Tonix Pharmaceuticals Holding Corp. (TNXP) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Tonix Pharmaceuticals FDA approval of Tonmya presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jessica Morris, Chief Operating Officer. Please go ahead.

Thank you, and welcome to Tonix's webcast and conference call to discuss the FDA approval of Tonmya for the treatment of fibromyalgia. Please note that a press release was issued on Friday, August 15 and can be found on the Investors section of our website. In addition, a copy of today's presentation is available and a replay of today's call will be available on the Investors section of our website. On Slide 2, joining me today with prepared remarks are Dr. Seth Lederman, our CEO and Chairman; and Tom Englese, Executive Vice President, Commercial and President of Tonix Medicines. In addition to Dr. Lederman, Mr. Englese, and me, Dr. Gregory Sullivan, our Chief Medical Officer, will be available for Q&A following the prepared remarks portion of today's call. Turning to Slide 3. I'd like to remind everyone that this call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information describing these risks is included in the press release that we issued on August 15 as well as in the Risk Factors and the Management's Discussion and Analysis section of our most recent annual report filed with the SEC. The forward-looking statements on this call speak only to the original date of this call, and except as required by law, we do not undertake any obligation to update or revise any of these statements. With that, I'd like to introduce and turn the call over to our CEO and Chairman, Dr. Seth Lederman.

Thank you, Jessica, and thank you all for joining us today. We're excited about the approval of Tonmya on Slide 4, which is sublingual cyclobenzaprine HCL tablets, now indicated for the treatment of fibromyalgia. We're here to share highlights of the label, outline our launch plans and answer questions. Tonix was founded more than 15 years ago to discover and develop a new treatment for fibromyalgia. That concept has now been realized as the FDA approved medicine Tonmya. The Tonix team has taken Tonmya all the way from a concept to an FDA-approved product and is now prepared to launch it commercially. Tonmya is a non-opioid analgesic, developed and now FDA approved for treating fibromyalgia, which is a common, chronic pain condition. FDA granted Tonmya fast track designation, which recognizes fibromyalgia as both a serious condition and as an unmet need. Healthcare providers or HCPs recognize that pain is a common complaint that leads patients to seek medical attention and an important determinant of whether they are satisfied with treatment. Fibromyalgia is a common pain condition. Employers, insurance companies, policy makers and elected officials recognize fibromyalgia as a source of significant disability and economic burden. We believe that today is a landmark day for people living with fibromyalgia. I want to thank the patients who participated in our clinical trials and their families, caregivers and supporters. Next, I want to thank the team at the U.S. FDA Division of Anesthesiology, Addiction Medicine and Pain Medicine for their expert regulatory guidance and commitment to putting patients at the center of the drug development process. I'd like to note that this 15-year development process has spanned the terms of 4 directors of this division. Today is also a landmark day for Tonix Pharmaceuticals. I would like to thank all of our current and former employees, board members, partners, investigators and investors who have brought us to this moment. The journey to today underscores the difficulty in developing clinically meaningful new medicines for the high unmet need of fibromyalgia. Some of the hurdles are long trials, large numbers of patients involved challenges of dose finding without an animal model, lack of a validated molecular target, the lack of objective endpoints and the time and capital required. Fibromyalgia is a complex and invisible condition. It presents the drug developers and scientists, the challenge of relieving pain with a nonaddictive medicine. Our process has required gleaning insights from clinical observations and abstractions concerning pain processing in the central nervous system. Tonmya targets nonrestorative sleep. We hope that Tonmya will provide relief to people living with fibromyalgia and will also lead to new medicines that also exploit the recognition that nonrestorative sleep is an Achilles heel of the devastating condition that is fibromyalgia. On Slide 5, we mark that today is a major milestone for Tonix but holds even greater significance for the more than 10 million adults in the United States living with fibromyalgia. Fibromyalgia has vexed physicians and patients for millennia. Our work on fibromyalgia has benefited from those who have gone before us. We stand on the shoulders of giants. Fibromyalgia was described in ancient Sanskrit lore from India. One such tale was adopted by Hans Christian Anderson as The Princess and the Pea. Many other legends and authors from all over the world have described fibromyalgia. From a medical perspective, a very modern description of fibromyalgia was put forth in 1642 by Dr. Guillaume de Baillou, who named it rheumatism. That clinical description stands pretty much unchanged today. Other names like neurasthenia and fibrositis have come and gone. Finally, the medical community and the FDA have coalesced around the term fibromyalgia, which is also used by the international study -- International Association for the Study of Pain. In 1975, 50 years ago, Dr. Harvey Moldofsky recognized the important role of nonrestorative sleep in fibromyalgia. We believe the approval of fibromyalgia (sic) [Tonmya] represents a major and long-awaited advancement. It is a first-in-class medicine and the first new medicine approved for fibromyalgia in more than 15 years. For the millions of Americans, predominantly women who live with fibromyalgia, Tonmya represents new hope. The journey to today has been both deliberate and forward-looking. We've approached every step of this process with care and clarity of purpose, and we're ready for what comes next. Moving to our balance sheet. As disclosed in our second quarter financial filing with the SEC, Tonix held approximately $125 million in cash at the end of second quarter and has raised approximately $50 million in the third quarter. We have no debt. We believe this provides an expected runway into the third quarter of 2026 positioning us to support the upcoming launch of Tonmya. Later in today's call, you will hear from Tom Englese, the President of Tonix Medicines who will highlight the commercial initiatives we are advancing to prepare for Tonmya's launch next quarter. Slide 6 shows you some of the science. Sublingual Tonmya delivers Cyclobenzaprine, into the blood stream in a way that bypasses first-pass liver metabolism. We believe that the reason why swallowed cyclobenzaprine does not work in fibromyalgia is because of liver metabolism, which converts cyclobenzaprine into norcyclobenzaprine. The accumulation of norcyclobenzaprine is believed to block the effects of swallowed cyclobenzaprine on treating fibromyalgia. Swallowed cyclobenzaprine studied for activity in fibromyalgia and it does not work. Slide 6 shows how Tonmya is uniquely designed to be administered sublingually meaning it dissolves under the tongue and releases solubilized cyclobenzaprine into the saliva adjacent to the mucosal membrane. Free-based cyclobenzaprine, crosses the mucosal membrane, enters the bloodstream directly and thus bypasses first-pass metabolism in the liver. This is called transmucosal absorption. Tonmya's sublingual transmucosal route of delivery leads to direct absorption of cyclobenzaprine, lower levels of norcyclobenzaprine and consistent, durable pain relief in fibromyalgia. Swallowed cyclobenzaprine is indicated for the treatment of muscle spasm and not fibromyalgia. Swallowed cyclobenzaprine is only indicated for acute treatment up to 2 weeks and not long-term treatment. In fact, the labels for the swallowed cyclobenzaprine products advised against long-term use. In contrast to swallowed cyclobenzaprine products, Tonmya has been developed tested and FDA-approved for treating fibromyalgia in a long-term treatment paradigm. Based on in vitro pharmacology studies, the mechanism of action of cyclobenzaprine is believed to relate to functionally blocking 4 neurotransmitter receptors. 5-HT2A serotonergic, Alpha-1 adrenergic, H1 histaminergic and M1 muscarinic receptors. Turning to Slide 7. Fibromyalgia (sic) [ Tonmya ] was specifically designed to treat fibromyalgia as a once-daily bedtime medicine. Tonmya is a first-in-class, first-line medicine for fibromyalgia. Two pivotal studies demonstrated durable reduction in fibromyalgia pain. In those studies, Tonmya was generally well tolerated. Tonmya is a non-opioid analgesic. Tonmya is not DEA scheduled. Relative to swallowed cyclobenzaprine products, Tonmya leads to reduced levels of norcyclobenzaprine, the major metabolite, which is believed to block the effectiveness of swallowed cyclobenzaprine in treating fibromyalgia. And since we developed Tonmya internally from concept to FDA approval we own the unencumbered worldwide rights to the medicine with a strong intellectual property portfolio. Now let's turn to the prescribing information. As shown on Slide 8, Tonmya is indicated for the treatment of fibromyalgia in adults. The recommended dose is 2.8 milligrams sublingually at bedtime for the first 14 days followed by 5.6 milligram once nightly thereafter. Tonmya comes in a 2.8 milligram tablet. The run-in dose is 1 tablet per night. The long-term dose is 2 tablets per night. For geriatric patients or those with mild hepatic impairment, the recommended dose is 2.8 milligrams nightly. This equates to 1 tablet per night. Pregnancy testing is recommended in females of reproduction potential prior to initiating therapy with Tonmya. The most common adverse reactions included oral hypoesthesia, oral discomfort, abnormal product taste, somnolence, oral paresthesia, oral pain, fatigue, dry mouth and aphthous ulcer. Turning to Slide 9. The FDA approval was based on efficacy from 2 double-blind, randomized, placebo-controlled Phase III clinical trials of nearly 1,000 patients in total that evaluated Tonmya as a bedtime treatment for fibromyalgia. Across both Phase III studies, Tonmya significantly reduced daily pain scores compared to placebo at 14 weeks, the primary endpoint. Pain was measured by and 11-point daily pain numeric rating scale. In Trial 1, the lease squares mean change in pain from baseline to week 14 was a 1.9 point reduction for Tonmya compared to a 1.5 point reduction for placebo, representing a p-value of 0.01. In trial 3, we saw a 1.8 point reduction for Tonmya versus a 1.2 point reduction for placebo, representing a p-value of less than 0.001. Turning to Slide 10. Shown here are the graphs of the pain data that are included in the label. Patients experienced a sustained and consistent reduction in pain intensity that extended over the 14-week period. These pivotal studies demonstrate statistically significant improvements in pain measured by the mean change from baseline in weekly average of the daily 24-hour recall pain intensity scores at week 14. Turning to Slide 11, are shown the pain reduction results from the trials shown as continuous responder graphs. On the X axis is percent reduction in pain. On the Y axis is the percent of subjects who experienced this level of pain reduction. A 30% reduction in pain is regarded as clinically meaningful, and those patients are called responders. As you can see, along the 30% responder vertical line in trial 1 47% of patients who received Tonmya were responders. Likewise, on the 30% responder vertical line in trial 3, about 46% of Tonmya patients were responders. Turning to Slide 12. In terms of safety and tolerability, Tonmya performed well across all of our studies. Tonmya was generally well tolerated. The most common adverse reactions are listed here, and we describe them on Slide 8. For women who may become pregnant health care providers are directed to obtain a pregnancy test prior to initiating treatment and female should avoid the use of Tonmya 2 weeks prior to conception and through the first trimester of pregnancy. In our clinical trials, there were no reports of cognitive dysfunction or sexual dysfunction. Importantly, our clinical trials revealed no evidence of abuse potential. Cyclobenzaprine is not associated with addiction or dependence. We believe this profile will resonate with both patients and prescribers especially against the backdrop of off-label opioid use that remains all too common in fibromyalgia management. On Slide 6 -- on Slide 13 provides the history of Tonix medicines. In 2023, recognizing the strong potential of Tonmya, we formed Tonix medicines to prepare to launch Tonmya. To stand up its commercial capabilities, we acquired 2 FDA-approved prescription migraine products. This move allowed us to build our in-house commercial infrastructure and has prepared us for the imminent launch of Tonmya. From a financial and operational perspective, Tonix is well positioned with a clean balance sheet, a clean cap table, and a projected cash runway into the third quarter of 2026, we are capitalized to support a robust and comprehensive launch. I'll now turn it over to Tom Englese, EVP of Commercial and President of Tonix Medicines.

Thanks, Seth. It's great to be here as the approval of Tonmya is a landmark moment, not just for Tonix but for the millions of people in the U.S. who have been living with fibromyalgia and searching for relief. For patients, this approval represents new hope, hope for improvement in fibromyalgia core symptom of chronic widespread pain with the medicine designed, tested and FDA approved to treat this serious condition. As Seth mentioned, Tonix Medicines has been preparing to launch Tonmya. On Slide 16, you can see we recruited an experienced leadership team with a strong track record in product launches across sales, marketing, commercial operations and market access. These are professionals who know how to bring novel products to market and how to make them successful. The acquisition of the 2 marketed migraine products provided us with immediate commercial infrastructure and gave us the systems, processes and people that form the operational backbone of Tonix Medicines. This strategy has allowed us to stand up a fully functioning and well-integrated commercial organization. Tonix Medicines is now prepared and ready to launch Tonmya. As seen on Slide 17, fibromyalgia represents both a significant unmet medical need and a compelling commercial opportunity. More than 10 million adults in the United States are affected by fibromyalgia. Only 2.7 million of these 10 million are diagnosed and treated each year. Despite the size of this patient population, treatment options remain limited and fibromyalgia remains underrecognized with approximately 75% patients not being diagnosed or treated. Each year, roughly 15 million prescriptions are written for fibromyalgia, still, dissatisfaction with current therapies is widespread. Market research shows that first-line treatments fail in 85% of patients most often due to the lack of efficacy or poor tolerability. Many patients cycle through different therapies in search of meaningful relief, including off-label opioids. Nearly 80% of patients end up on multiple prescription medications. We believe Tonmya is uniquely positioned to raise the standard of care in fibromyalgia and emerge as a market leader in a field long overdue for innovation. Through extensive market research, as shown on Slide 18, we have gained deep insights into the fibromyalgia treatment journey from the patient and the health care professional or HCP perspective. What we heard was consistent and clear. patients feel invalidated and isolated. Likewise, providers feel frustrated by the lack of well-tolerated, effective and durable treatment options. This leads to many patients feeling dismissed by their providers. This emotional layer of the condition and the feeling of being invisible are major drivers of dissatisfaction and therapy discontinuation. These findings directly informed our strategic launch approach, including messaging, branding and support programs. As seen on Slide 19, the widespread patient and provider dissatisfaction is reflected in real-world prescribing behavior. Our research revealed a surprising discrepancy between what prescribers know about the risks of opioids in fibromyalgia and what prescriptions are written for fibromyalgia patients. In our primary research, prescribers were well aware that opioids generally should not be prescribed for fibromyalgia. Yet, our claims data research revealed that off-label opioids are commonly prescribed within 18 months of fibromyalgia diagnosis. This includes drugs like oxycodone, hydrocodone and tramadol, each of which is associated with known risks. Many experts believe that opioids have no legitimate role in treating fibromyalgia and some believe -- some even believe that opioids have the potential to exacerbate fibromyalgia symptoms over time. Chronic opioids carry risks of abuse dependence and addiction, opioid use in people with chronic pain is a major driver of our opioid crisis. In the absence of well-tolerated, effective and durable options, many patients are placed on treatments not designed for fibromyalgia, including not only off-label opioids but also other off-label drugs with limited evidence supporting the utility and safety in fibromyalgia. With Tonmya, we have the opportunity to break the vicious cycle of opioid use in chronic pain and to provide a non-opioid analgesic medicine designed, tested and FDA approved to treat fibromyalgia. As you see on Slide 20, we recently launched a disease awareness campaign called Move Fibro Forward. This campaign is designed to bring awareness and to provide resources to individuals impacted by fibromyalgia. In just the first 3 weeks of launch, we saw close to 36,000 unique visitors with an average session duration over 5 minutes. About 15% of users downloaded a patient discussion guide or signed up for additional information. These early digital signals reinforce the opportunity ahead. On Slide 21, we see that another important dynamic in the fibromyalgia marketplace is the concentration of high prescribers. We learned that roughly 5% of fibromyalgia diagnosed HCPs are responsible for writing approximately 70% of fibromyalgia prescriptions. This 5% represents approximately 25,000 HCPs. These insights will allow us to be strategic and efficient in our targeting approach ensuring that we are directing resources to where they will have impact. Slide 22 demonstrates how we plan to capitalize on the concentrated prescribing pattern. We are deploying a focused field force of approximately 90 sales representatives supported by a tele-sales team. Initially, this group will include 10 existing internal representatives and the remainder will be made up of a contract sales representatives. All of the representatives will be utilizing our Tonix owned commercial data and infrastructure. We will be moving judiciously and at our discretion in hiring contract representatives to become Tonix employees. Our ultimate objective is to have a sales force that is 100% Tonix employee based. Our hybrid and internally coordinated team in combination with our direct marketing efforts will be responsible for reaching the top prescribers. These are the prescribers who are already making 70% of fibromyalgia diagnosis and writing 70% of fibromyalgia prescriptions. We expect them to be early adopters of Tonmya. Given that this space has seen no innovation for more than 15 years, there has been little to no direct sales or marketing aimed at these prescribers for some time. With no new medicines on the horizon, we expect our representatives will have a clear path to introduce Tonmya to receptive audience. To meet both patients and health care providers where they are, we are executing an omnichannel engagement strategy that complements in-person promotion with digital, social and educational outreach. Slide 23 outlines our strategy. Our strategy is designed for us to build awareness and drive action across multiple points of contact. For HCPs, that strategy will include tailored digital advertising, e-mail campaigns, interactive virtual tools and direct engagement from our field force and tele-sales force. For patients, some aspects of this strategy will include social media campaigns, paid search and an educational website to help them understand their symptoms and treatment options. As Slide 24 shows, our goal is to ensure broad patient access. We have been actively engaging payers, digital specialty pharmacies and traditional retail pharmacy channel partners. We plan to implement robust programs to help reduce out-of-pocket costs and facilitate treatment initiation. As with any launch, we expect to reach key milestones over the coming quarters as we strive to build Tonmya into a market leader. These milestones are highlighted on Slide 25. Our staged and focused strategy enables us to execute with precision while staying agile as real-world feedback emerges. In the third quarter of 2025, we are laying the foundation for our launch. Our field team is being onboarded, trained and aligned around key messaging strategy, HCP and patient education campaigns have begun and will continue to ramp up this quarter. We expect Tonmya to become commercially available next quarter. Our team will begin calling on and providing samples to the highest prescribing health care providers. They will be supported by a tele-sales team to expand reach and frequency. In the first quarter of 2026, we expect to see continued progress with payers and our national speaker programs will ramp up as we engage key opinion leaders. By the second quarter of 2026, we expect coverage to solidify and awareness to grow. This is when we plan to activate broader direct-to-consumer efforts across digital and social media platforms. This plan builds momentum, drives demand, expand access and positions Tonmya as a transformative treatment for fibromyalgia. We are confident in our strategy and our ability to execute. We look forward to launching Tonmya next quarter and to sharing details of our progress in the months ahead. With that, I will now turn the call back to Seth.

Thank you, Tom. Moving to Slide 26. Tonmya is a first-in-class medicine that was designed, tested and is now FDA approved to treat fibromyalgia in a long-term treatment paradigm. Tonmya is a non-opioid analgesic that showed durable improvement in the chronic widespread pain in fibromyalgia in pivotal studies and was generally well tolerated. We believe Tonmya has the potential to transform how fibromyalgia is treated and improve the lives of those who live with it every day. As you've heard today, the approval of Tonmya marks a defining moment for Tonix and more importantly, to the millions living with fibromyalgia, we have waited far too long for new treatment options. To the millions with fibromyalgia who have felt unheard and invisible, we hear you, we see you and we believe Tonmya will offer you better days ahead. To the HCPs who treat fibromyalgia and are frustrated by the lack of options, we also hear you we encourage you to facilitate a dialogue with your patients regarding this new medicine. As a company, we are entering this next important phase in stride and with strength. Our commercial team is prepared, our strategy is focused, and we are energized by the opportunity ahead. We look forward to making Tonmya available to patients next quarter and to continuing to build momentum in the quarters to come. I'd like to thank all of the participants on this call for their attention. Operator, please now open the line for questions.

[Operator Instructions] Our first question comes from the line of Benjamin Burnett with Wells Fargo. Our next question comes from the line of James Molloy with Alliance Global Partners.

Congratulations. It's been quite a long journey. Congratulations on getting it across the finish line. Could you walk through some of the self-launch -- on the self-launch plans, sort of the number of reps and so the onboarding process for that. And then have -- I know obviously, you've set up for self-launch, have partnerships -- partnership conversations stepped up since the approval? I know it's only in the weekend.

First of all, this is Seth Lederman, thanks for the question. I'll take the second part of the question first. We are always in discussion with potential partners but we're not in a position to discuss the progress of partnership talks. So I don't have an update view on that, but I'll turn it over to Tom Englese to respond about the specifics of the launch and the details of reps.

No. Thank you. So we have -- we will have it launched 90 reps, as mentioned, with 10 of them already being Tonix employees and roughly 80 contract sales reps. We've actually started this process a while ago. So we have most of those folks already onboarded through our contract sales partner including all the management positions. So that's what we'll be prepared to launch with at the beginning of Q4.

Okay. Can you talk a little bit about the kind of detail versus the approved the Lyrica's, the Cymbalta's and sort of the message that you'll be going out with the reps were going out to the providers. I think also, can you talk a little bit about any conversations with reimbursement and getting on payer plans.

Sure. So let me start with the messaging. The first thing to remember is that there's basically no counter messaging out there from the other fibromyalgia approved products. So none of the 3 approved products have sales reps in this space detailing. When it comes to Tonmya, it's a different product. It's been designed specifically for fibromyalgia. So we're going to focus on the messaging that we've already been testing and the information and the attributes of the product has set laid out, and we think that's going to be a winning message in the marketplace. Was there a second part around payers? Do you want to repeat that please?

Yes. Can you walk through how conversations with payers are going, please?

Yes, sure. Yes, we actually started talking to payers, roughly 3, 4 months ago. We've had a lot of initial meetings doing the preapproval information exchange presentation, which is a medical presentation. Payers have been very receptive to the story of Tonmya and the clinical data. We're going to continue to talk to those folks. Obviously, now that we have approval, and we look forward to working with them to make sure that there's broad access, as we said, to the product in the marketplace and for patients.

Our next question comes from the line of David Bautz with Zacks Small-Cap Research.

Congrats on the approval. So I don't know if I had missed this but is the company disclosing what the cost of Tonmya is going to be. And if not, maybe you could just discuss what some of the factors were that were going into determining what that cost is.

I'll start. Thanks for the question. We are not yet in a position to announce the WACC. We're still doing research and we are obviously in discussion with other stakeholders in that decision. So we hope to be able to update you and the market in the near future but we don't have that for you now.

Okay. Might be a little early but what kind of sales metrics will the company be sharing later on? And then at any point in the future, is the company planning on giving revenue guidance.

Thanks for that question. We plan to announce as a standard, net sales, gross to net and the standard facts at the end of each quarter going forward. We -- I'm sure everyone knows that these days with managed care and the PBMs and whatnot, launches don't go as quickly as they used to go. So we anticipate that Q4 will be quite slow. But we're confident that by the summer of 2026, we'll be able to guide the market on the trajectory of the launch and the pull-through.

Okay. And kind of a general question but what do you see as some of the largest challenges to getting widespread uptake of the drug?

Well, there are 2 parts of the market, and I'll leave it to Tom to explain but the first part is the diagnosed and treated people, which, as we said, is 2.7 million. And those are diagnosed and treated by doctors who are expert in fibromyalgia and who we expect might be the early adopters. So one of the interesting aspects of the fibromyalgia market is that because of the dissatisfaction, patients cycle between different therapies. Basically, they get frustrated, due to either lack of efficacy or tolerability issues with the existing medicines. So we think that with the treated patients we will have an opportunity to be tried by patients. So we like that because that will give them an opportunity to experience Tonmya and see if it works for them. And if it provides them with a favorable benefit to risk ratio. The next challenge will be to try to penetrate the 75% of patients who were told by epidemiology are out there, but who are not yet diagnosed be treated with fibromyalgia. And for that, I'm going to turn it over to Tom.