Q1 2022 Pear Therapeutics Inc Earnings Call

May 16, 2022

[music].

Yeah.

Good afternoon everyone. Welcome to the Pair Therapeutics First Quarter 2022 earning conference call. My name is Justin and I will be your operator today. All lines have been placed on mute to prevent background noise.

Good afternoon, everyone welcome to the payer Therapeutics first quarter 2022 earnings Conference call. My name is Justin and I'll be your operator today all lines have been placed on mute to prevent background noise.

This call is being recorded. A replay of the webcast will be available in the investor section of the company's website, approximately two hours at the completion of the call, and will be archived for 30 days. I'll now turn the call over to your host, Mayor Murphy, Senior Director of Corporate Communication.

I'll now turn the call over to your host MS Murphy Senior director of corporate Communications.

Thank you, Justin. Welcome to our first quarter earnings call and thank you for joining us today. With me today, our chlorine pan, our president and CEO , Chris Svephé, our chief financial officer and chief operating officer, Aaron Brenner, our chief product development officer, Yuri Marifich, our chief medical officer, Ronino Bryan, our general counsel and chief compliance officer, and Julius Tramberg, our chief commercial officer. To start the call, I'll turn it over to Ronin for the state harbor statement.

Thank you Jeff.

Welcome to our fourth quarter earnings call and thank you for joining us today.

With me today are greenfield.

Today as CEO .

We say, our Chief financial Officer, and Chief operating Officer, Aaron <unk> Chief product development.

Gary <unk>, our Chief Medical Officer.

Brian Our general counsel.

Okay.

<unk>, our chief commercial officer.

First of all I'll turn it over to Randy.

Christine.

Good afternoon. Some of the statements we make in today's call may constitute for looking state.

Good afternoon.

The statements we make in today's call may constitute forward looking statements. This includes statements concerning our future business operating results management's intentions beliefs and expectations about future results events strategies operating plans performance or financial condition.

This includes statements concerning our future business, operating results, management's intentions, beliefs and expectations about future results, events, strategies, operating plans, performance, or financial condition, all of which are forwarding statements within the meeting of the Private Security's litigation reform act of 1995 as amended.

All of which are forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95 as amended.

actual results make it for materially from those indicated by this forward-lifting statements through the variety of important factors.

Actual results may differ materially from those indicated by these forward looking statements due to a variety of important factors.

Additional information regarding these factors is included in our annual report on 1.10K and quarterly report on 1.10Q file with the FEC.

Additional information regarding these factors is included in our annual report on Form 10-K, and quarterly report on Form 10-Q filed with the SEC.

Accept is required by law. Parasumes no obligation to update or revise these forward looking statements, even if actual results or future expectations change materially. With that, it's why pleasure to turn the call over to court.

Except as required by law <unk> assumes no obligation to update or revise these forward looking statements, even if actual results or future expectations change materially.

With that it's my pleasure to turn the call over to Corey.

Thanks, Ronan. And thanks, everyone, for joining us today as we discuss Paris first quarter 2022 results.

Thanks, Ron.

And thanks, everyone for joining us today as we discuss pairs first quarter 2022 results.

Hair's goal is to transform healthcare by pioneering software as mainstream medical treat.

Paris goal is to transform healthcare by pioneering software as a mainstream medical treatment.

for making meaningful progress toward achieving that goal. Today, our commercial products have demonstrated value to patients, clinicians and payers, including robust.

We're making meaningful progress toward achieving that goal.

To date, our commercial products have demonstrated value to patients clinicians and payers, including robust patient engagement.

strong clinical outcomes, enhanced access for underserved and marginalized patients, building and coding infrastructure for clinicians, and real world cost savings for Paggers. The future is bright for PDT.

Strong clinical outcomes enhance access for underserved and marginalized patients.

Coding infrastructure for clinicians.

And real world cost savings measures.

The future is bright for <unk>.

Prison looks good too.

We're off to a solid start in 2022.

The only on the momentum we saw last year, revenue grew 108% quarter over quarter.

Building on the momentum we saw last year revenue grew 108% quarter over quarter.

We saw growing demand with more than 9,200 total clear prescriptions this quarter.

We saw growing demand with more than 9200 total prescriptions this quarter.

We moved closer to making PDT's a mainstream medical treatment with Hickspicks codes from CMS and integration into ethics electronic health Please do not submit in part, regarding letter

We moved closer to making pdt's mainstream medical treatment.

Fixed fixed codes from CMS and integration into Epic's electronic health record.

We also brought our reach to underserved patients with the launch of reset and resetto in space.

We also broadened our reach underserved patients with the launch of a reset and reset our in Spanish.

This momentum continues into the second quarter. And one great example is how our pain or value proposition continues to advance with our close 12 month and 24 month data demonstrating durability of clinical outcomes and reduction in healthcare resource utilization. Those are just the headlines. Thank you very much.

This momentum continues into the second quarter.

And one Great example is our <unk> value proposition continues to advance with our first 12 months and 24 months data demonstrating durability of clinical outcomes and reduction in healthcare resource utilization.

Those are just the headwinds.

Julia and Euro will provide details in just a moment.

Then, Chris will share financial and operating results and update you on the work we've done to simplify how we reported our progress. Finally, all of us will wrap up by answering your questions.

Chris will share our financial and operating results and update you on the work we've done to simplify how we report our progress.

Finally, all of us will wrap up by answering your questions.

Julia please take it away.

Thanks, Corey. I'd like to underscore our commercial momentum by highlighting a few market moving events.

Thanks, Corey I'd like to underscore our commercial momentum by highlighting a few market moving events.

First, let's talk about our progress expanding demand. We are seeing both more prescriptions from existing customers, as well as new customers coming on board.

First let's talk about our progress expanding demand.

We're seeing more prescriptions from existing customers as well as new customers coming on board.

We see demand growing in the future through our engagement with large addiction clinics, health systems, and state where we're creating that.

We see demand growing in the future through our engagement with large addiction clinic health system and state, where we're creating asset.

We believe our progress is fueled by our product optimization for clinicians.

This includes streamlining workflows via integration into EMRs like app.

Included streamlining workflows integration into the EMR like epic.

It also includes clinicians gaining opportunities for reimbursement to be a newly granted CPG code. Second.

It also includes clinicians gaining opportunities for reimbursement via newly granted CPT code.

Second, let's talk about our progress with <unk>.

Last year, we initiated access for recess and recessed-o in Indiana, Kentucky, and Ohio.

Last year, we initiated access for a reset and resettle in Indiana, Kentucky and Ohio.

followed by Massachusetts becoming the first state to cover our PDTs for all Medicaid patients.

Followed by Massachusetts, becoming the first state to cover our PDT for all Medicaid patients.

Already this year, we announced Michigan and Oklahoma to our growing list of states focused on addressing addressing the worsening addiction epidemic by providing patients in recovery access to visa and rate that up.

Already this year, we announced Michigan and Oklahoma to our growing list of states.

And address any addressing the worsening addiction epidemic by providing patients in recovery access to read that and ramp it up.

All these states provide references for coverage of our PDP.

All of these states provide references for coverage of our PDP.

I'm also pleased to share there is a growing number of states like Delaware, Kentucky, Michigan, Minnesota, and New York with proposed or passed legislation supporting access to PDP. Third.

I'm also pleased to share there is a growing number of states like Delaware, Kentucky, Michigan, Minnesota, and New York with proposed or passed legislation supporting access to PDP.

Third, let's talk about our activities at the federal level.

We convened a bipartisan by camera lead sponsors who introduced the access to prescription digital therapeutic act of 2022 in March.

We convened a bipartisan bicameral lead sponsors who introduced the access to prescription digital therapeutics back in 2022 in March.

If the bill is enacted, it would have significant impact on pair because it create a benefit category for our products by Medicare, Medicaid and commercial payers. It would also mandate.

If the bill is enacted it would have a significant impact on <unk>, because they create a benefit category for our products by Medicare Medicaid and commercial payers.

It would also mandate coverage under Medicare.

Additionally, the White House released its National Drug Control Strategy, which specifically mentions FDA-Clear Digital Tools to treat addiction and deliver contingency management.

Additionally, in the White House released its national drug control strategy, which specifically mentioned FDA cleared digital tools to treat addiction and deliver contingency management.

We believe reset and resetto remain the only option fitting these criteria.

We believe reset and resell remains the only options fitting these criteria.

And finally, we've worked to make PDT's mainstream through our continued effort to establish symbols and consistent product coding.

And finally, we've worked to make PDT mainstream for our continued effort to establish simple and consistent product coding.

Effective April 1st, CMS has made a Hix Fix Code available for all three of our commercial products.

Effective April one CMS has made <unk> code available for all three of our commercial products.

The MS is stated that only FDA cleared prescription digital behavioral therapies can be billed using these codes.

<unk> stated that only FDA cleared prescription digital behavioral therapy can be built using the east coast.

The new Hicks fix code provides a clear pathway to code cover and build PDTs across major pairs.

The new <unk> code provide a clear pathway to code cover Anvil PDT is across major payors.

Now, there's an option for PDTs to be reimbursed through pharmacy or durable medical equipment benefits.

Now there is an option for PDT to be reimbursed through pharmacy or durable medical equipment benefit.

This benefit type optionality increases the number of pairs who are able to cover PDTs and ultimately are impact on patients.

This benefit type optionality increases the number of payers, who are able to cover PDT and ultimately our impact on patients.

Now I'll turn the call over to Yuri who will walk you through the continuum of data for all three of our commercial products.

Now I'll turn the call over to your Ecu will walk you through the continuum of data for all three of our commercial products.

Thank you Julia.

Our PDP are supported by a growing body of data and evidence, including robust randomized control trials real world clinical data.

And real World Health economic data.

The combination of these types of evidence enables pair to show value to key stakeholders and we believe this has accelerated our progress with clinicians and payers.

I will now walk through the top line summary and look forward to taking a deep dive into our data at our investor day that we will host on June 6th.

I will now walk through the top line summary, and look forward to taking a deep dive into our data at our Investor day that we will host on June six.

Let's start with our product reset for substance use disorder or SUD.

Let's start with our product reset for substance use disorder or SUV.

Reset is indicated to treat patients with SUD related to alcohol, stimulants, cannabis.

Reset is indicated to treat patients with <unk> related to alcohol.

Stimulants cannabis and cocaine.

Our reset we had two successful randomized control trials and more than 1000 SCD patients.

Top line results from the Pivotal trial show that reset double grades of abstinence for or SUD patients

Topline results from the pivotal trial showed that reset doubled rates of absence for SCD patients.

We expect to soon publish the first real-world engagement in clinical outcomes data for reset.

We expect to soon published the first real world engagement and clinical outcomes data for reset.

We are also proud to share that our first real world health economic data for reset has been accepted for publication.

We are also proud to share that our first real world Health economic data for reset has been accepted for publication and we expect to announce results of this six month data prior to our Investor day.

We expect to announce results of this six month data prior to our investor day. Now let's...

Now, let's move to our product reset out.

Reset O is indicated for use in combination with medication-assisted therapy to treat opioid use disorder or OUD.

<unk> is indicated for use in combination with medication assisted therapy to treat opioid use disorder or <unk>.

We have three successful randomized control trials and more than 450 OUD patients.

We have three successful randomized control trials and more than 450 <unk> patients <unk>.

including two with reset L plus B minor scene and one with reset L plus method L.

<unk>, two with reset out plus buprenorphine and one with reset out plus methodology.

These studies evaluate outcomes out to 12 months.

These studies evaluate outcomes out to 12 months we.

We published real-world clinical data in two peer-reviewed manuscripts, each with over 3,000 patients who were prescribed reciddo across the US.

We published real World clinical data in two peer reviewed manuscripts.

Each with over 3000 patients who are prescribed reset out across the U S.

These analyses found a positive association between product use and clinical out.

These analyses found a positive association between product use.

And clinical outcomes.

Furthermore, these results demonstrate that RECIDO is readily and broadly used by patients with OUD. With 85% of patients retained in RECIDO treatment at 12%.

Furthermore, these results demonstrate that reset is readily and broadly used by patients with <unk> with 85% of patients retained in recent out treatment at 12 weeks.

We have new 12-month real-world health economic data for reset O, building on prior publications of encouraging results at six months and nine months. That is being presented today at the Professional Society for Health Economics and Outcomes Research Annual Conference, known as ISP-

We have new 12 month real World Health economic data for reset al.

Building on prior publications of encouraging results at six months and nine months that is being presented today at the professional society for health Economics and outcomes Research annual conference known as <unk>.

This study has also been accepted for publication in a peer review journal.

This study has also been accepted for publication in a peer reviewed journal.

Here we followed more than 900 patients with OUD for at least 12 months after initiation of Reset O.

Here, we followed more than 900 patients with <unk> for at least 12 months after initiation of reset.

The study showed a durable treatment effect with sustained reductions of inpatient hospitalization and emergency visits.

The study showed a durable treatment effect with sustained reductions of inpatient hospitalization and emergency visits among other findings of importance and cost savings data, which we look forward to sharing upon publication.

among other findings of importance and cost savings data, which we look forward to sharing upon public.

Our evidence suggests long-term, durable clinical outcomes for those with SUD and OUD, treated with reset and resetter respectively, while also reducing the need for many of the more costly consequences of addiction.

Our evidence suggests long term durable clinical outcomes for those with S&P and <unk> treated with reset and reset our respectively. While also reducing the need for many of the more costly consequences of addiction.

We are eager to share cost savings data in the coming weeks, which suggests that payers who are not providing access to reset and reset out are not only denying patient's effective treatments, but are also failing to realize cost savings that are meaningful to their business and the communities they serve.

We are eager to share cost savings data in the coming weeks, which suggests the payers who are not providing access to reset and reset out are not only denying patient's effective treatments, but are also failing to realize cost savings that are meaningful to their business and the communities. They serve.

Finally, somersault has been evaluated in more than 3,000 chronic infomnia patients across 29 completed or ongoing studies.

Finally, <unk> has been evaluated in more than 3000, chronic insomnia patients across 29 completed or ongoing studies.

Data showed a reduction in infomanias of airy symptoms and durable effect on infomanias, depression and anxiety up to 18 months.

Data showed a reduction in insomnia severity symptoms and durable effect on insomnia, and depression and anxiety up to 18 months.

a real world clinical evaluation of more than 7,000 patients was recently published, which demonstrated consistent outcomes when compared to rigorous clinical trials.

A real world clinical evaluation of more than 7000 patients was recently published which demonstrated consistent outcomes when compared to rigorous clinical trials.

We will present 24-month real-world health economic data for Somers at ISPOR tomorrow.

We will present 24 month real World Health economic data for <unk> at <unk> Tomorrow.

These data show in a real world cohort of 252 patients with chronic insomnia. Treatment with somerset was associated with clinically meaningful improvements in insomnia symptoms, as well as reductions in the use of healthcare services through 24 months.

These data show in a real world cohort of 252 patients with chronic insomnia treatment with <unk> was associated with clinically meaningful improvements in insomnia symptoms as well as reductions in the use of healthcare services through 24 months additional.

Additional results, including cost savings, will be presented at Isport tomorrow. And the four results of the analysis have been accepted for publication in a peer review journal.

Additional results, including cost savings will be presented at <unk> Tomorrow and the full results of the analysis have been accepted for publication in a peer reviewed journal.

Our products work as demonstrated by RCT data, real-world clinical data, and real-world health economic data.

Our products work as demonstrated by RCT data.

Real World clinical data and real World Health economic data.

And because PDTs collect data with every tree to bathe our data sets continue to grow.

And because pdt's collect data with every treated patient.

Datasets continue to grow.

Stay tuned for a deeper dive at our investor day on June 6th. With that, I will...

Stay tuned for a deeper dive at our Investor day on June six.

With that I will hand, it off to Chris.

Thank you, Yuri. Cory Julia and Yuri shared some value creating highlights from the corner. Now I'll talk about financial results and operating metrics. Then we'll open the call up for Q&A.

Thanks, Larry Corey Julia in your <unk> shared some value, creating highlights from the quarter now I'll talk about financial results and operating metrics. Then we will open the call up for Q&A.

We reported $2.7 million of revenue in Q1, up 108% over the prior quarter, and roughly seven times Q1 of left.

We reported $2 $7 million of revenue in Q1 up 108% over the prior quarter and roughly seven times Q1 of last year.

This growth was driven by progress in our most important operating metrics. One, total prescriptions. Two,

This growth was driven by progress in our most important operating metrics one total prescriptions.

Two fulfillment rate.

Three payment rate.

and for average selling price for AF.

And for average selling price for AFC.

Because of the importance of these for operating metrics, we now will provide guidance and quarterly updates on all four of them going forward.

Because of the importance of these four operating metrics. We know we will provide guidance and quarterly updates on all four of them going forward.

You can see the definitions for these metrics in our earnings release and in the MDNA section of our 10Q, which will be filed tonight. Now let's walk through each of the four metrics.

You can see the definitions for these metrics in our earnings release and in the MD&A section of our 10-Q, which will be filed Tonight.

Now, let's walk through each of the format tricks.

First total prescriptions.

We have more than 9,200 total prescriptions in Q1 in line with our expectations.

We have more the 9200 total prescriptions in Q1 in.

In line with our expectations.

Because in the solid start to the year, we feel good about the rest of 2022.

Because of the solid start to the year, we feel good about the rest of 2022.

Second, fulfillment rate. In Q1, we had a 57% fulfillment rate, also in line with our expectations.

Second fulfillment rates in Q1, we had a 57% fulfillment rate.

Also in line with our expectations that fulfillment rate is another reason to feel good about the rest of 2022.

That fulfillment rate is another reason to feel good about the rest of 2022. Third.

Third payment rate.

We received payment for 50% of the fill the descriptions in Q1.

We received payment.

For 50% of fulfill the script prescriptions in Q1.

We are adding payment rate as an operating metric for which we provide guidance and quarterly updates because of its importance to forecasting our commercial progress.

We are adding payment rate as the operating metrics for which we provide guidance and quarterly updates because of its importance to forecasting our commercial progress.

We previously used covered lives as a proxy metric for payment rates.

We previously used covered lives as a proxy metric for payment rate.

Payment rate, however, is the actual metric. And it reflects the rate at which we convert fulfilled prescriptions into paid prescriptions.

Payment rate, however is the actual metrics.

And it reflects the rate at which we convert fulfilled prescriptions into paid prescriptions.

We forecast payment rate for fulfilled prescriptions for this year to be in a range of 50 to 65%.

We forecast payment rate.

<unk> fulfilled prescriptions for this year to be in a range of 50% to 65%.

Finally asps.

Our ASP in Q1 was $1353.

Our AFP in Q1 was 1353 dollars.

AFB is another important operating metric for which we will provide guidance and quarterly updates going forward.

ASP is another important operating metric for which we will provide guidance and quarterly updates going forward.

We forecast full year AFP, per paid prescription, to be in a range of $1,150 to $1,350.

We forecast full year ASP.

Per paid prescription to be in a range of $1150 to $1350.

We see these four operating metrics as useful in understanding our commercial model and in estimating future product revenue growth.

So I'll spend a minute making sure you understand how they relate to one another.

So I'll spend a minute, making sure you understand how they relate to one another.

First <unk>.

Total prescriptions times fulfillment rate equals fulfilled prescriptions.

<unk> prescriptions.

<unk> fulfillment rate.

<unk> fulfilled prescriptions again total prescriptions time fulfillment rate equals fulfilled prescriptions.

Again, total prescriptions time fulfillment rate equals fulfilled prescriptions.

Second.

Fulfilled prescriptions times payment rate equals paid prescriptions. Let me say that one again too. Fulfilled prescriptions times payment rate equals paid prescriptions.

Fulfill prescriptions times payment rate equals paid prescriptions, let me say that one again to fulfill the prescriptions times payment rate equals paid prescriptions.

And third, paid prescriptions times AFP is an indicator of potential total product revenue, which of course is not the same as GAP net revenue, but which we think should help those of you who are trying to model our product revenue growth.

Third paid prescriptions times ASP is an indicator of potential total product revenue.

Which of course is not the same as GAAP net revenue.

Which we think through the <unk>.

Those of you who are trying to model our product revenue growth.

Further financial results to note on March 31st, we had $137.8 million cash, cash equivalents, and short-term investments on the balance sheet. That will take us well into 2023.

Further financial results to note on March 31.

$137 $8 million of cash cash equivalents and short term investments on the balance sheet.

That will take us well into 2023.

Our operating expenses were 37.5 million in the first quarter, which is higher than expected, primarily due to investments to build infrastructure for the PDG category, and stock compensation charges associated with annual equity.

Our operating expenses were $37 5 million in the first quarter, which is higher than expected primarily due to investments to build infrastructure for the PDP category.

Stock compensation charges associated with annual equity grants.

We expect a small decline and quarterly expenses for the remaining three quarters of this year. With that, Justin.

We expect a small decline in quarterly expenses for the remaining three quarters of this year.

With that Justin let's open the call for questions.

And thank you. As a reminder to ask a question, you'll need to press star one on your telephone to enjoy your question, press the pound key. Please stand by, we compile the Q&A roster. And once again, that it's star one, if we have a question, and our first question comes from Michael Cherny from Bank of America. Your line...

And thank you 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 standby we compile the Q&A roster and once again that is star one if we have a question and our first question comes from Michael Cherny from Bank of America.

Your line is now open.

Hi, good afternoon, and thank you for all the detail so far.

Good afternoon and thank you for the detail so far. Maybe I don't have a question for Corey or Anna wants to jump in, but I would love to know a little bit more as we learn more about your business and throw your playing PDTs on how you think about the evolution of marketing.

Maybe just a question for Corey.

Analyst wants to jump in but I would like to know a little bit more as we learn more about your business and for all Youre playing pdt's on how you think about the evolution of marketing spend and in terms of the channels what have been the most successful opportunities that <unk> had where do you continue to focus your spend are you working with the likes of some of the physician organizations.

And in terms of the channels, what have been the most successful opportunities that you've had, where do you continue to focus your spend? Are you working with the likes of some of the physician organizations like Doxivity, Medscape, et cetera? Luxures know a little bit more about where you're seeing the best returns as you continue to work on increasing both the fulfillment.

Doximity Midscale et cetera, let's just know a little bit more about where youre seeing the best returns as you continue to work on increasing both the fulfillment and payment rate.

Michael, thank you so much for your question. We appreciate you dialing in. As we think about the business, really we see a world where software is a mainstream medical treatment and is ultimately applied across most of these conditions.

Michael Thank you so much for your question. We appreciate you dialing in.

As we think about the business really we see a world where software is a mainstream medical treatment and is ultimately applied across most of these conditions what.

What we are working to build in pair is really a company which has both the deepest pipeline of PDT.

What we are working to build a pair is really a company, which has both the deepest pipeline.

<unk> and.

And all of those PDTs roll up to the same infrastructure. Again, we use something called paircreate to build our PDTs and pair connect to how them all in the same infrastructure.

And all of those Pdt's roll up to the same infrastructure.

We use something called per create to build our pvt and per connect to house them all on the same infrastructure.

As we think about the economies of scale inherent in that infrastructure, we believe that there's a tremendous opportunity for cross-push-push-push-push-push. And what I mean by that is we see what are quite high rates of clinician engagement with our backend clinician dashboard.

Should we think about the economies of scale inherent in that infrastructure, we believe that theres, a tremendous opportunity for cross prescribing and what I mean by that is we see what are quite high rates of clinician engagement with our back end clinician dashboard.

Those are engagement rates for poor, the CPT codes, which we mentioned today came online.

Those are engagement rates before the CPT codes, which we mentioned today came online and we see opportunities really where clinicians are able to cross detail our PDT to many if not all of the patients that they might see.

And we see opportunities really where clinicians are able to cross detail our PDTs to many if not all of the patients that they might see.

And so as we previously articulated our next stop from a pipeline and portfolio perspective, is the build out of all things mental and behavioral health. That includes assets like major depression, as well as alcohol use disorder. And to that end, we see the ability to continue to reduce what is marketing spend and ultimately marketing spend per unit patient, really as we're able to develop selling efficiencies across multiple products.

And so as we've previously articulated our next stop from our pipeline and portfolio perspective is the build out of all things mental and behavioral health that includes assets like major depression, as well as alcohol use disorder and to that end, we see the ability to continue to reduce marketing spend.

And ultimately marketing spend per unit patient really as we're able to develop sell and efficiencies across multiple products.

Got it.

Got it. Helpful. And then I guess on the real world evidence data, clearly a couple important milestones as...

Helpful. And then I guess on the real World evidence data clearly a couple of important milestones as you present that data how quick who is looking for the data. Most I guess how quickly does this get communicated through to your payer partners to your state partners in terms of how they think about the approach to further supporting your expansion.

and that data, who is looking for the data most, I guess. How quickly does this get communicated through to your payer partners, to your state partners, in terms of how they think about the approach to further supporting your...

Thanks Mike for that question. Also, certainly we view our real world health economic data as really a fundamental pillar of the value that we're able to create for payers.

Thanks, Mike for that question also.

Certainly we view.

Our real World Health economic data as really a fundamental pillar of the value that we're able to create for payers.

And we've seen both commercial payers as well as state payers be highly receptive to that data. We saw that receptivity really come through as we released our first data theft for reset, oh, which were our reset oh six month data. And we've really seen a continued audience for the nine month data. And we believe that 12 months is an important milestone within this space.

And we've seen both commercial payers as well as state payers be highly receptive to that data.

Saw that receptivity really come through as we release, our first datasets will reset.

Which were our reset over six months data and we've really seen a continued audience with nine months data and we believe that 12 months is an important milestone within this space.

So that's a very long-winded way of saying one of our fundamental advantages is our data collection. We will continue to collect data per unit, commercial patient treated, and that is data at the patient reported outcome level. It's data at the clinician reported outcome level, and it's data that rolls up to claims and health economic outcomes. Really will continue to push this data and publish this data in order to help us bring on additional cover lives and open up market access for additional actions.

So that's a very long winded way of saying one of our fundamental advantages is our data collection. We will continue to collect data for unit commercial patient treated and that has data at the patient reported outcome level. It's data at the clinician reported outcome level and it's data that rolls up to claims and health economic outcomes.

Really we'll continue to push this data and publish this data in order to help us bring on additional covered loans and open up market access for additional patients.

Awesome. Thank you so much.

Thank you. Hey, and thank you.

Thanks, Mike.

Thank you.

And our next question comes from Charles Reed from Cowan. Your line is now open.

And our next question comes from Charles <unk> from Cowen. Your line is now open.

Great, thanks for taking the questions. I wanted to talk about obviously the

Great. Thanks for taking the questions.

Wanted to talk about obviously the.

The agreement you have with Michigan and Oklahoma, you know, that you signed it, you know, he talked about last quarter as well.

The agreement you have with Michigan and Oklahoma.

That you signed a you talked about last quarter as well.

I think Massachusetts is the only one where you, and from a state Medicaid perspective, is all in the formula and is covered. Can you talk about the other states?

I think Massachusetts is the only one where you.

From a state Medicaid perspective is on the formulary is covered.

Can you talk about the other states.

you know where you are in terms of getting full coverage because the way I understand it right now with these states they kind of buy bulk licenses and make it available to physicians just want to understand you know how that process works for patients to get access to the prescriptions in those states and maybe talk about sort of the

Where were you at in terms of getting full coverage because the way I understand it right now with these day to day kind of buy bulk licenses and make it available to physicians just want to understand.

How that process works for.

Patients to get access to a to the prescriptions in those states.

Maybe talk about sort of the.

The update that you're seeing as a difference when you kind of get full coverage in Massachusetts versus the models that you're having so far in these other states, thanks.

The uptake that Youre seeing is a difference when you kind of get full coverage in Massachusetts versus the models that you are having so far in these other states.

Charles, thanks for the question and as you rightly point out, we have a number of different arrangements with different states, including Indiana, Ohio, Kentucky, Michigan, Oklahoma, and Massachusetts.

Charles Thanks for the question and.

As you rightly point out we have a number of different arrangements with different states, including Indiana, Ohio, Kentucky, Michigan, Oklahoma in Massachusetts.

The majority of those arrangements provide access to a subset of patients in a given state. We're very excited about the steps forward that the state of Massachusetts has taken and Massachusetts is in fact the first state where all Medicaid patients in the state have access to reset and reset up.

The majority of those arrangements provide access to a subset of patients in a given state.

We're very excited about the steps forward that the state of Massachusetts is taken and Massachusetts is in fact, a full state where all Medicaid patients in the state have access to reset and re setup.

I think agnostic of the type of access agreement, it is our goal to then pull through in these given access agreements. And what that means is really very much something that resembles an enterprise software sale where we're educating large health systems and large groups of providers.

<unk> agnostic.

Type of access agreement.

It is our goal to then pull through in these given access agreements and what that means is really very much something that resembles an enterprise software sale, where we're educating large health systems and large groups of providers in order to help them to understand the benefits of Chris.

in order to help them to understand the benefits of prescribing our PDTs, but also to understand the mechanics of prescribing.

Finding our PDT use but also to understand the mechanics prescribing, our PDP and I think as you rightfully point out as we move forward, we will continue to.

And I think as you rightfully point out, as we move forward, we'll continue to operate under a number of these different types of access agreements. And that's why we really try to simplify the modeling by focusing on payments right here, which is something that we believe is very material both to our business as well as to revenue generation going forward.

To operate under a number of these different types of access agreements and that's why we've really tried to simplify modeling quite focusing on payment right here, which is something that we believe is very material to our business as well as to revenue generation going forward.

yeah i appreciate that accordion and certainly you know that the guy she gave in the reiteration uh... you know all positive uh... i guess what i'm trying to get it like how close are we with these other states you know to to move from subset

Yes, I appreciate that and certainly the guidance you gave in the reiteration.

As all positive.

I guess, what im trying to get at like how closer are we with these other states.

To move from subsets to give me a broad coverage.

uh... to give you know broad coverage you know are they seeing you know i imagine they're seeing the value you know in in their in their patient population in their costs uh... namely right in the outcome

Seeing I'd imagine, they're seeing the value.

And they're in their patient population and their costs, namely right in the outcomes.

given what Yuri talked about in terms of, you know, what you're already seeing in the real-world evidence studies, you know,

Given what you already talked about in terms of.

What you're already seeing in the real world evidence studies.

Is.

you know, is that a focus for you guys to push to get, uh, you know, more, more broader access to a Massachusetts has. And I guess the question is, do you see a material difference in when you have broad access?

Is that a focus for you guys to push to get.

More more broader access toy, Massachusetts has.

And I guess the question is do you see a material difference in when you have broad access.

Versus the way the other states are doing because it's not that maybe it doesn't really matter I guess it's my

Versus the way the other states are doing because.

If not then maybe it doesn't really matter I guess is my point.

And, Charles, I think it's probably a little bit beyond the scope of what I can speak to today to speculate on the positions of individual states or individual payers in determining their access status.

And Charles I think it's probably a little bit beyond the scope of what I can speak to today to speculate on the positions of individual state for individual payers in determining their access status, having that said, it's very fair to think about this as the story which is.

I think that said, it's very fair to think about this as a story which is very deeply based in real world clinical data. And as you've seen us continue to do quarter over quarter, as I mentioned, each patient who utilizes the products in the real world adds to our doffiae of data, allows us to look at particularly efficacious and effective sub-sets for patients and ultimately continue to demonstrate our health economic value to patients.

Very deeply base in real world clinical data and as you've seen us continue to do quarter over quarter as I mentioned, each patient who utilizes the products in the real world adds to our dossier of data allows us to look at particularly applications and affected subtypes of patients and ultimately.

Continuing to demonstrate our health economic value to payers.

So I think the inference that you made is an app one where in many of these arrangements, we have the opportunity to demonstrate not just to a particular state that we're able to bend the cost curve and generate real low-pull economic outcomes, but those projects become demonstration projects, which really help us to then radiate more broadly into additional...

Think the inference that you made is an apt one where in many of these arrangements we have the opportunity to demonstrate not just to a particular state that we're able to bend the cost curve and generate really wont help economic outcomes, but those projects become demonstration projects, which really help us to then radiate.

Broadly into additional things.

That's helpful and maybe just one follow up for Chris. You said that obviously we take fulfillment rate, times payment rate, times ASP, and that gives you a good approximation of net revenue. What would be the delta of, what could be different that would affect net revenue from just following that formula?

That's helpful and maybe just one follow up for Chris.

You said that.

Obviously, we take fulfillment rate times payment rate.

Times Asps.

And that gives you a good approximation net revenue what would be the delta.

What could be different that would affect net revenue from just found a formula.

Sure. So if I could just one sort of bit of set up, when you think about multiplying those four metrics.

Sure. So if I could just.

One sort of.

Bit of a setup when you think about multiplying those four metrics each of them is an important part together. They get you an estimate of revenue and as you point out there is a difference between estimating forward looking revenue and calc.

Each of them is an important part. Together they get you an estimate of revenue. And as you point out, there is a difference between estimating forward looking revenue and calculating revenue looking back under gap.

<unk> revenue looking back under GAAP.

The biggest drivers, of course, are number one, our revenue recognition policy under AFC 606.

The biggest drivers of course are number one our revenue recognition policy under ASC 606 requires us to defer some of the revenue that we earn in any quarter and then number two.

requires us to disperse some of the revenue that we earn in any quarter.

And then number two, there are gross to net adjustments, which I won't discuss here because we don't provide non- GAAP financial measures, but that is the other main category of delta between the number you would get by multiplying the four of those things together and what you see us actually report as gap net revenue. Great, that's helpful. Appreciate that.

There our gross to net adjustments, which I won't discuss here because we don't provide non-GAAP financial measures, but that is the other main category.

So between the number you would get by multiplying the four of those things together and what you see us actually report as GAAP net revenue.

Great. That's helpful. Appreciate that.

Thanks Charles.

And thank you.

And our next question comes from Nina Petrito-Garg from Citi. Your line is now open.

And our next question comes from Neena <unk> Garg from Citi. Your line is now open.

Hey guys, thanks for taking my question. I was just wondering if you talk a little bit more about the demand metrics during the quarter and what you think really drove the strength to get to 9,200 scripts. Were there any sort of one-time events or anything like that that we should be aware of as we think about the cadence of scripts moving forward through the rest of the day?

Hey, guys. Thanks for taking my question.

I was just wondering if you could talk a little bit more about.

The kind of demand demand metrics during the quarter and what you think really drove the strength to get to 9200 scripts are there any sort of one time events or anything like that that we should be aware of as we think about kind of the cadence of Scripps moving forward through the rest of the year.

Nina, thank you for your question. And I'd like to turn it over to Julia Strandberg, our Chief Commercial Officer, to speak just a little bit more about volume and demand generation.

Thank you for your question and I'd like to turn it over to Julia <unk>, Our Chief commercial officer to speak just a little bit more about volume and demand generation.

I think, thanks, Corey. So as I mentioned, our demand efforts are certainly maturing. We are seeing an expansion in two ways.

I think thanks Corey.

So as I mentioned, our demand efforts certainly maturing we're seeing expansion in two ways.

So more scripts from existing customers with large potentials and as well as bringing new customers on board. And when we think about our strong integration and our scale through the year, our focus is on large addiction health clinics.

So mark scripts from existing customers with large potential and as well as bringing new customers on board and when we think about our strong integration and our scale through the year. Our focus is on larger Dixon health clinic that ban.

that span interstate as well as multiple states.

Interest feed as well as multiple states.

Second is engaging in large health system.

Is engaging in large health system.

where there are multiple locations and multiple disease states within those large systems. And then third is deeply engaging in states where we've already created access. And as we spoke earlier, both with Mac Health and Student Care in Oklahoma.

Where there are multiple states multiple location and.

In multiple disease states within those large system and then third is deeply engaging in states, where we've already created access and as we spoke earlier calls with Mac health and doing their care in Oklahoma.

So we continue to make progress, and largely that progress is fueled, and that growth is fueled in demand by simplifying our optimizing our integration and ease of use with our clinicians. So that is integration into EMRs, like AFIC.

So we continue to make progress and largely that progress if you will.

And that growth is still in demand by.

Simplifying our optimizing our integration.

And ease of use.

With our clinicians so that is integration and EMR like epic.

It is current state and future state as clinicians have opportunities to be reimbursed through CPT code.

Yes.

Current state and future state.

Clinicians have opportunities to be reimbursed or CPT code.

And then of course that is further emphasized as we continue to layer on a growing body of evidence and data to suggest value for PDTs. So.

And then of course that is.

Further emphasize as we continue to layer on a growing body of evidence and data that suggests value for PDP.

Ill.

<unk>.

garnering access in key locations, continuing to grow within current customers, expand new customers, continue to create optimization pathways for prescribing, layering on data and evidence to support further prescribing behaviors.

Garnering access in key locations continuing to grow within current customers expand new customers continuing to create optimization pathways for prescribing layering on data and evidence that the cord.

Further prescribing behaviors.

Got it that's helpful. Thank you.

Thank you.

And our next question comes from Eric Purcher, Mephron Research. Yulana's now open. Thank you.

And our next question comes from Eric Percher Nephron Research. Your line is now open.

Thank you.

Question on the operating metrics, the new metric of payment rate now at 50%. Do you expect that payment rate increases over the course of the year given guidance, simply with more coverage? And then with ASP, the guidance suggests that comes down over the year, is that also related to the type of coverage, you just mentioned addiction versus health system, state and commercial. What are the dynamics underneath those two?

Question on the operating metrics, the new metric of payment rate.

Now at 50% do you expect that payment rate increases over the course of the year, giving guidance.

Simply with more coverage and then with ESP. The guidance suggests that comes down over the year is that.

Also related to the type of coverage and you just mentioned addiction versus health system state and commercial what are the dynamics underneath those too.

Thanks, Eric for the question.

Chris, would you be willing to speak to that one? Sure thing. So I recommend to take ASP second and try and knock off your question about payment rate first. But before I do that, since this is new to everyone, if you'll indulge me, I just wanna do some multiplication just to make sure that everyone's got how this works. So. So.

Chris would you be willing to speak to that one sure so Eric I'm going to take ASP second and try and knock off.

Your question about payment rate, one, but before I do that since this is new to everyone. If you'll indulge me I just wanted to do some multiplication just to make sure that everyone's got how this works. So assume we have 100 total prescriptions and a 50% fulfillment rate that means we have 50 fulfill.

As soon as we have 100 total prescriptions and a 50% fulfillment rate, that means we have 50 fulfilled prescriptions.

Prescriptions, then we have a 50% payment rate that means we have 25 paid prescriptions. It is the paid prescriptions that you would multiply by ASP.

Then we have a 50% payment rate. That means we have 25 paid prescriptions. It is the paid prescriptions that you would multiply by ASD to make that rough estimate of total product revenue looking forward. So just to make sure that that sort of foundation is set, let's talk about payment rate.

To make that rough estimate of total product revenue looking forward.

So just to make sure that that sort of foundation is set let's talk about payment rate.

Payment rate is the percentage of filled prescriptions that are paid. So the way that we can drive payment rate up to the middle, or hopefully the high end of the range that we forecast.

Payment rate is the percentage of build prescriptions that are paid so the way that we can drive payment right up to the middle or hopefully higher.

The end of the range that we forecast is in a number of areas number one we can continue to drive progress with traditional payers and the way that we've been doing since we took over the launch of these products and as you heard I think both Corie and Julia mentioned, we do that for a number of mechanisms.

is in a number of areas. Number one, we can continue to drive progress with traditional payers in the way that we've been doing since we took over the launch of these products. And as you heard, I think both Corey and Julia mentioned, we do that through a number of mechanisms.

The largest of which we tried to highlight on this call, which is this remarkable body of evidence we have with RCT data plus real world clinical data plus real world health economic data. And that real world health economic data, we have found to be quite powerful.

The largest of which we tried to highlight on this call which is this remarkable body of evidence we have with RCT data plus real world clinical data plus real World Health economic data and that real World Health economic data, we have found to be quite powerful.

But in addition to driving payment rate up with traditional third party payers, we also could have had some success with these access agreements that you've heard us talk about. That is a situation in which a state, typically, it can be a commercial organization too. But for the most part, we've seen it with states.

In addition to driving payment rate up with traditional third party payers. We also have had some success with these access agreements that you've heard us talk about that.

That is a situation in which a stage typically it can be a commercial organization too but for the most part we've seen it with the states.

Pre-pay for a certain number of scripts. They buy scripts from us, and then they allows doctors in their state to provide those scripts to patients. Obviously the payment rate there is quite good because of the fact that the scripts are prepaid. So I wanna make sure the payment rate explanation makes sense before I jump to ASB.

We pay for a certain number of scripts they buy scripts from us and then they allow doctors in their states to provide those scripts to patients obviously the payment rate. There is quite good because of the fact that the scripts are prepay. So I want to make sure the payment rate explanation.

Sense before I jump to AFC.

Im with you. Thank you.

Okay, so let's talk about ASP. ASP truly is a function of leverage.

Okay, So let's talk about AFC.

ASP truly as a function of leverage.

When we need to give large discount from rebates, it drives ASP down. And when we don't need to do that, it drives ASP up.

When we need to give large discounts and rebates that drives ASP.

And when we don't need to do that drives ASP.

As we do larger and larger deals to achieve our revenue forecast, we expect ASP to go down slightly, as you know. That's why you'll see that our current ASP for Q1 is at the high end of the range that we forecasted for this year.

As we do larger and larger deals to achieve our revenue forecast, we expect asps to go down slightly as you know that's why you'll see that our current.

ASP for Q1 is at the high end of the range that we forecasted for this year.

But another way, I think it would be a good thing if our AFP goes down a bit over the course of the year because that would be consistent with the size deals we think we need to hit our 22 million in guys.

Put another way I think it would be a good thing if our AFP goes down a bit over the course of the year because that would be consistent with the size deals. We think we need to hit our $22 million in guidance.

Even though we want bigger deals that have the potential to drive down ASP, we're focused on continuing to generate additional real world health economic data.

Even though we want bigger deals that have the potential to drive down asps.

We're focused on continuing to generate additional real world health economic data.

as well as enhancing our products. Both of those things.

As well as enhancing our products both of those things should help us to enhanced pricing power, which of course would help push up ASP.

should help us to enhance pricing power, which of course would help push up ASP. To reiterate, our guidance is $1,150 to $1350 for ASP this year, which means we expect to see ASP impacted positively by additional data and product features and negatively by doing commercial deals of increasing sales. Thank you.

To reiterate our guidance is $1150 to $1350 for AFC. This year, which means we expect to see ASP impacted positively by additional data and product features and negatively by doing commercial deals.

Of increasing sales.

Hello.

Yeah, I appreciate the map too, which one follow up, which is we now have payment rate. Are you withdrawing covered lives or are you saying you'll get it annually but not quarterly?

Yeah, I appreciate the math tillage.

One follow up which is we now have payment rate are you withdrawing covered lives or are you, saying youll give it annually, but not quarterly.

Do you want to take that forward.

So we are, we are withdrawing cover lives.

So.

We are.

We are withdrawing covered lives hub.

Pugged Lives is a proxy metric for payment rate. Payment rate is the actual...

Covered lives is a proxy metrics for payment rate.

Payment rate is the actual metric.

So we'll be reporting the actual metric going forward as opposed to the proxy metric because the actual metric is what really matters as we begin to unlock the true revenue potential pair.

But we will be reporting the actual metric going forward as opposed to the proxy metric because the actual metric is what really matters as we begin to unlock the true revenue potential per.

Since you asked though, I'll share what I can about covered lives as we know it today.

Since you asked though I'll share what I can about covered lives as we know it today.

Managed markets insight and technology or M-M-I-T reported at the Assembee Conference last week that hair has approximately 80 million covered loss.

Managed markets insight and technology or <unk>.

Ported at the Assembly a conference last week.

<unk> has approximately 80 million covered lives.

We thought that number sounded high and we let MIMIC know that.

We thought that number sounded high and we let MMR.

Know that.

Since we are no longer reporting on the proxy metric, we have not attempted to confirm MMIT's number.

Since we are no longer reporting on the proxy metric, we have not attempted to confirm <unk> number.

I think it's important to note that calculating covered lives is a tricky business.

We know of covered lives under contracts when we sign with payers, but we don't typically know of covered lives when payers put upon formularity without having up sign a contract.

We know of covered lives under contract when we sign with payers, but we don't typically Noah covered lives when payers put us on formulary without having a sign a contract.

Moreover, the whole thing just got more complicated now that we don't just have pharmacy covered lives and we're adding DME covered

Moreover, the whole thing just got more complicated now that we don't just have pharmacy covered lives and we're adding DMA covered lives.

We will continue to put out press releases, announcing coverage decisions when we are permitted to do so. But I think you know that many payers prohibit companies from disclosing coverage decisions. So we can't promise you that you'll learn of every coverage decision we've learned.

We will continue to put out press releases announcing coverage decisions. When we are permitted to do so but I think you know that many payers prohibit companies from disclosing coverage decisions, but we can't promise you that youll learn of every coverage decision we land.

I guess maybe to try and sum all that up, we believe covered lies served us well as we were going from zero covered lies to tens of millions of covered lies.

I guess, maybe to try and sum all that up we believe covered lives served us well.

We were going from zero covered lives to tens of millions of covered lives.

So we're not going to continue to attempt to provide accurate reports on the proxy metric. Instead, we've started a report on the actual metric, which is payment rate.

We're not going to continue to attempt to provide accurate reports on the proxy metric. Instead, we've started to report on the actual metric which is payment rates.

And that is a very important metric for our future revenue growth.

That is a very important metric for our future revenue growth.

I think maybe the last thing I'd say is it is fair to say that we are satisfied with the progress we're making on payment rate.

But we understand that we will need to get that payment rate up significantly over time if we're going to unlock payers' full revenue protection.

But we understand that we will need to get that payment rate up significantly over time, if we're going to unlock payers.

Payers full revenue potential.

And so that was where it's going to go. So what is your feel for where payment rate should be given mature products, understanding you'll always be introducing additional products?

And so that was where I was going to give us what is your feel for where payment rate should be given mature products understanding youll always be introducing additional products.

I think it's a great question, but I think the way I'd like to answer it may be just a smidge is satisfying to you because I don't want to speculate. I think we're confident in putting out our guidance for this year of 50 to 65 percent. And you saw that we came in at the bottom of that range this quarter. We do intend to push the number up over the course of the year and we believe we'll be able to do that.

Alright, I think it's a great question, but I think the way I would like to answer it may be just a smidge of satisfying to you because I don't want to speculate.

I think we are confident in putting out our guidance for this year of 50% to 65% and you saw that we came in at the bottom of that range. This quarter, we do intend.

To push the number up over the course of the year and we believe we'll be able to do that but the only way I could accurately answer your question about where it lands. When we mature is to say that we certainly hope and expect it will be north of the range that we provided for 2022.

The only way I could accurately answer your question about where it lands when we mature is to say that we certainly hope and expect it will be north of the range that we provided for 2022 because we won't get all the way there in this calendar year.

Don't get all the way there in this calendar year.

Alright, thank you for the detail.

by pleasure. Thank you. And thank you. And our next question comes from Key Nagi, Poonchardon. Your line is not open.

Thanks, Eric and thank you and our next question comes from key Mackie from Chardan. Your line is now open.

Okay.

Yes, thanks, K. Jordan. I know if it's a small number, but we did see cost of sales, the clients, slightly sequentially on much higher scripts. So I know there's some rewards with the set we set out, so help us kind of put all this into perspective to model the South Pole.

Yes, Thanks Jordan.

I know, it's a small number.

Cost of sales declined slightly sequentially on much higher script. So.

I know, there's some rewards with recently said also help us kind of.

Put all this into perspective to model forward.

Thanks for the question. Chris, would you mind taking that one? Sure, so, okay. I think you're right that it's a small number.

Thanks for the question, Chris would you mind, taking them sure thing okay.

I think youre right that its a small number.

We did have modest improvements, but there's nothing notable enough to highlight for you on this call. I think you're gonna see a little bit of that bounce up and down over time because we're still relatively early in our launches and in the maturation of these products and this market segment, but I don't have anything that I can point to you to say this is an important driver of that slight improvement.

We did have modest improvements, but there is nothing.

Notable enough to highlight for you on this call I think youre going to see a little bit of that bounce up and down over time, because we're still relatively early in our launches and then the maturation of these products in this this market segment, but I don't have anything that I can point to to say this is an important driver of that slight.

Movement.

Okay, and then specifically for OptX going forward, you know, you just posted 13 million RID. How do you think about that specific one that I'm going forward?

Okay.

And then specifically for Opex going forward.

Posted $13 million in R&D, how do we think about that specific line item going forward.

I'm sorry, I didn't quite hear that. I have to admit. Would you mind just saying it again, please?

I'm, sorry, I didn't quite hear that I have to admit would you mind to say it again please.

R&D expenses within up up X how do we think about that going forward?

R&D expense within Opex, how do we think about that going forward.

I'm sorry I didn't understand the question initially. So we do not, as you know, provide overall expense guidance and we therefore don't provide it by segments.

Sure I'm, sorry, I didn't understand the question. Initially so we do not as you know provide overall expense guidance and we therefore don't provide it by segment, but what I think we have said previously in public.

But what I think we have said previously in public settings and what I'd be happy to say in this public setting.

Settings, and what I'd be happy to say in this public setting is that while we have significant aspirations to use per create to drive additional product candidates through the development process through the regulatory process and onto the market.

is that while we have significant aspirations to use pair-create.

to drive additional product candidates through the development process, through the regulatory process, and onto the market.

We're also being careful stewards of our cash in what our, let's call it sub-optimal conditions to raise money right now.

We're also being.

Careful stewards of our cash and what are let's call. It sub optimal conditions to raise money right now.

So, I think what you should expect to see us do is continue to move the pipeline forward, but in a very cautious way for now, because we think that managing cash burn in this environment is an important endeavor, and we're trying to balance that with our fervor for getting more of our candidates across the goal line with FDA.

So I think what you should expect to see US do is continue to move the pipeline forward, but in a very cautious way for now.

We think that managing cash burn in this environment is an important.

Endeavor, and we're trying to balance that with our fervor for getting more of our candidates across the goal line with FDA.

Okay, great. And then finally, on the Kela Health, that...

Okay, Great and then finally.

On the telehealth side.

You've announced some recent activity there. I'm just wondering on the margin, how much is this going to help in terms of

You've announced some.

Recent.

Activity there I'm just wondering.

On the margin how much.

Going to help in terms of.

And prescriptions.

Yes, I think this is a place where we probably won't be able to provide any sort of firm guidance.

Yeah, I think this is a place where we probably won't be able to provide any sort of firm guidance.

That said, I think one of the unique attributes of prescription digital therapeutics is that they're uniquely suited for both face to face. IE brick and mortar encounters as well as telemedicine counters.

That said I think one of the unique attributes of prescription digital therapeutics is that they are uniquely suited for both phase.

Face to face I E brick and mortar encounters as well as telemedicine encounters.

And I think if there's one thing that the COVID pandemic showed us, it's that telemedicine does not address the supply chain issues inherent in our healthcare.

And I think if there's one thing that the Covid pandemic showed us that telemedicine does not address the supply chain issues inherent in our health care system.

And so whereas many patients are currently able to see a telemedicine visit once a month, once a quarter, PDT is really nicely fit in the gaps between those telemedicine visits and give them both remote and asynchronous care as opposed to telemedicine, which is remote and synchronous.

So, whereas many patients are currently able to see a telemedicine visit once a month once a quarter PDT is really nicely fit in the gaps between those telemedicine visits and give them, both remote and asynchronous care as opposed to telemedicine, which is remote and synchronous.

So that's a sort of long-winded way of saying that we won't be able to project exactly what sort of contributions these different remote access forms may provide, but we do believe that there is a tremendous opportunity for telemedicine and PDTs to go hand in hand.

So that's sort of long winded way of saying that we won't be able to project exactly what sort of contributions these different remote access form that may may provide but.

But we do believe that there is a tremendous opportunity for telemedicine PDT has to go hand in hand.

Yes.

Okay. Thanks.

Thank you for your question and thank you.

And our next question comes from Judith Framer from CreditSleast. Your line is now open.

And our next question comes from Judah Frommer from Credit Suisse. Your line is now open.

Yeah, hi guys, thanks for taking the question. Maybe just first to follow up on the telehealth and wrapping in the Spanish language versions of resetter me, SIDO. Are there any early learnings on what the patient and prescriber profiles look like? Kind of in those channels, does it make you think any differently about how docs and patients may utilize the services?

Yeah, Hi, guys. Thanks for taking the questions maybe just first to follow up on the telehealth and wrapping in the Spanish language versions of reset and we set out are there any early learnings on what the patient and prescriber profiles look like.

Kind of in those channels does it make you think any differently.

About how.

Docs and patients may utilize the services.

Judah. Thank you for the question I think preliminarily, we're not seeing what I would characterize as fundamental differences between the Spanish language utilization in the English utilization.

I think what we are seeing is a tremendous hunger both on the part of providers as well as payers to be able to operate toward health equity and inclusion criteria.

And really, that is one of the principal strengths of prescription digital therapeutics is to be able to extend care across socioeconomic boundaries, across racial boundaries, across ethnic boundaries, and across geographic boundaries.

And really that is one of the principal strength of prescription digital therapeutics is to be able to extend care across socioeconomic boundaries across racial boundaries across ethnic boundaries and across geographic boundaries and we are seeing that value proposition.

<unk> strongly with Payors as this is a high point on the payer and provider agenda and.

And we're able to frankly be able to collect data to support that value proposition.

Okay, that's really helpful.

And then apologies if I missed this but just as we look toward 12 month data for <unk> and 24 month data for <unk> is there any color you can provide on conversations with payers and how they're thinking about this longer duration data that is coming out are there kind of benchmarks for them.

They'd like to see in terms of durability of effect for your products or is it just kind of.

More is better and eventually we'll get to that tipping point.

Judah. Thank you for the question and we certainly believe in the power of the real World Health Economic data I'd Love to tag in urea, our Chief Medical Officer, who can speak to this a bit further.

Yes.

Thanks, Corey and thanks. Thanks for the question I mean, I think what we're seeing from.

Our discussions with Payors is that.

The sooner a.

Value or cost savings as realized that's important but they want to also see that durability right and so we had previously published the six month data for reset.

Right? And so, we had previously published the six-month data for Reset-O. We added on the nine-month data, but then the question is, does this persist?

We added on the nine month data, but then the question is does this persist and for many payers. The time horizon is of a couple two maybe a little bit more years and so this is where the 12 month data and now the 24 month data really I think fit in nicely.

And for many payers, the time horizon is of a couple to maybe a little bit more years. And so this is where the 12 month data, and now the 24 month data really, I think, fit in nicely. So they see, we get our return.

They see we get our return.

from a health economic perspective, particularly around reduced inpatient and reduced ER visits, very quickly based on what we've already published with the six and nine months. But then that data continues to be durable and persist.

From a health economic perspective, particularly around reduced in patients and reduced ER visits very quickly based on what we've already published with the six to nine months, but then that that data continues to be durable and persist.

at the type of time horizons that they're typically looking at. And so then I think what's really nice as we continue to do this forward is to do this not only on a national data, but then to provide this for their specific patient populations and allow them to see how they are doing relative to their peers.

At the type of time horizon that they're typically looking at and so then I think what's really nice is we continue to do this forward is to do this not only on a national data, but then to provide this for their specific patient populations and allow them to see how they are doing relative to their peers.

Got it thank you.

And, Judith, if I can maybe just very briefly add on to Yuri's comments and tease just a brief trailer, we'll be speaking about this data as well as some of our other real world and health economic data at our June 6th investor day. And we'll be releasing more information on that event.

And Julie if I could maybe just very briefly add onto <unk> comments. Some t's just a brief trailer will be speaking about this data as well as some of our other real world and health economic data at our June 6th Investor Day, and we'll be releasing more information on that event.

Okay.

Great. Thanks for.

Thanks Julien.

Thank you.

And our next question comes from Marie the Bulp from B-T-I-G. Your line is not open.

And our next question comes from Murray the bulk from BP.

Your line is now open.

Hi, good evening, and congrats on a strong Q1. Thanks for sitting me in. I've had some phone disconnection issues. Wanted to start here with sort of a basic question and see if I could get any detail kind of on run rate throughout the quarter or just any trends you saw throughout Q1. Certainly your guidance looks reasonable to us, but would love to hear kind of where you exited the quarter in terms of prescription volumes or any ramping trends throughout the quarter.

Hi, good evening and congrats on a strong Q1, thanks for fitting me in I had some phone disconnected initiatives.

Wanted to start here with sort of a basic question and see if I could get any detail kind of on run rate throughout the quarter or just any trends you saw throughout Q1, certainly your guidance looks reasonable to us, but would love to hear kind of where you exited the quarter in terms of prescription volumes or any ramping trends throughout the quarter.

Okay.

I always love it when you keep me on my toes with your questions. And I hate to disappoint, but I think what we'd like to do is report on the very strong quarter we had. And I appreciate you acknowledging that. Provide the guidance that we provided for the rest of the year.

So Murray I always love it when you keep me on my toes with your questions.

I hate to disappoint, but I think what we'd like to do is report on the very strong quarter, we had and I appreciate you acknowledging that.

Provide the guidance that we provided for the rest of the year.

And I think you can read into the guidance what you want to read into it, but we're confident in the guidance or we would not have put it out there, but providing any intra quarter or end of quarter trending guidance, I think, is beyond the scope of what I'm prepared to do today.

And I think you can read into the guidance, what you want to read into it but we're confident in the guidance. So we would not have put it out there, but providing any intra quarter or end of the quarter trending guidance I think is beyond the scope of what I'm prepared to do today.

Okay, fair enough, Chris, I had to try. I will ask a question to you on the pipeline. I wanted to hear if there were any sort of brief updates in terms of development milestones on any of the pipeline products, things like AUD, MDD, the soft-thank collaboration, the pain candidate. Certainly a lot going on there, so if there's one or two highlights, you can show them. That's for us. Thank you.

Okay Fair enough, Chris I had to try I will ask a question.

Pipeline.

I wanted to hear if there are any sort of brief update in terms of.

Element milestones on any of the pipeline products things like AEP NBD Softbank collaborations pain candidates certainly a lot going on there. So if there's one or two highlights.

Thank you.

Maureen, thanks for the question and I'd love to again tag in Yuri.

Maria Thanks for the question and I'd love to again be tagging Uri.

Yeah. Thanks so much, Corey. So, on our pipeline, which is Corey highlighted earlier, is driven by PairCreate. I think one thing, just to draw people's attention to, was that in Q1, we were pleased to have received the Safer Technologies Program, or the STEP designation from the FDA, for our product candidate Pair010, which is designed for the treatment of acute and chronic pain.

Yes, thanks, so much Cory so.

Our pipeline, which as Corey highlighted earlier is driven by peer create I think one thing just to draw People's attention to was that in Q1. We were pleased to have received the separate technologies program or the step designation from the FDA for our product candidate payers <unk> zero, which is designed for the treatment of acute and chronic pain.

And what is exciting about that is that the candidate sits within the neurology category of our pipeline and we believe is well suited for treatment with the PDT because there's currently more than 50 million patients that are left to choose between pain and treatment by opioids.

And what is exciting about that is that the candidate fits within the neurology category of our pipeline and we believe is well suited for treatment with the PDP. Because there is currently more than 50 million patients that are left to choose between paying in treatment by opioids.

Also as you mentioned in March we executed a services agreement with Softbank Corp to develop the digital therapeutic for the treatment of sleep wake disorders for the Japanese market is a part of our strategy to commercialize digital therapeutics in international markets and as you know in late 2021, we announced the FDA breakthrough designation.

Nation for alcohol use disorder and that we acquired those two clinically validated assets targeting major depressive disorder for the development of our own PDP candidate there.

At this time, we're not able to share timelines at this point for these three product candidates, but I do just want to highlight and Chris referenced. This also earlier that we really believe that these assets when developed on our peer create platform begets development scale and.

And then as Corey talked about around the use of the dashboard that the commercial delivery of these assets be our peer.

Connect platform generates commercial scale. So really appreciate the question, we're looking forward to sharing more as we progress.

Alright, good thanks, so much.

Thank you Ed.

I am showing no further questions I would now like to turn the call back over to Dr. Mccann for closing remarks.

Thanks, everyone for the questions.

Thank you Justin.

We highlighted our commercial launches as well as the growing evidence based demonstrating the value of our commercial products.

In the first quarter, we grew script volume fulfillment rate payment rate and Asps.

Correspondingly, we also significantly grew our revenue.

In parallel we continue to March toward making Pdt's mainstream medicine by building the critical discovery development and commercial infrastructure, we call per create and per connect.

We look forward to hosting our first virtual Investor day on June 6th at 10, a M eastern time.

We will provide more details about the event in the coming days.

Thanks for your time as always please reach out to Meara Murphy, our head of corporate communications, if you have any questions.

That concludes today's call. Thank you for joining.

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Good afternoon, everyone welcome to the payer Therapeutics first quarter 2022 earnings Conference call. My name is Justin.

And I will be your operator today all lines have been placed on mute to prevent background noise.

This call is being recorded a replay of the webcast will be available in the investors section of the company's website approximately two hours after completion of the call and will be archived for 30 days I will now turn the call over to your host MS Murphy Senior director of corporate Communications.

Thank you, Jeff and welcome to our first quarter earnings call and thank you for joining us today.

Today, our <unk>, our president and CEO .

First we say, our chief financial Officer, and Chief operating Officer.

And Brian <unk>, our chief product development Officer.

<unk>, our Chief Medical Officer, Brian O'brien, Our General Counsel, Chief compliance Officer, and Julia <unk>, Our Chief commercial officer to start the call I'll turn it over to Ron for the Safe Harbor statement.

Good afternoon.

Some of the statements we make in today's call may constitute forward looking statements. This includes statements concerning our future business operating results management's intentions beliefs and expectations about future results events strategies operating plans performance or financial condition.

All of which are forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95 as amended.

Actual results may differ materially from those indicated by these forward looking statements due to a variety of important factors.

Additional information regarding these factors is included in our annual report on Form 10-K, and quarterly report on Form 10-Q filed with the SEC.

Except as required by law <unk> assumes no obligation to update or revise these forward looking statements, even if actual results or future expectations change materially.

With that it's my pleasure to turn the call over to Corey.

Thanks, Ron.

And thanks, everyone for joining us today as we discuss pairs first quarter 2022 results.

Paris goal is to transform healthcare by pioneering software as a mainstream medical treatment.

We're making meaningful progress toward achieving that goal.

To date, our commercial products have demonstrated value to patients clinicians and payers, including robust patient engagement.

Strong clinical outcomes enhance access for underserved and marginalized patients.

So we can coating infrastructure for clinicians.

And real world cost savings measures.

The future is bright for PDT.

<unk> looks good too.

We're off to a solid start in 2022.

So we on the momentum we saw last year revenue grew 108% quarter over quarter.

We saw growing demand with more than 9200 total prescriptions this quarter.

We moved closer to making Pvt's, a mainstream medical treatment with fixed fixed codes from CMS and integration into epic's electronic health record.

We also broadened our reach to underserved patients with the launch of reset and reset in Spanish.

This momentum continues into the second quarter.

And one Great example is how our payer value proposition continues to advance with our first 12 months and 24 months data demonstrating durability of clinical outcomes and reduction in healthcare resource utilization.

Those are just the headlines.

Julia and <unk> will provide details in just a moment.

Then Chris will share financial and operating results and update you on the work we've done to simplify how we report our progress.

Finally, all of us will wrap up by answering your questions.

Julia please take it away.

Thanks, Corey I'd like to underscore our commercial momentum by highlighting a few market moving events.

First let's talk about our progress expanding demand.

We're seeing more prescriptions from existing customers as well as new customers coming onboard.

We see demand growing in the future through our engagement with large addiction clinic health system and state, where we're creating asset.

We believe our progress is fueled by our product optimization for clinicians.

It included streamlining workflows via integration into the EMR like epic.

It also included clinicians gaming opportunities for reimbursement being newly granted CPT code.

Second, let's talk about our progress with <unk>.

Last year, we initiated access for a reset and reset in Indiana, Kentucky and Ohio.

I'll add by Massachusetts, becoming the first state to cover our PDT for all Medicaid patients.

All of these states provide references for coverage of our PDP.

I'm also pleased to share there is a growing number of states like Delaware, Kentucky, Michigan, Minnesota, and New York with proposed or passed legislation supporting access to PDP.

Third, let's talk about our activities at the federal level.

We convened a bipartisan bicameral lead sponsors who introduced the access to prescription digital Therapeutics Act of 2022 in March.

If the bill is enacted it would have a significant impact on per because they create a benefit category for our product by Medicare Medicaid and commercial payers.

It would also mandate coverage under Medicare.

Additionally, in the White House released its national drug control strategy, which specifically mentioned FDA cleared digital tool to treat addiction and deliver contingency management.

We believe reset and reset it remains the only options spinning these criteria.

And finally, we've worked to make pdt's mainstream for our continued effort to establish simple and consistent product coding.

Effective April 1st CMS had made <unk> code available for all three of our commercial product <unk>.

CMS has stated that only FDA cleared prescription digital behavioral therapy can be built using the east coast.

The new HCPCS code provides a clear pathway to code, cover, and bill PDTs across major payers.

The new <unk> code provide a clear pathway to code cover Anvil PDT is across major payors.

Now there's an option for PDTs to be reimbursed through pharmacy or durable medical equipment benefit.

Now there is an option for PDT to be reimbursed or pharmacy or durable medical equipment benefit.

This benefit type optionality increases the number of payers who are able to cover PDTs and ultimately our impact on patients.

This benefit type of Optionality increases the number of payers, who are able to cover PDT and ultimately our impact on patients.

Now I'll turn the call over to Yuri who will walk you through the continuum of data for all three of our commercial products.

Now I'll turn the call over to Gary who will walk you through the continuum of data for all three of our commercial products.

Thank you, Julia. RPDPs are supported by a growing body of data and evidence, including robust randomized control trials, real-world clinical data, and real-world health economic data.

Thank you Julia.

RPT keys are supported by a growing body of data and evidence, including robust randomized control trials real world clinical data.

And real World Health economic data.

The combination of these types of evidence enables pair to show value to key stakeholders. And we believe this has accelerated our progress with clinicians and pairs.

The combination of these types of evidence enables pair to show value to key stakeholders and we believe this has accelerated our progress with clinicians and payers.

I will now walk through the top line summary and look forward to taking a deep dive into our data at our Investor Day that we will host on June 6th.

I will now walk through the top line summary, and look forward to taking a deep dive into our data at our Investor day that we will host on June six.

Let's start with our product reset for substance use disorder or SUD.

Let's start with our product reset for substance use disorder or SUV.

Reset is indicated to treat patients with SUD related to alcohol, stimulants, cannabis.

Reset is indicated to treat patients with <unk> related to alcohol stimulants.

Stimulants cannabis and cocaine.

For reset, we have two successful randomized control trials in more than 1000 SUD patients.

For reset we had two successful randomized controlled trials and more than 1000 SCD patients.

Top line results from the Pivotal trial show that reset double grades of abstinence for SUD patients.

Topline results from the pivotal trial showed that reset doubled rates of absence for SCD patients.

We expect to soon publish the first real-world engagement and clinical outcomes data for RESET.

We expect to soon published the first real world engagement and clinical outcomes data for reset.

We are also proud to share that our first real world health economic data for reset has been accepted for publication.

We're also proud to share that our first real world Health economic data for reset has been accepted for publication and we expect to announce results of this six month data prior to our Investor day.

We expect to announce results of this six month data prior to our investor day. Now let's...

Now, let's move to our product reset out.

Reset-O is indicated for use in combination with medication-assisted therapy to treat opioid use disorder, or OUD.

<unk> is indicated for use in combination with medication assisted therapy to treat opioid use disorder or <unk>.

We have three successful randomized control trials and more than 450 OUD patients.

We have three successful randomized control trials and more than 450, <unk> patients, including two with reset out plus buprenorphine and one with reset out plus methodology.

including two with reset L plus B minor scene and one with reset L plus method L.

These studies evaluate outcomes out to 12 months.

We published real-world clinical data in two peer-reviewed manuscripts, each with over 3,000 patients who were prescribed resetto across the US.

We published real World clinical data and two peer reviewed manuscripts each with over 3000 patients who are prescribed reset out across the U S.

These analyses found a positive association between product use and clinical outcomes.

Furthermore, these results demonstrate that Reset-O is readily and broadly used by patients with OUD, with 85% of patients retained in Reset-O treatment at 12 months.

Furthermore, these results demonstrate that reset is readily and broadly used by patients with <unk>.

With 85% of patients retained in recent out treatment at 12 weeks.

We have new 12 month real World Health economic data for reset out building on prior publications of encouraging results at six months and nine months that is being presented today at the professional society for health Economics and outcomes Research annual conference known as <unk>.

This study has also been accepted for publication in a peer-reviewed journal.

For.

This study has also been accepted for publication in a peer reviewed journal.

Here we followed more than 900 patients with OUD for at least 12 months after initiation of Reset O.

Here, we followed more than 900 patients with <unk> for at least 12 months after initiation of reset.

The study showed a durable treatment effect with sustained reductions of inpatient hospitalization and emergency visits.

among other findings of importance and cost savings data, which we look forward to sharing upon publication.

Our evidence suggests long-term, durable clinical outcomes for those with SUD and OUD treated with reset and reset, respectively, while also reducing the need for many of the more costly consequences of addiction.

We are eager to share cost savings data in the coming weeks, which suggests that payers who are not providing access to Reset and Reset-Out are not only denying patients effective treatments, but are also failing to realize cost savings that are meaningful to their business and the communities they serve.

Finally, somersault has been evaluated in more than 3,000 chronic infomnia patients across 29 completed or ongoing studies.

Finally, <unk> has been evaluated in more than 3000, chronic insomnia patients across 29 completed or ongoing studies.

Data showed a reduction in infomanias of airy symptoms and durable effect on infomanias, depression and anxiety up to 18 months.

Data showed a reduction in insomnia severity symptoms and durable effect on insomnia, and depression and anxiety up to 18 months.

a real-world clinical evaluation of more than 7,000 patients was recently published, which demonstrated consistent outcomes when compared to rigorous clinical trials.

Our real world clinical evaluation of more than 7000 patients was recently published which demonstrated consistent outcomes when compared to rigorous clinical trials.

We will present 24-month real-world health economic data for Somers at ISPOR tomorrow.

We will present 24 month real World Health economic data for <unk> at <unk> Tomorrow.

These data show in a real world cohort of 252 patients with chronic insomnia.

Treatment with <unk> was associated with clinically meaningful improvements in insomnia symptoms as well as reductions in the use of healthcare services through 24 months additional.

Additional results, including cost savings, will be presented at ISPOR tomorrow, and the full results of the analysis have been accepted for publication in a peer-reviewed journal.

<unk> results, including cost savings will be presented at <unk> Tomorrow and the full results of the analysis have been accepted for publication in a peer reviewed journal.

Our products work as demonstrated by RCT data, real-world clinical data, and real-world health economic data.

Our products work as demonstrated by RCT data real world clinical data and real World Health economic data and.

And because PDTs collect data with every tree to bathe ship, our data sets continue to grow.

And because pdt's collect data with every treated patient our datasets continue to grow.

Stay tuned for a deeper dive at our Investor Day on June 6th. With that, I will.

They tuned for a deeper dive at our Investor day on June six.

With that I will hand, it off to Chris.

Thanks, Yuri. Cory, Julia, and Yuri shared some value creating highlights from the corner. Now I'll talk about financial results and operating metrics. Then we'll open the call up for Q&A.

Thanks, Larry Corey Julia in your <unk> shared some value, creating highlights from the quarter now I'll talk about financial results and operating metrics. Then we will open the call up for Q&A.

We reported $2.7 million of revenue in Q1, of 108% over the prior quarter, and roughly seven times Q1 of left.

We reported $2 $7 million of revenue in Q1 up 108% over the prior quarter and roughly seven times Q1 of last year.

This growth was driven by progress in our most important operating metrics. One, total prescriptions. Two, total.

This growth was driven by progress in our most important operating metrics.

<unk> total prescriptions.

Two fulfillment rate.

Three payment rate.

and four, average selling price for ASX.

And for average selling price for ASP.

Because of the importance of these four operating metrics, we now will provide guidance and quarterly updates on all four of them going forward.

Because of the importance of these four operating metrics, we know we'll provide guidance.

<unk> quarterly updates on all four of them going forward.

You can see the definitions for these metrics in our earnings release and in the MD&A section of our 10-Q, which will be filed tonight. Now let's walk through each of the four metrics.

You can see the definitions for these metrics in our earnings release and in the MD&A section of our 10-Q, which will be filed Tonight.

Now, let's walk through each of the four metrics.

First total prescriptions.

We have more than 9,200 total prescriptions in Q1, in line with our expectations.

We have more the 9200 total prescriptions in Q1 in.

In line with our expectations.

Because in the solid start to the year, we feel good about the rest of 2022.

Because of the solid start to the year, we feel good about the rest of 2022.

Second, fulfillment rate. In Q1, we had a 57% fulfillment rate, also in line with our expectations.

Second fulfillment rates in Q1, we had a 57% fulfillment rate.

Also in line with our expectations that fulfillment rate is another reason to feel good about the rest of 2022.

That fulfillment rate is another reason to feel good about the rest of 2022. Third.

Third payment rate.

We received payment for 50% of fulfilled prescriptions in Q1.

We received payments for 50% of fulfill the script prescriptions in Q1.

We are adding payment rate as an operating metric for which we provide guidance and quarterly updates because of its importance to forecasting our commercial progress.

We are adding payment rate as the operating metrics for which we provide guidance and quarterly updates because of its importance to forecasting our commercial progress.

We previously used covered lives as a proxy metric for payment rates.

We previously used covered lives as a proxy metric for payment rate.

Pamed rate, however, is the actual metric. And it reflects the rate at which we convert fulfilled prescriptions into paid prescriptions.

Payment rate, however is the actual metrics and it reflects the rate at which we convert fulfilled prescriptions into paid prescriptions.

We forecast payment rate for fulfilled prescriptions for this year to be in a range of 50 to 65 percent.

We forecast payment rate.

For fulfill prescriptions for this year to be in a range of 50% to 65%.

Finally ASP.

Our ASP-NQ-1 was 1,353-DOS.

Our ASP in Q1 was $1 $353.

ASP is another important operating metric for which we will provide guidance and quarterly updates going forward.

We forecast full year ASP per paid prescription to be in a range of $1,150 to $1,350.

We forecast full year AFC per paid prescription to be in a range of $1 $150 to $1350.

We see these four operating metrics as useful in understanding our commercial model and in estimating future product revenue growth.

So I'll spend a minute making sure you understand how they relate to one another.

So I'll spend a minute, making sure you understand how they relate to one another.

First <unk>.

Total prescriptions times fulfillment rate equals fulfilled prescriptions.

Total prescriptions.

<unk> fulfillment rate.

<unk> fulfilled prescriptions again total prescriptions times fulfillment rate equals fulfilled prescriptions.

Again, total prescriptions times fulfillment rate equals fulfilled prescriptions.

Second.

Fulfilled prescriptions times payment rate equals paid prescriptions. Let me say that one again too. Fulfilled prescriptions times payment rate equals paid prescriptions.

Fulfilled prescriptions times payment rate equals paid prescriptions, let me say that one again to fulfilled prescriptions times payment rate equals paid prescriptions.

And third, paying prescriptions times AFP is an indicator of potential total product revenue, which of course is not the same as GAP net revenue, but which we think should help those of you who are trying to model our product revenue growth.

Third paid prescriptions times AFP is an indicator of potential total product revenue.

Which of course is not the same as GAAP net revenue.

Which we think through the <unk>.

Those of you who are trying to model our product revenue growth.

Further financial results to note, on March 31st, we had $137.8 million of cash, cash equivalents, and short-term investments on the balance sheet. That will take us well into 2023.

Further financial results to note on March 31.

Had $137 $8 million of cash cash equivalents and short term investments on the balance sheet that.

That will take us well into 2023.

Our operating expenses were 37 5 million in the first quarter, which is higher than expected primarily due to investments to build infrastructure for the PDP category and stock compensation charges associated with annual equity grants.

we expect a small decline in quarterly expenses for the remaining three quarters of this year. With that, Justin.

We expect a small decline in quarterly expenses for the remaining three quarters of this year.

With that Justin let's open the call for questions.

And thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by. We've compiled a Q&A roster. And once again, that is star 1 if you have a question. And our first question comes from Michael Cherney from Bank of America. Your line is open.

And thank you as a reminder to ask a question you will need to press star one on your telephone to ensure your question press. The pound key please standby we compile the Q&A roster and once again that is star one if we have a question and our first question comes from Michael Cherny from Bank of America.

Your line is now open.

Good afternoon, and thank you for the detail so far. Maybe, I don't know if this is a question for Corey, or anyone else wants to jump in, but I would love to know a little bit more as we learn more about your business and the role you're playing in PDTs on how you think about the evolution of marketing.

Hi, good afternoon, and thank you for all the detail so far may.

Maybe just a question for Corey.

Our analyst wants to jump in but I would like to know a little bit more as we learn more about your business and for all your playing Pdt's on how you think about the evolution of marketing spend and in terms of the channels what have been the most successful opportunities that <unk> had where do you continue to focus your spend are you working with the likes of some of the physician organization.

Like Doximity Midscale et cetera.

No a little bit more about where youre seeing the best returns as you continue to work on increasing both the fulfillment and payment rate.

Michael Thank you so much for your question. We appreciate you dialing in.

As we think about the business really we see a world where software is a mainstream medical treatment and is ultimately applied across most of these conditions.

What we are working to build in pair is really a company which has both the deepest pipeline of PETT.

What we are working to build a pair is really a company, which has both the deepest pipeline.

<unk> and.

And all of those PDTs roll up to the same infrastructure. Again, we use something called pairCreate to build our PDTs and pairConnects to house them all in the same infrastructure.

And all of those Pdc's roll up to the same infrastructure.

We use something called per create to build our pvt and per connect to house them all on the same infrastructure.

As we think about the economies of scale inherent in that infrastructure. We believe that there is a tremendous opportunity for cost prescribing and what I mean by that is we see what are quite high rates of clinician engagement with our back end clinician dashboard.

And ultimately marketing spend per unit patient really as we're able to develop sell and efficiencies across multiple products.

Got it.

That's helpful and then I guess on the real World evidence data clearly a couple of important milestones as you present that data how quick who is looking for the data. Most I guess how quickly does this get communicated through to your payer partners to your state partners in terms of how they think about the approach to further supporting your expansion.

Thanks, Mike for that question also.

Certainly we view.

Our real World Health economic data as really a fundamental pillar of the value that we're able to create for payers.

and we've seen both commercial payers as well as state payers be highly receptive to that data. We saw that receptivity really come through as we released our first data sets for Reset-O, which were our Reset-O six-month data, and we've really seen a continued audience for the nine-month data, and we believe that 12 months is an important milestone within this phase.

And we've seen both commercial payers as well as state payers be highly receptive to that data.

Saw that receptivity really come through as we release, our first datasets will reset.

Which were our reset over six months data and we've really seen a continued audience for the nine month data and we believe that 12 months is an important milestone within this space.

So that's a very long-lead way of saying one of our fundamental advantages is our data collection. We will continue to collect data per unit, commercial patient treated, and that is data at the patient reported outcome level. It's data at the clinician reported outcome level, and it's data that rolls up to claims and health economic outcomes. Really will continue to push this data and publish this data in order to help us bring on additional cover lives and open up market access for different locations.

So that's a very long winded way of saying one of our fundamental advantages is our data collection. We will continue to collect data per unit commercial patient treated and that has data at the patient reported outcome level. It's data at the clinician reported outcome level and it's data that rolls up to claims and health economic outcomes.

Really we'll continue to push this data and publish this data in order to help us bring on additional covered loans and open up market access for additional patients.

Awesome. Thank you so much.

Thanks, Mike. And thank you.

Thanks, Mike.

Thank you.

And our next question comes from Charles Reed from Cowan. Your line is now open.

And our next question comes from Charles <unk> from Cowen. Your line is now open.

Great, thanks for taking the questions. I wanted to talk about obviously the

Great. Thanks for taking the questions.

Wanted to talk about obviously the.

The agreement you have with Michigan and Oklahoma, you know, that you signed it, you know, he talked about last quarter as well.

The agreement you have with Michigan and Oklahoma.

That you signed a you talked about last quarter as well.

I think Massachusetts is the only one where you, from a state Medicaid perspective, is on the formula and is covered. Can you talk about the other states?

I think Massachusetts is the only one where you.

From a state Medicaid perspective is on the formulary is covered.

Can you talk about the other states.

Yes.

Are you at in terms of getting full coverage because the way I understand it right now with these day to day kind of buy bulk licenses and make it available to physicians just want to understand.

How that process works for.

Patients to get access to.

The prescriptions in those states.

And maybe talk about sort of the.

the uptake that you're seeing as a difference when you kind of get full coverage in Massachusetts versus the models that you're having so far in these other states.

The uptake that Youre seeing is a difference when you kind of get full coverage in Massachusetts versus the models.

You are having so far in these other states.

Charles, thanks for the question. And as you rightly point out, we have a number of different arrangements with different states, including Indiana, Ohio, Kentucky, Michigan, Oklahoma, and Massachusetts.

Charles Thanks for the question.

As you rightly point out we have a number of different arrangements with different states, including Indiana, Ohio, Kentucky, Michigan, Oklahoma in Massachusetts.

The majority of those arrangements provide access to a subset of patients in a given state. We're very excited about the steps forward that the state of Massachusetts has taken. And Massachusetts is in fact the first state where all Medicaid patients in the state have access to reset and reset up.

The majority of those arrangements provide access to a subset of patients in a given state.

Thank agnostic.

Type of access agreement.

in order to help them to understand the benefits of prescribing our PDTs, but also to understand the mechanics of prescribing.

Our PBT use but also to understand the mechanics of prescribing, our pdt's and I think as you rightfully point out as we move forward, we will continue to.

And I think as you rightfully point out, as we move forward, we'll continue to operate under a number of these different types of access agreements. And that's why we really try to simplify the modeling by focusing on payment rate here, which is something that we believe is very material both to our business as well as to revenue generation going forward.

To operate under a number of these different types of access agreements and Thats why we really tried to simplify modeling by focusing on payment right here, which is something that we believe is very material to our business as well as to revenue generation going forward.

yeah i appreciate that accordion and certainly you know that the guy she gave in the reiteration uh... you know all positive uh... i guess what i'm trying to get out of like how close are we with these other states you know to to move from subset

Yes, I appreciate that and certainly the guidance you gave in the reiteration.

It's all positive.

I guess, what im trying to get at like how closer are we with these other states.

To move from subsets to give me a broad coverage.

Seeing I'd imagine, they're seeing the value.

And they're in their patient population and their costs, namely right in the outcomes.

given what Yuri talked about in terms of, you know, what you're already seeing in the real-world evidence studies, you know,

Given what you already talked about in terms of what you're already seeing in the real world evidence studies.

Is.

you know is that a focus for you guys to push to get uh... you know more more broader access to a match to the past and i guess the question is did you see a material difference in when you brought access

Is that a focus for you guys to push to get.

More more broader access to a Massachusetts has.

And I guess the question is do you see a material difference in when you have broad access.

Versus the way the other states are doing because it's not that maybe it doesn't really matter I guess it's my

Versus the way the other states are doing because.

If not then maybe it doesn't really matter I guess is my point.

And Charles, I think it's probably a little bit beyond the scope of what I can speak to today to speculate on the positions of individual states or individual payers in determining their access status.

I think that said, it's very fair to think about this as a story which is very deeply based in real-world clinical data. And as you've seen us continue to do quarter over quarter, as I mentioned, each patient who utilizes the products in the real world adds to our dossier of data, allows us to look at particularly efficacious and effective subsets of patients, and ultimately continue to demonstrate our health economic value to patients.

Very deeply base, the real world clinical data and as you've seen us continue to do quarter over quarter as I mentioned, each patient who utilizes the products in the real world adds to our dossier of data allows us to look at particularly efficacious and affected subtypes of patients and ultimately.

<unk> continued to demonstrate our health economic value to payers.

Broadly into additional opex.

That's helpful and maybe just one follow up for Chris.

You said that.

Obviously, we take fulfillment rate times payment rate.

Times Asps.

And that gives you a good approximation net revenue what would be the delta.

What could be different that would affect net revenue from just found a formula.

Yes.

Sure. So if I could just one.

One sort of.

Bit of a setup when you think about multiplying those four metrics each of them is an important part together. They get you an estimate of revenue and as you point out there is.

Difference between estimating forward looking revenue and calculating revenue looking back under GAAP. The biggest drivers of course are number one our revenue recognition policy under ASC 606 requires us to defer some of the revenue that we earn in any quarter.

And then number two.

There our gross to net adjustments, which I won't discuss here because we don't provide non-GAAP financial measures, but that is the other main category of Delta between the number you would get by multiplying the four of those things together and what you see us actually reports as GAAP net.

<unk>.

Great. That's helpful. Appreciate that.

Thanks Carl.

And thank you.

And our next question comes from Neena <unk> Garg from Citi. Your line is now open.

Hey, guys. Thanks for taking my question.

I was just wondering if you could talk a little bit more about.

I'll run through the rest of the year.

Thank you for your question and I'd like to turn it over to Julia Strandberg, Our Chief commercial officer to speak just a little bit more about volume and demand generation.

Thanks Corey.

So as I mentioned, our demand effort, certainly maturing and we are seeing expansion in two ways.

So mark scripts from existing customers with large potential.

And as well as bringing new customers on board and when we think about.

Our strong integration and our scale through the year, our focus is on larger Dixon health clinic that ban.

Interest paid as well as multiple state.

Second is engaging in large health system.

Where there are multiple states multiple location.

In multiple disease states within those large system and then third is deeply engaging in states, where we've already created access than as we spoke earlier bulk with map health and doing their care and Oklahoma.

So we continue to make progress and largely that progress if you will.

And that growth as you all are in demand by.

Simplifying our optimizing our integration.

And ease of use.

With our clinicians so that is integration and EMR like epic and.

Yes.

Current state and future state.

Clinicians have opportunities to be reimbursed through a CPT code.

And then of course that is.

Further emphasize as we continue to layer on a growing body of evidence and data and I think Jeff value for PDP.

Sure.

<unk>.

Further prescribing behaviors.

Got it that's helpful. Thank you.

Thank you.

And our next question comes from Eric Percher Nephron Research. Your line is now open.

Thank you.

Question on the operating metrics, the new metric of payment rate.

Now at 50% do you expect that payment rate increases over the course of the year, giving guidance.

Simply with more coverage and then with ESP. The guidance suggests that comes down over the year is that.

Also related to the type of coverage and you just mentioned addiction versus health system state and commercial what are the dynamics underneath those too.

Thanks, Eric for the question.

Chris would you be willing to speak to that one sure so Eric I'm going to take ASP second and try and knock off.

Prescriptions, then we have a 50% payment rate that means we have 25 paid prescriptions. It is the paid prescriptions that you would multiply by ASP.

To make that rough estimate of total product revenue looking forward.

So just to make sure that that sort of foundation is set let's talk about payment rate.

Payment rate is the percentage of build prescriptions that are paid so the way that we can drive payment right up to the middle or hopefully.

But in addition to driving payment rate up with traditional third party payers. We also have had some success with these access agreements that you've heard us talk about.

That is a situation in which a stage typically it can be a commercial organization too but for the most part we've seen it with the states.

Sense before I jump to ASP.

Im with you. Thank you.

Okay, So let's talk about AFC.

ASP truly as a function of leverage.

When we need to give a large discounts and rebates that drive the ASP down and when we don't need to do that drives the SPL.

As we do larger and larger deals to achieve our revenue forecast, we expect asps to go down slightly as you know that's why you'll see that our current.

ASP for Q1 is at the high end of the range that we forecasted for this year.

Put another way I think it would be a good thing if our ASP goes down a bit over the course of the year because that would be consistent with the size deals. We think we need to hit our $22 million in guidance.

Even though we want bigger deals that have the potential to drive down asps.

We're focused on continuing to generate additional real world health economic data.

As well as enhancing our products both of those things should help us to enhanced pricing power, which of course would help push up ASP.

To reiterate our guidance is $1150 to $1350 for AFC. This year, which means we expect to see ASP impacted positively by additional data and product features and negatively by doing commercial deals.

Of increasing sales.

Does that help.

Yeah appreciate the math to which.

One follow up which is we now have payment rate are you withdrawing covered lives or are you, saying youll get it annually, but not quarterly.

Do you want to take that core struggling.

No.

We are.

We are withdrawing covered lives.

Covered lives is a proxy metric for payment rate.

Payment rate is the actual metric so.

So we will be reporting the actual metric going forward as opposed to the proxy metric because the actual metric is what really matters as we begin to unlock the true revenue potential per.

Since you asked though I'll share what I can about covered lives as we know it today.

Managed markets insight and technology or M M <unk>.

We reported at the Assembly a conference last week.

<unk> has approximately 80 million covered lives.

We thought that number sounded high and we let MMR.

No that.

Since we are no longer reporting on the proxy metric we have not attempted to confirm mmm is number.

I think it's important to note that calculating covered lives is a tricky business.

We know of covered lives under contract when we signed with payers, but we don't typically Noah covered lives when payers put us on formulary without having a sign a contract.

Moreover, the whole thing just got more complicated now that we don't just have pharmacy covered lives and we're adding DMA covered lives.

We will continue to put out press releases announcing coverage decisions. When we are permitted to do so but I think you know that many payers prohibit companies from disclosing coverage decisions. So we can't promise you that youll learn of every coverage decision we land.

I guess, maybe to try and sum all that up we believe covered lives served us well.

As we were going from zero covered lives to tens of millions of covered lives.

But we're not going to continue to attempt to provide accurate reports on the proxy metric. Instead, we've started to report on the actual metric which is payment rates.

And that is a very important metric for our future revenue growth.

I think maybe the last thing I'd say is it is fair to say that we are satisfied with the progress we're making on payment rate.

But we understand that we will need to get that payment rate up significantly over time, if we're going to unlock.

Payers full revenue potential.

And so that was where I was going to go. So what is your feel for where payment rate should be given mature products understanding youll always be introducing additional products.

Eric I think it's a great question, but I think the way I would like to answer it may be just a smidge of satisfying to you because I don't want to speculate.

I think we are confident in putting out our guidance for this year of 50% to 65% and you saw that we came in at the bottom of that range. This quarter, we do intend.

To push the number up over the course of the year and we believe we'll be able to do that so the only way I could accurately answer your question about where it lands. When we mature is to say that we certainly hope and expect it will be north of the range that we provided for 2022.

Don't get all the way there in this calendar year.

Alright, thank you for the detail.

Bye bye.

Thanks, Eric and thank you and our next question comes from key Mackie from Chardan. Your line is now open.

Okay.

Yes. Thanks.

I know, it's a small number but we did.

Cost of sales declined slightly sequentially on much higher script. So.

I know, there's some rewards with recently said also help us kind of.

Put all this into perspective to model forward.

Thanks for the question, Chris would you mind, taking them sure thing okay.

I think youre right that its a small number.

We did have modest improvements, but there is nothing.

Notable enough to highlight for you on this call I think youre going to see a little bit of that bounce up and down over time, because we're still relatively early in our launches and in the maturation of these products. In this this market segment, but I don't have anything that I can point to you to say this is an important driver of that slate.

<unk>.

Okay.

And then specifically for Opex going forward.

Posted $13 million in R&D, how do we think about that specific line item going forward.

I'm, sorry, I didn't quite hear that I have to admit would you mind us say it again please.

R&D expense within Opex, how do we think about that going forward.

Sure I'm, sorry, I didn't understand the question. Initially so we do not as you know provide overall expense guidance and we therefore don't provided by segment, but what I think we have said previously in public.

Settings, and what I'd be happy to say in this public setting is that while we have significant aspirations to use per create to drive additional.

<unk> product candidates through the development process through the regulatory process and onto the market.

We're also being.

Careful stewards of our cash and what are let's call. It sub optimal conditions to raise money right now.

So I think what you should expect to see US do is continue to move the pipeline forward, but in a very cautious way for now.

We think that managing cash burn in this environment is an important.

Endeavor, and we're trying to balance that with our fervor for getting more of our candidates across the goal line with FDA.

Okay, Great and then finally.

On the telehealth side.

You've announced some.

Recent.

Activity there I'm just wondering.

On the margin how much.

Going to help in terms of.

Two prescriptions.

Yes, I think this is a place where we probably won't be able to provide any sort of firm guidance.

That said I think one of the unique attributes of prescription digital therapeutics that we're uniquely suited for both.

Face to face I E brick and mortar encounters as well as telemedicine encounters and I think if there's one thing that the Covid pandemic showed us is that telemedicine does not address the supply chain issues inherent in our health care system.

So, whereas many patients are currently able to see a telemedicine visit once a month once a quarter PDP is really nicely fit in the gaps between those telemedicine visits and give them both la mode and asynchronous care as opposed to telemedicine, which is remote and synchronous.

So thats sort of a long winded way of saying that we won't be able to project exactly what sort of contributions these different remote access form which may may provide but.

But we do believe that there is a tremendous opportunity for telemedicine PTT has to go hand in hand.

Okay. Thanks.

Thank you for your questions and thank you.

And our next question comes from Judah Frommer from Credit Suisse. Your line is now open.

Yeah, Hi, guys. Thanks for taking the question, maybe just first to follow up on the telehealth and wrapping in the Spanish language versions of reset and we set out are there any early learnings on what the patient and prescriber profiles look like.

Kind of in those channels is it make you think any differently.

How.

Docs and patients may utilize the services.

Judah. Thank you for the question I think preliminarily, we're not seeing what I would characterize as fundamental differences between the Spanish language utilization in the English utilization.

I think what we are seeing is a tremendous hunger both on the part of providers as well as payers to be able to operate toward health equity and inclusion criteria and really that is one of the principal strength of prescription digital therapeutics is to be able to extend care.

Across socioeconomic boundaries across racial boundaries across ethnic boundaries and across geographic boundaries and we are seeing that value proposition resonates strongly with payors. As this is a high point on the payer and provider agenda.

We're able to frankly be able to collect data to support that value proposition.

Okay, that's really helpful.

They'd like to see in terms of durability of effect for your products or is it just kind of.

More is better and eventually we'll get to that tipping point.

Judah. Thank you for the question and we certainly believe in the power of the real World Health Economic data I'd Love to tag in <unk>, Our Chief Medical Officer, who can speak to this a bit further.

Yes.

Thanks, Corey and thanks. Thanks for the question I mean, I think what we're seeing from.

Our discussions with Payors is that.

The sooner a.

Value or cost savings as realized thats important, but they want to also see that durability right and so we had previously published the six month data for reset.

We added on the nine month data, but then the question is does this persist and for many payers. The time horizon is up a couple two maybe a little bit more years and so this is where the 12 month data and now the 24 month data really I think fit in nicely.

They see we get our return.

Got it thank you.

And Julien if I can maybe just very briefly add onto <unk> comments. Some t's just a brief trailer will be speaking about this data as well as some of our other real world and health economic data at our June Investor Day, and we'll be releasing more information on that event.

Okay.

Great. Thanks for.

Thanks, Joe.

Thank you.

And our next question comes from Murray bulk from BP.

Your line is now open.

Hi, good evening and congrats on a strong Q1, thanks for fitting me in I had some phone disconnect your nephew.

Wanted to start here with sort of a basic question and see if I could get any detail kind of run rate throughout the quarter or just any trends you saw throughout Q1, certainly your guidance looks reasonable to us, but would love to hear kind of where you exited the quarter in terms of prescription volumes or any ramping trends throughout the quarter.

Okay.

So Murray I always love it when you keep me on my toes with your questions.

I hate to disappoint, but I think what we'd like to do is report on the very strong quarter, we had and I appreciate you acknowledging that.

Provide the guidance that we provided for the rest of the year.

Okay Fair enough, Chris I had to try I will ask a question.

Pipeline.

I wanted to hear if there are any sort of brief update in terms of development milestones on any of the pipeline products things like AED NBD Softbank collaborations pain candidates certainly a lot going on there. So if there is one or two highlights.

Thank you.

Maria Thanks for the question and I'd love to against the tagging Yuri.

Yes, thanks, so much Cory so.

On our pipeline, which as Corey highlighted earlier is driven by peer create I think one thing just to draw People's attention to was that in Q1. We were pleased to have received the separate technologies program or the step designation from the FDA for our product candidate payers <unk> zero, which is designed for the treatment of acute on chronic pain.

Also as you mentioned in March we executed a services agreement with Softbank Corp to develop a digital therapeutic for the treatment of sleep wake disorders for the Japanese market is a part of our strategy to commercialize digital therapeutics in international markets and as you know in late 2021, we announced the FDA breakthrough designation.

Nation for alcohol use disorder and that we acquired those two clinically validated assets targeting major depressive disorder for the development of our own PDP candidate there.

Its development scale.

And then as Corey talked about around the use of the dashboard that the commercial delivery of these assets via our Payor.

Connect platform generates commercial scale. So really appreciate the question, we're looking forward to sharing more as we progress.

Alright, good thanks, so much.

Thank you Ed.

Im showing no further questions I would now like to turn the call back over to Dr. Mccann for closing remarks.

Thanks, everyone for the questions.

Thank you Justin.

We highlighted our commercial launches as well as the growing evidenced based demonstrating the value of our commercial products.

In the first quarter, we grew script volume fulfillment rate payment rate and Asps.

Correspondingly, we also significantly grew our revenue.

In parallel we continue to March toward making Pdt's mainstream medicine by building the critical discovery development and commercial infrastructure, we call per create and per connect.

We look forward to hosting our first virtual Investor day on June 6th at 10, a M eastern time.

We will provide more details about the event in the coming days.

Thanks for your time as always please reach out to Meara Murphy, our head of corporate communications, if you have any questions.

That concludes today's call. Thank you for joining.

Q1 2022 Pear Therapeutics Inc Earnings Call

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