Everyone, for our next session here, we have Matt Korenberg from Palvella. Matt, thanks for joining us. My name is Gautam. I'm a biotech analyst here at Chardan. Matt, we have 15 minutes. I'll jump right into it. Give us a quick overview of what you've achieved over the last year. The stock did really well, right? What should we look out for the next 12 to 15 or 18 months or so from now on?
Sure. Thanks, Gautam. Thanks for having us. Palvella Therapeutics is a company focused on developing drugs to improve skin and vascular anomaly diseases. We do that by focusing on diseases where we can be first, and we focus on serious diseases that have no approved treatments. We transitioned to a public company a couple of years ago. At the time, we were developing QTORIN rapamycin, our lead product for just one disease, microcystic lymphatic malformations. Today, we're in four different diseases. We've, since the time we went public, announced our phase III data in microcystic lymphatic malformations, our phase II data in cutaneous venous malformations.
We've started a phase II trial in clinically significant angiokeratomas, our third indication with our lead product, QTORIN rapamycin. Then we've announced our second program, QTORIN pitavastatin, where we're intending to start a phase II trial later this quarter. We've progressed all that over the course of the last couple of years. We've successfully raised $230 million earlier this year. So we're funded through all of those projects to take them all to the next couple of years of development. That's the setup for now. Going forward, we will be expecting to take our lead product, which we filed our NDA for, to be commercial. We expect to hear back from the FDA any day now. We filed our rolling submission in the end of August, and we should expect to hear by the end of October about when our PDUFA date might be.
Yeah.
We expect that to be sometime in the first half next year, likely in the end of April timeframe, and then we'll transition to a commercial company.
Fantastic. Since the potential launch is on the horizon, let's just say that, maybe take a minute or two to explain what MLM really is. How big is the market? How are we thinking about pricing, those sort of launch aspects, and maybe a comment or two on the launch commercial team that you built.
Sure. Microcystic lymphatic malformations is a serious, rare, chronic, debilitating, progressive disease.
Right.
It results from a genetic mutation. It's present at birth, and it's a PI3K mutation that leads to overactive or hyperactivated mTOR in your lymphatic cells. It ends up with your lymphatic system growing progressively out through the skin and protruding out. The most serious symptom of microcystic lymphatic malformations tends to be lymphorrhea, or the leaking of your lymph fluid out onto your skin, which breaks down the skin barrier and ends up with basically an open wound to the outside environment and results in serious infections in both the skin and deeper. There are more than 30,000 patients in the U.S., which we've verified through various different claims analysis, and today, there's very poor treatment. There's things like surgery, sclerotherapy, and others that have temporary or ineffective results, and sometimes off-label rapamycin gets used either orally or topically.
Yeah.
We're progressing towards our commercialization by putting in place a team that we think is world-class. We started about 18 months ago with our Chief Commercial Officer, Ashley Kline. She was previously at Dompé, launched a drug called OXERVATE.
Very successfully drove that to over $500 million very quickly. She's put in place her core lieutenants. We brought on Kent Taylor to head sales. Kent, previously from Incyte and then most recently Arcutis. We brought on Jen J. McDonough to head market access, and she's most recently from Krystal Biotech, leading VYJUVEK through its launch from a market access standpoint.
Yeah.
With those two folks, Vimal Patel and Peter Finlayson on marketing and head of medical affairs, we've got a commercial team today that's spending their time on disease education and disease awareness, going out and meeting with the core folks that ultimately will be our prescriber base. We're seeding the market today with all this disease education. From an ultimate size standpoint, we've had good conversations so far with the payer community. We expect to price the drug at $100,000-$200,000 per patient per year. That translates into a multi-billion dollar TAM. What we've said is we think it should be at least a billion-dollar peak sales product for us.
Perfect. Very well phrased. Maybe, I guess let's take one step back and just even explain what QTORIN really is, right? How is it more sophisticated than, let's just say, compounded rapamycin for the indication? Just walk us through that.
Yeah. QTORIN is our platform for developing these topical products. It's an anhydrous gel that we spent over two years, several million dollars, tested 80 different prototypes to get to our first product.
Yeah
QTORIN rapamycin. The platform itself is a platform to allow for high drug loading or tunable drug loading into the gel, proper release characteristics, so you get the drug out of the formulation and into and onto the skin and into the skin. It creates new IP. Every time we pair QTORIN with a new molecule, we can create new IP. It allows for manufacturing efficiencies across the platform. We like to say it's a tunable platform for repeatably unlocking these billion-dollar opportunities that we can identify through disease identification. We can take any molecule that we find that's applicable to a particular disease, pair it with QTORIN, and quickly move into clinical development.
Okay, fantastic. Beyond MLM, you also have CVM with phase II data. Just phrase to us what CVM really is, why that is a serious condition, and if it's cosmetic or there are more serious quality of life issues. Put CVM into context for us and why that is your next big opportunity.
Yeah. Our second indication, cutaneous venous malformations. First off, it's a very big indication. It's at least double the size of microcystic lymphatic malformations. We say there's greater than 75,000 patients out there. It's another serious chronic genetic disease that is present at birth, this time instead of in your lymphatic system, in your veins. It results in dysregulated and overgrown veins that protrude sometimes out through the skin and diffusely underneath the skin. The most significant signs and symptoms of the cutaneous venous malformation indication include bleeding, thrombosis, and pain. Patients complain significantly of functional impairment, so the number one complaint by our patients in our phase II trial, and we surveyed them following the trial, was functional disability or impairment. You can imagine if you have a lesion on your arm, you can't bend your arm. On your leg, you can't bend your leg.
In general, it's quite debilitating for the patients, and that's what we saw in phase II in our results. The case study we talk about most frequently was of a 17-year-old female who had a significant lesion on her back. Prior to the trial, she was unable to wear proper clothing. She was sensitive to touch. Sitting in a chair was difficult. Just 12 weeks later, following the trial, she was excited to be able to wear clothes normally, have a normal hug with another person. It was really exciting to see that kind of improvement.
Okay, got it. There is a distinction between cutaneous deep malformations. Can you just phrase that for us? Are you only addressing the cutaneous version of it and not going after the deep venous malformations?
Venous malformations, generally speaking, are the most popular, most widely seen vascular malformation.
Yeah.
Venous malformations broadly can be both internal and cutaneous. Our drug will be focused on the cutaneous portion of a venous malformation. Patients in our trial, some had deeper components, some had cutaneous only components. The cutaneous treatment is what we'll see. Our drug won't treat the internal version of the disease or internal manifestations of the disease, but it will treat cutaneous manifestations of the disease.
Okay, perfect. Then maybe quickly you can frame what really happened with the breakthrough therapy designation scenario with the FDA. What do you anticipate the pivotal to look like, and when would you have more clarity on what that is going to be?
Yeah. Most companies don't announce when they were applying for breakthrough therapy. We did. We did announce also that we did not get breakthrough therapy on our first attempt. For us now, our attention's really turned and focused on getting drug to patients as fast as possible. We'll work with FDA to design the most efficient phase III trial we can. Throughout that process, we'll interact with the FDA frequently. As we finalize the design of that trial, which will come following the end of phase II meeting, which we've told the investor communities this quarter, should be imminent. We'll announce the design of the trial, and through that process, we'll also discover from the FDA whether they would like us to reapply for breakthrough therapy, and if they do, we will.
If the most efficient path forward is just to get the trial started and start the trial immediately, and we can run an efficient trial that we agree on with the FDA, then we'll move right to that and deal with breakthrough therapy later.
Perfect. My last question on this is, can you frame the size of this opportunity in relation to MLM? Is it as big, bigger, smaller? How do we look at that?
Yeah. With twice the patients, we think the opportunity is about twice the size. We've said in the past that we think QTORIN rapamycin from microcystic lymphatic malformations and cutaneous venous malformations should be between a $1 billion and $3 billion peak sales product. We think it's probably about a 1/3, 2/3 split, so about $1 billion for microcystic lymphatic malformations and $2 billion for cutaneous venous malformations. It'll be the same drug product with the same pricing. Most patients' lesions are slightly, on average, bigger in cutaneous venous malformations, so there'll be a little bit more revenue per patient in cutaneous venous malformations, as well as the larger patient population.
Perfect. Then, maybe in the minute or so we have, you have two other programs, DSAP and angiokeratomas. Tell us what to look out for. What are the next gating steps in those two? You have also mentioned that you will be announcing two more programs, so just walk us through that.
We will do five more programs in 49 seconds. The programs you mentioned, our disseminated superficial actinic porokeratosis program, is going to start a phase II trial in this quarter. That is with our second product I mentioned earlier, QTORIN pitavastatin.
Yeah.
Clinically significant angiokeratomas are phase II ongoing trial right now with QTORIN rapamycin. Then, as you mentioned, we have also announced that we will tell the world about two new diseases this year. One will be the fourth indication for QTORIN rapamycin, and the other will be a new QTORIN product, so the third active ingredient we will have with QTORIN. So by the end of this year, we will have three drugs with six diseases that we are pursuing, all moving forward in these rare diseases where we can be first.
Perfect. I think you have a really exciting next year, so good luck on the potential NDA approval. And the launch.
Thanks for having us.