Clarus Therapeutics Holdings, Inc.

Ladies and gentlemen, thank you for joining in the CLARIS fourth quarter and four-year 2021 financial results conference call. Today's call is being recorded and webcast live on the company's website at www.claristherapeutics.com in the investor relations section and it will be available for replay for 10 business days following this live call. Please note that discussions today may include forward-looking statements. Forward-looking statements may involve a number of risk uncertainties, some of which are beyond CLERD's control, and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the risks associated with CLERD's financial position, risk inherited and pharmaceutical development, and those factors described under the Heading Risk Factors in the Prospectus, filed with the Securities and Exchange Commission, the SEC, under Rule 424B-3, on December the 23rd, 2021. And those that are included in any of Clara's future filings with the SEC, including its annual report on 10-K, for the year ended December the 31st, 2021, when filed. These four statements speak only as of the date of this call, and Clarice disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements, except as may be required by law. Following the prepared remarks, Clarice will not be taking questions. At this time, I'd like to turn the call over to Dr. Bob Dudley, Founder, President, and Chief Executive Officer of Clarice. Please go ahead, sir.

Thank you. Good afternoon, everyone, and thank you for joining us today. We appreciate your interest in Claris. With me today is our Chief Financial Officer, Rick Peterson, and our Chief Commercial Officer, Frank Yeager. Let's get started with our recent business highlights. We continue to see total prescription growth for Jatenzo in the fourth quarter of 2021, with an increase of 11% sequentially and 81% year over year, driven primarily by advertising and promotion, and an increase in payer coverage across all channels. Two new patents were issued for Gitenzo in November 2021. These have been listed in FDA's Orange Book, bringing the total number of patents protecting Gitenzo to seven. It closed a $15 million private placement with a leading healthcare investor in December 2021, the proceeds of which support the ongoing commercialization of Gitenzo. In January of this year, we appointed Zhanna Jumadulova as Chief Clinical Development Officer. She brings a depth of clinical development experience that will be important as we develop our pipeline products and explore potential new indications for Jitenzo. And to this very point, we initiated screening for the first patient in an investigator-initiated phase four clinical study of Jitenzo for the treatment of hypogonadal men with chronic kidney disease in March 2022. We expect to announce results from this trial in the first half of 2023. On the commercial side of the ledger, we launched strategic partnerships with AltHealth and AssistRx in February to make patient access to Jatenzo easier and enhance their overall prescription process. Included in this initiative as a telemedicine portal for patients who do not have access to a healthcare provider. Recently, we completed filming of a direct-to-consumer advertisement for Jitenzo as part of a comprehensive plan to increase awareness among hypogonadal men for whom Jitenzo is medically appropriate. Assuming we are able to address our capital needs, our current plan is to air this piece later in the year and avail ourselves of the highly focused media technologies that are a far cry from buying expensive time in major network channels. Finally, while we are excited that Gipenzo continues to perform well in the market, the ability to raise capital to support the brand remains a challenge, and in light of our current cash position, we have initiated a process to explore strategic alternatives to maximize shareholder value. Now, Rick Peterson, our Chief Financial Officer, will discuss Claris' financial status. Rick?

Thanks, Bob, and good afternoon, everyone. I will be going over the fourth quarter and full year 2021 financial results. To start with, fourth quarter revenue was $4.6 million compared to $2.4 million in the same period for last year. Full year revenue was $14 million compared to $6.4 million in 2020. This represents growth of 119% attributed to the growth in Gitenzo sales. Gross margin for the quarter was 71.7% compared to 85.2% for the corresponding prior year period. Gross profit was 80.5% for the full year compared to negative margin in 2020. Cost of goods sold decreased 68.7% in 2021 compared to 2020 attributable to write-offs in those years of 0.7 million and 7.8 million for inventory obsolescence reserves for the years added December 31st, 2021 and 20 respectively. Fourth quarter operating expenses were 10.5 million compared to 10.2 million in the same period last year. And for the full year, operating expenses were 51 million compared to 44.9 million for 2020. This represents an increase in operating expenses that were driven mostly by headcount and professional fees associated with financing activities and operating as a public company. Fourth quarter sales and marketing expenses were $5.7 million compared to $6.0 million in the same period last year. Full year sales and marketing expenses were $30.7 million compared to $30.5 million for 2020. This represents a 0.5% increase primarily due to Gitenzo and commercial analytics, marketing research costs, and additional sales and marketing expenses associated with the brand. Fourth quarter, general and administrative expenses were 4.3 million compared to 3.7 million in the same period last year. Full year, general and administrative expenses were 16.7 million compared to $11.9 million for 2020. This represents an increase of $39.6 million attributed to higher personnel costs due to an increase in headcount and consulting costs and an increase in public company expenses. For R&D, R&D increased were $0.5 million compared to $0.6 million in the same period in the previous year And then looking at the full year for research and development, expenses were $3.6 million compared to $2.4 million in 2020. This represents a 51.4% increase, primarily attributable to clinical costs associated with our lead commercial asset, Jatenzo, and licensing fees related to the HAVA and McGill in licensing agreements. Our cash and cash equivalents as of December 31st, 2021, will fund our current operations plan into April 2022. As Bob noted, we continue to explore strategic alternatives for the purpose of maximizing stockholder value, and while we expect to devote significant efforts to raise capital, restructure, or indebtedness, and identify and evaluate potential strategic alternatives, we may not be successful, which could force us to delay, limit, or terminate our operations, including workforce reductions pursuant to asset sales or other alternatives, including seeking protection under the provisions of the U.S. Bankruptcy Code. Notwithstanding our challenges, Jetanzo has continued to perform well in the marketplace. Now, Frank Yeager, our Chief Commercial Officer, will discuss some of these important highlights. Frank?