Acerus Pharmaceuticals Corporation

Enter your conference passcode. Welcome to the Assyria Pharmaceuticals Corporation conference call held on Tuesday, August 9, 2022, at 10 o'clock a.m. Eastern Time, hosted by Mr. Edward Gudaitis. You may press 2 at any time during this conference to have a detailed help menu. Good morning, ladies and gentlemen. Welcome to the Q2 2022 earnings call for Esseris Pharmaceuticals Corporation. At this time, all participants are in a listen-only mode. A brief question and answer session will be followed by this discussion. 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 will be available for replay until 2359 PM on August 16th, 2022 by dialing 905-694-9451 or 1-800-408-3053 using access code four, three, six, nine, nine, eight, nine followed by the pound sign. I will now turn the call over to Mr. Bob Motz, Chief Financial Officer of SRS Pharmaceuticals Corporation. Mr. Motz will moderate today's call. Mr. Motz, please proceed.

Thank you very much, Marie. Good morning to everyone and welcome to the ACERIS 2022 Second Quarter Conference Call. I'm pleased to be joined today virtually by Ed Gudaitis, our President and Chief Executive Officer, along with other senior members of the ACERIS team. Before we begin, I would like to comment on forward-looking statements in this call. On behalf of the speakers who follow, investors are cautioned that the presentations and responses to questions on this call may contain forward-looking statements. Such statements may contain forward-looking information within the meaning of applicable securities laws. Forward-looking statements are given as of the date of this call, may involve risk and uncertainty, and may include but are not limited to the company's goals, targets, strategies, intentions, plans, beliefs, estimates, expectations, outlook, and other statements which contain language such as believe, anticipate, expect, intend, plan, will, may, and other similar expressions. Certain material factors or assumptions are applied in the formulation of forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. For additional information about the statements, the material factors or assumptions underlying such statements, and about the material factors or assumptions that may cause actual results to vary from those expressed or implied in such statements, please consult the press release issued today and the company's other filings, which are available on CDAR, at www.cdar.com. I would like to now turn the call over to Mr. Ed Godaitis, President and Chief Executive Officer, for his remarks.

Ed? Thanks, Bob, and welcome, everyone, to our 2022 second quarter conference call. Today, I'll review our recent operational progress, after which Bob will provide a detailed overview of the financial results. Our performance this quarter once again showed that the company remains on track for accelerated top-line growth and improved results going forward as we leverage our sales force to drive Netesto prescriptions across the U.S., product revenue rose substantially year over year, as Bob will review in a moment, reflecting continued strong demand, increased prescription bills, and higher ex-factory shipments. Now let me review some of the operational details regarding our products and ongoing market developments in the second quarter of 2022, starting with Netesto. I'm pleased to report that total Netesto prescriptions in the United States grew 47% year over year, and we're up approximately 23% sequentially over the first quarter of 2022. We're now the fastest growing branded testosterone product in the U.S. market, according to data from Symphony Health, positioning us for significant growth this year. We saw new prescriptions rise 65% year over year and grow 31% sequentially from the first quarter. This is simply quite phenomenal, reflecting the passion and dedication of our highly motivated and effective sales staff, whose activity levels remain at an all-time high based on calls to doctors, pharmacies, and other targeted professionals. Our rapid expansion year-over-year was again driven by the family practice segment, where total prescriptions rose 71% year-over-year, with new prescriptions up 94%. The urology segment also posted solid growth, with total scripts up 48% and new prescriptions climbing 66%. The breadth of overall prescribing activity continues to increase, with the number of healthcare professionals writing to testo prescriptions increasing 39% year-over-year. As a reminder, over 75% of Netesto scripts are written for commercially insured patients, and roughly 35% of prescriptions are now being dispensed through our pharmacy partner program, a group of local independent pharmacies dedicated to improving patient care and product adherence. So we've been on track for a very strong year on a significant growth in keeping with our strategic plan. It's an exciting time for Netesto in the U.S., and we thank our sales force for their pivotal role in driving the execution of our growth and underlying operations. In addition, as announced previously, the company and Amnial Pharmaceuticals agreed to end the Natesto co-promotion agreement effective June 30, 2022. Given our success in other HCP segments, this approach allows us to take full responsibility of our growth going forward. As such, the company has actively been reconnecting with high-prescribing endocrinology segment, and we anticipate this market segment to contribute meaningfully to our sales in the second half of 2022. As previously discussed, Netesto's reintroduction in Canada has been negatively impacted by supply chain disruptions and delays. But I'm very pleased to say that we now anticipate having the product to sell in Canada in Q3, meaning very soon. We look forward to having this back on the market and available to the numerous customers ready and eager, waiting for its return. Netesto interest in South Korea and Taiwan also continues to be sprung, with additional product orders anticipated in the second half of 2022. In addition, we remain excited about the future of our latest brand, Noctiva, since acquiring Serenity Pharmaceuticals LLC in March. We continue to work closely with our contract manufacturer, Renaissance Liquid, to restart production and to introduce Noctiva back into the U.S. market where it already has FDA approval. The resumption of commercial manufacturing is underway and is expected to take until the end of this year. We're currently planning for commercial availability of Noctiva in the U.S. in the first quarter of 2023, with expectations that the brand's efficacy and prior demand will drive rapid acceptance next year. Significant overlap in position call points for Noctiva and Intesto should provide for synergies that should result in both increased sales as well as better productivity from new and existing sales staff alike. Everyone at Aceris is excited to get this product off the ground again. With regard to Avanafil, we continue to work with Petro's Pharmaceuticals, the licensor, and Sanopi to update the regulatory dossier for resubmission. It's expected to be provided to Health Canada by the end of the year, with an anticipated introduction of Avanafil to the Canadian marketplace taking place sometime in 2023. Before turning the call over to Bob, I'd like to say, once again, thanks to our hard-working and dedicated workforce, particularly our U.S. sales organization, without which we would not be where we are today. transformation of this company has been nothing short of amazing, and the momentum we're experiencing makes us very confident in our growth strategy, which is driven by the growth of Natesto and Noctiva. With prescriptions for Natesto rapidly rising and our introduction of Noctiva being planned for the near future, the company remains on track for strong top-line growth and improved operating performance. I'd also like to take the time right now to thank our investors for their ongoing interest and support. which drives our commitment to achieve success in the quarters to come. That concludes my review of the operational highlights for the quarter. I'd like to now turn the call over to Bob for the financial review. Bob?