All right. Good afternoon, everyone. My name is Brandon Folkes. I am an equity research analyst here at H.C. Wainwright, and thank you very much for joining me for this fireside chat with Talphera. From Talphera, Vince Angotti, CEO, and Dr. Shakil Aslam, CMO. Thank you both for joining me.
Thanks for having us.
Vince, I think it's worth just starting and just setting the scene. What do you think investors miss about Talphera? If we look at 12- 24 months, how could the company look versus today? Specifically, obviously, let's assume that it's a go-alone strategy just because I don't want to sort of get into that, right?
Right. Well, just briefly on Talphera and who we are, we're an acute care company focused on nephrology, in particular in renal care in the acute care setting, as mentioned. We've got three major catalysts over the course of this next year. One is a pivotal study readout on our lead program and really highly focused program. That's nafamostat mesylate Niyad for anticoagulation with extracorporeal circuit. We plan on having that data around the end of this year, that's our goal, and filing the PMA within three months thereafter.
It has breakthrough designation and a six-month review clock, so the goal is to have this product approved and on the market in the second half of next year. So it could look very different from that standpoint versus where we are today.
Fantastic. I do want to now dig in. With NEPHRO, now 75% enrolled, how do we think about the remaining 25%? What are the remaining variables that could affect timing of enrollment and ultimately data?
Yeah, I'll turn that to Dr. Aslam to answer that.
Sure. Thank you. We are obviously over 75% enrolled, so that's great. I think that the most difficult and challenging part really is behind us. Finding sites which met our criteria based on the learnings we had from our earlier sites. We came up with a target profile of the sites, which would be a site that has a nephrologist as the investigator and has access to medical ICUs as well, because that's where most of our patients coming from.
The changes that we implemented, and we had all the target profile sites up and running, and we have seen tremendous improvement and progress over past few months in terms of enrollment where we are. I think everything right now is going as planned. I feel very confident that we'll wrap this thing up before the end of the year. If you add on this, we have monthly roundtable meetings with our research teams, and now that they see the study essentially in home stretch, they even are more engaged and excited, and they kind of understand the profile of nafamostat once it's approved and how it addresses their unmet needs.
There's a lot of excitement from them to actually finish up the enrollment and get this into approval process.
You got to remember, Dr. Aslam, when he came in, made some significant modifications to the protocol, all in alignment with the FDA. The relationship with the FDA has been outstanding. We got the breakthrough designation under Dr. Aslam's recommendation. They reduced the N from 166 patients all the way down to 70. They took other certain protocol changes to consideration. It's made a much smoother pathway so that the new institutions that gradually came on and those that we had inherited had an easier time to enroll patients. We're on track.
Fantastic. Can you just talk about how the study is powered, right? What you power it for? Along those lines, just given the real-world usage of nafamostat outside of the U.S. What do you view as the risks to a successful study?
Yeah. In terms of the primary endpoint, I can say with a lot of confidence there is essentially no risk to the study. That's very, I would say, daring statement to make, and I'll tell you why. It's not a clinical endpoint per se. We're looking at activated clotting time, which is a measure of how long it takes for blood to clot. All anticoagulants, they work by slowing down the process, so it takes longer for blood to clot. That's very objective. You take a patient whose clotting time is less than 150 seconds, you give them a blood thinner, which is supposed to prolong their clotting time.
We get them into a therapeutic range, and we measure it six times during first 24 hours. Our primary endpoint based out of those six readings that we get, we pick four readings and average them out to a placebo, which will have no effect on ACT. It's a very objective endpoint. On top of it's not an endpoint where you just use a fixed dose. In many clinical trials, you pick a dose or two, and you do your intervention, and then after some time, you see whether it worked or not. Sometimes, not everybody's going to respond the same way to the same dose.
Here, we actually go up on the dose within 15 minutes to see if we increase the ACT where we want it. That makes it very foolproof or fail-proof endpoint. In terms of sample size calculation, when we had this discussion with the FDA to reduce the size of the trial because of all existing human data from other countries, in Japan and South Korea, it has a recent paper that shows over 80% of CRRT patients receive nafamostat. It's the only agent they use for anticoagulation during CRRT.
We used very, very conservative estimates in terms of effect size as well as the variability that we're going to see. Then on top of that, we layered in a very aggressive dropout rate of 20%. For a study, that primary endpoint is at 24 hours in an ICU patient. When patient is not going anywhere, 20% dropout rate is extremely high. Even using those very, very conservative estimates, the study is still over 90% power to hit the primary endpoint. Primary endpoint is just not something that I ever lost sleep on. I'm very confident that we'll hit the primary endpoint.
What would cause any patient to drop out? Or any patient to be classified as a dropout, just given the circumstances you mentioned?
I think what we've seen, again, very rarely, perhaps one or two patients, I would say, is that something happens, and because these are very critically ill patients and they have multiple organ failure, the family may decide to withdraw care. That can happen anytime. Obviously, being in the study doesn't preclude you from withdrawing your loved one from that study. Otherwise, we haven't seen any deaths in 24 hours. That's only, I think, dropout reason, just comfort care. Kind of things. Yeah.
I think another comment is we just had our second DSMB. They, again, reviewed the data independently and, again, relying to continue as is with the study. That's always reassuring.
Given this isn't going to be a hospital product in the ICU, right, but any secondary endpoints you think are potentially very commercially relevant to a hospital and the value proposition to the hospital?
Yeah, I can comment on that. The secondary endpoints are filter life, clotting events, et c. I think the one that's most relevant because, look, this is continuous renal replacement therapy. This isn't intermittent hemodialysis. Continuous being the key word. You want to keep them on the therapy as long as you can before you have to have any interruptions. The most common interruption is clotting, and the clotting means a filter change. So that's probably the most prevalent one that's relevant to what I'll call the daily activity.
Because this often goes to one-on-one nursing. They're very difficult patients. They're high-cost patients to the system. And they're not in there for CRRT, in the ICU. They're in there for sepsis or some overlying condition. They just happen to have the renal failure associated, when this is one element of their care they're trying to take care of and then deal with the umbrella of the other issues. Now, with that being said, that's in our secondary endpoints, but we know that it's had an effect on filter changes historically.
So importantly, KDIGO, if you're familiar with them, they're the international guidelines for renal care, et c., and they were republished this year in 2026, and it's the first time they've actually included Niyad/nafamostat as a recommended agent in CRRT. While it was included as an available agent before, available is very different than a recommended agent. And the reason they moved from available to recommended, we believe, most importantly, that there's been two published studies between 2012 and now. It's taken that long.
Those studies published showed fewer clotting events and fewer filters utilized. So the data is available, and that'll be available to us regardless of our study in medical education, etc. , moving forward.
Fantastic. You mentioned the primary endpoint's at 24 hours. Can you put into context, once you complete enrollment of the study, how long until we see data?
Right. This is a very short study, so primary endpoint is within 24 hours, and 72 hours is when all the intervention is done, and you can take this patient off your study drug. Over 95% of the data, almost close to 100%, is obtained within first 72 hours of the study. Then you have a follow-up at day number 28, which could be just a phone call or just a check on the patient, because we're looking at mortality as a secondary endpoint to see if patient is alive or not. That does not include any kind of physical exams or labs, so there isn't really any more data to be entered.
What we're doing is we are cleaning the data as we go, and earlier slow enrollment allowed us to clean the data as we go in. That has helped us actually in a way that we have been able to keep the data clean and cleaning it real time as we go. There isn't going to be any extended period of time after the last patient is out. You wait for three months to clean the data. I think it's just a matter of a few weeks, I would say. My guess would be between perhaps four to five weeks that we should be able to get the top-line data once the enrollment is done.
Okay. Once we get the data, any gating factors or additional work you may need to do other than just getting the filing ready ahead of a filing?
I think the one consideration we're having is a pre-PMA meeting, just to be sure. We've been aligned with the FDA all along. They've agreed to the protocol changes. They've reduced the N. Anytime we need some questions answered with the breakthrough status, it seems like it's given us advantages on not real-time communication, but pretty close to it. We want to continue that alignment with the FDA. We have suggested that it'll be a three-month process from final data to submission, and that includes a pre-PMA meeting within that's really driving that timeline.
Okay. You have some pretty good market research on the market size, right? Can you just walk us through that, and then in particular, you recently updated that market size. Can you just talk us through what drove that increase and why the market may actually be bigger than we had been anticipating?
Yeah. We're confident it's bigger than what we originally anticipated. The previous data that we'd collated from the company that we had collected it from, that we had acquired the product from, and in discussion with some others, we had estimated about 100,000 to 165,000 CRRT procedures a year. That data was a bit dated and it was pre-COVID. What we wanted to do was update it with better source data, better scrubbed data, and take into account more recent growth trends in the market.
When we talk about scrubbing it, you take the CPT codes, and the CPT codes aren't always pure when they're labeled by the utilizing institution. They might mislabel them. They might use dialysis for CRRT or vice versa. We wanted to be absolutely sure. We would scrub it to associate it with AKI, with ICU or CCU stays, length of stays, etc. , to be sure it was really focused on CRRT, and it wasn't going one way or another from regular dialysis to that. In addition to that scrubbing, we then looked at the growth rates pre-COVID, which were averaging about 5%, a little bit more, and then they took an incredible spike during COVID.
You couldn't continue to count on that growth rate. We reevaluated it post-COVID for the most recent couple of years, and it's back to that 5%-6% growth rate. That trend seems to be continuing. It's being driven by, unfortunately, the rate of AKI that's occurring in the U.S., which is growing at a similar rate. Plus, in the fact that we have scrubbed the data with a partner, McKesson Compile, to really be sure we got it with as close or as tight an accuracy as we feel we're going to ever be able to get.
Okay. Fantastic. Digging deeper on that market opportunity, can you just talk about where you expect nafamostat to be used in place of what? What are they used now, and why do you think it gets used?
Sure. Right now, approximately, I would say one third of ICU physicians don't use any anticoagulant and they wait for the filter to clot. The median filter lifespan in the U.S. is about 12-14 hours. Some half of the filters will clot within 12 hours or so, within the first 24 hours. Then they have a rescue plan, and none of those rescue options are good. The most commonly used is heparin, which is an old drug, a lot of problems with it. It's a systemic anticoagulant, and in these critically ill patients, last thing you want to do is make their blood thin all over, and they can bleed from it.
That's one option. People throw it at because there's nothing else you can do if you don't have access to citrate and use heparin as a rescue. That probably gets used maybe 40% of the times in those rescue situation. The second option that's available is citrate, which is regional, like nafamostat would be, but the problem with it is that it's extremely complex protocols and you need expertise and a lot of additional nursing resources. Many institutions put one-to-one nursing ratio when they use citrate. For that reason, it's not really very commonly used.
Those are the only two options you have. If I'm in a clinical practice and seeing I have a patient on CRRT, if somebody needs a rescue therapy, or if I have a center where I know most of my filters clot anyway between first 24 hours, I see no reason to use heparin, which even KDIGO guidelines don't recommend it because most people don't think it's really worth the risk associated with it. I don't really see any reason why I would ever use citrate if nafamostat data is as good as it has been in other countries, because it avoids all the complexity of citrate.
It essentially gives you similar profile regional anticoagulant without any complexity or extensive monitoring or resources that you need to use citrate. I think if you are using heparin or you're using citrate as a first-line agent or as a rescue, I think both of them will be replaced by nafamostat.
Let's remember, citrate's not FDA approved. Citrate is the result of the fact that the physicians in the U.S. were dissatisfied with the options they had. The options they had were no anticoagulation for CRRT or heparin. Out of the need for an alternative agent, they created their own protocols, and citrate saw some experience, ex U.S., etc . It's not FDA approved. It's not promoted within the U.S. While it is supported by KDIGO guidelines, it's mostly off of European and other use. It enjoys a 27% in the neighborhood of market share without ever being an FDA-approved product.
That's the need for anticoagulation therapy in the U.S. with these patients, with these CRRT patients. They're getting that with the complexities that are entailed with it. To Dr. Aslam's point is, in our more recent market research, we feel like we're going to move to first-line agent more often than not, whereas they are typically, they being heparin and citrate, are used as second-line rescue. Being an approved agent without those complexities, we feel like we'll be in the primary position for use moving forward.
Fantastic. You've touched on the KDIGO guidelines a few times. Can you just help us understand how you leverage those to maximize the U.S. opportunity? I guess given sort of the use has been ex-U.S., any material difference in usage outside the U.S. versus how they would envision it being used inside the U.S. once it's approved?
Yeah, I'll make some comments on that.
Sure.
You have to remember they are international in nature, and they are evidentiary-based guidelines, so it is based off of published data, et c. Not everyone uses them in the U.S. for CRRT in particular, because they had not been updated since 2012, and the only agents they recommended primarily was citrate, which is off-label in the United States. There was not good alignment for use in the United States. They would include heparin in the recommendations or in the portfolio of products you could use, but not really recommend it like they would citrate.
If you were a U.S. operating institution and you were looking at the KDIGO guidelines, you are looking at a recommended agent in citrate that was not FDA-approved and complex to use, so you did not always follow it. There has been no revelations in these KDIGO guidelines for CRRT since 2012 until this year, until 2026. The revelation was nafamostat and the fact that they are recommending it as an alternative in CRRT for citrate. When KDIGO is developed, they also take into consideration availability of the product, and they know that nafamostat is only available in Japan and South Korea.
So they qualify it by saying, If you have access or can get. Most of the countries in the world do not have access to it. I would expect that the KDIGO guidelines would be modified moving forward if and when we get approved in the United States. I think it will be on parallel, if not the primary agent offered, especially if our data supports the data that they recently cited in those guidelines for fewer clotting events and fewer filter changes. Those two studies that they cited in the KDIGO guidelines, interestingly, are a similar size to our pivotal study.
One was only 50 patients and one was only about 70 patients. We are a 70-patient study. Those two studies showed the fewer clotting events and fewer filter changes. The goal is to be in alignment with those studies, continue to support them, but then have access in a much larger market in the United States where KDIGO can then consider that for recommendations moving forward.
Fantastic. We ought to.