AcelRx Pharmaceuticals, Inc.

Good day and welcome to the AccelerX fourth quarter and full year 2021 earnings call. This call is being webcast live on the events page of the investor section of AccelerX's website at www.accelerx.com. This call is the property of AccelerX and any recording, reproduction, or transmission of this call without the express written consent of AccelerX 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 AccelerX's website. I would now like to turn the call over to Rafi Osidorian, AccelerX's Chief Financial Officer. Please go ahead, sir.

Thank you, Chuck, and thank you for joining us this afternoon. Earlier today, we announced our fourth quarter and full year 2021 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 Accelerex. 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. This past year has been transformational for Accelerex despite the commercial challenges encountered with the pandemic. In line with our stated strategy, we've successfully added new late-stage development assets that we believe create multiple short-term catalysts, bring significant value to AccelerEx, as well as extend and diversify our product portfolio focused on medically supervised settings. Further, the adoption of the Suvia for use in procedural suites is encouraging amidst the continued challenges faced in introducing new and innovative pharmaceutical products to hospitals. Accordingly, Our near-term strategy is focused on commercializing Dissuvia in procedural suites, where many painful procedures are now being performed instead of at hospitals and ASCs, and advancing the development of our pre-filled syringe products in the famostat to realize their potential value. So today, we'll update you on Dissuvia's growth and success that we're seeing in the procedural suites, as well as the expected timelines and regulatory paths for our pre-filled syringes, and the Nifamistat product candidates. We'll also have an internationally renowned expert in acute kidney injury, Dr. Mink Chawla, join us on the call today. He'll provide his perspective on the unmet need for these patients and how Nifamistat can potentially address this need. So let's start by providing an update on the progress with Desuvia and the recent commercial shift we've made, which is producing promising results. Many painful procedures are no longer being performed in just the hospital or ASC settings, but instead take place in procedural suites, which are more cost effective. As an example, for ear, nose, and throat, or ENT, 55% of outpatient procedures have recently shifted from the hospital setting and into the office-based procedural suites. Similar to the historical shift from hospital to ASCs, these procedural suites support higher patient satisfaction, lower patient cost, and better economics for physicians. Importantly, in contrast with hospitals and ASCs, there is typically a single person that approves which pharmaceutical products to use, creating significantly shorter times to approval and ordering for Dysubia compared to hospitals and ASCs. Procedural suite specialties with which we are currently engaged are plastics and cosmetics, ENT, and oral maxillofacial surgeons with a primary focus over the last few quarters on plastic and cosmetic surgeons. Dysphuvia's key characteristics of rapid and effective analgesia with minimal to no cognitive impairment, low peak plasma levels, and its non-invasive route of administration are supporting solid adoption across these specialties as anesthesiologists, and IV access are typically not utilized in this setting. Many of these specialists rely on high patient satisfaction scores and reviews to support the practices, and the anecdotal feedback we've been receiving is that effective pain relief from Desuvia has been a key driver of patient satisfaction. The shift in our customer priority is reflected in how we've reorganized the structure and focus of our commercial team, and in fact, most of our recent success has been driven by the efficiency and reach of our virtual sales team. In the fourth quarter, we reorganized our commercial team to increase the number of virtual representatives in place of field-based sales representatives. This reorganized sales force exhibits improved productivity and cost efficiencies. Beginning in the third quarter, we increased our focus on the procedural suites resulting in 82% of all sales calls directed to these settings in the fourth quarter of 2021. And as a result of this shifted focus, the total increase of ordering customers in the fourth quarter compared to the third quarter was 52%. And the number of our customers in procedural suites increased 91% in the same period. The increase in customers was the main driver of the total increase in distributed units sold to commercial customers in Q4 from Q3 of 30%. We're expecting continued solid growth in orders for procedural suites during 2022. as a result of this shift in focus. As of December 31st, 2021, we achieved 725 approvals compared to our initial target of 615. And as of February 28th of this year, 2022, we've achieved 813 formally approvals for Desuvia. Overall, including Desuvia or including the DoD, Desuvia units sold in the first two months of 2022 compared to the first two months of the fourth quarter of 21 has increased by 63%. Doctor-to-doctor education in our procedural suite markets is important to support Desuvia's continued adoption. Given this is a relatively small community of specialists, we believe there's a positive momentum with doctors sharing their experiences with Desuvia, as we've been receiving inbound requests from physicians to speak with current Desuvia physician customers in each of these key specialties. Also, importantly, the number of recent publications about the SUV is providing further real-world evidence of the many benefits experienced when administering the SUV in these as well as other settings. Recent and upcoming publications focused on plastic and cosmetic procedures continue to report on the efficacy and safety profile of the SUV in the outpatient setting. So suffice it to say we're very encouraged by the recent progress being made with the SUV in the commercial settings, albeit there's certainly a long way to go. Regarding the Department of Defense, we continue to wait for the administrative and logistics prerequisites to enable the U.S. Army to begin purchases of the Suvia for their sets, kits, and outfits, or SKOs. The Army continues to make purchases for their pre-positioned stockpiling program, but we expect an increase once the Army begins supplying deployed troops for their SKOs. We're unable to estimate the timing of these SKO-related purchases as we expected these to begin back in 2020 after the Milestone C approval. However, We are encouraged that the DoD has finally initiated two studies that were initially planned 18 to 24 months ago. The first is being performed at the University of Pittsburgh Medical Center, and it's focused on the use of Desuvia in emergency room patients. And the second is being performed at the University of Texas Southwestern Medical Center, and it's focused on testing the hemodynamic stability of opioids, including Desuvia. In addition to these studies, a recently published commentary in military medicine noted the favorable pharmacological properties of Dysuvia that addressed the battlefield's unmet needs and identified Dysuvia as the next evolution in battlefield pain management. We believe that successful conclusion of the two new studies and this publication could further the demand for Dysuvia across more branches of the US military. And before I hand the call over to Dr. Palmer, let me now provide you with some details on our recently acquired development pipeline. In July of last year, we in-licensed two pre-filled, ready-to-use syringe product candidates, ephedrine and phenylephrine, from our European partner, Agaton. And in January of this year, we closed our acquisition of Lowell Therapeutics, acquiring their Nephamistat product candidates, including NIAID, for the anticoagulation of the extracorporeal circuit, which is currently advancing through the regulatory pathway after having received a breakthrough device designation for this initial indication. The pre-filled syringes, we believe, will undergo a relatively straightforward regulatory submission process since ephedrine and phenylephrine are commonly used FDA-approved drugs. The novel component in these products is the ready-to-use pre-filled syringe product delivery system. In early November, we submitted a meeting request with the FDA and planned for our first meeting in January. Despite two missed deadlines by the FDA, we continue with our efforts to prepare both NDAs for submission. Ephedrine, expected late in the second quarter of this year, and phenylephrine, expected late in the fourth quarter, assuming the FDA agrees with our proposed pathways. Both of these are commonly used products and are found on nearly every operating room cart. The markets are evolving to ready-to-use products from concentrated vials. Many hospitals are purchasing pre-filled ephedrine and phenylephrine syringes from compounding pharmacies today, which have limited shelf lives. So we believe there's a potential market opportunity in excess of $100 million for these products, and we look forward to receiving feedback from the FDA and submitting our NDAs to have these products available for sale next year. We're excited about our recently acquired product pipeline, including the Famistat, and for a number of reasons, continue to look forward to the investment in this pipeline portfolio. Dr. Palmer and Dr. Chawla will now discuss these recently acquired products. Dr. Palmer?