OptiNose, Inc.

Good day, and thank you for standing by. Welcome to the Often News Q1 2024 Earnings Conference 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your 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 your speaker today, Jonathan Neely, VP of Investor Relations. Please go ahead.

Good morning, and thank you for joining us today as we review OptiNose's first quarter 2024 performance and our plans for the year ahead. I'm joined today by our CEO, Dr. Rami Mahmood. 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 Factor section and elsewhere in OPTINOS' most recent Form 10-K and 10-Q 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. 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 Rami.

Thank you, Jonathan, and thank you to everyone listening for joining us this morning. We appreciate you joining us for our first quarter 2024 update. Starting on slide three, I'll start with a brief outline of what we'll cover during our call today. To start off, I'll review three key takeaways from today's call and discuss our initial plans to reach out to our ENT and allergy specialist physician audience with XANCE's new clinical profile, including communication of data showing strong efficacy in chronic sinusitis, which our market research indicates is a leading driver of prescribing behavior. Next, Jonathan Neely, our VP of Investor Relations and Business Development, will review our first quarter 2024 performance and our financial guidance for full year 2024. Finally, I'll return to review information about our peak net revenue estimates for XANCE and the profitability targets that we described on RxHAND's chronic sinusitis launch call in April. Then we'll wrap up the call and take your questions. Turning to slide four, we'll go into more detail in a moment, but I'd like to highlight three key takeaways from today's presentation. First, I'd like to reiterate the significance of the opportunity in front of us, which we believe has potential to reshape this business in the last three quarters of 2024 and for years into the future. Claims data suggest that chronic sinusitis is currently being diagnosed by healthcare providers at least 10 times more frequently than nasal polyps. Following our national launch meeting the week of April 8th, we have now fully engaged our sales team in our chronic sinusitis launch with training and a full set of materials. As a reminder, our plan is to launch with our current Salesforce structure armed with a new suite of chronic sinusitis promotional materials accompanied by digital and non-personal promotion efforts based on the new label and with the objective of obtaining peak year sales of at least $300 million and producing positive income from operations for full year 2025. Second, thanks to the efforts of our team, we have a significantly stronger base to build on than we did at the start of 2023. When I started as CEO, we implemented an initiative to greatly increase our operating efficiency and to stabilize expense revenue while preparing our organization to seize the greatly expanded opportunity in chronic sinusitis. we successfully met or exceeded the financial expectations we set for the last five consecutive quarters of revenue achievement, aggressive operating expense reductions, and improvements in our average net revenue per prescription. Third, the combination of expanded market opportunity and improved base business fundamentals has set up the opportunity for OptiNose to return to strong growth in 2024. We've now announced our initial guidance for full year 2024 net revenues and total operating expenses. Mindful that the full launch of the CS indication started in mid-April, we expect ExHance net revenues to increase by 20% to 34% for full year 2024 compared to full year 2023. We also believe that ExHance net revenue growth can be achieved with modest incremental operating expense increases to support promotional efforts while leveraging our existing commercial infrastructure. Turning to slide five, last week, we announced a $55 million registered direct financing, which was led by Nanta Hala and D.E. Shaw, and had participation from both new and existing healthcare-focused investors. As a result of this funding, Optinos now has cash and cash equivalents of approximately $100 million. Following on top of the recent approval of the chronic sinusitis indication, this financing is transformative for our company because, in the context of our base business plan, we now have sufficient cash runway to operate our business while servicing our debt through 2025, which is when we expect to produce income from operations for the full year. As part of the funding, we also favorably amended the terms of our debt agreement with a waiver of the going concern covenant until the filing of our December 31st, 2025 financial statements, which is expected to occur in March of 2026. Additionally, the minimum liquidity covenant will be reduced from $30 million to $20 million following the date of the first quarterly payment principle, which is due on September 30, 2025. We also extinguished $4.7 million of outstanding amendment and waiver fees, which have now been converted to equity. As a result of this financing and our revised debt agreement, Optinos is in a greatly strengthened financial position to consider multiple future opportunities for value creation, with our initial focus remaining squarely on our Ex-Hance launch plan. Turning to slide seven and our launch plan. In the second quarter of this year, we are leveraging four major tactics to launch Xhance into this major new market opportunity. These include our sales force, non-personal promotion, peer-to-peer education, and presence at medical meetings. Let's begin with our 75-person sales organization. In the second quarter, our team plans to reach approximately 7,500 target healthcare providers and make over 35,000 total sales calls. We're also supplying the field with 50% more ex-hance samples to stimulate additional physician and patient trial. In a highly symptomatic condition like chronic sinusitis, samples can be effective in facilitating new product adoption. It's still very early days for us in the field, but initial feedback has been quite positive, execution has been strong, and we expect the momentum in ex-hance prescribing to build over time with continued Salesforce engagement. We are supplementing the field force with non-personal promotion, targeting a total of 22,000 of the highest potential, largely specialty, prescribers. These tactics include digital media, search engine marketing, and social media. In the second quarter, we plan to generate 1.5 million healthcare provider impressions and over 50,000 customer engagements using this approach. We're also deploying a peer-to-peer speaker program with approximately 80 specialist prescribers familiar with both the product and the clinical trial data who are available to host educational events for their peers. During the second quarter, we plan to reach over 1,000 healthcare providers to highlight the new Ex-Ans clinical profile and discuss unmet need and diagnostic criteria, which are important considerations for facilitating appropriate patient identification in the clinic. Lastly, we're planning a strong presence at medical meetings during the second quarter, including 10 national and 20 regional events for ENTs and allergists. We have a booth where our team can interface with prescribers and are also planning to host promotional events such as product theaters with speakers. These events are aimed at disseminating our message about the recent approval and new clinical trial data, reinforcing the clinical benefits of exams, and reinforcing our leadership and visibility in the chronic sinusitis space. Taken together, these four tactical pillars are essential elements of our launch plan, I'll also remind you that we recently implemented hub services intended to increase the service level for prescribers and patients, while also resulting in overall improvement in the rate of written prescriptions that are ultimately filled and the rate at which insurance coverage and copay support are correctly applied to each prescription. Our generous copay support program will continue to facilitate patient starts, with many patients being offered $0 copays in their first month. Although many of these new initiations are not captured by IQVIA, they can help patients and providers gain personal experience with the benefits of ExHance, even if insurance coverage is still pending. We're also aware that it can often require five to seven calls on new physicians before initiation of product trials, and that successful product trials are a precursor for consistent adoption over time. We believe our planned efforts will get the ball rolling and result in gradually accelerating product uptake. All these activities in the context of our pre-existing payer access, which includes broad commercial coverage and which we expect to typically adapt to include our new indication over the first few months following approval, are expected to drive an uptick in enhanced growth this year and ultimately deliver at least $300 million in peak sales in peak year. I would like now to turn the call over to Jonathan Neely to review our financial guidance for full year 2024 and the equity offering we announced on May 9th. Jonathan.