Palvella Therapeutics, Inc. Common Stock 12th Annual Cantor Fitzgerald Global Healthcare Conference

going on. More and more going on. Great to have you join. Maybe just set the stage with us and frame for the audience where Palvella is today and where we're headed.

Great, Josh. Thanks so much for having me and the Palvella team here today. I'll start with our mission. Palvella in Finnish means to serve, so our mission is to serve patients that have serious rare diseases, and we only focus on those diseases where there are no FDA-approved therapies. The vision of the company, where we're going, we want to build the enduring leader addressing two areas in the orphan universe, rare skin diseases and rare vascular anomalies. Both of those are high unmet need, low competitive intensity corridors of the orphan universe, where we believe we can be the leading company serving these patients. Our strategy can be summed up in the word first. We are built to go from zero to one. In each of the diseases in which we develop, we want to be that first FDA-approved therapy.

Where we are today, we filed our NDA on our lead product candidate, which is QTORIN rapamycin for microcystic lymphatic malformations. We anticipate FDA approval in the first half of 2027. Behind that, Josh, looking forward to getting into this, we have a late-stage pipeline and we also have a platform for reproducibly generating novel topical product candidates called QTORIN.

Perfect segue into the next question, which is the key that you have to unlock all of these unmet medical needs is the QTORIN platform. This is where we're starting to hear really interesting investor dialogue. If you can hear me, is that better? Around the barriers that the QTORIN platform will erect around potential generic competition. Maybe describe to us what QTORIN is, what it allows you to do, and how you think about that defensive mode against potential competitive threats.

Sure. QTORIN is our platform for reproducibly generating novel topical product candidates. It can be evaluated in these rare skin diseases and rare vascular malformations. From an intellectual property perspective, we have a multi-layered exclusivity strategy, beginning number one with patents, two, also trade secrets, and three, regulatory exclusivities. To use a concrete example of QTORIN rapamycin, our lead product candidate, we now have six issued patents on QTORIN rapamycin. We have over 150 claims across those patents, and it is the breadth of the claims across composition of the formulation, as well as method of use on the patents. Those patents expire and at least have claims through 2038. We also have pending patents that, if issued, Josh, would give us protection on QTORIN rapamycin into the mid-2040s. Very active patent strategy around our formulations and methods of use. Trade secrets. Some of our most significant innovations we have intentionally not included in our patents, both manufacturing and formulation.

Without those trade secrets, as we get into topical formulations, generics are likely to get a very different drug product than QTORIN rapamycin. Third part of the exclusivity strategy is orphan exclusivities. In our lead indication, microcystic lymphatic malformations, we have FDA's orphan designation, which would provide seven years of exclusivity on the active moiety rapamycin in the indication microcystic lymphatic malformation. As we think about durable and defensible barriers to generic entry, we think about a broad patent estate that if generics develop too closely to the patents, they are going to be in a position of potential infringement. If they move away from the patents, they are designing a new drug product, which is very likely to require clinical work.

What we know about QTORIN is that small changes in the formulation or the manufacturing are likely to result in significant changes to the product performance.

Many directions we can take that in because that was such a rich description. Maybe though to start with, what is QTORIN?

Sure. QTORIN, there is three elements to it, Josh. There is formulation, there is manufacturing, and there is IP. On the formulation front, we start with an anhydrous base. That anhydrous formulation is the base formulation for QTORIN rapamycin and QTORIN pitavastatin, as well as future QTORIN product candidates. With that formulation, we do molecule specific optimization to try to achieve things like high drug loading, ensuring that we are getting adequate amount of the active into the vehicle to ensure we are also getting, in many cases, dermal engagement. In many of the diseases that we target, the disease pathology is deep in the skin. It is in the dermis. And thirdly and importantly, with the molecules we are working with, we are really looking to keep the drug in the dermis and minimize systemic exposure.

We think about the value to the patient as local therapeutic activity for these localized diseases, where we are harnessing the mTOR pathway and the inhibition of the mTOR pathway with rapamycin while minimizing systemic exposure, trying to reduce or eliminate things like immunosuppression and other acute toxicities. In terms of QTORIN, cannot emphasize enough, there is molecule specific Product development that occurs with each program, which opens up IP opportunities as we are optimizing each of these QTORIN programs.

Okay, got it. Now there is a bit of an investor debate that I think is easily settled, because when you call some compounding pharmacies, they will tell you that they can make 4%-6% topical rapamycin, therefore, what unmet need are you really serving? How do you kind of address that discussion and debate amongst investors?

Sure. I think first and foremost, there is a major difference between an FDA-approved therapy, which is our ambition and our near-term ambition, hopefully becoming reality in the first half of 2027, and therapies that are not approved by the FDA, that are therefore unapproved and unproven. To answer your question specifically on that 4%-6% nominal concentration, I think it is really important, as you dive into topical formulation development, to really look at what a 4%-6% concentration means. What a 4%-6% concentration does not mean is it does not necessarily translate into the amount of the active that is in the dermis. So that is really key. First aspect of formulation is thinking through what percentage can be solubilized in the base while preserving the physical and chemical properties and keeping it stable. Two is releasing the drug from the vehicle, making it bioavailable to the skin.

Three is driving it deep into the skin, and then four is keeping it in the skin and really minimizing that systemic exposure. A headline 4%-6% concentration doesn't mean that you're getting the right amount of active into the dermis. What we've shown pre-clinically is that we get levels of rapamycin into the dermis that exceed the IC90 for mTOR inhibition, scientifically. Clinically, we think that that translates into what we showed in the SELVA trial, which was 95% of our patients improving and 86% that were much or very much improved.

If a generic company were to try to take just an alternate anhydrous formulation approach, what are the barriers that they'll run into? What is so hard around working around your IP estate and just kind of coming up with a slightly different formulation that doesn't infringe the IP but is otherwise bioequivalent?