AcelRx Pharmaceuticals, Inc.

2021 earnings call. This call is being webcast live on the event page of the investor section of Accelerex's website at accelerex.com. This call is the property of Accelerex and any recording, reproduction or transmission of this call without the express written consent of Accelerex is strictly prohibited. As a reminder, today's call is being recorded. You may listen to a webcast replay of this call by going to the investor section of AccelerEx's website. I would now like to turn the call over to Rafi Azadorian, AccelerEx Chief Financial Officer. Please go ahead.

Thank you for joining us this afternoon. Earlier today, we announced our second quarter financial results and some business updates in a press release. This press release and the slide presentation accompanying this call are available in the Investors section of our website. With me today is Vince Angotti, our Chief Executive Officer, and Dr. Pam Palmer, our Chief Medical Officer. Before we begin, I'll remind listeners that during this call, we will make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of AccelRx. Please refer to our press release in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission for a discussion of the risks associated with such forward-looking statements. I'll now hand the call over to Vince.

Thank you, Rafi, and good afternoon, everyone. We appreciate you taking the time to join the call. We've accomplished a lot during the second quarter, despite the uncertainties that remain about the COVID pandemic. The highlights for today's call include, one, the solid Desuvio sales momentum and where we're seeing success, two, the addition of two new complementary late-stage product candidates to our portfolio, three, the addition of a commercial partner for Desuvio in Europe, and four, the agreement reached with the FDA regarding the promotional materials warning letter. These accomplishments are aligned with our four-pillar strategy, supporting both organic and inorganic revenue growth to drive the value of XLRX. After I review these accomplishments, Rafi will take you through the Q2 financial results, so let's get started. The studio revenues in the quarter were $.4 million, a 117% increase over the first quarter of the year. We're expecting continued growth this year, assuming we do not encounter returning restrictions from COVID. During the second quarter, we saw many of the restrictions on visitors to hospitals, surgery centers, and surgical suites lifted. Now, with the recent resurgence of COVID, we're beginning to see certain areas of the country again institute restrictions. Fortunately, we have some insulation given that plastic surgery is one of our fastest growing specialties and tends to have fewer COVID limitations since these procedures are often completed in surgical suites separate from the hospitals or surgery centers. As you can see on the slide, plastic surgery, followed by orthopedics, is our fastest-growing specialty. We're getting solid momentum with plastic surgeons, given the unique characteristics of the subia and its use during awake surgeries. In fact, several nationally recognized plastic surgery thought leaders are supporting the education of physicians in this specialty. which has resulted in an increasing number of plastic surgeons trialing Dissuvia. We don't have a large commercial team, and the word of mouth about Dissuvia has been encouraging, as Plastics is a concentrated community of physicians. For these physicians, patient comfort and satisfaction coupled with safety are key measures of success. Orthopedic surgery is the next fastest growing specialty. Again, some nationally recognized thought leaders have supported the education process. Published studies of real-world data in August and December of last year have been key contributors to the initial adoption by orthopedic surgeons. We expect the number of ongoing investigator-initiated studies and future publications will further support education regarding the key advantages of Dissuvia in this specialty, as well as more broadly across the perioperative environment. Adoption in the oral surgery specialty has been slower than that of plastics and orthopedics. Overall, surgery centers and procedural suites continue to adopt the SUVIA more quickly than hospitals. We believe this has mainly been driven by the pandemic leading to a slowdown and often cancellation of the P&T committee meetings held at hospitals. Regardless, our pipeline of potential hospital network approvals remains robust, and overall, we're on track to exceed our goal of 615 approvals by year end. Now moving to our first pillar, the Department of Defense remains the largest short-term sales growth driver for AccelerEx. The US Army continues to work through their administrative and logistics process to distribute to Soviet in all their sets, kits, and outfits for deploying troops. The resolution of the process has taken longer than we had hoped. However, just a couple of months ago, the US Army publicly communicated their support of the SUVIA for battlefield pain management. The US Army Medical Materiel Development Activity, known as USAMDA, stated concerns with the standard intramuscular morphine autoinjectors. They also emphasized that another commonly used battlefield analgesic, oral transmucosal fentanyl citrate, is licensed only for use in chronic pain syndromes found in cancer patients and it is specifically labeled not to be used for acute pain management. We believe this recent public commentary on the currently available alternatives to Desuvia is signaling the Army is moving closer to finalization of all logistics and therefore purchases and packing out of the SKOs. Another objective we achieved recently was the successful out-licensing of Desuvia, or Desuveo, as it is named in Europe, to Agaton. We believe Agaton is an ideal partner to commercialize the Zuvio across Europe given its broad commercial coverage of the territory as well as its focus on the acute care setting with its existing product portfolio. They are well known for their strong hospital market access capabilities and have a presence across more than 70 countries. We're working on the operational aspects of the partnership to ensure smooth transition of commercial knowledge as they focus on the regulatory and other aspects until they are prepared for their commercial launch, which we expect will be in the first half of 2022. AccelerX is responsible for manufacturing the product, and Agatant will perform secondary packaging, regulatory, and commercial activities. So we're thrilled to be partnering with an established organization which we believe is a strong fit with AccelerX. Separately, we agreed with Agaton to commercialize in the U.S. two of their ready-to-use patented pre-filled syringe product candidates, one with ephedrine and another with phenylephrine, subject to FDA approval. Ephedrine and phenylephrine are common medications for use in the perioperative setting in both ASCs and hospitals, as well as intensive care units in the emergency room, resulting in a strong commercial overlap with our current sales team. Now I'll hand the call over to Pam to briefly explain these two additions to the portfolio. Pam?