Tonix Pharmaceuticals Holding (TNXP) Q2 2026 earnings call transcript

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 two 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 filings, 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-looking statements, except as required by law. Joining me on today's call are Dr. Seth Letterman, Chief Executive Officer, Thomas Inglise, Executive Vice President of Commercial Operations, and Bradley Singer, Chief Financial Officer.

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

Thank you, Deborah, and good morning, everyone. We are pleased to welcome you to Tonix's earnings call. Today, we are 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 two, the launch of Tanmaya is progressing well, supported by growing sales, improvement across launch metrics, and patient access wins. Tonmaya was invented, developed, tested, and launched in-house by the Tonix team. Tonmaya 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 Tanmaya sales. We believe our second quarter and cumulative launch performance underscored Tanmaya's compelling value proposition and differentiated profile. Well, historically, fibromyalgia patients and their healthcare providers, or HCPs, have been dissatisfied with limited treatment options.

Now, we are pleased to offer Tanmaya as an effective and generally well-tolerated treatment option. Tanmaya is a non-opioid analgesic that improves fibromyalgia pain, the core symptom of the disease. Ton Maya 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 striving 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 Tanmayo, 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 Tanmaya and to our strategic focus and execution.

We also had early wins in managed access. We do not believe these wins contributed significantly to Tanmaya sales in Q2. However, we are beginning to see their effects in Q3. Currently, Tanmaya 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 1st, 2027, when our managed Medicare GPO coverage agreement becomes effective, Tanmaya 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 Salesforce 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, each 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-102SL, which is sublingual cyclobenzaprine tablets, which is a potential new indication for Tanmaya 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 two study, which we expect to begin enrolling in the first quarter of 2027. I will now turn the call over to Tom Inglese, EVP Commercial Operations, to discuss the Tonmaiot launch. Tom?

Thank you, Seth, and good morning, everyone. Today, I will review our second quarter sales performance for Tynmaya, and then I will cover our launch strategy. We are pleased to offer Tynmaya as a treatment to adults' fibromyalgia patients. Looking at slide four, we are encouraged to see net sales of $11 million for Tynmaya in the second quarter, representing 197 percent quarter-over-quarter growth or nearly triple the first quarter. There are a few contributing factors to note.

First, we are seeing proactive patient and prescriber hand raisers interested in TMIYA, 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 have 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 TMIYA. 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 TONMAYA and our patient support program. We will now walk you through our strategy regarding market access, sales, and marketing on slide five.

First, we've already reached major market access coverage milestones, which we believe speaks to the value of TMIO. We signed commercial pay agreements with two leading GPOs. These agreements, which went into effect on May 1st and June 1st, 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.

TMIAH is also available under Medicaid in most states We expect downstream pull 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 payers All together, 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 Tamiya and do not support any other company or product. Over time, we expect to bring high-performing reps in-house to Tonix. The entire Salesforce 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 Tanmaya 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 TMIYA. 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 a 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 six 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-102SL for the treatment of MDD could potentially serve as a label expansion for Tonmyo. In June, we randomized the first patient in Horizon, a potentially pivotal phase 2 study evaluating TNX-102SL 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-102SL 5.6 milligrams, taken sublingually at bedtime, or matching placebo. The primary endpoint of the study is the change from baseline in Madras total score at week six. Secondary endpoints include global impression scores, anxiety ratings, and measures of sleep quality. We are evaluating TNX-102SL for MDD based on initial signals observed in previous Tonix Phase II and III studies in which TNX-102SL nominally improved depression symptoms in fibromyalgia patients and PTSD patients.

TNX-102SL was designed to target the disturbed sleep in fibromyalgia. If TNX-102SL has effects on depression, then we believe targeting sleep would be a novel mechanism. The use of SSRIs and SNRIs for depression are frequently associated with treatment emergent insomnia.

Another Tanmaya 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 TNX4800, 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 prophylaxis, prophylactics for Lyme disease, are available.

We believe TNX4800 could potentially change the prevention paradigm. It targets the outer surface protein A, or OSP-A, 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 mid-gut 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. OSP-A 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 TNX4800 has important advantages over vaccines, namely that it provides protection within two days after one dose, compared to a prior vaccine or a vaccine in development that takes three or four separate immunizations over at least six 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 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 and activities that increase their risk of deer tick bites. We expect this to be a two-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 six months after the first dose and a key secondary efficacy endpoint will be prevention through three 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 TNX4800 over a 52-week period after dosing. Participants in the planned adaptive phase 2 field study will be randomized one-to-one to receive either placebo or TNX4800 450 mg sub-Q in the spring and another dose approximately three months later. Our focus in 2026 has been on manufacturing investigational product for TNX-40100, 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 Sanger, 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 Tonmaya and $2.5 million from Zembre, Simtouch and Tosimra, which are our migraine products. This compares to $2 million for the same period in 2025, which consisted only of Zembrace and Tecimbra.

Tonmai was approved last August and launched in November, and the second quarter of 2026 was Tonmai's second full quarter of sales after launch. Cost of sales for the second quarter 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 preliminary 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 investments behind the launch of Tonmeier and our MyGrain 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 capital expenditure requirements in 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 nine. In the second quarter, we delivered progress on the launch of Tanmaya and on the development of two of our mid-stage clinical development programs, TNX 102SL 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 Tonmaya, 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 Tonmaya, we remain focused on driving growth across net sales and KPIs, working to secure patient access and deploying our expanded sales force. For TNX 102SL, 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?

Thank you very much, Stacey. So, there are three parts to your question. Let me – Tom, would you please address the question about Tom Maya's launch?

Sure. And the clinical feedback? Yeah, absolutely. Thanks very much. Yeah, so the early feedback we have received from HCPs is that Tamiya is, like I said, a welcome addition and 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 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, Stacey, 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 and the process of, you know, 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, and 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 Maya to Tom.

Great. Thanks again. Yeah, 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 positively 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. And so, you know, I would anticipate a growth 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, you know, wholesaler and distributor partners. So I think that was probably where you were going with the inventory question.

Thank you, Tiago. I'll take the first part, about 4,800, and then I'll ask Tom to answer the question about step edits. So with the TNX4800 Lyme Preventative Program, the study that most people use as a reference is the study that was behind the approval of the Lyme-Rex vaccine in 1998, which has subsequently been withdrawn. And in that study, they had an attack rate of 0.8 in one group and 1.2 percent, 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 that's 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 Tom Maya.

Thank you very much. Yeah, 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 pre-launch even and post-launch, pre-launch in the pre-information exchange and post-launch and actual discussions about coverage, You know, 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.

Thank you, Tiago.

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

Yep. Thanks, Jim. So, look, in Q2, obviously, we said, you know, we had favorable dynamics that attributed to the growth 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. And 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, you know, at some point, obviously, once we get all the coverage pretty much locked down, we should see a more stabilization moving forward.

Yeah, so great. Yeah, 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 know, you believe are seeing and treating most of those patients, which obviously we have great data on. So over time, as we add these, you know, 50 incremental reps who will be boots on the ground September, they're already in training. We're going to be expanding, you know, the geographies, but also the depth. I would anticipate that over the course of 2027, we'll see, you know, a good portion of those reps, all the reps covering, you know, the cost of the reps and continuing to drive new patients, scripts, refills.

So, we're excited about it. We're looking forward to getting even more doctors with Tamiya and patients.

And then, Seth, would you like to go to Bradley on the gross margin question? Bradley?

Okay, great. Thanks for the question. So, obviously, as we mentioned, we do have, you know, Certainly a product mix that's shifting over time. So obviously we don't guide to exactly what our numbers would be, but 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 two. And hopefully, once things have stabilized, we will be able to have a more, you know, regular, you know, gross to net as well as margins as well.

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 enrolled from Europe, and we're planning a U. S. -only study. Their study, evaluating a vaccine product, it took about a year to develop immunity, and then they were looking at immunity after the, you know, protection after the immunity, whereas our product, we believe it would provide protection within two days of the first dose. So a much simpler 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, you know, 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, you know, our ability to understand all the details of that study are limited.

Thank you, Jim.

Well, we're very grateful to everyone who participated, and particularly those who asked questions. We are excited about the success of TONMAYA 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.