PVLA

Thank you for standing by. My name is Rochelle, and I will be your operator today. At this time, I would like to welcome everyone to the Palvella Therapeutics first quarter 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I will now turn the conference call over to Bohan Wei. Please go ahead.

Thank you, operator. Good morning, and thank you for joining the Palvella Therapeutics Q1 2026 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the investor section of our website at www.palvellatx.com. On today's call, you will first hear from Wes Kaupinen, our Founder and Chief Executive Officer, followed by Dr. David Osborne, our Chief Innovation Officer, Dr. Jeff Martini, our Chief Scientific Officer, and Matt Korenberg, our Chief Financial Officer. 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.

Now, I will turn the call over to Wes.

Thanks, Bohan. Good morning, everyone, and thank you for joining us on today's call. I am speaking to you today alongside our passionate management team, whose dedication and execution have helped bring our company to what we believe is a major inflection point. Palvella is now positioned for our first potential FDA approval and U.S. commercial launch. The first quarter of 2026 was a defining period for Palvella, not because of any single milestone, but because multiple core elements of our strategy advanced together. Decisively positive phase III results for QTORIN rapamycin and Microcystic Lymphatic Malformations, a strengthened balance sheet and shareholder base, the addition of key commercial and operational talent, and an acceleration of our U.S. launch readiness.

Most importantly, our positive phase III SELVA study for QTORIN rapamycin in Microcystic Lymphatic Malformations achieved its primary endpoint and all pre-specified key secondary and secondary endpoints with a safety and tolerability profile that we believe supports first-line standard of care positioning in this serious, chronically debilitating rare disease. The SELVA results, along with our phase II results in Microcystic Lymphatic Malformations, which supported FDA granting QTORIN rapamycin Breakthrough Therapy Designation, provide us with a robust evidence package as we move toward NDA submission later this year. On the NDA, I am pleased to share that our NDA submission remains on track for the second half of 2026. Since our last earnings call and corporate update just a few weeks ago, the FDA has granted Palvella an in-person pre-NDA meeting to be held later this quarter.

In parallel to advancing towards our NDA submission, we continue to make strong progress preparing for and investing in a potential U.S. launch. I'm pleased to share that we have added commercial and medical leadership with deep experience launching highly relevant therapies in rare diseases and skin diseases, including successful products such as VYJUVEK, ZORYVE, OPZELURA, TEPEZZA, and OXERVATE. At the same time, our pipeline progress extends well beyond Microcystic Lymphatic Malformations. In cutaneous venous malformations, we are on track to initiate a pivotal phase III study in the second half of this year. In clinically significant angiokeratomas, a superficial lymphatic malformation, earlier this week, we announced that the first patients dosed in our phase II LOTU trial. Thanks to our clinical development and clinical operations teams, this study initiated ahead of our original schedule.

In disseminated superficial actinic porokeratosis, or DSAP, we continue to see strong patient and physician interest in our planned phase II study, including having now received over 40 patient inbound inquiries expressing interest in the study. I wanted to take a moment to share a message I received on LinkedIn over the weekend from an individual living with DSAP. "Hi, Wes. I'm so excited to hear about your trials. As a DSAP sufferer, I have tried everything and nothing has worked. Really need this as I have been suffering for over 25 years." Testimonials like these reinforce the magnitude of the unmet need and strengthen my motivation and our team's motivation to advance our programs with urgency.

Importantly, we are pursuing this next phase of execution from a position of financial strength, supported by the upsized $230 million financing we completed in the first quarter with participation from high-quality existing and new investors. We continue to see significant opportunity across a large subset of serious rare skin diseases where patients and families have historically been overlooked. Therapeutic innovation has been limited, Palvella has the opportunity to step up for patients and families with targeted therapies designed to address meaningful unmet need. We were pleased to recently announce Dr. John Doux's appointment to our Board of Directors. John is a dermatologist and one of the leading voices advocating for drug development in rare, chronically debilitating skin diseases.

In John's 2015 manuscript in the Journal of Investigative Dermatology, he described how the orphan drug development model had expanded across many therapeutic areas, but had not yet meaningfully reached dermatology, a field with many serious debilitating diseases and few, if any, approved treatment options. As John anticipated, and as represented by the quote on this slide, the first wave of innovation in rare skin diseases has largely been concentrated in epidermolysis bullosa, where multiple FDA-approved therapies now exist to address this serious rare disease. At Palvella, we believe we are driving the next wave of innovation beyond epidermolysis bullosa across several serious rare skin diseases and vascular malformations.

Indications where historically patients and families have been overlooked, treatment options are limited or non-existent, and advances in understanding of the genetics and causal biology now create the opportunity to advance first-in-disease targeted therapies that can move patients from zero FDA-approved options to that first FDA-approved therapy. Palvella's strategy is unique and intentionally designed to stand apart. We are not seeking crowded indications. We are not building around incremental differentiation. Today, we are advancing four programs that fit the Palvella strategy. Notably, each has an estimated diagnosed U.S. prevalence that is meaningfully larger than the ultra-orphan threshold. We believe these clinical indications therefore not only high unmet need, but also underappreciated in terms of the size of the market opportunities they represent. Across the market research we've conducted, physicians have consistently noted 1st-line potential for a therapy with a profile similar to QTORIN rapamycin.

Our research shows that upon potential approval, more than 80% of physicians would consider QTORIN rapamycin as first-line therapy for Microcystic Lymphatic Malformations, cutaneous venous malformations, angiokeratomas, and disseminated superficial actinic porokeratosis. Specifically in Microcystic Lymphatic Malformations, which we believe will be the first approved indication for QTORIN rapamycin, 98% of physicians would consider a therapy with a profile similar to QTORIN rapamycin to be first-line. Furthermore, 96% of physicians surveyed noted advantages to targeted localized topical therapy for pediatric patients compared to oral mTOR inhibitors or oral PI3K inhibitors. Moving to our U.S. launch planning, the positive phase III SELVA results in microcystic lymphatic malformation and positive phase II TOIVA results in cutaneous venous malformations were important contributors to our ability to complete an upsized $230 million financing in February.

I am personally grateful to all the existing and new investors who participated in the financing and have entrusted our management team with their capital. Our management team and I remain committed to working tirelessly to realize the full potential of QTORIN rapamycin, the broader QTORIN platform, and the rare disease opportunities we believe Palvella is uniquely positioned to advance. The upsized financing does not change our commitment to disciplined capital allocation. It does ensure, however, that if approved, the QTORIN rapamycin launch will not be under-resourced. We intend to direct a substantial portion of the incremental proceeds raised beyond our original $150 million target toward launch success, including accelerating investments in our commercial and medical affairs build-out.

Proactively identifying and recruiting exceptional leadership to Palvella has been a key strategy for us since our founding, and I'm thrilled that Palvella has added two proven, high-integrity commercial leaders to our team in Jennifer McDonough and Kent Taylor. Prior to joining Palvella, Jen was instrumental to the pre-launch planning and successful launch of VYJUVEK, a repeat-dose topical therapy for epidermolysis bullosa, a serious rare genetic skin disease. Kent, most recently, was the Senior Vice President of Sales at Arcutis, where he led the sales organization and was a key driver behind the launch success of ZORYVE. I'm excited to work alongside Jen, Kent, and our Chief Commercial Officer, Ashley Kline, while leveraging their learnings from past launch successes with our shared goal of making QTORIN rapamycin the most successful launch yet for all of us.

With a strong capital base now in place, we are targeting a field sales force between 30-40 reps, revised from our original plan of 20-40 reps, with plans to have that field team in place prior to the PDUFA date, this consistent with industry best practices for rare disease launches. We've hired Medical Science Liaisons, or MSLs, with a clear objective of enhancing disease state awareness around the underlying genetic basis of Microcystic Lymphatic Malformations, the chronically debilitating nature of the disease, and the lifelong disease course. We are continuing to expand this MSL team on a national basis with plans to have several more MSLs start in the coming weeks and months.

We are also systematically engaging physicians at high volume treatment centers, including vascular anomaly centers, to support disease education, better understand patient flow, and prepared for a focused launch model anchored in the centers that are already caring for these patients. This, in contrast to many rare disease launches whose success is predicated on new patient identification and diagnosis. Turning to the peak sales potential for QTORIN rapamycin in Microcystic Lymphatic Malformations, we estimate peak U.S. sales potential of greater than $1 billion in Microcystic Lymphatic Malformations for QTORIN rapamycin. That estimate is grounded in several factors. First, recent field checks with high volume centers, as well as further analysis of the annual incidence data from our claims work, continue to support an estimated diagnosed prevalence of greater than 30,000 patients, many of whom are concentrated in vascular anomaly centers.

Regarding pricing, in addition to the payer testing and analog work previously performed, we believe based on the efficacy results from the phase III SELVA study, QTORIN rapamycin has the potential to support orphan pricing within our previously guided range of $100,000-$200,000 per patient per year. We also believe our current estimates do not fully capture the ways in which first-in-disease therapies can potentially expand the market over time. When a first-approved therapy becomes available in a rare disease, it often can do more than enter a market.

Diagnosis can improve, referral patterns can change, specialists can become more engaged, advocacy can increase, patients who were previously misclassified or untreated may be identified, and treatment can move upstream over time, particularly when a therapy has a favorable safety and tolerability profile, is convenient to use, and addresses a chronic disease that significantly impacts quality of life. That is why we believe QTORIN rapamycin has the potential to represent more than the first-approved therapy for microcystic LMs. If approved, QTORIN rapamycin could establish the foundation for a new standard of care for individuals living with this serious rare disease. Now, I will turn it over to David Osborne, our Chief Innovation Officer, to speak on our QTORIN platform. David?

Thank you, Wes. I'll now turn to the QTORIN platform and the role it can play in Palvella's broader strategy. Most recently I was Co-founder and Chief Technical Officer at Arcutis. I have now been with Palvella for more than six months. I want to share a few observations on what I believe makes QTORIN distinct. QTORIN is a technological foundation that allows us to pursue Palvella's mission efficiently. Topical formulation is technically difficult. Even small changes in formulation can have large effects on drug loading, stability, release, skin delivery, tolerability, and systemic exposure. QTORIN is designed to sit at a precise balance point, delivering therapeutic levels of drug into diseased skin, including the dermis, while maintaining tolerability and minimizing systemic absorption.

We think about the QTORIN platform across four core attributes, high drug loading, demonstrated safety and tolerability, dermal engagement, and durable intellectual property potential. QTORIN rapamycin is an important example. At 914 Daltons, rapamycin is a large molecule that historically would not have been expected to deliver efficiently through skin based on conventional assumptions, such as the 500 Dalton rule. QTORIN has demonstrated the ability to deliver rapamycin into the dermis, shattering my perception of the 500 Dalton rule, while also maintaining low systemic exposure and favorable tolerability. With six issued patents, additional applications pending, proprietary formulation and manufacturing know-how, and the potential for orphan drug exclusivity, we believe QTORIN rapamycin is supported by a multi-layered exclusivity position that could enable a long and durable commercial life.

Importantly, this exclusivity strategy may also create meaningful barriers to competition and potential generic entry by protecting not only the composition and use of QTORIN rapamycin, but also the specialized formulation and manufacturing capabilities required to reliably deliver rapamycin into affected skin. Since joining Palvella, I have also had the opportunity to evaluate multiple molecules within the platform. My view is that QTORIN has broad capability across a diverse range of molecules. Importantly, each new molecule can create a new opportunity for intellectual property, including formulation, composition, method of use claims, and disease-specific applications. With two positive clinical readouts now behind us, we believe this is the right time to scale additional product candidates from the platform while remaining true to Palvella's operating principles, capital efficiency for investors, and time efficiency for patients who are waiting.

I will now turn it over to Jeff to discuss our rare disease pipeline programs.

Thank you, David. I wanna spend a minute on the qualitative data generated from our patient interviews in SELVA, because this is something that's really important to Palvella, and to regulators, particularly in rare diseases where there are no approved therapies and no regulatory precedent. We previously shared the quantitative results from SELVA, where 95% of patients improved on the clinician-rated mLM-IGA. What this qualitative work does is help us understand just how meaningful these changes are for the patient. I have spent a lot of time going through the interviews and the full analytical report, and what stood out to me was just how significant the disease burden is at baseline and how meaningful the changes are as patients progress through the trial. At baseline, patients describe dealing with constant bleeding and leaking and the impact that has on normal day-to-day functioning.

They talked about needing bandages and changing clothes throughout the day. When asked what animal best represents their disease, one child described their disease, in her own words, as fire ants biting on the skin. A second child described their microLM as a hippopotamus and stated, "'Cause they're so big all the time. The spots keep getting inflamed and big like that." I was pleased that in reviewing these patient profiles, both of those patients were among the 95% who experienced improvement while on therapy. At week 24, what patients describe lines up very closely with what we measured in the trial. Across the interviews, you hear consistent themes around bleeding stopping, reduced leakage, and lesions looking more like normal skin.

You can see a couple of the quotes here, including the patient here who said her lesion doesn't bleed anymore, and now it just looks like normal skin. Ultimately, we see clear alignment between patients and the trial endpoints, that gives us confidence that these effects are both statistically significant and clinically meaningful. That's been our goal with this program, to deliver what we consider transformational efficacy and a well-tolerated therapy for these patients. These findings also strengthen the overall risk-benefit narrative, this qualitative work will be included as part of our planned NDA. As we advance towards NDA submission, we believe QTORIN rapamycin is supported by a regulatory profile that is meaningfully different from a traditional new chemical entity NDA or a BLA for cell or gene therapies.

We are pursuing the 505(b)(2) regulatory pathway, given oral rapamycin is an already FDA-approved drug with substantial scientific and clinical knowledge. This pathway allows Palvella to leverage existing data on rapamycin, including the established systemic safety profile. The program is supported by a growing body of real-world evidence and clinical experience with rapamycin in lymphatic malformations, which helps validate the therapeutic rationale for mTOR inhibition in the underlying disease biology. Our development program is designed to support a traditional approval, not an accelerated approval based on surrogate biomarkers. The SELVA phase III study evaluated clinical endpoints, including physician-assessed disease improvement and patient-reported outcomes, rather than relying on biomarker-based evidence of activities. QTORIN rapamycin is supported by two prospective clinical studies demonstrating consistent, large magnitude, clinically meaningful results with a favorable tolerability profile.

As I highlighted on the previous slide, the qualitative patient interview data further reinforce how meaningful these treatment benefits are from both the patient and caregiver perspective. Importantly, when I shared the SELVA data with the FDA's Office of Orphan Products Development, which is providing non-dilutive funding for the program, they were pleased to hear that we reached a pivotal milestone. They indicated they are interested in participating in our pre-NDA FDA meeting, which will occur this quarter. We believe QTORIN rapamycin has a compelling regulatory profile, the ability to leverage a well-understood molecule through the 505(b)(2) pathway, combined with the innovation of Palvella's dermal-targeted formulation and a disease-specific clinical program designed to support traditional approval. Turning to medical affairs. We've strengthened our leadership and are building a strong presence as we move through 2026.

As shown, a key focus will be ISSVA, where we're the platinum sponsor. That includes a late breaker presentation by Dr. Jim Treat from the Children's Hospital of Philadelphia of our SELVA and TOIVA data, as well as a scientific symposium with study investigators. We're also sponsoring other important meetings, including the Epidermal Differentiation Disorders Symposium in Chicago. As we look ahead, these engagements are an important opportunity for our medical affairs team to educate clinicians on our diseases and the SELVA and TOIVA data as we prepare for NDA submission in the second half of this year and move towards commercialization. Overall, this reflects our focus on engaging the clinical community, increasing disease state awareness, and laying the groundwork for a potential launch.

Cutaneous venous malformation is our second program for QTORIN rapamycin, and one where we have a strong conviction as we advance towards phase III, especially given how closely aligned with what we've already demonstrated in Microcystic Lymphatic Malformations. Like the rest of our portfolio, this is a serious rare disease with no FDA-approved therapies. Biology here is well understood, with mutations that ultimately lead to upregulated mTOR signaling, which is directly aligned with QTORIN rapamycin's mechanism of action and consistent with what we see in the mLM. Clinically, these patients experience malformed veins in the skin, which can lead to bleeding, ulceration, and functional impairment. Today, treatment is largely procedural, things like laser therapy, or sometimes use of off-label use of systemic therapies, including oral rapamycin. There's a clear need for a targeted, well-tolerated topical approach. What's particularly compelling to me is the strength of the phase II data.

As we announced last December, 73% of patients showed improvement, well exceeding our target of 30%. We are planning to present additional findings at ISSVA later this month. We're also seeing strong signals of physician adoption, with market research showing that 86% of physicians would consider QTORIN rapamycin as a first-line therapy. Our clinical and regulatory team is advancing phase III planning, with trial initiation expected in the second half of 2026. Our third indication, clinically significant angiokeratomas, is one we announced last year and is progressing ahead of plan. One of the key reasons we selected clinically significant angiokeratomas is how closely they align with Microcystic Lymphatic Malformations. From a disease biology standpoint, there's a strong connection between the two.

They share a number of key features, including superficial dermal involvement, a lymphatic basis, and clinical manifestations such as bleeding and functional impairment. In addition to the mechanistic rationale, there is also real-world evidence supporting targeted therapy with rapamycin in these lesions. We believe this represents a very, very logical indication for our QTORIN rapamycin pipeline in a product strategy, leveraging what we've demonstrated in Microcystic Lymphatic Malformations into a closely related disease with a similar underlying biology and no approved therapies. The QTORIN rapamycin program for the treatment of clinically significant angiokeratomas has strong momentum, and as I just mentioned, a clear scientific rationale given its close mechanistic and clinical adjacency to Microcystic Lymphatic Malformations. Since we announced last year, we have achieved a significant and regulatory and clinical milestones. On the regulatory side, we were awarded Fast Track Designation, which is an important milestone for this program.

On the clinical side, thanks to our best-in-class clinical team, we've initiated the phase II LOTU study and already dosing multiple patients. This is a single-arm, baseline-controlled study evaluating once-daily QTORIN rapamycin in patients with moderate to severe clinically significant angiokeratomas. We expect data from LOTU in the second half of 2027. I also want to highlight some market research we conducted to better understand how QTORIN rapamycin may fit into clinical practice. In a survey of 50 physicians who treat clinically significant angiokeratomas, 96% indicated they would incorporate QTORIN rapamycin into their practice for this patient population. Our fourth program in development is QTORIN pitavastatin for DSAP, or disseminated superficial actinic porokeratosis, a program that I am particularly energized about. DSAP is well-characterized genetic disease driven by mutations in the mevalonate pathway with a clear and validated pathophysiology. DSAP fits squarely within our disciplined disease selection framework.

It's a serious, rare, proliferative, and progressive disease, commercially attractive with more than 50,000 diagnosed patients and has no FDA-approved therapies. Clinically, patients develop multiple persistent lesions on sun-exposed areas like the arms and legs. These lesions are visible, burdensome, and increase over time with a risk of progression to squamous cell carcinoma. What has been particularly striking is the level of interest we're seeing from both patients and investigators. We've received over 40 inbound unsolicited patient messages for the planned phase II study, which really underscores both the disease burden and the urgency for new treatment options. As one potential patient shared with our clinical team, she describes the lifelong nature of the disease and the frustration of repeatedly having these precancerous lesions treated with procedures like freezing.

As reflected in the quotes on this slide, patients are actively seeking new, effective treatment options and are highly motivated to participate in clinical trials. The patients describe being desperate for any treatment. We're also seeing strong engagement from clinicians who recognize the lack of effective therapies and the need for a targeted approach. We're building on this momentum with a study initiation on track for the second half of 2026. To bring it all together, QTORIN pitavastatin fits very cleanly within our overall pipeline strategy and shares key characteristics with QTORIN rapamycin, addressing a serious, rare disease with no FDA-approved therapies and doing so on the basis of a strong scientific rationale supported by real-world evidence. Upon potential FDA approval, QTORIN pitavastatin stands to potentially be the first FDA-approved therapy while entering a commercially attractive, multi-billion dollar market with more than 50,000 patients in the United States.

Overall, we see DSAP as a highly aligned and compelling next program and a strong example of how we're continuing to expand the QTORIN platform and unlock new opportunities across rare diseases. With David's leadership, we're well-positioned to continue advancing this platform and realizing its full potential. We believe there's significant runway ahead, and we're just getting started. With that, I'll turn it over to Matt.

Thanks, Jeff. Starting with the financials, Palvella ended Q1 with $261.9 million in cash and cash equivalents, including our short-term investments in U.S. Treasuries. Following our positive phase III SELVA data and oversubscribed $230 million equity offering in February, we believe we now have sufficient cash to last well into a potential commercial launch. With current assumptions for a first half 2027 approval and launch, and using current consensus analyst estimates for revenue, we would expect our cash to last through cash flow break-even. Our approach to value creation is enabled in part by our capital-efficient operating model.

Palvella's core strategy of focusing on first-in-disease therapies targeting serious rare diseases with no FDA-approved products, and leveraging our QTORIN platform paired with existing molecules, which we believe allows Palvella to go from concept to phase II human data on less than $10 million of capital. This strategy allows robust build-out of the pipeline while remaining capital efficient. Also factored into our cash runway is a robust, fully funded spend on our commercial efforts. Having personally been involved in every conversation with investors during the financing, I'd like to thank everyone for providing Palvella the necessary capital to fully support our Chief Commercial Officer, Ashley Kline, and her team in our launch readiness efforts. Our successful financing now allows us the flexibility to pull forward commercial spending and invest in the opportunities we see to maximize launch success.

In addition to the longer-term funding support for commercialization and building a robust pipeline of new programs, we have a catalyst-rich period over the remainder of 2026 and early 2027. The first group of catalysts on the list surround our lead program for Microcystic Lymphatic Malformations, including data presentations and regulatory progress. Following our phase III SELVA trial, which exceeded our internal upside expectations and exhibited patient results like the before and after pictures included here on the slide, we are on track for an NDA submission in the second half of 2026, with the potential of FDA approval targeted for the first half of 2027. One important step on this path is our recently granted pre-NDA meeting that will occur later this quarter.

The meeting will be in person with the FDA. Our management team and KOLs are eager to align with the FDA on an efficient path forward to filing the NDA for our Breakthrough Therapy-designated program. Turning to the remainder of our disease programs, we have a robust roster of catalyst events in 2026 across the portfolio, all fueled by our QTORIN platform. In cutaneous venous malformations, we announced our positive phase II data in December 2025. After unveiling the data that clearly exceeded our threshold for moving forward to phase III, we plan to initiate our phase III study in the second half of the year. I'll also note that we've submitted our Breakthrough Therapy Designation application. We expect a decision in the middle of the year.

For clinically significant angiokeratomas, we have received FDA's Fast Track Designation, and just this week we announced that we had dosed our first patients in our phase II LOTU trial well ahead of our original schedule. The trial includes a 12-week safety and efficacy period similar to our phase II TOIVA trial in cVM and our previous phase II trial in mLM. We expect results for LOTU in the second half of 2027. In DSAP, we've developed our QTORIN pitavastatin formulation, filed our IP, and expect to initiate a phase II study in the second half of 2026. We also plan to expand the pipeline with two additional diseases in 2026. First, in the second half of 2026, we'll announce a new QTORIN product candidate, our third product candidate from our QTORIN platform.

Similar to a QTORIN rapamycin, we envision our new QTORIN product as a pipeline and a product with many potential indications. Second, we'll add a fourth indication for QTORIN rapamycin, which we expect to announce in the second half of this year. Both of these new diseases will be in markets with commercially attractive dynamics consistent with Palvella's core strategy focused on the serious rare skin diseases and vascular malformations with no FDA-approved therapies. A robust pipeline, including our lead program in Microcystic Lymphatic Malformations, positions Palvella for a catalyst-rich 2026, followed by the potential for our first FDA approval in the first half of 2027. I'll turn the call back over to Wes now for some additional comments prior to opening the line for questions.

Thanks, Matt. What makes Palvella stand apart is the combination of what we believe is a repeatable rare disease development model and a team capable of executing it from concept through commercialization. We are focused on serious underserved diseases that have historically been viewed as difficult or even untreatable. Diseases with no FDA-approved therapies, meaningful patient burden, and what we believe can become large, underappreciated commercial opportunities with limited competitive intensity. We identify diseases where we can be first in disease, where the biology is well-defined, and where existing human experience or proof of concept data can potentially help de-risk development and support the potential path to approval. We then apply the QTORIN platform to engineer product candidates designed for the affected tissue and pursue efficient clinical and regulatory pathways intended to reduce both the time and the capital required to reach potential FDA approval and commercialization.

The model only matters if you have the right team to execute it. We believe Palvella now has the team in place across all key disciplines, from the discovery of new product opportunities through U.S. commercialization and every critical discipline in between. In our view, that combination of our rare disease development model, our QTORIN platform, and our execution capability is what truly sets Palvella apart. With positive phase III data now in hand, development underway across four serious rare disease indications and plans to expand our pipeline to six indications by year-end, a strengthened balance sheet and a passionate team united by a shared commitment of serving patients, we have never been more motivated to deliver on Palvella's mission.

Our goal remains clear to serve patients with serious rare skin diseases and vascular malformations for which there are no FDA-approved therapies, while building Palvella into the leading rare disease biopharmaceutical company in this field. We believe the first quarter moved us significantly closer to the realization of this vision. Thank you for your continued support. With that operator, we will now open the call for questions.

At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Josh Schimmer with Cantor. Please go ahead.

Thanks for taking the questions. I have three quick ones, if I may. First, how do you think about which programs or indications will require a placebo arm versus which may be similar for clinical trials? Number two, you've been quite active in introducing new indications and new programs this year. What do you expect your cadence to be for those going forward? As you consider that, are there any limitations to the QTORIN platform in terms of the types of compounds that it will work with? To what extent does that narrow down the prospects relative to all of the compounded drugs that are currently being used in dermatology? Thank you.

Good morning, Josh. Thanks for the questions. Your first question on which programs require a placebo arm, you know, that's gonna be disease-specific. As we've seen in Microcystic Lymphatic Malformations, that's a disease where there is no spontaneous regression. Our view, and one that we believe we're aligned with the FDA on, is that allows or enables a single-arm study to be a reliable way to determine efficacy. We think we demonstrated that not only with the phase III SELVA results, but also the phase II results in Microcystic Lymphatic Malformations. I appreciate you asking the question because one of the differences between some of the diseases that we're pursuing is that they are genetically based. They are proliferative and progressive. Several of them are vascular malformations and not traditional skin diseases.

Traditional skin diseases oftentimes do have spontaneous improvement and therefore placebo controlled trials are required. To answer your question is, it's very disease specific. For several of our diseases, there's well-known pathophysiology. They're genetically based, they're progressive, they're proliferative, and therefore we think single-arm trials can be a reliable way to evaluate efficacy. In terms of new indications on a going forward basis, there really are few limitations to how many indications that we view longer term that we'd like to have on label for QTORIN rapamycin. Our internal analysis as well as third-party researchers have identified many different mTOR-driven skin diseases. We're in three of those today.

I'll just note in microcystic LM, cutaneous VM, and angiokeratomas, we have active clinical programs underway. Each of those are Fast Track Designations. As we look out to 2027, you can expect that the Palvella team will continue to expand upon the pipeline, particularly new product candidates from the QTORIN platform. Having David on our team really enables the capability that we did not have prior to David's joining the company. In terms of the limitations of the QTORIN platform, at this point in time, we've tested over 15 molecules in the QTORIN platform. We've seen very few limitations. That's been a diverse range of molecules in terms of molecular weight, molecular structure. I'll pass it over to David to comment on that question as well, Josh.

Hi, Josh. Good to hear your voice. As Wes said, so far, the 15 compounds that I've personally put into QTORIN, they've all dissolved to high degrees. They've given us the flexibility of maximizing thermodynamic driving force. For those nine or so compounds that we've taken into in vitro skin permeation testing, QTORIN has delivered each of the molecules. I think it would be, you know, foolhardy to say that QTORIN will work for every molecule that's ever been synthesized in the pharmaceutical industry, but I haven't found the one yet that it doesn't work for. We'll keep you posted.

All right. You got them all. Thanks very much. Appreciate it.

Your next question comes from the line of Ritu Baral with TD Cowen. Please go ahead.

Hi team, this is Josh Fleishman on the call for Ritu. Thanks for taking our question. Congrats on initiating the phase II LOTU trial in angiokeratomas. Curious, how are the global assessment endpoints and disease severity scales both similar to and potentially different from those used in SELVA and TOIVA? What are preliminary timelines to enrollment completion? Do these sites have considerable overlap with those in SELVA and TOIVA? As a quick follow-up, please, you mentioned the in-person pre-NDA meeting and mLM is on track for later this quarter. What are your goals going into this meeting? What would be a good outcome? What would be a great outcome? Thank you.

Great, Josh. Thank you for being on. We'll take each of those questions. In terms of the endpoint construction for the phase II study, we have endpoints that are very similar to the microcystic lymphatic malformation clinical program in that we have global assessment scales from both a physician and a patient perspective that are dynamic change instruments measuring any change between end of treatment and baseline. We also have static severity scales. One of the areas we probably don't emphasize enough is that when you're in these rare diseases where nothing is approved, there is a lot of innovation that is done around endpoints. It's not just innovating on formulation and executing your clinical trials, but you really have to design endpoints that measure that clinically meaningful burdens of disease to the patient.

Similar endpoints between microcystic LM and what you see with angiokeratomas. Jeff, did you wanna fill in any color there for Josh?

Yeah, just to add, you know, the purpose of the phase II study is really to inform future clinical trial designs. We have no statistical hierarchy in the endpoints. This is very similar to what we did with the phase II mLM study and our phase II TOIVA study. What we'll ultimately do is determine what endpoints are sensitive to change, what are meaningful to patients, and that will inform future clinical trial designs.

Josh, in terms of your question, around timeline to top-line readout. Top-line readout, we anticipate for the LOTU trial to be in the second half of 2027, second half 2027. That implies that we'll complete enrollment in the first half of 2027. Very important for all Palvella trials is we emphasize selecting the right patients for the study. We'll continue to do that with our clinical operations team. We believe they're very skilled at that, as evidenced by the results we've shown in the SELVA and TOIVA studies. On the overlap, you're right. Yes, there is some overlap between the investigators that have been involved in the mLM cVM programs with the investigators who are involved or will be involved in the LOTU trial.

We also do have some new sites, that are higher volume dermatology centers. This is an indication where some patients are in vascular anomaly centers, but there's also, from what we've seen, very significant patient loads in high volume, dermatology centers. In terms of the goal, of the pre-NDA meeting, you know, what is good, what is great, our objective is to align with the FDA on an expedited, submission plan. We have breakthrough and fast track designation. We'll step the FDA through our phase III results in what will be an in-person meeting. We are very pleased that the FDA granted us an in-person meeting.

Presenting those results will not only be the team that's on this call, including Jeff, but we also plan to have some of our key opinion leaders present there to talk about the absence of therapies that they have today for these patients and how QTORIN rapamycin in our two clinical studies consistently demonstrated safety and efficacy. We wanna stay on track, Josh, for a second half NDA submission that would keep us in line with our objective of a first half 2027 approval. That is our goal. We'll also be exploring in that meeting things, features, from Fast Track and Breakthrough like rolling submission. Hopefully we'll emerge post-receipt of FDA minutes from that meeting with some clarity around whether a rolling submission is the best path forward.

Awesome. Thank you guys so much.

Your next question comes from the line of Annabel Samimy with Stifel. Please go ahead.

Hi. Thanks for taking my question for the good detail around the programs. I'm understanding that you have some decent enrollment of patients from SELVA into an extension trial. I think it was relatively high. I guess I'm wondering to what extent will that be needed for the filing, or will you be able to supplement the filing with the data? Should we be expecting any data coming from that extension on an ongoing basis? Separately, congrats on dosing the first patient in angiokeratomas. Bigger picture here, there's clearly a lot more indications that you can add to rapamycin. Do you have analogs at this point regarding how many indications you might need to study before you could potentially get a broader label for mTOR-mediated diseases?

Yeah, I'll get back in the queue. Thanks.

Hey, Annabel. Good morning, and thanks for being on. In terms of your question around our open label extension study and whether there's any data from that study that will be required for filing, there are no rate-limiting items in terms of the data from that open label extension study that would preclude or slow down our NDA filing. That open label extension study is primarily a safety study, so we're able to collect additional safety data beyond the 24 weeks, which is already a study with a long duration of dosing. We're pleased not only with the rollover rate that we saw and previously reported, which was of the 44 patients who completed the study, 43 of those rolled over.

We're also pleased with the retention rate of the patients as they're moving through that open label extension. In terms of the data from that study, as I mentioned, that is primarily a safety study, we look forward to making that data available at the appropriate point in time at future medical congresses. As we think about analogs and how we might be able to one day have a label that is specific to mTOR-mediated diseases, we're not the first company, clearly, to pursue this pipeline in a product strategy. Certainly companies like Regeneron with DUPIXENT, AbbVie with HUMIRA, these are aspirational type comps that we have, whereas we identify diseases that are clearly driven by the mTOR pathway.

We see it within our best interest, the patient's best interest, to run those clinical studies and add those clinical indications to the label. What that allows us to do from a commercial perspective is to sort of perpetually grow, the size of the total addressable market for that first drug product from the QTORIN platform.

Great. Thank you. Your next question comes from the line of Gaurav Maini with LifeSci Capital. Please go ahead.

Hey, good morning, everyone. Congrats on the continued progress here. Just a couple from me. Number one, you know, from the phase II TOIVA cVM trial, you know, there's a nice curve in the deck where you see the percent of participants with at least a two-point improvement on overall cVM-IGA. And this curve, you know, looks like it still has room to improve. Kinda similar dynamic that we saw with the mLM data as well. You know, still need to finalize the phase III cVM trial, of course, but fair to kind of assume that a longer duration than the week 12 phase II is being considered for the phase III.

A follow-up to a prior question asked, will there also be a photograph assessment as well as patient interviews included as tested measures in the angiokeratoma phase II? Thank you.

Great. Thanks for those questions, Gaurav. In terms of your question around longer duration of dosing on TOIVA, as you're aware, patients are being evaluated beyond the 12-week endpoint that we reported top line on in December of 2025, where we saw 73% of patients improve in a disease where there's no FDA-approved therapies. Those patients are being followed for an additional 12 weeks. We do expect to have that data finalized soon, and we look forward to reporting on that data. I think our analysis of that data, Gaurav, is gonna dictate whether a phase III study is gonna be 12 weeks or something longer than 12 weeks.

You know, as you recall from the microcystic LM program and our phase II study, we showed a high magnitude treatment effect, and all 12 patients were much or very much improved at 12 weeks. An analysis of the data suggested that we follow patients longer. We ultimately ran that out to 24 weeks. The data will govern the endpoint for phase III, whether that's 12 weeks or something longer than 12 weeks. I'll pass it over to Jeff to respond to the second part of your question as to whether a photograph-based analysis will be included in a future study.

Gaurav, thanks for the question. Photos and interviews are critical to some of these programs that we develop. Clearly in the Microcystic Lymphatic Malformations and the cutaneous venous malformations program, we saw clear photographic evidence of treatment benefit, which aligned very well with the patient interviews. We will be including both of those as part of the angiokeratomas and potentially future studies. I think that the qualitative data that I went through today, you know, is really meaningful to read through those quotes. Certainly FDA is really likes to have that data as well.

Awesome. Thank you, guys.

Thanks, Gaurav.

Your next question comes from the line of Graig Suvannavejh with Mizuho. Please go ahead.

Hey, everybody. This is Ryan on today for Graig. Thanks for taking our question. Congrats on launching the new program in angiokeratomas. We already know about the overlap in etiology between mLMs and cVMs. The literature on angiokeratomas is not quite as robust, but there's a growing consensus that it has similar drivers. Just wondering, to what extent do you see read-through from the other QTORIN rapamycin programs, particularly mLMs, and what are the key similarities or differences when compared with angiokeratomas? As a follow-up, can you give us a sense of how you're determining whether or not angiokeratomas are clinically significant? Is it primarily based on the location or severity of the lesions? What are the primary qualitative, quantitative criteria for inclusion, and how are you setting up the patient screening criteria to maximize? Thank you.

Great, Ryan. Thanks for being on. I'll take the first part of your question and then pass it over to Jeff for your remaining question. From our perspective, there is shared biology here, aberrant lymphatic biology. Clearly, VEGF and the mTOR pathway, we believe, based on all the scientific evidence, are dysregulated in angiokeratomas. As Jeff highlighted in the slide deck, we really view this as a scientific adjacency to Microcystic Lymphatic Malformations. In the ISSVA classification, both mLM and angiokeratomas are classified as isolated lymphatic malformations. You know, we think it's really important to run the study and then let the data answer the question in terms of what our effect sizes may be in this indication.

Certainly we're encouraged by not only the scientific underpinnings of the disease, which is similar to microLM, but some of that real-world evidence that's growing in nature suggesting that rapamycin may have a very important role in treating this disease. I'll pass it over to Jeff to answer the back half of your questions.

Yeah. Thank you. For the clinically significant component, this is really important, is that we find patients who are at least moderate or worse of disease severity to enter the trial, and that's what we consider clinically significant, those that would require a topical therapy intervention. That is important for two reasons. I think, you know, number one, it's important to have patients who are severe and need this therapy. Also from a statistical or mathematical perspective, we want patients who are severe enough that they would move on the scales that we've entered the trial. We have similar criteria for having the patients enter the study that we used as in SELVA because that worked really well for the SELVA trial.

We have a global assessment where the patients need to be assessed by the clinicians as at least moderate or worse severity. What we've also done is we've identified four key individual signs that, in interviewing, patients and clinicians are relevant to the disease. They need to be moderate or worse on at least two of those four individual signs. That gives us patients who are we believe, will respond on therapy and show on these scales that they're having a treatment benefit.

Your next question comes from the line of.

Thanks so much.

Thanks, Ryan.

Your next question comes from the line of Whitney Ijem with Canaccord Genuity. Please go ahead.

Hey, guys. Thanks for taking the questions. Just going back to the commercial prep for mLM, just talking about the concentration of the patients at the top 50% of the centers. Can you In the engagement, I guess, you're having there, can you help us understand kind of or give us a sense of what you're learning so far as part understanding that you're kind of early in the process. Just as we think about, I think, kind of the 50% of patient of the prevalent pool, sorry, that are concentrated in those centers. Are you That was an estimate. Are you kind of confirming that estimate as you're engaging with these centers?

What are you learning about the patients as far as, you know, the % currently on some kind of treatment, you know, % accessible to you guys as far as the topical route? Just any color there on learning so far.

Yeah. Thanks for the questions, Whitney. First thing I'll say, it's just great to have a commercial and medical team on board that is spending 100% of their time engaging with physicians, with centers, extracting these key learnings that you've referred to here. Just a quick review of the numbers and what we've learned from the claims analysis. At the top end of the funnel, we estimate more than 30,000 diagnosed patients. That estimate comes from published real-world analyses studies as well as claims and also now with the field checks that we very consistently have been doing over the last several weeks and months.

The concentration you referenced of 50%, is we estimate that about half the patients or 15,000 patients are in about 400 centers, and many of those centers are already established vascular anomaly centers, most oftentimes associated with pediatric academic centers. We're spending a lot of time engaging that top 400, but also there's efforts underway to engage with the second and third tiers of the market, so that we're preparing for a launch to address not just the 15,000 in the top 50% but also the rest of the market as well. From a learnings perspective, our team does a great job of writing up their key learnings after each and every physician engagement so that we're learning together. We have a very collaborative culture here at Palvella.

I would say, the number one learning is there is a recognition in all these interactions that this is a serious, chronically debilitating disease and that current treatment approaches are not getting the job done for patients. So that recognition is one that we'll continue to reinforce with our scientific team, Jeff, and our medical team, through publications, through the presence of MSLs. And I'd say that's the major learning that we have on that front. The second key learning, I mentioned the field checks, is that there are what we would consider for a rare disease, very significant patient volumes at these centers.

One of the consistent write-ups that we do when we engage these centers is we try to understand how many patients are currently within that center being managed by physicians and being offered some sort of non-approved therapy or procedural intervention. I referenced earlier this is not an ultra-orphan disease. Those field checks have strengthened our confidence that there's more than 30,000 diagnosed patients in the U.S. Those are, I'd say, the two key learnings. There'll be many more as we continue to get out there. Really what we're doing is consistent with best practices in rare disease launch, which is having those touchpoints ahead of time and really driving that disease state awareness.

Got it. Super helpful. Just second question from me on as we think about platform expansion, and the new candidate you'll be announcing later this year, I guess should we be thinking about 505(b)(2) as a key part of the strategy, or are kind of novel proprietary molecules also being explored?

Thanks for the question. The answer is we can do both with QTORIN, both novel molecules and 505(b)(2) molecules. Matt has not nicely outlined in the past that the 505(b)(2) model can provide some time and cost efficiencies. For the patient at the end of the day, we think what they're interested in is a therapy that gives them a high magnitude treatment benefit and significantly improves their quality of life.

To the extent we can do that with systemic molecules that are not indicated for a specific rare genetic skin disease, where we can leverage QTORIN to develop a molecule that is on target and in the tissue while creating a lot of new and durable IP, we think that's a repeatable model while also selectively considering novel molecules for the platform.

Great. Thanks very much.

Your next question comes from the line of Ryan Deschner with Raymond James. Please go ahead.

Good morning. Thanks for the question, and congrats on a very productive 2026 so far. Can you talk a little bit more about your strategy to identify underdiagnosed or misdiagnosed patient populations within the mLM space? Can you also give us just a little more color on the types of data you might be presenting at ISSVA, particularly for the SELVA study, in terms of patient interviews, imaging, anything like that? Thanks.

Great. On the underdiagnosed or misdiagnosed patients, I'll point you to our BEYOND mLM disease state awareness campaign. While oftentimes Microcystic Lymphatic Malformations present with a distinct clinical presentation, specifically these fluid-filled or blood-filled vesicles, because they're rare in nature, and some physicians have not seen high patient loads, they can be misdiagnosed or underdiagnosed. Appreciate the question, Ryan. I mean, that is the basis for launching a disease state awareness campaign, which we did in conjunction with five advocacy groups. That's also the basis for having your medical science liaison team out in the field driving that disease state awareness. In terms of the underdiagnosis and the misdiagnosis, I just wanna comment that commercially our success is not reliant upon finding large pools of underdiagnosed or misdiagnosed patients.

What we're finding from those field checks as well as our claims analysis, is that there's more than 30,000 diagnosed patients that are already within these centers. Certainly part of our strategy is to try to help the underdiagnosed or misdiagnosed. That's core, and consistent to our mission. Our commercial success is really focused on those patients who are diagnosed within these treatment centers, who eventually upon a potential FDA approval, we're able to get on QTORIN rapamycin therapy as soon as possible.

Thanks, Ryan. I'll take the ISSVA question. Really excited about the ISSVA presentation. This is the first time that the ISSVA data or the SELVA data will be presented at a medical conference. It'll be led by Jim Treat from Children's Hospital of Philadelphia. ISSVA is a great conference. I would invite everyone who's in the Philadelphia area to attend. It's really an incredible medical conference to learn more about these vascular malformations. Jim is finalizing the presentation now. You know, he's gonna be presenting the top-line results as well as some new data, including some individual patient-level data that hasn't been disclosed. Really the audience here is the medical community, as this is the first time it's presented to them.

Got it. Thank you very much.

Your next question comes from the line of Catherine Novack with Jones. Please go ahead.

Hi. Thanks for taking my question. Just, I guess a quick one on thinking how you're thinking about the prescriber base. You know, the value proposition from the derm perspective seems fairly straightforward, just given the safety profile. You know, what are you hearing, and you'll probably learn much more at ISSVA, but from prescribers who are seeing patients at these vascular malformation centers, you know, patients who might have mixed disease or more severe disease, and, you know, how are these types of prescribers thinking about getting on board with a topical product versus, you know, something systemic?

Hey, Catherine. Thanks for the question. We've done market research on that exact question, where we've looked at what percentage of physicians would consider QTORIN rapamycin as a first-line therapy or a product with a profile similar to QTORIN rapamycin. That number was 98%. We asked as a follow-up in that market research, what % of your patients would you prescribe the drug to? In our market research, they indicated 75%. We broke it out to your question, in terms of VACs and non-VACs to try to tease out whether there would be any difference in prescribing behavior, based on the institution affiliation of that particular physician. We didn't see in that data any difference. I think one was 73% and the other was 77%.

We think independent of institutional affiliation, there's high enthusiasm to not only potentially prescribe this first line upon FDA approval, but prescribe it to a large percent of patients within VACs, but also outside of VACs. We also had additional data where we tested specifically for pediatric patients. One thing we haven't talked about on this call is that, you know, to Whitney's question, as we've gone out and gathered key learnings, now that targeted therapies will hopefully be available upon the first FDA approval of QTORIN rapamycin, there is a movement towards earlier intervention.

The genetics behind this disease was discovered about 10 years ago. Because microcystic LMs are recognized as a proliferative and progressive disease, the KOLs who we work closely with, who have been involved in the trial, have talked about early intervention to try to alter the natural history of the disease. We were able to test in our market research in pediatric patients specifically, whether there were advantages to a local targeted topical therapy versus a systemic approach. 96% of physicians noted the advantages to a localized topical approach versus a systemic approach. The systemic approaches, they're available today. They're sometimes used. Usually, they're used for internal disease.

There are challenges not only to the toxicity profile of those systemic approaches, but also whether those drugs are able to bio-distribute into the skin to levels that would be therapeutic for the patient. Put that all together, we believe upon a potential FDA approval, we have a very strong, compelling scientific and medical case for QTORIN and rapamycin to be first line and standard of care for patients with microcystic LMs.

Great. Thanks so much.

Your next question comes from the line of Kaveri Pohlman with Clear Street. Please go ahead.

Hi, team. This is William for Kaveri. Thanks for taking our questions and congrats on all the progress. Two for us. First, rapamycin is supported by a substantial body of literature demonstrating efficacy, yet but its clinical use has been constrained by the absence of well-defined treatment guidelines. To what extent can Keytruda and rapamycin address these limitations, and how effectively can these historical challenges be leveraged to position Keytruda and rapamycin within the treatment guide, paradigm? With advances in molecular genetic increasingly elucidating the pathways driving this disease, is there an opportunity to pursue a pivotal basket trial across the PI3K-driven rare dermatologic conditions to support a broader label rather than conducting the indication-specific studies? We believe Novartis have employed a similar strategy with alpelisib in the PIK3CA-related overgrowth spectrum. Thank you.

Wayne, thanks for those questions. Agree with you. There is a substantial body of evidence that's real-world in nature. It's large, it's growing. There's also a recent paper by Dr. Bryan Sisk, one of our collaborators, that notes the tremendous variability between institution, the use of systemic rapamycin for malformations. We would view the potential FDA approval QTORIN and rapamycin as a unifying moment 'cause we have tested the same drug product in rapamycin with a dosing schedule, with a consistent 3.9% concentration formulated in QTORIN. We believe that that could be the basis for treatment guidelines that highlight QTORIN and rapamycin as that frontline and standard of care treatment.

A lot of opportunity there, based on what we know about all the limitations of systemic approaches. In terms of a basket trial comment, and then open it up to Jeff Martini. Certainly, that's something that we always wanna be open-minded to. One of the limitations of basket trials, of course, is inviting in additional heterogeneity across multiple different diseases. Sometimes there's slight nuances in the endpoints that you wanna deploy for one indication versus another indication. I think what we've shown Microcystic Lymphatic Malformations is a very efficient clinical and regulatory strategy, a 12-patient phase II study, a 51-patient phase III study, and now we're on the cusp of an NDA submission.

We'll always consider all different types of trials, be open-minded with our collaborators like yourself, as well as key opinion leaders and our medical scientific and advisory board, in terms of how we think about the quickest way to get our drugs to patients. Jeff?

Yeah. Thank you. I, you know, I'll just add that, you know, in general, you know, we are open to many different trial designs, but what's worked really well for us is to be very specific and targeted and efficient in our clinical trial design and execution. You know, we have a world-class clinical operations team who finds the right patients, and this allows us to see large magnitude treatment effects and allows us to efficiently develop these therapies. That's something that will probably stay true. Two, we have very clear genetics in these diseases and ultimately our goal is to do these smaller studies that inform the design of future clinical trials.

Thank you. Very helpful.

Your next question comes from the line of Danielle Brill with Truist Securities. Please go ahead.

Hi, team. Thanks for taking our questions. This is Trinh for Danielle. Just have a question on Quoin Pharmaceuticals recently announced planning to initiate several trials for their QRX-009 topical rapamycin, and they previously also suggested that FDA indicated a single phase III trial might be sufficient for the other asset, 003. Just curious about if you have any thoughts on that. Thank you.

Yeah. Thanks for the question. Don't have any thoughts on the single phase III trial for the, for the other asset that you referenced. Believe that's in another rare skin disease. The other program you referenced in terms of their exploratory work with rapamycin, we understand that they're looking at microneedle technologies and other topical approaches, and that program is in preclinical development. It's something we'll monitor. For us, efforts, resources, mind share, and passion is focused on advancing our drug, QTORIN rapamycin, for patients with microcystic LM, cVMs, angiokeratomas, charging towards the clinic in the DSAP program with QTORIN pitavastatin. That's where our efforts will continue to focus.

Thank you.

Your final question comes from the line of Jeet Mukherjee with BTIG. Please go ahead.

Thank you for taking the question. You know, you spoke to the high level of patient interest for your DSAP study, but can you speak to patient enthusiasm for the LOTU trial? Subsequently, what change on the AK, IGA, or PGIC scales would you deem differentiated or meaningful here in this view as we look ahead to that data in 2027? Thanks.

Hi, Jeet. Thanks a lot for being on. I'll comment and then ask Jeff to comment on the LOTU trial, including some of the modifications that we've made on the endpoints. We've consistently heard leading into the trial from KOLs that there is a need for a targeted topical therapy for patients with angiokeratomas. Many of these angiokeratomas present, for example, with patients that have angiokeratomas of Fordyce in the genitals. We've seen some of the patients who have either enrolled in the study or have been screened to enroll in the study, and these patients that are not amenable to things like electrocautery, surgery, other invasive procedural approaches.

In terms of the patient numbers that we're seeing in terms of our site feasibility work, this is a disease where there are also a lot of patients for a rare disease. We believe KOL enthusiasm is high, patient enthusiasm is high, and I think the ability to move that trial forward and dose multiple patients ahead of schedule is a nice marker for the enthusiasm from both the physician community and the patients.

One of the things I've talked a lot about is the mechanism and scientific rationale for selecting this program. You know, when we were doing our diligence on selecting clinically significant angiokeratomas, the other piece was really the tremendous clinician demand for a targeted topical therapy here. That was, you know, part of the equation that we used to select clinically significant angiokeratomas. Since that time, I've had the opportunity to train all the clinicians that entered the study. It's really important to have a very hands-on approach like we do with our clinical team here.

You know, when I'm training the clinicians, I'll say anecdotally that the enthusiasm that I heard when doing the diligence for the program is as high, if not higher, from the clinicians who are part of our clinical trial. It's really encouraging. I think that's one of the reasons our trial is ahead of plan. There's just a lot of demand for it. As far as endpoints go, you know, what we do with these trials is because no one has ever run a clinically significant angiokeratoma trial before. That's the precedence and the innovation that we have here that Wes talked about earlier. We conducted patient and clinician interviews prior to starting the program. We selected endpoints that we think are relevant for the disease.

Ultimately, what we wanna test in this clinical trial is how these endpoints move on the scale with QTORIN rapamycin, if that's something we can move forward to phase III. We'll be looking for across all the endpoints. We'll be doing the qualitative interviews. We'll be doing the analysis of photographs. Ultimately, the decision to move forward will be based on the data that we generate in phase II.

Thank you.

Thanks, Jeet.

Your final question comes from the line of Dev Prasad with Lucid Capital Markets. Please go ahead.

Hi, Dean. Congrats on the caution. I have a sorry for the progress. I have a couple of quick one. One is, following the European patent on QTORIN and rapamycin, how are you thinking about that approach for ex-U.S. market to expand QTORIN and rapamycin? The second one is for DSAP program. You mentioned, phase II to initiate for second half. Can you narrow that down to early versus late? Are there any remaining gating items? Thank you.

Thanks for the question. Dev, we see significant market opportunities outside the United States for QTORIN rapamycin. Post the phase III data, we've been pleased by some of the inbound interest that we've received from potential licensing partners in territories such as Japan as well as Europe. We'll do what every biotech company we believe should do, which is explore launching alone outside the United States or doing a licensing deal. At this point in time, our preference is likely to maintain our key focus on our core competency, which is the U.S. market, and eventually, post FDA approval, intensify partnering discussions in those territories. For now, our global rights are intact, we think that that's a very attractive profile for the company.

In terms of DSAP, we will at some point narrow the guidance. What we're doing now is we're doing all the key IND-enabling work, such as toxicology work, where we have the results of a short-term toxicology study which were favorable. So we're completing those required elements to open the IND and dose that first patient in DSAP. Thanks for the question.

Great. Thank you.

That ends our Q&A session. I will now turn the call back over to Wes Kaupinen for closing remarks. Please go ahead.

Great. Thank you, operator, and thank you to everyone who continues to believe in Palvella's mission to serve rare disease patients. Our vision to become the leading rare disease biopharmaceutical company in this field and our strategy of pursuing first-in-disease therapies where there are no FDA-approved options. We remain relentlessly focused on execution and deeply committed to delivering for patients, physicians, and for our shareholders. With that, I'll conclude today's call. Thanks, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Palvella Therapeutics full-year 2025 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Bohan Wei, Vice President of Corporate Development. Please go ahead.

Thank you, operator. Good morning, and thank you for joining the Palvella Therapeutics full-year 2025 financial results and corporate update call. As a reminder, our press release detailing today's announcements can be found in the investor section of our website at www.palvellatx.com. On today's call, you will first hear from Wes 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.

Now, I will turn the call over to Wes.

Thanks, Bohan. 2025 was a landmark year for Palvella Therapeutics. One that brings us closer to recognizing our vision of building the leading rare disease biopharmaceutical company focused on developing and commercializing first-in-disease therapies for serious rare skin diseases and vascular malformations. Thanks to the efforts of the Palvella team, our scientific and clinical collaborators, our patient advocacy partners, and the rare disease patients we serve, we achieved several value-creating milestones, including, number one, announcing positive phase II data in cutaneous venous malformations. Data which support the advancement of that program toward a near-term Breakthrough Therapy designation submission to FDA and a pivotal phase III study. Number two, surpassing our target enrollment in our phase III SELVA study in microcystic lymphatic malformations. This based on physician and patient demand, as well as strong execution from our clinical operations team.

Number three, expanding our rare disease pipeline with the addition of two new programs, QTORIN rapamycin for clinically significant angiokeratomas, and QTORIN pitavastatin for porokeratosis. Number four, adding top talent to our senior leadership team, including Dr. David Osborne as our Chief Innovation Officer, and Ashley Kline as our Chief Commercial Officer. Number five, extending our collaboration with the FDA, and specifically FDA's Office of Orphan Products Development, who in 2025 supported our SELVA phase III study with additional non-dilutive funding. Number six, expanding our IP portfolio with two U.S. patents for QTORIN rapamycin, strengthening our multilayered exclusivity strategy. Number seven, capping 2025 by securing FDA's Fast Track designation in clinically significant angiokeratomas. The third Palvella program, which has been granted Fast Track designation.

This momentum, the result of focus and disciplined execution by the Palvella team, has carried into 2026, where earlier this year we announced positive phase III data from our SELVA study in microcystic lymphatic malformations. Results, which we believe position QTORIN rapamycin, if approved, to be a first-line standard-of-care therapy for individuals with microcystic lymphatic malformations. With a significantly strengthened balance sheet as the result of a $230 million financing announced earlier this quarter, Palvella is now well-positioned to pursue a near-term FDA approval of QTORIN rapamycin in microcystic lymphatic malformations, drive a successful standalone U.S. launch, and concurrently advance the rest of our rare disease pipeline. What makes Palvella stand apart from other companies begins with our corporate strategy of pursuing development and commercialization in serious rare diseases with no FDA-approved therapies.

We believe that these diseases are unambiguously high unmet medical need. We intentionally focus on diseases where we are the pioneers in advancing therapies targeted to be first in disease for patients and families suffering from these rare diseases. Our goal is to apply our proprietary QTORIN platform, our internal product development engine for reproducibly developing novel topical product candidates in a focused subset of rare skin diseases and vascular malformations which have clear biology and also the existence of human proof-of-concept data which serves to validate a specific molecular approach.

Evidence of this development strategy is microcystic lymphatic malformations, a well-defined disease caused by PI3K mutation where mTOR hyperactivation is driving the disease progression and in which rapamycin has a large growing foundation of real-world human clinical evidence upon which Palvella can build. We are taking a similar approach in cutaneous venous malformations, angiokeratomas, and disseminated superficial actinic porokeratosis, and we anticipate by year-end the addition of two new diseases to our pipeline, bringing the number of diseases we aim to treat to six. Overall, by taking the approach outlined on this slide, our aim is to reduce the time and capital required to achieve FDA approvals while entering uncontested markets that have more favorable commercial dynamics when compared to more traditional and more competitive markets.

With approximately 600 rare skin diseases, 98% of which do not have a single approved therapy, we see ample opportunity to grow our pipeline and repeat our focused rare disease development model. I want to take you through how our recent execution translates into multiple anticipated high-impact milestones over the next 12+ months. We enter 2026 exceptionally well-positioned across both our lead program and our expanding pipeline. Starting with microcystic lymphatic malformations, we have positive phase III data in hand and are on track for NDA submission in the second half of 2026, with a potential FDA approval targeted for the first half of 2027.

In cutaneous venous malformations, following positive phase II data, we expect a Breakthrough Therapy designation decision in the second quarter of this year and plan to initiate a phase III study in the second half of this year. For clinically significant angiokeratomas, we have received FDA's Fast Track designation and are advancing towards initiation of our phase II study ahead of schedule, with the phase II initiation now expected in the second quarter of this year versus our previous guidance of second half 2026. In DSAP, we have developed our QTORIN pitavastatin formulation, filed IP, and we expect to initiate a phase II study in the second half of 2026.

More broadly, we continue to expand the QTORIN pipeline with a fourth indication for QTORIN rapamycin expected to be announced in the second half of this year and a new QTORIN product candidate, our third, also expected to be announced in the second half of this year. This positions Palvella for a catalyst-rich period, including the potential for our first FDA approval, which we believe could create a streamlined and efficient pathway for indication expansion into other mTOR-driven skin diseases through planned supplemental NDA submissions. Let me now turn to our lead program, QTORIN rapamycin for microcystic lymphatic malformations. We believe microcystic lymphatic malformations represent a significant multibillion-dollar commercial opportunity based on an estimated population of more than 30,000 diagnosed patients in the U.S. according to claims analysis and published literature.

Based on the phase III SELVA results, the results from our phase II study, and the market research we've conducted, we believe QTORIN rapamycin, upon achieving potential FDA approval, is positioned to be first-line and standard-of-care therapy for microcystic lymphatic malformations, directly targeting the underlying disease biology through inhibition of the causative mTOR pathway and doing so in the pathogenic skin tissue of interest. Clinically, we have demonstrated a robust treatment effect across two prospective trials, along with a favorable safety and tolerability profile supporting efficacy and potential for long-term use in this patient population. With positive phase III data now in hand, we are on track for an NDA submission in the second half of 2026 and, if approved, potential FDA approval in the first half of 2027. I'd like to highlight our phase III SELVA data, which we announced last month.

Our team established base and upside cases grounded in what clinical study results could translate to meaningful improvement in patients' lives while supporting an attractive commercial opportunity. SELVA exceeded our predefined upside case across every dimension. On the primary endpoint, the microcystic lymphatic malformation Investigator Global Assessment, we observed a highly statistically significant outcome, well above our upside case. Importantly, 95% of patients completing the efficacy evaluation period improved, and 86% were much improved or very much improved. The blinded key secondary endpoint, the mLM-MCSS, was also highly statistically significant. From a safety perspective, QTORIN rapamycin was well-tolerated in both children and adults, supporting potential for chronic dosing across all ages. Importantly, retention in the study was exceptionally strong, with 98% of week 24 completers electing to roll into the extension period, supporting durability and continued treatment benefit.

SELVA exceeded what we at Palvella had hoped to see, not just on efficacy, but on durability and safety. Ultimately, these results, we believe, translate into meaningful impact for patients of all ages diagnosed with microcystic lymphatic malformations. Turning to our regulatory progress, our planned NDA submission is on track. We recently submitted our pre-NDA meeting request to FDA's Division of Dermatology and Dentistry, with the pre-NDA meeting anticipated in the second quarter of 2026. Notably, we are pursuing a traditional full FDA approval based on clinical endpoints, which differs from an accelerated approval, which relies upon surrogate biomarkers that are likely to reasonably predict clinical outcomes. Providing a strong foundation for our NDA submission is both our phase III SELVA data, which were highly statistically significant and clinically meaningful, as well as the results from our phase II study.

Our interactions with physician key opinion leaders in this disease and our understanding of the progressive nature of the disease suggest that early therapeutic intervention could alter the natural history of the disease. Therefore, it is our intent to pursue a label which includes patients aged three and above. We have previously been granted Breakthrough Therapy, Fast Track, and Orphan Drug designations, and we plan to pursue a 505(b)(2) pathway, which may enable us to leverage existing FDA findings and the established body of evidence for rapamycin as part of a more streamlined development and regulatory strategy. We continue to collaborate closely with the FDA's Office of Orphan Products Development, which in addition to providing non-dilutive funding, intend to participate in our anticipated pre-NDA meeting with the review division in the second quarter of this year.

These elements support a path towards NDA submission in the second half of 2026 and potential for FDA approval in first half of 2027. Turning to the commercial opportunity, we believe QTORIN rapamycin is well-positioned for a highly attractive orphan launch. Microcystic lymphatic malformations represent a serious rare disease with high unmet medical need and currently no FDA-approved therapies available to physicians and patients. There is already a large diagnosed patient population with a meaningful percentage of patients concentrated in specialized vascular anomaly centers. We have also consistently experienced strong enthusiasm from key opinion leaders about the potential for QTORIN rapamycin, many of whom participated in our phase III and phase II studies, and we believe this enthusiasm could contribute to a strong uptake curve following potential FDA approval.

From a pricing and reimbursement perspective, we anticipate orphan pricing consistent with our previous guidance of $100,000-$200,000 per patient per year. All of this is supported by positive phase III data, which indicate a favorable risk-benefit profile, particularly compared to the scarcity of therapeutic options available to these patients today, reinforcing the potential for QTORIN rapamycin to become a first-line standard-of-care therapy for individuals with microcystic lymphatic malformations. We have made significant progress in building the foundation for a potential first half 2027 commercial launch. Starting with leadership, we have assembled a highly experienced commercial team. Last year, Ashley Kline joined Palvella as Chief Commercial Officer, and we recently added Jennifer McDonough to lead market access and patient services.

Ashley is a commercial veteran in the rare disease space, having previously led the launch of OXERVATE, a novel topical therapy for neurotrophic keratitis and a therapy which now generates greater than $1 billion in US sales a few short years after launch. Last week, we welcomed Jennifer McDonough to the Palvella team. Jennifer is widely regarded as a leading executive in rare disease market access and patient services. Her contributions were critical to the success of the launch of VYJUVEK from Krystal Biotech, a first-in-disease topical therapy for dystrophic epidermolysis bullosa, a serious rare genetic skin disease. In parallel, we are building out our medical affairs capabilities with the hiring of medical science liaisons already underway and active participation across the key medical meetings you see listed on the slide here. Importantly, we are also taking a robust approach to patient identification and market development.

We estimate more than 30,000 diagnosed patients in the U.S. and importantly, approximately 1,500 new patients diagnosed each year. We are concentrating our initial efforts on the highest value centers and treating physicians with a specific focus on approximately 400 high volume centers that we estimate represent approximately 50% of the diagnosed population in the U.S. Overall, we've recruited top talent and are making significant investments to ensure we are well-positioned for a successful U.S. launch of QTORIN rapamycin in microcystic lymphatic malformations. Moving now to our QTORIN rapamycin for cutaneous venous malformations program. Let me begin with some comments on the commercial opportunity in this disease.

Venous malformations are the most common type of vascular malformation, and cutaneous venous malformations represent a large and underappreciated market opportunity, with an estimated more than 75,000 diagnosed patients in the U.S. and currently no FDA-approved therapies. We reported positive phase II data in December 2025, with statistically significant results across several clinician and patient-reported outcomes. Specifically, 73% of patients demonstrated improvement on the cVM Investigators' Global Assessment, with 67% rated as much improved or very much improved at week 12. This suggests both a high responder rate and a large magnitude treatment benefit in this initial phase II study. We are now swiftly advancing towards a phase III study with study design alignment expected mid-2026 and trial initiation planned for the second half of the year. In parallel, we are finalizing a Breakthrough Therapy designation application.

This follows a constructive preliminary advice meeting with the FDA earlier this quarter, in which our collaborator, Dr. Denise Adams, a prominent pediatric hematologist-oncologist from Children's Hospital of Philadelphia, described the unmet need in cutaneous venous malformations as well as her experience in the phase II study. In addition to the phase II data, our breakthrough application will include both patient qualitative interviews capturing the meaningfulness of the therapy to their daily lives, and a letter of support from the investigators who participated in the phase II study. We also importantly continue to generate additional data through the ongoing phase II treatment extension period, with plans to present that data set at a medical meeting later this year.

Overall, our QTORIN rapamycin program in cutaneous venous malformations represents a compelling opportunity to expand into a larger second indication for QTORIN rapamycin, and assuming initial pre-approval in microcystic lymphatic malformations, potentially advance through a streamlined supplemental NDA pathway. I will now hand the call over to Jeff, who will talk about our additional pipeline programs. Jeff?

Thank you, Wes. Our clinically significant angiokeratomas program represents our third clinical indication for the QTORIN rapamycin program. Our phase II trial is ahead of schedule, with initiation anticipated in the second quarter. Angiokeratomas are a superficial lymphatic malformation and share overlapping clinical and pathological features with microcystic lymphatic malformations, including similar lesion morphology, superficial vascular involvement, and aberrant lymphatic biology. These lesions are associated with increased mTOR signaling and do not spontaneously regress. This provides a strong mechanistic and clinical rationale for targeting this indication with QTORIN rapamycin. As Wes mentioned earlier in the presentation, and consistent with our strategy of leveraging existing human data, we are able to build on published proof of concept data, including multiple case reports demonstrating preliminary clinical benefit from off-label rapamycin use.

Clinically significant angiokeratomas represents a large underserved indication with more than 50,000 diagnosed patients in the U.S., no FDA-approved therapies, and the potential to expand QTORIN rapamycin into this indication through a supplemental NDA. QTORIN rapamycin is a pipeline in a product. With our lead program in microcystic lymphatic malformations preparing for NDA submission and launch, our cutaneous venous malformations program advancing towards phase III, and our clinically significant angiokeratomas program with a phase II study planned and ahead of schedule. Across these initial three indications, we are already addressing a meaningful patient population in the United States, but there is a significant opportunity for expansion. We are actively evaluating additional mTOR-driven diseases that meet our highly selective criteria and expect to continue to expand our addressable patient population over time.

This strategy enables efficient development by leveraging the same molecule and platform and targeting shared disease-driving biology across multiple indications. We are expanding our pipeline beyond rapamycin with QTORIN pitavastatin in disseminated superficial actinic porokeratosis or DSAP, which represents our second QTORIN program. DSAP is a chronic, progressive, and precancerous skin disease that presents with numerous expanding lesions on sun-exposed areas, causing significant symptoms including burning, itching, and discomfort, and carrying a risk of malignant transformation. Despite this, there are no FDA-approved therapies, and existing treatment approaches are invasive, temporary, and do not address the underlying disease biology. QTORIN pitavastatin is a pathogenesis-directed therapy targeting the mevalonate pathway with the potential to become first-line and standard of care for patients with DSAP.

Our approach is supported by emerging scientific evidence, including our recent publication in Experimental Dermatology, highlighting real-world statin use and treatment gaps, and our presentation at the American Academy of Dermatology demonstrating the burden of disease. Following our public announcement of the program, we are seeing strong inbound patient interest as we prepare for our phase II study, which remains on track for initiation in the second half of 2026. QTORIN pitavastatin for DSAP highlights our disciplined approach to selecting diseases that meet our highly selective criteria, combined with the QTORIN platform's ability to efficiently develop pathogenesis-directed therapies. Before turning the call over to Matt, I'd like to briefly highlight the strength of the QTORIN platform as a new product development engine. We follow a disease-first R&D strategy, spending significant time identifying diseases that meet our highly selective criteria and are well suited for targeted topical therapies.

We have now validated the platform with two positive clinical readouts, including our phase III SELVA trial and our phase II TOIVA results. We are leveraging QTORIN to scale our pipeline, rapidly advancing and testing multiple molecules in a time and capital efficient manner. We also plan to pursue FDA platform technology designation following the anticipated approval of QTORIN rapamycin. As we look ahead, we expect to announce one new QTORIN program and one additional QTORIN rapamycin indication later this year. QTORIN represents a validated and scalable engine to deliver first-in-disease therapies that we believe can make a meaningful difference for patients and create long-term value for shareholders. With that, I'll turn the call over to Matt to review our financial results.

Thanks, Jeff. Turning to the financials, Palvella ended Q4 with $58 million in cash and cash equivalents as of December 31st, 2025. Following our positive phase III SELVA data, we completed an oversubscribed $230 million public offering in February 2026, bringing in $215.8 million in net proceeds. I want to emphasize what this financing means for the company. With pro forma cash of $274 million, this financing fundamentally strengthens our balance sheet and eliminates financing overhang as we enter the most important execution period in Palvella's history. With this cash, and even before considering any potential revenue, we're now fully funded to advance our microcystic lymphatic malformations program through an NDA filing, an FDA approval, and if approved, a U.S. commercial launch.

For QTORIN rapamycin cutaneous venous malformations, our runway allows us to execute a phase III program and subsequently complete an NDA filing. For our QTORIN pipeline, we have the runway to support multiple phase II data readouts from our existing and future pipeline programs. The quality of investor participation in this financing was exceptional, and we believe it reflects the growing institutional conviction in both the SELVA data and our broader pipeline strategy. With this capital base and our innovative operating model that prioritizes capital efficiency, the Palvella team can now focus entirely on execution without the distraction of the near-term financing needs. I'll now turn the call back over to Wes for closing remarks and to open the line for questions. Wes?

Thanks, Matt. 2025 was an exceptional year for Palvella. Now our focus is squarely on execution across our deep pipeline of rare disease programs. We are closer to our first FDA approval than we have ever been, and the entire Palvella team is committed to making that a reality for the patients and families who have been waiting. With that, operator, we will open the line for questions.

As a reminder, if you'd like to ask a question at this time, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from Josh Schimmer with Cantor.

Great. Thanks so much for taking the questions. For the QTORIN rapamycin platform, what are the gating steps for each new indication that you choose to pursue? And given the broad number of settings where there is actual data for topical rapamycin, how many different indications do you ultimately expect you might have on the label? Thank you.

Great, Josh. Thank you for being on, and thanks for the question. For the platform, which was your first question, we really start with the disease. We profile diseases that one, have no FDA-approved therapies. Number two, we look for diseases where there's low competitive intensity in the development pipeline. That allows us to be first. That's the goal, to be on a trajectory to having that first approved therapy. We also carefully evaluate from a scientific perspective whether there is clear biology in that particular disease, well-defined biology. We do prefer to go in diseases, as Jeff nicely highlighted earlier, where there is existing human proof of concept data. Sometimes that can be from off-label use, like we've seen with the use of rapamycin and lymphatic malformations.

We think that having some of that data in hand, human proof of concept data, help to validate a particular molecular approach. We then apply the QTORIN platform, of course, the goal being to be on target and in tissue for these localized skin diseases. On your second question, in terms of how many indications we can eventually have for QTORIN rapamycin, there's a long list. There's three publications that I think nicely summarize all the different diseases, skin diseases, where the mTOR pathway is implicated. Jeff can speak to some of those diseases, but there's well over a dozen diseases where scientists, clinicians, researchers, geneticists have implicated a strong role for the mTOR pathway. Jeff?

Yeah, Josh, thanks for the question. You know, just to kind of reiterate what Wes said, you know, we take a really disease-first approach, rely heavily on our medical and scientific advisory board, both for understanding the disease unmet need as well as the biological rationale, and then find experts in the diseases. Because these are rare diseases, we have a lot of good collaboration with experts in these fields, which typically haven't seen much scientific or medical research. We collaborate very closely with the KOLs and then ultimately pick the diseases that have the highest probability of success, biggest unmet need, and also we do have a commercial evaluation as well.

Maybe just to round that out, Josh, the three papers that I referenced, the authors are Swarbrick, Fogel, and Tatiana Lapa, which look at the involvement of the mTOR pathway in skin diseases to maybe quantify your question. In terms of size of population, we think the addressable size of the patient population to be treated with QTORIN rapamycin once you add microLM, cVM, angiokeratomas, and several of the other diseases that we've identified is in the hundreds of thousands.

Thanks very much.

Our next question comes from Ritu Baral with TD Cowen.

Good morning, everyone. Thanks for taking my question. Wes, will the phase II extension data or at least some of the phase II extension data from the cVM study be part of your Breakthrough application for that indication to FDA? Can you give us any more detail as to when that extension data will be presented and sort of like the parameters of that extension data? Then I've got a follow-up on commercial.

Great. Hey, Ritu. Good morning, and thanks for the questions. The phase II extension data is not yet finalized, and we are proceeding with our Breakthrough Therapy designation application. Our Breakthrough Therapy designation application will include the phase II data, where we saw 67% of patients either achieve the ratings of much improved or very much improved. We're also gonna include interviews, patient qualitative interviews, where the patients, in their own words as part of a qualitative interview sub-study that we incorporated, describe their experience in the trial. We think that that's really important to augment the statistically significant data with data that supports clinically meaningful. Finally, our investigators have really rallied here to put together a letter of support for the Breakthrough Therapy designation application.

This is something that our Chief Operating Officer, Kathy Goin, has spearheaded with Denise Adams and several others. That's gonna be a key part of the breakthrough application. That letter will cover not only their view about the preliminary clinical evidence package, but also their view around future study designs, which is gonna be part of our discussion with the FDA after the breakthrough decision.

Understood. Then on the commercial side for mLM, Wes, you mentioned, and this is an Ashley question too, I guess. You mentioned there's the diagnosed pool for mLM. What are your up-to-the-minute estimates for that? And then you mentioned that those patients were under care in a concentrated way at vascular anomaly clinics. Do you have the number of those clinics and what percentage of the diagnosed pool they cover? And then right now, maybe more high level, what are your plans as far as patient support services, coverage support services, for you know, adjunct to the price range that you mentioned? Thanks.

Yeah, thanks, Ritu. Our latest estimates, and this is based on convergence of evidence from a real-world occurrence study that was published by Jack Gallagher, that's available in Orphanet, which projects that there's approximately 80,000 patients in the United States with a cutaneous manifestation of their microcystic lymphatic malformations. We've also done claims work, which suggests a range around 45,000-95,000 diagnosed patients that are within clinical medicine in the U.S. We look at all that evidence. This is a dynamic process at Palvella. You're always evaluating claims data. We estimate, perhaps conservatively, that there's greater than 30,000 diagnosed patients in the United States with microcystic lymphatic malformations that could be addressable, if approved, with QTORIN rapamycin.

When you break down the claims data, we break it down into high volume centers, many of which, Ritu, are these vascular anomaly centers. If you take the 400 highest volume centers, that constitutes about 15,000 patients in the United States. That really is our primary focus. We fortunately have great relationships with many of these vascular anomaly centers as a result of work by our clinical operations teams and the phase II and phase III studies that we've run. In terms of patient services for our U.S. launch, Ashley has a lot of experience in this area, having launched OXERVATE, one of the most successful orphan drug launches of the past decade. We're also thrilled to have recruited Jennifer McDonough.

We've closely followed and rooted for VYJUVEK's success from Krystal Biotech in a really rare and devastating disease there. What we want to do is work with a specialty pharmacy and a patient services hub that have a proven track record in the rare disease space, particularly when you think about microcystic LMs, where you're very likely to see chronic dosing with QTORIN rapamycin, so that we're not only treating the existing clinical signs, but that we're also preventing that disease recurrence, which is a major issue with the disease today.

Great. Thank you.

Our next question comes from Annabel Samimy with Stifel.

Hi. Thanks for taking my question. Great progress. You know, we've been getting questions from investors about FDA unpredictability. This is not an accelerated approval, clearly, and you've noted very specifically that it's not surrogate endpoints, but clinical endpoints. There is still some concern about a one-arm study. How have these interactions been with FDA? Are you still comfortable with that design? I guess looking at cVM, what are you planning as far as phase III design and how might that change with breakthrough designation? Should we have any read through to the mLM receptivity to one-arm trials? It's, I guess, it's a multilayered question, but really it's about FDA unpredictability these days.

Sure. Thanks, Annabel, for the questions. Prior to the commencement of the phase III study, we believe we were aligned and continue to be aligned with the FDA on that single-arm, phase III baseline controlled study where the patient serves as their own control. I think it's important to note here a couple things. Number one, this is a disease where there is documented no spontaneous regression of the disease. Therefore, that can enable a single-arm design to serve as a reliable design for the purposes of an efficacy assessment, particularly, when you employ clinical outcomes like we have, which we think are objective in nature, where the physician is scoring the patient's lesion at the end of treatment and comparing that to a baseline photo.

We shared several photos in our phase III SELVA release, and we think they clearly indicate clinical improvement in lesions that would otherwise progress to a worsened state. Our interactions, we've had interactions with both the review division, the derm division, as well as the Office of Orphan Products Development. Since the phase III SELVA study concluded, we presented them with the data. I would describe those interactions as constructive, and we are proceeding towards a pre-NDA meeting that's been requested at this point in time, and we expect that to occur in phase II. I think that there are certain elements of the FDA at a macro level that we're really encouraged by. I think we've all been following Dr.

Makary advocating for a common sense approach, describing that the new default approach to generating substantial evidence of effectiveness is one trial, not two, and he's consistently been advocating for expediting therapies to patients with rare diseases. FDA came out in Q4 of last year talking about accommodating real-world evidence to help inform regulatory decision making. From Palvella's perspective, we believe the FDA much prefers approved drugs to off-label or compounded drugs. We think all of those sort of macro trends certainly work in our favor. From a cVM perspective, it's gonna be a two-step process to land on a study design. Step one is gonna be determining whether or not we are Breakthrough designated.

That application is gonna go in imminently with the various elements that I mentioned earlier. Whether or not we're granted Breakthrough, we're gonna meet with the FDA on the other side of that decision. I think our KOLs will be strongly advocating for flexibility for the phase III study design. There's a range of potential outcomes here. In our interactions with folks like Denise Adams at CHOP, I think they would much prefer all patients having the opportunity to go on drug, given that it's well accepted that sirolimus does have activity in vascular malformations, and specifically venous malformations. There could be issues around clinical equipoise or ethics as well that we have to work through collaboratively with the FDA. That said, there is also the potential for a placebo-controlled design.

Our strategy is to first determine whether or not we're breakthrough designated, and then on the other side of that, align with the FDA on a study design that works for patients, physicians, FDA, and for Palvella as well.

Okay, great. Thank you.

Our next question comes from Ryan Ries with Mizuho.

Hi, this is Ryan on for today. I was just wondering if you guys could talk a little bit about the plans for the commercial launch of QTORIN rapamycin and mLMs beyond some of the key new hires, like any organizational changes, upgrades, or timelines on sales force or expanding KOLs. Any plans for upcoming medical meetings. Any kind of you're sort of prepping. Thank you.

Yeah. Thanks, Ryan, for those questions. I'm a firm believer in trying to recruit the best talent in the world to Palvella. Ultimately, I think that's gonna help dictate our success for patients and shareholders. I think we've really assembled incredible talent between Ashley Kline as Chief Commercial Officer, Jennifer McDonough, and our build-out of our medical affairs team. Ryan, in terms of your questions of changes or upgrades, I would characterize where we are as additions and investments that we're making. We are building out a medical science liaison team. We expect that to be somewhere between five and 10 MSLs. They will be very active with these Top 400 targets that I mentioned earlier.

They will also have a major presence at medical meetings. We expect to hire, and it was noted in our corporate deck, a head of sales in the near term. We're gonna bring that hire on a bit early to start to really think through how to shape an attractive uptake curve for QTORIN rapamycin, similar to what we saw with companies like the ones I've been involved with, such as Insmed, Ashley with OXERVATE and Jen McDonough with Krystal Biotech. That's gonna be really key. We've put forward a provisional range of 20-40 sales reps.

I think with the capital raise having been completed, and we're very grateful to the investors who participated for their support, we're more likely to go to the upper end of that 20-40 range versus the lower end of that range. Key in all this will be quality, Ryan. One of the hiring processes that we've implemented here is that the senior executive team is very involved in the hiring at all levels. We wanna make sure we bring in the right people that are high performers. We're a performance-driven culture here, but also ones who are authentically patient-oriented and really feel a strong desire to serve patients with rare diseases.

Great. Thanks, Wes.

Our next question comes from Sam Slutsky with LifeSci Capital.

Hey, good morning. Thanks for taking the questions. So obviously, great to see the angiokeratoma phase II initiation moves up to Q2. Could you just remind us on the key endpoints that you'll be looking at here and the magnitude of effect that would be deemed clinically relevant? Just as you prepare for commercial launch and pipeline expansion, any additional granularity that you're able to give on cash burn expectations over this next year? Thanks.

Hey, Sam. Thanks a lot for both questions. I'll pass it over to Jeff to discuss the endpoints that we're looking at in the phase II angiokeratoma study. That's gonna be similar to what we did in mLM and cVM, and that there's gonna be no pre-specified statistical hierarchy, no primary endpoint. We think that's a thoughtful approach to take in rare diseases, where there's no FDA-approved therapies and really where you're trying to determine which endpoints are sensitive to detecting a treatment effect before putting together that statistical hierarchy in phase III. Jeff will comment on that, and then we'll pass it over to Matt Korenberg to address the second part of your question. Jeff?

Yeah. Thanks for the question, Sam. We're gonna follow what we're calling the Palvella playbook, and it's really repeating the overall strategy that we've used for these other rare diseases that have never had a clinical trial done with them before. As Wes mentioned, there is no statistical hierarchy. The purpose of the study is to understand what are the endpoints that are sensitive to change. We started out by talking with patients as well as clinicians to identify what are the key signs. We'll look at individual signs as well as global endpoints to look at global changes. We'll look at both dynamic and static scales. We'll also look at both clinician and patient's perspective.

Importantly, like all of our trials, it's really important to capture the voice of the patient, so we'll be conducting qualitative interviews both at baseline and end of treatment. Ultimately, we'll package all that data, and that will inform future plans.

Yeah. Sam, on the, cash- Yep. On the cash burn, I appreciate the question. It's as I said in my prepared comments, the cash that we have today is sufficient to get us through basically advancing all of our programs over the next several years. What that translates to for 2026 is somewhere around $80 million of cash burn. That's the number for 2026, just around $80 million.

Thanks, Sam.

Our next question comes from Whitney Ijem with Canaccord Genuity.

Hey, guys. Thanks for taking the question. Just kind of to the FDA flexibility and macro tailwinds, Wes, I think you said there. Just curious if you've had a chance to speak with the agency on the plausible mechanism pathway. I know that was something you talked about back in December. Yeah, just curious if you've had those conversations and just as we think about kind of all of the indications where there is sort of clinical validation for topical rapamycin, just if that might be a potential path forward to shorten the timeline to some of those. Thanks.

Thanks, Whitney, for those questions. On the plausible mechanism pathway, at this juncture, we have not had formal interactions with FDA as to whether one or more of our programs qualify for the plausible mechanism pathway. Looking across our pipeline, we do have several molecules and several diseases that we believe represent closer to a validated mechanism than one that is plausible in nature. We're carefully monitoring how the FDA is implementing the new plausible mechanism pathway program. It is our intention to better understand whether one or more of our programs other than microLMs could qualify for the plausible mechanism pathway. On microLMs, we don't think that's a pathway at this point in time that we need to march towards an NDA submission and FDA approval.

Plausible mechanism could apply to cVM, potentially angiokeratomas, as well as porokeratosis.

Great. Thanks.

Our next question comes from Ryan Deschner with Raymond James.

Thanks for the question. Were there specific drivers in the written feedback from FDA that drove the acceleration in the angiokeratomas clinical initiation timeline? Also, what are your expectations for how far along in the clinical development of your new programs you can get with the current cash runway at this point? Thanks.

Great. Thanks, Ryan, for both questions. I'll take the first question, and then Matt can speak to the key milestones that we intend to achieve with the cash on hand. FDA granted us, Ryan, Fast Track designation in angiokeratomas at the conclusion of last year. We look at that as a major milestone for the company. It's our third Fast Track designated program. We placed in front of the FDA a phase II design on angiokeratomas of about 10 or 20 patients. That design is intended to really be a signal finding study. The FDA understands that we're evaluating a number of different endpoints in this disease, which currently has no FDA-approved therapies.

I think what enables us to move quickly there, and it's core to the business model that we articulated earlier, is we do have an open IND at the FDA around QTORIN 3.9% rapamycin anhydrous gel. They're very familiar with the tox package, all the safety data that we presented over the years. We're leveraging our existing manufacturing process, so our ability to jumpstart new indications on QTORIN rapamycin while preserving that same formulation, IND, manufacturing process is, we think, one of the advantages and what will allow us to do serial and sNDA submissions over time once we have that first approved indication, which we expect to be microcystic lymphatic malformation. Matt, do you wanna tackle the second part of the question?

Yeah. Thanks, Wes. Ryan, the existing cash, as I said, even without considering any revenue, fuels a whole number of catalysts for us over the 2026 and 2027 and into 2028 period. On the lead program mLM, we can get all the way through a potential approval and launch. On cVMs, we think we can get through a filing. For DSAP and angiokeratoma, the two programs launching phase II trials this year, we can easily get through data on those two trials. For the two new indications that we've talked about announcing this year, we believe we have sufficient cash to get through data readouts in those indications as well.

Importantly, my prepared comments were caveated by lack of any revenue adjustment for that cash runway. I think if we consider potential cash generation through revenue and launch, there's a potential that we can get to cash flow breakeven depending on how aggressively revenue ramps and depending on how aggressively we build out the pipeline. We feel like we have all the cash we need for the foreseeable future to really just focus on execution and generating data and eventually commercial products across the pipeline.

All right. Thank you very much.

Our next question comes from Danielle Brill with Truist Securities.

Hey, good morning. This is Jin Yong for Danielle. Thanks for taking our questions. So I have a question about the microcystic LM dosing. You previously mentioned that some patients with larger lesions may require more than 1 ppd dose based on your recent medical affairs outreach. We're just wondering how we should think about modeling the average daily dose and the annual revenue per patient across different lesion sizes. Thank you.

Yeah, thanks for the question. We think the average patient will be 1 ppd, and we expect this to be dosed in a manner that will be chronic therapy. I think that's something that we've gathered from our KOLs, including folks like Dr. Mike Kelly from the Cleveland Clinic. The way we're modeling that, and Matt can comment further, is looking at that in the pricing range of $100,000-$200,000 per patient per year. Averaging that out across patients, some of whom will consume more than 1 ppd, some patients who probably will consume less than 1 ppd. Matt can comment on any further specificity that he'd like to add.

Yeah. Thanks, Wes. I think it's important when we have recently started talking about a peak sales opportunity of multi-billion dollar TAM and $1 billion or more as peak sales at mLM, which is taking pretty conservative assumptions across the board, including for patient numbers, penetration, and then to your specific question on any patient compliance assumptions as you move out in years for patients on drugs. We see any kind of compliance variations from a standard 1 ppd as being more than offset by the new incident population of more than 1,500 new patients coming in per year.

We've been very conservative about that, as we get to that $1 billion peak sales number. I think that's probably the most level of specificity that we've given so far.

Thanks. That's very helpful. We have another question on the doctor feedback from the recent AAD conference. Specifically, you know, for the dermatologists who have historically relied on or were hesitant to move away from compounded rapamycin, did the data generate more buy-in from those doctors?

Yeah. Thanks for that question. We've had extensive conversations with our physician collaborators around that question. Many of our phase II and phase III investigators have utilized compounded off-label therapies. I think you heard that, Jenny, likely from Dr. Mike Kelly on the SELVA phase III data release. Very consistently what we hear is that physicians much prefer an FDA-approved therapy that has proven safety, quality, and efficacy, and done so in prospective studies under an FDA IND to any therapy which has not gone through that rigorous and stringent FDA-approved process. That's very consistent feedback, and I think, as we look at FDA activity around compounders, certainly the FDA is ramping up their enforcement of compounded medications in the presence of drugs that are FDA-approved, most notably from the GLP-1.

That's been consistent feedback that we have received from folks like Mike Kelly, Jim Treat at CHOP, and others. Most importantly, just to reiterate our SELVA phase III data, we saw 95% of patients who completed the efficacy evaluation period improve while on drug, and 86% of those were much or very much improved. We think that if we're FDA approved, we think that will result in a strong uptake from patients and physicians, and we're looking forward to that day of having QTORIN rapamycin be made available to those folks.

Our next question comes from Kaveri Pohlman with Clear Street.

Oh, yes. Good morning. Thanks for the updates, and thanks for taking my questions. I would like to follow up on maybe if you can provide more details on treatment compliance, what it would look like typically, and were there any patients in the phase III or prior phase II trial who needed to pause the treatment due to adverse events or any other factors? And overall also for mLM, out of 30,000 patients, can you share, like, what proportion you know consider truly, like, moderate to severe and therefore more appropriate for the treatment? I have a follow-up.

Yeah. Thanks for those questions, Kaveri. I'll start with the last one. We think that any patient who is within clinical medicine, and our data indicates that there's greater than 30,000 patients that are currently within clinical medicine that are diagnosed with microcystic LMs. We think any patient with that profile is a good candidate for QTORIN rapamycin. I think part of that goes to the underlying biology of the disease. This is a proliferative and progressive disease, so if the disease is left untreated, the patient will worsen. What we know clinically is that's likely to result in leaking or lymphorrhea, bleeding, other impact on quality of life and of course risk of infection, cellulitis and other infections, some of which can even be life-threatening.

We think the best approach, even for those patients who may be more moderate in nature, is to treat the lesion and treat it in a manner that hopefully alleviates the clinical signs but also prevents the progression of the disease. From a treatment compliance perspective, you know, our goal will be to work with, and Ritu asked the question earlier, our specialty pharmacy and our patient services hub to encourage patients to be compliant. We think that compliance with QTORIN rapamycin is set up in a manner for patients to be highly compliant with the drug. What do I mean by that? It is once daily dosing. We've also selected excipients in the formulation that are designed to be non-irritating. We do not have any traditional penetration enhancers.

For that reason, we would expect to see high compliance relative to other therapies which may require more frequent daily dosing and which may have more significant safety or tolerability effects. Jeff?

Yeah. Kaveri, thanks for the question on adverse events. You know, we've completed two clinical trials. The first was the phase II trial, which was 12 weeks. In that study, no patients withdrew due to adverse events. In the phase III trial, which was 24 weeks in duration, we had 50 patients enrolled. We did have six patients who discontinued treatment. Five of those six were deemed unrelated to study drug. One of the patients was related as possibly related to study drug. This is a patient who had a history of lymphorrhea and withdrew for lymphorrhea.

Oh, yes. Sorry. I just wanted to know if any patient had to pause the treatment in between and they restarted the treatment during that period?

No, we did not have that situation.

Got it. That's helpful. Maybe there was a recent publication suggesting that rapamycin's two years of continuous use followed by more like a customized intermittent use can provide long-term benefit to majority of patients. Is that your expectation for QTORIN rapamycin as well? Do you think having an official label and approval would increase awareness, and clear guidance could change these estimates around duration of treatment? Thank you.

Thanks for the question. It's a really nice scientific publication that came out just showing that, you know, long-term use of rapamycin can have a really nice clinical benefit. What we've observed in our clinical trial is that over 24 weeks with continued treatment you continue to have clinical benefit, and that we observed 98% of patients roll over to the treatment extension. So they were, at least in our perspective, perceiving a positive risk-benefit profile. We don't have additional data beyond that point, but we'll continue to monitor those patients in the treatment extension period.

Our next question comes from Catherine Novack with JonesTrading.

Hi. Thanks for taking my question. Just curious of, you know, what's still up for discussion at the pre-NDA meeting. Do you think you'll get clarity on the 3+ age range at this time, or would this be something that would take place down the line during labeling discussions? Just remind us of the enrollment dynamics that led to exclusion of the three to five age patients from the ITT in phase III. Thanks.

Great. Thanks, Catherine. On the pre-NDA meeting, essentially what you're doing is you're putting forth what you anticipate being your package to support substantial evidence of effectiveness, as well as what will constitute your safety package as well. I'm not sure those are up for discussion. I think the FDA has known for a long time about our drug development program, the fact that we ran a phase II study. Recall that they granted Breakthrough Therapy designation on that phase II study, so that's demonstration of preliminary clinical evidence. With a very similar design in phase III, albeit with a much larger sample size, we demonstrated highly statistically significant results on our primary, key secondary, and all secondary endpoints. It's a matter of presenting that data to the FDA.

To your question regarding age range, that typically does occur later on in the NDA discussions. We felt like it was important on this call to share that based on our feedback from investigators, that there is a desire for Palvella to advocate that younger patients might have this therapy available to them, of course, pending FDA review and approval. Jeff, do you wanna speak to why the three to five year-old cohort was not a part of the primary endpoint?

Yep. Thanks. Catherine, what we did in phase II is we had patients six and up in that trial where we had 100% of patients respond. For phase III, our intention was to repeat that successful study. We originally enrolled patients age six and up. We had a lot of interest from investigators to increase the age to three to five. We ran that by the FDA. They agreed, and they allowed us to expand while that trial was ongoing. Essentially because we haven't studied the efficacy in the three to five year-old population, we kept the primary analysis of the primary endpoint the same, age six and up, and then just did post-hoc analysis on the patient in the three to five year-old category.

Got it. That's very helpful. Thanks.

Thanks, Catherine.

Our next question comes from Albert Lowe with Craig-Hallum.

Hi. I was wondering, what are the steps for platform technology designation after the initial approval? When can you potentially receive designation, and how would this change the Palvella playbook?

Yeah. Thanks for that question, Albert. The goal is to secure approval of QTORIN rapamycin first. That's gonna be the first product from the platform, we believe, to achieve that FDA approval. As noted on this call, we've had a constructive and collaborative relationship with multiple parts of the FDA, including the review division and the Office of Orphan Products. Our strategy for achieving the platform technology designation would be to indicate our interest in that designation to the review division of the FDA, but also involving other parts of the FDA, if relevant, before submitting a more formal application around that. How does that change the Palvella playbook? I think that's an important question.

The platform technology designation, while relatively new, in many ways, functions similar to other expedited programs in the sense that, it's designed as a result of the FDA's review of a, CMC package and an understanding of a technology platform to then create more expedited and streamlined pathways for future, platform products. We see a lot of value in this, particularly given some of the similarities between QTORIN pitavastatin and QTORIN rapamycin. Dr. Osborne, David Osborne, and Jeff will be announcing a third QTORIN platform product later this year.

Again, further to one of my initial slides that was presented today, we are consistently pursuing and advocating for ways to get drugs to patients sooner and do so on reduced time and reduced capital, and we think the platform technology designation would help us achieve that.

Great. That's helpful. Thank you.

Thanks, Albert.

Our next question comes from Dev Prasad with Lucid Capital Markets.

Hi. Thank you for taking my question, and congrats on the update. I have a couple of questions. One is, can you talk about identification and recruitment of 10-20 angiokeratoma patient for phase II? Are you leveraging the same clinical site network as SELVA and TOIVA, or does this require a distinct referral approach? The second is the QTORIN pitavastatin. It's the first directed therapy for DSAP for this pathway. Just can you remind the most significant translational data or preclinical evidence that support this mechanism and what gives you confidence in topical drug penetration for these lesions? Thank you.

Great. Thanks, Dev. I'll take your first question on the angiokeratoma phase II study, and then Jeff will take your second question around evidence of mevalonate pathway inhibitors in porokeratosis. Actually, there's a great paper that Jeff was involved with that we recently published on that, so he'll be able to go through the highlights of that paper. In terms of the sites for angiokeratomas, you're exactly right. We are going to leverage some of the same sites that we've worked with closely in microcystic lymphatic malformations and cutaneous venous malformations. We have great relationships with these groups. We're also gonna leverage commercial sites that often have large volumes of patients with angiokeratomas. I'd say we've been pleasantly surprised.

One of our feasibility efforts that we make on our all of our clinical trials is understanding just how many patients a particular academic site or a commercial site have with this condition. I'd say consistently, we've heard from our clinical operations team that there are more angiokeratoma patients than there are microcystic LM and maybe even as much as cutaneous venous malformation. A nice blend of both academic sites and commercial sites, as well as a nice blend of sites who have been involved in mLM, cVM but also some new sites that will leverage for angiokeratomas as well as additional studies from our QTORIN platform. Jeff?

Yeah, thanks for the question, Dev. With DSAP, the genetics here are very well characterized, and a lot of this work comes out of the lab of Dr. Keith Choate at Yale University, who's a close collaborator and also a member of our MSAB. Genetically, they're monogenic loss-of-function mutations in any of the five genes involved in the mevalonate pathway. We know that this is the right pathway to involve a therapy. The idea mechanistically is if you can inhibit this pathway from being activated, you can have a clinical response because these intermediate metabolites can cause toxicity within the cells. This was first studied out of Keith Choate's lab. He did a really nice clinical study with topical lovastatin who showed clinical response.

Since that time, there's been a number of studies, about 24 studies that we recently published on during a review showing the potential proof of concept data with inhibiting this pathway in porokeratosis. Importantly, what we've uncovered in our formulation work, really led by David Osborne, was that many of these statins are chemically labile, so they break down very, very quickly, which really translates to the inconsistent yield which we've heard during our market research. What we've done with QTORIN pitavastatin is optimize that for delivery, so we get a very stable formulation and consistent delivery at therapeutic concentrations with low systemic absorption.

Great. Thank you.

Our next question comes from Jeet Mukherjee with BTIG.

Great. Thanks for taking the question. You shared some details about the phase II study for angiokeratomas in terms of number of patients and efficacy measures. I was hoping you could shed some light on the phase II study for DSAP as well. When can we expect data from both these phase II programs? Thank you.

Great, Jeet. Thanks for being on. Thanks for the questions. Jeff can speak to the phase II study design in DSAP. At this point in time, we have not given specific guidance on trial readout timelines. We are really enthusiastic about the fact that the angiokeratoma study one is moving ahead of schedule with the first patient expected to be dosed this quarter, and also just the level of demand that we're seeing for the study. We look forward to providing guidance on those trial timeline readouts here in the near term for both angiokeratomas and porokeratosis as we get a little bit further along towards initiation and start to move up the enrollment curve. Jeff?

Yeah, thanks for the question. The trial design for DSAP is not finalized yet, so we're still working through that. At a very high level, our approach is very similar. There's no spontaneous regression in this disease, and we know that inhibiting the mevalonate pathway is on target. What we've developed with QTORIN pitavastatin is an on target in tissue approach. We're looking at both individual signs of the disease and global changes in disease. We're working with both patients and KOLs to identify what are the right signs to measure and what we think we can have a clinical benefit on. We'll also, like all of our programs, incorporate baseline and exit interviews to help capture the voice of the patient.

That concludes today's question-and-answer session. I'd like to turn the call back to Wes Kaupinen for closing remarks.

Thank you, operator. In closing, thank you to everyone who firmly believes in Palvella's mission to serve, our vision to lead, and our strategy of being first in disease. We remain relentlessly focused on execution and have an unwavering commitment to delivering on this mission, vision, and strategy. We deeply appreciate your continued support. With that, I'd like to conclude today's call. Thank you, everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.