Q1 2025 scPharmaceuticals Inc Earnings Call
Okay.
Speaker Change: Good afternoon, and welcome to Etsy Pharmaceuticals, first quarter 2025 earnings conference call.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: Following managements prepared remarks, we will hold a question and answer session.
To ask a question at that time.
Speaker Change: Please press star followed by one one on your Touchtone phone.
Speaker Change: As a reminder, today's conference call is being recorded.
Speaker Change: I would now like to turn the conference over to Wendy thought Investor Relations. So a couple of forward looking statements well. Please go ahead.
Wendy: Thank you operator.
Wendy: Before beginning this afternoon's, earning call.
Wendy: I'd like to highlight the following forward looking statements.
Wendy: All statements on this conference call other than historical facts.
Wendy: We're looking statements within the meaning of the federal Securities laws.
Wendy: Including but not limited to.
Wendy: Statements regarding SC pharmaceuticals expected future financial results management's expectations and plans for the business.
Wendy: The ongoing commercialization and marketing of Euro six.
Wendy: Potential label expansion and other regulatory approvals of Euro six decrease of quarterly net cash outflows for the balance of 'twenty 'twenty five the rise of heuristics dispensers as out of pocket expenses decreased an estimated reduction in Cogs.
Wendy: The words anticipate believe estimate expect intend guidance confidence target.
Wendy: Project and other similar expressions are typically used to identify such forward looking statements.
Wendy: These forward looking statements are not guarantees of future performance.
Wendy: They involve and are subject to certain risks and uncertainties and other important factors that may affect the pharmaceuticals business.
Wendy: Natural condition and other operating results.
Wendy: Include but are not limited to the risk factors and other qualifications contained in the S. C Pharmaceuticals annual report on Form 10-K.
Wendy: 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.
Wendy: Any forward looking statements made in this conference call, including responses to your questions are based on current expectations as of today and Etsy Pharmaceuticals, expressively disclaim any intent or obligation to update these forward looking statements except as required by law.
Speaker Change: With that I will now turn the call over to John Faucher, Chief Executive Officer of <unk> Pharmaceuticals, John. Please go ahead.
Speaker Change: Thank you William and thank you to all for attending this afternoon's conference call. Today, we will provide an overview of FC pharmaceuticals core business and operational highlights for the first quarter of 2025.
Speaker Change: I'll, then hand, the call to Steve Parsons Senior Vice President of commercial for <unk> commercial update our Chief Financial Officer racial marks will then provide a financial update for Q1 before we open the line for questions.
Speaker Change: We truly believe particularly in this environment.
Speaker Change: <unk> pharmaceuticals is better positioned than at any point in our history <unk> has successfully penetrating a market, where we had broad synergies across the health care ecosystem.
Speaker Change: Keeping patients out of the hospital and at home, which is far greater from a quality of life and cost perspective for both the patient and the healthcare system. We are also expanding the market into chronic kidney disease, and making progress on our auto injector, which we think will continue to transform the company improve in <unk>.
Speaker Change: And the patient experience and add materially to our <unk> sales.
Speaker Change: In the first quarter of 2025 FC Pharmaceuticals generated $11 8 million in net revenue and sold approximately 13800 <unk> six doses as we have discussed our net revenue generated in the first quarter is impacted by the typical seasonality factors, including deductible and met.
Speaker Change: Care beneficiaries out of pocket cap resets. Despite these headwinds we did see an increase in doses filled quarter over quarter.
Speaker Change: On our Q4 2024 earnings call two months ago, we highlighted the increasing number of part D beneficiaries, who hit their out of pocket caps or enrolled in Medicare Copay smoothing program.
Speaker Change: Particularly in March of 2025 relative to January and February of 2025, we have seen an acceleration of this trend play out over the course of April and early may as more Medicare patients reach their 2000 dollar cap or enrolled in the copay smoothing program. Historically, we have observed increased prescribing.
Speaker Change: <unk>.
Speaker Change: And an improved fill rates for for Essex when patients have lower out of pocket Copays. This is what we have seen so far in Q2 and see it continuing to accelerate through the balance of the year.
Speaker Change: The gross to net discount for <unk> in the first quarter of 2025 was approximately 23% over.
Speaker Change: Over the balance of 2025, we anticipate a blended G T N of approximately 30%.
Speaker Change: The increase in <unk>, primarily attributable to the implementation of the Medicare part D redesign.
Speaker Change: The mandatory manufacturer rebates under the inflation reduction Act.
We view the Medicare part D. Redesign is a net tailwind in 2025, given the anticipated increase for us ex fill rates and prescribing for part D Enrollees, who art through two catastrophic coverage and have a zero dollar co pay on any part D prescriptions.
Speaker Change: In April 2025, we formally launched euro six in the chronic kidney disease and we're pleased to announce that we began selling nephrology prescriptions in April we believe prescribing by Nephrologists will be a meaningful growth driver for <unk> for a few core reasons.
Speaker Change: One there are an estimated 700000 additional patients that can be prescribed for asics for their fluid management too and the cardio renal space Nephrologists are the primary diabetic managers for patients with <unk> and heart failure, three the concentration of targets and their focus on fluid management.
Lastly, we're able to provide a positive update on the auto injector are additional shelf life testing of the high Silicon syringe is progressing as expected and we are targeting filing the NDA next quarter. We continue to believe that the auto injector will be meaningfully important to the long term for us its growth trajectory.
Speaker Change: With an estimated 70% to 75% reduction in Cogs compared to the current on body into user and an increase in our penetration rates.
Overall, we feel very positive about the long term growth trajectory for <unk> over the course of 2025 between the CK D indication expansion and the favorable co pay paradigm with part D patients progressing into catastrophic coverage. We believe <unk> is well positioned to treat heart failure and kidney disease patients with <unk>.
Speaker Change: <unk> offload.
Steve Parsons: With that I will pass the line of Steve Parsons Etsy Pharmaceuticals, Senior Vice President of commercial Steve.
Speaker Change: Thank you John.
Speaker Change: Since we launched <unk> in early 2023 over 4000 unique cardiologists and Nephrologists have prescribed for Asics to heart failure and now kidney disease patients. We expect the number of unique prescribers to increase steadily as we further penetrate cardiology.
Speaker Change: And expand into the nephrology market.
Speaker Change: With our sales force expansion in the fourth quarter of 2024.
Speaker Change: A larger team and smaller territory size has resulted in greater reach and frequency to target and non target prescribers and has increased demand for <unk>.
Speaker Change: Our improved target coverage capabilities will be especially important as we launch for <unk> in chronic kidney disease in quarter, two and add nephrology targets and continue our penetration further into heart failure.
Speaker Change: As John already mentioned, we are very positive about the balance of 2025.
Speaker Change: Our idea and distribution strategy is paying dividends as we open new accounts every month and see reorders from some of the top systems in the country.
Speaker Change: Targeting <unk> is a great complement to our overall promotional efforts.
Speaker Change: Medicare patient out of pocket costs move to $0 when patients reach the annual maximum threshold of $2000, we see more and more heart failure patients and chronic kidney disease patients who are meeting this thresholds as the year progresses.
Speaker Change: As a result for Essex dispenses will continue to rise as out of pocket expenses decrease.
Speaker Change: I will now hand, the call over to our Chief Financial Officer, Rachel Noakes Rachel.
Rachel Noakes: Thank you Steve.
Rachel Noakes: Product revenues were $11 $8 million for the first quarter of 2025 compared to $6 $1 million for the first quarter of 2024.
Rachel Noakes: Cost of product revenues were $3 $5 million for the first quarter of 2025 compared to $1 $8 million for the first quarter of 2024.
Rachel Noakes: The increase in both product revenues and cost of product revenues for the quarter ended March 31, 2025 was due to an increase in demand for euro six further into the commercial launch and related manufacturing costs.
Rachel Noakes: Etsy Pharmaceuticals ended the first quarter of 2025 with $57 $5 million in cash and cash equivalents compared to $75 $7 million in cash and cash equivalents as of December 31 2024.
Rachel Noakes: Net cash outflows in the first quarter included certain incentive compensation payouts and an increase in accounts receivable from our customers.
Rachel Noakes: We expect quarterly net outflows to decrease for the balance of 2025.
Rachel Noakes: The revenues increase and other cash outflows normalize.
Rachel Noakes: We continue to monitor our exposure to tariffs as the market landscape changes. We currently do not expect a material impact on our supply chain costs and believe that our exposure would be mainly limited to the cost of the drug component of Euro six I.
Rachel Noakes: I will now pass the call back to John for concluding remarks.
Rachel Noakes: In the first quarter of 2025 FC Pharmaceuticals delivered solid progress across our commercial operational and financial fronts and believe we are in the early stages of <unk> growth acceleration, we remain confident in our ability to scale effectively and deliver value for patients and shareholders alike.
Speaker Change: We will now open the call for questions operator.
Rachel Noakes: Thank you.
Speaker Change: Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Roanna Ruiz with Leerink partners. Your line is open.
Roanna Ruiz: Hi afternoon, everyone. A couple for me so I wanted to start with the launch in <unk> as of April what signs of growing physician traction are you seeing in the field, so far and could you talk a bit about the features or characteristics of the newer patients that are getting for Essex.
Roanna Ruiz: Also have <unk>.
John Faucher: Hey, Ron its John.
Roanna Ruiz: Steve to answer the question Steve.
Roanna Ruiz: Yeah, it's been it's been very positive.
Roanna Ruiz: We're getting.
Roanna Ruiz: Every single day peak 80 patients.
Roanna Ruiz: <unk> prescriptions.
Roanna Ruiz: New accounts Nephrologist, but we're also using it in heart failure, so we're seeing that as well.
Roanna Ruiz: It's meeting our early expectations.
Roanna Ruiz: We expect good things from this from this from the specialty and so far they are delivered.
Roanna Ruiz: I think we're on and we're seeing.
Roanna Ruiz: What we see as Nephrologists, we don't see it indicated specifically for <unk> or for heart failure. So.
Roanna Ruiz: We are seeing everyday nephrology scripts and that's accelerating.
Roanna Ruiz: Got it that helps and I wanted to follow up and ask about the increase in sales to idms as well in the quarter.
Roanna Ruiz: Do you think that could continue into subsequent quarters in 2025.
Roanna Ruiz: Any other color you can give on the cadence of orders and things like that.
John Faucher: So this is John and Steve.
Speaker Change: To you in a second yes, so we expect Q2 to be much bigger than Q.
Speaker Change: Q1 in <unk>, it's a key component of our strategy for a number of reasons doctors can order off their EMR.
John Faucher: It goes right through the specialty pharmacy, thats associated with the IV and they can use it to facilitate a discharge so.
John Faucher: We have a big emphasis there.
John Faucher: And we're continuing to see growth there.
John Faucher: Estimates into some of that cannibalize your other business, we're seeing both grow.
John Faucher: So.
John Faucher: In this quarter over over last quarter significant growth the highest we have seen yet.
John Faucher: Over quarter, we're almost halfway through may and it's being driven primarily outside of the <unk>, but also <unk> and growth as well.
John Faucher: Got it sounds good.
John Faucher: Thanks, Sean.
John Faucher: Please standby for our next question.
Speaker Change: Our next question comes from the line of Stacy <unk> with TD Cowen Your line is open.
Stacy: Hey, good afternoon, congrats on the quarter and thanks, so much for taking our questions. So.
Speaker Change: First question is a bit of a follow up so we understand it's still really early days, but maybe can you talk about the CK launch and how it's progressing.
Speaker Change: In comparison, so relative to the early heart failure to launch <unk>. So maybe talk about some initial signals that gives you confidence in the launch just a first question and then the second question is on reimbursement.
Speaker Change: Can you talk about access for both heart failure, and maybe talk about the early experience for <unk> patients what has been the feedback there and then last question a little bit of a kind of detailed question what percent of your Medicare for Essex patients have signed up for the smoothing.
Speaker Change: Are you able to kind of help raise the profile of this option is there high awareness now just help us understand kind of the cadence of sign ups. Thank you so much.
Speaker Change: Sure. Thanks, Thanks, Stacy maybe I'll handle the last one in.
Speaker Change: The <unk> launch and the adoption is.
Speaker Change: Way faster than it was in heart failure.
Speaker Change: It's not even close when we call on people, we're getting prescriptions, but the same data that we call on them.
Speaker Change: So.
Speaker Change: Multiple prescriptions are happening from these offices I feel like there must have been some pent up demand there are ways for us to come to them.
Speaker Change: They give us comments and why didn't you calling us for heart failure too we have heart failure patients. So it's been it's been very good.
Speaker Change: When we get in and talk to them. They are they are responding they can think of patients and so the comparison, it's much faster.
Speaker Change: And then as far as smoothing question Stacy So it's hard for us to look at the data we see.
Speaker Change: No.
Speaker Change: Smoothing.
Speaker Change: One of the four major Pbms, we do see it the other we are blinded to it but we do we are able to look at co pays. So we are seeing especially in April may and even in March at the end of March more patients with zero dollar co pays and Medicare which tells us.
Speaker Change: One of two things, maybe either gone through their $2000 out of pocket they've already hit that.
Speaker Change: Or they are elected for smoothing and that has accelerated our fill rate to give you. An example.
Speaker Change: In Q1 was around 46% in April it was 55% that is due relative either smoothing more patients and smoothing or probably more patients getting through their cap or <unk> patients their heart failure patients.
Speaker Change: I don't think we have enough data on nephrology right now to answer your second question to say, they've smoothed more or smooth last one again, we only see about 25% of the <unk>.
Speaker Change: Plans smoothing.
Speaker Change: But we do see.
Speaker Change: Similar low co pays again in the last two months.
Speaker Change: C J D patients and heart failure patients.
Speaker Change: So our reimbursement reimbursement is the same as it is for heart failure.
Speaker Change: The prescriptions are mostly gone through with a simple prior off.
Speaker Change: We're not noticing any additional rejections or need for apio.
Speaker Change: The co pays are about the same.
Speaker Change: Not noticing anything different about a patient with an.
Speaker Change: Indication of CTV versus versus heart failure, when it comes to reimbursement.
Speaker Change: Helpful. Thank you.
Speaker Change: Thank you.
Speaker Change: Please standby for our next question.
Speaker Change: Our next question comes from the line of Douglas Tsao with H C. Wainwright. Your line is open.
Douglas Tsao: Hi, good afternoon, thanks for taking the questions I'm just curious.
Speaker Change: With the part D redesign, we heard from one company that sort of suggested that they have visibility when patients get used up their out of pocket expense to move into catastrophic.
Speaker Change: The point, where they have full coverage do you have that.
Speaker Change: And so are you able to therefore, then direct patients to go ahead and get script sales.
So so we have it.
Again, we look at we look at the Copays that come in we are hub, we will talk to the patients and we'll be able to alert them what their what their co pay is we also received CMS claims for patients that are in catastrophic because they're listed in catastrophic because again the rebate.
Speaker Change: The rebate is different but real real time method doctor's office unless unless they can get the hub on the phone like immediately and run that benefit verification. We wouldn't we wouldn't know that but again, what we do at the hub is as soon as the patient.
Speaker Change: The patient co pay we'll alert the patient if it's if it's a large copay will automatically offer them smoothing that we can enroll them in smoothing and has to go through the plan, but we're given the given.
Speaker Change: Given the form from the plan given the phone number for the plan. We're also out promoting the smoothing to doctors I think doctors, where as I talked about in March a little confused at the beginning I think they understand it now and they are more active on their patients where they feel they're probably going to have a high co pay and actually encouraging them to enroll.
Speaker Change: We have the forms at the Doctor's office so.
Speaker Change: We're seeing more and more smoothing patients every day again the data we see.
Speaker Change: We see the zero dollars, we have the hub that speaks to the patient and understands if the patient has gotten through their out of pocket.
Speaker Change: Okay. That's helpful. And then just in terms of the.
Speaker Change: C kit launch I'm. Just curious are you largely now seeing patients you sort of have the comorbidity and kidney disease and heart failure or are you seeing evidence.
Speaker Change: Patients who only have.
Speaker Change: J D getting prescriptions for <unk>. Thank you.
Speaker Change: Thanks, Doug.
Speaker Change: Yes, so we do definitely see patients with <unk> only as their indication.
Speaker Change: Clear.
Speaker Change: There is also a lot of cases, we have <unk> and heart failure coming from nephrology.
Speaker Change: That we were getting before because we weren't calling on nephrology. So it's a double bonus for us because now we are calling on them for chronic kidney disease and they have a lot of heart failure patients, but there are there are <unk> only indicated patients that are getting <unk>.
Speaker Change: Okay, Great that's very helpful. Thanks, Doug.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen that star one one to ask the question.
Speaker Change: Standby for our next question.
Our next question comes from the line of Jason Knickerbocker with Craig Hallum. Your line is open.
Jason Knickerbocker: Good afternoon, thanks for taking the questions.
Speaker Change: Just first quick housekeeping can you share the doses per script in Q1.
Jason Knickerbocker: Seven four was the average doses per script. So it was up again from Q4.
Jason Knickerbocker: I look at it monthly I don't see it going much more than that it's kind of stabilized around seven.
Jason Knickerbocker: But that's what it was in Q1 here in Q2, it's not it's not going to eight.
Jason Knickerbocker: Staying right around there so we might have we might have hit.
Jason Knickerbocker: <unk> hit some kind of a.
Jason Knickerbocker: Normal normal dose number now around that around 774.
Jason Knickerbocker: Is it in Q4, Steve and then just any.
Jason Knickerbocker: And Clinton.
Jason Knickerbocker: Yes.
Jason Knickerbocker: $6 eight I think is what it was in Q4.
Jason Knickerbocker: Did you say initially any initial inkling on what we're going to see from <unk> patients as far as doses per script.
Jason Knickerbocker: It's similar.
Jason Knickerbocker: It's been similar so far to us.
Speaker Change: Got it and then just maybe following up on an earlier question I mean, obviously, it's good to see the improvement in fill rate.
Speaker Change: In April can you, maybe just kind of share some more specifics if he can just on.
Speaker Change: Kind of the percentage of patients, where you are seeing either smoothing or already at their out of pocket Maximums in Q4 versus what youre seeing in April and kind of what if thats kind of the.
Speaker Change: A big piece of that driver in April as far as that improvement.
Speaker Change: You mean from Q1 to April I do.
Speaker Change: Sorry, yes.
Speaker Change: Yes.
Speaker Change: There is.
Speaker Change: A noticeable difference of the number of zero dollar co pays here.
Speaker Change: In Q2 April and May is continuing.
Speaker Change: We had some some trouble in January and February with HEICO base.
Speaker Change: There's no secret about that and this is like 90 day.
Speaker Change: So.
Speaker Change: We know we just know from that that people are getting to either sign up for smoothing or they've reached their reach their out of pocket Gaba and that's only going to increase I mean, nobody has gone backwards from zero dollars.
Speaker Change: Those patients can get.
Speaker Change: <unk> again and again this year for zero dollars, yes.
Speaker Change: Yes.
Speaker Change: So we've seen an improvement in the fill rate.
Speaker Change: When I said, 55% in April but we also.
I think we've spoken about this before the the difference you see in prescriptions written when doctors can write them.
Speaker Change: We talked about the acceleration from Q1 to Q2, what we're seeing.
Halfway through the quarter is dramatically higher increase in doses shipped and we have seen quarter over quarter again, we're only halfway through the quarter than we've seen before but it's driven by two things, obviously driven by that much higher fill rate, but also driven by.
Speaker Change: The number of scripts that are actually being written in in May.
Speaker Change: Again, I think the scripts being written follows that fill rate.
Speaker Change: As docs have confidence that patients can get it and docs now know about the smoothing. They know were out there educating they know about the lower patient out of pocket and.
Speaker Change: And so I think they have more confidence that these scripts will get filled and their patients will get will get therapy. So.
Speaker Change: Again, it's a market difference between really we started seeing some of this in March March was.
Speaker Change: Decent month for us.
Speaker Change: But it has accelerated in April the jump in doses filled from March to April was the biggest one month, we've had and consider and continue to see.
Speaker Change: That growth in May.
Speaker Change: Got it and on that front.
Speaker Change: Last quarter, you gave us some.
Speaker Change: Just kind of overview thoughts on on kind of where the street was and you performed in line to a little bit better than that in Q1. If we look at street estimates still around 70 $475 million. It implies kind of call. It mid 30% kind of growth sequentially on a revenue basis.
Speaker Change: Can you just kind of speak to your thoughts there and it sounds like you're seeing an inflection in volume in the first couple of months, but maybe just kind of speak to current trends, yes. So again we.
Speaker Change: We have seen that inflection again started chase really in in March and then second half of March and then into April and it's carried through to May So I think where we feel comfortable about the full year, we feel comfortable about this quarter Q2.
Speaker Change: We knew the headwinds we were going to face in Q1.
Speaker Change: We know we have a GTS headwind, we saw the GCN headwind in Q1, which knocked down our revenue versus Q4.
Speaker Change: A little bit more here, but we think we're going to weigh more than grow through that.
Speaker Change: Are we going to have an extra three or four points in GTS hit this quarter, probably start stabilizing after that but.
Speaker Change: The growth rate, we're seeing and again, it's halfway through the quarter, but it has accelerated through through April into into May and for March and April so.
Speaker Change: We're bullish on this quarter were bullish on this year.
Speaker Change: Obviously these trends have to continue but but if you think about copays. They can only go down from here.
Speaker Change: Cannot go up there.
Speaker Change: Theyre capped 2000. These are heart failure patients chronic kidney disease patients that are on a lot of different drugs. So we're going to continue to enroll them in smoothing when that makes sense, but for a lot of these patients they're going to they're going to be blowing through that cap and.
Speaker Change: And so we really feel bullish about the balance of the year.
Speaker Change: I appreciate the thoughts thanks, guys.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, im showing no further questions in the queue.
Speaker Change: Q.
Speaker Change: That concludes the FC pharmaceutical first quarter 2025 earnings conference call I would now like to turn the call back over to the company for any closing remarks.
Speaker Change: Well. Thank you once again for joining US we look forward to keeping you updated on our progress as we believe we are well positioned for success in 2025. Thank you.
Ladies and gentlemen that concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
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