scPharmaceuticals Inc.

Good afternoon, ladies and gentlemen, and welcome to the SC Pharmaceuticals first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. And if at any time during this call you require immediate assistance, please press star zero for an operator. Also note that the call is being recorded Tuesday, May 14, 2024. And I would like to turn the conference over to PJ Keller, Investor Relations. Please go ahead.

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 within the meaning of the federal securities laws, including but not limited to statements regarding SD Pharmaceuticals' expected future financial results, management's expectations and plans for the business, the ongoing commercialization and marketing of furosics, and the potential label expansion and other regulatory approval of furosics. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are used typically 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 SC Pharmaceutical's 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 thanks to everyone listening to this afternoon's call and webcast. to review our first quarter 2024 results. This has been our practice. I will begin with an operational update before turning the call over to Steve Parsons, our Senior Vice President of Commercial, for a more detailed commercial update on Ferocix, and then Rachel Knowles, our Chief Financial Officer, for review of our financials. We will then open the call for your questions. During the first quarter, we saw a continuation of the positive trends that we believe reflect growing awareness and utilization as a new and innovative part of a heart failure care continuum. As Steve will detail shortly, our leading indicators, including doses written, unique prescribers, and in-services completed, suggest that providers are increasingly more comfortable prescribing cirrhosis to their heart failure patients during critical intervention windows, which are pre-hospital admission or post-discharge. We reported net revenue of $6.1 million despite experiencing approximately 10% negative impact on doses filled during the quarter due to the widely reported and previously disclosed change healthcare cyber attack. We also experienced some seasonal impact during the first quarter as patient deductibles reset with the new year. We continue to take steps to increase and improve our prescription fill rate. In March, we transitioned our patient service provider, or as we call it, the hub, which we think will result in an improved patient and physician experience. We are very pleased to have tuned in another solid quarter, notwithstanding these temporary headwinds. Our gross net discount during the first quarter was 19%, up slightly from 2023. We continue to expect the GPM discount to increase over time as contracting with payers and the marketplace evolve. and we expect that the GTN discount will approach 30% to 35% on a quarterly basis by the end of this year, consistent with our prior long-term guidance for GTN. Inventory levels at the end of the first quarter at our specialty pharmacy partners were generally consistent with the inventory levels at the end of 2023. Shifting now to payers, we continue to have productive discussions with commercial, Medicare Part D, and Medicaid payers in an ongoing effort to make furosics broadly available to patients at the most favorable terms possible. With favorable market dynamics in Medicare, we have expanded the population of heart failure patients who have access to furosics with fixed-tier co-pays of $100 or less to 70%, moving us closer to our previously stated goal of 75% or more over time. We are progressing with many other health plans, and we hope to have updates in the months to come. At this point, I would like to provide an update on several long-term growth initiatives that we previewed last quarter that we view as critical to our long-term growth strategy. As we discussed previously, last year we received positive feedback from the FDA regarding the potential expansion of the Ferrosix indication to allow for use in New York Heart Association class IV heart failure patients. Recall that Ferrosix is currently indicated for the treatment of congesting due to fluid overload in adult patients in New York Heart Association Class 2 and Class 3 chronic heart failure. We estimate that as many as 10% of all heart failure patients are Class 4, and a meaningful percent of these, as many as 40%, may benefit from cirrhosis. Based upon the feedback that we received from the agency, we filed for the Class 4 indication in early October of last year, and we have been assigned a PDUPA date for this August, although the possibility does still exist that the PDUPA date could occur sooner. If we are successful, we believe Class IV would represent a meaningful expansion of our market opportunity as providers would be able to prescribe cirrhosis to the most severe heart failure patients. Turning now to the 80 mg over 1 ml low-volume autoinjector that we are developing as an additional option to the on-body infuser. Just a few weeks ago, we announced that we initiated a pivotal PK study, and we plan to report results later this year that if successful, will allow us to submit a supplemental new drug application to the FDA by the end of this year. As we stated previously, we believe an auto-injector, if improved, would reduce manufacturing costs compared to the current on-body infuser and confer environmental advantages as well, in addition to giving treating providers and their patients more treatment flexibility. Finally, we previously discussed feedback that we received from the FDA pertaining to the potential expansion of the ferrosis indication to include treatment of edema due to fluid overload in patients with chronic kidney disease, or CKD. Recalled in its feedback, the FDA confirmed that no additional clinical studies are needed to expand the indication of CKD, provided that we can demonstrate an adequate PK and pharmacodynamic bridge to the listed drug, which is furosemide injection 10 mg over mL. CKD is a progressive disease characterized by worsening renal function over time, resulting in frequent episodes of fluid overload that are treated with loop diuretics. It is estimated that 12 to 15 million Americans are aware that they have kidney disease, and 50% of patients with CKD do not have a diagnosis of heart failure. With fluid overload being one of the most common complications with CKD, which worsens with disease progression, we believe cirrhosis could be beneficial to patients with CKD who have worsening symptoms due to fluid overload and are not responding to oral loop diuretics. To that end, earlier this month, we submitted a supplemental new drug application with the FDA for the CKD indication. At this point, I'll turn the call of our Senior Vice President of Commercial, Steve Parsons, for a deeper dive into our launch metrics. Steve?