Conference Transcript - TVRD 2026-06-04

Faisal Khashid, Analyst — Jefferies

Morning, everyone. Thank you to those of you in the room, as well as those dialed in on the webcast. My name is Faisal Khashid. I'm one of the senior biotech analysts here at Jefferies. We're here live at the Jefferies Global Healthcare Conference in New York. Really pleased to have with us today management team of Tavarti Therapeutics, joined here on the stage by CEO Imran Alibai. Imran, really great to have you here with us. Could you start by introducing the company?

Imran Alibai, CEO

Yeah, great. So first, thanks for having us during this Farsight chat. Tavari Therapeutics is a biotech company founded in 2018, and our focus has been STAT3. STAT3 is an incredibly well-known transcription factor where we have known that it sits downstream of all the signaling cascades we hear. When you think about an inflammatory or proliferative disorder, you think about the cascades that drive those, whether they be immune modulation, whether they be cytokines, whether they be growth factors all of which are signaling to the cell and every one of those targets have been interrogated previously and we have drugs to almost every one of those targets what's interesting is there is redundancy in all those targets and they all signal into stat 3 and so stat 3 has been this holy grail type of target which people have been going after for about 20 years now which is a transcription factor and once it is activated by these external signaling cascades moves into the nucleus and drives the not only intrinsic proliferation and inflammatory steps that we see but extrinsically in the immune compartment we see immune dysregulation and that is something that is common in malignancies but also common in a variety of inflammatory disorders and so the company was founded on the basis of a one of our co-founders a guy named David Tordy who actually identified STAT3 30 years ago so if you ever wanted a KOL in the field of STAT3 it's him and what we identified and what we developed it was a small molecule that's orally delivered which we've now tested in over well over 300 going into 400 patients now and so um i'm excited to tell the story from where we were which was a pre-clinical company you know five six years ago into a company that treated many many patients to learn tremendous amounts about

Faisal Khashid, Analyst — Jefferies

what it is to drug a stat 3 inhibitor got it excellent thank you for the overview so you so So you had two programs here. There's TTI 101, which is kind of your more first-gen program, and then TTI 109, which is your next-gen program. For 101, you evaluated this in Revert IPF. Can you talk to us about the key findings from there? And if I can just be blunt about it, tell us what went wrong. Yeah, yeah, yeah. What are you doing to kind of come back from that?

Imran Alibai, CEO

Yeah, no, no, it's great. It was a bit of a disappointing outcome, but we've actually gone back through and looked at the work and looked at what happened in that trial. And we actually learned some pretty interesting things. So as a background, we decided to go, we have a parallel path, one in oncology and one in pulmonary fibrosis initially for our first generation molecule, TTI-101. And 101 was really the proof of mechanism in the pulmonary fibrosis space. And then we said, hey, our next generation molecule, 109, would be used to address that. Used to basically move forward there and retain 101 for oncology. So what we did in that study and what we had shown preclinically is that we could actually reverse fibrosis in animal models. And so it was quite interesting and to restore lung function. And so we thought, okay, let's go ahead and do this trial. And the trial was an all-U.S. trial. It was a blinded trial in two arms of our drug versus placebo on top of the standard care of an intentinib. And we reported out data in October when we originally had the data. the initial set of data and there were two really confounding factors one we saw in the placebo arm in every other trial that we'd ever tested this in or had been tested um with the same patient characteristics that we had we didn't see the placebo drop so normally when you look at ipf trials you look at a force vital capacity and what we saw uh normally is anywhere between 70 to 110 mils over a 12-week period there was only a 22 mil drop so that conflated things and then the other issue which is an issue for everybody in the ipf field is that particularly on top of nintendib we saw a higher than expected discontinuation rate and so that led to having much smaller numbers than we had anticipated when of patients who completed and really the majority of that those dropouts were really driven by gi events and so when you look at nintendib we already know So, like, if you look at the phase three data for an attendant, 62% of those patients get some sort of GI or diarrhea. And so it was, you know, the conflagration of those two events together made comparisons difficult. But then we did do another analysis, which was actually quite intriguing. So we went back and we said, okay, yes, we had a higher discontinuation rate, but if you did complete trial, what happened to you? And we looked at what are the quantitative markers we can look at. So you know the IPF space as well as anyone. And we normally look at FVC as our endpoint. And FVC is even intrapatient, there's changes. But when we said, okay, what other quantitative markers can we look at? And for the patients who completed trial, we went back and we looked at fibrosis. And we looked at a marker that's incredibly well-known in the STAT-3 pathway, which drives a lot of disease, which is IL-6. And what we saw was a pretty encouraging event. and that is in animals we could say hey we could therapeutically reverse fibrosis and then in humans we actually saw the same thing so we saw that we in uh there was a seven percent placebo adjusted rate of fibrosis reduction and the way we measured fibrosis is pre and post um treatment and we looked at high-res cts and we looked at them independently and in a blinded fashion and it was encouraging because every other trial we've ever seen in this space or that I'm aware of anyway has always said there is an increase in fibrosis in the placebo arm and then in the treatment arm we prevent that increase this is the first trial I'm aware of that particularly over a 12-week period where there's an actual decrease in the fibrosis and that again ties to what we've seen pre-clinically Similarly, we saw a very nice trend in the exact same fashion with IL-6. So a couple of questions on that.

Faisal Khashid, Analyst — Jefferies

So the idea of kind of evaluating the trial on the basis of the patients who completed the trial, you know, I think you get it. Like for a lot of investors, they hear that they're like, well, is that legit? Can you kind of defend that a little bit?

Imran Alibai, CEO

Yeah, no, no. I think you're right. I think is what are we what are we doing when we're looking at a postdoc analysis and so I think you can't fudge let's say a quantitative score right and so when you look at those patients who complete a trial you're saying okay and and we're just looking at because those only patients where we can get both pre and post fibrosis numbers right or we can get pre and post IL-6 numbers And so I think the differentiation is not only are you seeing a difference, but the difference is in a scale that others have not shown before. And I think that's really where the differentiation was, is that, look, preclinically we've shown this, and now clinically this proof of mechanism has been repeated. And I think particularly the trend of how it occurred, it wasn't like, oh, we prevented an increase in fibrosis. It seemed to be that those patients on treatment were actually showing decreases in fibrosis. And I think I am, like I said, unaware of anyone who's shown anything like that, particularly whether it be a 12-week trial or a 52-week trial, but particularly in a 12-week trial to see that change was very encouraging to us. And, you know, if you had actually said to me, a priori, do you think you would see this? I'd be probably not. It's too short of a time period. So to see it and to have something that we can quantitate was encouraging to us. Now, are we saying, look, this is the end all be all. We're going to move straight to a phase three. No, right. We understood that there was limitations about what had happened in this trial. And it gives us actually a really nice conduit into with our next generation molecule, which we think will address some of the issues that we saw in this trial yeah so to kind of simplify it

Faisal Khashid, Analyst — Jefferies

like is the argument which i think i can get along with the argument you're essentially making is that analyzing the trial on a completer's basis is valid for a super objective measure maybe less so for something like fvc but more so for something like hrct fibrosis measurement 1000 i think that's

Imran Alibai, CEO

exactly right i think that's true not only for hrct but also other blood measures like il-6 which again is complete quantitation yeah there's nothing we can we can't say hey there's some change here that would have intrapatient change in a smaller time period like fvc does or diffusing lung capacities where you're basically blowing into it right so yeah so that's the

Faisal Khashid, Analyst — Jefferies

argument can you maybe just remind us and explain to us the like level of validation that exists for fibrosis quantification like how do you quantify this in the study how uh well validated is this and just kind of give us some uh confidence in that actually being like a accurate and objective

Imran Alibai, CEO

measure yeah so i think the we use the same so every time an ipf patient comes into a trial or into into a doctor's office there is a methodology to assess basically components of their fibrosis this is the same methodology we use so this isn't anything that was a methodology that isn't distinct. This is the same fibrosis score that every physician uses when they have a patient come in into a trial. And the way we did it again is to say that we took patients pre-treatment and then post-treatment. All of the scans were read independently. They were read on a blinded fashion. So there couldn't have been, from that perspective, anything that we could change or any way manipulate um to to come to an answer and i think that again and i'll say it one more time what we've seen previously um is in other trials and not many folks report fibrosis because i don't think people can show we haven't been able to show disease modification in the in the ipf space we've shown really good jobs of changing uh symptomology right but we still see patients continue to do worse over time and so it the to really change the trajectory of an ipf patient really need to change the basis of the disease and uh this is the first trial that i'm aware of anyway that actually shows a decrease in fibrosis as opposed to others that said hey we just prevented the increase um in fibrosis and when you look at the trial so and that again And why it's encouraging to us is because that's exactly what we saw in the models, in the animal models. And that is that gold standard model where therapeutic treatment can, in our hands anyway, show the reversals.

Faisal Khashid, Analyst — Jefferies

Got it. Makes sense. So maybe, I know I'm giving you a hard time, maybe one last hard question. Anytime. Then I'll go to what you're doing next. So in terms of the overall trial execution, obviously for investors, you know, one important thing to consider here is when you're thinking about the path forward, you know, thinking about trial execution and kind of fixing that going forward. So in terms of the very high discontinuation rate in the study, can you just walk us through, like, how is that not caught earlier and what are you doing from an execution, trial execution basis to address that going forward?

Imran Alibai, CEO

So a couple of things, right? So the trial was overseen by a safety monitoring committee, which is composed of folks who've been in the IPF space for decades, right? And so we had consistent meetings with them over time. And we asked that exact same question. And we said, you know, we were blinded to the data and we were blinded to the information on what was occurring. And so we asked them and they were like, well, it was the discontinuations were diarrhea, right? We see this in intended patients. This is not uncommon for us. There was no life-threatening reason to pause a trial. I think the other thing that they said to us that was very interesting, and when you look at the data, we could oversee discontinuation rates overall for the trial. And those numbers stayed stable. so interestingly if you look we and we referred back to us the nintendib phase two trials which the rates of discontinuation of placebo arms were in the mid to high 20s and the in the rates of the um in the treatment arm for nintendib was in the low 30s basically and we sat there the whole time um it was until and so throughout the whole period of the trial we're watching looking at the overall rate and it stayed stable even into april which was the last time we had our smc meeting where again we were blinded to the data so again from our perspective from a blinded perspective we weren't seeing this um clearly at towards the end of the trial there must have been a much there was a much higher rate of discontinuations particularly on top of intended and i think that it was one of those idiosyncrasies of that trial and and even the smc said to us they were like it's really surprising like to see what you saw in your trial um particularly um it was very unexpected right to see that why these patients weren't showing decreases in placebo because if we'd shown those decrease in placebo then i think we're having a different conversation

Faisal Khashid, Analyst — Jefferies

here right yeah yeah yeah so i guess part bad luck as well as kind of what you're saying yeah

Imran Alibai, CEO

yeah i don't think it's you know i think i think if you were to go back into an ipf trial it needs to be a longer trial right i think that's i think that's one of the the issues and then the other issue is you're facing a backbone therapy where everybody's struggling with right we are actually talking to the same smc members about what their experience is with the newest drugs and with nintendib and jackson now uh the new drug um by the pte4 inhibitor the people are really struggling to keep patients on nintendib and jackson at the same time yeah yeah so i think that's another issue that people are struggling with so i think ipf is it's great we have new drugs that are are now going to be available um it's become very very expensive but uh the backbone therapies have a lot of cause a lot of issues in in the first place and so you you have to think about okay if i'm going to incorporate into that into a future trial let's see how we manage that appropriately

Faisal Khashid, Analyst — Jefferies

yeah makes sense so so you went back to the drawing board you have tti 109 tell us about what tti 109 is and i think you have some data coming up like any data yeah exactly we we had

Imran Alibai, CEO

said that the data would come out in june so uh we didn't go back to the drawing board because of this we went back we were we went back to drawing park years ago yeah yeah yeah so we've been we've been um we we'd always told the street our board and and everyone associated with the company that 109 was our go forward molecule um in the non-oncology space and and the reason we liked 109 is that a few years ago we looked at 101 and we looked at the structure and we said this is a really interesting molecule it has everything we want in the fact that like has pk it has pd um and we've seen activity in oncology studies and we were we had seen activity um across every model that we've tested this in and so we we looked at it and the ones when you look at the structure you can see it's a small molecule it's under 500 kd but what what was really interesting is is that it is incredibly insoluble and very apolar and so which makes it difficult to formulate and so we went back to the drawing board on the simple basis of saying hey can we generate a molecule that is easier to handle and would give us a better drug from the same from the perspective how do we deliver this molecule orally and we actually found that if we simply added a phosphate group to this molecule now this molecule what we termed 109 was inactive so we gave that and it turned into uh we again orally delivered and the idea was with 109 is that once it is ingested and then passes through the cut and then into the blood where we have all these phosphatases that it would then convert into active moiety what did that give us so what it did and what we showed in our animal studies in our ind enabling work was something very interesting is that one we showed that 109 converted into 101 very rapidly so we have data and it's in our public decks that show in a in a in a rat and even in a monkey at even the highest dose that within two hours you can see a small amount of 109 left but almost well over 95 percent of it has converted but the other

Faisal Khashid, Analyst — Jefferies

benefit um but that's after first pass GI metabolism yeah exactly so from what we can

Imran Alibai, CEO

tell right because we're looking at we're looking at blood exposures and then the other thing that we saw that was really interesting exciting is that we know 109 is inactive right we know that has no activity so what that did is it solved two different problems one it made a drug much easier to formulate and deliver it also gave us patent protection not for a new chemical entity but also i think the thing that was exciting to us is that you're basically getting no exposure of the active moiety in the gut itself on the on the luminal side and so it's going to where you want it to do once it passes through into the cells of interest and then into uh into the blood right and so i think the one issue again in the ipf study that was really that was detrimental was was gi and a lot of that's delayed based on the background of what you're taking um but but now having this removing that aspect uh potentially could be very very intriguing um as we go into other indications or into indications general in the non um non-oncology space where we don't uh where we either have to deal with background therapies or as a single agent got it and when

Faisal Khashid, Analyst — Jefferies

When you say that 109 is unactive, you mean like against STAT-3 inhibitions? Was the tox that you saw, was that mediated through STAT-3 or was that due to some other idiosyncratic off-target?

Imran Alibai, CEO

So that's a good question, right? That's a good question. We have seen that if you look at other inhibitors that relieve immune suppression, for example, Think of PD-1, CTLA-4 inhibitors. A lot of those have background diarrhea as well. um so but i think this in this instance what we're expecting is that because you're not having any of the activmoity in the gut um and then you're once you're passing through it um and you're getting the active activation then you see that and i think in our preclinical work which we'll we'll be putting out here very very soon uh we'll be able to show you that look we we retain activity But based on the weight of the mechanism of the molecule, because we know that the 109 is not active towards stat three at this point, that we should potentially be in a better situation than we were before.

Faisal Khashid, Analyst — Jefferies

Got it. And the phase one data that you have coming up, just clarify for us, that is phase one healthy volunteer data.

Imran Alibai, CEO

Right. So the idea there was in rats and monkeys, we had shown that, hey, this molecule rapidly converts into the active moid. it has no tox just like 101 had no tox in the ind enabling studies and that we could show a dose dependent increase of the more 109 we gave the more 101 we got in in the blood and so we actually went to the fda and the oncology division and said hey could we move this forward and they were like yeah go right ahead you could go into an optimist design but we had as drug developers said we want to repeat these experiments in humans we want to show the same things we've shown in in rats and monkeys in human being and so that's exactly what we've done it's a three-part study and it's a study where we have a sad study and i'm at a mad a single sending and multiple sending very common everybody are pretty accustomed to that the other thing that we're looking at in this um in this study is a effectively a bioequivalence where we're looking at intra-patient um where a patient gets 101 or they get 109 a few days later or 109 or then 101 and vice versa and showing hey intrapatient do we see when we give molar equivalents of the same drug of the drug do we see similar exposures and so the idea there is not only on a pk perspective are we able to show what we need to show which is rapid conversion as well as equal exposure more importantly we can also say we're going head to head we're saying look we have placebo arms we have treatment arms And then those treatment arms are composed of 101 versus 109 to look at not only safety, but then look at pharmacodynamics as well. And so every one of those components will feed into then saying, here's the story. Here's why we think this is a differentiated molecule from our first generation molecule. And one then we can push forward into a variety of different indications, which we can talk about.

Faisal Khashid, Analyst — Jefferies

Got it. Makes sense. So super interesting on the PK side looking at – so you're looking basically at conversion from 109 to 101. You're looking at comparability between 109 to 101 and then 101 just given by itself. Safety, you want to check that box. What about PD? Are there inflammatory markers like aisle six or anything downstream of Stat3 that you can look at even in a healthy volunteer setting?

Imran Alibai, CEO

There is. And that's something that we're excited to talk about and walk through with folks when we release the data. And one of the things that we can look at and one of the things that we're incorporating into this trial is looking at facts, which is basically looking at immune profiles of patients now. Can we change, even in a healthy volunteer, immune profiles of certain cell types that we think are important? And we've actually shown that in mice. So, for example, when you look at a mouse, you can take a mouse and you can treat a normal mouse with our molecule and you can show downregulations of specific cell types and immune cells that are relevant in disease. And then that translates beautifully when you go to a diseased mouse. And so I think the same idea here is to look at those similar immune cell types and say, can we show a decrease here? And then what does that portend for disease indications where we know those are drivers of the disease?

Faisal Khashid, Analyst — Jefferies

Got it. And with respect to that, are there specific kind of like benchmarks for some of those immune cell changes that investors should be thinking about or prepared to see?

Imran Alibai, CEO

yeah i think that's i think it's a healthy volunteer right so you if you if you add stat three activated in the blood of a of a human being that's a problem you you have lymphoma right or you're you're gonna have you're gonna have a you know a leukemia so um i think what you're looking for and what we're uh hope to show here is actually show look is there is there a modulation um where you would expect that and again what's compelling to us is we've seen this in animals we've seen it in a healthy mouse that we can down regulate um certain immune cell types and then again when we go into a diseased mouse uh or one of the induced disease and then how about that um that those same populations change as well so i think it is indicative of what will occur there is no absolute threshold um if we knew absolute thresholds we'd be pre-treating everyone right on how to prevent um a whole variety of disease types got it and if I remember correctly

Faisal Khashid, Analyst — Jefferies

from your preclinical data for 109 you actually had a few different disease models that you've looked at it's not just a uh pulmonary fibrosis or bleomycin type of situation yeah uh are you still expecting that ipf would be the main indication for this or what does that look like

Imran Alibai, CEO

i think um it i think ipf is a changed space right i think you have to definitely do longer studies i think that was one of the the take-homes from from this trial i think also you have a multitude of other drugs that are a couple of drugs that have now um will be or are approved um so it it makes for a more challenging landscape and i think um what we have actually pointed to in our and and publicly released because it's all published is data that across a variety of modalities where are inflammatory and proliferative that are immune dysregulated and we've highlighted you know published papers and uh that are across the board things like um diseases of the uh of the colon of the gi tract excuse me um everything from the in the ibd space from ulcerative colitis to crohn's disease and similarly we've shown diseases where there's skin proliferation where we know that um where there's an inflammatory and proliferative response also where there's immune dysregulation across the board. And we think that's interesting. And the reason we think these are interesting indications, because some of these indications, you don't have to be on a background therapy. Like oncology, you switch from one therapy to the next. You don't have to stay on the background. So which solves one of the major issues that we believe from the IPF trial, which is having intedinib as a background. And then the other thing is that when we compare ourselves there's a lot of these other disease indications you're talking about injectables you're talking about iv therapy or injectables long term we're an oral inhibitor and then you compare ourselves to what are the other oral inhibitors in spaces currently that we're interested in and they're usually things like jack inhibitors right and jack inhibitors have a whole set of issues right they're oral molecules they seem to be functional but they have black box warnings um and then they cause a whole variety of cytopenias and thrombo and thrombolytic events um and even cardiovascular events and now over well almost to 400 patients we've not seen any of that we don't see these spontaneous and different this um strange infection types that we see um with jack inhibitors and and even you know you look at other molecules i mean we just You just mentioned this. This is the data that came from Abivex, which is a fantastic outcome, but we saw a propping up of, you know, oncology issues or cancer risk. If anything, we know STAT-3 inhibitor, which we know the mechanism, treats cancer. So it's not like we're going to cause cancer. So I think from our perspective, there is a need for oral drugs and oral drugs that hit a pathway where all the pathways coincide with. We've done a really good job with antibodies of hitting individual cytokines. But hitting individual cytokines doesn't shut off the whole pathway. And I think if you could find something that were at the coalescing of node point, like a STAT3 inhibitor, that could be very interesting.

Faisal Khashid, Analyst — Jefferies

But if I can just kind of like spell it out for investors in a way, right? Like one way to kind of be convinced on this is that you can understand that revert IPF study had challenges, but the fibrosis improvement is sort of undeniable. You can understand from a PK basis, 101 to 109 is kind of a simple tweak. The phase one healthy volunteer data kind of check the box on that and then sort of put the whole story together. But if you're now telling me, like, well, we're going to go into fibrotic Crohn's disease instead, you've kind of ruined the thread for me a little bit. Can you defend that?

Imran Alibai, CEO

No, no, no, absolutely. So I think you have to think about how do you execute a trial, right? How can a small company like ours execute into a trial where we can say and point to you, here are all the different indications where we know stat 3 is dysregulated, right? And can we then take from our data from a healthy volunteer, translate that, and then look in and pick indications or indication that makes sense where STAT3 is also dysregulated, where we can take what we've learned from these other trials and this healthy volunteer data and say, does that convert? does that translate does that does this suggest that if we were to take not only markers of pharmacodemics from that from this ongoing trial um but also have um clinical efficacy endpoints that make sense that you could actually hit that point and i think look it's because we haven't disclosed it we haven't publicly disclosed what these indications uh will be and we will do that and we're just compiling that data as we speak uh you'll see the story comes together we believe quite nicely um to suggest a path forward in an in indications where we know the

Faisal Khashid, Analyst — Jefferies

stat 3 is incredibly important got so so the tweak to my kind of layered pitch is basically that consider ipf your initial ipf trial and the and the finding on fibrosis there is kind of almost just like a like a test model or proving ground that this drug is anti-fibrotic and then you can string the rest of it together yeah yeah i mean i think yeah it's simplified but

Imran Alibai, CEO

potentially i think it's beyond just fibrosis i think i think the idea is that can you show hey can you change change models of inflammation can you change immune dysregulation can you change proliferative markers right and i think everything that we've shown whether it be across the board suggests all that and so then when we put all that together what indications make sense for us whether that be other new indications or going back into ipf got it that's awful uh we're at

Faisal Khashid, Analyst — Jefferies

time here but just one last question can you just remind us the funding status of the company yeah

Imran Alibai, CEO

so we are um we have uh capital into q4 this year that we have both readouts coming up we have a readout here with 109 in june and then obviously we didn't have enough time but and we have our phase two liver cancer study front line second line third line reporting out in the second half of the year and so we expect that we'll have plenty of capital to get through those readouts

Faisal Khashid, Analyst — Jefferies

and then we'll take it from there got it sounds good well thank you so much around for joining us