OptiNose, Inc.

Good morning, ladies and gentlemen, and welcome to the Optino Second Quarter 2021 Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct question-and-answer sessions, and instructions will follow at this time. If anyone should require any assistance during the conference, please press par, then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Jonathan Milley, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today as we review Optinose's second 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 Clavelli, and our CFO, Keith Kaldan. The slides that will be presented on this call can be viewed on our website, optinose.com, in the Investors 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 the 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 in OptiNose's most recent Form 10-K and Form 10-Qs that are filed with the SEC and available at their website, sec.gov, and on our website at optinose.com. You are cautioned not to place undue reliance on forward-looking statements. 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 very much, Jonathan, and good morning, everybody. We appreciate you joining us this morning. This clearly is an exciting time for our company, We believe that we made strong progress in the first half of 2021 towards our two core objectives, driving enhanced revenue growth and successfully completing our chronic sinusitis pivotal trials that have potential to unlock significant new value. Starting on slide three, I'd like to begin by highlighting four key takeaways from today's presentation. First, our Q2 2021 financial performance was aligned with our full year guidance. Second, We believe there are multiple opportunities that will continue to support revenue growth in 2021. We're very excited about the emergence of a stepwise care paradigm for the treatment of chronic rhinosinusitis with nasal polyps, much as the medical community has adopted in other disease areas such as asthma, hypertension, and pain. This paradigm was the subject of an algorithm published in June in the International Forum of Allergy and Rhinology, authored by leading independent experts from both the ENT and allergy thought leader communities. that highlighted the role of Exhance in a stepwise care. Importantly, this expert group recommends that Exhance be considered in two situations. One, when traditional nasal sprays have been tried and found to be inadequate before a patient progresses to a higher tier care such as surgery or biologics. And two, when symptoms recur after surgery. As awareness of the stepwise care paradigm continues to grow, we believe it could be very beneficial for the continued adoption of Exhance by physicians. Another factor that we believe could support revenue growth in the remainder of 2021 is improvement in patient flow and physician access. Although market conditions have improved during the last several months, we've not yet seen a complete return of the number of diagnostic visits by patients to ENT and allergy offices. Additionally, our sales representative access to those physician offices also remains below pre-pandemic norms. Although the future pandemic environment is not entirely clear, We believe our specialty physician environment will remain relatively stable and potentially improve in the last months of the year with respect to both patient volumes into offices and our representatives' access to those offices. Given the historical high promotional response we have seen with ExHance, we believe this could be beneficial in driving growth. In addition, we continue to see potential to get more benefit from our partnership with Caleo as the Potemic environment potentially improves access for their representatives as well. Finally, we believe there is potential for improvement in the average number of prescriptions filled per patient per year as a result of the changes we made to our co-pay assistance program. Third, we completed an enrollment in our first pivotal clinical trial evaluating enhance for the treatment of patients with chronic sinusitis in July and remain firmly on track to have top line results from this trial in first quarter of 2022. We are now focusing all of our recruitment efforts on the second pivotal trial, which we expect to complete enrollment by year end and have top-line results in the second quarter of 2022. And fourth, we are very enthusiastic about the opportunities for growth that successful chronic sinusitis trials would create. Xhance could be the first drug ever to be approved by the FDA for the treatment of chronic sinusitis. We believe these trials could not only It could not only be a breakthrough for the approximately 30 million patients in the U.S. who suffer from chronic sinusitis, but also a game changer for our business. Chronic sinusitis data could create a multifold expansion of the target population, could further increase product differentiation in our current physician audience, could be a strong basis for engaging a partner to help reach a substantially expanded physician audience in primary care, can improve ex-U.S. opportunities, and therefore, significantly drive additional value for the company. Turn to slide four. We had strong performance in second quarter 2021, and I will briefly touch on the year-over-year growth highlights on this slide and the next. In second quarter 2021, there were approximately 29,000 new prescriptions for Ex-Hance, a 55% increase compared to second quarter 2020, and the highest number of new quarterly prescriptions for Ex-Hance since launch. While the market increased 19% over the same period, as the second quarter of 2020 was the peak of pandemic-related restrictions, we're pleased with the disproportionately high increase in new prescriptions for expense. What's important here, though, is that in addition to increasing the number of new prescriptions, we've also improved the quality of our new prescriptions due to changes in our copay assistance program. This has increased the proportion of covered patients filling first prescriptions, which we expect to drive higher refill rates and improve average revenue per prescription. The total number of enhanced prescriptions in the second quarter of 2021 was approximately 82,900. This represents 33% growth over the second quarter of 2020 in a market environment which increased 5% over the same period. Turning to slide five, enhanced market share increased from 4.4% in second quarter of 2020 to 5.4% in second quarter of 2021. As market volumes potentially return towards the pre-COVID baseline in the later part of the year, we're focused on holding onto or adding to the gains we've made in market share. Breath and depth of physician prescribing is measured by the total number of physicians who have patients filling enhanced prescriptions increased from second quarter 2020 to second quarter 2021 as well. Regarding breath, in second quarter 2021, approximately 7,200 physicians had a patient fill at least one prescription of Exhance, an increase of 16% compared to second quarter 2020. Regarding death, the number of physicians who had more than 15 Exhance prescriptions filled by patients in a quarter has grown even faster, with that number increasing by 38% from second quarter 2020 to second quarter 2021, with more than 1,400 physicians now in this segment. In a few moments, I'll provide some closing remarks but I'll first turn the call over to our CFO, Keith Goldan, for comments regarding second quarter 2021 and perspectives regarding our corporate guidance.