Welcome to the Talphera First Quarter 2025 Financial Results Conference Call. This call is being webcast live via the Events page of the Investors section of Talphera's website at www.talphera.com. You may listen to a replay of this webcast by going to the Investors section of Talphera's website. I would now like to turn the call over to Raffi Asadorian, Talphera's Chief Financial Officer.

Thank you for joining us on the call today. Today, we announced our first quarter 2025 financial results and associated business updates in a press release. With me today are Vincent Angotti, our Chief Executive Officer; and Dr. Shakil Aslam, Talphera's 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 Talphera. 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.

Thanks, Raffi. Good afternoon, and thank you to everyone joining our call today. It's only been about 6 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. Dr. 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 3 new sites that are activated and screening patients with 5 more expected by mid-year. All 8 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 nafamostat if approved. These include: first, exploring a compassionate use IDE and we have been approached by multiple institutions and are discussing using nafamostat under a compassionate use IDE 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. Health care providers are inquiring about the timely availability of nafamostat given the recurrent heparin and citrate shortages. Dr. Aslam 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 Dr. Aslam to provide some additional details on clinical activities, let me remind you that if approved, Niyad 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 Niyad would fill a significant unmet medical need during renal replacement therapy. I'll now hand the call over to Dr. Aslam.

Thank you, Vince. The engagement at our new sites has been encouraging as we transition from the older site profiles to the new target profiles we previously mentioned. Currently, we have 8 sites actively screening: 4 legacy sites and 4 new target sites, 3 of which have just started screening recently. By mid-year, we plan to add 5 more sites, all adhering to the new target profile. The legacy sites are not expected to contribute significantly to the study, so the majority of enrollment will come from the new sites. The new sites are currently reviewing the clinical trial agreements and budgets and have progressed much faster than the legacy sites. Administrative efficiency was a crucial factor in our site selection, and this has been beneficial. These new sites are large academic institutions, most of which have greater CRRT volumes than the legacy sites. We anticipate that all these sites will be activated and screening patients before our next quarterly call. I would also like to discuss the compassionate use IDE we are considering at the request of a large institution in the Southeast. The physicians there see a pressing need for certain patients who do not respond well to current anticoagulants and require an alternative. We have been in discussions with this institution about potentially approaching the FDA to request a compassionate use IDE for these patients. This provides us an opportunity to assist patients who lack alternatives during CRRT, and we are exploring the most effective way to support these patients and their healthcare providers. Although we do not have a set timeline, we wanted to share this information as it is not the first request we have received. It is clear that the existing anticoagulants for CRRT are not optimal, and there is currently no FDA-approved regional anticoagulant available. We will share more updates on the compassionate use IDE as these discussions progress. Now, I'll turn the call back to Vince.

Thank you, Dr. Aslam. Before I hand the call over to Raffi, I want to reiterate our belief that the 3 critical risk elements; clinical, regulatory, and commercial for the NEPHRO program are low for a number of reasons. First, with over 30 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 Dr. 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.

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 million to $19 million. Our cash operating expenses, or combined R&D and SG&A expenses for the first quarter of 2025 totaled $2.9 million compared to $4.2 million for the first quarter of 2024. Excluding non-cash stock-based compensation expense, these amounts were $2.7 million for the first quarter of 2025 compared to $3.9 million for the first quarter of 2024. The decrease in cash operating expenses in the first quarter of 2025 was primarily due to reductions in personnel expense and other general and administrative expenses. Our cash balance at March 31, 2025, was $5.4 million or $9.8 million on a pro forma basis for the financing that closed on April 2. As a reminder, the financing was structured in 3 equal tranches of $4.925 million, with the first tranche received at the initial closing and the 2 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 $14.8 million 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 $5.4 million in cash at March 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.

Thank you, Raffi. I'd now like to open the line for any questions you might have. Operator?

We have a question from James Molloy from Alliance Global Partners. Your line is open.

Hi guys. This is 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.

Sure. I'll make a brief comment on the fact that we're not giving any specifics on enrollment. I think Shakil can comment to you about how the broader criteria have increased the activity at the sites, not only the previous sites, but in particular the new sites moving forward. Dr. Aslam?

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've definitely seen 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.

Shakil, 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.

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 population, those criteria will definitely give us a high yield.

Operator?

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

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 the NEPHRO trial this year in 2025 with an approval of Niyad targeted for 2026. Again, we look forward to providing additional updates on our progress, and thank you for joining us. That concludes our call.

This concludes today's conference. Thank you for participating. You may now disconnect.