OptiNose, Inc.

Focusing on what's next, the acceptance marked the start of the substantive review of safety and efficacy. The FDA action goal date, which is based on the original submission date in February, has been set for mid-December of this year. In the interim, our regulatory and clinical teams will focus on being responsive to the FDA during the review. Turning to slide eight, on our first quarter, In our first quarter, the prescription demand results were aligned with the expectations that were set on our last call. As a reminder, our objective in 2023 is to stabilize demand trends in our current business with a reduced commercial footprint while preserving the necessary capabilities and creating an efficient deployment of resources to support a successful launch of Xhance for CS in 2024. In the first quarter of 2023, there were approximately 30,400 new prescriptions for ex-hands, an increase of 3% compared to first quarter of 2022, while a market, which is defined by INS prescriptions written by any physician for any condition, a quite large component of which are prescriptions for allergic rhinitis, increased 8% over the same period. In addition, there were 84,400 total prescriptions for ex-hands in the first quarter of 2023. an increase of 1% compared to first quarter 2022, while the market, which again includes INS prescriptions written by any physician for any condition, a large component of which are prescriptions for allergic rhinitis, increased 5% over the same period. Results were mixed for breadth and depth of physician prescribing as measured by the total number of physicians who have patients filling ex-hance prescriptions. Regarding breadth, in the first quarter of 2023, There were 8,545 physicians who had a patient fill at least one prescription for ex-hance, an increase of 6% compared to the first quarter of 2022. Regarding depth, the number of physicians who had more than 15 ex-hance prescriptions filled by their patients in a quarter was generally unchanged at approximately 1,400 physicians, a decrease of 1% from first quarter 2022 to first quarter 2023. I'd like to note that all the data on this slide is estimated based on monthly prescription data from third parties and in large part, also on data directly reported to us by pharmacies that are part of the enhanced preferred pharmacy network. I will note that the first quarter 2022 data we're showing today reflects our current 2023 methodology. For reference, we footnoted our prior estimates based on prior methodology. While our best estimates may indicate slight growth in prescription demand, we believe stable is an appropriate way to describe these results. I'll now turn the call over to Jonathan to discuss our first quarter financial performance.

Thank you, Rami. Turning to slide 10. Our first quarter 2023 financial results are largely in line with the expectations we communicated on our last earnings call and are shaped by our strategy to prioritize capital resources for the potential launch of Exhance's first-ever FDA-approved drug treatment for chronic sinusitis. As we reported this morning, Optinoz recognized $24.5 million of SG&A plus R&D expenses in the first quarter of 2023, or approximately a $10 million decrease compared to first quarter 2022 expenses of $34.1 million. Regarding revenue, Optinoz recognized $11.8 million of Exance net revenue in the first quarter of 2023, a decrease compared to first quarter 2022 net revenues of $14.8 million. The over-year decrease in the first quarter is primarily the result of a decrease in unit shift and an increase in copay assistance driven by an increase in the proportion of volumes attributable to patients with commercial insurance that does not cover expense or who have not yet met the utilization management criteria of their insurer, as well as an increase in the proportion of volumes attributable to government programs, which increase gross to net deductions. While we exceeded the first quarter 2023 guidance that we gave on our last call for revenues of approximately $10 million in the first quarter, and we feel that the beat is encouraging, I'd like to note that we believe this result is not sufficient to change our expectations for the full year, which I will review in a moment. Finally, based on available prescription data purchased from third parties and on data we received directly from a preferred pharmacy network, the estimated average net revenue prescription for the first quarter of 2023 was $140, a decrease compared to $177 of estimated revenue per prescription in the first quarter of 2022. Year-over-year decrease is driven primarily by the increase across the net deductions and the decrease in the unit shift that influenced EXAMS net revenue performance. Overall, these results align with our intent to reduce use of cash in 2023, while maintaining the capabilities and resources that would be necessary to enable a successful launch and a new indication for EXAMS in 2024. Turning to slide 12, our first quarter of 2023 financial performance was in line with our prior guidance and, as a result, Our guidance for the full year of 2023 is largely unchanged. First, we are lowering our operating expense guidance to incorporate the effects of first quarter departures on stock compensation. We now expect operating expense defined as sales, general, and administrative expense, plus research and development expenses to be in the range from $88 million to $93 million, of which approximately $6 million is stock-based compensation. Previously, we expected operating expense to be in the range from $90 million to $95 million, of which approximately $8 million is stock-based compensation. Second, our expectation for ex-hance net revenue for the full year of 2023 is unchanged and is between $62 million to $68 million. It is important to note that we are not assuming revenues from a CS launch in our full year 2023 guidance. Third, with respect to ex-hance average net revenue per prescription, We expect our typical historical pattern of improvement from the first quarter through the remaining three quarters of 2023 and continue to expect our average net revenue per prescription to be approximately $200 for the full year of 2023. I will now turn the call back over to Rami for closing remarks. Rami? Thank you, Jonathan.

Before moving to Q&A, I'd like to take a moment to reiterate our clear strategic focus for this year. First, we believe achieving the first ever chronic sinusitis indication will be a crucial driver of future value for patients and for our company. It is therefore our top priority. Second, we are mindful of the importance of the cash we have today and of the potentially greater value of commercial investment following the future potential CS indication. Therefore, we have taken and will continue to take action to efficiently generate ex-hance revenue with the current indication. Third, we must prepare our organization to seize the potential opportunity created by a new chronic sinusitis indication by planning for a successful launch aimed at rapidly making the product available to millions of patients in need. With that, I'd like to thank you for your attention and open the call for questions and answers.