OptiNose, Inc.

Hello. Good day, everyone, and thank you for standing by. Welcome to the Opti-Nose Second Quarter 2023 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 the question, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand this phrase. To withdraw the question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jonathan Neely, Head of Investor Relations.

Good morning, and thank you for joining us today as we review OptiNose's second quarter 2023 performance and our plans for the remainder of the year. I'm joined today by our CEO, Dr. Rami Mahmoud, and our Chief Commercial Officer, Paul Spence. 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 in OPTINOS's most recent form 10-K and 10-Qs that are filed with the SEC and available at their website, sec.gov, and on our website at optinos.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'll now turn the call over to Rami.

Thank you, Jonathan, and thank you to everyone listening for joining us this morning. We appreciate you joining us for our second quarter update. I'd like to start on slide three. We'll go into more detail in a moment, but I'd like to highlight three key takeaways from today's presentation. First, as we engage in additional market research and preparations to be ready for a launch, we remain enthusiastic about the potential value of being able to offer ExHance as the first and only product indicated for the treatment of chronic sinusitis. Claims data suggests that CS is currently being diagnosed by healthcare providers at least 10 times more frequently than nasal polyps. In the current healthcare environment where off-label use of branded products is increasingly constrained by payers, we believe the new indication could enable us to access a multi-fold larger patient audience and therefore drive strong growth for multiple years starting in 2024. We also believe the value proposition that exams could offer both clinically and economically is very desirable, particularly for patients dissatisfied with their current symptom burden or who may otherwise be facing treatment with surgery or high-cost injected biologics. Second, our supplemental new drug application for the new indication of ExHance is being reviewed by FDA now. We submitted our application in February, and with the FDA target goal date in December, we are now more than halfway through the review period. We will show you how, in the second quarter of the year, we have continued to effectively execute against our previously communicated 2023 operating strategy, which is rooted in our intent to prioritize the value of investing in the potential near-term launch of Xhance as the first and only FDA-approved drug treatment for chronic sinusitis. To briefly elaborate on this last point, I'd like to remind you that we believe there are important differences, including patient prevalence, frequency of diagnosis, and payer dynamics that make the potential for return on investment from promotion of ex-hance following a potential chronic sinusitis approval significantly greater than the return available from promotion of ex-hance as a treatment for nasal polyps. Because of this, we have structured our business in 2023 to materially reduce the use of cash and increase focus on profitability while being careful to preserve infrastructure and capabilities that will be important for the successful launch of chronic sinusitis in 2024. We adhered to this strategic discipline through the first half of this year and delivered results that are better than our initial expectations. As a result of that performance, we have increased our revenue expectation for full year 2023. Turning to slide four, we believe future approval of Xhance as the first and only FDA approved treatment for CS has potential to increase the number of patients for whom the product can be promoted by at least tenfold because medical claims data indicate that order of magnitude more patients are currently being diagnosed with chronic sinusitis than are being diagnosed with nasal polyps. The new indication would create opportunity for strong growth within our existing commercial footprint, promoting largely to specialists who see large numbers of patients with the diagnosis. The newly expanded universe of patients would also include patients cared for by physicians outside our current commercial reach, and we are actively exploring commercial partnerships alternative selling models, and other ways to facilitate future outreach to those physicians and patients. Turning to slide six. Previously, we announced that during the second quarter the FDA accepted our supplemental new drug application in pursuit of an enhanced indication for treatment of patients with chronic rhinosinusitis. This is a novel indication for which the agency has never previously approved any drug product. Focusing on what's next, The substantive review of safety and efficacy for this largely clinical application is ongoing and the FDA action goal date, which is based on the original submission date in February, has been set for mid-December of this year. Our regulatory and clinical teams continue to focus on being responsive to the FDA during the review and will continue to do so throughout the entire review process. Turning to slide eight. As a reminder, our objective in 2023 is to stabilize demand trends in our current nasal polyps specialty business with a reduced commercial footprint and materially reduced expense, while both preserving the necessary launch capabilities and improving operational efficiency and effectiveness of our commercial resources. This is intended to best set us up for successful launch of Xhance for CS in 2024. With that objective in mind, we are pleased by ExHance prescription demand results in the second quarter of 2023. Regarding prescription demand, in the second quarter of 2023, there were approximately 30,900 new prescriptions for ExHance, an increase of 3% over second quarter 2022. In addition, there were approximately 90,700 total prescriptions for ExHance in the second quarter of 2023, an increase of about 3% compared to the second quarter of 2022. We measure breadth and depth of physician prescribing by the total number of physicians who have patients filling ex-hands prescriptions. Regarding breadth, in the second quarter of 2023, there were 8,624 physicians who had a patient fill at least one prescription of ex-hands, an increase of 4% compared to second quarter of 2022. Regarding depth, the number of physicians who had more than 15 prescriptions filled by their patients in a quarter That number decreased by approximately 6% from second quarter 2022 to second quarter 2023, now at approximately 1,400 physicians. I'd like to note that all the data on this slide is estimated based, in part, on monthly prescription and inventory data from third parties and, in large part, also on data directly reported to us by pharmacies that are part of the Ex-Hands Preferred Pharmacy Network. I'll also note that the second quarter 2022 data that we're showing today reflects our current 2023 methodology. For reference, we footnoted our prior estimates based on prior methodology. I'll now turn the call over to Jonathan to discuss our second quarter financial performance.