director of the Dermatology division that’s been in place since late 2023.

The Director of that division is Dr. Jill Lindstrom. She’s a dermatologist by training and has been a great collaborator, I’d say to not just Palvella, but to many companies developing novel therapies for rare disease. So we’ve seen stability in terms of her leadership of that division.

We’re in consistent contact with the FDA and continue to think that that’s been a beneficial collaboration for Palvella, as evidenced by the recent receipt of the second year of the FDA orphan drug grant proceeds. We’re very grateful for their non-dilutive capital support of our ongoing Phase III single arm baseline controlled study.

In terms of the SELVA data, which we expect in Q1 2026, the goal there of course is to demonstrate statistical significance on the primary endpoint. The primary endpoint as a reminder is the microcystic lymphatic malformation IgA. It shares many similarities to the clinical global impression of change that we had in Phase II.

By achieving a statistically significant result, we think that sets up for an NDA submission under Breakthrough and Fast Track designations. From a safety and tolerability perspective, I think that has to be framed relative to what’s available to these patients today, which is either surgery, which is not durable and highly invasive, sclerotherapy, is injection of chemotherapeutic agents like bleomycin, again, with a number of shortcomings and also a high incidence of recurrence.

So from a topical targeted approach with QTORIN and rapamycin, we think that that’s a very attractive profile for FDA, for clinicians, for patients, again assuming that we demonstrate success in Phase III. I think one key point of focus, of course, will be systemic absorption levels of rapamycin. We designed QTORIN to deliver drug to the dermis but also keep it retained in the dermis so that there’s not high levels of systemic absorption. That’s something we reported on in Phase II. And obviously, we’re tracking closely in Phase III as well.

Got it. And if I could squeeze one more follow-up. The IgA scale, Wes, I think you mentioned in the -- I’m sorry, I think you mentioned in your plans for the angiokeratoma indications that there is the potential to use the SELVA endpoint. Does that refer to the IGA scale? And how much will the SELVA data inform the potential design of both the Angiokeratoma and the DSAP proof of concept studies?

Yes, great. So there are shared characteristics, Ritu, between Microcystic Lymphatic Malformations and clinically significant angiokeratomas. Both are a type of lymphatic malformation. And so in our preliminary discussions with our key opinion leaders, they have noted the application of many of the SELVA endpoints is likely relevant to clinically significant angiokeratomas. Jeff and his team have drafted a Phase II protocol, so that’s underway.

But yes, we think that many of the endpoints constructed for microcystic LM like the MLM IgA, a seven-point scale which scores lesion severity between very much worse and very much improved are likely applicable to clinically significant angiokeratomas.

In terms of the applications to parakeratosis, we are early in our design of that Phase II study. We do think given the visibility of the disfigurement that presents from those lesions that there will also be clinician reported outcomes, both dynamic change scales and static scales that will be used in that Phase II trial. And as we get closer to initiating that study, we look forward to sharing more with you and everyone else.

Sam Slutsky, LifeSci Capital.

Hey guys, this is [Gaurav] for Sam. Congrats on another great quarter. Just a couple if you don’t mind here. So for the two new programs announced QTORIN, REPA and Angiokeratomas as well as QTORIN, Pitavastatin and DSAP, base case kind of seems for Angiokeratomas baseline controlled for Phase II, but any color you can give on how the team is thinking about DSAP? And given the prior precedent set from MLM CVM Phase II being baseline controlled, how should we be thinking about this?

And then just another quick one here. So on QTORIN, Pitavastatin, any guidance the team can give on when we can expect more granular product profile data just as it relates to skin engagement, dermal epidermal data, etcetera?

Yes. Hey, Gaurav, thanks for being on. I’ll take your last question first. So we expect to have some of that exciting data that we’ve been generating in the formulation development process to have that out publicly sometime in the 2026.

To answer your questions on trial design as it relates to the DSAP program, what we’ll do there is very similar to what we’ve done with other microcystic LM and CVM programs is we’ll sit down with the real experts in the disease and ultimately land on a trial design that we think is going to inform not only on safety, but on efficacy and on endpoints that could be used for a pivotal Phase III design.

As part of that, we look at single arm baseline-controlled studies. We look at placebo controlled studies. So we’re still going through that evaluation process on DSAP and look forward to coming back to everyone with more information. Jeff?

The only thing I’d like to add to that is incorporating the voice of the patient into our clinical programs is really critical. We do that early on. So prior to starting any of these clinical trials, we’d like to talk to patients and just understand the disease a little bit in a lot of detail and incorporate that in some of our patient reported endpoints.

Whitney Ijem, Canaccord Genuity.

Hey guys, this is [Angela] on for Whitney. Thanks for taking our questions. Few on DSAP. So how should we think about the surface area that’s to be covered for DSAP versus the other programs? And then of the about 50,000 patients I’ve used estimated, how should we think about a range of severity of the surface area that’s affected?

Yes. Hey, Angela, thanks for the questions. In terms of the surface area, there is some variability in the surface area that presents. There can be patients with smaller DSAP lesions and as you’ve seen from some of the publications, there can also be very extensive DSAP lesions. What we typically do in our Phase II studies is we have trial inclusion exclusion criteria around lesion size. We try to make that somewhat consistent across the study population. We just think that that’s a smart way to approach clinical trial design to try to reduce variability in a Phase II study.

In terms of your second question around the greater than 50,000, this is a precancerous, premalignant disease. So patients who are presenting in clinic are seeking therapy for either the clinical signs of the disease, which can include things like itch or they want to treat the disease and try to prevent that malignant transformation, which most commonly is the squamous cell carcinoma. So we what we project is that patients who are in clinical medicine seeking care today that have active lesions that those will be upon FDA approval great candidates for QTORIN and Pitavastatin.

Annabel Samimy, Stifel. Your line is open.

Good morning, team. This is Jack on for Annabel. Thanks for taking our questions. So, two from us. So on SELVA, I know that your primary efficacy analysis is based only on the patients who are six years and older, but you’re still enrolling 3- to 5-year-olds as well, who just won’t be contributing to that primary.

How do you anticipate FDA will view that younger population given they won’t be a part of the primary? And if they aren’t expected to be in the initial label, what additional work might you need to do to get them on? And then on QTORIN, Pitavastatin, acknowledging that you’re still going to meet with FDA, how do you foresee including the other porokeratosis subtypes in the clinical program?

Do you think the subtypes are sufficiently similar enough that you might be able to include a wider spectrum of disease in a potential pivotal after receiving Phase II proof of concept in DSAP? Or are they more likely to be independent programs that will each require their own designated Phase two and Phase III trials?

Hey, Jack, thanks for the questions. As it relates to SELVA, obviously the objective for Palvella, if we demonstrate safety and efficacy in the Phase three study and we’re able to do so not only in patients six years and above, but in that younger 3- to 5-year-old patient population, we’re going to strive to have a label that’s three and above. That would be the objective.

If we’re unable to attain that at FDA approval and let’s say the label results and initially being patients six years and older, what we would anticipate is some additional testing of QTORIN rapamycin in that younger population of patients who are 3 to 5 years old. So we want to do right by patients.

First and foremost, that’s completing the study, hopefully demonstrating safety and efficacy, then getting a label that’s appropriate for even that younger population if that’s not achievable on the first pass of FDA approval work will continue in parallel to try to expand the label. I do think it’s really important on this question to note that our KOLs really ardently supported the concept of dosing younger patients in the 3- to 5-year-old patient population.

Intervening early before these lesions engorge and enlarge over time could alter the natural history of the disease. So again, should we see the right sort of data in that younger patient population, we think we would have KOL support from pediatric dermatologists and Pediatric Hematologists, oncologists to really advocate for that label.

In terms of the DSAP program, we’re going to start the poor keratosis program. We’re going to start with DSAP. That’s going to be the initial Phase II study. There are a couple of different ways that we could pursue the development into these additional indications. One is to do a basket study where you have multiple subtypes of parakeratosis. An alternative path is to run a separate study in linear and Mibelli.

Where we stand right now, our objective is to initiate this Phase ii study and hopefully demonstrate a signal in DSAP. If we see the signal in DSAP that’s compelling, I think that opens up a number of opportunities to accelerate development in these other indications.

Danielle Brill, Truist.

Hi, good morning. Thanks so much for the questions. First, as a follow-up on the CVM data and what to expect in terms of the endpoints that you’ll disclose, can you walk us through a bit more details on what you’re thinking? Like will you share pre and post treatment pictures? Do you plan to share details on the parameters that are changing such as lesion bulkiness, color or maybe pain?

Any kind of additional color on what we should look for there will be helpful. And then I have a question on DSAP and the new QTORIN statin program. Can you just expand a little bit on the efficacy improvement that you’re expecting here over the compounded statins? Based on a preliminary search, it looks like they’re somewhat efficacious. Are there certain limitations that you believe you’ll be able to overcome with QTORIN? Thank you.

Yes. Thanks, Danielle. As it relates to the CVM data, what we anticipate is reporting on endpoints that we think would be viable endpoints in a potential Phase III study. So endpoints that we would carry forward from Phase II and Phase III. We will likely report on endpoints that are both global and static in nature.

Some of the scales that we’ve included are dynamic change scales, others are static severity scales. So those are scales that we’ve used in the MLM study in Phase II that we used in Phase III. And I think that that’s likely applicable to Phase II study for CVM as well. On DSAP, there’s no hard data as it relates to efficacy of compounded medications.

What we do know from Dr. Chode and others is that they are oftentimes not efficacious. There are not only issues with access to treatment, but Dr. Cho would characterize the outcomes oftentimes with the compounded statins as having poor patient outcomes. There’s bit of inconsistency in formulation. There’s quite a bit of batch-to-batch inconsistency in terms of concentrations type of vehicle that’s used.

We’ve done some patient level research as well to confirm that. So we’re not only hearing that data from clinicians, but also at the patient level as well. So I think just like we showed in Phase II for Microcystic LM, we thought that efficacy was transformational with QTORIN rapamycin compared to what’s available today for physicians.

Our goal in DSAP would be to similarly with QTORIN paired with Pitavastatin, which is a highly potent mevalonate pathway inhibitor showed transformational and hopefully consistent efficacy, which we then would want to reproduce in a Phase III study and ultimately the goal is FDA approval.

Ryan Deschner, Raymond James.

Hi, congrats on a busy quarter. Two questions for me. One, can you walk us through your thinking, sort of the rationale in the serial supplemental indication strategy and how that would work in practice vis-a-vis basket studies and other routes? And then now that your development pipeline has expanded meaningfully, how much overlap are you expecting in terms of prescriber base across MLM, CVM, ANGIO and DSAP? Thanks.

Hey, Ryan. Thanks for the questions. I’ll pass it over to Jeff to discuss the serial supplemental NDA strategy.

Yes, absolutely. The SNDA strategy is really based on having the first approved indication. So for example, if QTORIN rapamycin is approved in microcystic lymphatic malformation, all future programs, whether that be CVM or clinically significant Angtomyos, would allow us to reference the data package that we submit with the original SNDA. So it really just allows us it allows more efficient review process for the FDA.

Great. Ryan, your second question as it relates to overlap with the multiple indications that we’re pursuing, microcystic lymphatic malformations and cutaneous venous malformations, a meaningful percentage of those patients are treated in vascular anomaly centers in The United States. There’s about 150 vascular anomaly centers typically associated with pediatric academic hospitals. So very significant overlap between those two indications. Angiokeratomas recently reclassified as a lymphatic malformation.

Certainly many of the KOLs that we’re interacting with on microcystic LM and CVM also treat angiokeratoma patients. Some of those patients are also treated outside of the vascular anomaly centers as well. We would expect with approval of Qtoron rapamycin for microcystic LM that we’re not only going to promote to the vascular anomaly centers, but that our sales marketing and medical footprint will also be broadly covering dermatologists. So by the time that we would achieve an approval in Angiokeratomas and also in DSAP that there would be major call point overlap and that there would be efficiencies from a sales force targeting point of view.

Trevor Allred with Oppenheimer. Your line is open.

Hey, good morning. Thanks for taking my question. I had a question on DSEP. Can you provide any further detail on how the current topical treatment of 5FU proceeds? Just how painful or burdensome is the treatment course?

Yes, great, Trevor. I’ll kick it off and then pass it over to Jeff. So I actually received an email from a patient unsolicited last night talking about how aggressive topical 5FU, which is a chemo agent is in this disease. We’re also familiar with topical five 5FU from some other rare serious cancers that we’ve have been on our radar historically. So I’ll pass it over to Jeff, but essentially it results in can result in scabbing and peeling of the skin.

It’s a very aggressive therapy, not very tolerable from a safety perspective and tolerability perspective to patients. Jeff?

There’s really two aspects I’ll focus on. The first is sort of the biology and mechanistic impacts and the second is the patient’s perception of what they receive. So first, 5Fu is nonspecific. It’s a destructive technique. It’s also more superficial.

So in the one slide where I showed the deep coronoid lamella, it’s really important in order to prevent disease regression, you need to have deep penetration to the basal layer of the epidermis. You don’t typically get that with five FU. It’s also nonspecific. It’s just destructive. From the patient’s perspective, when I spoke with Dr. Chode about this, he said it’s like lighting their skin on fire. It’s extremely painful, irritable. And then you will have a little bit of clearance over a few weeks, but the disease will come right back because you don’t hit that root cause of the disease.

Catherine Novack, Jones.

I think you’ve touched on this in the past, but we’re still getting questions on regarding IP on QTORIN rapamycin, other QTORIN assets. What IP patent protection do you have on these assets? And how much protection comes from IP versus trade secrets, specialized processes, etcetera?

Hey, Catherine, thanks for the question. We have a multilayered strategy to address that topic. One is IP. We have six granted patents in The United States covering QTORIN and rapamycin, specifically the anhydrous composition of rapamycin and other mTOR inhibitors. We also have many layers of formulation and manufacturing trade secrets.

And then we are -- have been granted in microcystic lymphatic malformations, FDA’s orphan designation, which provides seven years of regulatory exclusivity upon approval. Our claims on our patents go out through at least 2038. Our trade secrets could extend our exclusivity well beyond 2038. This continues to be an area that we significantly invest in.

Understood. And then just a little bit more on TOIVA when it comes to how we should be thinking about weighting the specific outcomes. In the past, we’ve talked about FDA’s preference when it comes to static versus dynamic scales. So is that something that we should also be waiting when it comes to when we see TOIVA's top line results?

Yes. Thanks for the question. The goal is to provide FDA with several different efficacy endpoints. That was our proposal for our Phase III SELVA study, which included both, Catherine, static and dynamic endpoints. So the goal is in a trial to have both because it gives a more fulsome set of endpoints from which the efficacy -- from which the FDA can assess efficacy.

So that’s how we think about our Phase two study in any potential Phase III study in CVM. We’ll have we would have in a Phase three if we proceed, we would have static severity scales, likely have dynamic change scales. We would also have qualitative interviews which Jeff mentioned that’s really important in rare disease drug development to make sure you’re capturing the voice of the patient.

Dev Prasad, Lucid Capital Markets.

I have a question on commercialization. From a regulatory and commercialization perspective, what remains the major CMC or scale up milestone between now and the potential submission? And how far along are you in preparing for commercial manufacturing at the launch?

Yes. Thanks for the questions, Dev. As you know, we recently hired Jason Burdett as our SVP of CMC and Technical Operations. Jason has a long successful track record in manufacturing and commercial manufacturing at scale. The CMC package is a key part of the FDA’s NDA review.

One of the key points of focus to address your question is of course the robustness of the stability data from drug product manufacturing. We have stability data on our clinical batches that goes out to more than peers. So I think that that’s a really important data point and one that we’ve been frequently updating the FDA on. We also have multiple commercial manufacturers that we’ve scaled up with. I think it’s key not to take single site risk.

And so we have two groups that have very extensive and positive regulatory histories in terms of historical FDA inspections that we expect to be a part a key part of our NDA submission strategy.

And I’m not showing any further questions at this time. And as such, this does conclude today’s presentation. We thank you for your participation. You may now disconnect and have a wonderful day.