Novan, Inc.

Hello, and welcome to the Novant Incorporated quarterly update conference call and webcast. As a brief reminder, all participants are currently in a listen-only mode. If anyone requires operator assistance during the event, please press star then zero on your telephone keypad. Following the presentation, there will be a question and answer session. Note that this webcast is being recorded at the company's request, and a replay will be made available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risk and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on Novant's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports Novant files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable, it has not independently verified such information. Joining us on today's call from the Novant leadership team are Paula Brown Stafford, Chairman, President, and Chief Executive Officer. John A. D'Onofrio, Chief Operating Officer of Novant and President of EPI Health, and John M. Gay, Chief Financial Officer. I would now like to turn the call over to Paula Brown-Stafford, Chairman, President, and Chief Executive Officer. Please proceed.

Paula Brown- Thank you, Howard. Good morning, everyone, and thank you for joining our corporate update, including Novant's financial results for the first quarter of 2022. On March 11th, we announced exciting news for Novan. We had closed on the acquisition of EPI Health, and therefore we emerged as a fully integrated medical dermatology company. This is truly a foundational leap forward for Novan. We now have marketed products and a proprietary R&D platform technology to fuel future organic growth for Novan. A great example of the value we have added is Rofaid, a topical cream prescribed to treat ongoing facial redness associated with rosacea in adults. EPI Health acquired Rofaid in 2019 and relaunched just in time for the pandemic to hit. As dermatologists' offices began to reopen in late 2021 and early 2022, we've seen a nice increase in scripts written for Rofaid. The quotes here are from two patients who are seeing their medical needs met, something that we're striving to do at Novan. It's the tangible value of Novan's products for the patients we serve. We are now more steadfast in our belief that Novan remains a compelling investment opportunity. Our highlights can be summarized and easily remembered on one hand. We're going to count down. Five, product candidates in our development pipeline, all nitric oxide-based formulations. Four, products promoted by our commercial team. Three, near-term value creators. Two, priority products. And one, lead product candidates. Two, business units. We have an R&D engine and a commercial platform. And finally, one, NDA submission targeted before the end of 2022. We've created a medical dermatology company that has the capabilities to discover, research, and develop innovative therapies and bring medications to patients with diseases of the skin. Our nitrosil technology has generated multiple nitric oxide-based formulations to address multiple medical conditions with unmet needs. We've recently completed the upfitting and launch of our small-scale manufacturing facility in Durham, North Carolina, for our drug substance. We're able to tout an experienced dermatology commercial platform from supply to engagement to sales effectiveness. We've established healthcare relationships as well as product launch experience. We are now positioned to detail SB206 or Consolis if approved. Integration, let me talk a little bit about that. We're 65 days post-closing of the EPI acquisition, 20 days for accounting purposes, which John will speak to shortly. The transition has been smooth and generally on schedule and as planned. We've aligned our teams, focusing on one culture, one set of IT systems and processes, and leveraging our synergies. I'm truly pleased with our progress to date. The seamless integration enables us to focus on the execution of our growth strategy for NoVAN. We'll now take a few minutes for John D'Onofrio to review Novant's commercial platform, including our promoted products. As you heard, John is Novant's COO and president of EPI Health, a Novant company. John, over to you.

Thank you, Paula, and good morning, everybody. Paula mentioned we are now a fully integrated medical dermatology company with a strong leadership team, proven execution with both an R&D engine and now a commercial platform. I'm going to spend some time this morning to discuss three key areas. First, our commercial capabilities. Second, I'd like to provide background on our promoted product portfolio and therapeutic areas that serve our patients, and close with an update on our Q1 prescription performance. Paula mentioned the rationale and benefit of acquiring EPI Health along with our product portfolio was our commercial platform. We have an established commercial presence across the medical dermatology community, with the ability to reach over 7,000 healthcare practitioners. When you think of our commercial platform, we start with supply chain management of our third-party suppliers, along with an optimized demand management process. We have built our distribution capabilities to both wholesalers and direct network pharmacies. We enhanced our managed care capabilities with the payers and patient affordability programs to ensure patients have affordable access to all our medications. Our sales organization consists of four regions and 42 territories and has more than doubled over the past three years. We've also upgraded our sales training and our field sales support organizations. Our team has either launched or relaunched four products in the last four years, and we believe that experience will provide a solid foundation for our potential future launches. We have a brand marketing team focused on the product and disease state messaging and education. throughout our portfolio. And lastly, we built strong professional relations engagement with our healthcare practitioners and key opinion leaders across the country. When we look at our commercial capabilities, what differentiates us is our dedicated employees and our focus on execution, data, and performance. We have complemented our commercial capabilities with strong financial management, analytics, and a reporting platform that focuses on clear alignment of our financial and operational data and metrics. When we step back, we look at this as one platform that is aligned on a common set of objectives. We are also in the process of integrating the legacy Novant commercial organization into our platform to make it even stronger as we prepare our company for potential future launches. Our commercial platform is focused on field readiness, high engagement with our customers and employees, along with a strong performance management across our organization to ensure we deliver value to our shareholders and the patients that we serve. There are multiple channels in dermatology space, medical prescription, device, aesthetics, procedures, OTCs. Here at Novant, we are solely focused on providing a portfolio of prescription dermatology products across multiple disease states, and not just one product and not just one disease state. Over the past four years, we specifically focus our efforts on unmet needs in four key disease states in medical dermatology. We compete and provide our patients innovative solutions in psoriasis, rosacea, acne, and atopic dermatitis. We have a demonstrated commitment to the medical dermatology community, not only with our current promoted products, but with our strong development pipeline. When thinking about our pipeline, our commercial platform is built to expand disease states within medical dermatology and to call on other specialties, like pediatrics. I would like to now provide an overview of a diverse promoted product portfolio. In psoriasis, we launched Wenzora Cream last summer for the treatment of plaque psoriasis. This is a combination of calcipitrine and betamethasone dicroponate and works on both flares and maintenance of the disease. Wenzora delivers on three key attributes to the patient, efficacy, safety, and adherence in a novel cream formulation using an innovative pad technology. For rosacea, Rofate is a topical prescription medication indicated for the treatment of persistent facial erythema, PFE, or specifically redness. The majority of rosacea products address the inflammation of rosacea, and there was an unmet need in addressing the redness, and Rofate has become a market leader in the PFE category. For acne, Minolera is an oral antibiotic treatment with the active ingredient of minocycline. Minolera provides our patients with innovative technology approach to ensure consistent delivery of the active ingredients, limiting variability and potential side effects to our patients. Lastly, Cloderm. Cloderm is a known steroid with a 40-year trusted history with healthcare practitioners for patients with dermatoses. As mentioned, our products are promoted over 7,000 healthcare practitioners across the country by our existing sales force. of 42 territories. So now let's talk performance. We shared with you the fundamentals of our commercial platform, the disease states we serve our patients, and our diverse product portfolio. Now let's discuss how our team performed in the first quarter of 2022. I am pleased to report significant growth in three of our four promoted products. Beginning with Cloderm, prescriptions were slightly down over the last year, and flat over previous quarter, in line with expectations of adding a fourth product within our sales team call cycle when we launch Winsora. Speaking of Winsora, Winsora, which was launched in mid-2021, has shown consistent growth month over month and quarter over quarter since launch. For Rofade, we're excited to have closed the quarter with the strongest quarter in the history of the brand with over 37,000 prescriptions, nearly 50% above last prior year, and 14% over its previous all-time high quarter. The team did a fantastic job. Speaking of fantastic job, Menelera also had strong growth quarter with almost 50% above Q1 2021 and 14% over previous quarter. In summary, we're extremely pleased with this performance in a quarter that historically is lower or flat to Q4 2021. due to end-of-year seasonality, and feel this demonstrates our commercial platform's ability to execute and deliver going forward. Paula, I'll now hand it back over to you and John, and thank you very much.