OptiNose, Inc.

Hello, and welcome to the OptiKnow's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Vice President of Investor Relations, Jonathan Neely.

Good morning. Thank you for joining us today as we review OptiNose's second quarter 2024 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. 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 in 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 Opti-Nose's most recent Form 10-K and 10-Q that are filed with the SEC and available at their website, sec.gov, and our website at optinose.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 second quarter 2024 update. Starting on slide three, We're pleased to report a promising start to our chronic sinusitis launch and good progress in the quarter. I'll start with a brief outline of what we'll cover during our call today. First, I'll review three key takeaways from today's call. Second, our Chief Commercial Officer, Paul Spence, will discuss our early efforts to educate our ENT and allergy specialist physician audience on XANCE's new clinical profile and some encouraging early signals of progress that will enable future uptake. Next, Jonathan Neely, our VP of Investor Relations and Business Development, will review our second quarter 2024 performance and our financial guidance for full year 2024. Finally, we'll return to wrap up the call and take your questions. Turning to slide four, I'd like to highlight three key takeaways from today's presentation. First, I'd like to reiterate the significant long-term potential of the opportunity in front of us, which we believe has potential to reshape our business for years into the future. Claims data suggests that chronic sinusitis is currently being diagnosed by healthcare providers at least 10 times more frequently than nasal polyps. Reshaping our business by launching exams in chronic sinusitis started in the second quarter. In April, we held a national sales meeting to complete training of our sales team, and they are now engaged with a full set of new materials and have been interacting with a universe of both familiar and new prescribers. As a reminder, our plan is to launch with our current Salesforce infrastructure Arming our sales team with a suite of new chronic sinusitis promotional materials accompanied by digital and non personal promotion. And by educational efforts based on the new label with the objective of attaining peak year sales of at least $300 million and producing positive income from operations for full year 2025. Over the course of the prior five quarters since I accepted responsibility for this position, our focus has been on seeking approval for the new first and only chronic sinusitis indication. on greatly increasing our operating efficiency, on stabilizing enhanced revenue, and on preparing our organization for the greatly expanded opportunity in chronic sinusitis. Our success in these areas means that initial launch efforts by our commercial team in the second quarter of this year are building on a significantly stronger base than we had at the start of 2023. From a financial perspective, this includes a stronger balance sheet, lower expenses, and improving average net revenue per prescription. During the first few quarters of launch, we are aiming to sustain our operating efficiency gains while building on the strength and foundation to begin to penetrate the greatly expanded total addressable market resulting from our first and only new CS indication. Over the initial quarters after launch, we expected gradually improving insurance coverage and are pleased that late in second quarter, expense was added to large Express Scripts national formularies. You'll hear more about that in a moment. In the second quarter, we also empowered our sales force to use new and differentiated clinical data and new promotional materials to engage prescribers and begin the educational interactions that should facilitate gradual adoption of exams as a regular part of clinical practice for treating this underserved disease. In addition, as we previously noted earlier this year, we began to transition much of our prescription fulfillment to a central intake pharmacy or hub. And during the first few quarters of launch, we expect to continue work to optimize the effectiveness of that fulfillment channel. Overall, we believe we're making progress on laying the necessary foundation to be able to realize the significant long-term potential of Exance in our new market. Today, we're reporting on the first quarter of our launch and have achieved revenue consistent with our expectations. Our Chief Commercial Officer, Paul Spence, will provide some encouraging updates about initial progress by his team in just a moment. We continue to believe the first few quarters after launch will produce gradual growth while we progressively implement insurance coverage changes and steadily educate target prescribers on clinical data related to the new indication. We continue to believe that consistent commercial plan execution on multiple fronts will lead to future acceleration of the growth trajectory in the much larger market that has now been opened for exams. Lastly, during the first half of this year, we have been more successful than we originally anticipated in our efforts to focus on profitable business and move away from lower profit and unprofitable business. As a result, we are increasing our expectation for enhanced net revenue per prescription for full year 2024 to at least $250, compared to our previous expectation of at least $230, an increase of at least 20% compared to 2023. We're also narrowing our full year 2024 enhanced net revenue guidance range to $85 to $90 million from $85 to $95 million previously. The new range represents revenue growth of 20 to 27% compared to full year 2023 revenues of $71 million. The narrowing of the revenue range reflects removal of revenues associated with lower profit and unprofitable business for which we have intentionally reduced copay support. We believe focusing on growth in profitable lines of business will result in a healthier more sustainable business over the long term. It's important to note that the combined effect of these two changes is directionally offsetting, which leaves our expectations for cash runway and operating income largely unchanged. Finally, with respect to operating expense, we continue to plan for full year 2024 to be modestly incremental to full year 2023 in support of promotional launch efforts as previously communicated. I'd now like to turn the call over to Paul Spence, to review initial launch performance and recent commercial highlights. Paul?