Protara Therapeutics, Inc. (TARA) Earnings Call Transcript & Summary

Hello, and welcome to the Protara Update Call. We ask that you please hold all questions until the completion of the formal remarks at which time you will be given instructions for the question-and-answer session. Also, as a reminder, this conference is being recorded. If you have any objections, please disconnect at this time. With that, I would now like to turn the call over to Justine O'Malley, Senior Vice President, Investor Relations and Corporate Affairs.

Thank you very much. Good morning. Thank you all for joining us today for a review of the interim results of our ongoing Phase II open-label STARBORN-1 trial of TARA-002 in pediatric patients with macrocystic and mixed cystic lymphatic malformations or LMs. Before we begin, I would like to remind you that during today's call, we will be making certain forward-looking statements. These statements represent our views as of today only and should not be relied upon as representing our views as of any subsequent date. Actual results may differ from our forward-looking statements due to various factors, including those described in the Risk Factors section of our most recent annual report and subsequently filed quarterly reports that are on file with the SEC. Except as required by law, we disclaim any obligation to update these statements even if our views change. I will now turn the call over to Jesse Shefferman, Co-Founder, Director and Chief Executive Officer.

Thank you, Justine, and thank you all for joining us this morning. We're excited to share positive interim results from our ongoing Phase II open-label STARBORN-1 trial, assessing TARA-002 in pediatric patients with macrocystic and mixed cystic lymphatic malformations or LMs. I am joined today by Dr. Jacqueline Zummo, Co-Founder and Chief Scientific Operations Officer at Protara. Additionally, we are joined by Pat Fabbio, Chief Financial Officer; and Bill Conkling, Chief Commercial Officer, who will join us for Q&A at the end of the call. Finally, we are privileged to have Dr. Jesse Jones here with us today. Dr. Jones, a STARBORN-1 investigator himself works in the Department of Neurosurgery and Radiology at the University of Alabama. He has treated many patients with various vascular anomalies, including LMs throughout the course of his career. For those of you who are new to Protara, we are a clinical stage company developing transformative therapies for the treatment of cancer and rare diseases. Our lead asset is TARA-002, a genetically distinct strain of strep pyogenes that drives an immunologic attack of mutated cells. Our lead clinical program for TARA-002 is a non-muscle invasive bladder cancer or NMIBC. And we are pleased to be sharing positive safety and efficacy data for the treatment of LMs, one of several potential indications for 002 today. Our pipeline also includes IV Choline Chloride, an investigational phospholipid substrate replacement for patients dependent on parenteral support, for which we expect to commence a registrational study by year-end. While the focus of today's call will be our LMs program, we continue to be excited about our opportunity in NMIBC and look forward to presenting results from Cohort A of the ADVANCE-2 trial in BCG Naive NMIBC patients at the SUO conference in early December. Before I turn the call over to Jackie, I would like to provide a brief overview of our LMs program. LMs are rare congenital malformations of lymphatic vessels driven by somatic genetic mutations resulting in the failure of these structures to connect or drain into the venous system. There are three subtypes of LMs: Macrocystic LMs, which are large balloon-like cysts with well-defined fluid-filled spaces; Microcystic LMs, which are small, infiltrative lesions with tiny cystic spaces; and Mixed Cystic LMs, which are a combination of both macro and micro cystic components. Protara is focused on TARA-002 for the treatment of macro and mixed cystic LMs. Most of these cases are diagnosed in early childhood during the period of active lymphatic growth, with more than 50% of cases detected at birth and 90% of cases detected before the age of 3 years old. Most LMs are located in the head and neck region and can cause significant morbidity affecting breathing, swallowing, feeding, speaking and of course, the emotional impact of living with a visible anomaly. On the next slide, there are approximately 1,400 to 1,800 new lymphatic malformation cases diagnosed each year. When we take a closer look at the composition of these diagnoses, we see that patients with macro and mixed cystic lesions, the populations we are pursuing account for approximately 80% of diagnoses with the remaining 20% of patients presenting with microcystic-only lesions. And from a prevalence perspective, literature suggests approximately 20,000 patients are living with macro and mixed cystic LMs in the U.S., though we doubt, there are other contemporary estimates that have been produced recently that range much higher. Despite the gravity of this condition, no FDA-approved therapies exist for patients with LMs. Current treatment options include surgical intervention and off-label sclerosing agents, which carry significant rates of complications and recurrence. The literature suggests that 40% to 70% of LMs interventions are unsuccessful in preventing recurrence. We often see patients having to repeat treatment cycles leading to more exposure to potential complications and a potential lasting psychosocial impact especially in pediatric patients. When looking at the unmet need in LMs, we have confidence in the potential for 002 to serve as a meaningful treatment option for these patients. 002 is supported by an enormous amount of clinical data from its predecessor compound OK-432, which is approved and marketed under the branded name Picibanil, in Japan by Chugai Pharmaceutical, where it has been the standard of care for LMs patients for 30 years. In a previously completed University of Iowa led compassionate use program that included a randomized Phase II clinical study. OK-432 demonstrated safety and efficacy in over 500 LMs patients. This is the largest study ever completed in this patient population and Protara has rights to that data set. The compelling results from the University of Iowa study serve as a clinical template and impetus for our agreement with Chugai, the goal of which is to seek approval for TARA-002 in the U.S. for LMs, NMIBC and other potential indications. Our first step was to develop GMP manufacturing for 002 as we modernize the manufacturing process to comply with U.S. and Japanese standards. Our facility is an FDA-registered biologics facility that has been inspected for GMP quality. We worked with FDA to successfully establish manufacturing comparability of OK-432 to TARA-002, which would form the basis of an eventual supply agreement with Chugai to produce commercial product for the Japanese market on Chugai's behalf. And so today, we are excited to share that the interim data from the STARBORN-1 trial are consistent with historical results seen both in the University of Iowa study and the Japanese approval. Given these results, we feel confident that TARA-002 can represent an important much-needed option for this underserved patient population in the U.S. With these data now in hand, we plan to work with the FDA to determine a path to approval. I will now turn the call over to Jackie to walk through TARA-002's mechanism of action in LMs as well as an overview of the data we reported today.

Thank you, Jesse. I'll start by reviewing TARA-002's mechanism of action. TARA-002 is a genetically distinct strain of strep pyogenes that is fully inactivated while retaining its immune potentiating properties. In LMs, following aspiration of fluid from the lymphatic cyst, TARA-002 is administered directly into the cyst via injection to activate an immune response. TARA-002 activates TLR2 and NOD2 pattern recognition pathways. The innate and adaptive immune cells within a cyst are activated and produce a targeted immune cascade that eliminates the mutated cells in the epithelial lining of the cyst while sparing healthy tissue. Cytokines and chemokines, such as tumor necrosis factor alpha, interferon gamma, IL-6, IL-10 and IL-12 are released. Neutrophils and macrophages are activated. And NK cells and T-lymphocytes are rapidly recruited which attack and destroy the mutated cells. This increases epithelial permeability, which allows remodeling of the vessels to support normal drainage leading to the eventual deflation and structural collapse of the cyst. Pro-fibrotic cytokines promote this tissue remodeling and the formation of mature tissue to prevent recurrence. And as observed in Japan, the Iowa data and now our data, it promotes long-term resolution of the cyst. Moving on to the STARBORN-1 results. I will first briefly walk through the design of the trial. STARBORN-1 is a Phase II single-arm open-label prospective clinical trial evaluating safety and efficacy of TARA-002 for the treatment of macrocystic and mixed cystic LMs in 29 participants aged 6 months to less than 18 years. The trial has enrolled 12 patients, including age de-escalation safety leading cohorts of children ages 6 years to less than 18 years and 2 years to less than 6 years. And we are now actively enrolling the youngest cohort of 6 months to less than 2 years. After a minimum of three patients in each of these cohorts are treated, there is an independent data monitoring committee that reviews the data and subsequently, submission of those minutes are sent to the FDA before the next safety cohort can begin. We have now begun enrolling into the patients into the expansion cohorts. In the trial, patient receives up to four injections of TARA-002 spaced approximately 6 weeks apart. The primary endpoint of the trial is the proportion of patients with macrocystic and mixed cystic LMs who demonstrate clinical success. This is defined as having either a complete response of 90% to 100% reduction from baseline in total LM volume or a substantial response, which is 60% to less than 90% reduction in total LM volume. The interim analysis includes a total of 12 patients. As of the November 12, 2025 data cutoff, eight patients were evaluable for an 8-week post-treatment assessment, two patients have withdrawn from the study and two remain in dosing. 80% of enrolled patients that completed dosing achieved a clinical success. 100% of patients that completed the 8-week response assessment achieved clinical success. Of the two patients who withdrew from the study, one was misdiagnosed and had a rare form of cancer and did not respond to the treatment. The other was a 15-year-old who experienced a significant reduction in their macro cystic LM. Following two doses, the patient experienced significant lesion shrinkage from 160 ml aspirated at the time of the first dose to 10 ml aspirated at the second dose. It was indicated that missing school and general fatigue were experienced and the patient did not want to participate in the study any longer. However, we may be able to infer that from the reduction in lesion volume that this patient also had a complete resolution of their LM. Looking at the treatment evaluable population. 83% of macrocystic patients or five out of six achieved a complete response with the remaining macrocystic patient achieving a substantial response. There was one mixed cystic patient who achieved complete response. One patient was assessed to be a ranula patient, which is a different type of cyst following treatment, and this patient achieved a complete response. A durable response was observed in the two patients who reached their 32-week post-treatment assessment by the time of the data cutoff. Looking more closely at the patient details, we see that the ages of the patients ranged from age 2 to age 15. As I mentioned, we're now enrolling the cohort of youngest patients from ages 6 months to 2 years. When we look at dosing, we see that of the eight patients who are evaluable, seven of eight achieved clinical success with one or two doses and only one patient who presented with a 1.7 liter macro cyst required all four doses. We will show a medical photography of this patient shortly. Moving on to safety. The majority of adverse events were mild to moderate with no severe adverse events reported. The majority of AEs were Grade 1 or Grade 2. The most common were swelling and fatigue, and they were transient and resolved within a few days. The safety profile observed with 002 to date is consistent with the results seen with OK-432, both from the Iowa study as well as the experience in Japan. This is medical photography from two patients treated with TARA-002 in the STARBORN-1 study who achieved a complete response. The patient on the left is the patient who started with a 1.7 liter macro cyst. As you can see, the resolution of the cyst is dramatic and the skin remains healthy. We are very pleased with the outcomes that have been demonstrated as they mirror what we would expect for this therapy based on the historical efficacy of OK-432, which I will take you through briefly. But I want to spend a minute just to focus on this trial. This is an 8-year-old child that went through school and all the social interactions with the cyst. And after four doses of 002, the cyst was completely resolved. TARA-002 in developed from the same master cell bank as OK-432 and as previously mentioned was deemed to be convearable by the FDA. As Jesse stated OK-432 was studied in one of the largest trials ever conducted in LMs, in which OK-432 was administered to over 500 patients in the U.S. Our goal with the STARBORN-1 trial is to establish that TARA-002 produces the same safety and efficacy profile consistent with OK-432. Within the expanded access study led by the University of Iowa, there was a randomized clinical study that was conducted at 27 centers across the U.S. Patients were randomized to either treatment with OK-432 or observation, confirmatory imaging was utilized at baseline and at end of treatment. The results of the clinical trial were positive, with a vast majority of patients responding well to treatment with OK-432. As you can see on the left side, 69% of patients who received treatment demonstrated a complete or substantial response. This compares with the 7.5% of patients who had spontaneous resolution in the observation group. This response rate was more profound in patients with macrocystic LMs. On the right side, we see that 84% of patients achieved clinical success with the majority of those patients demonstrating a complete response. 60% of patients with mixed cystic LMs also achieved clinical success. For safety, the most common reactions were limited to local site reactions, fever, fatigue and other flu-like symptoms. This is consistent with the 30-year history in Japan and is also what we have observed with TARA-002 in the STARBORN-1 study to date. These are images of four children treated through the University of Iowa Expanded Access Program. We feel confident that based on the results that we have shown today, TARA-002 is producing consistent responses with those observed with OK-432 since its approval. I will now turn it over to Dr. Jones to talk us through his experience treating LM patients.

Thank you, Jackie. I'm an interventional neuroradiologist at the University of Alabama Vascular Anomaly Center, who specializes in head and neck lymphatic malformations. I trained at UCLA in Los Angeles, which conducts a busy VAC. I see about 50 vascular anomaly patients annually in my practice, and the majority of those are macro and mixed LM patients. Almost all my patients are infants or children, and many have had previous treatments for LMs that were unsuccessful or recurred, leading to their referral to a vascular anomaly center, like my own. The adverse mental and physical impact of LMs on patients is significant. Most LMs are located in the head and neck and may result in airway obstruction, difficulties with feeding and speech, chronic pain and disfigurement. In this age group, verbal abuse from peers can be devastating. My role is to reduce the LM as much as possible in order to minimize its impact, while at the same time preserving surrounding tissues. There is a need for an FDA-approved therapy for LMs. In the community setting, we see many patients being treated with surgery, which has high complication and recurrence rates. Sclerotherapy today relies on the use of off-label therapies, which can be toxic, especially for pediatric patients. I think TARA-002 is a promising option for patients, because it has a differentiated mechanism of action. As an immune potentiator, TARA-002 activates the body's own immune system to eliminate cyst without scarring or tissue destruction. There is a significant amount of clinical experience in LMs in a large safety database with OK-432, where efficacy and safety have been demonstrated previously. In my own experience, TARA-002 works effectively with minimal side effects in pediatric patients. As an investigator in the STARBORN-1 trial, assessing TARA-002 in LMs, I'm pleased with the results I've achieved in my own study patients. I've treated four patients in the study successfully. And there are a couple I'd like to talk about specifically. The first is a 4-year-old girl with a large macrocystic LM, spinning the lower neck and mediastinum, which is part of the chest cavity. She underwent several prior sclerotherapies, all of which led to recurrence. However, following a single dose of TARA-002, she experienced a complete clinical response and has remained asymptomatic. Physicians need treatment alternatives for LMs and TARA-002 is a potentially favorable option. Thus far, it has demonstrated a high clinical success rate and excellent safety profile. We also know that TARA-002 has the potential to be effective in treating other types of maxillofacial cyst beyond LMs. Their supporting literature from OK-432 in the past as well as TARA-002 trial patient of my own. This child had undergone both sclerotherapy and surgery for a salivary duct cyst known as a ranula. Unfortunately, surgery left her with an unsightly scar from exuberant fibrosis known as keloid formation. This cyst recurred again after sclerotherapy, and so I enrolled her in STARBORN-1. She too was effectively treated with a single dose of TARA-002. I'm excited for this that they continue and look forward to enrolling more patients.

Thank you, Dr. Jones. Today's data mark a meaningful step forward in the evolution of TARA-002. We are now addressing both NMIBC and LMs, two important therapeutic areas with this promising therapy. The success we observed in the ranula patient treated in the study, hence set further opportunities to expand. For now though, we are very pleased with these initial data in LMs and the significant unmet need in macro and mixed cystic patients. With these positive data now in hand, we plan to engage the FDA to determine the path forward to registration for 002 and LMs. I would now like to open up the call for Q&A. As a reminder, out of respect for Dr. Jones' time, we ask that you focus your questions on the LMs program. Operator?

[Operator Instructions] Our first question comes from Li Watsek from Cantor Fitzgerald.

Congrats on the data. I guess some questions for Dr. Jones. Just can you compare and contrast TARA-002's data today versus the surgical options that you talked about on the call, especially around response rate recurrence and complications that you alluded to. And how are you thinking about using TARA-002 in your LM patients given their different subtypes here?

Yes, Dr. Jones, go ahead.

So, the question relates to how this drug may play a role vis-a-vis surgery. So, I'm seeing surgery mainly on the community kind of side of the practice where people will go and see a doctor somewhere near where they live. That may not be a vascular anomaly center, like you had found at a university setting. And they may see an ear, nose and throat surgeon who doesn't have a lot of other options for the cyst or may not treat a lot of these types of cyst because they're rare, and they will embark on a procedure to try to extirpate the cyst through a surgical incision. That's usually not effective, because if any cyst is left residually there in that tissue, it will lead to a recurrence of the cyst. And so typically, we'll see these people after they've tried and failed the surgery and the family has been frustrated and come to see center like our own, University of Alabama or UCLA, where I trained. We do have surgeons, but they're deferring to sclerotherapy as the treatment of choice and only operating and in failures of sclerotherapy. So I think as an FDA-approved therapy becomes available, and that information is disseminated throughout not just universities, but the community, we ought to be seeing less surgery first and more sclerotherapy first.

And then, Dr. Jones, how TARA-002 may fit into your practice, I think, was the follow-up question.

Yes. So currently, sclerotherapy agents we're using now are things that we've used historically, but they don't have a lot of data behind them. Particularly, there's no clinical trial data behind them. They are things that maybe people have tried to found to work and written maybe a case report on a couple of patients. And they work by a different mechanism. I mean, they're meant to really destroy the tissue within the cyst, it's almost like a chemical warfare where you're trying to denude that tissue layer. And so these things are quite toxic. There may be desiccants like pure alcohol. There may be detergents like a sotradecol or even some chemotherapies are being used. There's nothing really that has an immune potentiator mechanism. So based on that, I would feel much more comfortable using something like Protara than one of these other agents.

Okay. Li any follow-up?

And then, in terms of maybe next steps, what is the timeline to finish expansion portion? And Jesse, you talked about perhaps go to the FDA for a discussion around accelerated approval path. Can you maybe just give a little color around that?

Yes, I'll ask Jackie to handle this one.

Yes. So, in terms of the study, we expect to have it complete by next year. And in terms of what we plan to do with the agency, we had a good interaction with them. We're in the Vaccines division right after COVID, and we establish comparability with them. And now it's really up to us to demonstrate to the agency that TARA-002 is producing the same clinical benefits as OK-432 from an efficacy and safety perspective. So what we plan to do is to go back to them and now with data in hand, have a conversation around what we have seen in the STARBORN-1 trial, how that can fit into registration and then also how we may be able to rely on the OK-432 data as supportive.

So Li, you should expect to hear kind of -- it's very difficult to predict FDA timelines, but we believe that we'll have certainty around the regulatory path to approval in the first half of next year. And the efforts to engage FDA on that are already underway.

Our next question comes from Soumit Roy from JonesTrading.

Congratulations on the data. If you could define a bit the clinical success, is it greater than 60% reduction in the lesion size? And maybe for Dr. Jones, how do you see the benefit is 60% or greater is applicable to these patients because there is no other options or you would really like these to go all the way down to 100%? Will multiple doses get to a curative level? Would love to get your thoughts.

So, I'll ask Jackie to give the sort of FDA definition. This is -- the clinical success is the definition of the primary endpoint that we've agreed to with FDA. So maybe, Jackie, you can define that and then Dr. Jones answer the question given that clinical success is defined as 60% to 100% reduction in the lesion by imaging. Is there an unmet need that's met by that?

So, yes. In terms of clinical success, it's complete response, which is 90% to 100% reduction from baseline in total volume or substantial response, 60% to less than 90% in total LM volume. And it is based on imaging. The other thing that we do look at in terms of end points is also investigator assessment. So that's the FDA agreed to approach to how we define clinical success. This is the same clinical success definitions that were utilized in the University of Iowa study. So, just leveraging historical involvement with the FDA in that study and then bringing that forward for consistency, that is how we come to where we are today from a primary endpoint perspective.

And then Dr. Jones, 60% to 100% reduction in lesion, what does that mean for you in terms of your assessment of impact to patients?

Yes. I think it's a bit of an artifact of what the FDA requires for these clinical trials. Lymphatic malformations and all vascular anomalies are not like in the sense like a cancer where you need to get a complete resolution or extirpation of the lesion. These don't pose that kind of harm. Many of the patients are coming to us primarily because of -- for the disfigurement concern, the size of the lesion, they're getting made fun of at school or it's causing some pain when it flares up and enlarges, say they get like a URI, like a cold or flu and the LM will enlarge and cause some local pain. And so for these people, really, a satisfactory response is getting the lesion to shrink to a size where it's either not noticeable even though there's still be some traces present under the skin, but if it's not obviously, noticeable, traditionally, that's been successful. And if a patient came to me after a treatment with sclerotherapy, and you couldn't see anything on exam, but if you didn't say an ultrasound and you saw a small fluid collection there, I would not treat because this is a patient who is satisfied with their response. So I think 60%, 90%, that's kind of hard to know. We typically don't get imaging of these patients after treatment. It's only because of this trial that we're doing these MRIs and CTs after therapy. But I think the most important thing is in the patient's mind, are they happy with their response.

Got it. That's really helpful. Jacqueline, maybe since you have a lot of data from the usage in Japan. If you could give us some sense of idea how many -- how often these patients get treated? Do they get resolution happens and then they come back again after a few years, durability of response? And my last question is, since LM is genetically defined, how do you see 002 outcompete targeted small molecule therapies against PI3K alpha types in the market and in the clinic?

Yes. So Jackie will answer that first question because there's a significant history in Japan and Iowa.

So, in terms of recurrence, what we know about OK-432 is that, it's a really low rate of recurrence. In the Iowa study, patients were followed for as much as 9 years, and we have access to those data, and it was submitted to the IND, to the FDA. So, we know that it's a very low rate, less than 3% in terms of patients who recurred in that study, and it's a large trial number -- a large number of patients in that trial. So very low recurrence rates. When we look at Chugai's data as well, it's the same thing, very low rates of recurrence. And as far as number of injections or number of required doses to shrink lesions, what we haven't been able to find is a sort of parallelism to a large lesion requires for. We have some in the Iowa data set and even in the data set from Japan, where very large lesions were shrunk with a single dose. And then you see in our study, you have a child who had a 1.7 liter ML that required four doses. We haven't been able to really get to a point where we can say that lesion size dictates required number of doses. It's really about the immune system of the child.

And then, remind me the second question, please?

I was mostly wondering since this LM is a genetically defined mutation type, how do you see clinically and in the market 002 which is really relying on the immune system of the patients out completes the targeted therapy against PI3K alpha inhibitors?

Yes. So, I think there's a couple of answers to that question. The first is just sort of basic efficacy and mechanistic activity. And the second is sort of the profile of safety of 002 relative to the targeted PI3K inhibitors. So, as it relates to the efficacy, what we know is that there needs to be complete exposure of all mutated cells in the epithelial lining of these cysts in order to drive resolution, right? I mean -- and so, what we know is that LMs can be -- the driver mutation there can be anywhere in that AKT/PI3K/mTOR pathway. And we sort of take a page out of our book from NMIBC to interpolate how 002 is working in the LM setting. There are about 50 known driver mutations in NMIBC. And we see that 002 because it is impacting and activating so many components of the innate and the adaptive immune system, it has the opportunity to drive a response there irrespective of the driver mutation. Really, what's happening is CD8+, T cells and NK cells are looking at mutated cells and going after them. And so, as it relates to a macrocystic or a mixed macro dominant cyst, the success is a function of our ability to expose all of the epithelial cells in the lumen of cyst to the activity of 002 if you will. As it relates to the historical application of kind of PI3K inhibitors or either topically or systemically, our understanding is that, that systemic or topical administration isn't quite as successful in macrocystic settings at addressing all of the mutated cells in the epithelial lining. And so again, what we're seeing is PI3K inhibitors utilize for microcystic lymphatic malformations, where sort of the burden of exposure to that epithelial lining in that kind of honeycomb like luminal setting of the microcyst, it tends to penetrate that epithelial setting better. So look, I don't view the PI3K inhibitors or the novel mTORs as competitive to what we're doing. I see it as synergistic to what we're doing and more to come on that. And so obviously, as we think about the very large number of maxillofacial cysts that are not driven by mutations in that pathway, we saw it with the ranula patient, that's not PI3K associated, but we had a complete resolution with one dose. So from our perspective, I guess the answer is our mechanism covers all your bases, and doesn't necessarily kind of need to compete with something that's more targeted.

Our next question comes from Vishwesh Shah from TD Cowen.

This is Vish on for Stacy. And congrats on the data that is further confirmatory of 002's profile. So we have first one for Dr. Jones. Based on the data that we've seen so far and your experience treating LM patients, what percentage of your patients do you think you would try this -- try TARA-002 on? And we see from the data that there is a low number of mixed cystic LM patients. I think there was just one that we've seen data from so far. So -- but would you -- given your experience with the patient population and TARA-002, would you be comfortable trying it in your mix cystic patient population? And then we have a follow-up for the team.

Go ahead, Dr. Jones.

Yes. So the mixed cystic, that's again a bit of an artifact of how the FDA trial was designed in terms of what percentage has to be macro versus micro and that's just not -- I mean, that's as common in the population as pure cystic or pure like microcystic. And so, I think in general, not just me, but other investigators are not seeing as many of those kinds of patients because less of them exist. Based on the prior efficacy of this drug, which has been around for quite a long time, the reason I got involved with this trial is because historically, among physicians, it's been known as being very effective, and we were a bit upset that it was off the market and people like in Japan and Korea had access, but we didn't. And so, I was excited to see a company picking it up and running with it because historically, it's been very desirable for us to use it. And that's kind of been borne out in these early results from the interim analysis. So, if I were to come across the patient with the macro cystic LM, this would be my first choice of treatment just based on the profile mechanism of action. And the safety profile. With the microcystic, it's a little harder. I think we touched on this with the last question. These are really not treatable without a large enough cyst to get a needle and to inject some kind of sclerosants. And if they're purely microcytic they're going to probably go for a biopsy to see if they've got any kind of mutation where they could potentially get a different biologic. Those agents, sometimes are effective if there's not a whole lot of activity, meaning like cell division, they tend to be less effective. They're more effective in growing lesions. And the patients would need to be on them like continuously. It's not like you get a treatment and you stop as you have to be on it. So that depends on whether insurance will cover it. And if they get side effects like oral cyst or whatnot, which can be a common side effect of those inhibitors. So if there's any cyst, I could get a needle into and treat with sclerotherapy, then I would, and that's the preference, I think, for most practitioners.

So as a follow-up, Dr. Jones, do you see any potential utilization in any type of cystic malformation where you can kind of effectively get a needle in?

Yes. And there are several of these, branchial cleft cysts, ranulas, post-operative seromas, abscess cavities. I mean, these are all basically malfunctioning epithelium that's over secreting various bodily fluids like lymphatic tissue -- like lymphatic fluid or other cysts. And so what we've seen from the ranula treatments, which traditionally are very hard to treat, because that fluid -- because it's a salivary-based fluid, it tends to be very viscous. And most of the sclerosants, which acts by a mechanism where they really need to contact the epithelium in order to dilute or destroy it. That's been quite difficult because the mucus layer serves to kind of protect the ranula lining. Whereas what we've seen from TARA-002 with this unique machine of action, it's been more effective in those kinds of cyst. So, I would expect more of the same with these other lesions like I mentioned before, and I think that's an exciting thing to look at next.

Vish, you had a follow-up?

Got it. Yes, yes. So for the team, can you just help us sort of characterize how the enrollment is progressing in both the last safety cohort and the expansion cohorts. And can you -- we really appreciate the incidence and the prevalence of the epidemiology that you put out to. Can you help us triangulate around a potential target patient population? Because you also said that maybe 90% of these patients are treated or diagnosed before they reach 3 years old. So, can you just help us triangulate an exact sort of patient population as well? And the first question was on the enrollment, if you can characterize that.

Sure. Jackie, you'll take the enrollment question and we'll ask Bill Conkling, our Chief Commercial Officer, to tackle that second question, Vish.

So, the first thing I want to say about enrollment is that our investigators are extremely excited about the study. That's the first thing, and that's always very helpful when you're trying to enroll a trial. The second thing I will say is that as we move into the lower age group, that will be -- there's a need within that patient population. But there's also, I think, a little hesitance from parents as it relates to having multiple imaging conducted on, say, a 6-month old. What I will say is that, we have patients that are in screening that have been identified. We had patients that were on the wait list. And really now, at this point, it's just for us to be able to get them through the screening procedures and enrolled into the trial. As it relates to the expansion cohorts, we have opened up those expansion cohorts and some of the patients that you see that we are presenting on here are part of the expansion from the older age group, and we -- now since we cleared the second safety sentinel, we're able to enroll patients into that 2- to 6-year-old group. And there are patients that are actively enrolled in that right now and then other patients that are in screening about to begin dosing. So, we are seeing a lot of excitement. I think these data, we just had an investigator meeting where we shared data. I think everybody now has seen the effect of the drug and the safety profile. And so, I think that will help us to round out our enrollment through 2026.

And then, Bill, you want to?

Sure. So based on the literature, I think we're all pretty well accept the incidence numbers that we see in the marketplace for LMs. I think the bigger question is with regard to the prevalent population. And we've done research as it relates to this population. You've probably seen research from others as well, that suggests the population might be even larger. However, we believe that if you look at those that are seeking active treatment, because just getting one claim for LMs doesn't necessarily mean a year that you are actively seeking treatment, you may be coming in for a visit just to get an ultrasound to see what it looks like, as Dr. Jones had mentioned. And when it starts acting up, you're going to actually seek that treatment. So, we've estimated about 20,000 are actively seeking treatment, because they're diagnosed early and whether they're treated early or they have watch and wait, they're still in that prevalent population and eventually may come back for treatment. And we believe that it is a quite sizable population that will have TARA-002 as an option upon FDA approval.

Our next question comes from Charles Zhu from LifeSci Capital.

Great. Congratulations on the strong and compelling data. Regarding that regulatory feedback that it sounds like you're going to get in the first half of next year, could you help us understand, what population -- what commercial opportunity does that derisk from a regulatory perspective? Because it sounds like pediatric LMs, macrocystic, mixed, pretty clear, but especially to the earlier point about thinking about the more prevalent population. Are there more patients out there? Are there any patients in that prevalent population that may not be within that initial batch of regulatory clarity? And similarly, as a follow-up to that, how are you thinking about potential paths to either regulatory approval or some sort of reimbursement support for facial cysts that are beyond the lymphatic malformations. Given that you have the ranula patient, given that we know that OK-432 works at various different types of cysts. And really, as we all know, what this gets at is one of the top 2, 3 questions that the investment community always has is, what is the true market potential for this? And is this a rare pediatric -- or is this something much bigger?

Thanks, Charles. Great question as ever. Let me -- there's a lot in there, and let me maybe just provide you a 30,000-foot view on how we're viewing sort of the longitudinal path of 002, LMs and potentially beyond. What I want to say first is, we are, as a company, essentially in late to -- mid- to late stage development on three different discrete programs. And we're -- we've got a lot going on, and I think that the investment opportunity in Protara requires the investing community to get fairly facile in three different therapeutic areas. And that you and your colleagues on the sell side do a great job, but it does -- the story requires a broad range of understanding of the investment community. And I think they're coming around. So, what we want to make sure we're doing as we think about the opportunity in LMs is not overcomplicating the story further. So look, when we go to the FDA -- let me tell you what the FDA is aware of already, right? The FDA has been following the OK-432 or followed the OK-432 compassionate use program that was led by the University of Iowa. So that was a 27 center study that spanned almost 15 years before it eventually wound down. And FDA was aware of that and monitor those patients, those 500 patients that were treated. And so, the FDA has also been made aware of the evidence of efficacy of OK-432/002 in the literature and in the Japanese experience. So, when we show them these 12 patients, there won't be kind of a cold start for them. They are also aware that there has been pretty well demonstrated efficacy in a number of other maxillofacial cysts. And that's something that they, again, are aware of. So, I think in the operative kind of, form of, do no harm, what we have is a really robust set of data in macro and micro cystic LMs. We have already been designated a rare pediatric disease. We've got rare disease designation, which upon obviously, approval that normally would result in a PRV. I think that's going to be the case moving forward. And so, we really just want to keep that story tight and make it as easy as possible on the FDA to approve this. Because as you heard from Dr. Jones, there's a very obvious place for this in the LM population, sort of, off the bat. I think as we think about expanding into other opportunities, I mean, you're right, the literature is pretty full of successful utilization of OK-432 and, let's say, thyroglossal duct cysts, right? There's the U.S. prevalence of 23 million patients with thyroglossal duct cysts. Salivary mucocele, right? There's a lot of literature on OK-432 being as efficacious in that setting as it is in LM. That's a U.S. prevalence of 800,000 patients. Ranula itself is 66,000 patients in the United States. So yes, I mean, there are big populations where there's a breadcrumb trail to the utilization case of OK-432/002. But let's get this thing approved and into the hands of docs so they can help these kids and take it from there is sort of how we're thinking about it. So that was an incredibly long answer to a short question, Charles, which, as you know, is my bailiwick.

Our next question comes from Leland Gershell from Oppenheimer.

Just a couple. First for Dr. Jones, just wondering, obviously, you're involved in development here. So you're very much up to speed on this candidate. I want to ask with respect to other positions out there who may be familiar with the data from over the years from the OK-432 but not as familiar, maybe directly with Protara's version. Do you think that the published data from University of Iowa and kind of just the general awareness of this approach, plus the data that we're seeing here in STARBORN-1 will be sufficient to provide comfort for use? I guess a question related to that would be, for Jesse, how does the company plan to ensure that potential users have that comfort? And then I have a follow-up.

Yes, go ahead. Dr. Jones, do you want to answer that question?

Yes. So you're asking, is the data from OK-432 applicable in physicians' minds to TARA-002? Is that?

Yes. So in other words, this is a small study by itself. But of course, we have the predecessor or the analog from Asia that has much more behind it. So I'm just wondering if in the general, to find in the mid of the physician, if you think there is -- what the level of comfort from a safety as well as efficacy perspective, you think physicians will have there? And then, I wanted to ask the company if you're able to kind of -- how you can make -- how you can provide awareness to those physicians out there beyond what may be in the label in terms of just the relatively small number of patients who've been studied in STARBORN-1?

Yes. I'll admit, I thought it was like exactly the same thing. I didn't realize that the GMP was the main holdup with the FDA. So, I first heard about the study, I thought it was like OK-432. And so, that's kind of why I want to get involved because of such the track record of that agent. So I think for other physicians, it's about the company messaging that to them. And also, as we get further and further away from when those studies were done from Iowa, there'll be a role to educate newer physicians about especially the data from Japan, because that's a little more recent.

And then Jackie will answer your second question, Leland, because it's a good one.

So, as far as how do we plan to spread the word. There are specialty conferences such as SUO that we are -- now that we have data that we're submitting to that individuals like Dr. Jones will be presenting the data to his colleagues. We're doing symposiums. We're obviously going to publish. And I think once we have an understanding from the FDA how OK-432 data may be able to be utilized from a supportive perspective in our regulatory filings, that will give us an opportunity to think about how we might be able to start to disseminate a combination of the 002 data with OK-432 data to kind of put that more substantial set of safety and more substantial set of efficacy findings out there. I do want to say, though, that majority of RPIs that we have now had someone in their history of training that either was part of the University of Iowa study and knew about OK-432 and either they were residents or they were early physicians when those studies are being conducted and they had experience with it or they knew about OK-432 just because to earlier to Dr. Jones' point, there was such a -- this drug is very effective, very safe, why don't we have access to it. So, I think there's already awareness out there, Leland. I think it's just now we need to get the awareness out there that the 002 data is consistent with what has been seen for the last 30 years since the drug was approved.

And maybe just to put a final note on that. Leland, you've been following the company for 5 years now, right? And I think so much has transpired. Taking you back to 2020 when we were first sort of bringing this product -- or this program into everyone's field division, the only reason that we call this product, TARA-002 is because there was sensitivity on our partner's behalf that what we were doing was introducing an investigational product into the U.S., while they were marketing a approved product in Japan. So, their view, Chugai, our partners view was, your product has to be called something different because we can't have a Phase I, Phase II product in NMIBC in the United States being called Picibanil because that then creates problems for us in Japan. Just a reminder, this every batch of 002 is manufactured from the exact same master cell bank as every batch of OK-432. And in fact, our agreement with Chugai is that we will eventually, from our modern facility in Winston-Salem, North Carolina, supply commercial Picibanil for the Japanese market, which means Japanese authorities are looking at Protara essentially as a site transfer of the manufacturing of OK-432. That's how very alike, in fact, exactly alike 002 is to OK-432. And again, in 2022, the FDA deemed us comparable to OK-432. Now as a biologic, we know there's no such thing as an exact replica of -- from one batch to another even. And so comparability is the terminology utilized to sort of say, "Look, these are functionally the same thing." So, that has already been established. The reason FDA wanted us to kind of be as methodical with the safety sentinels of the study is because, a, it's pediatrics; and b, a reminder, you are involved in some very sensitive architecture in the head and neck area. And so this, in our view, and in the FDA's view is backfilling further reference back to OK-432.

That's really very helpful. And then just a follow-up for the company. Jesse, could you just remind us on your eligibility for a priority review voucher upon approval, given various timelines and steps to that program?

Yes. So we have been granted RPDD, yes, Rare Pediatric Disease Designation, which effectively means that we would be awarded a PRV on approval. Now we know that the sort of the legislation that back that PRV program under which we were designated sunsets on September 30 of this year. But what we know is that the commerce department, which oversees PRVs and their designation has agreed to extend or is proposed to extend the PRV program out to 2029. That language left the commerce department and is now in Congress. We understand that there are 50 co-signees of the bill to push out the PRV program and those congressional co-signees, span both sides of the aisle. And so we feel pretty confident that as the government comes out of shutdown and we get ourselves to a place where legislation is making its way back through the house and then the Senate, it's a high likelihood that this program is going to be renewed again. But it's -- these are strange times in which we live. And so, this program has got to stand on its own two feet with or without the PRV. And we're very, very confident that there is a significant return available here with or without the PRV. Sorry, Operator, that's all the time we have. If it's okay, I'd like to just wrap up real quick. Great. So listen, this is an -- you tell me? Right. Okay. This is an exciting day here at Protara. We are committed to enrolling and completing the study as expeditiously as possible in service of the patients and families that are impacted by this condition. We'd like to thank Dr. Jones for his participation today. And more broadly, we'd like to thank the patients, the families, and all the investigators that have made this data possible. We are working tenaciously to get this product into the hands of patients that desperately need it. We thank you for your attention and wish everybody a great day. Thank you.