Baudax Bio, Inc.

Ladies and gentlemen, this is the operator. Today's conference is scheduled to begin shortly. Until the time your lines will again be placed on hold, thank you for your patience. Again, ladies and gentlemen, this is the operator. Today's conference is scheduled to begin shortly. Until the time your lines will again be placed on hold, thank you for your patience. Thank you. Thank you. Thank you. Thank you. Good morning and welcome to the Bodex Bio 3rd Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference is being recorded at the company's request. I'd now like to turn the call over to Claudia Steislinger, Investor Relations. You may begin.

Good morning, and thank you for joining us on today's conference call to discuss BodexBio's third quarter 2021 financial results. This is Claudia Steislinger, and I'm joined today by Jerry Henwood, President and Chief Executive Officer, and Rick Kasten, Chief Financial Officer. On today's call, Jerry will provide some introductory remarks, provide a business update, and discuss the continued progress around the commercialization of Angesso. Following Jerry's prepared remarks, Rick will discuss the financial highlights from the quarter. Earlier this morning, we issued a press release detailing our financial results for the third quarter of 2021. The press release, along with the slide presentation that we will reference for today's call, is available on the events page of the news and investor section of our website at bodexbio.com. Please note the slides for today's presentation are viewer controlled. Before we begin our formal comments, I'll remind you that various remarks we make today constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations and forecasts, and can be identified by words such as anticipate, believe, could, estimate, target, expect, intend, may, plan, predict, project, will, and other words of similar meaning. The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statements. The ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the commercial launch of Angesso or disruption in supply chain, our ability to maintain regulatory approval for Angesso, Our ability to successfully commercialize Angesso. The acceptance of Angesso by the medical community, including physicians, patients, healthcare providers, and hospital formularies. Our ability and that of our third party manufacturers to successfully scale up our commercial manufacturing process for Angesso. Our ability to produce commercial supply in quantity and quality sufficient to satisfy market demand for Angesso. and our ability to raise future financing for continued product development and AGESO commercialization, our ability to pay our debt and satisfy conditions necessary to access future tranches of debt, our ability to comply with the financial and other covenants under our credit facility, our ability to manage costs and execute on operational and budget plans, the accuracy of our estimates of the potential market for AGESO, our ability to achieve financial goals, and our ability to obtain, maintain, and successfully enforce adequate patent and other intellectual property protection. This list of important factors is not all inclusive. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the risk factors in the management's discussion and analysis section of BODAC's bios and a report on Form 10-K for the fiscal year ended December 31, 2020, and any quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC's website. Any information we provide on this conference call is provided only as of the day of this call, November 4, 2021, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. During the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation between the GAAP and non-GAAP financial measure is included in our earnings release, which is available on our investor relations website at badaxbio.com backslash news and investors. I encourage you to visit our investor relations site to access our earnings release, periodic SEC reports, a replay of today's call, or to learn more about BadaxBio. I would now like to turn the call over to Jerry Henwood. Jerry?

Thanks very much, Claudia, and good morning, everyone. I'm going to use the slide deck that we have filed with this earnings report and just go through some highlights of what's happened in the quarter. So, if I move first to the executive summary slide, just as an overview, I believe that we are tracking an exit rate for 2021 that will put us in a position to provide for more robust growth of Angesso in 2022. Everyone is leaning into that to make sure that we're in a position to be having a good start to next year with a good end to this year. Our growth we saw was accelerating in September after the summer Delta variant peak had definite impact during July and August, which we'll talk more about in a minute. Peer-to-peer programs, both in terms of things like speakers bureaus as well as former directors of pharmacy who are health economics experts interacting with their peers at hospitals, directors of pharmacy. I think both of those are helping us to gain some more momentum in addition to the very strong efforts of our field force and ancillary groups. And it's setting the stage for Q4 and for 2022. If we go to the next slide, you'll see that during the third quarter of 21, we saw not as robust a growth in existing hospital sales, which we account mostly to what was happening in July and August because of the Delta variant and the diminution of elective surgeries in the southern states in particular, which were most heavily affected and which you'll see accounts for a reasonable amount of our current business. However, growth in the ASC arena was more robust. That was about 66%, and I think reflects the fact that they were less affected generally than were the hospitals during this period of time. We go to the next slide. You'll see that we're over 150 formulary wins by the end of Q3. Our P&T success rate is continuing to be, we think, pretty robust at about 84%. The top five ASCs and service providers have been included from one of the accounts that we've gotten that has 125 nationwide accounts. We have their overall formula approval. We haven't counted more than the five that have individualized approval and then that plus another three are getting us into implementation right now. There are a number of others that are pending but haven't gotten it through, for instance, their electronic health records, et cetera. So we're encouraged that we're poised for more growth and more success because of that. If we go to the next slide, slide five, some of the highlights, you know, just wanted to talk about what's going on in the different sectors that we're dealing with. If we start at the top right corner of the circle, integrated delivery networks, We have had growth in IDNs, you know, a tough area to penetrate because they're big and quite deliberate about their decision making. But we have one top IDN nationally who has been using the product early uses in the orthopedic and anesthesia service lines. And then we've got a five hospital group that we've gotten formulary approval in and we're getting implementation in that that is beginning to help accelerate growth as well. If we go down to national ASC groups, as I referenced on the formulary page, there is a very large, one of the top five nationally, group that has approved us and we're in a rollout of those accounts. And in the first month since that was approved, we have about 10% of those accounts who have come online and are beginning to order. And I think that was a pretty quick turnaround for the amount of integration that had to happen in that But the goal is to continue nationwide in each of the regions to try and tick down more of these members. And the members who have been using the product prior to this national relationship with them have been very enthusiastic about the product and are spreading that to others within the group. If we keep going around the circle counterclockwise, no, I guess it's clockwise, to ASCs per se, Individual ASCs, we do have a number of large ASCs with whom we've got volume-based contracts, and we see good progress there in California and Texas with those ASCs. We go up to the top and just say, what's another segment of the market that's important to us? Regional hospitals and regional hospital groups. And so we have a surgical hospital in the south central area, that had had a change of anesthesia groups. They had switched out an anesthesia group that had been managing their patients, and a new group came in and had to be converted again in their decision. What were they going to be using? What products would be part of their normal routine usage? We were able to get renewed in that. There was a lag of a couple months in between those two situations. but we're back in the swing with surgeons who like the product and anesthesiologists who are happy with it. And we've got a top regional hospital that has just recently added Angesso based on their clinical experience. So we're feeling good that we're hitting all of the cylinders that we need to hit. Obviously, we want to do more and more of that, but a lot, as you know, hospital launches, a lot of it, and this year really we see as our first year of a launch because last year with COVID, was not really representative at all. We're looking at getting the kinds of layout of approvals that we need to have to be able to expand on and grow on and use as references for further growth as we're in 22. If we move up to slide six, there's a way that we approach these larger accounts that we think make sense and that has seemed to be very successful for us So we're continuing to implement that, and that is, you know, we start with the smallest circle where we're creating awareness, clinical advocacy, making sure that we have individuals who have had an experience with the product because we find that trial usage is very converting. People use the product and see that it does work, that it does contribute meaningfully to pain relief over a 24-hour period for their patients. they are often converted to becoming champions and widening their adoption and initial orders. Subsequent to that, we will work with their teams and with the organization that they're a part of to make sure that we've got communication that's top-down coming as kind of the next step. So we're working with their pharmacy director, we're working with others in their administration, to talk about the product, talk about its advantages, do in-services, so that as there is demand bubbling up from people who are using it in trial usage, we're then in a situation where we can go to that third circle, which is a direct model setup. They have the opportunity to order directly from us, and there is some discount that can be passed on to them through that based on the volume of their usage, and then ultimately doing a defined contract that supports that once they have a little bit more comfort about what they anticipate their near intermediate term volume to be, and that's something that we can adjust if their volume picks up. So that's just a way of looking at how are we approaching both from the bottom up and the top down, working these larger accounts such as IDNs or national accounts on the ASC side. I'll talk for a minute about the impact of the pandemic. I know we're all sick to death of hearing about COVID, me too, but it is still a factor that periodically in sort of whack-a-mole fashion pokes its head up. And that certainly did happen this past summer. So on slide seven, you'll see that Florida, Texas, and North Carolina are our top three states and account for about 40% of our sales right now. And these states were among the highest percentage of hospitals suffering from extreme stress based on COVID hospitalizations. Now this extreme stress doesn't mean that people were feeling tired. This means they were in a situation where they had to curtail or eliminate elective surgery because they had such bed demand for treatment of COVID patients that they could not add major surgeries that could result in people needing a bed even if it was anticipated to have been a same-day surgery, but complications do occur. So this did impact us, as you can see, pretty dramatically in these three states, and it had an impact. Now, in spite of this, we did grow, and I'll just reinforce this a little bit. If we go to the next slide, which is based on IQVIA data, you see that orthopedic and other procedures declined significantly during this summer COVID flare-2. That's just to reinforce what was happening in these states in particular, although there were some other states affected. Separately, just because we've had some folks asking, where are we seeing the highest usage of Angesso surgically? Just under half of our usage is in orthopedic procedures. About 20-some percent is associated with other types of pain and with the use of a radiofrequency ablation procedure, which itself produces pain. and about 16% in urologic and gynecology cases. If we go to slide nine, you see that we are getting quarter-over-quarter growth. So in spite of what I just talked about with respect to the impact of COVID in July and August, for the quarter, we still showed growth. We showed growth. You can see the rebound in the line slide to the left. And this was through the end of September and the units sold by quarter are continuing to grow very nicely even through the COVID. And that's really part of what we're trying to help our team be able to do, find ways to win even when the unexpected happens. So whereas last year we were very stymied by COVID, this year it did slow the impact a bit in that quarter, but we still grew through that quarter. and we're still getting new contracts, and we're still moving ahead, and that's what we continue to see going forward as part of the plan for the brand. I'm going to switch now to have Rick talk a little bit about the financial results, and then I'll come back and talk a little bit about closing the year and what we expect for 22. Rick?