Palvella Therapeutics, Inc. Common Stock H.C. Wainwright 28th Annual Global Investment Conference

All right. Well, good afternoon, everyone, and welcome to our next session. I'm Sarah Nick from H.C. Wainwright's healthcare research team. It's my pleasure to introduce Palvella Therapeutics, a clinical-stage company developing therapies for patients with rare diseases. Presenting today on behalf of the company is founder and CEO, Wes Kaupinen. Please join me in welcoming them. Wes, the floor is yours.

Great. Thank you, Sarah. Appreciate you and Andrew on the H.C. Wainwright hosting Palvella today and the great research coverage you've provided us since we went public. I'm going to start with the name Palvella. Palvella in Finnish means to serve. The mission of our company is to serve patients that have serious rare diseases, and we exclusively focus on those diseases where there are no approved therapies. We want to build the enduring leader addressing rare skin diseases and serious vascular anomalies, and our strategy can be summed up in a word, which is first. We're built to go from zero to one. We want to develop first in disease therapies for these patients who previously have had nothing, and in doing so, create outsized value for both patients and also for investors.

The way we want to do this is through repeatably unlocking what we think could be multibillion-dollar opportunities in these markets. We do that through what's listed on the slide here, focusing on diseases where we can be first, where the biology is clear, where we're leveraging some existing human proof of concept data, oftentimes from off-label use of a molecule that provides that clinical validation, and then applying our QTORIN platform. Our QTORIN platform is our platform for reproducibly generating novel topical product candidates that can be first in disease. The two areas we're focused on can be described as high unmet need and low competitive intensity. We think these dynamics lend themselves to building an enduring leader in the space. Rare skin diseases and rare vascular malformations together make up close to 700 diseases, and over 98% of those don't have a single approved therapy.

Our team is working day in and day out to change that treatment paradigm. What we've assembled since going public, just under two years ago, is now four diseases, which we think are each in large, multibillion-dollar total addressable markets, where there's no approved therapies, and where our market research suggests that we could potentially have a first-line QTORIN therapy. Microcystic lymphatic malformations, we estimate more than 30,000 patients, cutaneous venous malformations, more than 75,000, angiokeratomas, more than 50,000 patients, and disseminated superficial actinic porokeratosis, we also believe to have more than 50,000 patients. These are large orphan markets, an order of magnitude greater than ultra-orphan markets, and we're excited about the opportunity to bring forward what could be first in disease therapies. What's new at Palvella? There is always something new at Palvella.

I'm excited to report that our NDA submission on our lead product candidate, QTORIN rapamycin for microcystic lymphatic malformations, has now been submitted. It is being reviewed by the FDA under a rolling review, which was granted to us after our pre-NDA meeting. At the top of the slide, you can see that we are investing significant capital resources and human resources behind what we anticipate will be the launch of QTORIN rapamycin in microcystic lymphatic malformations. We've added some great talents since the beginning of the year to our board. Matt Pauls, my former colleague from Insmed, Jen McDonough, who was crucial to the successful launch of VYJUVEK at Krystal Biotech, and also Kent Taylor, who previously led the sales organization while at Arcutis.

In terms of our lead product candidate and our lead indication, we believe that QTORIN rapamycin is poised to be the first FDA-approved therapy for microcystic lymphatic malformation, and our research indicates that it could be first line and establish a new standard of care in this disease. Across our phase II and phase III studies, we believe the efficacy data supports the broad applicability of this drug in both pediatric and adult patient populations across severities and in treatment-naive and treatment-experienced patients. We also anticipate long-term chronic administration of the drug. One of the benefits of QTORIN as a platform is that it enables a constant, steady flow of catalysts. We have two additional clinical stage programs, one in cutaneous venous malformations, where we expect to start a phase III study later this year. There, we have FDA's Fast Track designation.

In clinically significant angiokeratomas, we have an ongoing phase II study. Expect that to read out in the second half of next year. Also have been granted FDA's Fast Track designation. Under four, five, and six are our earlier stage programs. We expect to start a phase II study in DSAP in Q4 of this year. By the end of the year, we will also be making two announcements. One will be an announcement of a third QTORIN program. The other will be our fourth indication for QTORIN rapamycin. Very exciting time at Palvella. Our platform, which we refer to as QTORIN, is a platform for reproducibly developing novel topical product candidates that can be first in disease therapies for rare skin diseases or rare vascular malformations. Several elements to QTORIN. We start with a tunable anhydrous gel.

We attempt to get high drug loading of each molecule that we bring into the platform. We think that that high solubility can lend itself clinically to a rapid onset of therapeutic activity and a larger magnitude treatment effect. Many of the diseases which we target are deep in the skin or the dermis. So we tune our formulations to deliver drug to that cytopathophysiology. Key to our diseases, many of which are genetically based and require long-term chronic administration, is also tolerability. So with each molecule that we bring into the platform, we tune that formulation to ensure low systemic absorption of that molecule. We're able to generate, with QTORIN, molecule-specific IP. This opens up an opportunity to have long-duration composition IP claims on the formulation as well as method of use. Our first product candidate from the QTORIN platform is called QTORIN rapamycin.

We refer to that as a breakthrough innovation because we've been granted FDA's Breakthrough Therapy Designation. Over 2 years and over 80 prototypes, we landed on this final construct of QTORIN 3.9% rapamycin anhydrous gel. You can see the key innovations listed on the slide here. We're able to get high concentrations of the active into the anhydrous base. We've shown pre-clinically, we get levels deep in the dermis, which exceed the IC90, and we've been able to show clinically and pre-clinically low systemic absorption of this, which is really key for patient tolerability. What's really held back rapamycin's potential in many of these mTOR-driven skin diseases and vascular anomalies is that it's today available orally, and it's not a viable therapeutic orally because of risks of immunosuppression and other acute mTOR-related toxicities.

We hope to change that with our first FDA approval anticipated in the first half of next year in micro-LMs, but there is a much broader opportunity for our drug beyond microcystic lymphatic malformations. We believe QTORIN rapamycin can be a pipeline and a product. When you look at our commercial markets, we're going to start with microcystic lymphatic malformations, but our goal is to continually expand the label in mTOR-driven diseases, and ultimately we want to grow the pool of addressable patients by a factor of greater than 10x, as you can see represented on the slide here. Bottom of the slide are our estimated approval timelines. The way we'll do this from a regulatory perspective is through serial sNDA submissions once that first NDA has been approved, which we anticipate in the first half of next year.

Microcystic lymphatic malformations are driven by the PI3K pathway. They are monogenic somatic mutations where mTOR is upregulated. There are more than 30,000 diagnosed patients we estimate with this disease in the United States based on claims data, based on real-world occurrence studies. We see this as a large, uncontested, total addressable market. Because of the PI3K mutation and the upregulation, the hyperactivation of mTOR, you can see on the right side of the slide that you have genetically malformed lymphatic vessels protruding out through the skin. Clinically, this creates a significant burden for patients. They leak lymphatic fluid onto the skin, which puts them at persistent risk of infections such as cellulitis, and this is a disease that is proliferative and progressive in nature. Today, nothing's approved. These patients are oftentimes treated with interventional approaches such as laser surgery and sclerotherapy.

We're grateful to the FDA for the designations we've been granted, which includes Breakthrough, Fast Track, and Orphan Designation. Listed here is our phase III SELVA study. We completed a phase III study which read out in Q1 of this year. We enrolled 51 patients into that study. We're grateful to the FDA for their financial support of that study through the FDA's non-dilutive FDA Orphan Products Grants Program. The outcome of the study was positive. Our primary key secondary and all four key secondary endpoints were highly statistically significant. On our primary endpoint for patients 6 and above who completed the 24 weeks of treatment, 95% improved on the primary endpoint, and 86% were rated by clinicians as much or very much improved.

This was corroborated, the primary endpoint, by our blinded key secondary endpoint, which was a photo evaluation of the lesions, also demonstrated a highly statistically significant result. I am going to show two of the patients who were in our phase III study. Here you can see a 10-year-old boy who had previously had multiple sclerotherapy procedures, had gone through rounds of antibiotics due to infection after 24 weeks of therapy. Here you can see the height of the lesion has improved, the bleeding has improved, the vesicle appearance, and this patient continued on therapy after the 24-week efficacy evaluation period. Here is a 7-year-old girl who was in our phase III study. Also bottom of the slide, you can see had prior interventions such as laser, as well as compounded topical rapamycin, which was discontinued. Very good result for this patient at 24 weeks.

She also continued on therapy following that 24-week efficacy evaluation period. We just put out data a couple of months ago at the International Society for the Study of Vascular Anomalies, or ISSVA. This is the results of our blinded key secondary endpoint. You can see between day 56 and day 1, which was the pretreatment period, that the disease was largely stable, which you would anticipate. After patients at day 1 went on therapy, you can see numerically and statistically a very significant improvement. So great result on our key secondary endpoint, which corroborated our primary endpoint. We also presented data on the youngest patient population in our phase III study. That was the 6 to 11-year-old cohort. Two key takeaways here is that 100% of these patients were much or very much improved on the primary endpoint, and also 100% of these patients stayed on drug.