Tonix Pharmaceuticals (TNXP) Q2 2026 Earnings Call Transcript

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DATE

Monday, Aug. 10, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Head of Investor Relations - Deborah Elson
• Chief Executive Officer - Seth Lederman
• Executive Vice President of Commercial Operations - Thomas Englese
• Chief Financial Officer - Bradley Saenger

TAKEAWAYS

• Net Product Revenue -- $13.5 million for the second quarter, compared to $2 million in the prior year, reflecting the commercial launch of TONMYA.
• TONMYA Net Sales -- $11 million, representing 197% quarter-over-quarter growth during its second full quarter on the market.
• Migraine Product Sales -- $2.5 million from ZEMBRACE SymTouch and TOSYMRA, compared to $2 million for the same period in 2025.
• TONMYA Prescription Volume -- 12,592 total prescriptions, representing 100% growth versus the first quarter of 2026.
• New Patient Starts -- 36% quarter-over-quarter increase in new patient prescriptions, driven by clinician and patient interest in the first new fibromyalgia treatment in over 15 years.
• Refill Growth -- 207% quarter-over-quarter increase in refills, which management attributed to product tolerability and the efficacy of its patient support programs.
• Payer Coverage -- 136 million covered lives or 43% of the U.S. population, following the activation of commercial payer agreements with two leading GPOs in May and June.
• Projected 2027 Coverage -- 145 million covered lives or 46% of the U.S. population, effective Jan. 1, 2027, when a new managed Medicare GPO agreement begins.
• Sales Force Expansion -- 50 additional sales representatives, bringing the total field force to 150 by September to increase depth in existing geographies and expand into new ones.
• Research and Development (R&D) Expenses -- $19.4 million, compared to $10.8 million in 2025, due to increased manufacturing, clinical expenses for prioritized programs, and higher headcount.
• Selling, General, and Administrative (SG&A) Expenses -- $36 million, compared to $16.2 million in 2025, primarily driven by marketing investments for the TONMYA launch.
• Cash Position -- $176.2 million in cash and cash equivalents as of June 30, 2026, compared to $207.6 million as of Dec. 31, 2025.
• Cash Runway -- Funding for planned operating and capital expenditures into the early second quarter of 2027, including proceeds from subsequent equity offerings.
• Net Loss -- $40.6 million or $2.44 per share, compared to a loss of $28.3 million or $3.86 per share in the second quarter of 2025.
• MDD Study Enrollment -- 360 patients targeted for the Phase II HORIZON study of TNX-102 SL, which randomized its first patient during the second quarter.
• Lyme Disease Study Enrollment -- 3,300 adult participants targeted for an adaptive Phase II field study of TNX-4800, expected to begin in the first quarter of 2027.
• TNX-4800 Dosage Regimen -- Two 450 milligram subcutaneous doses administered three months apart, designed to provide protection within two days of the first dose.
• TNX-1500 Study Size -- five adult kidney transplant recipients for an open-label Phase II study at Massachusetts General Hospital, expected to initiate in the second half of 2026.
• DTRA Contract Value -- Up to $34 million over five years for the TNX-4200 program, which recently transitioned to its next project phase.
• Diagnostic Timeline -- 6 years on average for a fibromyalgia diagnosis, which management aims to shorten by educating clinicians that the condition commonly co-exists with other chronic illnesses.

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RISKS

• Englese stated, "We expect continued fluctuations for gross-to-net in both Q3 and Q4," noting that volatility is common during the early stages of a commercial launch.
• Lederman warned that if the Lyme disease attack rate is lower than planned in the study population, "enrollment could potentially extend into 2029," delaying clinical milestones.

SUMMARY

Management reported net product revenue of $13.5 million, with TONMYA sales reaching $11 million during its second full quarter since launch. The company expanded market access to 136 million covered lives and initiated a 50-person sales force expansion to increase prescriber outreach. Development efforts focused on the HORIZON Phase II study in major depressive disorder and the TNX-4800 program for Lyme disease prevention, which received positive feedback from the FDA on its adaptive Phase II study design. Management attributed commercial growth to strong prescriber interest and improved prior authorization rates across distribution channels.

• CEO Lederman stated that TNX-4800 is "designed to act in the midgut of the Borrelia-infected deer tick," killing the bacteria before transmission to the human host.
• Tom Englese attributed favorable second-quarter gross-to-net performance to a "favorable mix between the retail and specialty distribution channels" and higher-than-expected prior authorization approvals.
• CEO Lederman indicated that the sublingual tablets target "disturbed sleep in fibromyalgia," which represents a novel mechanism for treating depressive symptoms if proven effective in the ongoing MDD study.
• The company is deploying unbranded digital campaigns, such as Move Fibro Forward, alongside influencer and peer-to-peer programs to address diagnostic barriers for the 10 million U.S. adults with fibromyalgia.
• Management plans to transition high-performing contract sales representatives to in-house positions over time while maintaining the current full sales force management team in-house.
• The Lyme disease study is designed as a potential registrational trial, with CEO Lederman noting it "has the potential to demonstrate efficacy" and could serve as a pivotal study for approval.

INDUSTRY GLOSSARY

• TONMYA: A sublingual tablet formulation of cyclobenzaprine hydrochloride approved for the treatment of fibromyalgia.
• TNX-102 SL: A sublingual cyclobenzaprine product candidate being investigated for major depressive disorder and acute stress disorder.
• TNX-4800: A long-acting monoclonal antibody being developed for the seasonal prevention of Lyme disease.
• Borrelia burgdorferi: The specific bacteria responsible for the majority of Lyme disease cases in the United States.
• OspA (Outer Surface Protein A): A protein on the surface of Borrelia bacteria targeted by TNX-4800 to block transmission from ticks.
• MADRS (Montgomery-Asberg Depression Rating Scale): A 10-item diagnostic questionnaire used by clinicians to measure the severity of depressive episodes.
• GPO (Group Purchasing Organization): An entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on collective buying.

Full Conference Call Transcript

Operator: 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.

Deborah Elson: 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 Saenger, Chief Financial Officer. With that, I will turn the call over to Seth. Seth?

Seth Lederman: Thank you, Deborah, 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. More than 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 sublingual 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 II 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?

Thomas Englese: 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 co-pay 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 payer agreements with two 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 co-pay 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?

Seth Lederman: 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 two 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 II 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 II and III 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 II 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 treatment of Lyme disease -- for the prevention of Lyme disease. Positive FDA meeting minutes demonstrate alignment on the key elements of our adaptive Phase II 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. One 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 I data earlier this year and meeting with the FDA in early Q3, we now have a clear view of our planned Phase II 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 II 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 II 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 Saenger, our Chief Financial Officer, to review our financial results. Bradley?

Bradley Saenger: 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 approximately $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 write-off 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 employee-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?

Seth Lederman: 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 two 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 II study in MDD. For TNX-4800, we are manufacturing the investigational product in 2026 to begin the adaptive Phase II field study in preventing Lyme disease in the first quarter of 2027. With that, we will now open the call for questions. Operator?

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

Stacy Ku: 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, given 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 II has the potential to be pivotal in Lyme given the patient study size of around 3,300? And then actually before you guys answer the questions, just some really quick quarterly clarifications for TONMYA. One, 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?

Seth Lederman: So there are three parts to your question. Let me -- Tom, would you please address the question about TONMYA's launch and the clinical feedback?

Thomas Englese: 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.

Seth Lederman: 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 II 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, this quarterly gross-to-net and also about inventory on TONMYA to Tom.

Thomas Englese: 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.

Seth Lederman: Stacy, are there follow-up questions?

Stacy Ku: No, I think we're all set.

Operator: Our next question comes from Tiago Fauth with Raymond James.

Tiago Fauth: Great. Thanks for the good question and congrats on the progress. I have one for TONMYA, one for the 4800. For the 4800, just to hone in on the sample size and to 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?

Seth Lederman: 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 increase 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.

Thomas Englese: 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 two through one 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.

Tiago Fauth: All right, fantastic.

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

James Molloy: 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?

Seth Lederman: Thank you very much for the question, Jim. Let me turn that over to Tom.

Thomas Englese: 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 two 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.

James Molloy: 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?

Seth Lederman: Tom?

Thomas Englese: 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, 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?

Seth Lederman: Bradley?

Bradley Saenger: 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.

James Molloy: Okay, final question then, if I could, please. On 4800, 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.

Seth Lederman: 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.

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

Seth Lederman: 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.

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

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