scPharmaceuticals Inc.

Greetings and welcome to the SC Pharmaceuticals fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, PJ Kelleher, LifeSci Advisors. Thank you, Peter. PJ, you may begin.

Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements on this conference call, other than historical facts, are forward-looking statements with a meaning of the federal securities law, including, but not limited to, statements regarding SC Pharmaceuticals' expected future financial results and management's expectations and plans for the business and for OPEX. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other important factors that may affect business, financial condition, and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in SC Pharmaceutical's annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed by the company with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these four looking statements. Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and SC Pharmaceuticals expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. It is now my pleasure to turn the call over to Mr. John Tucker, Chief Executive Officer of SC Pharmaceuticals. John?

Thank you, PJ, and thank you to everyone listening to this afternoon's call and webcast. This afternoon, I am pleased to provide an operational update on the initial stages of the pro 6 commercial launch. Before I turn the call over to Rachel notes, our newly appointed chief financial officer. For review of our financials, well, it's only been a few weeks since we announced the launch and commercial availability of for a 6 on February 20th. Initial interest among patients providers and payers is very high. reflecting the important role that furosix can play in the heart failure treatment paradigm, either pre-hospital admission or post-discharge. As we have said before, we believe furosix is a true game changer as it allows patients for the first time to access IV equivalent furosemide based on similar systemic exposure and diuresis in the comfort of their own homes. Our own proprietary research suggests that among heart failure specialists, cardiologists, and nurse practitioners, intent to prescribe cirrhosis ranges between 93 and 96%. And intent to prescribe within six months ranges between 86 and 89%. This research underscores the openness to a different approach to the treatment of heart failure. We believe we are well-financed and have assembled a highly experienced commercial team that hit the ground running, making contact with top-tier hospitals, clinics, and physicians in their respective territories. I'm confident that we will see a strong update and quickly get furosics to the many heart failure patients who stand to benefit from it. Taking a step back, or for the benefit of those maybe new to the story, in October of 2022, we received FDA approval for furosics a proprietary formulation of furosemide delivered by an on-body infuser, the outpatient treatment of congestion due to fluid overload in adult patients with New York Heart Association Class 2 and Class 3 chronic heart failure. Furosix is not indicated for use in emergency situations or in patients with acute pulmonary edema. The furosix infuser will deliver only an 80 milligram dose. We believe this represents a significant advancement in the management of heart failure with the potential for improved outcomes for patients and material cost savings to healthcare payers, most notably the Centers for Medicare and Medicaid Services, who represent Medicare, the single largest payer for heart failure-related medical services. Pelosamide is the most widely used oral and parental diuretic available for patients with congestive heart failure. But the bioavailability of all furosemide decreases and becomes highly variable during episodes of worsening symptoms. As symptoms worsen, patients are often hospitalized to be treated with IV furosemide. By contract, furosix allows patients to access IV equivalent furosemide based on similar systemic exposure and diuresis in the comfort of their own homes. Furosix is administered subcutaneously with the West Pharmaceutical Services smart dose on-body drug delivery system technology, delivering an 80-milligram dose over a period of five hours. Heart failure is a significant financial pain point for both healthcare payers and hospitals. It's been estimated that up to 90% of patients presenting to the emergency department with symptoms of worsening heart failure are admitted to the hospital, and 50% of these admissions may be potentially avoided. The average cost of a heart failure related hospital admission for Medicare patient is nearly $19,000. It is no surprise that the Centers for Medicare and Medicaid Services has put significant resources in place to look for solutions to this problem. Treatment of heart failure is estimated to be 33% of annual Medicare Part A and Part B spending. It's staggering, $123 billion. Further, hospitals face significant reimbursement pressure under the current heart failure payment structure. The average length of stay for heart failure patients is 5.2 days, while CMS reimburses just 3.9 days under the current DRG. Hospitals also face exposure to financial penalties resulting from readmissions under the hospital readmission reduction program, which includes heart failure as one of its focus conditions. Our clinical development program is focused on the safety and efficacy of furosics, as well as the pharmacoeconomic benefits to the system, a prospective clinical trial, FREEDOM-HF, without positive results in July of 2021. The study design focused on select patients who presented to the emergency room with a worsening heart failure event and were treated with furosics at home, as opposed to being admitted to the hospital. The results of the study were patients treated with cirrhosis at heart failure-related costs that were lower by an average of $16,995 versus historically matched comparators. And this result was achieved with a very high rate of statistical significance with a p-value less 0.0001. While this analysis excludes the cost of furosics, since pricing had not been established at the time of the study readout, the conclusion remains unchanged. More recently, we announced positive results from a Phase II pilot study at home HF that compared furosics with a treatment-as-usual approach in chronic heart failure patients presenting to a heart failure clinic with worsening congestion requiring augmented diuresis. Among the key findings, subjects randomized to furosics had a 37% reduction in the risk of a heart failure hospitalization at day 30 relative to patients randomized to treatment as usual. We are pleased with the results of these two studies, which added significantly to the growing body of clinical and pharmacoeconomic evidence favoring furosics versus the current standard treatment protocol. The market opportunity for furosics is significant. In the U.S. alone, there are estimated to be 6.7 million adults suffering from heart failure, resulting in 4 million heart failure events annually. Of those, we believe 2.1 million episodes can be effectively addressed by furosics. If we assume $3,300 per episode, which is four doses of furosics, we have the potential to access a market opportunity that is nearly $7 billion. And again, this is in the U.S. alone. There are a total of 15.8 million adults suffering from heart failure if we include the other G7 countries. Coming now to the launch, we put a strong commercial team in place that is led by Steve Parsons, our Senior Vice President of Commercial. We have 40 field territory sales representatives fully trained in conducting face-to-face in-services at hospitals, doctor's offices, and heart failure clinics. Targeting the approximately 150 to 200 HCPs in 10 hospitals per territory, insurfaces provide HCPs with training and prescribing instructions for furosics designed to ensure office readiness. Demo kits to train patients are provided at the completion of each insurface. The focus on the insurface is crucial to ensuring effective use and training on furosics. Our sales force has conducted approximately 307 in-services to date, with many of these in-services lasting one to two hours, as physicians desire to have training done throughout the entire office or clinic. This reflects the interest in Ferocix by healthcare providers. The sales team is a specialized force that can target top hospitals and clinics efficiently and effectively. They are focused on building strong relationships with the key constituencies at these clinics through an educational and consultative approach. Depending on the launch trajectory, we stand ready to add more reps in the field as needed to maximize clinic and patient access to furosics. In terms of distribution, we are pleased with the seamless functioning of our distribution process thus far through our strategic partnership with Cardinal Health as our third-party logistics provider. Cardinal is working well with our three specialty pharmacy partners, including our main specialty pharmacy, Biomatrix. Cardinal has shipped initial inventory to the specialty pharmacies, which will be recognized as revenue in the first quarter. As a reminder, we recognize revenue when Perosix moves from Cardinal to the specialty pharmacies. So, Q1 revenue will reflect initial stocking at the specialty pharmacies. We have already seen initial patient prescriptions being filled and shipped to patients next day. Ferosix Direct, our reimbursement support hub, provides benefits, investigations for physicians to determine insurance coverage and patient out-of-pocket costs. Our specialty pharmacy partners provide device training with patients and are available 24 hours to answer questions about the use of Ferosix. From a marketing perspective, we've engaged in a broad, multi-channel market awareness campaign to drive brand awareness, adoption, and commitment. This program encompasses many different activities, but some of the key ongoing activities include KOL engagement and development, conference appearances, print and electronic collateral, and the development of both provider and patient websites, among other critical tasks. In terms of reimbursement, we are pleased that all Medicare Part D and Medicaid beneficiaries will have reimbursed access to Ferocix since day one of the launch. We estimate that approximately 60% of all heart failure patients will have fixed tier copays of $100 or less. We continue to meet with many large national and regional Medicare Part D and commercial health plans, and those discussions have been productive. Our goal remains to achieve 75% of patients with access to Pro6 under fixed-tier copays by the end of this year. Turning to our balance sheet, in November, we were able to add $50 million of gross proceeds through a public offering of common stock. This follows a $100 million secured debt facility that we announced with Oak Tree Capital Management in October, $50 million of which was made available to us upon the signing of the agreement. The remaining $50 million will be made available in two additional $25 million tranches based on the achievement of pre-specified commercial milestones. With these financings, we believe we are well-funded to execute a very successful launch. Finally, in December, we announced the promotion of Rachel Noakes to the position of Chief Financial Officer. Rachel brings tremendous experience and leadership to the CFO role, and her promotion maintains organizational consistency and an important time for the company. We are excited to celebrate this well-deserved recognition of her expertise and contributions. I will now turn it over for her comments. Rachel?