All right. Welcome, everybody. My name's Alexa Deemer, and I'm here with the Cantor Biotech Equity Research Team. With me today on stage is Seth from Tonix. This is the last session of the second day of our Cantor Healthcare Conference, and we unfortunately only have 30 minutes and a lot to cover. Seth, let's get started. For those in the audience that are new to the Tonix story, maybe you can give an overview of the company, where it is today, and how you think about the portfolio across both commercial and pipeline assets.
Great. First of all, thank you very much for having us at the conference and for doing this fireside chat. I'm Seth Lederman, the CEO of Tonix, and we are a fully integrated biotech company, where we've taken a product from concept through development, FDA approval, and now launch all on our own. The product is TONMYA, for the treatment of fibromyalgia in adults. In addition to that, we have a pipeline of programs, several phase II or phase II-ready programs, that present, I think, also a very exciting opportunity for investors and for patients. The ones I'd call out quickly are we have a prophylactic long-acting monoclonal antibody for Lyme disease. In addition to that, we have an antibody, an anti-CD40 ligand antibody, for transplant rejection and treating autoimmunity.
All right. Great, and we will definitely talk about those topics later. Maybe before we get started, what, in your view, are the most important things that Tonix needs to execute on over the next 12 months to continue driving shareholder value?
Thank you. I think the launch of TONMYA is really first and foremost on our minds and as a value creator for Tonix. We've now had two full quarters of launch under our belts. The first quarter of 2026, we had $3.7 million of net sales, and in the second quarter, we had $11 million, which is a 3x increase Q2 over Q1. It's not a small undertaking for a small company to build out a whole commercial infrastructure, but I think we're doing a good job of it. We now have 150 reps in the field, where we had 100, and we've just gone up to 150.
We have also been successful on managed care access, where we have two out of the three big PBM GPOs signed up under contract on the commercial side, and we have one of the big three on the managed Medicare side. The managed Medicare contract will come in in January of 2027, at which point we will have about 46% of Americans covered.
Okay, and I guess what aspect of the story do you still think is misunderstood or underappreciated by investors today?
Fibromyalgia is an enigma. I was a professor at Columbia University, and I spent several years in the division of rheumatology, and I can tell you fibromyalgia is hard to understand, even for rheumatologists. First, without falling back into being a professor too much, the term "rheumatism" is the parent term for rheumatology. Fibromyalgia, rheumatism is the archaic term for fibromyalgia, so in a way, we are studying the most ancient and prevalent rheumatology condition in fibromyalgia. But 50 years ago, it was said by one of the thought leaders that among rheumatologists, half of rheumatologists say they never see fibromyalgia, and the other half said it is the most common condition they see.
I think in today's term, you would call that ascertainment bias and confirmation bias, but there is still a big lack of understanding, even among prescribers, about what fibromyalgia is, what it takes to diagnose it, and other issues. I think that there are about 3 million diagnosed and treated fibromyalgia patients, so those are our kind of low-hanging fruit from the commercial side. But then there is about 7 million that are not yet diagnosed, and that is going to be our big upside. Some of the very big changes that have happened in fibromyalgia recently, all of which are wind at our backs. One is that the new criteria in 2016 very specifically say it is not a diagnosis of exclusion and that fibromyalgia can be diagnosed in the setting of many other conditions, even conditions that cause similar symptoms.
The second is that now tender points are not part of the diagnosis, so I think that that makes it more straightforward to diagnose. I think that understanding fibromyalgia is so important. I should say one of the other big thing that's happened is in 2017, the International Association for the Study of Pain, the IASP, recognized nociplastic pain, and fibromyalgia is the prototype of nociplastic pain. There are three primary types of pain, kind of like there are three primary colors, yellow, blue, and red. There are three primary types of pain, nociceptive, neuropathic, and now nociplastic, and fibromyalgia is the prototype of nociplastic pain. These are messages we have to get out there and have to explain the potential for using a new FDA-approved medicine for this indication.
And I think when we were sitting here at this time last year, TONMYA had just been approved, so it was a totally different conversation last year than we're probably going to have right now. I guess there are only really other three FDA-approved therapies for fibromyalgia: Cymbalta, Lyrica, Savella, and those were all approved greater than 15 years ago. I guess, given TONMYA's mechanism and its profile, how does it differentiate from these other therapies, and where does it currently fit in this treatment paradigm?
Great. First of all, like all of the other programs at Tonix, it's first in class. The existing medicines, Lyrica was approved in 2007; Cymbalta in 2008, Savella in 2009. Two of them are SNRIs, and the other is a gabapentinoid. And they have their own mechanisms, but ours targets the disturbed sleep in fibromyalgia. So there's no other product that has our mechanism. I think that that's a very unique aspect to it. It's an every-night bedtime medicine that's designed and FDA approved for long-term use. Now, we have not done any comparative head-to-head studies with the other products. And it's a little bit hard to compare also because we enrolled patients with the 2016 criteria in our studies, and the earlier drugs enrolled patients by the 1990 criteria, which required tender points.
I generally think that the earlier products, those studies, probably enrolled more severe patients, and we enrolled the patients that you would currently call fibromyalgia today. Another thing is that those products were studied before the FDA required the modern treatment for missing data. And we did our approvals under modern standards. So it's hard to compare the data, but I think that ours is probably as effective. But the important thing is that I think that we have big advantages in tolerability.
That was going to be my next question. Perhaps you can remind us of TONMYA's safety and tolerability profile.
Thank you. TONMYA, in the clinical studies, and we did three phase III studies, was generally well-tolerated. The most common adverse event in the studies was an oral experience that some people called tongue numbness, some people called abnormal taste. Some people had other words for it. But in practice, we are finding that that is not an obstacle to people initiating or staying on therapy by and large. Obviously, we don't have the same kind of data from real-world evidence that you would have in a controlled study. But we're very pleased with the way the product is being accepted in practice. We're still early in the game as we bring in new patients. But we'll have to see as time plays out about refill rates, persistence, and things like that. I think it's too early to have quantitative information.
Generally speaking, the design of the product was used for long periods of time, and I believe that we have the potential that that will be realized.
I guess for sales going forward, do you expect more of a linear growth curve or more of an inflection point at some point in time?
Well, we certainly expect an inflection point at some time. It is hard to tell when that will be, can't predict the future. But right now, I think that our growth is pretty linear overall in terms of NRx, new to brand, the rest of it. I think that we are growing well. But probably if there is an inflection point, it will probably be related to access. As I said, we have two out of the big three in commercial, but it takes a while for those to percolate into the sub-plans and things like that. So it will take some time to get the benefit of that access. Obviously, we are hoping to get the third big three and Medicare. The Medicare won't come in until 2027.
Because of the way that Medicare is set up, we won't get general Medicare; this is managed Medicare, we won't get regular Medicare until October 1, 2027, when we expect it. We think that Medicare may be as much as a third of our market, or 30% of our market. So those are all important, but I think that access is important, but you can expect that as we improve access, we will then also increase our marketing efforts because you don't want to drive demand and then have frustrated patients that are unable to get the product.
Got it. I guess you are initially targeting rheumatologists, but presumably, many undiagnosed patients are seen first by primary care, pain management, or psychiatric providers. I guess as you continue to grow the sales force, what specialties are next on the list?
Yeah. So we are doing a modern launch that's very data-driven. So we are really targeting prescribers, that's doctors and other prescribers, who have a history of diagnosing and prescribing medicines for fibromyalgia. So we are not actually targeting rheumatologists, and it's a broader swath of people. But what we are finding is that about 40% of the writers are rheumatologists, and then the next 30% are primary care, and then about 20% are a new specialty, a relatively new specialty, certainly since the approval of Lyrica, Cymbalta, and Savella, of pain anesthesia, and that's actually where some of the new key opinion leaders in fibromyalgia are emerging. Then we get some neurologists and some psychiatrists. But I think the days of going after just one specialty are behind us, and what we are really doing is targeting to the writers, to the particular writers.
Got it. And then I guess before we move on to the pipeline, what is some of the feedback that you have been hearing from both patients and physicians?
So obviously the information we get is indirect. I mean, the sales team talks to prescribers, and they get feedback. I, for the most part, speak to key opinion leaders, and then we monitor what is said about it in the media and the rest of it. But generally speaking, I think the one thing that has emerged is that the tolerability is living up to our expectations, and that is important because in any clinical study, these oral effects had to be declared as AEs, adverse events, or side effects. Whereas in practice, they may not rise to that kind of level in people's brains, particularly if they are getting a benefit from the product. So I think that overall the feedback we are getting is that the tolerability is not going to be an obstacle to us succeeding and hitting our goals.
I think it is harder to say anything quantitative about the efficacy side of it. But one thing that is very gratifying is both from feedback that the reps get and that I have gotten from key opinion leaders is there is a group of patients. I do not know how big it is, but there is a real group of patients who say, "This medicine has changed my life." "And that is very gratifying to us, and that is what we hope for. And really, having studied fibromyalgia for 30 years, that is the most you can hope for because fibromyalgia is a waxing and waning condition. So you are really only going to get that kind of response from people who are in some kind of a flare or some kind of an exacerbation of their disease activity.
We just hope that with more people out there taking it at different cycles of the condition, that we will accumulate more patients and more experience.
Okay, got it. Let's move on to the Lyme program. For those less familiar with this program, maybe you can give us an overview of TNX-4800, what it is, how it works, and why you believe a monoclonal antibody approach is well suited for Lyme disease prevention.
Thank you. Well, Lyme, hopefully the audience knows, is a nuisance. It is a major healthcare problem. It is the most common tick-borne disease, but even among the tick-borne diseases, Lyme has a 10%-20% rate of people developing chronic symptoms. This is really a devastating problem, both for the health of Americans and also for the economics of the disability and the rest of it, because chronic Lyme or post-treatment Lyme disease can be really devastating. We are working on a long-acting antibody that prevents infection by the Borrelia. It stops Lyme before the person even gets infected. It is very unique in terms of mechanism of action that this is designed to kill the Borrelia bacteria in the midgut of the tick. The tick is the vector, and in New England today, the vector is often infected with Borrelia, and that is how you get sick.
When the tick sucks the blood of a treated person, they suck this antibody into the belly, and that is where it acts. It kills the bacteria in its belly. Very unique. I used to teach the medical students at Columbia University the vaccine lecture. I believe there is no other prophylactic that acts in the belly of the vector. We are very excited to be developing this. We have recently met with FDA. We have press-released the top line from that meeting, and we expect to start a phase II study in the beginning of next year.
Yeah, as you said, no FDA-approved vaccine or prophylactic therapy for Lyme, so maybe you can frame the size of the unmet need.
The size of the unmet need is very large. One way you can put it is 87 million Americans live, work, or travel to Lyme-endemic areas. It's a big piece of the population, and it's relatively common. It's not unsurprising in the summer; there's a lot of news coverage about Lyme, but once again, it's another bad Lyme season, more disease, more problems. It's a very large market. I think that the size of our product and the uptake will depend on how easy it is to get the tolerability and other things. From the phase I PK study that we've done, we have every reason to believe that it will be well-tolerated and will be a good strategy for protecting people from the devastating effects of Lyme.
Okay, great. Maybe now you can walk us through the design of the planned phase II field study, target enrollment, primaries and secondary endpoints, and the surveillance period that you're using to define efficacy.
Great. Yeah. So like the development of our antibody is very similar to the development of a vaccine. FDA regards Lyme as clinical Lyme, not just serology. The primary endpoint will be decreasing the number of cases of clinical Lyme in the treated group versus the placebo. In prior vaccine studies, there will be a decrease, presumably also in the number of people who seroconvert, but that's not the efficacy endpoint. It's decreasing the number of Lyme cases. One of the big advantages of our product is we believe it provides protection within two days, and that's really the earliest time where we've measured the product in the bloodstream, as opposed to antibodies, which typically take six months to a year of immunizations to provide any protection. So that's a big difference.
Someone can make a decision; I'm going to a Lyme endemic area, or hopefully if it's ever approved in children, my kids are going to a Lyme endemic region to camp or something. You can get a product that we expect ours to be right before the risk of exposure. We envision this study to play out over two seasons. Lyme is seasonal in the United States. By the way, Lyme in Europe is quite different than Lyme in the U.S. But in the United States, Lyme is seasonal. FDA regards the Lyme season as 6six months, so our surveillance period will be six months. The overall dosing protocol is one dose early in the season, something like March, and then another dose three months later.
That way, we believe from our modeling that we will provide a good level of the antibody in the bloodstream for the six-month surveillance period. Other than that, it will be very similar to the vaccine trials that some other people have done. But we believe that by enrolling 3,300 people in the phase II study, that we should be able to get an efficacy signal. But our study will be a hybrid, not fully event-driven, but hybrid to event-driven so that if, for example, we do not get a certain number of cases after the second season, it would mean that we would enroll into a third season.
Okay, got it. I guess what are the signs and symptoms of Lyme disease, and how quickly after infection do these symptoms typically manifest?
The most common symptom of Lyme disease is the target rash called erythema migrans, and that evolves over a period of days after the tick bite and the Borrelia infection. But Lyme, there are only two spirochetes that cause disease in humans. One is syphilis, and the other is Borrelia. They have a lot in common in the sense that syphilis is known as the great imitator because Lyme, for example, infects the conduction system in the heart, and it is not as common as erythema migrans, but you can get heart block and even complete heart block.
Another is a palsy, a nerve palsy that is very similar to Bell's palsy, where you get facial paralysis and other things. But actually all of the cranial nerves are at risk of being paralyzed by Lyme infection. So that is why we, like other people in efficacy studies, will have an adjudication panel. So each case will be adjudicated in order to count towards the efficacy goal.
Got it. I am assuming site selection is very critical for a field study like this. What have you learned from prior Lyme vaccine programs about what makes a site productive versus one that struggles with enrollment or event rates?
Well, we are very involved right now in site selection and working with experts on trying to increase the attack rate for the volunteers that we are enrolling. One of the things about Lyme is that in New England, the incidence of Lyme is much higher, roughly twice in the group that is 60 and older relative to younger people. Then there is another bump early on in kids, but not as big. The big risk group is 60 and above. I am not sure why that is. Is that because older people are gardening, hiking, doing more outside than younger people? I do not know. But we are certainly going to have the demographics of our trial population match the population at risk. Which, in FDA, it is standard practice and FDA guideline.
I think right there we should have an increase relative to other studies that are more biased at younger people. But I think that we are definitely looking for people who engage in activities that put them at risk for Lyme. There are some things that, right out of the bat, someone who has had Lyme before is more likely to get it again, the family members and whatnot of those people. So, there are a number of ways that we think that we can enrich the population of volunteers to get our attack rate higher. There were two Lyme vaccines studied in 1998, that was LYMErix and ImuLyme, and each of them had attack rates of 0.8%. Since then, Lyme has increased more than threefold in New England.
We think it is not unreasonable to think that we could, if we enrolled smartly, get up to an attack rate of, let us say, over one, and that is why we believe that 3,300 participants should accrue the right number of cases in the placebo group.
I see. Then I guess if a competitor's vaccine program gets approved, what do you think the impact would be on TNX-4800? Would it help build out the market, or would it create more direct competition for the same patients?
Yeah. I am a drug developer, not so much of a market expert, but I will tell you that several of the very smart investors that we have spoken to have said that being second would be better for us. That, particularly if a big company was out there before educating the market, telling about the risk of Lyme and the rest of it, that that would do a lot of work for us. I guess I will adopt that position. But I do think that we have a better target product profile than the vaccine, that we work within two days, it does not take a year to have protection, and at least in the phase I study, we think the tolerability will be better than a vaccine.
All right, great. I know we only have a few minutes left, but, beyond TONMYA and TNX-4800, is there another program in the pipeline that you are particularly excited about right now? I am sure there is many, but if you could just pick one.
Sure. Well, I think that our anti-CD40 ligand program, which we call TNX-1500, but recently as a provisional INN name of mostiprubart, is very exciting. It is phase II ready, and we are going to start in kidney transplantation, preventing rejection in kidney transplant. But that is really a door to the whole autoimmune market. I have been working on anti-CD40 ligand antibodies for more than 30 years. Actually, as a young assistant professor at Columbia University, I discovered the CD40 ligand and worked with Biogen on the first generations of it. We believe that we have the best in-class anti-CD40 ligand antibody, and that is, again, no head-to-head comparisons, but looking at the efficacy, for example, in allotransplant in non-human primates. So we are very excited about our antibody in that program.
We hope this year to start a phase II study with Massachusetts General Hospital, part of the Harvard Medical School system, in preventing rejection in allotransplant.
All right. In the last minute here, maybe you can give us a quick update on the current cash position and how you're thinking about runway.
Thank you. At the end of Q2, we had $176 million. We have no debt, and we have a very simple cap structure. We've publicly said that we have runway into Q2 of 2027. We're continuing to work on advancing TONMYA, advancing the programs in development to get more interest in what we're doing. But we believe there'll be funds out there to get us to the next level.
Okay. All right. Thank you so much, Seth. It's always a pleasure to talk to the Tonix team, and thank you , everybody, for joining us today. This was the last session of Fireside Chats, the second day of our conference, and I think we have a bunch of panels next. Look forward to seeing you there. Thank you.
Thank you, Alexa.
Yes. Thank you, Seth.