Good afternoon, everyone. Thanks for joining us on day two of Maxim's Virtual Healthcare Summit. On this chat, we have Talphera Inc. and their CEO, Vincent Angotti, and their CFO, Raffi Asadorian, with us today. Thanks for joining. It's always a pleasure to talk to you two. Just for some quick context, Talphera is a clinical stage company, phase three enrolling company, developing a product, Niyad, for the extracorporeal circuit. It's a very, very unique compound that's never been developed in the U.S., with a lot of potential. With that being said, I'll hand it over to Vincent and Raffi to give more color about themselves and kind of explain what Talphera does. Sure. Sure. So my name's Vincent Angotti. Excuse me, I'm the CEO, joined in 2017. And the company Talphera is a newly branded public company in our focuses in the acute care space, meaning medically supervised settings, hospitals, things of that nature. You typically won't ever find our products in development, eventually getting to the retail outlets at your local pharmacies, etc. We're a little unique in that our core value driver has a number of potential catalysts over the course of, we'll call it 2025, including potentially the registrational study readout, a PMA submission, etc. And it's also unique in the fact that it's got a lot of regulatory wind in its sails because of a breakthrough designation we'll talk about here shortly. So if you're looking at our company for the first time and looking at something that potentially has newsworthy events over the course of the next year, that is Talphera. Raffi? Yeah. I'm the CFO, and I've been with Vince about seven years now, and my background is a partner at PwC in their M&A group, left in 2007, and been CFO to a couple of private equity-owned and public companies. I think one thing just to add to what Vince was saying, this product that we'll get into, and this is a compound that's been used for 30 years over in Japan and South Korea. So we have a lot of data which supports not only the clinical study, but will also support commercialization of the product as well. So take that from what Raffi just said. So Niyad, the product, the active drug in the nafamostat, it's an anticoagulant, obviously. And there's two commonly used anticoagulants in the U.S., heparin and citrate, right? Or two products used for anticoagulation, heparin and citrate. Why hasn't nafamostat been used or approved in the U.S. before? And what was your rationale for developing it in the U.S.? Yeah, good question. So let's talk about Nafamostat quickly. Nafamostat is a serine protease inhibitor. And all you really need to know about that is the fact that serine protease inhibitors affect certain cascades in the body. It might affect the clotting cascade, which is where we're studying it imminently, the anti-inflammatory cascade, maybe the mucus clearing cascade, etc. The product has been available and approved for multiple indications in both South Korea and Japan for three decades, over 30 years. And those approvals have been in the anticoagulation of the extracorporeal circuit, disseminated intravascular coagulation, the acute pancreatitis. So the key takeaway of all this is the amount of data available on this product is extraordinary as it's been in the market in some major markets around the globe outside of the U.S. Our focus for this study and for the initial indication is on the anticoagulation or the prevention of clotting in the extracorporeal circuit. That's a fancy way of saying extracorporeal circuit, a circuit outside the body. And in particular, where we're showing its effect as an anticoagulant or anticlotting agent is in CRRT or continuous renal replacement therapy. So think about a dialysis circuit, but as opposed to the classic dialysis where you might have a friend, a relative that has to go to a clinic three times a week to have a substituted renal function through the dialysis center to clean their blood. These are patients in even more severe health circumstances in the ICU typically who have complete kidney shutdown, and they need that substitution for their kidney function 24 hours a day, seven days plus while they're in that ICU. And what they can't afford to have happen is for that circuit to clot, in particular the filter itself. So when the blood leaves the body, the blood naturally clots. So as it goes to an extracorporeal circuit like this 24-hour dialysis, it's going to clot in that circuit. When that clotting occurs, you get horrible dialysis and blood cleansing. You get filter clotting. And when the filter clots, you have to change the filters, which take one to two hours to change in totality. With that change, the filter goes a lot of blood with it, which may result in transfusions, etc. So the whole goal in this therapy outside of supporting that kidney function is having that exterior kidney function or circuit not clot so that you can get the best product you can when you're cleansing this blood. Got it. Nafamostat, how did Talphera get this product developed as a device instead of a drug? And are there any advantages conferred by having it developed as a device instead of a drug with the PMA pathway? Yeah, it's a great question to ask. People will always ask us twofold. Number one, why hasn't someone else brought it to the U.S. when it's been available for 30 years and has all this data as a primary agent for this particular indication in these other countries? And two, I'm a little confused. They'll say, "Help me understand. It's a drug, but it's being regulated as a device." So the unique aspect of our product is that it's a very short half-life. So it's actually injected into the circuit, the extracorporeal circuit, the extracorporeal circuit. And it does its anticoagulating effects while it's in that circuit outside the body. It often binds to the filter, which is a good thing to prevent that clotting of the filter. And then it's pretty much chewed up, for lack of a more scientific term, by plasma esterases. And it's chewed up by plasma esterases fast. The half-life is in the neighborhood of minutes. So little, if any, ever get back into the body. So if you're injecting it into the circuit, it stays and does its work in the circuit, doesn't get back into the body. The question is, is it a drug when it's not really working on the body, or is it a device? We were very fortunate in discussions with the FDA to have this classified as a device because of its use external to the body. Now, is that good or bad? I can tell you for us, it's good. There's a couple of reasons why. One is a device review is only a six-month review once you submit the PMA submission. So much shorter than your classic drug programs, which will take at least a year in review. Number two, along with this device designation, the FDA gave it breakthrough designation. And they gave it breakthrough designation for a couple of reasons we believe. One is it's a known entity outside the U.S. and has 30 years' worth of data. And number two, the currently available agents in the U.S. market have a lot of shortfalls. They have shortfalls because they get back into the body and cause continuous bleeding like heparin. Therefore, you can't use it with anyone that's got potential for systemic issues if they've just come out of surgery, if they have a brain hemorrhage. It's all contraindicated. The second option is only available off-label. And it's used at very few institutions around the country. It's called citrate. citrate is also injected into the circuit. It chelates calcium and prevents blood from clotting because it chelates that calcium. But when the blood goes back into the body, you've got calcium-less blood. You need that to survive. You need calcium to survive. It affects your whole conduction system. So they got to reinfuse calcium on the back end. Bottom line is the two currently available agents, one approved, one used off-label, have significant shortfalls. The FDA reviewed the environment and the need for an alternative to these current products and gave it that breakthrough designation as well. So we got device designation, six-month review, breakthrough designation. We have almost like a live go-between with the FDA, which is very rare to get that kind of dialogue. And number three, they awarded us only a single study to complete to get it to fruition. One study, 166 patients, our powerful serine protease inhibitor or anticoagulant for the circuit against placebo. And based off the evidence we've seen ex-U.S., you know the product works. You know placebo won't. This is an objective endpoint at 24 hours on activated clotting time. And it should perform just as it has ex-U.S. for over 30 years and achieve that primary endpoint. Vince, on that point, since the product's been available for 30 years, could you talk about what kind of patent or IP protection you have or can get for Niyad and Nafamostat? Yeah, that's another very good question. And we believe I'll give you a broader answer on this because it'll incorporate some of what you just asked us. People will say, "Well, Vince, it sounds great. You got a breakthrough designation. You got it as a device. You're getting these shortcuts. The FDA is on your side. You get regulatory wind in your sails. It's available for 30 years. All this data on it. Why you guys? Why now? Why hasn't this been brought to the U.S. before?" And we think it's for a few reasons, one of which we'll talk about on exclusivity that you just asked. One is I think as people were traditionally looking at this, especially big pharma, a $100 million-$200 million peak sales opportunity in just this extracorporeal circuit might not have weighed as much for them in their current portfolio. But for a product or a company like us with a market cap right now of $20 million or less, it's game-changing. And for our investors, it could potentially be game-changing. That's number one. Number two, most people were looking at it as a drug development program with $100 million-$200 million peak sales. They were thinking, "It's going to take me 10 years, multiple phase twos, multiple threes, and tens of millions of dollars to get across the finish line." We've got one study. We've communicated that study in totality is costing us about $7 million to get it across the finish line, and it'll be finished next year. And then finally, I think the third reason people were looking at this and maybe saying they weren't going to bring it to the U.S. is because of their concerns about exclusivity now, as to your point. And they're saying it's generic in South Korea. It's generic in Japan. Well, with our current program, the first thing we'll have is six years of data exclusivity upon a PMA approval. But we've also filed multiple method of use patents in the U.S. as it's being used a little differently, maybe with the priming of the pumps, the types of filters we use in the U.S., etc., that we believe will allow us to have protection out into the 40s for this particular product. So for all those reasons, it makes great sense for us. And I think maybe along the way, others looked at it, thought of it mostly as a drug and as a generic. And we believe we've overcome or are overcoming those potential hurdles as others looked at it. Got it. That was helpful. This is obviously an exciting time at Talphera. You're conducting your phase III NEPHRO CRRT study. For the audience, could you kind of give an overview of what the study design is and the endpoints? Yeah, it's very simple. So it's a single final registrational trial, regulated as a device, 166 total patients. That's it. Half on placebo, half on Nafamostat blinded. The primary endpoint is the mean activated clotting time over the first 24 hours. So as you can imagine, there'll be multiple readings of the activated clotting time in that first 24 hours. We'll take the mean or average measurement of that at the close of that 24 hours. And that'll be the measurement versus placebo's activated clotting time for that period of time. Now, the beauty of that is it's completely objective. There's no subjectivity. So as opposed to maybe a pain study or getting the opinion from the patient how you feel, these patients have no say in it. You take the blood, you enter it into a particular machine that measures activated clotting time. That's your measurement. Period. There won't be a placebo effect because there's nothing to have a placebo effect. Either clotting or don't clot, and a placebo is not going to affect that. It's saline solution, basically, right? So that's the design of the primary endpoint. The other efficiency of this trial is that a completer in the study occurs at 72 hours. So you get your primary endpoint at 24 hours, and you get your completer after 72 hours. So you enroll, they finish. You enroll, they finish. It's a very quick study. They can stay on longer, but once they've completed 72 hours of therapy, they're considered a completer in this particular study. So very efficient as it relates to the operations of this trial. All right. So the trial itself, I mean, can be conducted relatively quickly, but I know Talphera has had some issues or some growing pains with actually setting up the trial sites. Could you kind of comment on or talk about where you are now in terms of setting up trial sites, what's left to go, enrollment? Yeah. Yeah. So we haven't given any specifics on enrollment. What I can tell you and reiterate is we absolutely fell behind on site, what I'll call activation. Site activation is all of the logistical and paperwork pain that occurs before the site's actually able up and ready to enroll. People say, "Well, what does that mean? What does that include?" It includes budget reconciliations, it includes clinical trial agreement negotiations. It includes IRB reviews, whether they're internal or external to that particular study site, etc. And the sites, from a paperwork standpoint, often aren't on the same timeline we are. We turn our paperwork around in 24 hours- 48 hours. They can take weeks, months, up to a year. So we finally got really the first seven sites across the finish line. Five of them are up in screening and actively pursuing enrollment with enrollment now at multiple sites. And we've got two additional sites coming on board here shortly. And they are two highest potential sites of these first sites, meaning enrollment capability, the number of CRRT machines they have, the number of ICU patients they have in their facility, and those that are typically more eligible for CRRT therapy based off their feasibility studies. So we're excited about now we're actually seeing it come to fruition. We're seeing the enrollment begin. We got sites highly engaged. I was at one yesterday, one two weeks ago. Very excited about the opportunity with this product. And we're going to be bringing on more sites into next year. We can have up to a maximum of 14. And so we'll have 50% of them running here shortly. Got it. I mean, do you expect any of the sites to complete their portion of the study by year-end, seeing how it takes? Yeah. So there's no designation. It's interesting. For this particular study, there's no quota on a site. It's actually competitive enrollment. So you can enroll until the study is complete. So of the 166 patients, of course, we don't want any one site to enroll 120 of the 166. But they're actively competing to get to the study finish line as opposed to their own finish line. And we'll cut them off when the study is completed at the 166 end. Right. So obviously, you're still setting up trial sites or activating trial sites. Do you have any thoughts on when we could potentially see data at this point, or is it still just too early to say? Yeah, I think it's too early to say because the highest enrolling sites just got up and running or will be up and running in the next couple of weeks. We got the other five sites actively screening and enrolling now. And until we get a few months under our belt, look at the cadence of the high enrolling versus low enrolling, it's difficult to model, but we certainly expect this done next year, obviously. The question is when next year. And as we get that cadence better and continue to add more sites up to the 14, we can be more precise on that timing. Right. Understood. So obviously, for the current indication you're going for is CRRT. But long-term, what are all the different indications that this could be used for, expand for? Because I mean, heparin and citrate are used for more than one indication. And if Nafamostat is ultimately just a competitor to heparin and citrate, I could see it being used in other indications, whether it's approved or reimbursed, but that's maybe a different conversation. But what are all the other applications of Niyad and Nafamostat? Yeah. Well, I think, look, the obvious ones, when you take a look at our current study, that it could, no pun intended, bleed into. So for instance, we're communicating $100 million conservatively with only a peak market share of 19% in that CRRT anticoagulant world versus an on-label and off-label product. We should do very well in that particular segment of $100 million. But that $100 million could easily double if physicians or centers decide to use it in their dialysis centers outside of the hospital. So right now, heparin is the mainstay there, but call it 5%-6% of patients, it's a small percentage can't tolerate heparin for one reason or another. But because the denominator is so big, the market is so big in your chronic kidney or chronic dialysis patients to the tune of number of patients in the neighborhood on an annual basis, call it over 500,000. We just get 5%-6% share of that market. You go from $100 million-$200 million in peak sales. Now, apart from those particular uses where we're studying it today and it's approved overseas, you've also got options like acute pancreatitis, disseminated intravascular coagulation. Those would be the most obvious in the U.S. because they're already approved overseas, and you could certainly benefit from that data like we're doing in the current indication. And then because it's a serine protease inhibitor, it's got other effects such as COVID, the symptoms with COVID, etc. So there's a multitude of different ways to utilize this product. We call it a pipeline and a product. All our resources today, all our energy is against this current trial to get this completed as quickly as possible and get it across the finish line, and that's in the extracorporeal circuit. Got it. Relatively speaking, you're pretty late stage on development. Obviously, you're still conducting your phase three trials. But have you thought about or do you know what your strategy is for actual commercialization? Does Talphera plan on going alone or partnering for commercialization? Yeah. I think what's important about this is this isn't a market that requires a large commercial infrastructure. Why do I say that? 50-70 institutions based on our data in the entire country control the majority of the CRRT procedures in the country. I can tell you one thing I don't want to do. I don't want to put up a large infrastructure commercially. So in the event we decide to commercialize this on our own for one reason or another, most of it will be virtual and through meeting education and physician education outside of a sales representative. Not interested in putting that infrastructure up. I don't think it's the right infrastructure to have to do this. This would be peer-to-peer review. There's a small group of people that dictate the guidelines for use of these anticoagulants internationally. And that's how the education will be out there. Now, with that said, the reality is there's a dearth of acute care products that have longevity and real fit for unmet medical needs, I believe, on the horizon. We're one of those. My history has been exits for companies, and if it's the right thing to do for our shareholders, we would certainly entertain that as well. One thing I don't think you're going to see us do is put up any large commercial infrastructure. That's not what this product needs, and I think it could often be better combined with other products in portfolios with companies that have an acute care infrastructure on their own. Got it. We have a few minutes left. On a high level, could you talk about what Talphera's current capital situation and cash runway is? And I guess more specifically, could you also comment on where you are with your investor that previously committed capital based on certain milestones? Has any of that been amended and sort of where that situation is to the extent you can talk about it? We're rough? Yeah, sure. Yeah, so we ended Q2 with $14 million in cash. Our guidance for the year for cash OpEx was between $19 million-$20 million, right? We think we'll probably end up at the low end of that range, and the first half of the year, we spent $10 million of that. So you can do the math in terms of the cash burn for the rest of this year, and really, that is dictated by how quickly the study is accelerating in terms of enrollment, so it's a large part of that is the variable cost of the study. Importantly, as you mentioned, one of our key investors, we did a capital raise in January, and we structured it in a two-close scenario, right? The first close was at the time of signing. Second close was in total another $12 million at the time of the data announcement, effectively, right? Positive data announcement. That was initially scheduled for September 30th of this year. We just amended that to extend that to June 30th of next year, that second close. But I think it's important that our key investor, Nantahala, has remained very supportive of us and is, in fact, one of the members who is on the board of the company, and we have very good dialogue on this and supporting the company in terms of any capital needs that we have. Got it. Looks like we're coming up on time, and we'll probably talk for another 30 minutes to an hour, honestly. But Vincent Angotti, do you have any final comments or takeaways you want to leave with our audience as we wrap up? Yeah. I think, look, when you're looking at our company, we're not a well-known company. We just rebranded the company to Talphera this year, and I think as an investor, when you're looking at companies like us, you're going to assess three things. You're going to assess the clinical potential, the regulatory potential, and the commercial potential of the key asset, and for us, from a clinical perspective, we already know there's 30 years' worth of data behind this product ex-US. We've got a study design from the FDA in the U.S. that is about as straightforward as it gets versus placebo with a 24-hour primary endpoint, 72-hour completion endpoint, so from a clinical perspective, there should be no real questions. From a regulatory perspective, the fact that they gave us breakthrough designation and decided to regulate it as a device, I think tells you that they've put it in a preferential position and feel a need to get this product approved as long as it demonstrates what it's supposed to in the study. I think finally, commercially, the U.S. medical market has been dealing with a lack of products for this particular specific indication forever. heparin can't be used for patients with systemic issues of bleeding. citrate is off-label. That's really the only real choices you have. And the fact that we've got a product that is in the primary position, this particular disease state over the last 30 years, ex-U.S. should give you some confidence in its ability to produce at the approved and medical point of care. So when you look at the clinical, regulatory, and commercial aspects of our company on our core asset, I think we're in a very favorable position here moving forward. It's a story most people are just starting to learn about, but we think could be one of the great success stories moving forward over the next year or so. Got it. Once again, thanks for your time, Vincent Angotti. To our audience members, if you want to have a follow-up with Vincent Angotti and Talphera, feel free to reach out to your Maxim representative, and we'll see if we can connect you with a one-on-one. Once again, always appreciate your time, and we'll connect again in the future, hopefully very soon. Thanks, Naz. We appreciate you.