Earnings call transcript: Talphera Inc. outlines strategic shifts in Q1 2025

Talphera Inc. (TLPH) reported its first-quarter 2025 financial performance, showcasing significant strategic shifts and operational updates. Despite the absence of specific earnings results, the company highlighted a reduction in cash operating expenses and provided insights into its ongoing nephro CRRT trial. The company’s stock experienced a slight uptick of 1.96% in aftermarket trading, closing at $0.52. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, though investors should note the company’s rapid cash burn rate.

Want deeper insights? InvestingPro offers 10+ additional exclusive tips about TLPH, including detailed analysis of its financial health and market positioning.

Key Takeaways

• Talphera reduced Q1 2025 cash operating expenses to $2.9 million from $4.2 million in Q1 2024.
• The company is focusing on a nephro CRRT trial, with FDA-approved changes to the study design.
• Talphera’s financing strategy includes three tranches, with the first already received.
• Stock price increased by 1.96% in aftermarket trading, reaching $0.52.

Company Performance

Talphera Inc. demonstrated a strategic focus on reducing operational expenses and advancing its nephro CRRT trial. The company’s Q1 2025 cash operating expenses decreased significantly compared to the same period last year. This reduction aligns with Talphera’s revised guidance for 2025, which anticipates cash operating expenses between $17 million and $19 million. The firm also emphasized its ongoing efforts in the nephro CRRT trial, a critical component of its product development pipeline.

Financial Highlights

• Cash operating expenses: $2.9 million in Q1 2025, down from $4.2 million in Q1 2024.
• Cash balance as of March 31, 2025: $5.4 million.
• Pro forma cash balance after financing: $9.8 million.
• Reduced 2025 expected cash operating expense guidance to $17-19 million.

Outlook & Guidance

Talphera’s strategic initiatives include completing the nephro trial in 2025 and targeting NIAID approval in 2026. The company plans to activate five additional clinical trial sites by mid-year, aiming to enhance patient enrollment. Talphera’s financing strategy, structured in three tranches, is expected to support the company through the study’s completion.

Executive Commentary

CEO Vince Angotti stated, "If approved, NIAID would become the only FDA-approved regional anticoagulant for use during continuous renal replacement therapy." This underscores the company’s strategic focus on addressing unmet medical needs in CRRT. Dr. Shaquille Azlem, CMO, highlighted the limitations of current anticoagulants, stating, "It is evident that the current anticoagulants for CRRT are not ideal products."

Risks and Challenges

• Potential supply chain issues with heparin could impact the CRRT market.
• Enrollment challenges persist at legacy clinical trial sites, despite broader criteria.
• Macroeconomic pressures could affect financing and operational costs.
• Regulatory hurdles remain a concern for NIAID approval.

Q&A

During the earnings call, analysts inquired about the impact of broader criteria on patient enrollment. Dr. Azlem confirmed increased screening activity, although legacy sites continue to face enrollment challenges. The company expects new sites to drive higher patient enrollment, addressing this critical bottleneck.

Talphera Inc.’s strategic focus on cost management and clinical trial advancements positions it to potentially capture a unique market niche in CRRT. The company’s proactive approach to financing and operational efficiency reflects its commitment to achieving long-term growth and innovation.

Full transcript - Talphera Inc (TLPH) Q1 2025:

Conference Operator: Welcome to the TULFERA First Quarter twenty twenty five Financial Results Conference Call. This call is being webcast live via the Events page of the Investors section of TULFERA’s website at www.tolpera.com. You may listen to a replay of this webcast by going to the Investors section of TULFERA’s website. I would now like to turn the call over to Raphia Sedorian, Telfairis’ Chief Financial Officer.

Raphia Sedorian, Chief Financial Officer, Telfaira: Thank you for joining us on the call today. Today, we announced our first quarter twenty twenty five financial results and associated business updates in a press release. With me today are Vince Angotti, our Chief Executive Officer and Doctor. Shaquille Azlem, Telferis Chief Medical Officer. Before we begin, I want to remind listeners that during this call, we will likely make forward looking statements within the meaning of the federal securities laws.

These forward looking statements involve risks and uncertainties regarding the operations and future results of Telfaira. Please refer to our press release in addition to the company’s periodic, current, and annual reports filed with the SEC for a discussion of the risks associated with such forward looking statements. These documents can also be found on our website within the Investors section. I’ll now hand the call to Vince.

Vince Angotti, Chief Executive Officer, Telfaira: Thanks, Raffi. Good afternoon, and thank you to everyone joining our call today. It’s only been about six weeks since our last call, so we’re going to keep our prepared remarks brief. We began 2025 with strong momentum with a focus on the execution of our nephro CRRT trial that resulted in the approval from the FDA on a significantly decreased study size, the removal of certain exclusion criteria, and the activation of additional high volume sites to accelerate enrollment. In addition, a PIPE financing was also completed.

As detailed on our year end call, we made tremendous progress with the study protocol changes, highlighted by the reduction in the size of the study to 70 patients from 166. This certainly helps with shortening the time to complete the study, but importantly, so does adding more of the right clinical study sites and principal investigators. As a reminder, we’ve been focused on the new site profile, specifically one, the type of intensive care unit where the study will be performed, for example, medical ICUs instead of surgical or cardiothoracic ICUs. Two, the specialty of the principal investigator, again specifically a nephrologist as a primary lead for selecting patients to enroll compared to an intensivist or other specialist and three, the efficiency of the administration to initiate a new study at their institution. Doctor.

Aslam identified these site characteristics after his review and learnings from assessing the initial sites as critical, successful, and timely enrollment. Our new site target profile focused on medical ICUs and nephrologists as principal investigators is proving to make a real difference in engagement and activity at each of the sites, including a more efficient contracting process compared to our legacy sites, all supporting our belief that we’re engaging with the right institutions and investigators to allow us to complete the study by the end of the year. Adding these new sites is key to achieving that success. And so far this year, we’ve added three new sites that are activated and screening patients, with five more expected by mid year. All eight of these sites plus others, which we’re having contracting discussions fit our new target site profile, including a much more efficient process to finalize contracting compared to the legacy sites.

In addition to adding new sites, we believe there are other favorable trends and activities that could support the adoption of the FAMI STAT if approved. These include: first, exploring a compassionate use IDE, when we have been approached by multiple institutions and are discussing using the femestat under a compassionate use ID for a specific patient population that does not do well with other available anticoagulants And second, continued shortages of citrate supply and potential supply chain issues with heparin. Healthcare providers are inquiring about the timely availability of Nefamostat given the recurrent heparin and citrate shortages. Doctor. Asim will provide some more information on this, as well as around the ongoing contracting with the new sites.

We’ll not be providing clinical study enrollment updates until we attain the 17 patient mark, which is the milestone to achieve the next tranche of financing. Before I turn the call over to Doctor. Aslam to provide some additional details on clinical activities, let me remind you that if approved, NIAID would become the only FDA approved regional anticoagulant for use during continuous renal replacement therapy. There are many disadvantages to the currently used products, heparin, which is systemic in nature, and citrate, which is being used off label. Through conversations with many nephrologists, we believe that NIAID would fill a significant unmet medical need during renal replacement therapy.

I’ll now hand the call over to Doctor. Adlam.

Dr. Shaquille Azlem, Chief Medical Officer, Telfaira: Thank you, Vince. The new site engagement has been promising, as expected, as we shift away from the profile of the legacy sites to new target profiles previously described. To provide some clarity on the sites, we now have a total of eight actively screening sites, Four legacy or old profile sites, and four new target site new target profile sites, three of which just recently started screening. We expect to add five additional sites by midyear, all with the new target site profile. The four legacy sites are not expected to make a significant contribution to the study, so the overwhelming majority of the study enrollment will be coming from the new sites.

The five new expected sites are currently reviewing the clinical trial agreements and related budgets for the study, and have advanced far more quickly than any of the legacy sites. As a reminder, administrative efficiency was one of the key criterion of site selection, and this has proven to be helpful. These sites are all large academic institutions, and most have higher CRRT volumes than any of the legacy sites. We expect to have all these sites activated and screening patients before our next quarterly call. I would like to now provide some details about the compassionate use IDE we are exploring at the request of a large institution in the Southeast.

The physicians see an immediate and compelling need for a subset of specific patients that do not do well with currently used anticoagulants and need an alternative. We have had several discussions with this institution on potentially going to the FDA to request a compassionate use IDE for these patients. This is an opportunity to provide something to patients who have no other alternative during CRRT, and we are exploring the best approach to try to help these patients and their healthcare providers. We do not have a timeline set, but wanted to share this information, as this was not the first such request we have had. It is evident that the current anticoagulants for CRRT are not ideal products, and there is currently no FDA approved regional anticoagulant on the market.

We will provide more information on the compassionate use ID as we advance these discussions. And with that, I’ll turn the call back over to Vince.

Vince Angotti, Chief Executive Officer, Telfaira: Thank you, Doctor. Aslam. Before I hand the call over to Raffi, I want to reiterate our belief that the three critical risk elements, clinical, regulatory, and commercial, for the nephro program are low for a number of reasons. First, with over thirty years of use as an anticoagulant during CRRT in Japan and South Korea, we know nafamostat’s track record of efficacy and safety, minimizing the clinical risk. The trial design has been agreed with the FDA, including broader inclusion criteria and a reduced number of patients, all of which help minimize study execution risk.

Second, we have a clear regulatory path, including breakthrough designation from the FDA, which has provided us with efficient access to the agency, leading to quick review and response times. Lastly, while we know there’s always commercial risk, we believe this is mitigated given the disadvantages of the products currently being used for anticoagulation of the CRRT circuit, namely heparin and citrate. As you heard from Doctor. Aslam, there’s a clear need for an FDA approved regional anticoagulant. I’ll now hand the call over to Raffi for a financial update.

Raphia Sedorian, Chief Financial Officer, Telfaira: Thank you, Vince. As mentioned, we have been highly focused on delivering a completed nephro study by the end of this year. To support achievement of this objective, we continue to reduce our operating expenses. Accordingly, we are reducing the lower end of our previously communicated 2025 expected cash operating expense guidance to now be in the range of $17,000,000 to $19,000,000 Our cash operating expenses, or combined R and D and SG and A expenses, for the first quarter of twenty twenty five totaled $2,900,000 compared to 4,200,000 for the first quarter of twenty twenty four. Excluding non cash stock based compensation expense, these amounts were $2,700,000 for the first quarter of twenty twenty five, compared to $3,900,000 for the first quarter of twenty twenty four.

The decrease in cash operating expenses in the first quarter of twenty twenty five was primarily due to reductions in personnel expense and other general and administrative expenses. Our cash balance at 03/31/2025, was $5,400,000 or $9,800,000 on a pro form a basis for the financing that closed on April 2. As a reminder, the financing was structured in three equal tranches of $4,925,000 with the first tranche received at the initial closing, and the two additional tranches, based on achieving an enrollment of 17 patients and 35 patients, and with the stock trading above $0.73 per share. In total, the $14,800,000 commitment is expected to be achieved later this year, as we expect acceleration in enrollment rates given all the changes made to the nephro CRRT study and the new sites that are coming online. This financing, combined with the $5,400,000 in cash at 03/31/2025, should support the company through completion of the study anticipated by the end of the year.

I’ll now turn the call back to Vince.

Vince Angotti, Chief Executive Officer, Telfaira: Thank you, Raffi. And I’d like to open the line for any questions you might have. Operator?

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. And if you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star then the number one on your telephone keypad. We have a question from James Molloy from Alliance Global Partners.

Your line is open.

Matt, Analyst, Alliance Global Partners: Yes. Hi, guys. It’s Matt on for Jim. I was just wondering if the broader enrollment criteria have started to translate into increased enrollment and if you’ve seen any of that and if you could give some color there. Thank you.

Vince Angotti, Chief Executive Officer, Telfaira: Sure. Well, I’ll make a brief quick comment on the fact that we’re not giving any specifics on enrollment. I think Shaquille can comment to you about how the broader criteria has increased the activity at the sites, not only the previous sites, but in particular the new sites moving forward. Doctor. Aslam?

Dr. Shaquille Azlem, Chief Medical Officer, Telfaira: Yes, thanks Vince. So absolutely. So we have seen more activity, more patients passing through the first stage of their screening, which were previously being rejected because of not meeting some of the broader eligibility criteria. So, in terms of activity, we definitely see an increase in activity at our older sites, as well as new sites. Unfortunately, that has not yet translated into new patients from our legacy sites.

We are hoping that once we get all the new sites up and running, those expanded criteria will definitely yield higher numbers of eligible patients going forward.

Matt, Analyst, Alliance Global Partners: All right. Got it. Thank you guys for taking our questions.

Vince Angotti, Chief Executive Officer, Telfaira: Shaquille, I think you can also add a little color to that, that for the legacy sites outside of just the enrollment criteria that was expanded, there may have been other things impeding them from enrolling, again, on the legacy sites only.

Dr. Shaquille Azlem, Chief Medical Officer, Telfaira: Right, absolutely. So that has been the issue with the types of patients that these sites have access to. So, many of these patients continue to be coming from surgical ICUs or cardiothoracic ICUs. So, although those broader inclusion criteria did give them a bit more flexibility in terms of when to enroll these patients and which patients would qualify. However, because of their overall dependence on this target population where the background use of heparin is very high, it hasn’t materialized as much.

But I think in the new sites that we have different target patient populations, those criteria will definitely give us a high yield.

Conference Operator: There are no questions at this time. I would now like to turn the conference back to Vince. Please go ahead.

Vince Angotti, Chief Executive Officer, Telfaira: Thank you, Chloe. Again, thank you for joining our first quarter earnings call. We’re excited about the progress we’ve made and continued alignment with the FDA, again, with the goal of completing an EFRO trial this year in 2025 with an approval of NIAID targeted for 2026. Again, we look forward to providing additional updates on our progress. And thank you for joining us.

That concludes our call.

Conference Operator: This concludes today’s conference. Thank you for participating. You may now disconnect.

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