TFF Pharmaceuticals, Inc. (NASDAQ:TFFP) Q2 2023 Earnings Call Transcript

TFF Pharmaceuticals, Inc. (NASDAQ:TFFP) Q2 2023 Earnings Call Transcript August 15, 2023

TFF Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.14 EPS, expectations were $0.2.

Operator: Good morning, ladies and gentlemen, and welcome to the TFF Pharmaceuticals Second Quarter 2023 Corporate Update and Earnings Conference Call. As a reminder, this conference is being recorded. I will now turn the call over to your host, Corey Davis of LifeSci Advisors. You may begin your conference.

Corey Davis: Thank you, operator. Hello, everyone, and welcome to TFF Pharmaceuticals second quarter 2023 corporate update and earnings conference call. With me on the line this afternoon are Dr. Harlan Weisman, Chief Executive Officer of TFF Pharmaceuticals; Dr. Zamaneh Mikhak, Chief Medical Officer; and Kirk Coleman, Chief Financial Officer. Before we get started, I would like to remind everyone that this call will contain forward-looking statements, including, without limitation, statements about the anticipated timing of achievement of clinical milestones, the potential to see positive effects in our Phase 2 studies, the number of treated patients necessary to make our decisions in regards to moving to Phase 3 studies, the market opportunity for our product candidates, and the expected time frame for funding operations with cash and cash equivalents.

These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in all of our findings with the U.S. Securities and Exchange Commission, including the Risk Factors section of our 2022 annual report on Form 10-K filed with the SEC. And now, it’s my pleasure to turn the call over to Dr. Harlan Weisman. Harlan?

Dr. Harlan Weisman: Thank you, John, and good morning, everyone, and thank you for joining us for our second quarter 2023 Corporate Update and Earnings Conference Call. On today’s call, I’m going to review the significant progress that we’ve made over the first half of 2023 and then provide an outlook on what we expect to achieve for the remainder of the year. Following my remarks, our Chief Medical Officer; Dr. Zamaneh Mikhak will provide an update on TFF clinical stage programs. Our Chief Financial Officer, Kirk Coleman, will then review our financial results for the second quarter. We’ll then open up the call for Q&A. In early February, soon after my appointment as TFF’s permanent CEO, we held an investor call to review our corporate strategy and outline our objectives for 2023.

On that call, we expressed our commitment to grow shareholder value by prioritizing the advancement of our clinical stage assets, TFF VORI and TFF TAC. We also expressed a desire to remain opportunistic with respect to signing new partnerships that show the potential to create long-term value while also minimizing internal costs to our company. It’s been nearly 6 months since that call, and I can say that I’m proud of the Company’s progress on both fronts. Under Zamaneh’s leadership, our clinical development team has made considerable progress across a number of key areas to help build physician and patient awareness of TFF VORI and TFF TAC. Based on the continued success of these efforts, we anticipate reaching key clinical milestones by year-end, each of which could serve as a major catalyst for our company.

In a moment, Zamaneh will provide greater details on each of these rare disease programs. We will also have sufficient capital to reach these milestones. As announced earlier this morning, TFF raised additional capital through an equity financing. Importantly, no warrants were issued to investors in this transaction. Considering the ongoing challenges in the capital markets, our ability to close this financing while minimizing dilution to our existing shareholders, in my view, reflects a growing recognition of the attractive risk/reward of our two clinical programs. In contrast to programs and opening new chemical entities, TFF VORI and TFF TAC, couple significant innovation with reduced clinical development risk. The innovation is driven, of course, by our Thin Film Freezing technology that enables efficacious levels of voriconazole and tacrolimus to be delivered directly into the lungs.

Through this improved delivery, we expect to see strong efficacy, but with lower toxicity and drug-drug interactions compared to systemic delivery. Physicians have told us that they would welcome these types of solutions to improve overall care in these highly vulnerable patient populations. We also believe each program bears significantly less clinical risk compared to other development stage programs. By improving the delivery of two well-established first-line FDA-approved drugs, we expect to see positive treatment effects for most of the patients enrolling in our ongoing Phase 2 trials. For this reason, I believe TFF represents a compelling opportunity for investors who seek an optimal balance of innovation, coupled with lower overall clinical development risk.

Developing new therapies like TFF VORI and TFF TAC that can efficiently deliver an effective drug while lowering systemic toxicities is likely to have a significant positive impact on overall patient health, clinical outcomes and health economics. Given the size of the patient population, the level of unmet need, the economic burden of each disease and the anticipated impact of TFF VORI and TFF TAC on clinical outcomes, we believe each product represents a $1 billion-plus market opportunity. While advancing our pipeline remains our primary strategic objective, I’m also pleased to note that business development at TFF remains quite active. We announced three separate government collaborations during the quarter, which provide third-party validation of the value of our Thin Film Freezing technology.

In May, we signed a Cooperative Research and Development Agreement, or CRADA, with the National Institute of Environmental Health Sciences part of the National Institutes of Health to develop dry powder formulations of hyaluronan to prevent and treat respiratory diseases. NIEHS and TFF will evaluate the pharmacokinetics and therapeutic efficacy of TFF hyaluronan formulations, using in vitro and in vivo models of select respiratory diseases with a primary focus on chronic obstructive pulmonary disease, or COPD, and viral respiratory diseases caused by SARS-CoV-2, influenza virus and/or respiratory syncytial virus or RSV. Also in May, we signed a contract extension with Leidos that provides additional funding to advance next-generation personalized protective biosystems under the Personalized Protective Biosystems Program managed by the Defense Advanced Research Projects Agency, more commonly referred to as DARPA.

The goal of the program is to develop lightweight materials using Thin Film Freezing technology that protects military and healthcare personnel from exposure to chemical and biological threats. In June, we announced an agreement with the National Institute of Allergy and Infectious Diseases, also part of the National Institutes of Health, that awarded TFF Pharmaceuticals, a direct to Phase 2 Small Business Innovation Research, or SBIR grant of approximately $3 million to continue development of a shelf-stable universal influenza mucosal vaccine using the Company’s Thin Film Freezing technology. The aim of this program is to develop a vaccine that is at least 75% effective against symptomatic influenza virus infection. Importantly, these agreements are largely funded by our partners, and provide an important source of external validation for our technology.

I’d now like to turn the call over to Dr. Zamaneh Mikhak to discuss the TFF VORI and TFF TAC clinical programs. Zamaneh?

Dr. Zamaneh Mikhak: Thank you, Harlan. As Harlan mentioned, I’m pleased to share with you the considerable progress we’re making to advance enrollment in our two Phase 2 trials of TFT TAC and TFF VORI. Over the last several months, our clinical development team has undertaken multiple initiatives to advance these programs. I’ll start by providing an update on TFF VORI. As a reminder, TFF VORI has been formulated using our Thin Film Freezing technology to deliver antifungal drug voriconazole directly to the lungs. TFF VORI is being developed for potential treatment of pulmonary fungal infections, including pulmonary aspergillosis, starting with invasive pulmonary aspergillosis or IPA. IPA is a life-threatening fungal lung infection that primarily impacts immunocompromised patients.

Even with standard-of-care therapy, the 12 weeks mortality rate from IPA is approximately 30%, which represents a significant unmet medical need for this rare disease. Oral voriconazole is first-line therapy for treatment of IPA, but because of the drug’s narrow therapeutic window, attaining efficacious concentrations often requires dosages that cause significant toxicities. By administering TFF VORI directly into the lungs, we hope to improve efficacy by delivering high local concentrations of the drug, while lowering systemic exposures and, therefore, systemic toxicities and drug-drug interactions, problems commonly associated with oral administration. As Harlan mentioned earlier, we have made considerable progress over the last several months.

We established weekly goals for our CRO and weekly meetings with CRO upper management, to improve accountability and overall execution, and these changes have helped considerably. For example, we now have 16 of our 19 clinical sites activated compared to only a single site when I first joined TFFs back in January. We expect additional sites to be up and running this quarter. The experience [ph] of the TFF VORI program is growing amongst hematologists oncologists, infectious disease physicians, pulmonologists and transplant physicians as our active clinical sites and their referral networks, which in turn is leading to an acceleration in patient prescreening and screening activities. As a result, our rate of prescreening has increased nearly fivefold in the past four months compared to the first four months from 9 to 44.

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And we now have two patients enrolled in our study. Additionally, we have amended the study protocol to improve patient access to TFF VORI. For example, based on feedback from our investigators, we have expanded eligibility to allow real criteria used for the diagnosis of IPA. In a disease with high unmet need, in which first-line therapy is associated with high mortality, toxicity and drug-drug interactions, patients often choose to participate in a clinical trial with the hope of receiving an investigational drug with potential for improved efficacy and toxicity. To improve the chances of receiving TFF VORI, we have also increased the ratio of patients receiving TFF VORI to those receiving oral voriconazole from 1:1 to 3:1 in this study. While we’re developing TFF VORI for the potential treatment of IPA by conducting clinical trials, we understand that in some cases patients who have exhausted available therapeutic options, may not qualify for participation in clinical trials.

For such cases, we have launched an Expanded Access Program, or EAP, offering TFF VORI to patients with all forms of pulmonary aspergillosis, including both invasive and chronic pulmonary aspergillosis, allergic bronchopulmonary aspergillosis, aspergillus tracheobronchitis and aspergillus bronchoanastomotic infections. Patients with other voriconazole responsive pulmonary infections also qualified for this program. The patients who enter our EAP have limited or no treatment options or in some cases, have had an unfavorable response to standard-of-care therapy. The EAP program builds on the positive efficacy, safety and tolerability results in two such patients with pulmonary fungal infections who were previously treated with TFF VORI on a compassionate use basis.

I’m also pleased to note our collaboration with Durbin to help us implement EAP for TFF VORI in the U.S. Canada, Australia, UK and select countries in the EU. Durbin has a long track record of executing Expanded Access Programs across the globe for large and small pharma companies. And we are confident that through this partnership, we will be able to provide expanded access to TFF VORI to eligible patients. In fact, I’m pleased to note that we have already enrolled our first patient in this new program. As Harlan mentioned, we expect to see a majority of patients who receive TFF VORI therapy to show a positive treatment effect due to the well-established activity of voriconazole as an antifungal medication. Given the availability of considerable historical data on the safety, tolerability and efficacy of voriconazole, and in line with what is generally customary in rare disease indications, we believe no more than 10 patients treated with TFF VORI may be necessary to provide us with enough clinical data to make a go/no-go decision on entering the Phase 3 trial.

Initial data from our ongoing Phase 2 trial in EAP are expected by the end of 2023. Now, let me turn to discussing the TFF TAC Phase 2 program. Similar to TFF VORI, the TFF TAC program addresses an area of significant unmet medical need in another rare disease indication. TFF TAC is being developed for prevention of rejection in lung transplant recipients, a patient population with five-year mortality rate as high as 50%. The 50% five-year mortality in lung transplant comes largely from the narrow therapeutic window of available immunosuppressants where too little immunosuppression leads to acute or chronic rejection, whereas too much immunosuppression leads to infection, chronic kidney disease and post-transplant lymphoma or other malignancies.

To overcome these deficiencies, TFF TAC has been formulated using our Thin Film Freezing technology to deliver the first-line calcineurin inhibitor immunosuppressant drug tacrolimus directly to the lungs. The direct delivery of TFF TAC to the lung is poised to potentially address multiple contributing factors to the 50% five-year mortality seen in lung transplant. With local delivery to the lungs, the ratio of lung exposure to systemic exposure increases. Therefore, lung concentration sufficient to drive efficacy locally can be achieved at lower doses compared to oral administration, leading to lower systemic exposures to minimize systemic toxicity. The improved lung to systemic exposure achieved with TFF TAC is predicted to address the fine balance needed for immune suppression.

The improved concentrations in the lung, the site of inflammation would address acute and chronic rejection, while diminished systemic exposures would address potentially fatal complications, such as infections, chronic kidney disease and post-transplant lymphoma or other malignancies. It should be noted that presence of systemic exposure, albeit at lower levels compared to oral tacrolimus is predicted to suppress systemic inflammation to further prevent rejection. In our Phase 2 trial, we have gained considerable insights at our active site in Australia in transitioning lung transplant patients from oral tacrolimus to the inhaled form TFF TAC. The transition from oral to inhaled tacrolimus is a delicate process given the risk of rejection and toxicities.

We have been pleasantly surprised by the low doses of TFF TAC needed to date to match overall clinical outcomes from oral tacrolimus. To date, three patients have enrolled in the Phase 2 study at our active sites. We expect to activate additional sites in Australia in the coming months. Since our selected sites have a large database of lung transplant patients that could be considered for potential enrollment in our study, we expect a steady flow of patients in our TFF TAC study. Similar to the TFF VORI program, given the availability of considerable historical data on the safety, tolerability and efficacy of tacrolimus, and in line with what is general practice in rare indications, we believe meaningful clinical data from approximately 10 patients treated with TFF TAC will be sufficient to guide a go/no-go decision for entering a Phase 3 study, and we expect to report initial data from the ongoing Phase 2 study by the end of 2023.

I’ll now turn the call over to Kirk to review our second quarter financial results.

Kirk Coleman: Thanks very much, Zamaneh. Our cash and cash equivalents as of June 30, 2023, were $7.7 million. The additional proceeds from the financing transaction announced earlier today will ensure that we have sufficient resources to reach anticipated upcoming clinical milestones and will extend our cash runway through the first quarter of 2024. Research and development expenses for the second quarter of 2023 were $2.7 million compared to $5.1 for the comparable period in 2022. $2.4 million decrease year-over-year is primarily a result of reduced clinical and manufacturing expenses. General and administrative expenses for the second quarter of 2023 were $2.7 million compared to $3.7 million for the comparable period in 2022.

$1 million decrease year-over-year is primarily related to decreased professional fees and patent expenses, insurance, consulting, market research, and payroll and payroll-related expenses. Net loss for the second quarter of 2023 of $5 million compared to a net loss of $8.7 million for the comparable period in 2022. As Harlan noted previously, we have been focused on spending responsibly as we progress our clinical trial programs. I’m proud of the team for successfully reducing spending in areas that were not part of the primary strategic objectives. I’ll now turn the call back over to Harlan.

Dr. Harlan Weisman : Thank you, Kirk. Before opening up the call for questions, I would like to express my sincere thanks to Zamaneh and her team for all of their hard work and dedication, which has enabled us to make significant progress across multiple fronts in our TFF TAC and TFF VORI program. Since becoming CEO six months ago, my confidence in the therapeutic and commercial value of these two assets has only continued to grow. By improving drug delivery with our Thin Film Freezing technology, the VORI and TAC programs have the potential to demonstrate a transformative impact in two rare disease indications by effectively restoring the full efficacy potential of life-saving medicines. Moreover, each addresses areas of significant unmet medical need in rare disease indications with sizable patient populations and substantial market opportunity.

If we succeed in this endeavor, I’m equally confident that the value of our technology platform, internal pipeline and partnerships will be increasingly recognized in the market, providing investors with the opportunity to reassess the value of our company in the months ahead. That concludes our formal remarks, and I’d like now to open the call up for the question-and-answer session. Operator?

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Q&A Session

Operator: [Operator Instructions] First question comes from Jonathan Aschoff of ROTH MKM. Please go ahead.

Jonathan Aschoff: Thank you very much. My first question, guys, is about VORI. Given there’s only 2 patients in the trial, what gives you the confidence that you can meet that 10-patient expectation by year-end? And I guess this explains the 2:1 ratio of sites to intended patients.

Dr. Harlan Weisman: Jonathan, hi, and good morning. And thank you for the question. The clinical trial has been ramping up since Zamaneh took over as Chief Medical Officer. And it is a process that takes a while to overcome the initial inertia in the clinical trial. But we’re now, as Zamaneh went over in her remarks, seeing that progress. And I’ll ask Zamaneh to comment further on answering your question.

Dr. Zamaneh Mikhak: Hi Jonathan. Thanks for the question. As I mentioned, we have made a significant level of progress. We now have 80% of our sites activated, 16 sites in Europe in 5 different countries. Our investigators are engaged. Our protocol eligibility has been expanded to allow patients that need real-life criteria for diagnosis of IPA. And because we’ve changed the randomization schedule such that instead of 1:1, patients have the opportunity to receive TFF VORI with a 3:1 chance, the trial is a lot more inviting to patients who would consider participation. All of this momentum, we believe is setting us up to bring the number of patients that we are projecting and to have initial data by the end of the year.

Jonathan Aschoff: With the [Technical Difficulty] can you tell me, I mean, up fivefold in the past four months, but to only have two patients, what’s the explanation for so few patients qualifying for this trial?

Dr. Zamaneh Mikhak: That’s a good question. IPA is a fatal disease. So, one of the things that we’re noticing is that because it’s such a severe disease, you have severe fungal infection on top of, for example, hematologic malignancy. This is a patient, say, with leukemia, type of leukemia, who now has a fungal infection. So, quite a fatal disease. What we’ve noticed is that many of the patients who are considered for the clinical trial actually end up in hospice or palliative care. They’re quite ill and that’s why they don’t qualify. Another reason that they might not qualify is that the diagnosis ends up not being as aspergillus or not being exactly IPA or they’re not meeting the very specific and very narrow criteria for diagnosis of IPA, based on the original diagnostic criteria that was in the protocol, which we’ve capped, but again, we expanded that to include real-life criteria.

And we believe that improves eligibility and study participation. As I mentioned, we have a lot of sites active now and the investigators are quite engaged. But at the end of the day, we want to make sure we get the right patients in this study. And I think the other thing to really keep in mind is that what do you accomplish — what can you accomplish while you’re setting things up and what can you accomplish once you have set things up. So, we have brought in the number of patients that we brought in as we’ve been activating sites, as we’ve been putting in an addendum, as we’ve been putting in an amendment. But doing that requires a lot of steps to actually implement these changes. Now, we’re at a point where the sites are active.

The amendment is in place and approved in almost every country. These sites are familiar with these broadened eligibility criteria, and they understand how that impacts their evaluation of patients. So, that’s why looking at the activities on the ground and the information we have, we’re comfortable to project that we’ll be able to have initial data by the year-end.

Jonathan Aschoff: Thanks for that. What was flawed about 40 patients as an enrollment number for VORI such that 10 can allow you to come up with a go/no-go decision for Phase 3?

Dr. Zamaneh Mikhak: That’s a good question, too. The 40-patient trial was the original design of this study really did not take into account the indication IPA is a rare disease. You do a 40-patient Phase 2 study, for example, in rheumatoid arthritis, if you’re doing a sort of a regular pack or you do it in psoriasis, big common, big footprint disease. In rare diseases, generally, you look for a smaller sample size in your trials because there are just fewer patients in these trials. For example, IPA, the number of patients with new diagnosis of IP worldwide is 80,000 patients. So, that’s a quite a rare of disease. So the way one does clinical development in a rare disease indication is that you look for more telling signals of efficacy, and that helps you have a smaller sample size.

We also have the luxury that the drugs we’re developing are first-line approved drugs, the chemical entities are not new. So, we know what voriconazole can do. We know what tacrolimus can do. We understand their efficacy profile. We understand their safety and tolerability profile. So, we don’t think you need 40 patients to be able to make a call as to how TFF VORI is doing compared to oral voriconazole. I’ll give you an example. With oral voriconazole, about 15% to 20% of patients have to decrease their dose or actually eventually go off therapy because of liver toxicity. That’s a really high rate of liver toxicity, and that’s very well known, very common experience. In our clinical trials, we have not seen any patients so far between the healthy volunteers, between patients with mild asthma, between the patients we’ve had in compassionate use, between the patients we’ve had so far in our clinical trial, nobody with liver toxicity.

So, we don’t think you’re going to need 40 patients to be able to make this call. The difference will be large enough that you’ll be able to make it call the just 10 patients. So it’s really an adjustment in clinical trial design to match the indication a little bit better?

Jonathan Aschoff: Okay. So you will make that decision on 10 patients versus 10 doesn’t quite look compelling, hey, let’s enroll more. Like, what do you think you’re more likely to do, just make that call, or if that’s not clearly a yes, try for some more patients to see if it gets to a yes?

Dr. Zamaneh Mikhak: We’ve always said it’s approximately 10 patients. But bottom line is that we don’t think you need a lot more than that. Obviously, you have to look at your data, make decisions accordingly, but we don’t think it will be — you need the original design, which was comparing 20 patients getting TFF VORI with 20 patients, getting oral voriconazole, then making a call. We think we’ll be able to really rely and draw on the experience that the knowledge that’s there about oral voriconazole. And also, you would need fewer patients than 20 to make a call about TFF VORI.

Jonathan Aschoff: Okay. And I’m not to leave Kirk out. Kirk, there were sequential decreases, which is good in R&D and SG&A for the first and the second quarter. Are you at a cruising altitude, or do you expect that to continue dropping a little?

Kirk Coleman: That’s a great question, Jonathan. Thank you. I think we are starting to settle in and the guidance we are giving obviously is we are anticipating that our burn rate is about $4 million a quarter, and then we’ve got enough runway to get us through into — through Q1 of 2024.

Jonathan Aschoff: I’ve got you there easily. Okay. Thank you very much.

Operator: Thank you. The next question comes from Justin Walsh of JonesTrading. Please go ahead.

Justin Walsh: Can you expand on the criteria you expect to use for your go/no-go decisions? Like, what type of results would you need to see to give you confidence that it warrants advancing into Phase 3 for your asset?

Dr. Harlan Weisman: Yes. Good morning, Justin. Thank you for the question. That one seems like another perfect one for Zamaneh to address.

Dr. Zamaneh Mikhak: Thank you, Justin. So, we will look at signals of efficacy. For example, in TFF VORI, we certainly want to see that patients are feeling better, the clinical signs and symptoms have improved, and we like to see that there is evidence that aspergillus has been cleared. The treatment duration is about 12 weeks. That may or may not be long enough to see radiologic evidence, but we certainly look for it, and we expect to see that at least in some patients. In the TFF TAC program, for example, we want to make sure that as we transition patients from the oral tacrolimus to the inhaled tacrolimus, we continue to see that patients are free of rejection. And that they are shown good signs of safety and tolerability. And of course safety and tolerability is big for TFF VORI as well.

Justin Walsh: Got it. And did you discussions with the FDA or the EMA related to the amendment of the trial?

Dr. Zamaneh Mikhak: We made the amendment, and we submitted it to the health authorities in the various countries we’re in, in Europe, and they’ve been approved in 4 out of 5 countries, and it’s under review in the 5th country.

Justin Walsh: Got it. And then last question for me, you had mentioned the hospice and some of that angle here. But I’m just wondering if you can remind us or provide commentary on the expanded access and compassionate use of TFF VORI. What alternatives do these patients face, either in terms of standard-of-care or other experimental therapies that you might be aware of?

Dr. Zamaneh Mikhak: So the Expanded Access Program really provides the opportunity for patients who might benefit from TFF VORI to get access to it. And the patients who might benefit from this therapy are not just patients who have invasive pulmonary aspergillosis. There are many other indications for which TFF VORI could be helpful, chronic pulmonary aspergillosis, ABPA, in patients with lung transplant, bronchoanastomotic infections. There are many areas, and also fungal infections that are not aspergillus but are voriconazole sensitive. So, every time you do a clinical trial, you have a clinical trial protocol, you have to implement and cement a particular design. And once that design is cemented, then there are patients who don’t qualify based on one thing or another.

So the Expanded Access Program really helps us get TFF VORI in the hands of patients who could potentially benefit from it. And these are patients, like you mentioned, who have tried standard-of-care therapy at adequate levels and they have not had a good response to it or because of systemic toxicities are not able to tolerate these drugs. The two patients we had for compassionate use that were treated previously, for example, were patients who were lung transplant recipients, they had recurrent pulmonary infections — pulmonary fungal infections. And they had significant toxicities to the point that when their infection came back, they were at the end of their rope. And they didn’t have — they didn’t know where to go, and that’s where TFF VORI was given to them with very good results.

Did that answer your question?

Justin Walsh: Yes.

Operator: The next question comes from Vernon Bernardino from H.C. Wainwright. Please go ahead.

Vernon Bernardino: Your answers as far as the VORI program have been very informative. So I think I know the answer to my question. Regarding the Phase 2 TFF TAC program, though, do you think that the small number of patients that are going to be dosed with the — in the TAC clinical trial will be predicted enough to also make a go/no-go decision for Phase 3?

Dr. Harlan Weisman: Why don’t you go ahead and take that, Zamaneh?

Dr. Zamaneh Mikhak: Yes. Yes, we think just about 10 patients would be sufficient for us to make a call about TFF TAC as well. As I mentioned, we’ve enrolled three patients. With our first patient, it was the first time we were transitioning patients from oral tacrolimus to inhaled tacrolimus. So, we approached it very conservatively, watching that patient very carefully, making the transition and then very slowly leaning that dose of inhaled tacrolimus because you have to have — you have to be careful about that balance of making sure the patients have been going to rejection while you’re improving prospects of safety and tolerability. And we — as I mentioned, we were surprised of how low we were able to go in the TFF TAC dose.

With the second patient, we implemented our learnings from the first patient and were able to duplicate those observations. So obviously, we want to see that happening in a number of other patients, but we think 10 — approximately 10 patients will be sufficient to give us the information we need to make a call that, yes, this is a goal into Phase 3. And obviously, you continue always to learn from additional patients you bring in, also at your development program. But approximately 10 patients should be sufficient.

Vernon Bernardino: Great. I look forward to that decision. Now I know an Expanded Access Program is generally not one designed to provide results, for example. But the Expanded Access Program, especially with your drugs, TFF VORI and TAC, in particular, the voriconazole study, as you mentioned, the small number of patients. Would there be a possibility to give any kind of data and/or results from that program and would — especially with the help of Durbin Ireland or Uniphar rather provide a perhaps broad coverage of the kind of patients globally that you could, I guess, put together, translate, synthesize, whatever — however you want to describe it into the results that you might see with TFF VORI?

Dr. Harlan Weisman: Why don’t you go ahead Zamaneh and take that one, too?

Dr. Zamaneh Mikhak: Sure. Yes. We believe that the information we gather through the Expanded Access Program will add to the knowledge base that we’re going to have about TFF VORI and its potential. We are developing TFF VORI by conducting a clinical trial, and the results of the clinical trial will lead us and help us, guide us to understand our next steps and the design of our Phase 3, et cetera. But the information we are gathering through the Expanded Access Program is very valuable and adds to that. It also really expands the indications that we are in. The clinical trial is in invasive pulmonary aspergillosis, Expanded Access Program gives the opportunity for TFF VORI to be in five additional indications, which is really significant. So, that information is really helpful to us also to understand where are the signals of efficacy where we should be pursuing further clinical trials for TFF VORI.

Dr. Harlan Weisman : Probably we are — I just wanted to, I’m sorry, just mentioned that, you brought up Durbin. And one of the reasons for us signing on with Durban is that it — we have — although it’s not a formal clinical trial protocol, we do have a data collection mechanism that would provide us with uniformity, across the various patients that come into the compassionate use program. So it’s not with the same degree of rigor, but there is a systematic data collection that’s planned that would allow us to characterize the patients and the outcomes. Zamaneh, I don’t know if you want to…

Vernon Bernardino: Sure. That’s exactly what I was looking for. Yes. Terrific. That’s exactly what I was looking for. And then, secondarily, I know you have cash, as Kirk said, through perhaps third quarter 2024. My model makes it easy to see that is certainly true. But if you had additional cash, what other molecules do you think you might think about advancing into clinic and make good sense in whether they be a small studies or just even a proof-of-concept studies, where you could generate results that would provide just additional opportunities for our partnerships.

Dr. Harlan Weisman : Yes. Thank you for the question. Just to clarify, it’s enough cash to get us through the first quarter of next year. And clearly, we are going to have to raise money again based on the expected inflection point from us producing data, we think it will be a catalyst to allow us to raise more money. The first order of business when we raise money is to be able to continue to fund the development of TFF VORI and TFF TAC. So, I want to ensure that we don’t drop the ball on those two programs and get too unfocused. So, that’s our initial focus. But, as you pointed out, there are other molecules. And we have a process underway to evaluate potential pipeline products. We recently reacquired full rights in the niclosamide.

I’m not saying we would go forward with that, but it’s — we have it and we are currently evaluating whether it makes sense to go forward with niclosamide and indications besides COVID-19, which was the original idea of it, and we’ll evaluate that. But we’re also — have shown that our technology is able to take, for example, a large variety of biologics, like monoclonal antibodies, vaccines, and we have the agreement with NIH to develop a universal flu vaccine and mRNAs and even bacterial causes. And so there’s — we have a wealth of different opportunities. The key is going to be to see what we should focus on. And it’s premature for me to say that with any degree of certainty. We really have to go through that evaluation process, which we will get underway and we have underway right now.

Operator: The last question comes from Daniel Carlson at Tailwinds.

Daniel Carlson: Question — just a couple of follow-up questions. Regarding the Expanded Access Program, is that data that something you can submit to the regulatory authorities, like the FDA or EMA and will they consider that data when advising on potential next steps?

Dr. Harlan Weisman: Yes. Dan, first of all good morning, and thank you for participating. I appreciate the question. We believe the answer is yes, but let me let Zamaneh elaborate.

Dr. Zamaneh Mikhak: Hi, Dan. Yes. Yes, we believe that will be part of the data package. The expanded access data, after all is valuable and helpful data that what TFF VORI has been able to do. And the FDA does accept that as part of the data or package that one submits.

Daniel Carlson: Great. Zamaneh, you mentioned for the Phase 2 VORI, expanding the eligibility criteria with additional real world criteria. Can you just elaborate on what that means exactly?

Dr. Zamaneh Mikhak: Sure. So, with every clinical trial, obviously, you need to make sure that you get the right patients because, for example, if the patient doesn’t have, let’s say aspergillus, which responds to voriconazole, then obviously one couldn’t expect TFF VORI to cause improvement. So, it’s important to make sure you get the right patients in. The diagnostic criteria, that’s part of the protocol that is customarily part of the protocol for IPA type studies is a very strict and academic type of diagnostic criteria, which is very valuable, but it is very strict. For example, it includes that the patients have to have certain signs and symptoms to be part of that, to be eligible as part of meeting the criteria.

And those signs and symptoms don’t include worsening cough. Now, in reality, when physicians face, for example, we’re talking about the patient with hematologic malignancy, you have that patient with AML, who’s now developed a fungal, pulmonary fungal infection. They see that the patient has increased respiratory symptoms, including a productive cough that has worsened and the chest CT shows a cavity and they grow aspergillus from their lungs. That patient in the real world gets treated with voriconazole for their probable diagnosis of IPA. But based on that academic set of criteria, that patient wouldn’t be considered because worsening cough is not one of the specific signs and symptoms mentioned in that diagnostic criteria. So, after talking with our investigators, one of the — they gave us feedback about various aspects, and one of the pieces of feedback we received was this, that, in the real world, we actually diagnose patients with IPA, bringing clinical judgment and putting the various parameters together to get a story, get a picture of does this fit IPA or not.

And as a result of that, we’ve brought that into the protocol, allowing these real world criteria, like worsening cough to qualify the patient as long as other elements are met the way they’re supposed to be met.

Daniel Carlson: Got you. Got you. And so, can you just — can you comment at all about your screening failure rate? And will this change that?

Dr. Zamaneh Mikhak: It should, it should. Because again, previously, some of the patients that didn’t have the specific signs and symptoms mentioned in the algorithm, they would not qualify. And now, because they’ve entered these real world criteria into the protocol, they would qualify for study participation.

Daniel Carlson: Got you. Okay. And then one question on TAC, it’s for you again, Zamaneh. You mentioned that you’re surprised how much — how little TFF TAC it takes to match your overall clinical outcome from oral tacrolimus. Can you elaborate on that and what that means from a clinical standpoint?

Dr. Zamaneh Mikhak: Yes. So patients coming — these are patients who are lung transplant recipients. They’ve had their lung transplant some time ago, six months ago or so, or more, years ago. And these are patients who — all of them are oral tacrolimus because most patients — most lung transplant recipients do go on oral tacrolimus to control rejection. And they’ve been on oral tacrolimus long enough to start to have the toxic effects of oral tacrolimus. So, these are the patients whose kidneys are shutting down. But the physician is faced with that decision of what do I do with this patient? If I continue the patient on oral tacrolimus at the dosages that I have them on, the kidneys are going to continue to worsen. So I decrease the oral tacrolimus, hoping they don’t go into rejection.

Maybe I add a different type of immune suppressant as I decrease oral tacrolimus, but that’s going to have its own toxicity. So, these are the types of patients right now in this study. So, as we take these patients, the patients are doing well from a rejection perspective. They’re not rejecting their lungs, their oral tacrolimus is keeping rejection at bay, but their kidneys are not functioning well. So, we have transitioned these patients. We have learned how to transition, how to take that dose of oral tacrolimus and understand what would be an equivalent dose in TFF TAC to keep the same blood levels. And then from there, we’ve learned how much can we slowly go down and see that the patients continue to be clinically stable. No clinical signs of rejections, no inhaled tacrolimus TFF TAC providing them with the benefits of oral tacrolimus and then starting to see the beneficial effects of lower toxicity.

So obviously, we need to dose many more patients. That’s why we think we will need approximately 10 patients to make a final call, but we were just very encouraged. TFF TAC is also the drug that when we talk with lung transplant doctors, they say this is the drug we’ve been waiting for. So there is a lot of enthusiasm to hopefully get this drug in the hands of patients and hopefully see how this transition helps with that improved efficacy and lower toxicity parameter. And in the long run, this is a drug that should be used in — assuming we show the type of response we are projecting and hoping to see, this is the type of drug that should be used in patients before they develop renal toxicity. There should be no reason for us to wait for patients to develop renal toxicity from oral tacrolimus and then change them to TFF TAC.

So in the long run, our goal would be to really have this available for patients from the start.

Daniel Carlson: Got you. That’s exciting. Thank you. And Zamaneh, thank you, you’ve obviously done a lot of work at turning these programs around. So, I want to thank you for your efforts in that regard.

Dr. Zamaneh Mikhak: Thank you.

Daniel Carlson: You brought a long way in a short time, it appears. So, last question for me, Harlan. I mean, you focused rightly on the two Phase 2s, but there were a number of other potential balls out there in the air. I’m just wondering if there is anything progressing on the third party work that you’ve been working on in the past, or if that’s just sort of all silent now?

Harlan Weisman: Thank you, Dan, for that question. We still have ongoing collaborations going with some big pharma companies and also biotech companies. It is going on in the background. The one thing we have done is we have changed the emphasis of what we are doing to throw as many hooks out there to catch fish to be more focused and go to the fishing hole where the fish actually are. And so, we are saying, one, we’ve narrowed our — the focus to be only on those programs that we think we can make a real difference that our business interests to the collaborator that might lead to — where we can add value that might lead to a business deal in the future. And the other is that we want people to pay their way completely before we were doing quite a lot of work, where we were taking on the burden of the cost.

It wasn’t tremendous cost, but we were taking on that burden. Now, we want — if somebody wants to collaborate with us, and part of demonstrating that it’s important to them is for them paying their way. So, we have a more narrowed group of collaborations that we have going on. And, of course, we have the government collaborations, which we are very excited about. We’ve received that pace for our laboratory costs, our human resource is devoted to those projects. And we’re exploring other opportunities on the nondilutional side of working with government and other organizations.

Operator: Thank you. There no further questions. I will turn the call back over for closing comments.

Dr. Harlan Weisman: Well, in closing, I’d just like to thank all of you for being on today’s call. And I’d especially like to thank all of our investors who’ve demonstrated their belief in and support of our company. I’m convinced the TFF VORI and TFF TAC programs have the potential to significantly advance the current standard-of-care in their respective rare disease indication. And that’s why I, as well as our officers, directors and employees have purchased significant equity in our company. Thank you again, and we look forward to providing another corporate update in November.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.