scPharmaceuticals Inc.

Greetings and welcome to the SC Pharmaceuticals second quarter 2024 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 and then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, PJ Killeher. investor relations. Thank you. 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 within the meaning of the federal securities laws, including but not limited to statements regarding SC Pharmaceuticals' expected future financial results, management's expectations and plans for the business, the ongoing commercialization and marketing of perosics, and the potential label expansion and other regulatory approvals of perosics. 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 guaranteed to have 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 expressively 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. Thank you to everyone listening to this afternoon's call and webcast. to review our second quarter 2024 results. At the center of practice, I will begin with an operational update before turning the call over to Steve Farson, our Senior Vice President of Commercial, for a more detailed commercial update on Ferocix, and then Rachel Noakes, our Chief Financial Officer, for a review of our financials. We will then open the call for your questions. I would like to begin this afternoon with a recap of the financing up to $175 million that we announced earlier this week. Upon closing of these transactions, approximately $75 million was added to the company's balance sheet, which extends our cash runway through profitability. Through this financing, the company also has access to an additional $50 million through debt and or royalty facility. Financing is comprised of three parts. First, $75 million of senior debt facility with receptive advisors, of which $50 million was funded at closing, to repay 50 million of existing debt with Oaktree. An additional 25 million will be available subject to the achievement of certain pre-specified commercial and regulatory milestones. Debt carries a five-year term of which the first four years are interest only with a bullet repayment in year five. Facility lowers our interest rates and push out the amortization as compared to the retired Oaktree facility. Second, a synthetic royalty agreement of up to $50 million also with perceptive advisors. $25 million of the royalty financing was funded at close, and the additional $25 million remained available subject to the achievement of certain pre-specified commercial milestones. And finally, a public offering of approximately $50 million of equity led by leading life science investors. Together, we believe this financing extends our cash runway through profitability. Turning now to our launch progress. During the second quarter, we generated sequential net revenue growth that we believe reflects increasing awareness and utilization of cirrhosis by cardiologists and heart failure specialists. As Steve will detail shortly, our leading indicators 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 8.1 million representing sequential growth of 33% as compared to the first quarter of 2024. Our gross net discount during the second quarter was approximately 8%, down from 19% in the first quarter. We expect the GTN discount to increase over time as contracting with payers evolves and IDN demand grows. Looking to the back half of the year, we currently anticipate our GTN to range from 10% to 15% for the next two quarters. Over the longer term, we continue to believe that a GTN in the 30% to 35% range is appropriate, although there will be some variability from quarter to quarter as we continue to expand our roster of payers and IDNs. I would like to now 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. We announced that the FDA has approved our supplemental new drug application seeking to expand the 406 label to include all heart failure patients, including the most symptomatic patients and those with the greatest limitation on physical activity categorized as New York Heart Association Class 4. Virosis was previously indicated as a treatment of congestion due to fluid overload in adult patients with New York Heart Association Class 2 and Class 3 chronic heart failure. By expanding the label to include New York Heart Association Class 4, which accounts for approximately 10% of heart failure patients and 30% of heart failure hospitalizations, we estimate that as many as 40% of these patients may potentially benefit from cirrhosis. Given cirrhosis' ability to improve signs and symptoms of congestion, which may lead to a reduction in unnecessary hospital admissions and readmissions, with the potential to improve patient-qualified life while reducing overall and heart failure-related health care costs. We believe uptake among cardiologists and heart failure specialists who treat these very symptomatic patients could be meaningful. Turning now to the low-volume autoinjector that is in development. We announced earlier this week positive top-line study results from a PK study, which demonstrated that furosix achieved primary pharmacokinetic and secondary pharmacodynamic endpoints. Some of the highlights from the study results include SCP-111 demonstrated bioavailability of 107.3, achieving the 90% confidence interval limit of 80% to 125%. Participants that received SCP-111 had similar urine output, urinary sodium excretion, and urinary potassium excretion at 6, 8, and 12 hours compared to IV furosemide. Participants reported a median pain score of zero across all time points assessed. The most common adverse events of SCP-111 were localized at the injection site, and systemic adverse events were consistent with those reported in the prescribing information for intravenous and oral furosemide. With these results, we continue to work towards our target submission of an SNDA to the FDA by the end of the year. As we stated previously, we believe in auto-injector, if approved, will reduce our manufacturing costs compared to the current on-body infuser, confer environmental advantages, and give treating providers and their patients treatment flexibility. Finally, we announced that FDA has accepted our filing of a supplemental new drug application seeking to expand the process label to treatment of edema due to fluid overload in patients with chronic kidney disease, or CKD. The FDA had previously indicated that no additional clinical studies were required to expand the furosemide indications to include CKD if we can demonstrate an adequate PK and pharmacodynamic bridge to the listed drug, which is the furosemide injection. 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 there were 6.6 treated with loop diuretics, and it's made 50% of patients with CKD do not have a diagnosis of heart failure. This results in a potential incremental increase of $3.1 billion to the already existing $9.4 billion addressable market opportunity in heart failure, with fluid overload being one of the most common complications in CKD, which worsens with disease progression. We believe cirrhosis can be beneficial to patients with CKD who have worsening symptoms due to fluid overload and are not responding to oral loop diuretics. The FDA has assigned that the due date of March 6th, 2025, if approved, we would make investments in our sales and commercial infrastructures to expand our reach to nephrologists. At this point, I will turn the call over to our Senior Vice President of Commercial, Steve Parsons, for a deeper dive into our launch metrics. Steve?