Q1 2022 Baudax Bio Inc Earnings Call

May 5, 2022

[music].

Yes.

Good morning, and welcome to the <unk> Bio first quarter 2022 financial results Conference call.

Good morning and welcome to the Botox Bio First-Quarter 2022 Financial Results Conference call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at this time.

At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time. As a reminder, this conference is being recorded at the company's request I would now like to turn the call over to Sam Martin Investor Relations you may begin.

As a reminder, this conference is being recorded at the company's.

I would now like to turn the call over to Sam Martin, Investor Relations. You may begin.

Thank you Kim.

Good morning, and thank you for joining us on today's conference call to discuss <unk> first quarter 2022 financial results.

Good morning and thank you for joining us on today's conference call to discuss BotX Bio's first quarter 2022 financial review.

This is Sam Martin and I am joined today by Jerry Henwood, President and Chief Executive Officer of BotX Bio.

This is Sam Martin and I am joined today by Gerri, Henwood, President and Chief Executive Officer of <unk>.

On today's call, Jerry will discuss the continued progress around the commercialization of NJSO and will provide an overview of the financial highlights from the first quarter. We will then open the call up for questions.

On today's call Gerry will discuss the continued progress around the commercialization of <unk> and will provide an overview of the financial highlights from the first quarter. We will then open the call up for questions.

yesterday afternoon, we issued a press release detailing our financial results for the first quarter 2022.

Yesterday afternoon, we issued a press release detailing our financial results for the first quarter 2022.

The press release, along with the slide presentation that we will reference for today's call, is available on the events page of the News and Investors section of our website at www.botxbio.com. Please note the slides for today's presentation are viewer controlled.

The press release, along with a slide presentation that we will reference for today's call is available on the events page of the news and investors section of our website at <unk> Dot Com. Please note.

The slides for today's presentation are viewer controlled.

Before we begin our formal comments, I'll remind you that various remarks we make today constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial outlook as seen on slide two.

Before we begin our formal comments I'll remind you that various remarks, we make today constitute forward looking statements pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095, including statements related to our financial outlook as seen on slide two.

These forward-looking statements are subject to risks and uncertainty.

These forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations and forecasts and can be identified by words, such as anticipate believe could estimate target.

That may cause actual results to differ materially from our expectations and forecasts and can be identified by words such as anticipate, believe, could, estimate, target, expect, intend, may, plan, predict, project, will, and other words of similar meaning.

Specced intend May plan predict project will and other words of similar meaning.

The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statement.

The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward looking statements.

ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the commercial launch of NGSO or disruption in supply chain.

The ongoing economic and social consequences of the COVID-19, pandemic, including any adverse impact on our commercial launch of <unk> or disruption in supply chain.

Our ability to maintain regulatory approval for NJSO. Our ability to successfully commercialize NJSO. The acceptance of NJSO by the medical community, including physicians, patients, healthcare providers, and hospital formula.

Our ability to maintain regulatory approval for <unk>, our ability to successfully commercialize in GSO the acceptance of <unk> by the medical community, including physicians patients health care providers and hospital formularies.

Our ability and that of our third-party manufacturers to successfully scale up our commercial manufacturing process for NJSO. Our ability to produce commercial supply in quantities and quality sufficient to satisfy market demand for NJSO. And our ability to raise future financing for continued product development and NJSO commercialization.

Our ability and that of our third party manufacturers to successfully scale up our commercial manufacturing process for <unk>, so our ability to produce commercial supply in quantities and quality sufficient to satisfy market demand for <unk> and our ability to raise future financing for continued product development <unk> commercialization.

Our ability to pay our debt and satisfy conditions necessary to access future tranches of debt. Our ability to comply with the financial and other covenants under our credit facility. Our ability to manage costs and execute on operational and budget plans.

Our ability to pay our debt and satisfy conditions necessary to access future tranches of debt.

Our ability to comply with the financial and other covenants under our credit facility, our ability to manage costs and execute on operational and budget plans.

the accuracy of our estimates of the potential market for NJSO, our ability to achieve financial goals, and our ability to obtain, maintain, and successfully enforce adequate patent and other intellectual property protection. This list of important factors is not.

The accuracy of our estimates of the potential market for <unk>, so our ability to achieve financial goals.

And our ability to obtain and maintain and successfully enforced adequate patents and other intellectual property protection.

This list of important factors is not all inclusive.

Any such forward looking statements are not guarantees of future performance and involve certain risks and uncertainties.

Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.

These risks are described in the Risk Factors and the Management Discussion Analysis section of BODAX BIO's annual report on Form 10-K for the fiscal year ended December 31, 2021 and in any quarterly reports on Form 10-Q which are on file with the Securities and Exchange Commission and available on the SEC's website.

These risks are described in the risk factors and the management discussion and analysis section of <unk> Annual report on Form 10-K for the fiscal year ended December 31, 2021 and.

And in any quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC's website.

Any information we provide on this conference call is provided only as of the day of this call, May 5, 2022, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise.

Any information we provide on this conference call is provided only as of the day of this call May five 2022, and we undertake no obligation to update any forward looking statements. We may make on this call on account of new information future events or otherwise.

During the course of today's call, we will refer to a certain non-GAAP financial measure

During the course of today's call, we will refer to a certain non-GAAP financial measure.

A reconciliation between the GAAP and non-GAAP financial measure is included in our earnings release, which is available on our Investor Relations website at bodaxbio.com.

A reconciliation between the GAAP and non-GAAP financial measure is included in our earnings release, which is available on our Investor Relations website at <unk> Dot com.

I encourage you to visit our Investor Relations site to access our earnings release, periodic SEC reports, and a replay of today's call to learn more about BODX.

I encourage you to visit our Investor Relations site to access our earnings release periodic SEC reports and a replay of today's call to learn more about <unk>.

With that.

I'll ask you to please turn to slide three, and I will turn the call over to Gerri Henwood. Gerri? Thank you, Sam.

I'll ask you to please turn to slide three and I'll turn the call over to Gerri Henwood Gerri.

Thank you Sam and good morning, everyone.

If you'll turn to slide three and then advance to slide four, just a reminder that Angeso, our commercial product, is the first and only once-daily non-opioid IV analgesic. We provide up to 24-hour pain relief. The product continues to demonstrate good safety and tolerability as seen in the development studies.

If youll turn to slide three and then advance to slide four.

A reminder, that and Jeff So our commercial product is the first and only once daily non opioid IV analgesic, we provide up to 24 hour pain relief product continues to demonstrate good safety and tolerability as seen in the development studies.

COX-2 preferential characteristics are attractive to many clinicians who prescribe the product, and it's a very easy-to-use, once-daily IV push.

Cox two preferential characteristics are attractive to many clinicians who prescribe the product and it's a very easy to use once daily IV push.

If we go to slide 5, you'll see that we have a very cute little bottle. It's not actual size. It's really giant compared to the actual size. It's a 2 mL bottle with a 1 mL dose in it.

We go to slide five you'll see that we have a very cute little bottle, it's not actual size thats really giant compared to the actual size. It's a two ml bottle with a one ml dose in it.

During the quarter, we achieved net product revenue of

During the quarter, we achieved net product revenue of.

just under $425 million, $0.425 million, up 112% year over year. This was our sixth consecutive quarter of demand growth. Quarterly vials sold to end users increased dramatically, thankfully, and increased 20% quarter over quarter versus the fourth quarter.

Just under $4 $25 million for 25 million up 112% year over year.

This was our sixth consecutive quarter of demand growth quarterly vials sold to end users increased dramatically thankfully and increased 20% quarter over quarter versus the fourth quarter.

Our top 15 accounts grew by 31% during the quarter and these accounts make up just over half of our known customer units in the first quarter.

March was the largest month, single month, of Angesta units sold, launched to date. And we continue to have Orange Book listed patents that run until 2030.

March was the largest month single month event gesture units sold launch to date and we continue to have Orange book listed patents that run until 2030.

If we go to slide six, you'll see that there's continuing nice quarter over quarter growth. And I just would remind you that during the first quarter, we continue to have a reasonably impactful COVID outbreak during January and for part of February , but in spite of that, we still saw 20% growth in that quarter.

If we go to slide six you'll see that there is continuing nice quarter over quarter growth and I just would remind you that during the first quarter. We continue to have a reasonably impactful COVID-19 outbreak during January and for part of February but in spite of that we still have about 20%.

Growth in that quarter.

If we go to slide seven, the unit sales was, as mentioned before, a very big increase year over year, and a 20% increase quarter over quarter. And, again, a 73% roughly attainment of forecast really we think was very good, considering the headwinds that we sustained in the marketplace associated with COVID reductions in surgeries during January and parts of February .

If we go to slide seven.

The unit sales was as mentioned before very big increase year over year, and a 20% increase quarter over quarter and again, a 73% roughly attainment of forecast really we think was very good considering the headwinds that we sustained in the marketplace associated with.

Covid reductions and surgeries during January and parts of February .

We also did the reduction in force in March, and during that month we continue to have very good pull through and sales, so we're gratified by the team that remains on board and their diligence with which they've continued to work.

We also did the reduction in force in March and during that month, we continue to have very good pull through in sales. So we're gratified by the team that remains onboard in their diligence with which they continue to work.

If you look at slide eight, you see that we do, you know, there is a little bit of variability in the weekly growth, but the weekly growth in terms of units by months is trending up.

If you look at slide eight you.

You see that we do.

There is a little bit of variability in the weekly growth, but the weekly growth in terms of units by months is trending up.

April , this was not including some of the late data that comes in usually by this weekend. So we think that April will be a normal first month of the quarter. Normally our first month of the quarter a little bit lighter than the ending month of the prior quarter. And because we had such a great quarter overall in the first quarter, we don't have a reason right now to believe that we're not going to see continued progress during this quarter. If we get a

April this was not including some of the late data that comes in easily by this weekend. So we think that April will be a normal first month of the quarter normally our first months of the quarter a little bit later than the ending month of the prior quarter and because we had such a great quarter overall in the <unk>.

First quarter, we don't have a reason right now the belief that we're not going to see continued progress during this quarter.

If we go to slide nine.

We, because of the intermittence of COVID, because of the expense of the team that we were running, although they were working hard and growing in efficacy, we made the decision that we could not continue with the burn rate that we had. We had a lot of feedback from investors that we took very seriously during that time period and made a significant change.

We because of the Intermittency of Covid because of the expense of the team that we were running although they were working hard and growing in efficacy.

Made the decision that we could not continue with the burn rate that we had we had a lot of feedback from investors that we took very seriously during that time period and made a significant change in our commercial footprint to reduce that burn rate. So during the first quarter we reduced.

in our commercial footprint to reduce that burn rate. So, during the first quarter, we reduced from our prior staffing levels down to a total, including in-house personnel, of seven professionals associated with the commercialization of Angeso.

Our prior staffing levels down to a total including in house personnel.

Seven professionals associated with the commercialization of <unk>.

This is in spite of the fact that we're making progress for NGESSO, but believe that we could not sustain the platform that we had going. We also made some cuts in finance and medical and some other areas as well to align with this new footprint. We continue, and we'll talk a little bit more about that in a moment.

This is in spite of the fact that we're making progress for ingest, so but believe that we could not sustain the platform that we had going we also made some cuts in finance and medical and some other areas as well to align with this new footprint, we continue and we will talk a little bit more.

That in a moment with a very efficient approach to development of our <unk> and after a reduction in force expenses, our burn rate is reduced by approximately 65% going forward. We will continue on the <unk> front.

with a very efficient approach to development of our NMBs. And after our reduction in force expenses, our burn rate is reduced by approximately 65% going forward.

We'll continue on the ingestive front to focus on key accounts.

To focus on key accounts and contracts that we have in place or just getting to be put in place. The key staff. We have as I said continue to hustle hustle and are working with existing accounts ordering accounts as well as specific targeted new institutions obvious.

and contracts that we have in place were just getting to be put in place.

The key staff we have, as I said, continue to hustle, hustle, and are working with existing accounts, ordering accounts, as well as specific targeted new institutions. Obviously, we can't cover the same ground that we were covering before, but a highly selective approach to date looks like it's being fruitful for us.

We can't cover the same ground that we're covering before but highly selective approach to date looks like it's been fruitful for us.

We continue to evaluate possible partnering options for the Angeso portfolio, and we believe that it is very possible for this product to attain terrific results with perhaps a sponsorship from an organization with a larger balance sheet, but in the meantime, we're going to continue to grow this product, although modestly, but we will be continuing to show progress with the product in the meantime.

Continue to evaluate possible partnering options for the <unk> portfolio and believe that it is very possible for this product to attain terrific results with perhaps a sponsorship from the organization with a larger balance sheet, but in the meantime, we're going to continue to grow this.

Although modestly, but we will be continuing to show progress with the product in the meantime.

So if we go ahead then past the cover slide on page 10 to slide 11.

So if we go ahead and test that cover slide on page 10 to slide 11.

We'll talk a little bit about where we are in terms of overall development. And you know, of course, Ingesto is approved already. You know that we're doing the pediatric study that FDA had wanted us to do, but it also will open up a new market opportunity in addition. And we are making planned progress on that pediatric trial and have enrolled the first cohort in it to date.

Talk a little bit about.

Where we are in terms of overall development.

And of course, and just so is approved already you know that we're doing the pediatric study that if he had wanted us to do but it also will open up a new market opportunity. In addition, and we are making planned progress on that pediatric trial and have enrolled the first cohort in it to date.

The neuromuscular blocking agents, I'm going to talk about in a little more detail in a moment, but we're now entering phase two for BX1000, and towards the end of this quarter or very early in the second quarter, excuse me, in the third quarter.

Enormous blocking agents I'm going to talk about a little more detail in a moment, but we are.

Now entering phase two for VX 1000, and towards the end of this quarter or very early in the second quarter excuse me in the third quarter. We believe we will be getting enrollment into that phase II trial for VX 1000, and <unk> 2000, which is the ultra short app.

we believe we'll be getting enrollment into that phase two trial for BX1000. And BX2000, which is the ultra-short acting, has just begun to enroll patients into its dose escalation study, excuse me, healthy volunteers to its dose escalation study. And we continue to do the progressing work on BX3000, the reversal agent.

King.

<unk> just begun to enroll patients into its dose escalation study excuse me healthy volunteers to its dose escalation study and we continue to do that progressing work on VX 3000 that reversal agent.

to make the dosage form a little bit more efficient and then look at some preclinical studies.

To make the dosage form a little bit more efficient and then look at some preclinical studies, we're doing all of this with a very tiny team inside and great efficiency, so being very conscious of how we how we spend our shareholders' money.

We're doing all of this with a very tiny team inside and great efficiency, so being very conscious of how we spend our shareholders' money.

If we look at slide 12, again, a little more detail on the neuromuscular blocking agents, just framing this for you a little bit.

We look at slide 12.

Again, a little more detail on the neuromuscular blocking agents just framing this for you a little bit.

Estimated 400 million people receive neuromuscular blocking agents annually, and these agents are used to produce total paralysis. This allows for safe

Estimated 400 million people receive neuromuscular blocking agents annually and these agents are used to produce total paralysis. This allows for safe.

Right.

placement of a breathing tube, intubation, and muscle relaxation during surgery or in patients who need to be on a breathing machine, a ventilator, for other reasons, used either in the operating room or the ambulatory surgical center. And it may be used in an ICU setting. It isn't clear yet what role we'll have in those cases. The surgical case usage seems to be a little bit different.

Placement of a breathing tube into patients and muscle relaxation during surgery or in patients who need to be on a breathing machine a ventilator for other reasons used either in the operating room or the ambulatory surgical center and it may be used in an ICU setting.

It is unclear what role will have in those cases the surgical.

Case usage seems.

more likely, assuming that we continue to fulfill the profile of the product and see the safety that we are believing we will see.

More likely assuming that we continue to fulfill the profile of the product and see the safety that we are believing we will see.

The number of these procedures is increasing because there are more and more surgeries that are being done through minimally invasive methods. And laparoscopic surgery often creates a pressure in the abdomen as they inflate it to do those surgeries. And so many of those patients, if not all of those patients, are put on to ventilators and need to be intubated. So these kinds of agents have roles in those types of surgeries.

The number of these procedures is increasing because there are more and more surgeries that are being done through minimally invasive methods and laparoscopic surgery often cree.

Pressure in the abdomen as they inflate it to do those surgeries and so many of those patients if not all of those patients are put on to ventilators and need to be intubated. So these kinds of agents have roles in those types of surgery.

Our two novel NMVs, as I said, are 1000, which is estimated to act for approximately 45 minutes with a natural decay after that. Appears to have rapid onset.

Our two novel <unk> as I said are 1000, which is estimated to act for approximately 45 minutes with the natural decay. After that appears to have rapid onset.

And we have completed the dose escalation trial for this agent and we'll be looking to do a phase two surgical trial that we think will begin, as I said, towards the end of June or early in July . And this trial, we believe, has a reasonable chance, you know, COVID permitting, of enrolling and possibly completing enrollment in 2022.

And we have completed the dose escalation trial for this agent and we will be looking to do a phase II surgical trial that we think will begin as I said towards the end of June or early in July and this trial, we believe has a reasonable chance COVID-19 permitting.

Of enrolling and possibly completing enrollment in 2022.

<unk> 2000, and our ultra short acting. This is one that would have a natural decay curve of about 10 to 15 minutes, where it would.

The X2000 are ultra-short-acting. This is one that would have a natural decay curve of about 10 to 15 minutes, where it would wear off, if you will. Also, we believe, based on animal studies, and we're just now beginning the enrollment into human studies in this quarter, rapid onset. The preclinical development has been completed for this phase of development. The IND's filed and open,

We are off if you will but also we believe based on animal studies and we're just now beginning the enrollment into human studies in this quarter.

Rapid onset the preclinical development has been completed for this phase of development, the IND filed and open and so.

So, we're looking forward to seeing different dose cohorts as we move up the dosing curve in a safe and methodical manner for this trial.

So we're looking forward to seeing different dose cohorts as we move up the dosing curve in a safe and methodical manner for this trial.

progress during 2022. And it's possible that we could complete it, but more likely that it will complete in the early part of the 2023 first quarter.

Progressed during 2022, and it's possible that we could complete it but more likely that it will complete in the early part of the 2023 first quarter.

The novel reversal agent that's specific to 1000 and 2000.

The novel reversal agents that specific to 1000 2000 and provides chemical reversal of the blockade in a rapid time period based on animal studies monkeys has been reasonably predictive of human effects in this therapeutic area. That's why we think that it.

and provides chemical reversal of a blockade in a rapid time period based on animal studies, monkeys.

have been reasonably predictive of human effects in this.

therapeutic area, that's why we think that it will be very quick as a reversal agent. We are right now trying to work with the dosage form a little bit more to make it a more efficiently administered dosage form, and then to do some preclinical work on it in advance of.

We'll be very quick as a reversal agent we are right now.

Trying to work with the dosage form a little bit more to make it more efficiently administered dosage form and then to do some preclinical work on in advance of <unk>.

human clinical trials, which could begin at the end of 22 or early 23, depending on the timing of those and feedback from FDA.

Human clinical trials, which could begin at the end of 'twenty, two or early 'twenty three depending on the timing of those and feedback from FDA.

Yes.

So if we then move ahead to slide 13, I'll briefly cover the financial highlights from the quarter.

So if if.

If we then move ahead to slide 13.

I'll briefly cover the financial highlights from the quarter.

we put the press release that yesterday afternoon at one year for financial results so i'm not going to go into great debt

We put the press release out yesterday afternoon outlining our full financial results, so I'm not going to go into great depth.

But for the first quarter, we had cash and cash equivalents of $11.5 million at the end. Net product revenue, according to U.S. GAAP, for the quarter was $0.4 million, an increase of $0.2 million, or 113 percent, compared to 2021. The cost of sales for the first quarter was $0.4 million.

But for the first quarter, we had cash and cash equivalents of $11 5 million at the end net.

Net product revenue according to U S. GAAP for the quarter was <unk> 4 million, an increase of <unk> 2 million or 113% compared to 2021.

Cost of sales for the first quarter was <unk> six a decrease of <unk> 2 million compared to the same prior year period, primarily as a result of the reduction of inventory scrap expense recorded in the current year compared to 21.

a decrease of 0.2 million compared to the same prior year period, primarily as a result of the reduction of inventory scrap expense recorded in the current year compared to 21.

We expect that over time, the product costs and cost of sales will increase as sales increase and inventory associated with the units manufactured have been sold.

We expect that over time, the product costs and cost of sales.

Increase as sales increase and inventory associated with the units manufactured have been sold.

Research and development expenses for the first quarter were $1.3 million, compared to $1.1 million for the first quarter last year, and the increase was primarily due to the 0.2 increase caused by the pediatric trial initiating in the quarter.

Research and development expenses for the first quarter were $1 3 million compared to $1 1 million for the first quarter of last year and the increase was primarily due to the point to increase caused by the pediatric trial initiating in the quarter.

Selling general and administrative expenses for the first quarter were $14.2 million compared to $12.1 million for the same period in the prior year. The increase was primarily a result of increased selling expenses, which were related to the $1.7 million in accrued severance costs associated with the reduction in force during the first quarter of 2022.

Selling general and administrative expenses for the first quarter were $14 2 million compared to $12 1 million for the same period.

In the prior year the.

The increase was primarily a result of increased selling expenses, which were related to the $1 7 million in accrued severance costs associated with the reduction in force during the first quarter of 'twenty two.

We reported a net loss, including a noncash benefit of $2 4 million or $12 8 million or $3.17 per diluted share for the first quarter of 'twenty one.

We reported a net loss including a non-cash benefit of $2.4 million of $12.8 million or $3.17 per diluted share for the first quarter of 2021.

Before we open up the call for questions, I'd like to take a moment to recap some of the key takeaways today.

Before we open up the call for questions I'd like to take a moment to recap some of the key takeaways today and.

And GESO continues to show meaningful growth year-over-year and quarter-over-quarter, with revenues up 113% and 5% respectively on the dollar side. In terms of growth of the product in units, that growth continues to be good in spite of COVID impact in the first quarter and the number of elective surgeries being impacted in January and February . We saw 20% growth in vials to end users in that quarter.

And just so continues to show meaningful growth year over year and quarter over quarter with revenues up 113% and 5% respectively on the dollar side.

In terms of growth of the product in units that growth continues to be good in spite of COVID-19 impact in the first quarter and the number of elective surgeries being impacted in January and February we saw 20% growth in vials to end users in that quarter.

With respect to the neuromuscular blocking agents, we look forward to beginning enrollment in the upcoming phase two study in BX1000, the intermediate duration agent in surgical patients this summer, and to continuing to execute on the dose escalation study, which just began enrollment, evaluating BX2000, our ultra-short-acting NMV in healthy volunteers this year.

With respect to the neuromuscular blocking agents, we look forward to beginning enrollment in the upcoming phase II study in VX 1000 intermediate duration agent in surgical patients this summer and to continuing to execute on the dose escalation study, which just began enrollment evaluating PX 2000.

Our ultra short acting and then be in healthy volunteers this year.

In closing, we continue to receive positive feedback from those already using Angesso and are looking forward to keeping you updated on our progress as we continue to educate physicians and healthcare professionals on the overall benefits of Angesso in the acute care setting and to the further development of our NMB products. I'll now turn the call over to the operator for any questions.

In closing we continue to receive positive feedback from those already using and just so and are looking forward to keeping you updated on our progress as we continue to educate physicians and healthcare professionals on the overall benefits of and just so in the acute care setting and to the further development of or <unk>.

Products I'll now turn the call over to the operator for any questions.

That concludes our prepared remarks. We will now open the call up for questions. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster.

That concludes our prepared remarks, we will now open the call up for questions.

A reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.

Please standby, while we compile the Q&A Ross.

We have a question from Greg <unk> from Noble capital. Your line is now open.

We have a question from Greg Arendt from Novo Capital. Your line is now open.

Good morning, Gerry and Sarah this is Gregg.

Good morning, Jerry and Sam. This is Greg. Thanks for having the call. A question regarding the revenue levels in the quarter. Minutes, as I calculate, vials were up about 20 percent. Revenues increased about 11 percent. Is there a disconnect that I'm missing relative to the wholesale cost versus direct sales level, the revenue for vials, for instance, that changed? Is there something that I'm missing there that you can elaborate on?

Thanks for having the call.

Regarding the revenue in the quarter.

As I calculate vials, we're up about 20% revenues increased about 11%.

Is there a disconnect that I am missing relative to wholesale cost versus direct sales level. The revenue for a while for instance changed is there something that I'm missing there.

Collaborate on.

So there are slight timing differences between the units that are passing through and then the reconciliation of those costs. But there is not an overall impact of the volume-related discounts that we're doing. Our senior financial people have taken a look at what is

So there are there are slight timing differences between the units that are passing through and then the reconciliation of those costs, but there is there is not an overall impact of the volume related discounts that were doing the.

Our senior financial people have taken a look at what is the net impact to us on the revenue side of that discounting program and it is in single digits. So that's that is not the impact in the quarter, but there are some some of the changes in the.

the net impact to us on the revenue side of that discounting program, and it is in single digits. So that is not the impact in that quarter. But there are some

some of the changes in the inventory could have had some impact on that.

Inventory could have had some impact on that Greg.

Thank you. A follow-up. In terms of the gross margin overall, is that related to that? You mentioned scrap costs were lower this quarter, but I noticed the gross margin was a little bit larger relative to the fourth quarter. Is there something there that you can elaborate on?

Okay. Thank you.

Follow up in terms of the gross margin overall was that related to that you mentioned.

Scrap costs were lower this quarter, but I noticed the gross margin was a little bit larger relative to the fourth quarter or is there something there that you can elaborate on.

We're still not at, you know, what we would consider full cost absorption, and, you know, we're certainly striving to do that, and part of the way that we're doing that is by lowering some of the costs associated with our commercialization of the.

So we're still not at.

What we would consider full cost absorption and we are certainly striving to do that and part of the way that we're doing that is by lowering some of the costs associated with our commercialization of the brand we do think that at.

We do think that at a full commercialization level.

A full commercialization level.

At some point in time, this product continues to have the ability to generate more typical gross margins for parenteral products, you know, more in the 70s.

Some point in time this product continues to have the ability to generate more typical gross margins for parenteral products and more in the seventies, but right now we're not at that full an absorption level.

But right now, we're not at that full on absorption level.

Okay, and then thoroughly, if you don't mind me going on here, approvals in the formulary, did you want to specify the number? I didn't hear anything in the presentation that you might have received in the quarter.

Okay.

And then thirdly, if you don't mind me going on here.

Approvals in the formulary.

Could you want to specify the number I didn't hear anything in the presentation.

I have received in the quarter.

No, we didn't. We did not specify that part of that is going back through and looking at as we did the reduction in force. There were some formularies that were in

No. We didn't we did not specify that and part of that is going back through and looking at as we did the reduction in force there were some formularies that were in progress.

And as you may know, you need fair access in terms of relationships.

As you May know.

Fair access in terms of relationships to get the word quickly because otherwise it can take you a month or more to get the full determination of what was approved was approved for a limited service line was approved for broad service lines. So there were approvals in the quarter.

to get the word quickly because otherwise it can take you a month or more to get the full determination of what was it approved, was it approved for a limited service line, was it approved for broad service line. So there were approvals in the quarter, but I haven't put the number down yet because we are still finalizing that for that quarter, but we did see a pretty dramatic jump in the early part of the quarter as we got.

But I haven't put the number down yet because we are still finalizing that for that quarter, but we did see a pretty dramatic jump in the early part of the quarter as we got in.

an agreement with a particular large ASC chain, again, one of the top five in the U.S. in terms of size, and that includes a total of close to 200 units.

Agreement with a particular large ASC chain again, one of the top five in the U S. In terms of size and that includes a total of close to 200 units. So nominally we are approved there and that came through in the first quarter incrementally but not.

So nominally we are approved there and that came through in the first quarter incrementally, but not every one of those institutions by far is set up for pull through yet.

Every one of those institutions by far is set up for pull through yet so I would say we were probably more like.

So I would say we were probably more like another 20 to 40 in the quarter if we look at pull through on that, pull through on the previous large.

Other 20 to 40 in the quarter, if we look at pull through on that pull through on the previous large surgical ASC groups that we had and the number of hospitals. So it's it's a number that is I think still quite respectable, but I don't want to put a point on it right now so I have it but I think as.

surgical ASC group that we had, and a number of hospitals. So it's a number that is, I think, still quite respectable, but I don't want to put a point on it right now, so I have it. But I think as we go through this next quarter, we'll be in a better position to.

We go through this next quarter, we'll be in a better position to.

create that baseline for Q1 and into Q2 with a little more precision.

Create that that baseline for Q1 and into Q2 with a little more precision.

Great, thank you. That's very helpful. I'll get back in the queue. Thanks for taking my call. Thanks very much, Greg.

Great. Thank you that's very helpful I'll get back in the queue. Thanks for taking my call.

Thanks, very much Greg.

And we are showing no further questions. I will now turn the call back to Jerry for closing remarks. Thank you very much for your time today, for your support of the company. We continue to look at ways of helping and just so to grow in our hands and to consider options that could provide for an even broader commercialization of the product.

And we are showing no further questions I will now turn the call back to Jerry for closing remarks.

Thank you very much for your time today for your support of the company. We continue to look at ways of helping and just so to grow in our hands and to consider options that could provide for an even broader commercialization of the product.

it with a potential partner or otherwise, but continue to believe it is a strong contributor to the management of patients in this non-opioid world.

With the potential partner or otherwise, but.

Can you to believe it is a strong contributor to the management of patients in this non opioid <unk>.

perioperative care arena for pain management, and are very encouraged that with modest spend, we're making good progress on the NMBs, which we think are also potentially very economically important for our shareholders. Thank you, operator. Thanks, everyone, for joining us. Hope you have a great rest of your day.

Sorry operative care Arena for pain management and are very encouraged that with modest spend we're making good progress on the Nmb's, which we think are also potentially very economically important for our shareholders. Thank you operator, thanks, everyone for joining us and hope you have a great rest of your day.

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Good morning and welcome to the Botox Bio First Quarter 2022 Financial Results Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time.

Good morning, and welcome to the <unk> Bio first quarter 2022 financial results conference call at.

As a reminder, this conference is being recorded at the company's.

I would now like to turn the call over to Sam Martin, Investor Relations. You may begin.

Thank you Kim.

Good morning, and thank you for joining us on today's conference call to discuss BODAX BIO's first quarter 2022 financial.

Good morning, and thank you for joining us on today's conference call to discuss <unk> first quarter 2022 financial results.

This is Sam Martin and I am joined today by Jerry Henwood, President and Chief Executive Officer of Vodax Bios.

This is Sam Martin and I am joined today by Gerri, Henwood, President and Chief Executive Officer of <unk> bio.

On today's call, Jerry will discuss the continued progress around the commercialization of NJSO, and will provide an overview of the financial highlights from the first quarter. We will then open the call up for questions.

Yesterday afternoon, we issued a press release detailing our financial results for the first quarter 2022.

detailing our financial results for the first quarter of 2022. The press release, along with the slide presentation that we will reference for today's call, is available on the events page of the News and Investors section of our website at BotExBio.com. Please note, the slides for today's presentation are viewer-controlled. Before we begin our formal comments, I'll remind you that various remarks we make today constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial outlook, as seen on slide two. These forward-looking statements are set

The press release, along with the slide presentation that we will reference for today's call, is available on the Events page of the News and Investors section of our website at BODXbio.com. Please note the slides for today's presentation are viewer controlled.

The press release, along with a slide presentation that we will reference for today's call is available on the events page of the news and investors section of our website at <unk> Dot com.

These notes the slides for today's presentation are viewer controlled.

These forward-looking statements are subject to risks and uncertainty.

that may cause actual results to differ materially from our expectations and forecasts and can be identified by words such as anticipate, believe, could, estimate, target, expect, intend, may, plan, predict, project, will, and other words of similar meaning.

And other words of similar meaning.

The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward-looking statement.

The following are some of the factors that could cause our actual results to differ materially from those expressed in or underlying our forward looking statements.

ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the commercial launch of NGSO or disruption in supply chain.

The ongoing economic and social consequences of the COVID-19, pandemic, including any adverse impact on the commercial launch of LNG, so or disruption in supply chain.

Our ability to maintain regulatory approval for and Jay So our ability to discuss fully commercialized and GSO the acceptance of <unk> by the medical community, including physicians patients health care providers and hospital formularies.

Our ability and that of our third-party manufacturers to successfully scale up our commercial manufacturing process for NJSO. Our ability to produce commercial supply in quantities and quality sufficient to satisfy market demand for NJSO, and our ability to raise future financing for continued product development and NJSO commercialization.

Our ability to pay our debt and satisfy conditions necessary to access future tranches of debt.

Our ability to comply with the financial and other covenants under our credit facility or.

Our ability to manage costs and execute on operational and budget plans.

The accuracy of our estimates of the potential market for <unk>.

Our ability to achieve financial goals.

And our ability to obtain and maintain and successfully enforced adequate patents and other intellectual property protection.

List of important factors is not all inclusive.

Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.

Any such forward looking statements are not guarantees of future performance and involve certain risks and uncertainties.

These risks are described in the Risk Factors and the Management Discussion Analysis section of BODAX Bio's annual report on Form 10-K for the fiscal year ended December 31, 2021, and in any quarterly reports on Form 10-Q , which are on file with the Securities and Exchange Commission and available on the SEC's website.

These risks are described in the risk factors and the management discussion and analysis section of <unk> Annual report on Form 10-K for the fiscal year ended December 31 2021.

And in any quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC's website.

Any information we provide on this conference call is provided only as of the day of this call, May 5, 2022. And we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise.

During the course of today's call, we will refer to a certain non-GAAP financial matter.

During the course of today's call, we will refer to a certain non-GAAP financial measure.

A reconciliation between the GAAP and non-GAAP financial measure is included in our earnings release, which is available on our Investor Relations website at BodexBio.com.

A reconciliation between the GAAP and non-GAAP financial measure is included in our earnings release, which is available on our Investor Relations website at <unk> Dot com.

I encourage you to visit our Investor Relations site to access our earnings release, periodic SEC reports, and a replay of today's call to learn more about BODX.

I encourage you to visit our Investor Relations site to access our earnings release periodic SEC reports and a replay of today's call to learn more about <unk>.

With that.

I'll ask you to please turn to slide three, and I will turn the call over to Gerri Henwood. Gerri? Thank you, Sam.

I'll ask you to please turn to slide three and I'll turn the call over to Gerri Henwood Gerri.

Thank you Sam and good morning, everyone.

If youll turn to slide three and then advance to slide four.

Just a reminder, that and Jeff So our commercial product is the first and only once daily non opioid IV analgesic, we provide up to 24 hour pain relief product continues to demonstrate good safety and tolerability as seen in the development studies.

COX-2 preferential characteristics are attractive to many clinicians who prescribe the product, and it's a very easy-to-use, once-daily IV push.

Cox two preferential characteristics are attractive to many clinicians who prescribe the product and it's a very easy to use once daily IV push.

If we go to slide 5, you'll see that we have a very cute little bottle. It's not actual size. It's really giant compared to the actual size. It's a 2 mL bottle with a 1 mL dose in it.

If we go to slide five Youll see that we have a very cute little bottle, it's not actual size thats really giant compared to the actual size. It's a two ml bottle with a one ml dose in it.

During the quarter, we achieved net product revenue of

During the quarter, we achieved net product revenue of <unk>.

just under $0.425 million, up 112% year over year. This was our sixth consecutive quarter of demand growth. Quarterly vials sold to end users increased dramatically, thankfully, and increased 20% quarter over quarter versus the fourth quarter.

Just under $4 $25 million for $25 million up 112% year over year. This was our sixth consecutive quarter of demand growth quarterly vials sold to end users increased dramatically.

Thankfully and increased 20% quarter over quarter versus the fourth quarter.

Our top 15 accounts grew by 31% during the quarter and these accounts make up just over half of our known customer units in the first quarter.

March was the largest month, single month, of Angesta units sold, launched to date. And we continue to have Orange Book listed patents that run until 2030.

March was the largest month single month event gesture units sold launch to date.

And we continue to have Orange book listed patents that run until 2030.

Rent growth in that quarter.

If we go to slide seven, the unit sales was, as mentioned before, a very big increase year over year, and a 20% increase quarter over quarter. And again, a 73% roughly attainment of forecast really we think was very good, considering the headwinds that we sustained in the marketplace associated with COVID reductions in surgeries during January and parts of February .

If we go to slide seven the unit sales was as mentioned before very big increase year over year, and a 20% increase quarter over quarter and again, the 73% roughly attainment of forecast really we think was very good considering the headwinds.

That we sustained in the marketplace associated with Covid reductions in surgeries during January and parts of February .

We also did the reduction in force in March and during that month, we continue to have very good pull through in sales. So we're gratified by the team that remains on board and their diligence with which they continue to work.

If you look at slide eight, you see that we do, you know, there is a little bit of variability in the weekly growth, but the weekly growth in terms of units by month is trending up.

If you look at slide eight.

See that we do.

There is a little bit of variability in the weekly growth, but the weekly growth in terms of units by months is trending up.

April , this was not including some of the late data that comes in usually by this weekend. So we think that April will be a normal first month of the quarter. Normally our first months of the quarter are a little bit lighter than the ending month of the prior quarter. And because we had such a great quarter overall in the first quarter, we don't have a reason right now to believe that we're not going to see continued progress during this quarter. If we get...

April this was not including some of the late data that comes in usually by this weekend. So we think that April will be a normal first month of the quarter normally our first months of the quarter a little bit later than the ending month of the prior quarter and because we had such a great quarter overall in the first.

<unk>.

Don't have a reason right now to believe that we're not going to see continued progress during this quarter.

If we go to slide nine.

Because of the Intermittency of Covid because of the expense of the team that we were running although they were working hard and growing in efficacy.

We've made the decision that we could not continue with the burn rate that we had we had a lot of feedback from investors that we took very seriously during that time period and made a significant change in our commercial footprint to reduce that burn rate. So during the first quarter we reduced.

But from our prior staffing levels down to a total including in house personnel of seven professionals associated with the commercialization of <unk>.

This is in spite of the fact that we're making progress for <unk>, so but believe that we could not sustain the platform that we had going we also made some cuts in finance and medical and some other areas as well to align with this new footprint.

We continue and we will talk a little bit more about that in a moment.

with a very efficient approach to development of our NMBs. And after our reduction in force expenses, our burn rate is reduced by approximately 65% going forward.

With a very efficient approach to development of our MBS and after a reduction in force expenses, our burn rate is reduced by approximately 65% going forward. We will continue on the <unk> front to focus on key accounts.

We'll continue on the ingestive front to focus on key accounts.

and contracts that we have in place were just getting to be put in place.

And contracts that we have in place or just getting to be put in place. The key staff. We have as I said continue to hustle hustle and are working with existing accounts ordering accounts as well as specific targeted new institutions. Obviously, we can't cover this.

Same ground that we're covering before but highly selective approach to date looks like it's being fruitful for us.

We continue to evaluate possible partnering options for the Angesto portfolio and we believe that it is very possible for this product to attain terrific results with perhaps a sponsorship from an organization with a larger balance sheet, but in the meantime, we're going to continue to grow this product, although modestly, but we will be continuing to show progress with the product in the meantime.

We continue to evaluate possible partnering options for the <unk> portfolio.

And you believe that it is very possible for this product to attain terrific results with perhaps a sponsorship from that organization with a larger balance sheet, but in the meantime, we're going to continue to grow this product, although modestly, but we will be continuing to show progress with the product in the meantime.

So if we go ahead then past the cover slide on page 10 to slide 11.

So if we go ahead then test the cover slide on page 10 to slide 11.

We'll talk a little bit about where we are in terms of overall development. And you know, of course, ingesto is approved already. You know that we're doing the pediatric study that FDA had wanted us to do, but it also will open up a new market opportunity in addition. And we are making planned progress on that pediatric trial and have enrolled the first cohort in it to date.

We'll talk a little bit about where we are in terms of overall development and of course and Jeff. So as approved already you know that we're doing the pediatric study.

That FDA had wanted us to do but it also will open up new market opportunity. In addition, and we are making planned progress on that pediatric trial and have enrolled the first cohort in it to date neuromuscular blocking agents is going to talk about a little more detail in a moment, but.

neuromuscular blocking agents I'm going to talk about in a little more detail in a moment, but we're now entering Phase 2 for BX1000, and towards the end of this quarter, or very early in the second quarter, excuse me, in the third quarter,

We're now entering phase two for VX 1000, and towards the end of this quarter or very early in the second quarter excuse me in the third quarter. We believe we will be getting enrollment into that phase II trial for VX, one and VX 2000, which is the ultra short.

we believe we'll be getting enrollment into that Phase 2 trial for BX1000. And BX2000, which is the ultra-short acting, has just begun to enroll patients into its dose escalation study, excuse me, healthy volunteers to its dose escalation study. And we continue to do the progressing work on BX3000, the reversal agent.

Acting has just begun to enroll patients into its dose escalation study excuse me healthy volunteers to its dose escalation study and we continue to do the progressing work on VX 3000 that reversal agent to make the dosage form a little bit more efficient and then look.

to make the dosage form a little bit more efficient and then look at some preclinical studies.

Get some preclinical studies, we're doing all of this with a very tiny team inside and great efficiency, so being very conscious of how we spend our shareholders' money.

We're doing all of this with a very tiny team inside and great efficiency. So being very conscious of how we spend our shareholders money.

If we look at slide 12, again, a little more detail on the neuromuscular blocking agents, just framing this for you a little bit.

We look at slide 12.

Again, a little more detail on the neuromuscular blocking agents just framing this for you a little bit.

Estimated 400 million people receive neuromuscular blocking agents annually, and these agents are used to produce total paralysis. This allows for safe

Estimated 400 million people receive neuromuscular blocking agents annually and these agents are used to produce total paralysis. This allows for safe.

placement of a breathing tube, intubation, and muscle relaxation during surgery or in patients who need to be on a breathing machine, a ventilator, for other reasons, used either in the operating room or the ambulatory surgical center, and it may be used in an ICU setting. It isn't clear yet what role we'll have in those cases. The surgical case usage seems...

Placement of a breathing tube into basin and muscle relaxation during surgery or in patients who need to be on a breathing machine a ventilator for other reasons.

<unk> either in the operating room or the ambulatory surgical center.

And it may be used in an ICU setting it is unclear what role will have in those cases, the surgical case usage seems.

more likely, assuming that we continue to fulfill the profile of the product and see the safety that we are believing we will see.

More likely assuming that we continue to fulfill the profile of the product and see the safety that we are believing we will see.

The number of these procedures is increasing, because there are more and more surgeries that are being done through minimally invasive methods. And laparoscopic surgery often creates a pressure in the abdomen as they inflate it to do those surgeries. And so many of those patients, if not all of those patients, are put on to ventilators and need to be intubated. So these kinds of agents have roles in those types of surgeries.

The number of these procedures is increasing because there are more and more surgeries that are being done through minimally invasive methods and laparoscopic surgery often create.

Pressure in the abdomen as they inflated to do those surgeries and so many of those patients if not all of those patients are put on to ventilators and need to be intubated. So these kinds of agents have roles in those types of surgery.

Our two novel NMVs, as I said, are 1000, which is estimated to act for approximately 45 minutes with the natural decay after that, appears to have rapid onset.

Our two novel <unk>.

As I said are 1000, which is estimated to act for approximately 45 minutes with the natural decay. After that appears to have rapid onset.

And we have completed the dose escalation trial for this agent and will be looking to do a phase two surgical trial that we think will begin, as I said, towards the end of June or early in July . And this trial, we believe, has a reasonable chance, you know, COVID permitting, of enrolling and possibly completing enrollment in 2022.

And we have completed the dose escalation trial for this agent and we will be looking to do a phase III surgical trial that we think will begin as I said towards the end of June or early in July and this trial, we believe has a reasonable chance COVID-19 permitting.

Enrolling and possibly completing enrollment in 2022.

The X2000 are ultra-short acting. This is one that would have a natural decay curve of about 10 to 15 minutes, where it would wear off, if you will. Also, we believe, based on animal studies, and we're just now beginning the enrollment into human studies in this quarter, rapid onset. The preclinical development has been completed for this phase of development. The IND's filed and open, and

VX 2000, our ultra short acting. This is one that would have a natural decay curve of about 10 to 15 minutes, where it would.

We are off if you will.

We believe based on animal studies, and we're just now beginning any enrollment into human studies in this quarter.

Rapid onset the preclinical development has been completed for this phase of development, the IND filed and open and so.

So, we're looking forward to seeing different dose cohorts as we move up the dosing curve in a safe and methodical manner for this trial.

So we're looking forward to seeing different dose cohorts as we move up the dosing curve in a safe and methodical manner for this trial.

progress during 2022. And it's possible that we could complete it, but more likely that it will complete in the early part of the 2023 first quarter.

Progressed during 2022, and it's possible that we could complete it but more likely that it will complete in the early part of the 2023 first quarter.

The novel reversal agent that's specific to 1000 and 2000.

The novel reversal agents that specific to 1000 2000 and.

and provides chemical reversal of a blockade in a rapid time period based on animal studies, monkeys.

And provides chemical reversal of a blockade in a rapid time period based on animal studies monkeys has been reasonably predictive of human effects. In this therapeutic area. That's why we think that it will be very quick as a reversal agent we are right now.

have been reasonably predictive of human effects in this.

Trying to work with the dosage form a little bit more to make it more efficiently administered dosage form and then to do some preclinical work on in advance of.

human clinical trials, which could begin at the end of 22 or early 23, depending on the timing of those and feedback from FDA.

Human clinical trials, which could begin at the end of 'twenty, two or early 'twenty three depending on the timing of those and feedback from FDA.

Yes.

So if we then move ahead to slide 13, I'll briefly cover the financial highlights from the quarter.

So if.

If we then move ahead to slide 13.

I'll briefly cover the financial highlights from the quarter.

We put the press release out yesterday afternoon at Lanier, full financial results, so I'm not going to go into great depth.

We put the press release out yesterday afternoon outlining our full financial results, so I'm not going to go into great depth.

But for the first quarter, we had cash and cash equivalents of $11 5 million at the end net.

Net product revenue according to U S. GAAP for the quarter was <unk> 4 million, an increase of <unk> $2 million or 113% compared to 2021.

The cost of sales for the first quarter was $0.6, a decrease of $0.2 million compared to the same prior year period, primarily as a result of the reduction of inventory scrap expense recorded in the current year compared to $21.

The cost of sales for the first quarter was <unk> six a decrease of <unk> 2 million compared to the same prior year period, primarily as a result of the reduction of inventory scrap expense recorded in the current year compared to 21.

We expect that over time, the product costs and cost of sales will increase as sales increase and inventory associated with the units manufactured have been sold.

We expect that over time, the product costs and cost of sales.

Increase as sales increase and inventory associated with the units manufactured have been sold.

Selling general and administrative expenses for the first quarter were $14 2 million compared to $12 1 million for the same period.

The prior year.

We reported a net loss including a non-cash benefit of $2.4 million of $12.8 million or $3.17 per diluted share for the first quarter of 2021.

We reported a net loss, including a noncash benefit of $2 4 million or $12 8 million or $3 17 per diluted share for the first quarter of 'twenty one.

Before we open up the call for questions, I'd like to take a moment to recap some of the key takeaways today.

Before we open up the call for questions I'd like to take a moment to recap some of the key takeaways today.

And just so continues to show meaningful growth year over year and quarter over quarter with revenues up 113% and 5% respectively on the dollar side.

In terms of growth of the product and units that growth continues to be good in spite of COVID-19 impact in the first quarter and the number of elective surgeries being impacted in January and February we saw 20% growth in vials to end users in the quarter.

Our ultra short acting and then be in healthy volunteers this year.

In closing, we continue to receive positive feedback from those already using Angesso and are looking forward to keeping you updated on our progress as we continue to educate physicians and healthcare professionals on the overall benefits of Angesso in the acute care setting and to the further development of our NMV products. I'll now turn the call over to the operator for any questions.

In closing we continue to receive positive feedback from those already using and just so and are looking forward to keeping you updated on our progress as we continue to educate physicians and healthcare professionals on the overall benefits of and Jess on the acute care setting and to the further development of our <unk>.

Products.

I'll now turn the call over to the operator for any questions.

That concludes our prepared remarks. We will now open the call up for questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster.

That concludes our prepared remarks, we will now open the call up for questions.

A reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound Keith Please standby, while we compile the Q&A Ross.

Okay.

We have a question from Greg Arendt from Novo Capital. Your line is now open.

We have a question from Greg <unk> from Noble capital. Your line is now open.

Good morning, Jerry and Sam. This is Greg. Thanks for having the call. A question regarding the revenue levels in the quarter. Minutes, as I calculate, vials were up about 20%. Revenues increased about 11%. Is there a disconnect that I'm missing relative to the wholesale costs versus direct sales level, the revenue for vials, for instance? Is there something that I'm missing there that you can elaborate on?

Good morning, Jeremy.

Meg.

Thanks for having the call.

Question regarding the revenue in the quarter.

As I calculate vials, we're up about 20% revenues increased about 11%.

Is there a disconnect that I missing relative to.

Wholesale cost versus direct sales level the revenue per mile. For instance changed is there something that I'm missing there.

Collaborate on so.

Our senior financial people have taken a look at what is the net impact to us on the revenue side of that discounting program and it is in single digits. So that's that is not the impact in that quarter, but there are some some of the changes in the.

the net impact to us on the revenue side of that discounting program, and it is in single digits. So that is not the impact in that quarter. But there are some

some of the changes in the inventory could have had some impact on that.

Inventory could have had some impact on that Greg.

Okay. Thank you.

A follow up in terms of the gross margin overall was that related to that you mentioned.

Yeah.

Scrap costs were lower this quarter, but I noticed the gross margin was a little bit larger relative to the fourth quarter or is there something there that you can elaborate on.

So we're still not.

We do think that at a full commercialization level.

A full commercialization level.

At some point in time, this product continues to have the ability to generate more typical gross margins for parenteral products, you know, more in the 70s.

Yes, some point in time this product continues to have the ability to generate more typical gross margins for parenteral products and more in the seventies, but right now we're not at that full and absorption levels.

But right now, we're not at that full on absorption level.

Okay.

And then thirdly, if you don't mind me going on here.

Approvals in the formulary.

Did you want to specify the number I didn't hear anything in the presentation.

I have received in the quarter.

No, we didn't. We did not specify that part of that is going back through and looking at as we did the reduction in force. There were some formularies that were in place.

No. We didn't we did not specify that and part of that is going back through and looking at as we did the reduction in force there were some formularies that were in progress.

And as you may know, you need fair access in terms of relationships.

As you May know.

Need fair access in terms of relationships to get the word quickly because otherwise it can take you a month or more to get the full determination of what was it approved was it approved for a limited service line was approved for broad service lines. So there were approvals in the quarter, but I haven't put the number down yet because.

to get the word quickly because otherwise it can take you a month or more to get the full determination of what was it approved, was it approved for a limited service line, was it approved for a broad service line. So there were approvals in the quarter, but I haven't put the number down yet because we are still finalizing that for that quarter, but we did see a pretty dramatic jump in the early part of the quarter as we got

We are still finalizing that for that quarter, but we did see a pretty dramatic jump in the early part of the quarter as we got in.

an agreement with a particular large ASC chain, again, one of the top five in the U.S. in terms of size.

The agreement with a particular large ASC chain again, one of the top five in the U S. In terms of size and that includes a total of close to 200 units. So nominally we are approved there and that came through in the first quarter incrementally but not.

And that includes a total of close to 200 units.

So nominally we are approved there and that came through in the first quarter incrementally, but not every one of those institutions by far is set up for pull through yet.

Every one of those institutions by far is set up for pull through yet.

So I would say we were probably more like another 20 to 40 in the quarter, if we look at pull through on that, pull through on the previous large.

I would say we were probably more like.

Another 20 to 40 in the quarter, if we look at pull through on that pull through on the previous large surgical ASC groups that we had and the number of hospitals. So it's a number that is I think still quite respectable, but I don't want to put a point on it right now so I have it but I think as.

surgical ASC group that we had, and a number of hospitals. So it's a number that is, I think, still quite respectable. But I don't want to put a point on it right now, so I have it. But I think as we go through this next quarter, we'll be in a better position to.

We go through this next quarter, we'll be in a better position to create that that baseline for Q1 and into Q2 with a little more precision.

create that baseline for Q1 and into Q2 with a little more precision.

Great. Thank you. That's very helpful. I'll get back in the queue. Thanks for taking my call. Thanks very much, Greg.

Great. Thank you that's very helpful I'll get back in the queue and thanks for taking my call.

Thanks, very much Greg.

And we are showing no further questions. I will now turn the call back to Jerry for closing remarks. Thank you very much for your time today, for your support of the company. We continue to look at ways of helping Ingestive to grow in our hands and to consider options that could provide for an even broader commercialization of the product.

And we are showing no further questions I will now turn the call back to Jerry for closing remarks.

it with a potential partner or otherwise, but continue to believe it is a strong contributor to the management of patients in this non-opioid world.

With the potential partner or otherwise, but continue to believe it is a strong contributor to the management of patients in this non opioid <unk>.

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