Tonix Pharmaceuticals Holding Corp. Stock

Good morning, and welcome to Tonix Pharmaceuticals' Third Quarter 2026 Financial Results and Business Update Conference Call. [Operator Instructions]. As a reminder, this call is being recorded.

I would like to hand the call over to Deborah Elson, Head of Investor Relations at Tonix Pharmaceuticals. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for joining us to discuss Tonix Pharmaceuticals' Third Quarter 2026 Financial Results and Operational Highlights.

Before we begin, I would like to refer you to the forward-looking statements disclaimers on Slide 2. Any statements made on today's call that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These factors include, but are not limited to, risks related to the failure to successfully launch and commercialize TONMYA and any of our approved products, uncertainties of patent protection and litigation, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations, risks related to the timing and progress of clinical development of our product candidates, our need for additional financing, uncertainties of government or third-party payer reimbursement, limited research and development efforts and dependence upon third parties and substantial competition. These risks are described more fully in our filings within the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2025, and our subsequent quarterly reports on Form 10-Q. Tonix undertakes no obligation to update or revise any forward-looking statements, except as required by law.

Joining me on today's call are Dr. Seth Lederman, Chief Executive Officer; Thomas Englese, Chief Commercial Officer; and Bradley Saenger, Chief Financial Officer. Following our prepared remarks, we will open the call for questions.

With that, I will turn the call over to Seth. Seth?

Thank you, Deborah, and good morning, everyone. Today, we are reporting our third quarter financial results and operational highlights. Slide 3 outlines our progress in advancing TONMYA's commercial business and priority clinical programs. TONMYA third quarter net sales totaled approximately $15 million, increasing 37% quarter-over-quarter. Previously signed payer agreements contributed to third quarter sales. We have also begun to see promising performance growth since our expanded sales force entered the field on September 1. These positive trends are continuing into the fourth quarter. We remain encouraged by TONMYA's trajectory. With our larger sales force and growing sales, we believe we're well positioned to create value by improving the treatment of fibromyalgia and reinvigorating this market.

On October 1, 2026, we received notice from Dr. Reddy's Laboratories that it had filed an abbreviated new drug application, or ANDA, Paragraph IV patent certification for TONMYA. Generic challenges are common in the life cycle of an approved drug. We will vigorously defend and enforce our TONMYA intellectual property rights against infringement.

As we prioritize TONMYA's growth, we are also advancing key research and development programs. These include 3 programs: first, the potential pivotal Phase II HORIZON study of TNX-102 SL for the treatment of major depressive disorder, or MDD, which could serve as a potential label expansion for TONMYA; second, the Phase II adaptive study of TNX-4800 for the prevention of Lyme disease; and third, the initiation of the Phase II investigator-initiated study of TNX-1500, also known by its proposed name mosdaprubart to prevent kidney transplant rejection.

I will now turn the call over to Tom Englese, our Chief Commercial Officer, to discuss the TONMYA launch. Tom?

Thank you, Seth, and good morning, everyone. I'm honored to serve as Tonix first Chief Commercial Officer, and I'm grateful to our team for their hard work.

On Slide 4, net sales of TONMYA were approximately $15 million in the third quarter, representing 37% quarter-over-quarter growth. Key contributors included pull-through from the 2 commercial payer agreements signed in May and June, more favorable gross to net adjustments than expected and execution of our launch strategy. We continue to expect gross to net fluctuations early in the launch. Despite expected summer seasonality, TONMYA prescriptions grew by 28% in the third quarter and outperformed other FDA-approved fibromyalgia indicated products in the third quarter, which were generally flat in the same period.

Turning to our key performance metrics. Third quarter prescriptions totaled 16,375, up 28% from the second quarter. Bridge scripts declined quarter-over-quarter, consistent with significantly more patients moving to covered paid scripts. New prescriptions grew 17% quarter-over-quarter and refill prescriptions grew 56% quarter-over-quarter.

Our September 1 expansion to 150 sales reps has strengthened the TONMYA business. Total prescriptions, new prescriptions, refills, new writers and total writers have all meaningfully increased since September 1 compared to the first 2 months of the third quarter. More field activity, broader and deeper prescriber reach, and sampling are driving the stronger performance. We view these early trends as promising indicators of future performance and are focused on deepening them.

Now turning to market access on Slide 5. TONMYA coverage now reaches approximately 53% of covered lives in the U.S., and we continue to focus on expanding access. We have prioritized access early in the launch to help patients obtain insurance coverage before significantly increasing demand. We signed multiple commercial and government payer agreements in 2026, including 2 managed Medicare agreements in the third quarter. Our team is engaging downstream plans under existing agreements and pursuing contracts with additional payers.

Since the end of the second quarter, our total prescription approval rate among commercially insured patients has increased and our bridge prescriptions via BlinkRx, our digital specialty pharmacy have decreased. Both trends are consistent with expanding coverage, and we continue -- we expect continued progress.

Additionally, prior authorization submission and approval rates remain strong. We recently added third-party field access managers to support further progress. Finally, we added multiple new TONMYA distributors in the third quarter and continue to see stable and consistent days on hand at the large wholesalers.

Now looking at marketing, prescriber feedback remains positive. Our latest market research survey of top prescribers shows growing TONMYA awareness. Since February, unaided awareness of TONMYA has doubled and more than 80% of health care providers surveyed recognize TONMYA when prompted. Intent to prescribe is also encouraging. Our direct-to-consumer or DTC initiatives are evolving. We sponsored a segment this morning on Good Morning America to help people learn about fibromyalgia, engage with our Move Fibro Forward digital assets and talk to their providers.

On the branded side, in the third quarter, we conducted a media tour with a leading fibromyalgia key opinion leader and paid spokesperson for Tonix. 20 interviews were broadcast across major U.S. markets. On the branded side for HCPs, from September to early November, we generated high-touch engagements through our booth presence and symposia at 13 congresses. KOLs also hosted more than 130 peer-to-peer sessions in the quarter.

I will now turn the call back to Seth to discuss medical affairs and our pipeline. Seth?

Thank you, Tom. Our medical affairs organization is focused on building awareness of the TONMYA data that supported FDA approval through participation in key medical meetings. The team is also educating providers about the current diagnostic criteria for fibromyalgia. The 2016 revised criteria state that fibromyalgia is not a diagnosis of exclusion.

The National Academy of Sciences, Engineering and Medicine has stated that fibromyalgia is a diagnosable condition in long COVID. We believe broader understanding of these criteria could meaningfully grow the diagnosed population and help patients get treated earlier.

Now I will move to our priority clinical development programs on Slide 6. We are enrolling participants into HORIZON, a Phase II potentially pivotal study of TNX-102 SL as a first-line monotherapy in adults with MDD. TNX-102 SL targets the disturbed sleep of depression through antagonism at 4 neuronal receptors, which we believe represents a novel approach. Despite FDA-approved treatments, MDD continues to impose a substantial burden on patients and leave room for better options.

Moving to Slide 7. We're advancing TNX-4800, our long-acting monoclonal for the prevention of Lyme disease in the U.S. towards the initiation of an adaptive Phase II field study, which will be called TRAIL in the first quarter of 2027. We believe this study has the potential to demonstrate efficacy and if positive, support registration.

In August, we received FDA minutes from our Type C meeting confirming overall agreement on the randomized placebo-controlled adaptive field study design. In the third quarter, we also submitted the study protocol to the FDA for their review. We are manufacturing investigational products and remain on track to deliver it to study sites in the first quarter of 2027.

Additionally, we have selected our CRO partner and are evaluating potential study sites. We are pleased that our study has generated strong interest so far from potential sites. As a reminder, we expect to enroll approximately 3,300 adults, age 18 and older, from Lyme endemic areas in the U.S. who engage in activities that increase their risk of deer tick bites. We plan to enroll the study over 2 Lyme seasons, starting with a lead-in cohort of approximately 500 participants starting in the first quarter of 2027 that will address safety in addition to efficacy. After the second dose, a Data Safety Monitoring Board, or DSMB, is expected to review unblinded safety data. If cleared to proceed, we expect to enroll the balance of the efficacy cohort in the 2028 Lyme season.

As you can see on Slide 8, the ideal participant will have meaningful outdoor exposure, understand the risk of Lyme disease, and be motivated to prevent infection. We expect to screen for exposure to endemic areas, age profile, willingness to prevent infection, risk perception, and lifestyle.

Turning to Slide 9, an initial third-party commercial assessment conducted by Trinity Market Research in the third quarter supports TNX-4800's significant market opportunity. First, this assessment estimates that approximately 118 million U.S. adults may be at risk of Lyme disease because they live, work, or travel in high-risk endemic areas. This population could grow over time as tick habitats expand.

Second, providers and payers cited high public awareness and concern about Lyme disease as reasons for their interest in TNX-4800. Additionally, they are enthused about TNX-4800's potential clinical differentiation, target population, phase I safety results, potential efficacy and potential rapid onset and duration of protection. They also cited Lyme prevention as the most significant unmet need for this condition.

Finally, on Slide 10, an investigator-initiated phase II study of TNX-1500, our anti-CD40 ligand monoclonal antibody to prevent kidney transplant rejection, is expected to begin at Massachusetts General Hospital in the first quarter of 2027. CD40 ligand is also called CD154. The study is expected to enroll five patients. We believe TNX-1500 is a differentiated third-generation anti-CD40 ligand program. We engineered TNX-1500 to improve safety and tolerability relative to first-generation anti-CD40 ligand monoclonal antibodies while preserving the durable half-life and certain effector functions associated with the Fc, or crystallizable fragment. In this phase II study, the dose of conventional immunosuppressive drugs will be significantly reduced. Long-term use of conventional immunosuppressive drugs is associated with infection, cancer, cardiovascular side effects, and metabolic syndrome.

With that, I will turn the call over to Bradley Saenger, our Chief Financial Officer, to review our financial results. Bradley?

Thank you, Seth, and good morning, everyone. On Slide 11, I'll review our financial results for the third quarter ended September 30, 2026. Net product revenue for the third quarter of 2026 was approximately $17.2 million, which consists of approximately $15 million from TONMYA and $2.2 million from Zembrace SymTouch and Tosymra, our migraine products. This compares to $3.3 million for the same period in 2025, which consisted only of Zembrace and Tosymra, as TONMYA launched in November 2025. Cost of sales for the third quarter was approximately $1.3 million compared to $1.4 million for the same period in 2025. The decrease was driven by a change in product mix.

Research and development expenses were approximately $25.8 million compared to $9.3 million for the same period in 2025. The increase was primarily driven by higher manufacturing expenses of $9.8 million, clinical expenses of $3.6 million, and non-clinical expenses of $1.1 million as we advanced our prioritized pipeline, as well as high employee-related costs of $1.5 million due to increased headcount.

Selling, general and administrative expenses were approximately $45.6 million compared to $25.7 million for the same period in 2025. The increase was primarily driven by higher sales and marketing expenses of $13.5 million, employee-related expenses of $4.1 million, and professional expenses of $1.5 million, all in connection with the launch of TONMYA.

Turning to the balance sheet, we ended the quarter with approximately $162.8 million in cash and cash equivalents as of September 30, 2026, compared to approximately $207.6 million as of December 31, 2025. We believe our cash resources as of September 30, 2026, together with the net proceeds raised from the equity offering after quarter end, will meet our operating and capital expenditure requirements into early third quarter of 2027.

With that, I will turn the call back to Seth for closing remarks. Seth?

Thank you, Bradley. Looking at Slide 12, our third quarter results demonstrate TONMYA's potential to create value and help the fibromyalgia community. We are dedicated to growing the TONMYA business, and we believe we are well-positioned for a strong fourth quarter and 2027. We are also advancing TNX-102 SL in MDD, TNX-4800 to prevent Lyme disease and TNX-1500 to prevent kidney transplant rejection, which we believe could make a difference for patients facing these chronic conditions.

With that, we will now open the call for questions. Operator?

[Operator Instructions]. Our first question comes from Stacy Ku with TD Cowen.

Tom, I have a couple for you. You've disclosed some encouraging refill metrics. But first, can you maybe comment on the anecdotal durability of the product from patients taking TONMYA from last winter? So that's the first comment as we look to kind of TONMYA next year.

And then maybe further discuss your confidence and expectations for what will drive growth next quarter and year? Are the writers broadening? Are they going deeper? What kind of outreach are you expecting to see with kind of a fully formed 150-person sales force? To us, it doesn't seem like you need any more than modest steady month-over-month growth to convert into next year. So that's the second question.

And then third, we appreciate your comments on the recent ANDA filing. It does suggest TONMYA's growing nicely and catching folks' attention. So just remind us the time lines here. So what will be the normal course of updates and of course, your current patent protection.

And then last, as we kind of look at the company prep for 4800 in Lyme, as we await the FDA response on study design, what kind of feedback would you expect? And would you be willing to provide more detail on study sites and learnings from other programs?

Yes. So I'll start since you started with questions for me. It's Tom. Thank you for the question, Stacy. So moving from the feedback that we're getting on the durability and what we're seeing in terms of the persistence and number of prescriptions that we're getting from patients who started early but have also continued to start, anecdotally, what we're hearing is what we expected, which is good efficacy, a very strong tolerability profile. What we're seeing in the data is we're seeing a greater number of prescriptions coming after the first couple of fills as we move forward as evidenced by the refills. So the feedback has been patients are on it. They're seeing a benefit. Some doctors have given us the feedback that their patients view it as life-changing versus what they were taking. And we think we'll continue to see that increased refills, persistence and durability as we move forward.

In terms of growth, which obviously is the thing we're really laser locked in on. The 150-person sales force with the recent expansion, since that started on September 1, we are seeing an increase in the rate across the board. So we are seeing more new writers. We are seeing greater depth. We are seeing more new prescriptions. Obviously, the refills, as you noted. So I think it's really a broad-based growth that we're going to be seeing as we move through Q4 through 2027. And I believe you made a comment about the consistent growth. That's exactly what we anticipate.

Our progress with the payers will obviously add a little bit to that as coverage increases. But we believe that we are on a really good path right now. And the conversations with those payers with the immediate impact that we're seeing from the sales force expansion, I think those are going to be the real growth levers as we move forward into 2027.

I believe the next question was more about the ANDA. So maybe I'll pass that over to Seth.

Okay. Thank you, Tom. And thank you, Stacy, for these questions. The ANDA filing, the process for responding to an ANDA certification is laid out in the Hatch-Waxman Act, and we're in that process. The -- since this is litigation, we don't really comment on details about it, but we are committed to vigorously defending our intellectual property.

With respect to the time of our core patents, they, as granted right now, provide protection into 2034, and they relate to aspects such as the eutectic formulation technology and other characteristics -- other unique characteristics of our product.

And then finally, with respect to 4800, we had a meeting with the FDA in mid-July and had favorable minutes, positive minutes from that meeting about our plans for the Phase II study, the upcoming Phase II field study. And we submitted a protocol based on the conversation we had with FDA. So we don't expect significant changes, but we can't give a time line in terms of when exactly we'll have a completely finalized protocol. But we believe we have great confidence that we'll be able to begin enrolling in the Phase II study in the first half of 2027 in order to catch the first part -- to catch the Lyme season of 2027.

And as we laid out in the presentation, the first season will be focused on enrolling about 500 participants who would be one-to-one randomized 4800 and placebo with the idea of getting at least 200 patients through 2 doses and their safety assessment. So we are confident about beginning the study in 2027.

Our next question comes from Tiago Fauth with RJ.

Just thinking about, so revenue growth outpaced prescription growth this quarter. So I'm just trying to understand, I'm assuming a lot of that reflects improved bridge to pay conversion, the gross to net and the payer mix, right? So wondering if you can quantify any of those factors. And again, as coverage expands, how should we expect that relationship to continue tracking over time? When can we reach a steady state on a net revenue per script basis, for example?

And then one on the Lyme program. Just trying to think specifically what you can learn from the 2027 cohort that can improve your confidence in getting to the right number of cases without expanding the trial in 2029. I know most of the enrollment is planned for 2028. So just how much flexibility is there to adjust either number of sites, number of patients depending on what you see in terms of event rates in the first season?

Thank you, Tiago. Tom, why don't you take the first part on TONMYA, and then I'll do Lyme.

Yes, that sounds great. Thanks for the question. Yes, so we are seeing obviously strong revenue and prescription growth. In terms of the mix of what's contributing that, obviously, you mentioned gross to net. That is obviously one component of it. We are seeing obviously a better mix as we progress through the launch in terms of the 60-count bottle versus a 30-count bottle. So the average price continues to climb up every quarter, which is driving some of that growth as well.

In terms of the payer mix, obviously, that has an impact in terms of where the prescriptions are coming from. As we continue to see more prescriptions even from payers who we do not have formal coverage with yet, get approved through the prior authorization process that they may have set up for a new launched drug. And obviously, those have a very strong gross to net profile being that they're coming from a payer that we're not necessarily paying rebates for.

The real encouraging thing is as we progress, we are seeing the number of approvals go up. We are seeing the amount we're contributing in copay buydowns go down, which is exactly the trend that you want. So I think we're going to continue to see that as we progress. Those trends have been multiple quarters now. So I would anticipate that we're going to see continued improvement on the copay buy down and also on the approval rates as we move forward. So all of that really is contributing that excess revenue growth.

Thanks, Tom. And then Tiago, thanks for your question about Lyme. In 2027, the 500-volunteer lead-in cohort is mostly focused on safety. Nonetheless, in 2027, we expect to learn a lot about how to enroll intelligently in 2028. So our idea is when we have the safety clearance from DSMB to expect by the end of the second quarter or early in the third quarter, then we can go into 2028 at full speed enrolling. But that means that in 2027, we're going to be on the ground, talking to sites, looking at epidemiology and using lots of techniques, established technique, including some techniques that rely on artificial intelligence to identify sites and potential participants who are likely to get bitten by deer ticks.

So I don't think that the cohort that we're enrolling in 2027 will be large enough to be instructive about attack rate and how to find people at risk. But I think the other work that we'll be doing in 2027 will be very illustrative on how to make the 2028 year the most productive as possible.

Our next question comes from Gary Nachman with Canaccord Genuity.

So on TONMYA, again, just as coverage improves and awareness improves, is it being used more as second line, third line? Any cases where it can be used first line potentially? And what about combo use with other fibro drugs? Just give us a sense of how you think the drug is being used and how that's going to be trending going forward?

And then with the additional 50-reps, yes, if you could just quantify how many more physicians you're targeting? So how many new writers have there been? And I guess what your goal is there with that 150-person sales force going forward? And then I have one follow-up.

Sure. Thank you, Gary. Let me take -- Tom, let me take the first part of that on TONMYA first line, second line, and then you take 50-reps, if that's okay.

So Gary, I'm coming to you from the ACR conference, the American College of Rheumatology Conference in Orlando, where I can report an anecdotal but pretty compelling sea change in the acceptance of fibromyalgia among rheumatologists. And fibromyalgia is rheumatologists divide fibromyalgia into primary fibromyalgia and then often something called concomitant fibromyalgia. And concomitant fibromyalgia means in the context of other conditions. And I think the whole field is waking up to the idea that fibromyalgia is a parallel but distinct condition that needs separate treatment. So for example, in many different autoimmune conditions, like rheumatoid arthritis, there's a group called difficult-to-treat rheumatoid arthritis, and there's a growing conception that, that difficult to treat means that they have concomitant fibromyalgia.

In lupus, there's a specific type of lupus that people are now recognizing is concomitant fibromyalgia. There's a lot of excitement here about the Sjogren's drugs, new Sjogren's drugs in development from Amgen, BMS and Novartis. And while they have compelling immunological data, there's still not a lot of response or not enough response on the symptoms that patients complain of the most, which people are increasingly recognizing are fibromyalgia symptoms. In Sjogren's, the mix of fibromyalgia relative to immunological condition is possibly greater than the other 2.

So -- and I could go on and on. But I think the key thing is the recognition of fibromyalgia and the recognition that fibromyalgia needs to be treated separately from the associated rheumatological diseases is gaining great acceptance. And this all comes on the heels of the recognition of nociplastic pain by the International Pain Society in 2017 and the widespread acknowledgment that fibromyalgia is the prototype nociplastic syndrome. So I think there's been a tremendous sea change in utility.

So in terms of fibromyalgia, our label and our studies all studied it as monotherapy for fibromyalgia. And as far as I know, I think that's being used. But since fibromyalgia is concurrent with many other conditions, then doctors evaluate the safety of using 2 drugs together. But I think that this could be good for the health care system because many times people who have a flare or an exacerbation of autoimmune disease are chased with steroids and biologics when in fact, the flare might be just fibromyalgia.

Fibromyalgia is a serious condition defined by the FDA. But the idea that people sometimes are chasing the fibromyalgia flare as a flare of their autoimmune disease is something that I think will make a big improvement in the care of autoimmune patients.

So Tom, do you want to talk about the 50-reps?

Sure. Yes. Thanks for the question, Gary. Yes, so as we've laid out before, there's about 25,000 HCPs who are really diagnosing and treating these fibromyalgia patients. With the new sales force expansion that we have, we've moved to now basically seeing roughly -- targeting roughly 70% of these doctors, probably greater than the, call it, 40% or so pre-expansion that we were targeting. We are targeting all 25, obviously, with our digital assets and direct to HCP reach out via the marketing team. Since the expansion, the new writers and total writers have increased at a much greater rate than pre-expansion. We've been seeing increases every single week, but that rate has definitely stepped up as we've post the September 1 expansion. We continue that -- we continue to believe that's going to keep going as we've already moved 1 month into the fourth quarter here. We have seen that trend continue.

So more total -- more new writers will lead to more new patients. And with the durability that I spoke of earlier, we anticipate that we'll continue to see strong refills on those new patients. So hopefully, that helped and answered your question.

Yes. No, thanks for all that color. And then just quickly, just on 4800, given the timing of starting the Phase II, just give us a sense of how we should think about the spending for that next year, how that's going to ramp up? And just more generally, your options for extending the cash runway. So how much left on the ATM? Will you scale back in any place on spending at all? And would you consider potentially out-licensing any of maybe the noncore pipeline programs?

Yes, Gary, thank you. So first of all, we've guided that we have runway into Q3 of next year. We are looking at all our expenses critically as we go forward and focusing on the key programs that we mentioned in this -- in the introductory comments. The -- but we're always looking for partnerships, and we're in various levels of discussion with potential partners. We have a group right now at BIO-Europe. We're in touch with potential partners all the time.

The timing of that is uncertain. So we don't give any updates on any particular dialogues. But the first 500 patients of TNX-4800, I think, will be very value creating for that program because there will be a lot of derisking of that program. So in the beginning of Q3 next year, we expect to have the safety completed and to have investigational product and to be in a position to really give clarity about what is going to happen in 2028.

So the cost from now until this clarity is, call it, 7 or 8 months is a much smaller number than the cost of 2028 when we'll be doing the big efficacy portion of the Phase II study. So we are monitoring everything as we go forward, but we believe we're creating very significant value with the programs that we're focusing on.

Our next question comes from James Molloy with Alliance Global Partners.

Seth, you touched on the Dr. Reddy's time line. Obviously, the litigation, you can't comment a lot on it, but as outsiders looking in, any suggestions on sort of cut points that we should be watching for of upcoming events as this litigation proceeds through? An obvious thought would be potential next generation, new and improved TONMYA to extend patent life. Anything you can comment on along those lines?

Thank you, Jim. Two great questions. Unfortunately, 2 questions for which I can't give you a lot of clarity. As I said, the Dr. Reddy's Para IV certification, it goes along a clock set forth in the Hatch-Waxman Act, and we're involved in it, but it's hard to comment on litigation ongoing. But I'm sure you're familiar with the ideas of after the certification, there's 45 days to respond and a 30-month stay, et cetera. And I don't know when in the course of that there will be public updates.

With respect to follow-on programs, the answer is yes. We see ourselves as the leader in understanding the relationship of nonrestorative sleep to widespread pain, and particularly to how widespread pain manifests in fibromyalgia and other chronic overlapping pain conditions. And that includes things like ME/CSF (sic) [ ME/CFS ], chronic fatigue syndrome, chronic Lyme, post-treatment Lyme disease syndrome.

So an enormously large group of adults in America are suffering from these conditions, and I think that the insights that we've gotten from developing TONMYA put us in a very unusual leadership position in exploiting next-generation products. So we do have some very early work underway, but it's not really -- it doesn't cost enough to be something that we would materially comment on relative to the expensive clinical development of our major depressive disorder study, which would be a label expansion of TONMYA. But we also think that we have time to introduce tests and hopefully get approval for next-gen products that target nonrestorative sleep.

Maybe 2 last questions on 1500 and 1300. 1500, the phase II starting first quarter next year, 5 patients. It's an IST. These are notoriously challenging, I guess, to it's out of your control with the ISTs running the trial. Any thoughts on timing on that to get that going, get that wrapped up to come to data? And on 1300, I believe last guidance was expectations for an FDA meeting for next steps. Is that still ongoing?

Yes, Jim. And thank you for following us. Yes, the 1500 study that is starting at Mass General, pretty imminently, we are guiding for first quarter, the primary endpoint is 18 months, but there will be interim looks at earlier time points. But I think it will be a big change in the valuation and importance of that program once we accumulate this phase II data. We believe that looking at all the factors together, potency in terms of modulating the immune system, PK, how long the product lasts in the bloodstream and other features, we think putting all of those together, we believe we have the best in class of anti-CD40 ligand products. And I am sure many of you are aware that it's a very exciting area, so that is a lot to say, but we think that breaking the ground and getting it into a phase II study and collecting this kind of information will be very important in its development.

And yes, with respect to 1300, we did have that FDA meeting, and we are awaiting a response from FDA. But we remain very interested in that program, but we are kind of in an impasse with clinical development that we're trying to straighten out with FDA, where we believe the path forward is to seek an approval based on lab studies only, but we're waiting to see if FDA will agree with that approach. But there is no other treatment out there for cocaine intoxication, and ours is fundamentally a cocaine antidote. So it's an important program to us, but until we reach agreement with FDA on a path forward, we really don't have much to comment on.

Our next question comes from David Bautz with Zacks Small Capital Research.

So one more for you, Tom, about the launch. I was wondering if you could tell us if you have this data available, what percentage of the third quarter prescriptions were bridge prescriptions versus commercially reimbursed? And then maybe more importantly, how has that percentage changed from the second quarter to the third quarter?

Yes, yes. Thanks for the question. Absolutely. So looking to get into the specific percentages. What I can tell you is this, first, we have a very good conversion rate on bridge prescriptions that are through BlinkRx, as I mentioned earlier in the discussion. That rate of percentage of bridge scripts as a total percentage has consistently come down as coverage has come up.

I would anticipate that we would continue to see this quarter-over-quarter, month-over-month continue to be a smaller percentage of our total prescriptions. As this coverage comes on, once that script comes in, if they're covered, there is no bridge required. So the change has been a strong change in the positive direction, and that coincides with the approval rate I mentioned earlier and the continued progress that we're making on the payer front.

And those discussions, I tell you, happen every week with multiple payers and downstream plans, and we feel like we're making really good progress. And I would say the bridge scripts have been a great lever to start, but they are slowly becoming a less meaningful part of the total prescriptions, and that will continue as we move forward.

Okay. Great. Appreciate that. Now as far as the HORIZON study goes, does management have any expectations for when enrollment could be completed or top line results might be reported?

Yes. Thank you, David. We're not guiding to that yet. It's still early on in the enrollment period. So we don't have a clear trajectory, and we're certainly not at steady state yet in terms of the enrollment of participants. But I will say that this is a very standard 6-week depression study, very similar to other depression studies that multiple other sponsors have run. So we are hoping to enroll it quickly, but we will provide guidance hopefully sometime soon when we believe that the run rate has become more predictable.

Okay. And last 2 for Bradley on the financial side. I was wondering if you could tell us how much of the $45 million in SG&A this quarter was for, say, recurring commercial infrastructure versus nonrecurring launch expenses? And then with the sales force now presumably fully expanded, how should we think about SG&A, say, in the fourth quarter and then going into 2027?

Great. Thank you, David. So as you point out in our 10-Q, which actually was also filed today that a significant amount of that $45 million was due to the sales force. Obviously, as we continue to launch TONMYA and grow the program, I would expect that to be, again, a significant piece of our SG&A.

Thank you. I'm showing no further questions at this time. I'd like to turn the call over to Seth Lederman for closing remarks. Mr. Lederman?

Yes. I'm sorry, I was fumbling for the right buttons here. Well, thank you, operator, and thank you all for joining us. I would like to thank our entire team for their dedication to Tonix's mission and to patients. Have a good day.

Thank you for your participation. This does conclude the program. You may now disconnect.

Good morning, and welcome to the Tonix Pharmaceuticals Second Quarter 2026 Financial Results and Business Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to [ Deborah Elson ], Head of Investor Relations at Tonix Pharmaceuticals. Please go ahead.

Thank you, Operator, and good morning, everyone. We appreciate you joining us today to discuss Tonix Pharmaceuticals' second quarter 2026 financial results and operational highlights. Before we begin, I would like to remind everyone of the disclaimers on slide 2 that any statements made on today's call that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks are described more fully in our filing with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2025, and our subsequent periodic reports. Tonix undertakes no obligation to update or revise any forward statements, except as required by law.

Joining me on today's call are Dr. Seth Lederman, Chief Executive Officer; Thomas Englese, Executive Vice President of Commercial Operations; and Bradley Slenger, Chief Financial Officer. With that, I will turn the call over to Seth.

Thank you, [ Deborah Elson ], and good morning, everyone. We're pleased to welcome you to Tonix's earnings call. Today we're reporting second quarter financial results and operational highlights that reflect strong execution in both our commercial business and advancing our development pipeline. We are focused on improving the care for patients with debilitating conditions or preventing illness before it happens. We believe each of the commercial products and the development candidates target major unmet medical needs.

As you can see on slide 2, the launch of Tonmya is progressing well, supported by growing sales, improvement across launch metrics, and patient access wins. Tonmya was invented, developed, tested, and launched in-house by the Tonix team. Tonmya is the first medicine for the treatment of fibromyalgia in adults approved by the FDA in over 15 years. With 10 million adults in the U.S. suffer from fibromyalgia. We are initially targeting nearly 3 million patients who are currently diagnosed and treated.

The second quarter of 2026 was the second full quarter of Tonmya sales. We believe our second quarter and cumulative launch performance underscored Tonmya's compelling value proposition and differentiated profile. Historically, fibromyalgia patients and their healthcare providers, or HCPs, have been dissatisfied with limited treatment options. We are pleased to offer Tonmya as an effective and generally well-tolerated treatment option.

Tonmya is a non-opioid analgesic that improves fibromyalgia pain, the core symptom of the disease. Tonmya is a once-daily medicine taken at bedtime and indicated for long-term use by fibromyalgia patients. Commercially, Tonix has 100% share of voice as the only branded and marketed product for fibromyalgia. We are set to improve the lives of patients and simultaneously creating long-term value for shareholders.

In the second quarter of 2026, we achieved approximately $11 million in net sales for Tonmya, representing 197% quarter-over-quarter growth. That is approximately triple the net sales of the first quarter. Additionally, we saw increases across other key metrics. We attribute these results to the patient and prescriber recognition of the value of Tonmya and to our strategic focus and execution. We also had early wins in managed access. We do not believe these wins contributed significantly to Tonmya sales in Q2.

However, we are beginning to see their effects in Q3. Currently, Tonmya coverage across commercial, managed Medicare, and Medicaid channels represents approximately 136 million covered lives, or 43% of the approximately 314 million covered lives in the United States. On January 1, 2027, when our managed Medicare GPO coverage agreement becomes effective, Tonmya coverage will represent approximately 145 million covered lives or approximately 46% of the covered lives in the United States.

We believe this broad coverage lays the foundation for growth in patient access and net sales for the rest of the year and beyond. This coverage led us to activate our planned sales force expansion, which will be fully implemented by September. Tom will dive deeper into the field dynamics and expectations for the rest of the year. As we execute on our commercial launch, we are also strategically advancing certain development stage programs.

Tonix's pipeline includes a carefully selected group of therapeutic and preventative development stage candidates targeting large therapeutic or preventative areas of unmet need. Each of these agents are potentially first-in-class or best-in-class. In 2026, we have focused our resources primarily on TNX-102 SL, which is cyclobenzaprine sublingual tablets, which is a potential new indication for Tonmya for the treatment of major depressive disorder, or MDD, and TNX-4800, a long-acting monoclonal antibody for the prevention of Lyme disease.

In the second quarter and early third quarter, we made substantial headway on both programs. For TNX-102 SL and MDD, we randomized the first patient in the second quarter. For TNX-4800 and Lyme disease prevention, we held a constructive Type C FDA meeting and received positive final minutes on our planned adaptive Phase 2 study, which we expect to begin enrolling in the first quarter of 2027. I will now turn the call over to Tom Englese, EVP Commercial Operations, to discuss the Tonmya launch. Tom?

Thank you, Seth, and good morning, everyone. Today, I will review our second quarter sales performance for Tonmya, and then I will cover our launch strategy. We are pleased to offer Tonmya as a treatment to adult fibromyalgia patients. Looking at slide 4, we are encouraged to see net sales of $11 million for Tonmya in the second quarter, representing 197% quarter-over-quarter growth or nearly triple the first quarter.

There are a few contributing factors to note. We are seeing proactive patient and prescriber hand raisers interested in Tonmya, and we're gaining traction with our HCP target list. Second, gross-to-net in both Q1 and Q2 have been driven by a favorable mix between the retail and specialty distribution channels and lower copay buy-downs related to stronger-than-expected prior authorization approvals. We've historically shared that we expect fluctuations quarter-over-quarter, as is common early in commercial launches. We expect continued fluctuations for gross-to-net in both Q3 and Q4.

Now, we'll look at our key performance indicators for Tonmya. In the second quarter, we saw positive trends across prescriptions, new patient starts, and refills. Prescriptions for the quarter totaled 12,592, increasing 100% quarter-over-quarter. New patient prescriptions increased 36% quarter-over-quarter and refills increased 207% quarter-over-quarter. We continue to see increases in the number of prescriptions per patient, which we attribute to the benefits and tolerability of Tonmya and our patient support program.

We will now walk you through our strategy regarding market access, sales, and marketing on slide 5. First, we've already reached major market access coverage milestones, which we believe speaks to the value of Tonmya. We signed commercial pay agreements with 2 leading GPOs. These agreements, which went into effect on May 1 and June 1, 2026, cover 52 million lives. We also signed a major managed Medicare agreement, which will cover approximately 9 million Medicare lives beginning January 1, 2027. Tonmya is also available under Medicaid in most states.

We expect downstream pull-through from these agreements to begin to materialize in the third and fourth quarters of 2026. Our strategy has been to secure market access as early as possible so that the availability of insurance reimbursement could match patient demand. As our team brings these coverage agreements online, we expect patient access to become more robust. We have seen favorable rates of prior authorization submissions and approvals across commercial payers and Medicare and strong usage of our copay assistance and savings programs in the commercial population.

Altogether, we expect these trends to serve as the catalyst to unlock the next stages of the launch, which is sales and targeting. We've been planning to expand our sales force after securing coverage. Following the access wins, we are adding 50 sales reps who will be in the field by September. This expansion will enable us to increase our presence in previously uncovered geographies and increase our breadth and depth in existing dense geographies. By September, our field force will be roughly 150 reps, primarily engaged through our contract partner.

Each of these contract reps is exclusively dedicated to Tonmya and do not support any other company or product. Over time, we expect to bring high-performing reps in-house to Tonix. The entire sales force management team has recently been brought in-house at Tonix. We are committed to quality and consistency of tactical execution. As a reminder, we are initially targeting the 25,000 HCPs who write approximately 70% of the fibromyalgia treatment prescriptions.

We continue to focus on engaging priority HCPs and supporting prescribing for appropriate patients consistent with approved labeling. We are hearing supportive feedback from prescribers that Tonmya is a welcome new treatment option for their patients. Moving to marketing, our efforts have focused on an unbranded digital disease awareness campaign called Move Fibro Forward, DTC social advertising, influencer programs, and peer-to-peer KOL speaker programs.

Highlights in Q2 include programs such as our KOL speaker bureau, a Reddit Ask Me Anything program, influencer ads, and a digital HCP webcast. Looking ahead, we are excited to further advance the launch of Tonmya. I will now turn the call back to Seth to discuss medical affairs. Seth?

Thank you, Tom. Medical affairs is making headway with KOL engagements and education through conference symposia and data presentations. A key focus of our efforts has been on raising awareness among HCPs for the current fibromyalgia diagnostic criteria that state fibromyalgia is not a diagnosis of exclusion. The outdated conception that fibromyalgia was a diagnosis of exclusion created a barrier to diagnosis for 2 reasons.

First, a diagnosis of exclusion was an unreasonable standard because no amount of lab tests or imaging can prove a negative. Second, the medical community now recognizes that fibromyalgia commonly occurs in the context of other conditions, including long COVID, chronic Lyme, systemic lupus, rheumatoid arthritis, and cancer. This means that these other diagnoses should not exclude the diagnosis of fibromyalgia. We believe broader understanding of the current diagnostic criteria could meaningfully grow the addressable fibromyalgia patient population and help patients get diagnosed and treated earlier in the course of their condition.

It currently takes on average over 6 years for patients to be diagnosed with fibromyalgia. Moving on from medical affairs, I now want to update you on the pipeline. We are advancing our development pipeline. Today, I will focus on TNX-102 SL and TNX-4800. Moving to slide 6, TNX-102 SL for the treatment of MDD could potentially serve as a label expansion for Tonmya.

In June, we randomized the first patient in Horizon, a potentially pivotal Phase 2 study evaluating TNX-102 SL as first-line monotherapy in adults with MDD. We are targeting the enrollment of approximately 360 patients in the U.S. Eligible participants must be 18 years of age or older, currently experiencing a moderate to severe major depressive episode. Participants are being randomized to receive TNX-102 SL 5.6 milligrams taken sublingually at bedtime or matching placebo.

The primary endpoint of the study is the change from baseline in MADRS total score at week 6. Secondary endpoints include global impression scores, anxiety ratings, and measures of sleep quality. We are evaluating TNX-102 SL for MDD based on initial signals observed in previous Tonix Phase 2 and 3 studies in which TNX-102 SL nominally improved depression symptoms in fibromyalgia patients and PTSD patients. TNX-102 SL was designed to target the disturbed sleep in fibromyalgia.

If TNX-102 SL has effects on depression, then we believe targeting sleep would be a novel mechanism. Use of SSRIs and SNRIs for depression are frequently associated with treatment-emergent insomnia. Another Tonmya label extension is acute stress disorder and acute stress reaction. An investigator-initiated Phase 2 study called OASIS is enrolling at the University of North Carolina, funded by a United States Department of Defense grant to University of North Carolina, and for which we expect to report top-line data in mid-2027.

Now, I'll move to slide 7 to discuss TNX-4800, our long-acting monoclonal antibody for the prevention of Lyme disease. Positive FDA meeting minutes demonstrate alignment on the key elements of our adaptive Phase 2 study design and support study start in the first quarter of 2027. Currently, no FDA-approved vaccines or prophylactics for Lyme disease are available. We believe TNX-4800 could potentially change the prevention paradigm.

It targets the outer surface protein A, or OspA, on the Lyme-causing Borrelia bacteria. 1 type of Borrelia, Borrelia burgdorferi, causes 99.9% of Lyme disease cases in the United States. TNX-4800 is designed to act in the midgut of the Borrelia-infected deer tick. If someone is treated with TNX-4800 before getting bitten by the tick, then the tick sucks 4800-containing blood into its midgut.

TNX-4800 either kills or blocks the maturation of Borrelia burgdorferi in the midgut of infected deer ticks while they are sucking the victim's blood. This mechanism blocks transmission and infection. OspA is a validated target for antibodies. TNX-4800 is engineered for an extended half-life to provide a longer duration of protection after dosing relative to standard monoclonals.

As a monoclonal antibody, we believe TNX-4800 has important advantages over vaccines, namely that it provides protection within 2 days after 1 dose, compared to a prior vaccine or a vaccine in development that takes 3 or 4 separate immunizations over at least 6 months to provide protection. Also, TNX-4800 does not require a host immune response like vaccines. That means it doesn't depend on the host's immune system, which is known to be less active in older people and people with certain conditions.

After reporting Phase 1 data earlier this year and meeting with the FDA in early Q3, we now have a clear view of our planned Phase 2 study. Pending FDA agreement on the final study protocol, we plan to conduct a randomized, placebo-controlled, adaptive field study. We expect to enroll approximately 3,300 adult participants. These volunteers, age 18 and older, will be recruited from Lyme endemic areas in the U.S. and selected for their engagement in activities that increase their risk of deer tick bites.

We expect this to be a 2-season study and expect to enroll the majority of participants in 2028. If the attack rate is lower than planned, enrollment could potentially extend into 2029. The primary efficacy endpoint will be Lyme disease prevention through 6 months after the first dose, and a key secondary efficacy endpoint will be prevention through 3 months. Although it is a Phase 2 study, we believe it has the potential to demonstrate efficacy.

The primary safety objective will be to evaluate the safety and tolerability of TNX-4800 over a 52-week period after dosing. Participants in the planned adaptive Phase 2 field study will be randomized 1-to-1 to receive either placebo or TNX-4800 dosing 450 milligrams sub-Q in the spring, and another dose approximately 3 months later. Our focus in 2026 has been on manufacturing investigational product for TNX-4800, which is on track for delivery to study sites in the first quarter of 2027.

With that, I will turn the call over to Bradley Slenger, our Chief Financial Officer, to review our financial results. Bradley?

Thank you, Seth. And good morning, everyone. On slide 8, I will review financial results for the second quarter ended June 30, 2026. Net product revenue for the second quarter of 2026 was approximately $13.5 million, which consists of approximately $11 million from Tonmya and $2.5 million from Zembrace SymTouch and Tosymra, which are our migraine products. This compares to $2 million for the same period in 2025, which consisted only of Zembrace and Tosymra.

Tonmya was approved last August and launched in November, and the second quarter of 2026 was Tonmya's second full quarter of sales after launch. Cost of sales was $0.7 million compared to $3.3 million for the same period in 2025. The decrease in the cost of sales was predominantly driven by a change in product mix and a rise of migraine products in 2025.

Research and development expenses were approximately $19.4 million compared to $10.8 million for the same period in 2025. The increase was primarily driven by higher manufacturing and clinical expenses reflecting pipeline prioritization along with increased employee-related costs from higher headcount. Selling, general, and administrative expenses were approximately $36 million, compared to $16.2 million for the same period in 2025.

The increase was primarily driven by sales and marketing investment behind the launch of Tonmya and our migraine products, together with higher employer-related and professional expenses. Turning to the balance sheet, we ended the quarter with approximately $176.2 million in cash and cash equivalents as of June 30, 2026, compared to approximately $207.6 million as of December 31, 2025.

We expect our cash resources as of June 30, 2026, together with net proceeds from equity offerings subsequent to June 30, 2026, to fund our planned operating and capital expenditure requirements into the early second quarter of 2027. With that, I will turn the call back to Seth for closing remarks. Seth?

Thank you, Bradley. We'll move to slide 9. In the second quarter, we delivered progress on the launch of Tonmya and on the development of 2 of our mid-stage clinical development programs, TNX-102 SL for the treatment of MDD and TNX-4800 to prevent Lyme disease in the United States. We entered the second half of 2026 with meaningful momentum.

Our strategic priorities are clear. Deliver on the promise of Tonmya, advance the development of our mid-stage clinical programs, and drive sustainable growth to create value for all shareholders. Patients remain at the forefront of our work and our team is dedicated to supporting them. For Tonmya, we remain focused on driving growth across net sales and KPIs, working to secure patient access and deploying our expanded sales force.

For TNX-102 SL, we will continue to execute on the enrollment of the potentially pivotal Phase 2 study in MDD. For TNX-4800, we are manufacturing the investigational product in 2026 to begin the adaptive Phase 2 field study in preventing Lyme disease in the first quarter of 2027. With that, we will now open the call for questions. Operator?

[Operator Instructions] Our first question comes from Stacy Ku with TD Cowen. Your line is open.

Hey, good morning. Congratulations on a great quarter and thanks so much for taking our questions. We do have a few. First one is for Tom and Seth. Given that Tonmya launch is going pretty well, can you talk about your current learnings and what strategies you're using to drive patient adoption in fibromyalgia? What has been the early clinical feedback on Tonmya's efficacy and the early durability signals, giving encouraging refill dynamics? That's the first on Tonmya.

And then as we look to 4800 and Lyme, it's been great to get the FDA interaction minutes. So first, can you discuss in more detail why you believe the majority of infections will be collected in the first season? Maybe discuss how you're identifying the right sites. And then second, do you believe the Phase 2 has the potential to be pivotal in Lyme given the patient study size of around 3,300? Thanks so much.

And then actually before I let you go, I want to thank you for your answer the question. Just some really quick quarterly clarifications for Tonmya. 1, what gross-to-net range would you expect for Q3 and Q4 given the favorable mix we saw in Q2? And kind of the same question, but what kind of inventory nuances we should consider for Q2? Thanks so much.

Thank you very much, Stacy. So there are 3 parts to your question. Let me, Tom, would you please address the question about Tonmya's launch and the clinical feedback?

Yes, absolutely. Thanks very much. Yes, so the early feedback we have received from HCPs is that Tonmya is, you know, like I said, a welcome addition, a new product into the space. There hasn't been anything for 15 years. The durability thus far has been very good. We have seen, as you mentioned, a high rate of refills.

I really attribute that to, you know, the effectiveness of the product and the tolerability of the product especially. So the feedback has been positive. We're going to continue, obviously, to target over time with our sales force, those key writers, as I mentioned. And we're excited for the additional reps because we can increase our breadth and depth. So all in all, signs have been very positive and the durability and refill signals have been positive as well.

Great. Thank you, Tom. And Stacy, to follow up on your question about Lyme. First of all, now that we have the final FDA minutes, we've gone back to the CROs in the process of bid defense and the rest of it. And we're actively working on identifying sites and characteristics of people at risk for deer ticks and Lyme disease.

With respect to your question about whether we think it could provide evidence of efficacy, we have stated that in a press release and in our comments today. And we do believe that this Phase 2 study can provide evidence of efficacy, and if positive, could be a pivotal study supporting approval of the product. The study will be conducted as a potential registrational study. The key question will be whether we accumulate enough events, which is mostly driven by Lyme disease cases in the placebo group in our observation period. So now let me turn the third part over about the quarterly--

gross-to-net back to Tom. It's quarterly gross-to-net and also that inventory of Tonmya to Tom. Great. Thanks again. Yes. So, you know, as we mentioned, we don't disclose specifics about our gross-to-net. What I can say is that we've seen a good, as I mentioned earlier, we've seen the gross-to-net positive being impacted by our mix in our channel. The prior approval submissions and approval rates have been strong as well.

And we obviously have new coverage that's coming online. So, you know, I would anticipate a gross-to-net in the range similar to what we've seen, you know, in Q1 and Q2. In terms of inventory, I'm assuming we're talking about the inventory at the wholesalers. We track that, and we have seen a consistent days on hand as demand has increased. So there's been really no incremental inventory build at our wholesaler and distributor partners. So I think that was probably where you were going with the inventory question. So thank you for that.

Thank you so much. Stacy, are there follow-up questions? No, I think we're all set. Thank you so much. Thank you.

Thank you. Our next question comes from Tiago Fauth with Raymond James. Your line is open.

Great. Thanks for the good question and congrats on the progress. I have 1 for Tonmya, 1 for the 4800. For the 4800, just to hone in on the sample size into your comment related to infection rates on the placebo arm. If you look at the older studies, you see a slightly higher rate. We've seen a surprisingly low rate of infections in VALOR.

So can I just talk about that dynamic as we're thinking about both powering of the study and also the site selection enrichment to ensure that you can accrue enough events. And also I just wanted to understand a little bit better how to characterize the access and ease of access of the policies that are in place relative to step edits, how cumbersome is the paperwork, how is that kind of evolving over time?

Thank you so much. Thank you, Tiago. I'll take the first part about 4800 then I'm going to ask Tom to answer the question about step edits. So with the TNX-4800 Lyme preventative program, the study that most people use as a reference is the study that was behind the approval of the LYMErix vaccine in 1998, which has subsequently been withdrawn.

And in that study, they had an attack rate of 0.8% in 1 group and 1.2% in another group that was the main efficacy group. And since then, Lyme has increased significantly in the United States, at least threefold increased in Lyme endemic areas. So we think that the attack rate, you know, that is supported by the epidemiology supports that we could get enough events with 3,300 participants that we've announced we're targeting.

How we're targeting them and the specifics of the clinical trial, are to some extent proprietary, but we're certainly working with experts in the field and clinical experts in areas where Lyme is growing rapidly to select patients who are at risk for contracting getting deer tick bites and in areas where the deer ticks have a significant rate of Borrelia infection. So let me turn it over to Tom for the discussion about step edits on Tonmya.

Yep. Thank you very much. Yes, so obviously first let me note that our target patient population is around 3 million patients who were previously diagnosed and treated for fibromyalgia. And it's important to understand that 80%, roughly 80% of these patients have been already or are on multiple therapies for fibromyalgia.

So in our discussions with the payers and our, you know, pre-launch even and post-launch, pre-launch in the pre-approval information exchange and post-launch in actual discussions about coverage, we've seen a tendency to require a step or 2 through 1 of multiple products, no mandatory steps through any specific product. Based on what we've already seen in the market and what we've already seen with our prior authorization submissions and approvals early in launch, we're comfortable that this is a very manageable approach for both the patients and HCPs.

All right, fantastic. Thanks again for taking the question. Thank you, Tiago.

Thank you. Our next question comes from James Molloy with AGP. Your line is open.

Hey guys, thank you very much taking my questions. I know that looking at the Tonmya launch the gross-to-net came down quite a bit in the quarter. I know you suggested it's going to fluctuate. It seems like we see different numbers than you guys see when we look at our Symphony data. Is this lower level, do you anticipate this lower level being more typical, or do you think it's more likely to fluctuate back towards sort of the second quarter of launch, where it's almost a 50% gross-to-net discount?

Yes. Thanks, Jim. So, look, in Q2, obviously, we said we had favorable dynamics that attributed to the gross-to-net in Q2. It is going to fluctuate, as I mentioned, especially as the coverage comes online from the 2 commercial contracts that we have recently signed and the downstreams come online.

Moving forward, I would expect continued fluctuations, you know, in the range of what we've seen thus far for Q1 and Q2. And then at some point, obviously, once we get all the coverage pretty much locked down, we should see a more stabilization moving forward.

Okay, great. And then stay with Tonmya on the launch. You had some anecdotal comments already. I saw the launch is going well. Could you walk through sort of on the sales reps, what percentage of the reps or what number of the reps are sort of covering their own costs currently? When do you sort of anticipate them getting to that point?

And also looking at the overall gross margin was quite good, 5% cost of goods in the quarter. Is that a number we should anticipate going forward now that sort of you've got production up to a scale and running at a higher level?

Yes. Tom? Yes, so great. Yes, so we're excited about the performance of the reps so far. Obviously in launch you're in a very, you know, very, you know, very, you know, very focused ramp period and focused targeting and calling on specific doctors that you believe are seeing and treating most of those patients, which obviously we have great data on.

So over time, as we add these 50 incremental reps who will be boots on the ground September, they're already in training, we're going to be expanding the geographies, but also the depth. I would anticipate that over the course of 2027, we'll see a good portion of those reps, all the reps, covering the cost of the reps and continuing to drive new patients, scripts, refills, et cetera. So we're excited about it. We're looking forward to getting even more doctors with Tonmya and patients. And then, Seth, would you like to go to Bradley on the gross margin question?

Bradley? Thank you. Great. Thanks for the question. So obviously, as we mentioned, we do have a, you know, certainly a product mix that's shifting, you know, over time. So obviously we don't guide to exactly what our, you know, numbers would be, but, you know, I would expect, again, a little fluctuation as we try to solidify various levels.

And so I think that's where we will be for at least the next quarter or 2. And hopefully once things have stabilized, we will be able to have a more regular, you know, gross-to-net as well as margins as well.

Okay, final question then if I could please. The study's starting up. Could you sort of compare, contrast any learnings you may have got from Pfizer's VALOR study, which just missed significance? I think they didn't have quite enough people get infected, and how to sort of, how you can best try to work around that in the 4800 study.

Thank you, Jim. I'll take that. The Pfizer study was very different from the study that we're planning. They had a very significant proportion of their patients were enrolled from Europe and we're planning a U.S.-only study evaluating a vaccine product that took about a year to develop immunity and then they were looking at immunity after the, you know, at protection after the immunity, whereas our product, we believe it would provide protection within 2 days of the first dose.

So a much easier product to get and for people to understand and the engagement with volunteers is shorter. So I think that several characteristics of our study are different. The U.S. focus, the product that we're evaluating, and also I think that we are speaking to experts and clinicians who see a lot of Lyme in the United States.

And I think that we have confidence that we can do a better job of identifying people at higher risk of Lyme than was seen in that study, although our ability to understand all the details of that study are limited.

Thank you very much for taking the questions. Thank you, Jim.

Thank you. I'm showing no further questions at this time. I'd like to turn the call over to Seth Lederman for closing remarks.

Well, we're very grateful to everyone who participated, and particularly those who asked questions. We are excited about the success of Tonmya so far and our clinical programs. And we look forward to keeping our investors and stakeholders engaged and updated as we make progress in 2026 and beyond.

So with that I want to thank everyone on the call, particularly the management team. And thank you very much. This is the end of the call.

Thank you for your participation. You may now disconnect. Good day.