Q4 2020 AcelRx Pharmaceuticals Inc Earnings Call

Welcome to the accelerates the fourth quarter and full year 2020 conference.

Operator: Welcome to the AcelRx fourth quarter and full year 2020 conference call. This call is being webcast live on the Events page of the Investor Relations section of AcelRx's website at acelrx.com. This call is the property of AcelRx, and any recording, reproduction, or transmission of this call without the express written consent of AcelRx is strictly prohibited. As a reminder, today's call is being recorded. You may listen to a webcast replay of this call by going to the investor section of AcelRx's website. I would now like to turn the call over to Raffi Asadorian, AcelRx Chief Financial Officer. Please go ahead.

Call.

This call is being webcast live on the events page of the Investor Relations section of the accelerates as website at accelerate Dot Com. This call is the property of accelerates and any recording reproduction or transmission of this call without the express written consent of acceleration is strictly prohibited.

As a reminder, today's call is being recorded.

You may listen to a webcast replay of this call by going to the investors section of ex all Rx's website.

I would now like to turn the call over the Rafi Aciduria accelerates Chief Financial Officer of please go ahead.

Thank you for joining us this afternoon.

Raffi Mark Asadorian: Thank you for joining us this afternoon. Earlier today, we announced our previously released fourth quarter and full year 2020 financial results in a press release. This press release and the slide presentation accompanying this call are available in the Investors section of our website. With me today is Dr. Pam Palmer, our Chief Medical Officer. Unfortunately, Vince Angotti, our Chief Executive Officer, is unable to join us today due to a family emergency.

Earlier today, we announced our previously released fourth quarter and full year 2020 financial results in a press release. This press release and the slide presentation accompanying this call are available in the investors section of our website.

With me today is Dr. Pam Palmer, our Chief Medical Officer.

Unfortunately, Vince and gaudy, our Chief Executive Officer is unable to join US today due to a family emergency.

Before we begin I'll remind listeners that during this call we will make forward looking statements within the meaning of the federal Securities laws.

Raffi Mark Asadorian: Before we begin, I'll remind listeners that during this call, we will make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of AcelRx. Please refer to our press release, in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission, for a discussion of the risks associated with such forward-looking statements. Now, let's get started. We have a long call today.

These forward looking statements involve risks and uncertainties.

Regarding the operations and future results of accelerates.

Please refer to our press release in addition to the company's periodic current and annual reports filed with the Securities and Exchange Commission for a discussion of the risks associated with such forward looking statements.

Let's get started we have a long call today.

Hey.

Raffi Mark Asadorian: Like most companies during this pandemic, we have adapted and found ways to continue advancing the long-term value of AcelRx and the commercial launch of Dissuvia despite the obvious challenges with access to hospitals, physicians, and decision makers. As a result, we've successfully achieved many of the objectives set out at the beginning of 2020 and believe that in the post-COVID environment, Dissuvia is well positioned for success due to the need for efficiencies at ASCs and hospitals.

Like most companies during this pandemic, we have adapted and found ways to continue advancing the long term value of accelerates and commercial launch of the subia. Despite the obvious challenges with access to hospitals physicians and decision makers.

As a result, we success.

Access fully achieved many of the objectives set out at the beginning of 2020 and believe that in the post COVID-19 environment. The Subia is well positioned for success due to the need for efficiencies at <unk> and hospitals, the progress of our partnerships and the readout of additional clinical data.

Raffi Mark Asadorian: We look forward to the progress of our partnerships and the readout of additional clinical data through the course of 2021. We've learned from the real world use of Dysuvia that, in addition to Dysuvia being an effective and well tolerated analgesic to manage acute pain,

Through the course of 2021.

We've learned from the real World real World use of the Silvia that in addition to the Cvs being an effective and well tolerated analgesic to manage acute pain. The subia also supports opioid stewardship and that it reduced overall peri operative.

Raffi Mark Asadorian: Vesuvia also supports opioid stewardship in that it reduced overall perioperative opioid requirements in patients from two separate peer-reviewed published studies. Importantly, these studies showed data that supported, for the first time, economic benefits to hospitals and surgery centers, which is resonating with physicians as well as hospital administrators. Later, I will discuss the importance of this data and our continued focus on supporting investigator-initiated studies where we see significant potential for Dysuvia to help new patient populations.

Opioid requirements and patients from two separate peer reviewed published studies.

Importantly, these studies showed data that supported for the first time economic benefits to hospitals and surgery centers, which is resonating with physicians as well as.

Hospital administrators.

Later, I will discuss the importance of this data and our continued focus on supporting investigator initiated studies, where we see significant potential for <unk> to help new patient populations.

I will also update you on the progress.

Raffi Mark Asadorian: I will also update you on the progress in each of our four pillars providing a foundation for revenue growth. In addition, we have a special guest with us today who is one of our physician experts in oral and dental anesthesia, Dr. Steven Yun. Zimmer Biomet is gearing up for its formal launch of Dysuvia into the oral and dental surgery space, and we thought it would be helpful for our investors to hear about Dr. Yun's experiences with Dysuvia. Pam will provide a further introduction to Dr. Yun later in the call.

Progress in each of our four pillars, providing a foundation for revenue growth.

In addition, we of a special guest with US today, who is one of our physician experts and oral and dental anesthesiology Dr. Steven you're on.

The Zimmer Biomet is gearing up for its formal launch of the Subia.

The oral and dental surgery space and we thought it would be helpful for investors to hear about Doctor Younes experiences with the <unk>.

Pam will provide a further introduction to Dr. Jan later in the call.

The pandemic has many has had many unanticipated.

Raffi Mark Asadorian: The pandemic has had many unanticipated effects on the world and impacted each of us in different ways. With regard to AcelRx, the three main impacts we have experienced are one, cancellation or delays of formulary committee meetings. 2.

Interest on the world and impacted each of us in different ways.

With regards to accelerates the three main impacts we have experienced are one cancellation or delays of formulary committee meetings.

To restrictions on pharmaceutical representatives or any outside visitors entering the institution.

Raffi Mark Asadorian: Restrictions on pharmaceutical representatives or any outside visitors entering the institutions to educate healthcare providers, and 3. Delays in elective surgeries. With regard to the last point, the elective surgery backlog has grown significantly over the last year. A May 2020 study of orthopedic surgery volumes by the Journal of Bone and Joint Surgery suggested that even under the most optimistic scenario, the United States may face a cumulative backlog of more than a million total joint and spine surgery cases.

The effects to educate healthcare providers and three delays of elective surgeries.

With regards to the last point the elective surgery backlog has grown significantly over the last year.

The May 2020 study of orthopedic surgery volumes by the journal of bone and joint surgery.

<unk> suggested that even under the most optimistic scenario the United States May face a cumulative backlog of more than 8 million total joint and spine surgery cases.

With the rollout of vaccines many industry insiders believe these elective surgeries will start ramping in the second half of 2000.

Raffi Mark Asadorian: With the rollout of vaccines, many industry insiders believe these elective surgeries will start ramping up in the second half of 2021. We believe this expected return of surgeries provides an opportunity as the surgical environment has been the initial primary use for Dysuvia. I'll provide an update on some 2021 guidance that includes this growth expectation and the number of expected formulary approvals by the end of the year. But before looking forward, let's review the progress made and objectives achieved in 2020 in each of our four pillars. The first pillar is centered on the Department of Defense.

<unk> one.

We believe this expected return of surgeries provides an opportunity as the surgical environment has been the initial primary use for <unk>.

I'll provide an update on some 2021 guidance that includes this growth expectation and the number of expected formulary.

The 20 rubles by the end of the year.

Before looking forward.

Let's review the progress made and objectives achieved in 2020 in each of our four pillars.

The first pillar is centered on the department of Defense, we made significant progress in 2020 with.

Raffi Mark Asadorian: We made significant progress in 2020. Milestone C approval was received in April, and Joint Deployment Formulary Approval was received in September.

Malaria, but don't see approval received in April joint deployment formulary approval received in September and finally for year $3 $6 million contract received from the U S Army to develop clinical practice guidelines.

Raffi Mark Asadorian: And finally, a four-year, $3.6 million contract received from the U.S. Army to develop clinical practice guidelines. In addition, we continue to penetrate Military Treatment Facilities, or hospitals, based here in the U.S. as the benefits of Dysuvia across the military are being better understood. As a reminder, the Milestone C approval means DeSuvia will be packed out in U.S. Army SKOs, or sets, kits, and outfits, for all deploying troops. We continue working with the Army on all the complex logistics and administrative matters to improve this process, which has taken time.

In addition, we continued to penetrate.

With mild military treatment facilities or hospitals based here in the U S. As the benefits of the subia across the military are being better understood.

As a reminder, the milestone C approval means to Sylvia will be packed out in the U S Army <unk> or sets kits and outfits.

The trade for all deploying troops.

We continue working with the army on all of the complex logistics and administrative matters to improve this process, which has taken time.

Regardless once the logistics are finalized we still believe that the initial stocking for all of <unk> will.

Raffi Mark Asadorian: Regardless, once the logistics are finalized, we still believe that the initial stocking for all SKOs will approximate $30 million in revenue over three years. We do not yet have any guidance on what this will translate into for revenues in 2021, but we expect these final logistics to be worked out in the near term. Our focus will remain on educating and training the U.S. Army teams so they are prepared as DeSuvia ships for deploying troops.

The approximate $30 million in revenue over three years.

We do not yet have any guidance on what this will translate into for revenues in 2021, we would expect these final logistics to be worked out in the near term.

Our focus will remain on educating.

The catering and training the U S. Army teams. So they are prepared as the Cvs ships to deploying troops.

Separately military treatment facilities continue to be of focus as many of these physicians rotate into deployment, which provides an opportunity for more health care providers within the military to learn about.

Raffi Mark Asadorian: Separately, military treatment facilities continue to be a focus as many of these physicians rotate into deployment, which provides an opportunity for more health care providers within the military to learn about the benefits of DeSuvio. The second pillar is concentrated on large specialty markets accessed through partnerships. A significant accomplishment in 2020 was the exclusive Zimmer Biomed Oral and Dental Surgery Partnership announced in July. Zimmer Biomet has just started to begin promotion with the trained 31 sales representatives that is expected to expand to the broader 200 plus sales representatives later this year, particularly after Zimmer Biomed Dental receives its wholesaler drug license.

The benefits of <unk>.

The second pillar is concentrated on large specialty markets accessed through partnerships a significant accomplishment in 2020 was the exclusive Zimmer biomet oral and dental surgery partnership announced in July.

Zimmer Biomet has just started.

To begin promotion with the trained 31 sales representatives that is expected to expand to the broader 200 plus sales representatives later this year.

Particularly after Zimmer biomet dental receives their wholesaler drug of licenses.

As a reminder, this opportunity approximates.

Raffi Mark Asadorian: As a reminder, this opportunity approximates 7.5 million applicable Dysuvia procedures. We believe the potential is significant to reach a large proportion of these customers given Zimmer Biomets Dental's customer base and established relationships in this space. Once a full promotional effort is made with their sales force, we believe growth will ramp quickly.

$7 5 million applicable to Subia procedures.

We believe the potential is significant to reach a large proportion of these customers given zimmer biomet dental customer base and established relationships in this space.

Once a full promotional effort is made with their sales force.

We believe growth will ramp quickly.

Raffi Mark Asadorian: Dr. Yun will discuss his experience with Dysuvia in this setting to provide a better idea of the types of procedures that can benefit from Dysuvia. Also within this pillar are other potential specialties such as plastic surgery, emergency medical services, and many others. Plastic surgery has been one of our fastest-growing specialties in the first quarter of this year, given the unique pharmacokinetic characteristics of Dysuvia and how these procedures are being performed. And this has been accomplished with only two sales representatives making virtual sales calls initiated in the fourth quarter.

Dr. Jan will discuss his experience with the <unk> in this setting to provide a better idea.

Of the types of procedures that can benefit from the <unk>.

Also within this pillar or other potential specialties, such as plastic <unk>.

Surgery emergency medical services and many others.

Plastic surgery has been one of our fastest growing specialties in the first quarter of this year given the unique pharmacokinetic characteristics of the <unk> and how these procedures are being performed.

And this has been accomplished with only two sales.

<unk> representatives, making virtual sales calls initiated in the fourth quarter.

Our third pillar, which is the primary focus of our internal commercial organization is hospitals and surgery centers.

Raffi Mark Asadorian: Our third pillar, which is the primary focus of our internal commercial organization, is hospitals and surgery centers. While COVID has certainly had an impact on our progress in this pillar, the publications of the new real-world clinical data have provided a rationale for how Dysubia can help address the backlog in elective procedures moving forward. Importantly, in 2021, we believe the ongoing investigator-initiated trials at some of the most prestigious hospitals in the U.S. and new studies being evaluated will provide further evidence of dysuvia's potential to change the paradigm of pain management for surgery. However, selling into hospitals and surgery centers has a long lead time. And this was only exacerbated during the pandemic.

While Covid has certainly had an impact on our progress in this pillar of the.

The publications of the new real World clinical data have provided of rationale of how <unk> can help address the backlog and elective procedures moving forward.

Importantly in 2021, we believe the ongoing investigator initiated trials at some of the most prestigious hospitals.

<unk> in the U S and new studies being evaluated we will provide further evidence of <unk> potential to change the paradigm of pain management for surgeries.

Selling into hospitals and surgery centers has a long lead time and this was only exacerbated during the pandemic.

With the data showing real world use of <unk> supporting opioid stewardship and efficiencies in the perioperative setting now there is more information that healthcare providers are able to evaluate for upcoming formulary and purchasing decisions.

Raffi Mark Asadorian: With the data showing real-world use of Dysuvia supporting opioid stewardship and efficiencies in the perioperative setting, now there is more information that health care providers are able to evaluate for upcoming formulary and purchasing decisions. One example of the benefits of this data was our recent partnership with the National Rural Health Association, which identifies opioid stewardship as one of its four critical priority areas after reviewing the available publications with this clinical data. They decided to enter into a partnership with us to help support this effort.

One example.

<unk> the fit of this data with our recent partnership with the National Rural Health Association.

Which identifies opioid stewardship as one of their for critical priority areas.

After reviewing the available publications with this clinical data the.

They decided to enter into a partner.

<unk> with us to help support the suffered.

Raffi Mark Asadorian: As we've previously announced, there are ongoing investigator-initiated studies being performed at Harvard Brigham and Women's Hospital, the Cleveland Clinic, University Hospitals of Cleveland, as well as at the Newport Plastic and Reconstructive Surgery Center. These are well-regarded institutions, all focused on different studies in patient populations. We believe the data from these ongoing studies will demonstrate the effectiveness and benefits Dysuvia provides over current standards of care. We expect data from these studies to be released later this year.

As we've previously announced there are ongoing investigator initiated studies being performed at Harvard Brigham and Women's Hospital, the Cleveland Clinic University hospitals of Cleveland as well as at the Newport plastic.

The reconstructive surgery center.

These are well regarded institutions all focused on different studies in patient populations.

We believe the data from these ongoing studies, we will demonstrate the effectiveness and benefits. The subia provides over current standards of care.

We expect data from these studies to read out later this year and coupled with the opening up of elective surgeries expected in the second half of the year. We believe it will provide further momentum for the use of <unk>.

Raffi Mark Asadorian: Coupled with the opening up of elective surgeries expected in the second half of the year, we believe this will provide further momentum for the use of Dysuvia. Knowing how important new data is for driving adoption by health care providers, we are reviewing many other study requests. Several focused on orthopedic surgeries, which has been one of the fastest increasing specialties along with plastic surgery. The benefits being seen from orthopedic surgeons while using Dysuvia include faster discharge times for patients and overall reduction in opioid utilization in the PACU.

Knowing how important new data is for driving adoption by.

The health care providers, we are reviewing many other study of requests with several focused on orthopedic surgeries, which has been one of the fastest increasing specialties along with plastic surgeries.

The benefits being seen from orthopedic surgeons, while using to Sylvia include faster discharge.

Charge time for patients and overall reduction in opioid utilization in the PACU.

These physicians also report patients are more clear headed which is consistent with the Sylvia the Cvs lack of cognitive impairment as assessed in our registration trials.

Raffi Mark Asadorian: These physicians also report patients are more clear-headed, which is consistent with Dysubia's lack of cognitive impairment as assessed in our registration trials. The orthopedic surgery market will be a key specialty for Dysuvia in 2021. In addition to orthopedic studies, we continue to receive strong interest for investigator-initiated trials in other areas, including proposed studies in sickle cell patients presenting to the emergency department and retinal surgery in the elderly. With COVID delaying formulary reviews, as mentioned on our last quarterly call, we shifted our commercial team's focus to the accounts that had already been reviewed and approved for Suvia.

The orthopedic surgery market will be of key specialty for <unk> in 2021.

In addition to orthopedic studies, we continue to receive strong interest for investigator initiated trials in other areas, including proposed studies in sickle cell patients presenting to the emergency Department.

<unk> and retinal surgery and the elderly.

With Covid delaying formulary reviews as mentioned on our last quarter call we.

We shifted our commercial team's focus to the accounts that had already reviewed and approved <unk> for use.

As a result.

Raffi Mark Asadorian: As a result, in the fourth quarter, 90% of all orders shipped were for reordering customers. Before providing a further operational and financial update, I would like to hand the call over to Pam to introduce Dr. Jung.

Fourth quarter, 90% of all order shipped were for reordering customers.

For providing a further operational and financial update I would like to hand, the call over to Pam to introduce Dr. Yang.

Thank you Rafi, we are fortunate to have with us today.

Pamela Pierce Palmer: Raffi, we are fortunate to have with us today the anesthesiologist who first recognized the important benefits that D'Souza could bring to oral surgeons and their patients. And we're also excited about the collaboration with Zimmer Biomass.

And the for anesthesiologists to first recognize the important benefits that.

The C D could bring to oral surgeons and their patients.

And we're also excited about the collaboration with Zimmer Biomet.

Dr. Stephen you on is a board certified anesthesiologist, who specializes in providing dental office anesthesia for.

Pamela Pierce Palmer: Dr. Steven Yun is a board-certified anesthesiologist who specializes in providing dental office anesthesia for complex oral surgery cases. He is an examiner and expert consultant for the Dental Board of California, clinical professor of the Western University of Health Sciences, and a lecturer at the Loma Linda School of Dentistry. He is also a safety inspector for the American Association for the Accreditation of Ambulatory Surgical Facilities.

The oral surgery cases.

He is an examiner and expert consultant for the dental board of California clinical Professor of Western University of Health Sciences, and day lecture at the Loma Linda School of Dentistry.

He is also of safety Inspector for the American Association for the accreditation.

To put the name, but it's the marine career schools.

[laughter] Doctor yen knows firsthand, how important consistent and effective the level.

Pamela Pierce Palmer: Dr. Yun knows firsthand how important, consistent, and effective levels of opioid analgesia are for the oral surgeon performing a lengthy surgery in his or her procedural suite. Usually, patients are not under general anesthesia during these lengthy procedures, and throughout the case, the oral surgeon will have to repeatedly stop to administer low-dose IV opioids. This is because the peaks and troughs of IV-administered drugs are inherently ineffective at providing stable levels of analgesia for cases lasting hours.

Opioid analgesia or for the oral surgeon for for me link the surgery and his or her procedural suite.

Usually patients are not under general anesthesia.

Seizure during these linked the procedures and.

Throughout the case that we're on surgeon will have to repeatedly stop.

The administer low dose of IV opioids.

This is because of the peaks and troughs of IV administered drugs are inherently ineffective at providing stable level of analgesia out of it for.

Cases.

<unk> hours.

Pamela Pierce Palmer: Dr. Yun's direct observations during surgical cases of the unique pharmacodynamic profile of sublingually-administered Dysubia, and his knowledge of the High Therapeutic Index of Sufentanil make him uniquely qualified to discuss with you today the use of sedation during these oral surgery procedures. Before Dr. Yun discusses his experience with utilizing Dysuvia in his dental anesthesia practice, I will cover some safety information about Dy The following information is intended for investors, not healthcare professionals, or patients.

The Doctor Yens direct observations during surgical cases of the unique pharmacodynamic profile of sublingual administered the subia.

And his knowledge of the high therapeutic index of Sufentanil make him uniquely qualified to discuss with you today the use of just using these oral.

Oral surgery procedures.

Before Doctor you on discuss at six is experienced with the utilizing to Sue the Inn is dental anesthesia practice I will cover some safety information about the Sylvia.

The following information is intended for investors not health care professionals or patients.

<unk> is the scheduled two controlled.

Pamela Pierce Palmer: Dasuvi is a Schedule II controlled substance that may only be dispensed to adult patients in a certified medically supervised healthcare setting for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate. Risks include life-threatening respiratory depression, addiction, abuse, misuse, cytochrome P450-3A4 interaction, and risk from associated use with benzodiazepines or other central nervous system depress The most commonly reported adverse reactions are nausea, headache, vomiting, dizziness, and hypotension.

Bold substance that may only be dispensed for adult patients and of certified medically supervised health care setting for the management of acute pain severe enough to require an opioid analgesic and for which alternative treatments are inadequate.

Risks include life, threatening respiratory depression addiction abuse misuse.

Side of Chrome P for 53, eight for interaction and risk from the associated use with benzodiazepines or other central nervous system depressants.

Most commonly reported adverse reactions are.

Vomiting, dizziness and hypertension and.

Insufficient data are available on the use of just use the in patients with severe liver kidney impairment does.

Pamela Pierce Palmer: Insufficient data are available on the use of dasuvi in patients with severe liver or kidney impairment. Therefore, dasuvi should be used with caution in such patients due to the importance of these organs in the metabolism and excretion of sufentin. AcelRx ensures proper use of Dysuvia via physician education and the Dysuvia Risk Evaluation and Mitigation Strategies, or REMS, program. Dysuvia is only available to facilities that are part of the Dysuvia REMS program. Facility that administers Dysuvia must be able to manage acute opioid overdose, train relevant staff on Dysuvia, and implement policies and procedures to ensure the appropriate administration of Dysuvia.

<unk> should be used with caution and such patients due to the importance of these organs in the metabolism and excretion of Sufentanil.

Accelerates insurers proper use of the Subia via physician education, and the Soobee of risk evaluation and mitigation strategies or Rems program just to be the only available to facilities that are part.

The just to be a rems program for.

So the you said administered to sue the and must be able to manage acute opioid overdose train relevant staff on the subia and implement policies and procedures to ensure the appropriate administration of the Sylvia.

Full safety information and the Black box warning for the Subia can be found at the suite the dotcom.

Pamela Pierce Palmer: Full safety information and the black box warning for Dysuvia can be found at Dysuvia.com. Now, I would like to hand the call over to Dr. Yun to share his insights into the use of Dysuvia in oral surgery practices.

Now I would like to hand, the call over the doctor him to share his insights into the use of the subia in oral surgery practice.

Steven Yun: Thank you, Dr. Palmer. Hello, I'm Dr. Steve Yang. I'm pleased to be able to share my observations on the use of Vesuvia in patients undergoing oral surgery. Of note, I am a consultant and speaker for AcelRx, and I am being compensated for my time to speak with you today.

Great. Thank you Dr. Palmer, Hello, I'm, Dr. Steve Yeah, I'm pleased to be able to share my observation on the used.

The Cvs in patients undergoing oral surgery.

Oh, no I am of consultant and the speaker for solar ex and being compensated for my time to speak with you today.

Steven Yun: Almost two years ago, I was attending a talk by Dr. Palmer on dysphoia that was unrelated to oral surgery. But given my focus in this field of anesthesia, I immediately realized the potential impact dysphoia could have on an oral surgeon's practice. Oral surgeons train not only in oral surgery but also in anesthesia, so the vast majority of these cases do not have an anesthesiologist like me present. I am only brought in for the more complex or difficult cases, such as patients with many comorbidities or difficult IV access.

Almost two years ago, all of its attainment of top of my back of Palmer on the suit that was unrelated the oral surgery.

But given my focus in this field of athleisure, if I immediately realize.

The potential impact.

You could have on the oil so items right.

Well certainly the trade not only in all of surgery, but also an easier.

The vast majority of these cases since I haven't asked the geologist.

I am only brought in for the more complex or difficult cases.

Such as patients with many comorbidities or difficult IV access.

Therefore, all of certain have to provide both of the sedation and the Algeria as well as on the surgery, which is no easy task.

Steven Yun: Therefore, oral surgeons have to provide both sedation and analgesia, as well as perform the surgery, which is no easy task. While dental local anesthetic blocks provide a substantial amount of pain control, These alone are often inadequate for larger searches. It's actually those that involve the upper arc, and it is cumbersome to administer and can often get in the way of the surgeon's operative field.

While the central and local anesthetic blocks provide a substantial amount of pain control.

He's alone.

Alone are often inadequate of larger surgeries the person.

The those that involve the upper arm.

Nitrous oxide laughing guests can slightly 1% for the pain.

It really isn't that effective for moderate to severe pain and it is cumbersome to administer.

Can often get in the way of the surgeons.

Since the opposite the appeal.

Steven Yun: Now, oral surgeons often rely on intravenous opioids, such as low-dose intravenous fentanyl, to supplement the local NSA flight. I say low-dose since these patients are not intubated, but rather they are under a moderate level of sedation and breathing on their own. The pharmacokinetic profile of intravenous fentanyl is a rapid, high peak followed by a fairly rapid drop. Therefore, we can only give low doses in these awake cases because the rapid peak plasma concentration can cause respiratory depression if it rises too high.

The oral surgeons often rely on intravenous opioids, such as the low dose intravenous effect on this.

Supplement the local and state of flux.

I stayed low dose since these patients are not integrated for.

Rather they are under a moderate level of the basin.

Breathing on their own.

The pharmacokinetic profile of intravenous fentanyl is of rapid high peak.

Followed by a fairly big drop.

And only give low doses and diesel weight cases, because of the rapid peak plasma concentrations and caused respiratory depression, if it rises too.

Okay.

Following the peak of drug levels, the distribution help of an IV fentanyl is on the one seven minutes.

Steven Yun: Following peak drug levels, the distribution half of an IV fentanyl is only 1.7 minutes, which essentially means it quickly leaves the plasma and doesn't maintain a consistent plasma concentration that is delivered to the brain. The duration of action of these typical low doses of fentanyl, such as 25 micrograms, is about 30 minutes at most.

Which essentially means of quickly leaves the plasma.

Doesn't maintain a consistent plasma concentration that is delivered to the brain.

The duration of action of the typical.

To high doses of fentanyl, such as 25 micrograms is about 30 minutes at most.

So you can imagine the roller coaster of banknote plasma concentrations of <unk>.

Steven Yun: So you can imagine the rollercoaster of fentanyl plasma concentrations throughout a two- to three-hour case. The Interruptions to the Surgeon and the Breakthrough Pain Fulfillment are not optimal times to take a leap, and patients who are especially risky from an airway standpoint, such as patients with sleep apnea who have excessive soft tissue in their airway. These high peak opioid levels can really be problematic as these sedated patients can have an obstructed airway and drop their oxygen levels more rapidly than a patient without sleep apnea.

Two to three of our case.

The interruptions to the surgeon and the breakthrough pain pump on.

Our non optimal.

The load to the leaf.

And patients for especially risky from an airway standpoint of such as patients with sleep apnea, who have excess of soft tissue in the airway.

These high peak operating levels can really be problematic.

Is this the day the patients can have on instructed the airway and drop their auction.

Optimal the levels more rapidly than the patient without sleep apnea.

Steven Yun: Now, before recommending Visevia to my oral surgeon colleagues, I wanted to dose it in my own challenging oral surgery anesthesia cases to really get a feel for the safety and efficacy of the drug. My first case was a morbidly obese patient weighing 350 pounds who needed full mouth extraction and full arching teeth. These cases typically last 5 to 6 hours, and this patient not only had a difficult airway to protect but many comorbidities, such as coronary artery disease and diabetes.

That'd be part of recommending the Cvs to my oral of certain colleagues I want the dose it in my own challenging oral surgery anesthesia cases to really get a feel for the safety and efficacy of the drug.

My first case.

This was the morbidly obese patients between 350 pounds.

For the full multi extraction and full arching plans.

These cases typically last August six hours and this patient not only had simple airway to protect the many comorbidities, such as cornea or disease and diabetes.

Steven Yun: In fact, I felt the patient was at too high a risk to put under general anesthesia in the oral surgery suite, so instead, I opted to use only intravenous Versed, which is a sedating, Valium-like drug, and Dasuvia for analgesia throughout the case in order to keep the patient only lightly sedated and breathing on his own. So, with a total of three doses of ZUYA... Each one spaced 2-3 hours apart, and a total of 6mg of intravenous reset dosed throughout the case.

In fact, I felt the patient with Chinas high of risk.

Under general anesthesia in the oral surgery suite.

And instead I opted to use on the intravenous for said.

So getting volume like the drug.

The <unk> for Algesia the walk the case in.

The order to keep the patient only lately is the data and breathing unresolved.

So with a total of three doses of the <unk>.

Each one space to the few hours apart.

On a total of six milligrams of intravenous for said dose throughout the case.

Steven Yun: I was able to provide the patient with a quality level of sedation and analgesia with no biosteine or hemodynamic concerns. After a number of cases where I've dosed Vesuvia in similar patients with difficult airways and underlying comorbidities, I believe there are two attributes of Vesuvia that provide stable pain control with minimal side effects that I'm observing in these patients. The first is the blunted and extended duration of su-fentanyl plasma concentrations following dosing with Vesuvia, which is quite differentiated from the intravenous bolus profile. And the second is the high therapeutic index of su-fentanyl, which is a measure in animals for the safety of the drug.

I was able to provide the patient with the quality level of sedation.

On the Algesia with no biocide or hemodynamic concerns.

After a number of cases, where it goes to the CBO and similar patients the pulp Airways and underlying Comorbidities I.

I believe the key attributes of the Subia, which provides the stable pain control with minimal side effects.

Excuse me.

The have observing in these patients.

The first is.

The blunted the extended duration of Sufentanil plasma concentrations following dosing with the CBS, which.

Which is quite differentiated from the intravenous bolus profile.

For the second is the high Inc.

The index of synthetic oil.

Which is a measure of animals for the safety of the drug.

These attributes of the severe are above and beyond that there's no benefit of not requiring an IV.

Steven Yun: These attributes of Distubia are above and beyond the additional benefit of not requiring an IV for administration of the drug. There are many times where patients need to put off dental procedures or completely avoid the oral surgeon's office for fear of needles. Having a non-invasive method to effectively administer analgesia to allow the surgery to proceed without an IV or as an analgesic bridge to allow an IV to be inserted in a patient who will require multiple attempts due to difficult-to-access veins is really a leap forward in the dental field.

For administration of the drug.

There are many times of patients be the put off the old procedures or completely of boy the Oilsands office for.

Fear of needles.

Having a noninvasive methods the effectively administer.

Algesia to allow the surge of the proceed without and I view.

Or is the algae is the bridge to allow an IV to be inserted in the patients who require multiple attempts due to difficult to access the veins.

He is really a leap forward in the downfield.

Steven Yun: In addition, the analgesic onset of 15 minutes and the duration of approximately three hours allows only one to three doses to cover up even the longest oral surgery cases, which is well below DeSuvia's label limit of 12 doses in a day. The lack of Cottingham impairment, as shown in Dr.

In addition, the.

The onto the of 15 minutes and the duration of approximately three hours allows only one to three doses the cover of even the longest of all of sudden the cases, which is well below the city of label limit of.

12 doses in.

On the day.

The lack of kinds of impairment as shown on the Doctor and binders of published Phase III study of the CBS use and the emergence of trauma or injury.

Steven Yun: Miner's published Phase 3 study of DeSuvia's use in emergency trauma or injury is also a key attribute for dental analgesia. The Oil Service Office is busy, and rapid recovery following the case is critical to keep the daily flow of patients Moving Efficiently Through the Distro.

Also of key attribute for example of allergies.

The Austin was office is busy and rapid recovery. Following the case is critical to keep the daily location.

<unk>.

Moving efficiently smoothed the discharge.

Steven Yun: Consistent with the recently published real-world evidence on Dysubia use, we are finding that patients are recovering quite quickly when Dysubia is utilized as an opioid allergy. I am excited about the collaboration between OthelloRx and Zimmer Biomed. Zimmer has a trusted relationship and broad outreach to oral surgeons throughout the U.S. as well as top-rated educational courses that provide ongoing training in dental and oral surgery procedures. Adding the Cedia to their offerings to the oral surgeons and IV sedation-certified dentists will truly be beneficial to both the surgeons as well as the patients.

Consistent with the recently published real World evidence of understood the of use.

We're finding the reasons.

The covered I quickly.

The <unk> is utilized as the opioid all of them.

I am excited about the collaboration between the flow.

All of them are filenet.

Jim or has the trusted relationship and broad outreach to all of surgeons throughout the U S. As well hop weighted educational courses that provides ongoing training and central and also get the symptoms.

Adding the senior to the offerings to the oral surgeon and <unk>.

These conditions surfactant.

We're truly beneficial for both the surgeons as well as the patient.

The weather impacted the third molar extractions of.

Steven Yun: Whether it's impacted third molar extraction, multiple dental implants, or the large full mouth dental implant case, Vesuvia is a uniquely effective analgesic option that minimizes frequency of dosing, minimizes your CNF impairment, doesn't require IV access, and is a much-needed advance in the

Multiple of the dental implant.

For the large the full bulk of dental implant cases.

The studio is a uniquely affected the outages adoption of.

Minimizing the.

Frequently dose in a.

Minimizing the scene.

The impairment.

It doesn't require of IV asset.

Operator: Thank you, Dr. Yuen, for those great insights. And apologies if you were unable to hear Dr. Yuen on some of that, given the difficulties with the line.

And it's a mix of needed event.

Yeah.

Thank you.

Thank you Dr. Yang for those great insights and apologies if you were unable.

To to hear of Doctor you on on some of that given the given the difficulties with the line, but we're very excited about the launch into the oral surgery space.

Raffi Mark Asadorian: But we're very excited about the launch into the oral surgery space, and Dr. Yuen will be available for Q&A at the end of our call. I would like to provide a few other important updates before going into the financial review. First, our high-volume automated packaging line that was held up in Europe because of COVID has finally shipped. We expect to receive the packaging line at our contract manufacturing facility by the end of the month.

And Doctor you on will be available for Q&A at the end of our call.

I would like to provide a few other important updates before going into the financial review.

First.

Our high volume automated packaging line that has been held up in Europe because of Covid has finally shipped we expect to receive the packaging line at our contract manufacturing facility by the end of the month.

After the equipment has been received the next steps are to assemble at our contract manufacturer complete final.

Raffi Mark Asadorian: After the equipment has been received, the next steps are to assemble it at our contract manufacturer, complete final acceptance testing, and then begin producing validation batches, which, importantly, will be able to be sold after all approvals are received. Subsequent commercial production batches are expected beginning in the third quarter of twenty-two. This will have a significant reduction on our unit cost of production and increase our capacity to meet expected demand from the DoD and growth in hospitals and surgery centers.

Final acceptance testing and then begin producing validation batches, which importantly, we'll be able to be sold after all approvals are received.

Subsequent commercial production batches are expected beginning in the third quarter of 'twenty two.

Okay.

This will have a significant reduction on our unit cost of production and.

And increase our capacity to meet expected demand from the D O D Zim.

Zimmer and growth in hospitals and surgery centers.

Importantly, this also clears the path to finalizing discussions on the out licensed the subia or <unk> in Europe.

Raffi Mark Asadorian: Importantly, this also clears a path to finalizing discussions on outlicing Dysuvia or Dysuvio in Europe. We plan to have an agreement later this year with a potential partner for Europe. As part of our fourth pillar, we continue to explore additional product licensing or acquisition opportunities, which we believe will complement Dissuvia and improve efficiency and leverage our commercial team. We remain committed to adding at least one complementary product to Dissuvia in our portfolio.

We plan to have an agreement later this year with the potential.

Partner for Europe.

As part of our fourth pillar, we continue to explore additional product licensing or acquisition opportunities, which we believe will complement the subia and improve efficiency and leverage our commercial team we remain committed to adding at least one complementary product to the subia in our.

Our portfolio.

This does not replace our priority with the Subia, but simply provides our commercial team with additional sales opportunities on the same call.

Raffi Mark Asadorian: This does not replace our priority with Dissuvia but simply provides our commercial team with additional sales opportunities on the same call. We've completed a lot this year, but much more is expected in 2021. We have had some questions about the recent FDA warning letter, and we take their communications very seriously.

We've completed a lot this year, but much more is expected in 2021.

We've had some questions about the recent FDA warning letter we take.

Take their communications very seriously as such we responded to their letter of promptly and have already received confirmation of the response receipt and that they will schedule a requested meeting.

Raffi Mark Asadorian: As such, we responded to their letter promptly and have already received confirmation of the receipt of the response and that they will schedule our requested meeting. Our intention has always been to partner with the FDA and be a model citizen of proper promotion and education. And importantly, considering Vesuvia is an opioid, I'd like to mention the data that has been collected with respect to Dysuvia being kept in the hands of qualified personnel and not adding to the outpatient opioid abuse issues we have all heard about over the past ten years. We work with Denver Health's RADARS program, which is the top surveillance program for prescription drug abuse, misuse, and diversion. And this data, which is reported annually to the FDA, shows a clean track record for Dysubia.

Our intention has always been to partner with the F D a and B the model citizen of proper promotion.

Education.

And importantly, considering the Sylvia as an opioid I'd like to mention the data.

That has been collected with respect to <unk> being kept in the hands of qualified personnel and not adding to the outpatient opioid abuse issues. We have all heard about over the past 10.

Years.

We work with Denver Health radars program, which is the top surveillance program for prescription drug abuse misuse and diversion and this data which is reported annually to the FDA chose a clean track record for discover.

I'll now take you through.

Raffi Mark Asadorian: I'll now take you through the financials. We believe we will see improved access to health care institutions, as well as a stronger return to elective surgeries in the second half of this year, after a year filled with COVID restrictions. I'll first provide an overview of our historical results and provide some guidance for 2021. Q4 revenues were $0.7 million, a 55% increase over the $0.5 million in the same quarter of 2019. Total 2020 product sales were $2.5 million, a 38% increase over the $1.8 million in 2019.

The financials.

We believe we will see improved access to health care institutions as well as a stronger return to elective surgeries in the second half of this year after year filled with Covid restrictions.

I'll first provide an overview of our historical results and provide some guidance for 2020.

The one.

Q4 revenues were zero point $7 million of 55% increase over the zero point $5 million in the same quarter. In 2019 total 2020 product sales were $2 $5 million of 38% increase over the $1 8 million in 2019.

Growth. Despite the challenges we've encountered with Covid was encouraging but it is expected to accelerate once elective surgeries return in the second half of 2021 and the backlog begins to be reduced.

Raffi Mark Asadorian: This growth, despite the challenges we've encountered with COVID, is encouraging but is expected to accelerate once elective surgeries return in the second half of 2021 and the backlog begins to be reduced. At the same time, we expect many of the restrictions still in place at hospitals and surgery centers to be lifted. This combined with the expected acceleration of the rollout of Dissuvia to deploying troops, SKOs, should be a catalyst for much stronger revenue growth beginning in the second half of 2021. Gross profit was negative during the quarter and the year as revenues did not cover the fixed overhead costs within cost of sales.

At the same time, we expect many of the restrictions still in place at hospitals.

<unk> and surgery centers to be lifted.

This combined with the expected acceleration of the rollout of <unk> to deploying troops.

Should be a catalyst for much stronger revenue growth beginning in the second half of 2021.

Gross profit.

This lift during the quarter and the year as revenues did not cover the fixed overhead costs within cost of sales.

The loss narrowed compared to 2019 and is expected to continue to do so as sales growth accelerates.

Raffi Mark Asadorian: The loss narrowed compared to 2019 and is expected to continue to do so as sales growth accelerates. We're excited that our automated packaging line has finally shipped and will be installed later this year. Once our automated packaging line is approved for commercial production in 2022, the direct unit production costs with our contract manufacturers are expected to significantly reduce. This, combined with the expected revenue growth to cover our fixed costs, will have a favorable impact on overall gross margin.

We're excited that the our automated packaging line is finally shipped and will be installed later this year.

Once our automated packaging line is approved for commercial production in 2022, the direct unit production costs with our contract manufacturers are expected to significantly reduce.

This combined with the expected revenue growth to cover our fixed costs, we will have a favorable impact on overall gross margins.

Raffi Mark Asadorian: Cash operating expenses, or combined R&D and SG&A, excluding stock compensation and depreciation, in the fourth quarter were $7.5 million, compared to $12.5 million in the same quarter of 2019. The decline is across all functional areas but primarily driven by our sales and marketing spend, as we continue to be mindful of our expenses and closely manage them during the extended DeSuvia launch period and while in COVID.

Cash operating expenses or combined R&D and SG&A, excluding stock compensation and depreciation in the fourth quarter was $7 5 million compared to $12 5 million in the same quarter in 2019.

The decline is across all functional areas, but primarily driven by.

By our sales and marketing spend as we continue to be mindful of our expenses and closely manage them during the extended the <unk> launch period and while in Covid.

Looking forward to 2021 as mentioned we are expecting elective surgeries to start returning in the second half of this year as the vaccines.

Raffi Mark Asadorian: Looking forward to 2021, as mentioned, we're expecting elective surgeries to start returning in the second half of this year as the vaccines continue to get rolled out across the U.S. We believe this also will have a favorable impact on new hospitals and surgery centers adopting Dysuvia on formulary. We expect to have 615 hospitals and surgery centers that have approved Dysuvia for use by the end of 2021. Quarterly combined R&D and SG&A expense, excluding stock compensation and depreciation, is expected to range from $8 to $8.5 million in 2021.

<unk> continued to get rolled out across the U S. We believe this also will have a favorable impact on new hospital and surgery centers adopting <unk> on formulary.

We expect to have 615 hospitals and surgery centers that have approved the subia for use by the end of 2021.

Quarterly combined R&D and SG&A expense, excluding stock compensation and depreciation in 2021 is expected to range from 8% to $8 5 million.

The annual debt service is expected to approximate $10 million as we continue to pay down on <unk>.

Raffi Mark Asadorian: Annual debt service is expected to approximate $10 million as we continue to pay down amounts outstanding under our Senior Debt Facility that matures in June 2023. Capital expenditures in 2021 are expected to range from $4 to $5 million, mainly to the final installation of our new high-volume automated packaging line at our contract manufacturer. We expect initial packaging batches to be produced at the end of this year, with commercial batches beginning after regulatory approvals are received in Q3 2022.

<unk> outstanding under our senior.

Senior debt facility that matures in June 2023.

Capital expenditures in 2021 are expected to range from $4 million to $5 million attributed mainly to the final installation of our new high volume automated packaging line at our contract manufacturer.

We expect initial.

Packaging batches to be produced at the end of this year with commercial batches beginning after regulatory approvals are received in Q3 2022.

With the path now cleared to finalize installation of the automate automated packaging line. We also plan to close on an agreement.

Raffi Mark Asadorian: With a path now clear to finalizing the installation of the automated packaging line, we also plan to close on an agreement to out-license DeZuvio for Europe later this year. In summary, 2020 was challenging for many people, but we've been able to make solid progress despite these challenges and are set up nicely once many restrictions are lifted in hospitals and surgery centers. There are many different opportunities for sales creation, and this is unique for companies in our sector.

Agreement to out license of <unk> for Europe later this year.

In summary, 2020 was challenging for many people, but we've been able to make solid progress. Despite these challenges and are set up nicely. Once many restrictions are lifted in the hospitals and surgery centers.

There are many.

Any different opportunities for sales creation and this is unique for companies in our sector.

We expect to capitalize on this beginning of the second half of the year as COVID-19 restrictions begin to be lifted and one we benefit from the 90% reorder rates, we are seeing from our hospital and ASC customers to the Dod logistics.

Raffi Mark Asadorian: We expect to capitalize on this beginning in the second half of the year as COVID restrictions begin to be lifted. And one, we benefit from the 90% reorder rates we're seeing from our hospital and ASC customers. Two, the DOD logistics and administrative issues get cleared. And three, the clinical data from the approved investigator-initiated studies is received.

And administration straight of issues get cleared and three the clinical data from the approved investigator initiated studies as received.

I would now like to open the question the lineup for any questions you might have.

Operator: I would now like to open the line up for any questions you might have. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To draw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Brandon Folkes with Cantor Fitzgerald. Please go ahead.

Operator.

We will now begin the question and answer session.

To ask a question you May press Star then one on your telephone keypad. If you were using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

The first question comes from Brandon Folkes with Cantor Fitzgerald. Please go ahead.

Alright, thanks for thanks for taking my questions I had.

Brandon Richard Folkes: Hi, thanks so much for taking my questions. Maybe just the first one. Raffy, you talked about sort of three headwinds that COVID created. But in color awareness, sort of hospital protocol is a limiting factor for dysphoria in the current environment. And in that, I mean, maybe you're getting close to a patient to actually administer it under the tongue versus sort of putting an IV in.

Maybe just the first one.

Well I think you talked about sort of three headwinds that COVID-19 had created.

But any color witnessed.

If I recall.

The limiting factor for.

For <unk> in the current environment and it isn't that I mean, maybe you sort of getting close to a patient actually administered.

Under the tongue versus sort of putting in I IV and is there any sort of headwinds there that may reverse as we come out of Covid.

Raffi Mark Asadorian: Is there any sort of headwind there that may reverse as we come out of COVID? And then secondly, you talked about the new formulary wins in 2021 and the goal, the cumulative goal for the end of the year. Any color on what we should expect and the types of institutions we should expect coming out of that? Thank you very much.

And then secondly.

The talks about the new formulary wins in 2021 of the goal the.

The cumulative over the end of the year any color on the types of institutions, we should expect coming out of that thank you very much.

Yeah, Brent I'll take the second part first of you broke up a little bit on the protocol question, but let me let me answer.

Raffi Mark Asadorian: Yeah, Brandon, I'll take the second part first. You broke up a little bit on the protocol question, but let me answer your first one.

Your first your first one I mean, what we've been seeing is about a quarter of the formulary approvals to date have been hospitals and the.

Raffi Mark Asadorian: I mean, what we've been seeing is about a quarter of the formulary approvals to date have been hospitals, and the rest are surgery centers. We're seeing a lot more hospitals up for approval for formulary approvals, but those have been the ones that have been really delayed because of COVID. So we're expecting that to come back once.

And the rest of our surgery centers.

We're seeing a lot more hospitals up for approval for formulary approvals, but those have been the ones that have been.

Really delayed because of Covid, so we're expecting that to come back.

Once.

Raffi Mark Asadorian: Once things open up, so hospitals, we'll see that mix shift a bit more to the hospital side of things. But the surgery centers, with the big backlog of elective surgeries, will continue to be a primary place that we'll see approvals and orders coming in, with an increasing share coming in from hospitals. And as you know, the volumes from those hospitals are usually much, much larger than those surgeries. Does that answer the second part of your question?

Once things open up.

So the hospitals, we will see that mix shift a bit more to the hospital side of things.

But.

At the centers with the big backlog that of elective surgeries will continue to be of primary pre.

Primary place that we'll see our approvals and orders coming in.

With an increasing share coming in from hospitals and as you know the the volumes.

For those hospitals on.

There are usually.

The surge of much larger than those surgery centers.

Does that answer the second part of your question.

Brandon Richard Folkes: It does, yeah, and hopefully you can hear me now. But so my first part of the question was more just, have you heard any feedback that perhaps, given that Batuvia is administered sublingually in the COVID environment, has that maybe been a bit of a challenge to uptake in institutions where you have formulary approvals rather than just, you know, sticking an IV in the arm? And so do you think that's something that may reverse as we come out of COVID and everyone is vaccinated?

It does yeah, and then hopefully you can hear me now, but some of the first part of the question was more of just have you heard any feedback that perhaps given that the TVA is administered of separate angrily at in the Covid environment.

And much of you being a bit of a challenge uptake.

Institutions, where you have formulary approvals rather than just sticking on IV in the on and do.

Do you think that's something that may reverse as we come out of kind of getting vaccinated.

Raffi Mark Asadorian: Got it. I've not heard that. Pam, I don't know if you've heard that at all, but I've never heard that. No, no.

Got it.

I've not heard that Pam I don't know if you've heard that at all.

<unk> no no in fact, it's very calm multimodal analgesia right now on the perioperative setting.

Pamela Pierce Palmer: And in fact, it's very common. Multimodal analgesia right now in the perioperative setting involves giving oral medications. It's very common for oral COX-2 inhibitors, oral acetaminophen, and oral gabapentin to be given. So giving Dysuvia as another type of oral medication is no more invasive or close contact for the nurse than injecting an IV. So I don't really, I've never heard of that as being a differentiating aspect of the dosage form. Okay, that's fine. Thank you.

Involves giving oral medications, it's very common for oral Cox two inhibitor of <unk> oral acetaminophen oral GAAP of patent has given so giving to Sylvia as another type of.

But of net oral medication is no more.

In face of or close contact for the nurse and then injecting an IV.

So I don't really see I've never heard of that as being a differentiating.

Aspect of the dosage form.

Okay. That's fine thank you very much.

Or.

Operator: The next question is from Evan Seigerman with Credit Suisse. Please go ahead.

The next question is from Evan <unk> with Credit Suisse. Please go ahead.

Hey, guys. Thanks for taking the question congrats on the results. So I know on your guidance you kind of have the skull for what is the 615 formulary approvals. This year can you just remind.

Evan Seigerman: Hey guys, thanks for taking the question. Congratulations on the results. So I know in your guidance, you kind of have this goal of 615 formulary approvals this year. Can you just remind us where you are with formulary approvals, and I guess what your pace is?

Here, you are with formulary approvals and I guess, what the paces I know a lot of it's weighted to the back half of the year, but just more color on that and then as a follow up so there's a lot of discussion about reopening and how that impacts your business.

Raffi Mark Asadorian: I know a lot of it's way to the back half of the year, but just more color on that. And then, as a follow-up, there's a lot of discussion about reopening and how that impacts your business. It seems that things, at least in parts of the country, are getting better, and folks are actually getting back into medical facilities for surgeries. You know, can you provide some numbers as to where we are compared to pre-COVID and where you hope to be by the end of the year to achieve some of the results you outlined? Thank you.

It seems that you know things at least in parts of the country are getting.

So we're on folks are actually getting back into the medical facilities for surgeries.

Can you provide some numbers as to where we are a comparator of post pre COVID-19 and where you hope to be by the end of the year to achieve some of the results you outlined thank you.

Sure.

Raffi Mark Asadorian: Yeah, so where we are at the end of February, Evan, was 307, sorry, 387 approvals. So that was enough to get to the 615. I mean obviously, in that second half of the year when elective surgeries are opened up, that's going to be the biggest, but the pace continues in terms of that. We're starting to see some areas open up, but it's still largely restricted. So we would expect the second half of the year to be the biggest in terms of that pace, but we're still getting, it's taking a lot of work and effort, but we're I don't know if that answers your question or not, Evan, but that first part.

Yeah, So where we are at the end of February.

Better of 307, seven sorry, 387 approvals.

So that pace to get to the $6 15, I mean, obviously in that second half of the year.

When elective surgeries are opened up that's going to be the biggest but the pace continues in terms.

Of that we're starting to see in some areas open up but it's still largely restricted.

So we would expect the second half of the year too.

<unk> to.

B the biggest in terms of that pace, but we're still getting its taking a lot of work and effort, but we're still getting a lot.

Good good.

Formulary wins from from large hospitals, but the pace will certainly be in that second half of the year I don't know if that answers your question or not even the first first part.

Raffi Mark Asadorian: And then the second part, just kind of this reopening and how you think about it. Yeah, the reopening, I mean, it's...

That's helpful.

And then the second part just on kind of of this reopening and how you think about it.

Of the.

Raffi Mark Asadorian: Yeah, the reopening, I mean, there are a couple things that have, as we said, that have really had an impact. It's the formularies; just the formulary meetings have really just been delayed. And it's not just AcelRx; we talked to others in the same space about cancellations, delays. So it's really that impact, and then the elective surgeries coming back in the second half of are really, I think, those two issues that we've encountered as they start improving and start opening up and lifting those restrictions.

Reopening of it's a couple of things that have as we said that have really had an impact. It's the the formularies just the formulary meetings have really just been delayed and it's not just accelerates. It's we've talked to others in the same in the same space.

Cancellations delays.

Yeah, So it's really.

That impact and then the elective surgeries coming back in.

In the second half of the year.

It's really I think those two issues that we've encountered.

As they start improving and start opening up the.

And lifting those restrictions.

Raffi Mark Asadorian: And even just our reps getting into the hospitals is going to make a big difference in the pace of those approvals. Excellent, thank you. The next question is from Michael Higgins with Lattenberg Thalmann. Please go ahead.

And even just our reps getting into the hospitals is going to make a big difference.

And then the pace of of those approvals.

Excellent. Thank you guys.

The next question is for Michael Higgins with Ladenburg.

Addenbrooke Thalmann. Please go ahead.

Operator: Good afternoon. This is Edward. I'm from Michael.

Good afternoon. This is edwin on for Michael I. Appreciate you guys, taking our questions.

Edward: I appreciate you guys taking our questions. Just piggybacking on those last couple of questions, are you planning any additional marketing efforts to boost those formularies from 3 to 7 to 6-15 by the year end? And then are there any formulary decisions that are currently pending?

Just piggybacking on the last couple of questions are you planning any additional marketing efforts to boost the formularies from 3% to 7% to 15 by the year end.

And then are there any formulary decisions that are currently pending.

Raffi Mark Asadorian: We have, all the time, formulary meetings being scheduled. We've had a lot also delayed. But yes, there's always... We're working on hospitals and surgery centers. But we're not going to comment on what that backlog is in terms of the numbers, but there's always some in the pipeline for approval.

The we have all the time formulary meetings being being scheduled.

Had a lot also delayed but yes, theres always constantly.

We're working on on hospitals and surgery centers.

But we don't we're not going to we don't comment on on what that backup.

Is in terms of the numbers, but theres always some of the pipeline for for approvals.

Raffi Mark Asadorian: In terms of marketing efforts, I mean, we mentioned on the call the investigator-initiated studies, the real-world data that's coming from these has been the strongest voice for us, showing how Dysuvia is being used and the benefits that we're seeing. And that has really provided us with a boost. I mean, the August and December publications that came out of those two studies gave us a great boost in that third pillar that we talked about in hospitals and surgery centers.

In terms of marketing efforts are on.

We mentioned on the call of the investigator initiated studies.

The real World data, that's coming from these has been the strongest voice for us.

Backlog showing how is to see the are being used and the benefits that we're seeing and that has really provided us a boost of me the August and December publications that came out from those two studies gave.

Gave us the gave us a great boost in that third pillar that we talked about in the hospitals and surgery centers.

Raffi Mark Asadorian: So that's been the primary benefit of that data, is really... This is what doctors want to see. Doctors want to hear from other physicians and how they're using the product, and that's been the biggest benefit for us. So there are no new marketing efforts or promotional efforts or things like that that we're planning.

That's been the primary benefit of that data is really.

This is of doctors want to see is physicians want to hear from other physicians on how they're using the product and that's been the biggest benefit for us. So theres no new marketing efforts of our promotional efforts or things like that debt that we're planning.

So it's really having this data come out and we're confident in <unk> and the benefits of provides that the data will be.

Raffi Mark Asadorian: It's really important for us to see and to get out there this data, and we're confident in DeSuvia and the benefits it provides that the data will be, will be just as good as we've seen in the previous two clinical studies. And it's important information for us to see and to get out there. So we're eagerly awaiting that data.

We will be just as good as we've seen in the previous two clinical studies and its important information for us too.

The C and to get out there.

Lanning for later weighting of that data.

Edward: Thank you for that. And then, as things are starting to open up a little bit here, are you noticing any trends in the communities? For example, like our outpatient procedures picking up more than inpatients, certain types of surgeries picking up a little bit more than other types. And how are you expecting this to change as we move into the back house?

Thank you for that.

And then as things are starting to open up a little bit here are you noticing any trends in the communities for example, like for our outpatient procedures picking up more than impatience for certain types of surgeries picking up a little bit more than other types of Noah.

Are you expecting that the change as we move into the back half.

Raffi Mark Asadorian: Well, it hasn't opened up yet, so we've seen pretty much the same. We keep hearing about things starting to open up, but it has not opened up yet. The restrictions are still in place.

Well it could be on it hasn't opened up yet so I mean, as we've seen pretty much. The same we keep hearing about things starting to open up but it has not opened up yet the restrictions are still in place.

Raffi Mark Asadorian: I think soon, as we said, the second half, we're expecting elective surgery. That's what we've heard from others as well. It's pretty consistent information. Right now, it hasn't really been opening up. A couple different regions, maybe you hear more in a certain state or others, but we still haven't seen that pick up.

I think soon as we said second half.

Are you expecting elective surgery, that's what we've heard from.

From others as well, they're pretty it's pretty consistent information right now it hasn't really been opening up a.

A couple of different regions may maybe of here.

More and more in a certain state or or others, but we still haven't seen that pick up.

Raffi Mark Asadorian: In terms of the types of surgeries, we mentioned plastics and orthopedics were the strongest performers and the strongest increasing specialties. Pam, I don't know if you want to comment on anything in terms of certain specialties that you've heard from our physician customers, but those are the ones we're hearing. In terms of strength and the ones that have been returning because those are a lot of elective surgeries, those orthopedic type surgeries.

For it.

In terms of the the types of surgeries, we mentioned plastics and orthopedics has been the strongest performers in the strongest increasing specialties.

The Pam I don't know if you can if you want to comment on anything in terms of certain specialties that you've heard from our from our physician customers but.

Those are the ones we're hearing.

In terms of the strength and the ones that have been returning because the electrodes or lot of electric surgeries of those orthopedic type surgeries.

Yeah, absolutely and I think that's the few sites that are starting to open up are starting to work through their incredible of backlog.

Pamela Pierce Palmer: Yeah, absolutely. And I think that's the few sites that are starting to open up, are starting to work through their incredible backlog that they have. And we're starting to hear surgeries are now being scheduled on Saturdays. And that's why the efficiency; they're really eager to have something that can get these patients out, keep them awake and alert in the PACU, and be able to discharge quickly so they can get through these surgeries.

But that they have and we're starting to hear surgeries are being now scheduled on Saturdays.

And that's why the efficiency the really eager to hassle of isn't that can get these patients out to keep them on waking alert in the PACU and be able to discharge quickly. So they can get through the surgeries. So they're looking.

Pamela Pierce Palmer: So they're looking for anything that will enhance their efficiency. And specifically, there's a huge move for total joints to be performed in the outpatient sector to get them out of hospitals. And especially with COVID around, no one really wants to be hanging out in hospitals right now. So we've had orthopedic surgeons reach out to us saying, hey, if you've got data that Dysuvia can possibly help me discharge more patients same day from total joints, that will be just a really terrific asset for them in their practice. So, like Rafi said, not everything is loosened up, but the few places that have them, you can see they're eager to learn about this new analgesic and how it can help their practice.

Speaking of will enhance their efficiency.

And specifically also you know there was a huge move for a total joints to be performed in the outpatient.

Sector and get them out of the hospitals, and especially with Covid around no one really wants to be hanging out in the hospitals right. Now so we've had orthopedic surgeons to reach out to us.

For in saying, Hey, you know if you've got data that the Susie can possibly help me I discharged more patient same day from total joints that will be just a really terrific asset for them in their practice. So like like Rafi said not everything has loosened up with the few places that have you can see they are eager to learn about.

On new analgesic and how it can help the practice.

Raffi Mark Asadorian: Yeah, and I'll just add to that. I think one of the other things I failed to mention, but we talked about unprepared remarks, is oral and dental surgery. I mean, that specialty, you know, with the efforts that will be behind that from Zimmer Biomed's dental division, as they roll out and get their licenses in place and really roll it out to their full sales force, I would say that's going to be a very strong pickup, and they will put their educational efforts behind that.

And I'll just add to that I think one of the other things that I failed to mention but we talked about on the prepared remarks is the oral and dental surgery of in that specialty.

With the efforts that will be behind that from Zimmer biomet dental.

For the vision.

As they roll out and they get their licenses in place and really roll it out to their full sales force I would say that's going to be a very strong pickup and they put their educational efforts behind that.

Raffi Mark Asadorian: It's a great partner that we have, and they've got an established relationship with those dental customers, but I think that that is also going to be a specialty that we see in the second half of the year really pick up.

It's a great partner that we have.

And they've got an established relationship.

With those dental customers, but I think that that is also going to be of specialty.

On that we see in the second half of the year, it's really going to pick up.

Yes. This is Dr. Steeped in again, if I could add in the tent pole on oral surgery market, we've seen the huge explosion in demand even with.

Steven Yun: Yeah, this is Dr. Steve Unigan. If I could add, in the dental and oral surgery market, we've seen a huge explosion in demand, even with the fears of COVID. And I can tell you personally, in April, when all our dental and oral surgery offices basically shut down for routine care, I was basically not working in April and half of May. And yet, the demand for our services and for dental implants and oral surgery was so high that, in 2020, my case volume was still 30% higher than it was in 2019, even though I took essentially six weeks of the year off.

Fears of Kogan.

And I can tell you personally.

In April when all of our dental and all sorts of options basically shut down for routine care.

<unk> was not working in April and half of me.

And yet the demand for our services on for dental implants in the oral surgery was so high.

The flat in 2020.

Case volume was still 30% higher the.

It was in 2019, even though I took essentially six weeks of the year off.

And so far on 2021, we've continued to see tremendous demand when people.

Steven Yun: And so far in 2021, we continue to see tremendous demand. When people can't eat when they're in pain, it doesn't matter. They want to have their oral surgery done. They want to have their implants. And the fears of COVID notwithstanding, they're willing to come into the dental and oral surgery office to get those procedures.

Hi, eat when Theyre in pain.

Doesn't matter they want to have the oral surgery done the one that had their implants.

And the fears of Covid notwithstanding.

They are willing to come into the dental oral surgery office because of those procedures done.

Raffi Mark Asadorian: Right, so we're eager to get Zimmer Biomed out there to begin really promoting this. I think it's going to be a great opportunity as they get out there.

Right. So we're eager to get Zimmer biomet out there.

Cash again really promoting this and I think it's going to be of great opportunity.

As they get out there.

Edward: That's really interesting. I appreciate all that detail. If I could squeeze in a couple more here,

That's the really interesting I appreciate all the detail if I could squeeze on a couple of more here Jeff.

Raffi Mark Asadorian: Just in terms of the out-licensing that you're talking about for DeZuvio in Europe, what type of structures are you expecting, especially as it compares to Zalviso, for example? And one question about the presentation of the investigator-initiated studies. Do you expect all of them to be started this year? For example, do you have an annual target for these? What qualifications are you looking for before agreeing to some of these studies?

Just in terms of the out licensing that you were talking about for the <unk> in Europe, what type of structures are you expecting especially on the comparisons I'll be.

For example.

And one question about the presentation on the investigator initiated studies do you expect all of them to be started this year for us.

Example of your of an annual target for these.

For qualifications are you looking for before agreeing to some of these studies.

I'll, let the I'll, let Pam take that second one.

Pamela Pierce Palmer: I'll let Pam take that second one. In terms of outlicensing, I mean, we're not going to comment on potential structures, but, you know, I would expect it's a... As you know, the European market is a very low-priced market, and we've said that, that's why the automated packaging line, having that installed, is so important to get the unit cost down. So we think it's a good opportunity for us, but we can't comment on the structure. Pam, do you want to take the question on the IITs?

So of out licensing I mean, we're not going to comment on potential structures, but you know I would expect it's a it's a.

As you know the European market very low price market and we said that that's why the automated packaging line of having that installed is so important to get the the unit cost down.

So we.

In terms of it's a good opportunity for us, but we can't comment on the.

On the the structure.

Pam do you want to take the question on the on the <unk>.

Pamela Pierce Palmer: Sure. Yes, of the ones that we've listed, we are expecting them to all start this year. Some have already started, and the rest we are expecting to start this year. And what we look at is, you know, the subject matter. Is it some of the areas that we're interested in evaluating? We look at the quality of the investigators. We look at the cost of the overall study. So those are some of the things.

Sure, Yes of the ones that we've listed we are expecting them to I'll start this year some have already started on the.

We think it's the are expecting to start this year and what we look at is you know the subject matter is it on some of the areas that we're interested in Italian eating we look at the quality of the investigator are we look at the cost of the overall study. So those are some of the things and of course, the there's usually.

Pamela Pierce Palmer: And, of course, there's usually a lengthy contracting process that always has to occur. So everything takes longer than you think. But we're really excited that we've had such interest from these investigators regarding, you know, many different ways of utilizing DSUVIA. So, as Raffi said, the data that's come out of these real-world investigator-initiated trials, real-world studies that aren't investigator-initiated, the data that's come out has really been our best marketing tool yet for the use of this UVA.

The rest of the lengthy contracting process that always has to occur. So everything takes longer than you think but we're really excited that we've had such interest from these investigators regarding you know many different ways of utilizing the Sylvia So as Rafi said, our the data that's come out of these.

These are real world investigator initiated trials real World studies that arent investigator initiated.

The data that's come out is really than our best marketing tool.

Yet for the use of D C. The M.

Edward: That's great. I appreciate all this detail, and thanks for taking all the time.

That's great I appreciate all of the detail on thanks for taking all the time.

Sure sure.

Operator: The next question is from Ed Arce with HC Wainwright. Please go ahead.

The next question is from Ed Arce with H C. Wainwright. Please go ahead.

Antonio Eduardo Arce: Hi, Pam and Raffi. Thanks for giving all this guidance for the next year, and also congratulations on continued real-world data supporting the Suvia. Three questions for me. First, on DOD Milestone C approval, obviously, that's been something we've talked about in the past, sort of given the department's own cadence with things. I realize it's sort of difficult to know when this is expected, but I guess the question is, would you expect any procurements at some point this year?

Hi, Herman Rafi.

And.

Thanks for giving all of this our guidance for the next year and also congrats on the continued.

The real world data supporting the severe.

Three questions for me.

The first is.

On the D O D milestone C approval, obviously that's.

And something we've talked about in the past sort of given the departments on the cadence.

With things.

On two to know when this is expected, but I guess the question is would you expect any procurements.

Some point this year.

Antonio Eduardo Arce: That's one. Two is regarding the target of 615. I'm wondering what proportion is that of your total targeted market, and what proportion to date have you seen of..., Formulary Declination. And then lastly, regarding..., Zubio in Europe. I'm wondering as well if you would expect, whatever form this ultimately takes in terms of an agreement, whether you would expect an upfront milestone as part of that. Obviously, this could be another potential non-dilutive source of capital in addition to The Milestone Series.

That's one.

The two is regarding the.

Target of 615.

The formulary approvals.

By the end of this year I'm wondering what proportion.

Is that of your total targeted facilities.

Facilities between the S season, and in the hospitals and.

If you could share with us.

What proportion of the date have you seen of.

Formulary declination.

And then lastly regarding.

The.

On the zoom zoom here in Europe I'm wondering.

As well if you would expect.

Whatever form. This ultimately takes are in terms of an agreement whether you would expect in upfront milestone.

As part of that obviously could be another potential non dilutive source of capital. In addition to the milestone C payment.

Raffi Mark Asadorian: Okay, yip. So, on the milestone C, you know, yes, we've said it's going to be hard to predict how much will be coming in under the deploying troops. We certainly do expect something this year, but we're still waiting to hear what that is. And, you know, right now, we've been working a lot on, as we said, the logistics and administrative issues to clear all that, which is, you know, hopefully, we're close to clearing all the logistics there that are needed.

Thank you.

So on on the milestone C. Yes.

We said, it's going to be hard to predict how much will be coming in under the the deploying troops. We certainly do expect something this year.

But we're still waiting to hear what what that is and we are right.

We've been working a lot on as we said the logistics and administrative issues to clear all of that which.

As you know hopefully we're close on clearing all of the logistics there.

Raffi Mark Asadorian: As you can imagine, it's a complex process getting products out to deploying troops. But yes, we do expect, something under the milestone C, deploying troops this year. In terms of the target of 615, I mean, right now, Ed, with the limited reps that we have, we have 15 of our own reps that are focused on this. And with, you know, some others from the co-promote that we have.

That are needed and as you can imagine it's a complex process getting products out to to deploying <unk>.

Now we.

But yes, we do expect something.

Something under the milestone C deploying troops this year.

In terms of the target of 615, I mean, right now and with the the limited reps that we have right. We have 15 of our of our own reps that are.

Our focus on this and with the <unk>.

Some others from a from a co promote that we have.

Raffi Mark Asadorian: We are targeting 300 hospitals and 600 ambulatory surgery centers, right? And you can even narrow that focus down to, you know, kind of 50% of those surgery centers to really get those high-performing surgery centers. So, if we get to that 615, we're making a big dent into that, call it 900 institutions, but then, you know, that's what we focused on. We can expand that, but that makes a big dent into that, and it's really right now focused on those higher performing ones, in the surgery centers and the high-volume, high-procedure ones. Orthopedic Types of Surgery Center

We are targeting 300 hospitals in 600 ambulatory surgery centers right.

And you can even narrowed that focus down to even kind of 50% of those surgery centers to really get those high performing.

Troops of surgery centers.

So if you get if we get to that 615, we're making a big dent into that call. It 900 institutions.

But then that's what we focused we can expand that but that makes a big dent into that and it's really right now focused on those higher performing ones.

Yeah.

That debt.

In the surgery centers.

And the high high volume high high procedure.

Orthopedic types of surgery centers.

Raffi Mark Asadorian: So it makes a big dent, getting to that, and then we'll expand from there. In terms of declining formulas, you know, there have been a handful of formulas that have been declining. The biggest issue has really been delays because of COVID, right? It's not been the biggest priority of bringing new products on for a lot of these hospitals that have just been under pressure. They've really been focused on their own operational and other issues. And quite frankly, when it comes back, and the...

So it makes a big debt getting to that and then we'll expand from there.

In terms of.

Declining formularies the it's been a handful of of formularies that have been declined the biggest issue is really been delays because of of Covid right. It's not been the biggest priority to bring in new products on a for a lot of these hospitals that have just been under pressure.

The.

They've really been focused on on their own operational on the other other.

Of the degree of isn't quite frankly, when it comes back in the the the the ability for it to Sylvia to support operations, meaning throughput and getting patients are discharged.

Raffi Mark Asadorian: The ability for Dissuvia to support operations, meaning throughput and getting patients..., discharged more quickly, as we've seen in some of the recent studies, we think that'll help as these surgeries come back. But it has not, it's been a handful of declining declines on formulary. And Raffi, just to clarify on that, as you mentioned, it's either a cancellation of PNP or, usually, a deferral of approval.

For more quickly that we've seen in some of the recent studies, we think that'll help as the surgeries come.

The other issue, but it is not it's been a handful of declining declines on and Rob just to.

Just to clarify on that as you mentioned its either a cancellation of PMT or usually a deferral of the an approval. We received very few out an outright declines in opt in with.

Pamela Pierce Palmer: We've received very few outright declines, and often, what they'll say is, "This data looks interesting; can you please come back to us with a more definitive health care population, patient population that you're interested in using for DeSuvia." One thing about large hospitals is that when they adopt a new product, they want to test it out in a certain group of patients before having it expanded to all of the patients undergoing surgery, for example, or all patients in the emergency room. They really want that P&T champion to come back with a more defined patient population where they can really start trying it out in that institution. So overall, I think the absolute declines have been few and far between.

Come back is the state of looks interesting can you. Please come back to us with the more distal.

This health care populate patient population that you're interested in using the Cvs on one thing about large hospitals is obviously when they adopt the new product they want to test it out in a certain group of patients.

They'll say before having it expand our Tam.

To all of the patients undergoing surgery for example are all patients in the emergency room.

Right.

They really want that out of P. T champion to come back with the more defined patient population of where they can really start trialing. It in the institution. So overall.

And the absolute declines at the few and far between.

Yeah, I think just to add also to the debt.

Raffi Mark Asadorian: Yeah, and I think just to add to that, you know, the 615 and, you know, a lot of the approvals we're getting are institutions that are not even on that list of targeted 900 institutions. I mean, there's a lot that are coming in from word of mouth, and that's what we expected. If you recall, during the launch, the physicians that use this product love it and the benefits it brings to them and their patients, so a lot of word of mouth has been from institutions that are outside our initial targets, and obviously that's great as well.

615, and a lot of the approvals were getting on.

For our institutions that are not even on that list of of targeted 900 institutions. I mean, there's a lot of air coming in from the.

And that's what we expected.

If you recall during the launch that the the physicians that use this product love love the product and the benefits it brings to them and their patients. So a lot of word of mouth.

That's been on institution.

Institutions that are outside of our those are initial targets and obviously, that's that's great as well.

Raffi Mark Asadorian: So moving on to your last question, Ed, in terms of an upfront payment, we can't say. It's going to be, you know; we're working through that now. We're just happy we now have the automated packaging line so we can open up that possibility here to close on the DeZubio. Without a licensing agreement, I think any structure, I think that the ability to have a good partner over there that is focused on the same thing, hospitals and surgery centers, is the key, right? But it's difficult right now to say, you know, whether there will be an upfront payment or not.

<unk>.

So moving on to your last question Ed in terms of on upfront you know I can't we can't say, it's going to be it's.

Working through that now we've we're just happy we now get the automated packaging.

Ward of mine that we can open up debt that possibility here to close on them on the <unk>.

Out licensing agreement I think.

The structure I think that the the.

The.

The ability of do you have a good partner over there that is focused on the same.

The line of hospitals and surgery centers is the key right, but it's difficult right now to say, whether the there'll be an upfront or not.

Okay and then one final last one if I may that was a very helpful. Thank you for that.

Antonio Eduardo Arce: Okay, and then one final last one, if I may, that was very helpful. Thank you for that.

Raffi Mark Asadorian: Assuming no sort of external cash inflows like, for example, from DoD, what is your current cash runway?

Assuming no sort of external.

All our cash inflows like for example from the O D.

What is your current cash runway.

Raffi Mark Asadorian: So we ended the year with, what, $43 million and got in another $36 million through February. So it gives us a pro forma pretty good balance. So with our sales projections that we hope to have, we've got a very good runway. I mean, you can do the math, Ed, based on the guidance that we gave, to see what our burn is going to be.

So we ended the year, what $43 million and got into another 36 million through through through February. So it gets us of pro forma of pretty.

The good.

Pretty good balance.

You know with with our sales projections and debt that we hope to have we got of a very good. Good runway. When you can you can do the math and debt based on the guidance that we are that we gave.

To see what what our burn is going to be I mean, it's it's effectively it's round.

Raffi Mark Asadorian: I mean, it's effectively around... If you just take out all our sales, it's about $10 million or so a quarter. So it gives us a pretty good runway here to get Dissuvia launched and get things moving. So even if there were zero sales, it would give us a good runway.

If you just take out even all of our sales it's about the 10 million of sale quarter.

So it gets us a pretty good runway here to get the Subia launched and get get things moving so even if there was zero sales.

That's a good good runway.

Raffi Mark Asadorian: So the additional 36 were from ETM.

So the additional 36 of us from a T M.

Raffi Mark Asadorian: No, we did a, we did a 30 million of around 30 million of a capital raise in January.

No. We did a we did a $30 million of around $30 million of.

The capital raise and of in January.

Antonio Eduardo Arce: Great. Fantastic. Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Raffi.

Great Fantastic. Thank you.

Got it.

This concludes our question and answer session I would like to turn the conference back over the roughly aciduria and for any closing remarks.

Raffi Mark Asadorian: I would like to turn the conference back over to Raffi Asadorian for any closing remarks.

Raffi Mark Asadorian: Thank you, Gary. We thank everybody for joining us as well today. We see a great opportunity coming in the second half of the year. We believe we're very well positioned for that growth while we continue to control our expenses. So we look forward to sharing more developments in the near future. Thank you.

Thank you Gary.

Yeah, we see we thanks, everybody for joining us as well today, we see a great opportunity coming.

<unk> in the second half of the year, we believe we're very well positioned for for for that growth while.

While we continue to control of expenses. So we look forward to sharing more more developments in the in the near future. Thank you.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.