Q4 2023 scPharmaceuticals Inc Earnings Call

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Okay.

Operator: Greetings and welcome to SC Pharmaceuticals' Full Year 2023 Earnings Confidence. This time all participants are on a listen-only basis. This question and answer session will follow the formal. If anyone should require operator assistance, turn to call Star Zero on your telephone.

Greetings and welcome to U S C pharmaceuticals fourth quarter and full year 2023 earnings conference call.

At this time all participants are in a listen only mode.

<unk> and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded. It is now my pleasure. PJ Kelleher with Lifesci Advisors. Thank you. Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements on this conference call other than historical facts are forward-looking statements within the meaning of the federal securities laws, including but not limited to statements regarding SU Pharmaceuticals' expected future financial results and minimum expectations and plans for the business and for us. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements.

A reminder, this conference is being recorded.

It is now my pleasure to introduce P. J kelleher with lifestyle advisors. Thank you you may begin.

Thank you operator before turning the call over to management I would like to make the following remarks concerning forward looking statements. All statements on this conference call other than historical facts are forward looking statements within the meaning of the federal Securities laws.

<unk>, but not limited to statements regarding etsy pharmaceutical its expected future financial results and then X.

<unk> plans for the business and for optics. The words anticipate believe estimate expect intend guidance confidence target project and other similar expressions. Typically are used are used typically to identify such forward looking statements.

These forward looking statements are not guarantees of future performance and may involve and are.

PJ Kelleher: These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other important factors that may affect SC Pharmaceuticals' business, financial condition, and other operating results. These include, but are not limited to, the risk factors and other qualifications contained in SC Pharmaceuticals' annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed by the company with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements.

Subject to certain risks and uncertainties and other important factors that may affect <unk> pharmaceuticals business financial condition and other operating results.

And include but are not limited to the risk factors and other qualifications contained in <unk> Pharmaceuticals annual report on Form 10-K quarterly reports on Form 10-Q, and other reports filed by the company with the SEC to what's your attention is directed.

Actual outcomes and results may differ materially from what is expressed or implied by these forward looking statements.

PJ Kelleher: Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and SCCPharmaceuticals expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. It is now my pleasure to turn the call over to Mr. John Tucker, Chief Executive Officer of SC Pharmaceuticals. Thank you, PJ.

Any forward looking statements made in this conference call, including responses to your questions are based on current expectations as of today.

<unk> pharmaceuticals expressly disclaims any intent or obligation to update these forward looking statements, except as required by law.

It is now my pleasure to turn the call over to Mr. John Tucker Chief Executive Officer of Etsy Pharmaceuticals, John.

Thank you P J and thanks to everyone listening to this afternoons call and webcast to review, our fourth quarter and full year 2023 results.

John H. Tucker: And thanks to everyone listening to this afternoon's call and webcast to review our fourth quarter and full year 2023 results. As has been our practice, I will begin with an operational update before turning the call over to Steve Parsons, our Senior Vice President of Commercial, for a more detailed update on the Ferosix launch, and then to Rachael Nokes, our Chief Financial Officer, for a review of our finances. We will then open the call for your questions. The fourth quarter of 2023 represents our third full quarter of Ferosix commercial availability since we launched the product in late February of 2021. Demand has continued to grow, as reflected in our key indicators, including number of doses, number of total prescribers, and doses filled per prescription. We believe fluorescence is meeting the needs of heart failure patients suffering from fluid overload, and the continued positive trend in these KPIs demonstrates that specialists continue to gain comfort prescribing.

It has been our practice I will begin with an operational update before turning the call over to Steve Parsons, Our senior Vice President commercial for a more detailed update on the <unk> launch and then Rachel knows our Chief Financial Officer for a review of our financials. We will then open the call up for your questions.

The fourth quarter of 2023.

Represents our third full quarter, but for all six commercial availability as we launch the product in late February of 2023.

<unk> has continued to grow reflected in our key indicators.

The number of doses number of total prescribers.

This film per prescription.

We believe for US it is meeting the needs of heart failure patients suffering from fluid overload and the continued positive trends. These kpis demonstrate specialists continue to gain comfort prescribing it.

For the fourth quarter of 2023, we reported net revenue of $6 1 million.

John H. Tucker: For the fourth quarter of 2023, we reported net revenue of $6.1 million, representing a sequential increase of 61% from 3.8 million for the third quarter of 2023. And at the upper end of the range that we provided in a pre-announcement press release on January 10, this was driven predominantly by doses shipped to patients through our specialty pharmacy network. We also had direct sales of Ferosix integrated delivery. In fact, the fourth quarter net revenue was a sizable order by one of the largest closed IDMs in the country towards the end of Q4.

Representing a sequential increase of 61% from $3 8 million for the third quarter of 2023 and at the upper end of the range that we provided in our pre announcement press release on January four.

This was driven predominantly by doses shipped to patients through our specialty pharmacy network. We also had direct sales for us.

Weighted delivery networks in fact fourth quarter net revenue.

We made a sizable order by one of the largest closed ibm's in the country towards the end of Q4.

John H. Tucker: Going forward, while we expect to have sales to IDNs every quarter, including in Q1 of this year, the size of these orders can vary. We'll cover this in more detail shortly. Before diving in further, I would like to note that in the fourth quarter, we adjusted our KPIs from prescriptions to doses. The number of doses is the metric we use across our internal projections, and is more reflective of our current business. Especially as the number of doses per prescription varies, a gross net discount from launch to the end of Q4 was running at approximately 18%, down from 21% to the end of Q2.

Going forward, while we expect to have sales to IV and every quarter, including Q1 of this year.

These orders convert will cover this in more detail shortly.

Before diving further I would like to note that in the fourth quarter, we adjusted our Kpis from prescriptions to doses, but the number of doses is the metric we use across our internal projections.

More reflective of our current business, especially at the number of doses per prescriptions theory.

Our gross to net discount from launch through the end of Q4 was running at approximately 18%.

Down from 21% through the end of Q3.

John H. Tucker: We continue to expect the GTN discounts to increase over time as contracting with payers and the marketplace evolve. We anticipate that the GTN discount, Q1 of 2024, will increase relative to 2023 levels due to discounts we anticipate paying. Inventory levels at the end of the fourth quarter at our specialty pharmacy partners were consistent with the inventory levels at the end of the third, although shifting now to pay.

We continue to expect the G T N discount to increase overtime as contracting with payers in the marketplace evolves.

We anticipate that the G T N discount Q1 2024.

Increase relative to 2023 level at a discount as we anticipate.

Inventory levels at the end of the fourth quarter that our specialty pharmacy partners were consistent with the inventory levels at the end of the third quarter.

Shifting now to payers, we continue to have productive discussions with commercial and Medicare part D and Medicaid payers.

John H. Tucker: We continue to have productive discussions with commercial, Medicare Part D, and Medicaid payers in an ongoing effort to make fluorosics broadly available to patients at the most favorable terms possible. As mentioned earlier, in late October, we reached an agreement with one of the largest closed IDNs in the United States, providing unrestricted access to fluorosis without prior authorization to over 8 million lives at a fixed copay ranging from $16 to $75. Also, as of November 1st, 2023, Ferosix has been added to formulary as Preferred Brand, one of the largest government retired payer formulas. This will increase the number of lives with preferred access to fluorescence by an additional 1.1 million lives.

Ongoing effort to make for us it's broadly available to patients at the most favorable terms possible.

As mentioned earlier in late October we reached an agreement with one of the largest closed ideas would be United States.

Fighting unrestricted access to six without prior authorization over 8 million lives.

Okay, ranging from $16 to $75.

Also as of November one 2023 rose six there's been added on formulary and preferred brand.

One of the largest government retire payer formularies.

<unk> preferred access to <unk> by an additional $1 1 million lives.

These favorable payer decisions and expanded the population of heart failure patients with access to process.

John H. Tucker: These favorable payer decisions have expanded the population of heart failure patients who have access to fluorosisics with fixed co-pays of $100 or less to 70%, moving us closer to our previously stated goal of 75% or more over time. We are progressing with many other health plans, and we hope to have more announcements like these in the months to come. At this point, I would like to provide an update on several long-term growth initiatives that we previewed last quarter that we view as critical for a long-term growth strategy. In August, we announced favorable type C meeting feedback from the FDA regarding the potential expansion of the fluorocyclic indication to allow for use in New York Heart Association Class IV heart failure. Furosics is currently indicated for the treatment of congestion due to fluid overload in adult patients with Neopartis Association Class 2 and Class 3 chronic heart disease.

It's co pays of $100 or less 17% moving.

Moving us closer to our previously stated goal of 75% or more overtime.

We are progressing with many other health plans and we hope to have more announcements like these in the months.

At this point I would like to provide an update on several long term growth initiatives that we previewed last quarter that we view as critical for long term growth strategy.

In August we announced favorable type C meeting feedback from the FDA regarding the potential expansion for six indications.

Now for use in New York Heart Association class four heart failure patients.

<unk> is currently indicated for the treatment of congestion due to fluid overload adult patients with New York Heart Association class two and class three constantly we.

John H. Tucker: We estimate that as many as 10% of all heart failure patients are Class IV, and a meaningful percentage of these, as many as 40%, may benefit from progesterone. Based upon the feedback that we received from the agency, we filed for the class 4 indication early in October of 2023. We've been assigned a PDUFA date for this August. We are successful.

We estimate that it's maybe 10% of all heart failure patients are class four and a meaningful percentage of the many as 40% may benefit from producers.

Based upon the feedback feedback that we received from the agency.

While for the class four indications early October of 2023.

Bill signed at Paducah date is August.

We are successful we believe class four represent a meaningful expansion of our market opportunity will enable for all six to be prescribed to the most severe heart failure patients.

John H. Tucker: We believe Class IV will represent a meaningful expansion of the market opportunity to enable ferrocysteine to be prescribed to the most severe heart failure, bringing out the 80 meg by one ml auto injector that we are developing as an additional option in the on-body. We believe that an auto injector, if approved, would reduce manufacturing costs compared to the current on-body infuser and confer an environmental advantage. We remain on track to initiate If that is successful, we will submit a supplemental new drug application to the FDA by the end of 2022. Finally, we announce feedback from the FDA pertaining to the potential expansion of the PROCYX indication to include treatment of edema due to fluid overload in patients with chronic kidney disease, or CKD. In its feedback, the FDA confirmed that no additional clinical studies are needed to expand the indication provided that we can demonstrate an adequate PK and pharmacodynamic bridge to the listed drug, which is furosemide injection. TKD is a progressive disease characterized by worsening renal function over time, resulting in frequent episodes of fluid overload that are treated with loop diuretics.

Turning now to the 80 made by one ml auto injector that we are developing an additional option to the on body.

We believe that our auto injector, if approved reduce manufacturing costs compared to the current onboarding to user and confirm environmental advantage.

We remain on track to initiate a pivotal PK study in Q2 of this year.

Poor results later this year that successful allows us to submit a supplemental new drug application to the FDA by the end of 2024.

Finally, we announced feedback from the FDA.

Turning to the potential expansion of the prostate indication to include treatment of a demerger of the fluid overload in patients with chronic kidney disease or C. J D.

This feedback the FDA confirmed that no additional clinical studies are needed to expand indication provided that we can demonstrate adequate PK and Pharmacodynamic bridge to the listed drug which is for us to mine injection.

<unk> is a progressive disease characterized by worsening renal function over time, resulting in frequent episodes of fluid overload that are treated with Luke diabetics.

It is estimated that 12 to 15 Americans are aware that they have kidney disease and 50% of patients with <unk> do not have the diagnosis of heart failure.

John H. Tucker: It is estimated that 12 to 15 Americans are aware that they have kidney disease, and 50% of patients with CKD do not have a diagnosis of heart disease. Fluid overload is one of the most common complications in CKD, which worsens with disease progression. We believe Ferocious could be beneficial to patients with CKD who have worsening symptoms due to fluid overload and are not responding to oral loop diarrhea. To that end, plan to submit a supplemental new drug application with the FDA for the CKD indication in the second quarter of 2020. Now, turning to the first quarter of 2024. Despite the normal Q1 headwinds caused by patient out-of-pocket deductibles resetting, this was our highest dose demand in shipment for the first half of the quarter. This growth in demand has further accelerated in March.

Fluid overload being one of the most common complication cadence, which worsens with disease progression, we believe gross it could be beneficial to patients with ckc.

Worsening symptoms through the fluid overload.

Not responding to all the arguments for that and plan to submit a supplemental new drug application with the FDA for the <unk> kidney indications second quarter of 2024.

Now turning to the first quarter of 2024.

Quite the normal Q1 headwinds caused by patient out of pocket deductibles resetting its our highest dose demand and shipments through the first half of the quarter.

This growth in demand has further accelerated in March.

John H. Tucker: However, the impact of the cyber attack on changed health care began the third week of February and is ongoing. This has caused a disruption in claims being processed, resulting in delays in patients receiving shipments of ferroceramide. Unique Physicians for OSIC TABs and the Treatment of Heart Failure Patients

However, the impact of the cyber attack unchanged healthcare began in the third week of February and is ongoing.

This has caused disruption claims being process, resulting in delays in patients receiving shipments the boroughs.

The unique position for all six pads in the treatment of heart failure patients are concerned that we will not see all of these units shipped through <unk>.

John H. Tucker: We are concerned that we will not see all of these units, but we're actively working with our specialty pharmacy partners to ship as many of these units as possible. At this point, we do not know if and how much this will ultimately impact support. We intend to provide a more detailed update when we report our first quarter results. At this point, I'll turn the call over to Senior Vice President of Commercial Steve Parsons for a deeper dive into our launch. Okay. Thank you, John.

We'll be working with our specialty pharmacy partners to ship as many of these units as possible at this point do not know if and how much this will ultimately impact.

They tend to provide more detailed update report on first quarter results.

At this point I'll turn the call over to senior Vice President of commercial Steve Parsons for a deeper dive into our launch metrics Steve.

Thank you John as John indicated in the fourth quarter was our third full quarter of zero six commercial availability.

Steve Parsons: As John indicated, the fourth quarter was our third full quarter of Furosics commercial availability, and we remain pleased with our progress. From launch through December 31st, we've had 1,696 unique prescribers, up 52% from the 1,119 unique prescribers from launch through September 30th. They're extremely encouraged by this growth as it reflects our strategy in 2023 of establishing a broad prescriber base. Importantly, more than half of these prescribers had written multiple prescriptions by the end of the year. During the fourth quarter, we had 13,542 doses written, and 7,116 of those doses have already been filled. There were another 4,592 doses that were still pending as Q4 ended. We continue to report doses ridden and doses filled because of the unique nature of how physicians prescribe cirrhosis.

We remain pleased with our progress.

From launch through December 31st he had 1696 unique prescribers up 52% from the 1119 unique prescribers from launch through September 30th extra.

We're extremely encouraged by this growth as it reflects our strategy in 2023 of establishing a broad prescriber base.

Fortunately more than half of these prescribers have written multiple prescriptions by the end of the year.

During the fourth quarter, we had 13542 doses written and 7106 7016.

Those doses up already themselves.

There were another 4592 doses that we are still pending as Q4 and.

We continue to report doses written and doses still because of the unique nature of how physicians prescribed <unk>.

Many of our physicians write prescriptions for patients.

Steve Parsons: Many of our physicians write prescriptions for patients in anticipation of future need due to worsening fluid overload. While these prescriptions might not be filled in the month or quarter they are written, they do get filled when the patient needs treatment, and we report these doses when the patient receives them. It is important to note that approximately 14% of our prescriptions were canceled during the fourth quarter of 2023.

Dissipation of future need due to worsening fluid overload.

While these prescriptions might not be filled in the month of quarter. They are written they do get filled when patient needs treatment and we report those doses.

When the patient receives them.

It is important to note that approximately 14% of our prescriptions were cancelled.

During the fourth quarter of 2023.

Steve Parsons: Recall that pending prescriptions are not yet filled; whether they are still in process with the payers, some are approved and waiting in queue, while others are still in prior authorization. We filled a significant portion of these pending prescriptions in the first few weeks of 2024. And we continue to fill more pending prescriptions written in Q4 into the filled category every day. Now, the prescriptions that are canceled are for various reasons, including unreachable patients who are hard to contact, have been hospitalized, or a small number that have been deceased. Of those that are reached who cancel, a high copay is the main reason given. We anticipate the cancel rate will continue to decrease with Furosics as it is expected to become better positioned on more health plan formularies, lowering patients' out-of-pocket costs, and providing quicker coverage decisions. During the fourth quarter, the average number of doses per prescription filled was 5.9 doses, which remains higher than our long-term expectations.

Recall that pending prescriptions are not canceled but they are still in process with the payers some are approved and waiting in queue.

Others are still in prior authorization.

We felt a significant portion of these pending prescriptions in the first few weeks of 2024.

We continue to feel more pending prescriptions written in Q4 into this builds category every day.

Now the prescriptions.

Canceled or for various reasons, including unreachable patients who are hard to contact.

Had been hospitalized or a small number that have that are disease.

And those that are reached to cancel it.

High co pay is the main reason given.

We anticipate the cancel rate will continue to decrease with euro six.

As is expected to become better positioned and more else planned formularies lowering patients' out of pocket costs and providing quicker coverage decisions.

In the fourth quarter. The average number of doses per prescription filled was $5 nine doses, which remains higher than our long term expectations.

Our sales force is conducting 2000 and 331 in services as of December 31.

Steve Parsons: Our sales force has conducted 2,331 in-services as of December 31st, which is up from 1,806 in-services conducted as of September 30th. InServices provide important training to offices on the prescribing process for Ferocity, and Mission Insurance Office Readiness. As we open more new accounts, the execution of in-services remains fundamental to furosic success, and we regard the number of in-services conducted each quarter as an important leading indicator. We've said previously that we stand ready to add additional territories as demand warrants, and plan on adding additional territories in advance of our class four and chronic kidney disease initiatives. Transcribed by https://otter.ai. From a marketing perspective, we are engaged in a broad multi-channel marketing campaign to drive brand awareness, adoption, and commitment. This program encompasses many different activities, but some of the key ongoing activities include engagement and development of key opinion leaders, conference presence, print and electronic collateral, and the development of both provider and patient websites, among other critical tasks. We've begun reaching out to heart failure patients and their caregivers with patient education materials for Furosa.

This is up from 1806 in services inducted as of September 30th.

In surfaces provide important training to offices on the prescribing process Pittsboro six.

Ensures office readiness.

We opened more new accounts.

The execution is in services remains fundamental tiptree relative success.

We regard the number of in service is conducting each corner as an important leading indicator.

You said previously that we stand ready to add additional territories as demand warrants and.

We plan on adding additional territories in advance of our class four and chronic kidney disease initiatives.

From a marketing perspective, we are engaged in a broad multichannel marketing campaign to drive brand awareness adoption and commitment.

Graham.

Compass has many different activities, but some of the key ongoing activities include engagement and development of key opinion leaders conference presence.

Print and electronic collateral and the development of both provider and patient website among other critical tasks.

We've begun reaching out to heart failure patients and their caregivers.

Education materials, well if your own ships.

Rachael Nokes: Overall, we're pleased with our progress, continued progress on the path we are on. That concludes my update. I'd like to turn the call over to our Chief Financial Officer, Rachael Nokes, for a financial update.

Overall, we're pleased with our progress our continued progress in the path we are on.

That concludes my update I'd like to turn the call over to our Chief Financial Officer, Rachel notes for a financial update.

Thank you Steve.

Rachael Nokes: Thank you, Steve. As of December 31, 2023, we held $76 million in cash, cash equivalents, and investments compared to $118.4 million as of December 31, 2022. Now I will cover a few income statement items. We reported a net loss of $13.8 million for the fourth quarter of 2023 compared to a net loss of $9.2 million for the fourth quarter of 2020. For the full year 2023, we reported a net loss of $54.8 million compared to a net loss of $36.8 million for the full year 2020. Product revenues were $6.1 million for the fourth quarter of 2023, and the cost of product revenues was $1.8 million. For the full year 2023, product revenues were $13.6 million, and the cost of product revenues was $3.8 million.

As of December 31st 2000, Twenty's brain, we held $76 million in cash cash equivalents and investment compared to $118 $4 million as of December 31st 2022.

Now I'll cover a few income statement items.

Reported a net loss of $13 $8 million for the fourth quarter of 2020 and.

Parents with a net loss of $9 $2 million for the fourth quarter 2022.

For the full year 2023, we reported a net loss of $54 $8 million compared to a net loss of $36 $8 million for the full year 2022.

<unk> revenues were $6 $1 million for the fourth quarter of 2023 cost of product revenue were $1 $8 million.

For the full year 2023 product revenues were $13 $6 million and cost of product product revenues were $3 $8 million, we did not generate revenue during the fourth quarter, our full year 2022.

Rachael Nokes: We did not generate revenue during the 4th quarter of full year 2022, as Bureau 6 was approved in October 2022 and commercially launched in February 2020. Research and development expenses were $3.3 million for the fourth quarter of 2023, compared to $2.3 million for the comparable period in 2021. The increase in research and development expenses for the quarter ended December 31st, 2023, is primarily due to an increase in device and pharmaceutical development, although it was partially offset by a decrease in employee-related costs.

It was approved in October 2022, and commercially launched in February 2023.

Research and development expenses were $3 $3 million for the fourth quarter 2020.

Compared to $2 $3 million for the comparable period in 2022.

The increase in research and development expenses for the quarter ended December 31, 2023, it was primarily due to an increase in device.

Settlement.

Increase was partially offset by a decrease in employee related costs.

Rachael Nokes: Research and development expenses were $11.8 million for the full year 2023, compared to $15.5 million for the full year 2022. The decrease in research and development expenses for the full year 2023 was primarily due to a decrease in clinical study and medical affairs costs, employee-related costs, and quality and regulatory consulting costs. The decrease was partially offset by an increase in pharmaceutical development costs. Selling general and administrative expenses were $16.2 million for the fourth quarter of 2023, compared to $7.2 million for the comparable period in 2020. The increase in selling general and administrative expenses for the quarter ended December 31, 2023, was primarily due to an increase in employee-related costs and commercial costs. For the full year 2023, we reported selling general and administrative expenses of $53.4 million compared to $20.6 million for the full year 2022.

Research and development expenses were $11 $8 million for the full year 2023.

It's a $15 $5 million for the full year 2022.

The decrease in research and development expenses for the full year 2023 was primarily due to a decrease in clinical study aarons com.

Employee related cost and quality and regulatory.

The decrease was partially offset by an increase in pharmaceutical development.

Selling general and administrative expenses were $16 $2 million for the fourth quarter of 2023 compared to $7 $2 million for the comparable period in 2022.

Selling general and administrative expenses for the quarter ended December 31 2023.

Primarily due to an increase in employee related costs and commercial costs.

Full year 2023, we reported selling general and administrative expenses of $53 4 million compared to $26 million for the full year 2022.

Rachael Nokes: The increase in selling general and administrative expenses for the full year 2023 was primarily due to an increase in employee-related costs and commercial costs following the commercial launch of Hero6 in February 2023, as well as an increase in legal costs. This increase was partially offset by a decrease in insurance-related costs. Based on our current operating plan, we expect our operating costs to increase in 2024 as we further support the launch of Bureau 6 and the development of the 80 megs by 1 ml auto generator and auto injector. As of December 31, 2023, we will have 35,968,510 total shares at standard.

Yeah.

General and administrative expenses for the full year 2023, it was primarily due to an increase in employee related costs and commercial costs. Following the commercial launch of heroes.

Oriented thousands mainframe.

As well as an increase in legal costs.

The increase was partially offset by a decrease in insurance related costs.

Based on our current operating plan, we expect our operating cost to increase in 2024 would be further support the launch.

On the development of the evening I want them out auto Jarrod auto injector.

As of December 31st 2023, we have $35 million 968500, and total shares outstanding.

John H. Tucker: That concludes the financial update. John, thanks, Rachael. This concludes our prepared remarks. At this point, we will open the call for questions.

That concludes the financial update John Thanks, Rachel.

Includes our prepared remarks at this point, we will open the call for questions.

Thank you ladies and gentlemen at this time, we will be conducting a question and answer session. If.

Operator: Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask a question, you may press star 1 on your screen. Press star 2 if you would like to remove..., www.scpharmaceuticals.com. I'm sorry to pick up your hand. The first question comes from the line of Roanna. Clearwind, Please proceed with your question, www.scpharmaceuticals.com. Hi, everyone. Rosa Chen is on behalf of Roanna Ruiz at Lyrinc Partners. Thanks for taking our questions. So, first one from us, can you guys share some additional details on your efforts securing more additional IDN agreements and how you expect that could impact some of the current trends that you're seeing in the uptake of Ferro6 by individual prescribers? Sir Rosa, this is John and I'll, I'll, Steve.

If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the Q.

For participants using speaker equipment it may be.

Necessary to pick up your handset before pressing the star key.

Our first question comes from the line of Rwanda Ruiz with Leerink Partners. Please proceed with your question.

Hi, everyone, a Rosa Chan on for honorees at Leerink partners. Thanks for taking our questions. So first one from US can you share some additional details on your efforts securing.

Additional idea and agreements and how you expect that could impact some of the current trends that you're seeing in the uptake of farone six by the individual prescribers.

Sure Robyn this is John and I'll out Steve.

John H. Tucker: Jump in. So, you know, the two largest IDNs in the country are Kaiser and the VA, the VA being the largest. And, you know, we're working with the VA. We've been selling into individual VAs. This year, a key initiative for us is to be a national formulary for the VA.

Jump in so you know that the two largest Saudi and in the country are Kaiser and the VA the VA being the largest.

We're working with the VA, we have been selling into individual VA. This year, a key initiative for us.

The national formulary for the ITN I mean for the VA, you think that'll that'll drive uptake.

John H. Tucker: I mean, for the VA, we think that'll drive uptake. And then with Kaiser, more of a closed system where we've already struck the contract, and we have sales in there. So we think those two kind of are a little unique in that they're really the closed integrated system. And you have Geisinger, who's one of those as well.

With Kaiser a more of a closed system where we.

We've already start the contract and we have we have sales in there. So we think those two kind of are a little unique in that they're really the closed integrated system and.

And you have guys singer who was one of those as well. So we will continue to sell into those really hard closed systems, but we really see a big expansion opportunity into into what you would call ideas that might not have the closed part of the pharmacy involved so the docs might.

John H. Tucker: So we'll continue to sell into those really hard closed systems, but we really see a big expansion opportunity into what you would call IDNs that might not have the closed part of the pharmacy involved. So the docs might be employees, but they're not in the pharmacy. They don't have the pharmacy benefit.

Be employees, but they're not in the.

Pharmacy, they don't have the pharmacy benefit. This is this is good for us because.

John H. Tucker: This is good for us because we can still talk about the 406 value message but also be able to track the prescription. So those would go through our regular distribution network. But we anticipate that growing as a percentage of the business. There are still a lot more patients outside of the IDN world than there are in it. But we've always thought that this would be a good market for us as the value proposition is so well defined. I don't know, Steve, if you want to add anything to that. Yes, we get approached by integrated delivery network hospital systems quite regularly, and they see an opportunity to shorten the length of stay in some cases by having the product available right there on campus, as well as prevent unnecessary readmissions, which they pay penalties for.

We can still talk about the 406 value message, but also be able to track. This the prescription. So those would go through a regulatory regular distribution network, but we anticipate that growing.

As a percentage of the business.

Still a lot more patients outside of the IBM world than there are in it but we have always thought that this would be a good market for us is the value proposition is so well defined don't know, Steve if you want to add anything to that.

We get we get approached by integrated delivery network Hospital systems are quite regularly.

They see an opportunity to shorten the length of stay in some cases by having the product available right there on campus.

As well as.

Preventing.

Unnecessary readmissions, which they pay penalties for so they'd like to be involved in this the risk distribution directly.

Steve Parsons: So they'd like to be involved in the distribution directly and have their doctors order it right through their EMR systems in the hospital. So there'll be more and more of that happening. That's helpful. Thanks.

Have their doctors order it right through their EMR systems in the hospital, so there'll be more and more of that happening this year.

That's helpful. Thanks, and second one from US on your C. T D. Our label expansion efforts, so thinking of the potential launch there if it's approved and the Nephrologists you may call on what learnings from your current for six launch would you apply there and anything you would do differently.

John H. Tucker: And a second one from us on your CKD label expansion effort. So thinking of the potential launch there, if it's approved, and the nephrologist you may call on, what learnings from your current Fero6 launch would you apply there? And anything you would do differently, specifically for that patient population and prescriber base? So when we look at nephrologists, you know, they actually prescribe, they're more productive in a way than the cardiologists around how many loop diuretics they use. So I think, again, one learning we've had early on, and I think this will apply to nephrologists as well, is really that treating that patient as soon as that patient starts showing a reduced response to the oral diuretic is critical. Critical to get that patient feeling better, critical to keep that patient from being totally fluid-overloaded.

Specifically for that patient population and prescriber base.

Okay.

So so.

So when we look at Nephrologist.

They actually prescribed.

There are no more productive in a way then the cardiologist around how much how many loop diuretic.

So I think again, one learning we've had early on and I think this will apply to nephrologists as well is really the treating that patient as soon as that patient starts showing a reduced response to the oral diuretic is critical.

Critical to get that patient feeling better critical to keep that patient from from being totally fluid overloaded. So that that message in our market research really plays well to the nephrologists.

John H. Tucker: So that message in our market research really plays well with the nephrologists. In fact, when we look at any of the market research with nephrologists, I think they understand the value proposition, and I think they're going to embrace it, perhaps even earlier than cardiologists. I mean, Steve, I don't know.

In fact, when we look at any.

Any of the market research with Nephrologists.

I think they understand the value prop I think they're going to embrace it we would think perhaps even earlier than cardiologists I mean, Steve I don't know.

John Mohr: We've been calling on a small number of nephrologists already due to them having heart failure patients that are experiencing fluid overload. Some of them are seeing cardiology patients that have been referred to them to deal with the fluid overload, so we're calling them already, and they're very anxious to have a broader indication to include CKD. Yeah, we've been very enthused, and I'm not sure, John Moore, if you want to add anything. He's done most of the work on kidney, but we've been incredibly enthused with the response of the nephrologists to the product profile, the value, and there are fewer of them, so we can cover more of them with our sales force, so we're anticipating a really quicker uptake in nephrology than we've even seen in cardiology.

We've been calling on a small number of nephrologists already due to them, having heart failure patients with fluid overload. Some of them are seeing cardiology patients had been before.

Referred to them to deal with the fluid overload.

I'll call on them already and they're very anxious to have the broader indication to include T. J D.

Yeah, we've been very enthused and I'm not sure John more if you want to add anything he's done most of the work on kidney, but we've been incredibly enthused with the response to the nephrologists to the product profile the value prop and there's less of them. So we can cover more of them with our sales force so weird.

Anticipating a really a quicker uptake in nephrology and we've even seen in cardiology I'm not sure. John do you have anything you'd like to add to that since you've done.

John Mohr: I'm not sure, John, if you have anything you'd like to add to that since you've done most of the work. Yeah, I'll just add that when doing research and talking with nephrologists, and you hear the story, and you hear the description of the problem that they're describing in their patients with chronic kidney disease, if you didn't know that they were nephrologists, you'd think that they were cardiologists; they're describing the exact same problem. And so when a patient reaches out to their nephrologist for worsening signs and symptoms of fluid overload, the nephrologist is inclined to treat them; they don't say we'll go to your cardiologist; electric cardiologists do it, and vice versa.

Yes, I'll just I'll, just add that when doing research and talking with Nephrologists and you hear the story you hear the description of the problem that they're describing and their patients with chronic kidney disease. If you didn't know that they were nephrologist you think that they were cardiologists there describing the exact same problem and so when a patient reaches out to their nephrologist for.

We're seeing signs and symptoms of fluid overload. The nephrologists are inclined to treat them. They don't say, we will go to your go to your cardiologists electro cardiologists to it and vice versa. So it's the exact same problem just different individual being being presented and now the nephrologist will have that will have the opportunity that you don't use it just like the carty.

John H. Tucker: So it's the exact same problem, just different individuals being presented. And now that nephrologists will have that opportunity, they'll use it just like the cardiologist to address additional touch points. Great. I really appreciate the perspective. So last one, I'm going to squeeze one in. Can you just share the range of doses that you're seeing right now for ferrosic? You mentioned the 5.5 average.

I will just do just additional additional touch points.

Great. Thank you really appreciate the perspective on the last one I'm going to squeeze one in on can you just share the ranging in doses that you're seeing right now and for US. It you mentioned the five five.

What's the range.

John H. Tucker: What's the rate? So the range, you know, you'll see, you know, every once in a while a script for one unit. I think usually that's something weird going on, but typically, it's two or three. I think the maximum you'll see is eight, and that's for a patient who's fairly volume overloaded who's in pre-admission, but I think you're looking at two to eight is the range. Great. Thanks so much, guys.

So the range you know.

Youll seen.

Every once in a while at scrip for one unit I think usually that's something weird going on but but typically it's it's it's two or three I think the maximum you'll see it's eight and that's four at Ah patients fairly volume volume overloaded, who is in a pretty admission, but but I think youre looking at two to eight is the range.

Great. Thanks, so much guys.

Thank you Ross.

Our next question comes from the line of Stacy crew with TD Cowen. Please proceed with your question.

John H. Tucker: Thank you. Our next question comes from the line of Stacy Ku with TD Calendar, with your questions. Hi, thanks so much for taking our questions. We had a few.

Hi, Thanks, so much for taking our questions. We had a few so first Steve I understand you're kind of focused on establishing the infrastructure and driving uptake for prescribers, but just curious your views on expanding patient populations.

John H. Tucker: So first, Steve, I understand you're currently focused on establishing the infrastructure and driving uptake for prescribers, but just curious your views on expanding patient activation for, Unknown Attendee, Stacy Ku, Nazibur Rahman, Peter Kelleher, John Tucker, Rachael Nokes, Steven Parsons, Nik Gasic, Peter Kelleher, John Tucker, Rachael Nokes, Steven Parsons, Unknown Attendee, Stacy Ku, Nazibur Rahman, Peter Kelleher, John Tucker, Rachael Nokes, Unknown Attendee, Stacy Ku, Nazibur Rahman, Peter Kelleher, John Tucker, Richard Einstein, Unknown Attendee, Stacy Ku, Nazibur Rahman, Peter Kelleher, John Tucker, Unknown Attendee, Nancy Faust, Unknown Attendee, Kristin Auer, cznientest Act Pwaip, I can repeat the questions if needed. Okay, we're probably going to end, I wasn't writing fast enough, Stacy. Let me do the first one again.

Especially as reimbursement continues to progress.

We have a few more questions. So let's kind of leave them out first.

And as you also broaden out the prescriber base are you, helping these clinicians get a good sense of which patients will have been small copay is just to help him kind of ease of prescribing for the clinicians as they think about appropriate patients and as we think about long term improvements or settlement.

Then just a follow up on your comments around the change healthcare.

Cyber attack is pretty well understood issue at this point, but curious if you could provide any other additional details is this just a delay.

Hey, good occasion for co pays from Q1 Q2 as you permit at the temporary workarounds do you anticipate any prescriptions will be lost.

And then last question. If we May when do you think you would might break out that IBM contribution and what are your thoughts about what takes that Scott disclosure. Thanks. So much I can I can repeat the question just needed.

Okay, we probably got anything that wasn't writing fast enough and let me do the personal lines.

John H. Tucker: I think I'll take them from the end. I'll talk about change first. You know, as I said, what's happened since February 21st, when the system went down, is really the prescriptions coming in, being able to adjudicate them, co-pays, and ship them. So we have, I think I said it in my prepared remarks, our demand, the number of prescriptions and units being written is, is, is, Way higher than at this time, quarter to date, last quarter, dramatically different. Obviously, our units filled are higher, but it's lagging behind the prescriptions because of the delays we're seeing. So your question is, is it just the delay? Do you lose some of them?

So again, I think I'll take them from.

And I'll talk about change.

Change first.

No as I said, what what's happened since February 21st ads.

When that when the system went down.

Is.

It's really the prescriptions coming in being able to adjudicate them co pays and ship them. So we have I think I said it in my prepared remarks.

R.

Our demand.

<unk>.

<unk> prescriptions in units being written.

Is is as well.

[noise] way higher than at this time quarter to date last last quarter dramatically different.

Obviously, our units filled is higher but it's lagging the prescriptions because of the delays. We're seeing so your question is is it just the delay.

Do you lose some of them I think that's that's that's the big question is yes. They are delayed but do you do you get them back we have a work around with our specialty pharmacy partners. We're hoping change comes back up fully online here they've said next week.

John H. Tucker: You know, I think that's the big question is, yes, they're delayed, but do you get them back? We're going to work it out with our specialty pharmacy partners. We're hoping change comes back fully online here, they've said, next week. And the question is, you know, can we ship everything that we should have shipped? And we just can't.

And the question is can we can we ship everything that we should have shipped and we're just not sure of that of that right. Now. We don't think you know unless something weird happens. It's a long term, it's a long term issue and we remain optimistic about about making.

John H. Tucker: Unknown Speaker 0-4.0.0.0, We talk a little bit, so that's the first question, we talk a little bit about the reporting of the IDN. It will depend on the IDN and in our contract with them of what metrics we can report. You know, we could break the sales out. I think we've said that, you know, for Q4, you know, we think it, you know, it was in the 10 to 15% range for the IDN purchases. That'll vary.

Consensus for the year, but as you know this is a disruption for us.

Right now.

Again it started February 21st its ongoing now we have a work around.

<unk> been shipping units just not as many as we should be because because of the slowness of the system.

A little bit. So that's the first question to talk a little bit about the reporting of the idea and it will depend on the IDM.

And in our contract with them on what metrics, we can report.

We could we could break the the sales I think we we've said that you know for Q4, we think it.

It was in the 10% to 15% range for the IBM purchases that'll vary again, we get a large purchase at the very end of the year.

John H. Tucker: Again, we had a large purchase at the very end of the year from Kaiser. We don't have visibility into what, Kaiser doesn't let you see what doctors wrote. They don't want you detail the doctors, which is crazy.

Pfizer.

We don't have visibility into what Kaiser doesn't let us see what Doctor wrote they don't want you detail on the doctors, which is crazy but.

John H. Tucker: Some of the IDNs that Steve mentioned, the hospital-based ones, will have more metrics to be able to share. But unfortunately, with Kaiser, I think the metrics are gonna be somewhat scarce. And then, Steve, do you have any other questions?

Some of the IV and let Steve mentioned the hospital based ones, we will have more more metrics to be able to share, but unfortunately with Kaiser I think the metrics are going to be are going to be somewhat scarce and then Steve do you want to do you have any other questions.

Steve Parsons: Yes, about helping doctors identify patients who are gonna have, what the co-pay is gonna be for those patients so they can have success. And yeah, we can do that pretty confidently. 70% of our patients are able to access neurosusceptive therapy with a co-pay of $100 or less, some of them much less. Like the average co-pay for the patients with a $100 less is in the $20 range.

You asked about helping doctors identify patients who are going to have with the co pay is going to be for those patients. So they can have success.

Yeah, we can do that.

Yeah.

We're pretty confident like 70% of our patients.

Or are able to access your house Senate co pay of $100 or less some of them much less like the average co pay for the patients with a with a with $100 left this is the $20 range, though.

Steve Parsons: So you can imagine anything from $0 co-pay, $10, $50. A lot of the doctors are now, they're submitting prescriptions in advance of needing the product, anticipating that they're going to need furosics for a specific patient who's going to worse, and it's just a matter of time. And they get a cost and coverage feedback. They get an answer, and they get an approval on the product. They know the company is good.

Any big zero dollar co pay $10.

<unk>.

A lot of doctors are now.

They're submitting prescriptions in advance.

Needing the product.

Anticipating that they're going to need Jurassic first specific patient who's going to worse and it's just a matter of time and they get a cost and coverage.

They get an answer and they get an approval on the product. They know the company is good.

Steve Parsons: And then when the patient does get sick and does need it, that's when they call it down, and it's ready to go very, very quickly. So they'll tell the patients who have the really good copays, no hesitation at all. And some people who have a higher copay may not talk about the product to them until there's, you know, foundational charitable funding support for those. So I don't know if that answers the question, but they are able to get clearance on a lot of these patients and know who has the really good COVID. That's really helpful.

And then when when the patient does get sick and does need it that's when they call it down and it's ready to go very very quickly. So they'll tell the patients who have really good co pays no hesitation at all in some people who have a higher co pay it may not talk about about the product to them.

Until the until this foundational charitable funding support for those so I don't know if that answers the question, but they are able to.

Yep Creek clearance on the August a lot of these patients.

And I know who has been really good copays.

That's really helpful. And then the first question. We asked this I was really.

Steve Parsons: And then the first question we asked was really around activating patients by DTC. Now you're focused on prescribers right now, but as you progress with your reimbursement as you get the auto injector, what are your thoughts there? Yeah, we have a plan. We have a strategy to reach directly out to patients and their caregivers. We did an awful lot of market research to be ready so that we know what, how they like to be communicated to, what, you know, what, what, what, how to reach them, where to reach them. We've begun in the office, direct to patient with brochures and the doctors giving them out things, and we're building a website just for patients.

Curious your thoughts around activating patients, but you can see that you're focused on on the prescribers right now, but as you progress your reimbursement as you got the auto injector what are your thoughts there long term.

Yeah, we have a plan we have a strategy to reach directly out to patients and their caregivers.

We get an awful lot of market research to be ready so that we know what how.

They like to be communicated to.

What are how to reach them where to reach them.

We've begun in the office direct to patient patient with brochures and the doctors getting them out of things and we're building a website just for patients.

We have.

Steve Parsons: We have advocacy groups, Mended Hearts and Heart Brothers, that are connecting us with patients through their networks of people who have opted in and signed up. So the patient is a big focus for us this year, more so than it was in year one. We spent the first 12 months as our plan was educating cardiologists before we educated patients. So this year, there'll be a lot more targeted outreach to patients and to caregivers. You know, we're going to be doing a giant DCC campaign, you know, on survivor or something, probably, probably not. You won't see that, but I think you'll see some targeted things for patients, including potentially the media as well. Wonderful! That's really helpful. Thank you for all the details. Thanks, please.

Advocacy groups Mended Hearts and heart brothers that are <unk>.

Next thing us with patients through their networks of people who've opted in signing up so.

The patient is a big focus for us this year more than it was in year. One we spent the first 12 months as our plan was educating cardiologists before we educated patient. So this year there'll be a lot more targeted outreach to patients and caregivers, we're going to be doing a giant DTC campaign launch.

Survivor, or something probably probably not you won't see that but I think youll see some targeted things to patients, including potentially media as well.

Okay wonderful that's really helpful. Thank you for all the details.

Thanks Steven.

Our next question comes from the line of Douglas Tsao with H C. Wainwright. Please proceed with your question.

Steve Parsons: Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Please proceed with your question. Hi, good afternoon.

Hi, good afternoon, thanks for taking the questions and congrats on the progress so John I'm just curious.

Douglas Dylan Tsao: Thanks for taking the questions and congrats on the progress. So, John, I'm just curious in terms of the change health. I mean, what percent of your business has been affected by this? Because really, you know, was it really just both united in that one pair?

So the change health I mean what percent of.

Your business has been affected by this because it really is.

Yeah. It was it was it really just a united in that one payer.

No. It's it's Doug it's really.

John H. Tucker: No, it's it, Doug, it's really, So you think of United, United owns or often owns change, but our specialty, most of all of the specialty pharmacies and of the payers use change healthcare. So the adjudication of the scripts goes through change. So you could say all of our scripts for that period of time and ongoing are impacted now. That said, it was really slow for a couple of days because what happened was everything had to be called in manually, and everyone was doing the same thing. So it was incredibly slow.

So you think of United United owns are awesome, and United on bonds change, but.

You know our specialty you know most of all of the specialty pharmacies and of the Payors used us change healthcare. So the adjudication of the scripts go through go through change. So so you could say all of our scripts for that period of time and ongoing are impacted now.

Now that said it was really slow for a couple of days because what happened was everything had to be called in manually and everyone was doing the same thing. So it was incredibly slow we have managed workarounds theres another system in place called relay that one of our other specialty pharmacies.

John H. Tucker: We have managed workarounds. There's another system in place called Relay that one of our other specialty pharmacies utilizes, so we were able to move business there. But that's slow as well.

<unk>, So we were able to move business there.

That slow as well, but I think the work around has started to work and really what we need to do and what we're focused on is making sure. We ship all of those all of those scripts that were caught up.

John H. Tucker: But I think the workaround has started to work, and really, what we need to do and what we're focused on is making sure we ship all of those scripts that were caught up when it was totally down and we didn't have a workaround. It's not, I'm not saying you're saying it's working smoothly now. It's obviously with the workaround working better, and I think especially pharmacies are getting better at working through the limitations in the system. We've heard that it'll be coming back online soon.

When it was totally down and we didn't have a work around its not I'm not sitting here, saying, it's working smoothly now it's obviously with the work around working better and I think the specialty pharmacies are getting better at working through the limitations in the system, we've heard that it'll be coming back online.

Here next week.

John H. Tucker: Here next week. So we're gonna continue the work. We asked the specialty pharmacies to put more people on to man the phones and ship the drugs. So if you ask what percentage of our business got, the question would be, what percentage of the business, what percentage of units prescribed aren't going to ship that should have shipped? That's the question. That is relevant.

So where we're going to continue.

You know work, we've asked the specialty pharmacies to put more people on to man the phones to ship. The drug. So did you ask what percentage of our business got impacted.

The question would be what percentage of the business what percentage of units prescribed arent finished ship that should a ship. That's that's the question.

Yes, it is relevant.

John H. Tucker: It's impossible for us to give you that final answer right now. We have recovered, you know, a good portion of it. But have we recovered all of it so far? No.

It's impossible for us to give you the final answer right now we have recovered.

A good portion of it have we recovered all of it so far no.

John H. Tucker: The good thing is we're still seeing demand come in very robustly. The doctors are still writing, and they're writing, you know, kind of more than they've ever written. We just need to be able to keep up, ship what's coming in now, and then deal with those that are still sitting in the system. Okay, that's helpful. And then also, just where are you from in terms of nephrology? Are you starting to see any off-label scripts being written? I mean, I know it's challenging in terms of getting paid for it, but I'm just curious; some plans are somewhat liberal.

The good thing is we're still seeing the demand come in very robustly. The docs are still writing underwriting kind of more than they've ever written.

Need to be able to keep up.

Ship whats coming in now and then and then deal with that that deal with those that are still sitting in the system.

Okay. That's helpful. And then also just are you in terms of nephrology are you starting to see any off label scripts being written.

I know, it's challenging in terms of getting getting paid for but I am just curious some plants are somewhat level.

We have it.

John H. Tucker: We have it, you know, when we mentioned that we go to some nephrologists, so you'll see a lot of times, even the cardiologists will say, boy, they have heart failure and CKD. I just let the nephrologist take care of it. So that's on the label for us. That's part of our heart failure.

We mentioned that we would go to some nephrologist. So you'll see a lot of times, even the cardiologists will say boy they have heart failure N C. J D. I just let the Nephrologist take take care of it. So that's on label for US that's part of our heart failure Tam is as those patients even if they're even.

John H. Tucker: Cam is for those patients, even if they're even if they're cared for by a nephrologist. So that would be on the label. Now, if it's class four, it wouldn't be.

If they are cared for by a by a nephrologist so that would be on label now if its class four it wouldn't be but if it's two and three and it's it's a nephrologist and they have heart failure and that's all label and will get filled if they wrote it and it was C. J D. First off we wouldn't be promoting that at all.

John H. Tucker: But if it's two and three, and it's in a nephrologist, and they have heart failure, then that's all label, and we'll get filled if they write it and it was CKD. First off, we wouldn't be promoting that at all. Second off, it probably will not be. Okay, great. Thank you. Thanks, Doug.

Second off it probably will not be filled.

Okay, great. Thank you.

Thanks, Doug.

Our next question comes from the line of Chase Knickerbocker with Craig Hallum. Please proceed with your question.

Chase Richard Knickerbocker: Our next question comes from the line of Chase Knickerbocker with Craig Hallam. Please proceed with your question. Good afternoon, guys.

Good afternoon guys.

Chase Richard Knickerbocker: I'll share my congratulations on the progress as well. Maybe, To start, where are we at from an average time for adjudication from the PA's perspective? And give me, you know, the average time, I guess, before the healthcare disruption. And then since then, should we just think of it as, you know, those, a lot of those adjudications have just been, you know, almost completely paused. And that's what's causing this underlying disruption that you're talking about that, again, everybody's experiencing.

Sure My congrats on the progress as well.

B.

To start where are we at from an average time for adjudication of the ph perspective, and give me. The average time I guess before the change healthcare disruption and then since then should we just think of it as you know those a lot of those communications have just been almost completely paused and thats whats, causing this underlying disruption that you are talking about that again everybody is experiencing.

Yes.

Steve Parsons: Yeah, we couldn't tell you what the average time is since change went down. I mean, it's variable, you know, and we've got workarounds now, you know; we still have our primary. Specialty Pharmacy that goes through change, that is adjudicating claims for change, and then they get triaged to relay if there's an issue. So that is an impossible question for us to answer due to, now again, the thing here Chase is the data itself, very hard to even get your hands on.

We Couldnt tell you what the average time is since since change went down I mean, it's variable.

And we've got workarounds now we still have our primary.

Specialty pharmacy that goes through change that is adjudicating claims for change and then they get triage.

Yes to relay if there's an issue. So that is an impossible question for us to answer do that again.

The thing here is the data itself is very hard.

So you can get your hands on them, we know the scripts coming in that we can see clearly.

Steve Parsons: We know the scripts coming in, that we can see clearly. It's what's going out, when they go out, and again, we've got a workaround that involves a couple other specialty pharmacies, and so the data is kind of, some report it differently. So prior, you know, after the change, there's just no way this soon we can tell what that is. I don't know, Steve, if you want to talk about that before the change. Yeah, not trying to be evasive, but it's a really multi-factor question on how fast prescriptions get filled. It depends on what the doctor wants.

Whats going out when they went out and and again, we've got to work around that involves a couple of other specialty pharmacies and.

So the data is kind of some report.

It differently. So prior you know after change there's just no way that assume we can we can tell what that is.

Steve do you want to talk about that before the change.

Yeah.

Not ever trying to be evasive, but it's really multi factor question on how fast prescriptions getting filled.

It depends on what the Doctor once we have two ways for the Doctor to order the product. They can check expedite in 24 hour review, meaning they wanted as quickly as possible or they can check.

Steve Parsons: We have two ways for the doctor to order the product; they can check expedited 24 hour review, meaning they want it as quickly as possible. Or they can check coverage, and cost determination. And that's more of the layaway, and that could sit there after it's approved very, very quickly with a known copay, that could sit there for weeks until the doctor wants to call it off. Now, let's just focus on the ones where they say, "I want it as fast as possible."

Coverage and cost determination and not one that's more of the layaway.

And that could sit there after it's approved very very quickly without knowing.

Second sit there for weeks until the Doctor wants to call. It down now, let's just focus on the ones, where they say I wanted to as fast as possible.

Steve Parsons: Our brand promise is we'll get them something the very next day. When we get a quick answer from the payer and we reach the patient, we are able to able to ship it for a next day delivery. If we don't get a quick answer from the payer, we'll still ship them one dose overnight for free so that they have something the very next day. And then it buys us another 24 hours to get through to the payer, get the answers and then and then ship it out for the following day. So that's been working, very well to the satisfaction of our of our prescribers. But to do an average.

Brand promises, we will get them something the very next day.

We get a quick answer from the payer and we reach the patient we are.

Are you able to ship it for next day delivery, if we don't get a quick answer from the payer will still ship them one dose overnight for free so that they have something the very next day, and then buys us another 24 hours to get through to the payer get the answers.

And then and then ship it out for the phones and so that's been working.

Very well to the satisfaction of our of our prescribers.

But to do an average when you add in all of these ones that purposely can be there for four weeks or even buds were filling prescriptions.

Steve Parsons: When you add in all these ones that purposely can be there for weeks or even buds, we're filling prescriptions this quarter where people wrote them in October or November, and they're finally calling them down. We're very happy to have them. We do not discourage doctors from ordering in advance and getting it pre-approved. They like to do that. We like to see them do that.

This quarter, where people wrote them in October or November and Theyre. Finally, calling them now were very happy to have them, we do not discouraged the doctors from ordering in advance and getting a preapproved.

They like to do that we like to see them doing that but it does impact our both our fill rate as well as our <unk>.

Steve Parsons: But it does impact both our fill rate as well as our speed to dispense. Yeah, it makes sense. Certainly appreciate the complexities there with that answer. Maybe some color, you know, just based on some of the color you've given around gross to net and where you expect it to end the year, you know, that indicates that you expect a contract with some of these large Medicare Advantage payers at some point, you know, call it earlier in the year, this year in 2024, just kind of speak to some of that activity and the conversations that are happening in Yeah, so we've had ongoing negotiations with, you know, there are four big, big, big payers here in Medicare. And, you know, we've talked about it that, you know, when we first went out, they didn't agree with what we offered them, and we didn't agree with what they offered us.

Speed.

Fencing.

Yes, it makes sense certainly I appreciate the complexities there with that answer.

Maybe some color.

Just based on some of the color you've given around gross to net and where you expect it to end the year that indicates that you expect to contract with some of these large Medicare advantage payers at some point.

All it earlier mid year. This year in 2024, just kind of speak to some of that activity and the conversations that are happening in the background that kind of gives you the confidence to.

To kind of assume that those contracts are going to get done.

Yeah. So we've had ongoing negotiations.

Negotiations with theirs.

There's four big Big Big payers here in Medicare.

And we've talked about at that.

When we first went out they didn't agree with what we offered them, we didnt agree with what they offered us.

John H. Tucker: We've had a couple of iterations of that, but these aren't quick iterations. You don't pick up the phone call; pick up the phone and call on Tuesday, and they give you an answer on Wednesday. So it takes some time, but we're making progress. You know, we think it's key if you look at, especially next year, that we're on formulary here because of how Part D is going to reset, but we have to, we have to get these done for this year too. So, you know, we're pretty confident that it's going to happen this year.

We've done a couple of iterations of that these arent quite generations, you don't pick up the phone call pick up the phone and call on Tuesday, and they gave you an answer on Wednesday.

Take some time, but.

We're making progress.

We think it's key and if you look at net especially next year that we're on formulary here because of the holiday.

The part D is going to reset, but we have that we have to get these done for this year too. So you know, we're we're pretty confident.

And it's going to happen.

This year and that that's why we keep messaging that the G. P. N is going to go the discount is going to go up because we're gonna be paying these rebates and again, we're not paying them unless we think it makes sense for the brand, but we do think being able to some lower co pays for that 30% of the patients to get them to a.

John H. Tucker: And that's why we keep messaging that the GTN is going to go, the discount is going to go up because we're going to be paying these rebates. And again, we're not paying them unless we think it makes sense for the brand, but we do think being able to lower co-pays for that 30% of the patients to get them to $100 or less is going to be a big deal. And also, speeding up adjudication time is important for the brand to go where it's going.

$100 or less and also to speed adjudication time.

It is important to the brand and go where it's going so they're progressing.

John H. Tucker: So they're progressing. You know, we said once we signed them, we'd announce them, and we still plan on doing that. And yeah, that's the plan.

You know we've said it once we sign them, we'll announce them when we can still plan on doing that.

And Yep, that's that's the plan.

Chase Richard Knickerbocker: Great. Thanks for the call, guys. I'll hop back in queue.

Great. Thanks for the color guys I'll hop back in queue.

Nazibur Rahman: Thanks. Thanks, Chip. Our next question comes from the line of Nev Rahman with Max. Thank you. Hi, everyone.

Yes.

Thanks, Thanks chip.

Our next question comes from the line of Robyn <unk> with Maxim Group. Please proceed with your question.

Hi, everyone. Congrats on the progress so just a couple of questions for me on your C. T D.

Nazibur Rahman: Congratulations on the progress. So just a couple of questions for me on your CKD indication. So the first one is, what kind of review cycle do you expect? Do you expect a six-month review or one-year review for the product or for the indication label? And two, how do you think the reimbursement conversation and the reimbursement paradigm have sort of evolved for this indication?

Indications so the first one is.

What kind of review cycle. Despite do you expect a six month review of one your view for the product.

The indication label and too.

How do you think the reimbursement conversations and reimbursement paradigm, sorry evolve for this indication.

Nazibur Rahman: Like, are you already having discussions with payers regarding this potential label expansion? So you might see that benefit upon approval, or do you have to kind of go back and have additional discussions? And we might see the benefit of those.

Are you already having discussions with payers regarding this potential label expansion. So you might see that benefit upon approval or do you have to kind of go back and have additional discussions.

And we might see the benefit of those.

John H. Tucker: Discussions and reimbursement sometime later in 25. Like, how do you think that'll progress? Yeah, I'll take the first one.

Discussions on reimbursement sometime later in 'twenty five like how do you think that for us.

Yeah I'll take the first one Steve you picked that up as we.

John H. Tucker: As we anticipate a 10-month review, it's not a new molecular entity, which would be a 12-month review, but we anticipate, and again, we've said we're filing next month, and we will file in April, we'll receive our PDUFA date, but we anticipate that would be 10 months. Is there a chance it could be six months? There's always a chance, but I think to be conservative, we'd say 10 months, but there wouldn't be any way that it could be 12 months.

Anticipate a 10 month review, it's not a new molecular entity, which would be a 12 month.

But we anticipate and again, we're five we've said we're filing next month.

And we will file and in April we will receive our Paducah date, but we anticipate that would be 10 months is there a chance it could be six months.

There's always a chance, but but I think to be conservative, we'd say 10 months, but there wouldn't be a way that it could be 12 months, it's not really a path that way, we expect a pretty straightforward review you know the IV has <unk> in their label or match in the label.

Steve Parsons: There's not really a path that way. We expect a pretty straightforward review. You know, the IV has CKD in its label. We're matching the label of the IV. We did a PK study that matched the PK of the IV, so we think it's a pretty straightforward review, and as I said before, we're excited. Steve, do you want to talk about it?

I V. We did a PK study at <unk>.

That's the label of the eye on them.

Match, the PK of the IV. So so we think it's a it's a pretty straightforward review and as I said before.

We're excited Steve do you want to talk about yes, yes, well, we're not negotiating for CK. It hit this at this stage payers don't really want to do that.

Steve Parsons: Yes, well, we're not negotiating for CKD at this stage. Payers don't really want to do that, but we do know with pretty good certainty that ferrosis will be covered the same way it is for heart failure with CKD. It'll be a simple prior authorization to label, and that prior auth means they have to be trying generic oral diuretics, and that's just not working before Ferrosix would be approved for, you know, an acute intervention.

But we do know.

You know with pretty good assurance that.

Sure houses will be covered in the same way it is for heart failure with Ckc it'll be.

A simple prior authorization to label and that prior off means they have to be trying generic oral diabetics in that just not working before with euro six would be.

Sure.

And acute intervention so it'll be essentially the same P. A to label our label will have seen J D.

Steve Parsons: So it'll be essentially the same, PA to label, our label will have CKD, and it won't be any more complicated than that. Yeah, you know, there are exceptions where the plans will start a review prior to approval. It's pretty rare, though, that they spend the time to really, you know, start reviewing a product or an indication prior to approval. Again, they do it with, you know...

And it won't be any more complicated than that.

There's there's exceptions, where the plans will we will start our review prior to approval, it's pretty rare, it's pretty it's pretty rare, though that they spend their time.

To really start reviewing.

Our products are indication prior to approval again, they do it with you know so when things are under review at the FDA. They are more likely to the final fair, yes exactly.

John H. Tucker: When things are under review at the FDA, they're more likely to; we have to file first. Yeah, exactly. Thanks, that was helpful. And just one last question. So I think in your prime remarks, you said you planned on expanding the commercial force for ferrocytes. Could you comment on what the magnitude of that expansion would be? And does the impact of change impact your timing division making there? There'd be no impact unless change went on for months here, which we don't anticipate.

Okay.

Thanks that was helpful. And then just one last question. So I. Thank you.

Mark You said you plan on expanding the commercial force.

For <unk> could.

Could you comment on what the magnitude of that expansion would be and does what the impact of change impact your timing decision, making there.

There'll be no impact unless change went for months here right, which we don't anticipate I think anyone anticipates that.

John H. Tucker: I think anyone anticipates that, you know, there's no impact on how we're looking at expanding the sales force at all. So, I think what our thinking has been is that to expand it to 90 here by mid-year in front of class 4 approval, and then to 125 very early next year. In front of the CKD, in front of the CKD expansion. That's the thinking right now, but there'll be no impact from change on health care.

There is no impact on how we're looking at expanding the sales force at all so I think what what our thinking has been is that.

To expand it to 90 here mid year in front of the class for approval and then to $1 25, very early next year in front of the C. J D.

C. J D expansion, that's that's the thinking right now, but there'll be no impact from change on change healthcare all of that.

John H. Tucker: Thanks a lot. Thanks for taking my questions. And once again, congratulations on the progress. Thanks, I appreciate it. Okay, no further questions in the queue. I'd like to hand it back to management for closing remarks. Great. Thank you very much.

Thanks, a lot thanks for taking my questions and once again congrats on the progress.

Thanks I appreciate it.

Okay. There are no further questions in the queue I'd like to hand, it back to management for closing remarks.

Great. Thank you very much and that concludes our call. This afternoon. We remains remain pleased with the trajectory of our Prosigna launch, we expect that the meaningful progress that we're making with payers will add to our momentum is heart failure patients gain affordable access to <unk>. We are excited about our lifecycle initiatives have you are having.

John H. Tucker: That concludes our call this afternoon. We remain pleased with the trajectory of our Ferocix launch. We expect that the meaningful progress that we're making with payers will add to our momentum as heart failure patients gain affordable access to Ferocix. We're excited about our lifecycle initiatives. We're having productive discussions with the FDA and look forward to providing some updates as we progress through 2024. Overall, I'm pleased with our progress and believe that we can build on our current momentum and look forward to a successful year.

Productive discussions with the FDA and look forward to providing some updates as we progress.

Through 2024 overall I am pleased with our progress and believe that we can build on our current momentum and look forward towards a successful year.

Operator: Thank you again, and have a great evening. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.

Thank you again and have a great evening.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.