Palvella Therapeutics Reports $17.4 Million Net Loss for 2024 Following Business Combination

Palvella Therapeutics, Inc. (formerly Pieris Pharmaceuticals, Inc.) reported a net loss of $17.4 million for the year ended December 31, 2024, compared to a net income of $18.7 million in 2023. This significant change is primarily attributed to a $36.1 million decrease in other income, net, offset partially by an increase in general and administrative expenses from $3.1 million to $5.9 million. The decrease in other income resulted from a $10.2 million decrease in interest income related to the royalty agreement liability, a $23.1 million non-cash loss on the extinguishment of the original Ligand Agreement, and a $1.1 million decrease in other income, partially offset by a $2 million gain related to a German R&D tax credit receivable. Research and development expenses decreased by $642,000 to $8.2 million, primarily due to the discontinuation of certain programs in 2023.

A key development during the period was the completion of a business combination with Legacy Palvella on December 13, 2024. This reverse merger resulted in a change of the company's name and a shift in its primary business focus to developing therapies for rare genetic skin diseases. Concurrently, the company completed a PIPE financing, raising approximately $78.9 million through the sale of common stock and pre-funded warrants. The company also issued convertible notes totaling $18.4 million, which were subsequently converted into common stock and pre-funded warrants upon closing of the PIPE financing. A Contingent Value Rights Agreement was also established, providing pre-merger stockholders with contingent value rights based on future milestone payments and royalties.

Palvella's lead product candidate, QTORIN rapamycin, is currently in clinical development for microcystic lymphatic malformations (microcystic LMs) and cutaneous venous malformations (cutaneous VMs). A Phase 3 trial (SELVA) for microcystic LMs, initiated in the third quarter of 2024, is expected to report top-line data in the first quarter of 2026. A Phase 2 trial (TOIVA) for cutaneous VMs began in the first quarter of 2025 and is expected to report top-line data in the fourth quarter of 2025. The company has received Breakthrough Therapy Designation, Fast Track Designation, and Orphan Drug Designation from the FDA for QTORIN rapamycin in the treatment of microcystic LMs, and Fast Track Designation for its venous malformations program. As of March 28, 2025, Palvella employed 14 full-time employees.

Palvella's financial statements show cash and cash equivalents of $83.6 million as of December 31, 2024. The company anticipates that its current cash resources will fund operations into the second half of 2027, but additional funding may be required beyond that point. The company's future capital requirements will depend on various factors, including the progress of clinical trials, regulatory approvals, and commercialization efforts. The company does not anticipate paying cash dividends in the foreseeable future. The company's outlook is contingent upon the successful development, regulatory approval, and commercialization of QTORIN rapamycin and other potential product candidates. The company acknowledges significant risks associated with its clinical development programs, regulatory approvals, commercialization efforts, and reliance on third-party manufacturers and collaborators.