OptiNose, Inc.

Good day and thank you for signing by. Welcome to the Optinose Quarter 1 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Jonathan Nellie. Vice President, Investor Relations, please go ahead.

Good morning, and thank you for joining us today as we review Optinose's first quarter 2021 performance and our plans for the remainder of the year. I'm joined today by our CEO, Peter Miller, our President and Chief Operating Officer, Rami Mahmoud, our Chief Commercial Officer, Vic Covelli, and our CFO, Keith Goldan. The slides that will be presented on this call can be viewed on our website, optinose.com, in the Investor section. Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements. All statements that are not historical facts are hereby identified as forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements. Additional information regarding these factors and forward-looking statements is discussed under Cautionary Note on Forward-Looking Statements section of the earnings release that we issued today, as well as under the Risk Factors section and elsewhere of Optinose's most recent Form 10-K and Form 10-Q that are filed with the SEC and available at their website, sec.gov, and on our website at optinose.com. Your caution not to place undue reliance on forward-looking statements. The forward-looking statements during this conference call speak only as of the original date of this call or any earlier date indicated in such statement, and we undertake no obligation to update or revise any of these statements. We will now make prepared remarks, and then we will move to a question-and-answer session. With that, I will now turn the call over to Peter Miller. Peter.

Thanks, Jonathan, and good morning, everybody. We appreciate you joining us this morning. Starting on slide three, We'll go into more detail in a moment, but I'd like to highlight four key takeaways from today's presentation. First, our Q1 2021 financial performance was aligned with our company guidance. This is an important year for our company, and getting off to a good start enables continued strong focus on our two core objectives, driving enhanced revenue and completing the chronic sinusitis pivotal trials, which we believe could create significant additional value for the company. Second, New prescriptions of enhanced achieved another all-time high in the first quarter despite continuation of pandemic-related market challenges, with new prescriptions increasing 16% over first quarter 2020. Notably, this growth is against a quarter a year ago, which was not significantly impacted by the pandemic, and in an environment where market new prescriptions decreased 30% versus the prior year. We believe there are multiple opportunities that will continue to support revenue growth in 2021. Market environment is one factor I will discuss now, and we will discuss additional factors on the next slide. The pandemic both reduced the number of diagnostic visits by patients to physician offices and limited the ability of sales representatives to meet in person with physicians. These market conditions have improved somewhat since the death of the pandemic, but are still lagging pre-pandemic norms. Looking forward, as the pandemic environment eases, we expect both our territory manager access to healthcare offices and patient volumes into those offices to improve throughout 2021. We expect these two factors will provide strong support for continued growth and enhanced prescriptions in 2021. In addition, we believe there is opportunity to get more benefit from our partnership with Caleo as the pandemic environment improves access for their representatives as well. Fourth, we expect to complete enrollment in our first Pivotal Clinical Trial Evaluating Exhance for the Treatment of Patients with Chronic Sinusitis in third quarter 2021, with corresponding top-line results in first quarter 2022. This is a change to prior guidance of top-line results by the end of 2021, and is a result of pandemic-related issues, including temporary research site closures and decreased patient flows in locations outside the United States that have continued beyond the first months of this year. We are very enthusiastic about the opportunities for growth that successful chronic sinusitis trials would create. Xhance could be the first drug ever approved and promoted for treatment of the 30 million U.S. patients who suffer from chronic sinusitis. We believe this data could increase product differentiation, create a multifold expansion of the target patient population, be a basis for new partnerships, improve XUS opportunities, and drive significant additional value for the company. Turning to slide four, as I just mentioned, we believe our expectations for growth in 2021 is supported by multiple factors. In addition to, and perhaps more important for long-term prospects and improving market conditions, we believe there is an increasing recognition by thought leaders and specialty societies that enhance plays a distinct and important role in treatment of patients with chronic rhinosinusitis with nasal polyps. We believe a stepped care paradigm is emerging for treatment of this disease, much as we have seen in other disease areas where there are multiple different types of therapeutic options, such as asthma, hypertension, and pain. Importantly, based on activity from relevant specialty societies, such as the American Rhinology Society and American College of Allergy, Asthma, and Immunology, it appears that Xhance is increasingly perceived by experts as offering an option distinct from standard nasal sprays, surgery, or biologics. We believe that a framework customized to individual patient needs, but based on a stepwise logic of escalating patient care as needed from over-the-counter nasal sprays to enhance, to surgery, to enhance again after surgery, and finally to biologics, will support broad adoption of enhance as a standard of appropriate medical management of the disease. This paradigm is supported in multiple ways, that we have already begun to discuss with physicians today, one of which is a published analysis of our pivotal trial data from Dr. Brent Senior, Chief of Rhinology at the University of North Carolina, Chapel Hill and others, reporting the benefits of Xhance for patients who previously tried standard nasal steroid sprays. We think that this kind of expert specialty recognition of the distinct role of Xhance is an important validation of the value of the product, reflecting growing appreciation for its importance and supporting broader adoption by clarifying the role it can play in the treatment armamentarium. Turning to slide six, we had strong performance in first quarter 2021, and I will briefly touch on the year-over-year growth highlights on this slide and the next. In first quarter 2021, there were approximately 25,900 new prescriptions for ExHance, a 16 percent increase compared to first quarter 2020, and the highest number of new quarterly prescriptions for ExHance since launch. As mentioned, this volume growth was achieved against a market that declined 30% over the same period. The total number of ExHance prescriptions in the first quarter of 2021 was approximately 72,600. This represents 30% growth over the first quarter of 2020 in a market environment which declined 23% over the same period. Turning to slide seven. Exhance market share increased from 3.4% in first quarter of 2020 to 5.4% in first quarter of 2021. We're encouraged by this growth, but also excited about the headroom for future growth as more physicians incorporate Exhance as a part of their customary practice. While Exhance is 5% of the intranasal steroid spray prescriptions written by the 18,000 physicians in our target audience, There is a growing segment of believer physicians for whom Xhance exceeds 20% of INS prescriptions written. The share penetration achieved in this group continues to signal the potential for growing a substantial business in the ENT and allergy audience based on the current nasal polyp indication alone. Breath and depth of physician prescribing, as measured by the total number of physicians who have patients filling enhanced prescriptions increased from first quarter 2020 to first quarter 2021 as well. Regarding breadth, in first quarter 2021, approximately 6,920 physicians had a patient fill at least one prescription of enhanced, an increase of 9% compared to first quarter 2020. Regarding depth, the number of physicians who had more than 15 enhanced prescriptions filled by their patients in a quarter has grown even faster with that number increasing by 44% from first quarter 2020 to first quarter 2021, with nearly 1,300 physicians now in this segment. During the last year, increased depth drove more of our growth and increased breadth. As business conditions improve, we believe the opportunity for growth in both depth and breadth will return, and we have focused promotional efforts against this objective. In a few moments, I'll provide some closing remarks but I will first turn the call over to our CFO, Keith Goldan, for comments regarding first quarter 2021 results and perspectives regarding our corporate guidance.