Conference Transcript - PVLA 2026-08-12

Whitney Egem, Analyst — Canaccord

All right. Good afternoon, everyone. Thank you so much for joining us. My name is Whitney Egem. I'm one of the biotech analysts here at Canaccord. And it's my pleasure for the last slot of the day to be chatting with Palvela. And as I said, ending on a high note. So thank you for being here. And on behalf of Palvela, we have a CEO, Wes Kaufman. So thank you so much.

Wesley H. Kaupinen, CEO

Thank you for having me, Whitney.

Whitney Egem, Analyst — Canaccord

Starting high level, we're going to dive right in. For anybody newer to the story, can you just frame what Pelvella is today? Like, what do you do? What's the platform designed to address? And what are you trying to build over the next five years?

Wesley H. Kaupinen, CEO

Well, thanks so much for having me. This is our second year in a row having the opportunity to present at the Canaccord Conference. Appreciate your coverage. You were one of the first analysts to initiate coverage on Pelvella after we went public. And appreciate all your support since we've been a public company. I'm going to start with the name Pauvela, which in Finnish means to serve. The mission of our company is to serve patients that have serious rare diseases. And we specifically focus on those diseases where there are no approved therapies. The strategy of the company can be summed up in a word, which is first. We want to deliver drugs that are first approved therapies for these serious rare diseases. The vision of the company, Whitney, is to build the enduring and leading biopharmaceutical company addressing rare skin diseases and rare vascular malformations for which there are no FDA-approved therapies. That's obviously rare skin disease is a corridor of the orphan universe that you know well. I would describe rare skin diseases as high unmet need. There's approximately 600 rare skin diseases. Fewer than 2% have approved therapies, but also very low competitive intensity. So those dynamics really lend itself to building a company in this space. You've referenced our pipeline and our platform. We have both a late-stage pipeline and a platform. Our late-stage pipeline, the flagship product is called Cutorin rapamycin. That is our 3.9% anhydrous formulation of the mTOR inhibitor rapamycin. Earlier this year, we read out a positive phase three study in a disease called microcystic lymphatic malformations. That's a serious, rare, genetic, and lifelong disease for which there are no approved therapies. There's more than 30,000 of these patients in the United States. We recently had a pre-NDA meeting with the FDA and have initiated, thanks to Jeff Martini and his team, our rolling NDA submission at the agency. Beyond that, we're going to expand the uses of cutorin rapamycin to other mTOR-driven skin diseases. Since we went public, we read out a positive phase 2 study in a disease called cutaneous venous malformations, also a type of vascular malformations, no approved therapies. These patients have this condition at birth. It is a lifelong disease. We also believe this to be driven by the mTOR pathway as well. Our third indication for cutorin rapamycin listed on the slide here is called angiokeratomas. Thanks to our clinical operations team, we initiated a phase two study here earlier this year. That study we'll read out in the second half of this year. That is a type of a superficial lymphatic malformation. More recently thought to be driven by the mTOR pathway, FDA has granted us fast-track designation in both angiokeratomas and cutaneous venous malformations and microcystic lymphatic malformations. We have breakthrough designation, fast-track designation, as well as orphan designation. You mentioned the platform as well. We have a second molecule that we've paired with the platform, and that's called pitavastatin. So our second product here is called cutorin pitavastatin. That will be studied in a serious rare genetic disease called disseminated superficial actinic porokeratosis. We're completing our pre-IND work there, our IND-enabling studies, and we expect to initiate a study there later this year. So four diseases that we're currently in today, really excitingly, we're going to announce two more diseases by the end of the year, such that we're going to exit this year developing programs, cutorin-derived programs, in six rare diseases, each of which we have the opportunity to deliver that first approved therapy.

Whitney Egem, Analyst — Canaccord

Okay, awesome. That is a very helpful overview. So going back to MLM, can you briefly characterize the disease? We have this picture up here. So talk about that and kind of through the lens of it's not just an aesthetic thing. We're looking at a picture, but they're kind of talk about the burden of the disease and some of the data that you've shown.

Wesley H. Kaupinen, CEO

Sure. So genetics were elucidated about a decade ago. We know that we estimate close to 100 percent of these are driven by PIK3CA mutations. mTOR is directly downstream of PIK3CA. mTOR is hyperactivated. What does that cause? You can see in the picture here that causes genetically malformed vessels to protrude out through the skin. The major clinical issues to these patients is that they have discharge of lymphatic fluid onto the skin. That phenomenon is called lymphorrhea that results in the skin barrier being compromised because the skin barrier is compromised. These patients are prone to super infections and oftentimes have infections like acute cellulitis, and they can be hospitalized. They also, as you can see from the picture here, can bleed. So those are two of the major clinical burdens to these patients, oftentimes being in these cycle of infections. It is proliferative and progressive. So if left untreated clinically, it should predictably get worse. So there is an urgency to intervene, and the FDA considers it a serious disease, which is a prerequisite for both fast-track and breakthrough designations.

Whitney Egem, Analyst — Canaccord

Okay, perfect. And then to the data you've shown, just, again, high-level briefly, talk about what you showed in the Phase III and maybe kind of any physician-patient feedback you got on the meaningfulness of those results.

Wesley H. Kaupinen, CEO

Great. So what preceded the Phase III was a Phase II study. Twelve patients we studied in Phase II. all 12 patients improved on a clinician change scale, where all 12 patients were rated as much improved or very much improved. So that was the basis upon which we designed the phase three study. It was also the basis upon which we applied for breakthrough designation, which was granted. The phase three study was a 51-patient study. This was our pivotal study that read out in Q1 of this year. Our primary endpoint was called the Microcystic Lymphatic Malformation Investigator global assessment. It's a seven-point scale where physicians are rating the patient's lesion severity at the end of treatment compared to day zero. What we found at the end of the study was that 95 percent of patients improved having been on our drug according to that clinician scale, and 86 percent were rated much improved or very much improved. We met from a statistical significance perspective our primary, key secondary, and all pre-specified secondary endpoints. Got it.

Whitney Egem, Analyst — Canaccord

Okay. So on the back of that data, you mentioned you had a pre-NDA meeting with the FDA and you've started the rolling submission. You've let Jeff out of the office today, so I assume things are going well. But can you talk about are there any outstanding rate limiting items or is it just kind of execution to get to the completion of the filing?

Wesley H. Kaupinen, CEO

Sure. So it is execution to get to the filing. We are very focused on putting forward a very high quality persuasive submission. So we are in the final QC stages. At this point, we're not waiting for any additional data. We're just packaging the remaining modules. What we've said is we'd like to have this submitted before the end of the year. That puts us on track for a first half 2027 submission. And Jeff and the rest of the leadership team is doing a great job. We were really pleased to have a pre-NDA meeting and even more pleased that the FDA, given some of the resource constraints there, granted us a rolling review, which is really designed to expedite therapies through the NDA process. Got it.

Whitney Egem, Analyst — Canaccord

So completion by the end of the year, as you said, what does launch readiness look like at this point? You're planning to launch yourself in the U.S., right? So what are you building? What are the kind of different pieces of that and, like, what's happening now versus what will be happening maybe next year and then post-approval?

Wesley H. Kaupinen, CEO

Sure. So I believe the most important thing that we can do as a company that's going to go from a clinical stage company to a commercial company is to proactively identify and recruit exceptional leadership. in the orphan space so i want to spend a minute talking about the management team that we've recently recruited to paul vella ashley klein is our chief commercial officer she previously led the launch of a drug called oxervate which is a topical therapy for a rare eye disease she led that launch in the united states for an italian pharmaceutical company called dompe under her leadership that drug went from zero to north of 500 million in annual sales in about a four to five year period. The launch was profitable in the first year of the launch. So she's an experienced launch leader in the orphan space, launching a first disease drug. She's hired Jen McDonough, who worked at Crystal Biotech, your former company. Jen led all market access at Crystal Biotech, as well as patient services. She's now in that role for Pauvela. Crystal launched very successfully a repeat dose topical therapy, similar to what we envision for Ketoran Rapamycin, so Jen has started to build out her team on the market access, pricing, and reimbursement side. We've also hired Kent Taylor as our SVP of sales. Kent was at Arcutis, where he led the sales organization for the Zareev launch. So I think that's really a key decision that we'll make. The other thing is to ensure that you appropriately resource the launch. We closed $230 million in capital, and we're grateful to the investors who participated in that financing in Q1 of this year. So strong leadership team in place, strong balance sheet. What are we doing now? A lot of what we're doing now is deploying our medical affairs team in the field, meeting with physicians, meeting with sites. We've been able to, through a claims analysis, identify a total of about 400 centers in the United States that manage about 15,000 patients, we estimate with microcystic lymphatic malformations. So we're prioritizing at medical meetings, through on-site visits, meeting with these sites, developing relationships, and really driving disease state awareness of this disease. We've launched the disease state awareness campaign called Beyond MLM. As we move into launch, what we'll start to do is we'll start to recruit more of the sales leadership team and sales reps. Previously, we guided that we were going to hire somewhere between 20 and 40 sales reps on our earnings call last week. We've said that the goal is to bring 40 sales reps on board. We expect to have those sales reps in place prior to launch. We don't anticipate those being contingent offers where we're waiting for the FDA approval. We actually want to have them recruited as Paul Vell employees, train them on Kitoran, train them on our clinical data such that once we have that FDA approval in place, they have the ability to go out and be in a position to drive sales.

Whitney Egem, Analyst — Canaccord

Okay, got it. And I guess, how are you thinking about pricing? just remind people there. And have you been, is the payer engagement, I guess, something that's going on as well now?

Wesley H. Kaupinen, CEO

Yes. So we've been able to do payer testing, thanks to Ashley and her team, following the phase three data. I can confirm that we, through that payer testing, we anticipate a price point somewhere between $100,000 and $200,000 per patient per year. That's in line with other orphan therapies that are first in disease. You know, as we looked at launch analogs, which we'll talk about, there are some topical orphan launches like the Crystal launch, like the launch from KeyAZ that are much higher price points than that. But we think the $100,000 to $200,000 price point is a reasonable price point for Ketor and Rapamycin at launch.

Whitney Egem, Analyst — Canaccord

Okay, got it. And yes, launch analog, where would you point people to get a sense of how things could go?

Wesley H. Kaupinen, CEO

Sure. So we've dug deep to really understand the most successful orphan launches, particularly those ones that are non-oncology orphan launches. We look at a drug like Vyjavec, which was launched for a rare genetic skin disease and the great work that Crystal Biotech has done bringing that therapy to a patient population that was in the need of the first approved drug. We've learned a lot from that launch. Obviously, we have Jen on our team now, and she was previously at Crystal. One of the things that they did particularly well, in our opinion, was they hired patient access liaisons. So instead of outsourcing their patient services hub, they had a team of FTEs who on a very compliant basis worked really closely directly with the patients. So that's a strategic decision that we've made. Other launch analogs are drugs like Oxervate. Ashley led that launch, topical therapy for a rare eye disease, a number of different tactics that she used there that were successful. One of those is hiring an inside sales team to augment the efforts of the outside sales team to really promote to the tier two and tier three of the markets. And we've, of course, looked at the Tepeza launch, which was a first in disease therapy for thyroid eye disease, serious, rare, highly visible disease as well, and some key learnings that we've extracted from that launch. We've also been able to hire some folks who were involved in that launch as well from the Horizon Therapeutics team.

Whitney Egem, Analyst — Canaccord

Okay, got it. I could keep asking you MLM questions, but I'll switch to CVM. And just, I guess, going straight to the disease itself and how it maybe compares to MLM, can you kind of compare and contrast what's similar, what's different, and briefly touch on the data you've generated there as well?

Wesley H. Kaupinen, CEO

Sure. So similarities is it's a genetically driven disease, typically TIE2 or PIC3. There's a lot of evidence of oral rapamycin treating internal venous malformations. So we think that there's a lot of data to suggest there's clinical benefit from taking the approach of intervening with an mTOR inhibitor. We want to treat patients who have cutaneous venous malformations. The cutaneous manifestations of venous malformations are going to be less responsive to oral rapamycin because oral rapamycin doesn't distribute well through the skin. These patients, in terms of the the disease burden, they have a number of issues with their venous malformation. The veins are dysregulated and engorged in the skin, this can cause issues such as thrombosis, swelling. A subset of these patients have major issues with bleeding. In the words of our key collaborators like Mike Kelly at the Cleveland Clinic, this is as debilitating or can be as debilitating as microcystic lymphatic malformations. Another similarity, nothing's approved for these patients so we have that opportunity to have the first approved therapy and really importantly these patients are treated with very similar physician treaters to microcystic lymphatic malformations. So there's quite a bit of call point overlap between microcystic LM and cutaneous venous malformations.

Whitney Egem, Analyst — Canaccord

Got it. Okay, perfect. And then there's been a lot of discussion on the phase three design. That's something you're working through and getting ready for. Can you maybe like bookend it for us? What is like best case scenario? And I don't want to say worst case scenario, but maybe less ideal outcome in terms of design?

Wesley H. Kaupinen, CEO

Sure. So I think it's incumbent upon any management team, including the Paul Vella management team, when you see a large effect size in phase two, which is what we saw with 73% of patients responding, we've had the opportunity as a team to go through the patient qualitative interviews and how they're reporting the drug had a major impact on their quality of life. So I think it's incumbent to shape an efficient and expedited development program. We think that's something we'll have the opportunity to do because we have fast-track designation in this disease. So we'll explore a number of scenarios with the FDA. Typically, the FDA likes to default to placebo-controlled studies. So that's something that we look forward to having the conversation with them around whether that's going to be a requirement or whether there's a path to a more efficient development program.

Whitney Egem, Analyst — Canaccord

Okay. And at some point there, a placebo-controlled study was on plan for MLM, and you successfully made the case to the FDA and ended up running the study that you ran. I guess, can you remind us of the playbook you followed there, and are you planning to kind of do the same thing here?

Wesley H. Kaupinen, CEO

Sure. So one similarity between MLM and CVM to answer that question is neither disease has spontaneous regression. The disease does not get better. MLM is proliferative, progressive. CVM is also a progressive disease. so in certain diseases where there is well-known pathophysiology and a well-defined disease course and the disease is rare sometimes the FDA can be amenable to trial designs that use the patient as their own control so I think that's one of the similarities that was something that you know we worked really closely with the agency on I think that's one key piece I think the the second key piece is that there is a lot of off-label use systemically of rapamycin and microcystic lymphatic malformations, where you can see off-level use for those patients that have internal disease, that can also be the case with cutaneous venous malformations. That can present clinical equipoise issues. So that's something that we need to work through as part of our regulatory interactions as well. So I think those are, you know, two key points. And then I think given the amount of real-world evidence, Whitney, that's out there that suggests that mTOR inhibition is on target in this disease, particularly off-label oral use for venous malformations. I think there's a question of, you know, how much incremental evidence is needed to prove safety and efficacy beyond what's already out there from a real-world evidence perspective and beyond what we've shown in our Phase II study.

Whitney Egem, Analyst — Canaccord

Okay, got it. And remind us what you said on timelines or when you expect to have an update on the conversations there.

Wesley H. Kaupinen, CEO

So we want to start that study this year, and we look forward to post our FDA interactions into Phase II interactions and then receipt of minutes, announcing that Phase III study by the end of the year.

Whitney Egem, Analyst — Canaccord

Okay, perfect. We look forward to that. Moving over to angiokeratomas, Phase II study ongoing, as you said, with data expected in the second half of next year, right? Just to double check. So what would constitute a meaningful efficacy signal here, and how would this opportunity fit commercially with what you're already building for MLM?

Wesley H. Kaupinen, CEO

Sure. So it fits really nicely commercially because angiokeratomas were recently reclassified as a type of superficial lymphatic malformation. So there's a lot of biological similarities between angiokeratomas and microcystic lymphatic malformations. There's more than 50,000 of these patients in the United States with this disease. This disease can present on the extremities, It can present in the buttocks. It can present in the vulva, the genitals as well. So very debilitating disease. So it fits really well with the pulvella ethos, really treating patients that have serious disease where there's no FDA-approved therapies. There's absolutely some treater overlap in terms of the physicians who are treating microcystic LM and CVM. And then from a rollout perspective, we expect approval next year in micro LM. In 2029 for CVM, we would expect approval here, assuming successful phase 2 and phase 2. three in that 2031 timeframe. So we would be continually expanding the total addressable pool of patients with cutorin rapamycin.

Whitney Egem, Analyst — Canaccord

Okay. So yeah, nice little commercial cadence there for sure. All right. So maybe switching over to potavastatin for DSEP, as you mentioned, that phase two, or I guess, how should we be thinking about the potential phase two design there similar to what we've seen from the other programs and what are the endpoints that matter most here?

Wesley H. Kaupinen, CEO

Sure. So the phase two should be very similar to the playbook you referenced earlier, which is typically in these rare diseases, we like to run 10 to 20 patient studies to develop an initial evidence base. We like to include a lot of different endpoints, both clinician reported and patient reported, understand which of those endpoints is sensitive to the drug effect, and then understand what the effect sizes are on those endpoints. That ultimately informs phase three design. Similar to our three ketorin rapamycin indications, there is a lot of real-world evidence suggesting that this approach of inhibiting the mevalonate pathway, which is what we're going to be doing with ketorin potavastatin, does generate clinical benefit for patients. So that's why even a 10 to 20 patient study we think is enough evidence if we see the right effect size to move to a phase three. I'll harken back to my experience at InsMed with Aircase, which was a drug I worked on while part of the management team there. That's a drug that had about a 30% efficacy rate. In its phase three pivotal study, it's gone on to be about a half billion dollar a year drug. So our threshold for success in these rare diseases is if you can really impact about a third of the patient population positively with an intervention, a patient population that currently has nothing and may be undergoing destructive approaches with laser surgery, electrocautery, different sorts of procedural interventions, having a targeted pharmacotherapy that can be delivered locally and topically could be really meaningful for that patient population.

Whitney Egem, Analyst — Canaccord

Got it. Okay. And then you've talked about pipeline expansion and announcing two new programs later this year. Any hints, any previews you can give us, or what are the kind of key lenses through which you look to pick new indications?

Wesley H. Kaupinen, CEO

Sure. So we'll announce the fourth indication for Ketor and rapamycin. There's three publications out there from Fogel, Swarbrick, and Tatiana Lappa that really profile more than 20 mTOR-driven skin diseases. Where we like to focus Whitney is diseases that are serious, rare, nothing approved, and they're commercially attractive. So we do have an internal threshold for what the diagnosed prevalence needs to be for us to study that indication. I'm really excited by what Jeff and his team have uncovered here in terms of commercial opportunities and clinical indications for the fourth quitorin rapamycin indication. So we'll announce that fourth indication later this year. And then we're already starting to work on what could be the fifth indication to be announced sometime after this year.

Whitney Egem, Analyst — Canaccord

Okay.

Wesley H. Kaupinen, CEO

Got it. Got it.

Whitney Egem, Analyst — Canaccord

All right. And rapamycin pitavistatin, is there potential to expand quitorin to other molecules as well? Is that a focus or are you kind of good with the two you've got now?

Wesley H. Kaupinen, CEO

That is a focus. We have a reproducible method for generating these novel topical product candidates. It's an internal product development engine that really describes what Q-Torin is, reproducibly generating topical product candidates to study in serious rare diseases. So we'll announce later this year our next Q-Torin program, which will be a third molecule. So we'll exit this year with Q-Torin rapamycin, Q-Torin patavistatin, and a third Q-Torin candidate. And I think this is part of the Paul Vela story that may be underappreciated, which is MLM gets a lot of focus as a post-phase III asset. going into launch in an uncontested disease with 30,000 plus patients. There's a lot of internal excitement at Pauvela about just how many diseases there are out there and the reproducibility and scalability of Qutorin to keep generating these exciting programs that can be first in the disease for these patient populations.

Whitney Egem, Analyst — Canaccord

Got it. Okay. Last minute here. With 251-ish million dollars in cash at the quarter end, how do you think about Runway? What's contemplated through all of the things you've got going on, what's funded with current cash, and how do you think about that going forward?

Wesley H. Kaupinen, CEO

Sure. So capital efficiency has been a hallmark of this company since founding. Our goal is to flush out as much risk on the least amount of capital. And I think we've done a very good job of that. We'd agree.

Whitney Egem, Analyst — Canaccord

Thank you.

Wesley H. Kaupinen, CEO

And continue to do so with Matt Kornberg, doing a great job as our CFO. So with the $250 million in cash, assuming even modest revenue numbers, there is a path forward to getting to cash flow breakeven without additional capital raises. Something we will revisit, like a lot of biotech companies do at approval, is whether we want to augment the balance sheet, potentially with non-dilutive capital. We think there could be a lot of capital out there, assuming FDA approval. But right now, with the balance sheet we have in place, we're well-funded to fund these six programs and also potentially get to a cash flow breakeven moment for the company.

Whitney Egem, Analyst — Canaccord

Okay. Awesome. And then last five seconds. Oh, everything we've been talking about so far, clinical trials, et cetera, U.S. and commercial launch in the U.S. How are you thinking about international at all, if at all?

Wesley H. Kaupinen, CEO

Sure. We think it's a great expansion opportunity for Paul Vela. We've had a lot of interest from Japan, both physician interest and potential partnering interest. We'll do what every great company does. We'll look at both both launching a loan there as well as partnering and see what the best approach is as we think about the patients we serve, but also making sure any sort of geographic expansion is done in an NPV positive way. Excellent.

Whitney Egem, Analyst — Canaccord

Okay, perfect. We covered a lot of ground. Thank you so much for taking the time and thank you all for listening.

Wesley H. Kaupinen, CEO

My pleasure.