Thanks so much, everyone, for joining us this year for the Guggenheim Healthcare innovation conference. I'm Vamil Divan, one of the biopharma analysts here. Next up here in this room, we have Tonix Pharmaceuticals, and I'm joined by Seth Lederman, the CEO of the company. Thanks again for joining us. Maybe I'll turn it to you first, I know you just reported earnings yesterday morning. I'm keeping my days straight here. Maybe just the key takeaways that you're highlighting from the results you shared.
First of all, thank you very much for including us in the conference and for interviewing me. We did report yesterday our earnings, and I think the headline was that our launch of TONMYA for treating fibromyalgia is on track. We had growth in net sales, all of our KPIs, net sales, TRx, NRx, refills, NBRx, et cetera, MBRx. So, we're really on track for what we think is going to be a very important product in fibromyalgia. There hasn't been a product in fibromyalgia, a new product in more than 15 years. So, we've had to come in and recreate, breathe life into this category, which is a challenge.
Yeah.
But on the other hand, there's really wind at our back because there's a lot of science that's happened in the past 15 years and a lot of interest in fibromyalgia.
Okay. You touched on this briefly, but what are the key metrics that you're looking at? What should investors be focused on as we track this launch?
Yeah. Well, the main thing is net sales.
Right.
We had $15 million of net sales last quarter, and that was over $11 million of net sales in Q2, so that was a 37% increase. TRx grew significantly, 27%, and all the way down. But in addition to that, behind that, we had wins in access. In Q2, we got two of the big three payers in commercial, and then in Q3, we got two of the big three in managed Medicare. As we sit here today, we have 53% of covered lives in the United States, and we believe that contributed to Q3 sales, but we expect going forward that that will be further wind at our back. Another important change is over the summer, we recruited and trained 50 new sales representatives who were in the field on September 1st, so our sales force has grown from 100- 150.
Our commercial operation is running on all cylinders. Yesterday, we sponsored an unbranded segment on "Good Morning America" to raise awareness of fibromyalgia. Both on the unbranded and the branded piece and all over, I think that we're having wins and successes in fibromyalgia.
Okay. You mentioned the access that you have now, I think you said 166 million lives covered?
Yes.
Couple questions from there. What do you think is next here? What is the sort of steady state you hope to get to in terms of covered lives? What is the level of access? Are there step throughs or what do patients have to do to actually get on the product?
Yeah. I think the same reasons that the current payers have signed on are the same reasons why new payers will sign on, meaning I think a typical experience is that a plan will see that they are paying for prescriptions and they are not getting a rebate. That is usually something that brings people to the table. From the launch, from the very beginning of the launch, actually almost a year ago today, we have had very good rates on prior auth submissions and prior auth approvals. I think that that is what is really driving our success. Where do I hope it gets to? Well, I think that we still have one of the big three to get in commercial and one of the big three to get in managed Medicare.
There are some other plans that are not part of the big three, but together a lot of lives. I cannot guide, and obviously we cannot drag anyone to the table, but we are having a lot of productive conversations, and our managed access team is running all over the country, not just focused on the top plans, but also the sub-plans now.
Yeah.
Because once you get the top plan, you still have to get the sub-plans to buy on. In terms of the steps, we have not focused on getting coverage without steps. It just has not been a priority for us. So typically, our contracts would have one or two steps, and it is usually a list of the three approved medicines and then maybe one or two off-label medicines that are commonly used. But we do not see that as an obstacle to our product being used. Part of that is it is just the way of life today in the industry, but the other thing is that fibromyalgia patients, particularly the group of fibromyalgia patients who are already diagnosed, typically have already been on and failed one of the existing products.
We're getting a lot of people showing up at the doctors, and they already qualify for trying a new medicine because they've
Okay. Then one other thing you mentioned yesterday with the earnings was the gross to net, and you saw some fluctuations in the quarter. Maybe a similar sort of question in terms of how do you expect that to settle when we get to more of a steady state with the product?
Yeah. Early on in the launch of a product, gross to net definitely fluctuates. We think that at equilibrium, when we're at steady state, I don't know if that's year two or year three. We think it'll be 50% or better, meaning or more favorable. But so far, we've been pleasantly surprised by our gross-to-net, and I think that part of that is the mix that before you have contracts, you're not paying rebates.
Yeah.
That tends to make the gross-to-nets favorable, but not where we want to be to have a very successful launch. So, we're at it every day, and we think that this is going to be a very important product.
Okay. Maybe last one on this topic, just in terms of the uptake from the prescriber side. Maybe you can comment a little more detail in terms of what you're seeing in terms of breadth and the depth of the prescribing out there.
Well, we had 100 reps going into the summer, and now we have 150. Our sales team has alternated between first going for breadth, and then in Q2, the focus was depth, getting more prescriptions per writer. Now, with 150 reps, we're focused on both, and I think that we're making progress in both categories. I just came from the American College of Rheumatology meeting in Orlando, and my feedback will be anecdotal, and maybe biased because people are talking to me because they're interested in fibromyalgia. But I've been talking about fibromyalgia for more than 30 years, and I've never seen so much interest. I think that the biggest group of writers are rheumatologists, and we knew that going into it, and that's proven true.
But the rheumatologists are very interested in this because there's a real recognition now that fibromyalgia is not a diagnosis of exclusion. In fact, fibromyalgia typically occurs in the setting of other conditions. In rheumatology, there's a certain group of rheumatoid arthritis patients who are called difficult to treat, and now more and more people realize that means they also have fibromyalgia. In psoriatic arthritis and spondyloarthritis, there's the concept of persistent pain, and now they realize that's fibromyalgia. Fibromyalgia in rheumatology is emerging as the thing that's left when the biologic has controlled the inflammation. It just seems to be, I think our moment has arrived in terms of the recognition of this aspect and what our product might do.
Okay. All right, great. Maybe we can shift now to more of the pipeline because you have several interesting programs to talk about there. For TNX-102 SL in MDD, just kind of how do you see that asset differentiating? I know one of the things you've talked about is sort of the benefit there on sleep. So, what's the patient population you're looking to enroll, and how do you sort of show the differentiation here for this asset?
Yeah, thank you. We have an ongoing potential pivotal phase II study in MDD, major depressive disorder, and this is exactly the same product that we have approved in fibromyalgia. In fibromyalgia, it is called TONMYA, but in depression, where it is not approved, we call it TNX-102 SL. It is well-known that depression patients have sleep problems. Our targeting of depression by trying to improve their sleep quality, I think, is really a novel idea. We have de-risked this to some extent because from a pivotal trial in fibromyalgia, we actually had a nominal P-value in improving depression by what is called the Beck, the Beck Depression Inventory. In a PTSD study, we had a nominal P-value improving depression by the MADRS, and the MADRS is the primary endpoint of this study.
We have not enrolled prospectively patients with MDD and looked at their depression, but from two large registration quality studies, we believe there is a signal in there. We are very excited. This would obviously be a line extension or a label expansion of the product in depression. Depression, as you know, is a much more accepted and big market, so we are very excited. An unsatisfied market.
Yeah
Despite the many products that are out there.
Now the HORIZON, maybe last, what is the latest around the HORIZON trial that you are running? What are the next steps to look out for?
Yeah. We started enrolling in June. We haven't given an update. We're generally pleased with how it's going, but we don't feel we can guide to top line yet until the enrollment hits steady state. I think it will not be long before we can guide to top line in that study. It's a very traditional six-week depression study that all the latest drugs in depression have done pretty much the same protocol. It's not particularly hard to enroll or operate. I mean, every study, you have to focus on every detail, but I'm saying there's nothing novel about this study.
Yeah, right.
I think that this is more blocking and tackling, but we're very excited about the idea of expanding this into an entirely new category.
Okay. Last question on TNX-102 SL. Beyond MDD, do you see potential to expand this further into other indications?
We do, and we are very excited because poor sleep plays roles in so many indications. There is actually a very interesting news article in Nature Medicine over the summer that was triggered by our work, but also some of the new orexin drugs. We are excited that we are not alone in targeting disturbed sleep as a mechanism. Most people think of a molecular target when they talk about targets, but as a therapeutic target, improving sleep quality could have a lot of broad applications. We think fibromyalgia and depression are just the tip of the iceberg.
Okay. All right, so let us shift gears into TNX-4800, obviously in development for Lyme. You have the TRAIL trial, which I like the name there.
Thank you.
So maybe just, what is the proposed dosing regimen here for this program?
Yeah. Our TNX-4800 is a long-acting monoclonal antibody that provides passive immunity to the OspA protein on Borrelia. It functions like a vaccine, but it's not a vaccine. It's a long-acting monoclonal antibody that delivers passive immunity. What we're competing against, so to speak, there are no currently markets on, no products on the market, but obviously Pfizer Valneva has a vaccine that elicits active immunity to the same antigen. Comparing it to, we have much faster onset to protection, because if you get our antibody, in theory, it's in development, we don't know, but in monkeys, in experimental challenge studies with Borrelia-infected ticks, we have onset very rapidly, so call it two days. Whereas the vaccine takes several months for the first season, and then there's another booster after a year.
We think that that's probably the biggest advantage is the speed of onset. Except for that, the study that we're doing, that we plan to start in 2027, is very similar to the Pfizer study in terms of being a field study, looking, the primary endpoint is decreased number of Lyme disease cases. Very similar statistical analysis, very similar in just about every way. One of the things that makes it easier for us is we can start getting efficacy the first season, whereas in the vaccine trials like Pfizer, the primary efficacy surveillance period was after that one-year boost. It's a little bit faster for us to get there.
Two questions on this program. You take the antibody, and it's a one-time?
Oh, I'm sorry. I didn't answer your question. We believe, based on the serum levels of the antibody, it's a long-acting antibody. It's the LS type of long-acting antibody. We believe that one dose will have protected levels for three months.
Okay.
Our protocol is to get a booster, if that's the right word, or a second dose, three months later. Imagine someone starts, gets the first shot in April in the Northeast, let's say, and then May, June, July. July, they get the second one, and they're protected all summer. That's the protocol we're testing, and that's really for people who live in endemic areas. We also envision that there could be another market, more of a traveler's vaccine market, for someone who lives in a non-endemic area, but then goes and spends two weeks on the Cape, Martha's Vineyard, East Hampton, wherever, when they go into the belly of the beast, so to speak.
Right
Where there's very high rates of Lyme. They would probably only need the one dose.
Okay. A couple of other questions that I have on the trial itself. One, what age range are you studying in terms of the population?
That's a very important question, because Pfizer studied five and up, and at some point, we would love to study the pediatric population, but right now, we're focusing on adults. Our population will be 18 and older.
Okay.
At some point, we'll go back to the pediatrics. But one of the advantages of studying adults is, particularly if you look at the population 55 and older, there's almost a doubling of incidents of Lyme. That's one of the ways where we think we can address some of the case accumulation issues that have plagued other studies.
Okay. Then you mentioned this trial, wanting to see the impact, the proposed patient profile. Any people who could be at risk of getting Lyme. How are you executing the trial to make sure the patients you enroll are actually at risk for getting it, so you can see an impact from your therapy?
Well, one of the big advantages we have is all of the work that Pfizer's already done. They've already put out literature about risk factors, and all the things. We're following in their footsteps, following the footsteps of giants. We're going to do everything that they did, so to speak. We have the advantage of the adult thing and loading up on potentially people 55 and above. But generally speaking, it's the same things that they were looking at, people who spend time outdoors, hikers, golfers, gardeners, et cetera. Similar to them, we are going to focus on people in areas where you can do, call it geo-targeting, and find people in areas where the deer ticks are now advancing into that area, because those are areas where people are more likely to get Lyme.
Okay. Then we can talk just a little bit about how you're seeing the commercial opportunity. Obviously, still a little bit ways off, but in terms of what patients do you think, or what people do you think would be likely to receive this antibody? What do you envision the cost would be, and is this something you think would be covered by insurance, or it'd be more of an out-of-pocket?
Well, first of all, we have done some primary research. We commissioned a third-party firm to do primary research, some of which is in our materials on the web. But the interest in a product that protects against Lyme is extremely high.
Yeah.
There is just a lot of paranoia about Lyme. Obviously, I think Lyme, it is the most common tick-borne disease, but I think it is the most terrifying tick-borne disease because between 10% and 20% of people get long-term symptoms. I think, I live in New York and vacation essentially on the Cape, so I am adjacent to a community that is very appropriately scared of getting it, because it can really derail someone's life. It is a very significant problem for adults. For children, it can change the trajectory of their life.
I think that the Borrelia bacteria is a terrible nuisance, and I think that that really drives the high level of, I do not want to use the word paranoia because it sounds like I am not treating it respectfully, the high level of fear about contracting Lyme, because you really do not know if you are going to be part of that unlucky 10%- 20% who is going to wind up with long-term symptoms. We have not gotten to the cost yet. Just on the surface, though, this is a full monoclonal antibody, so it is not going to. Probably, it will be more expensive than a vaccine, but it is amazing what is happening now in terms of the manufacturing efficiencies and consequently lower costs of monoclonal antibodies. If all goes well, this product has the potential, well, top line could be Q1 2029 or first half 2029.
If all went well and we got favorable reviews from everything, product could potentially be approved in 2031. I think we have time to get there, but by that time, I think that the cost of antibodies would astound all of us, given all of the advances that are going on in terms of manufacturing. I do not have a number in mind, but I do not think it would be out of pocket, but I think that it would be covered by insurance. The previous one, LYMErix, which was approved in 1998, was covered by insurance and got recommendation from the vaccine group. I am pretty sure that this would be recognized as providing significant benefits.
Okay. Maybe let's quickly touch on your TNX-1500, and I guess a couple quick questions I have here. CD40 ligand for kidney transplant rejection. There's an investigator-initiated trial starting next year. What are you hoping to learn from that trial? Then maybe the broader question is going to, from that, what's the path to try and get this into registrational type work? There's Eledon's in this space too, and is this something you'd follow a non-inferiority pathway, or are you looking at it differently?
Yeah. Thank you very much for I think you know this, but maybe the audience doesn't, but I've been working on CD40 ligand for more than 30 years. As a young assistant professor, I discovered the CD40 ligand and worked for many years with Biogen on the first-generation product called ruplizumab. So, I've been working on this for a long time. We followed the other products, and I think that the two most exciting products out there are ours, which is an antibody, not long-acting, but it has a half-life of more than 30 days, and the Amgen product, which actually, it came from Horizon, Viela, MedImmune, and that one has very interesting data in Sjögren's syndrome. Then there's tegoprubart from Eledon, and there's also Sanofi has frexalimab that they're developing.
It's a crowded space. By the way, Biogen's product is in its second phase III for lupus, and that was actually developed under our original Columbia patent, under a license from our patent, and yet it's about to be approved, pending phase III data. So, I'm very excited that the field is advancing, and I just came from ACR, and Amgen and Sjögren's is very exciting. The Biogen data in lupus, in the U.S., Biogen has it. In Europe, it's UCB. So these I'm delighted that CD40 ligand's come to the surface. I don't have time to go through all of the comparisons, but I believe from a number of different studies, and by the way, not head-to-head comparisons, but from all of the data I've seen, I believe ours is the most potent.
And I believe that it has the longest half-life. It's kind of the same as the Sanofi's frexalimab. And those two factors together, I think, we believe we've got a best in class. So when you ask about what's our plan, we're starting with kidney transplant because kidney transplant is a very stringent test of the potency of an anti-CD40 ligand. For example, the Biogen antibody that I'm very proud of, my role in it indirectly, 30 years later, that does not modulate cell-mediated immunity. That's limited to humoral immunity, and that's why I think it's so exciting for lupus, which is mostly a humoral immunity condition. But then going into things like transplant, if we get what we're hoping to get, I think that that would open the door to many immunological conditions.
There's something about back in that day, the early days of therapeutic monoclonal antibodies, something about low-hanging fruit. Modulating CD40 ligand is a very potent modulator of the immune system. Now it's taken time for the subtleties of IL-17 and some other things to be monster successes, but anti-CD40 ligand has tremendous potential to modulate the immune system, both cellular and humoral. I know this is a line from Johnson & Johnson when they bought their FcRn, but I really believe this is a pipeline and a product.
Yeah
opportunity.
Okay. Maybe just last quick question is just around your cash position and the runway.
Yeah, thank you. We reported our Q3 cash was $163 million, and we have no debt. In the three quarters so far of 2026, our cash burn has been $41 million, and $43 million. Nonetheless, we're guiding that we have cash to get into Q3. But the fact that we have no debt, and I think we have reasonable access to cash, and I think that our story just keeps getting better and better. Every week, we get TONMYA sales, and there are a number of other milestones that we feel are coming up.
Okay. All right, great. Thanks so much again for joining us. Congrats on the progress, and we'll look forward to seeing how things progress from here.
Thank you very much.
Thank you.