Hello, welcome to the Novan, Inc. Full Year 2022 Update conference call and webcast. As a brief reminder, all participants are currently in a listen-only mode. If anyone requires operator assistance during the event, please press star then zero on your telephone keypad. Following the presentation, there will be a question-and-answer session. Note that this webcast is being recorded at the company's request, and that a replay will be available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on Novan's current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Novan files with the Securities and Exchange Commission. These documents are available on the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified and makes no representation as to the adequacy, fairness, accuracy or completeness of that or of any independent source that has been verified any information obtained from any third-party sources. Joining us on today's call from Novan's leadership team are Paula Brown Stafford, Chairman, President, and Chief Executive Officer, John A. Donofrio, Executive Vice President and Chief Operating Officer, and John M. Gay, Chief Financial Officer. I would now like to turn the conference over to Paula Brown Stafford, Chairman, President, and Chief Executive Officer. Please proceed. Thank you, operator. Before I begin my formal presentation, I would like to take a moment to recognize two important individuals to me and to the full Novan team. Both individuals recently passed away. First, Dr. John Palmour, one of our original board members and shareholders, passed away in November. Second, Mr. Bob Ingram, previous chair before myself of the Novan board, a decade-long member and shareholder and an icon in the pharmaceutical industry, passed away this past weekend. I ask for just a moment of silence in their memory. Thank you. Now I would like to thank our stakeholders and analysts for joining our annual earnings webcast and general business update. Novan is building a premier medical dermatology company that is focused on developing and commercializing innovative therapies for diseases of the skin. In January, we submitted our NDA for berdazimer gel 10.3% for the treatment of molluscum contagiosum. Our filing has been accepted for review, we were provided our PDUFA goal date of January 5, 2024. We are in the review cycle with nine months remaining. We anticipate a potential FDA approval in the first quarter of 2024, if not before. Importantly, we could be the first FDA-approved prescription treatment solution for molluscum. Over the course of 2022 and in the first quarter of 2023, we have achieved a number of noteworthy accomplishments. We remain excited about our progress, our momentum, and what lies ahead. Our NDA was filed and accepted for review with no known potential issues. This followed our submission in January, which followed the completion of our CMC and analytical testing, which we had shared with you, which was required for submission. Prior to that, in July, the results from our pivotal phase three trial were published in JAMA Dermatology. To start 2022, we acquired EPI Health, which had marketed products and a commercial capability to launch berdazimer gel 10.3%, if approved. We firmly believe that Novan remains a compelling investment opportunity. Speaking of berdazimer sodium, our active pharmaceutical ingredient, is a new chemical entity, and berdazimer gel 10.3% is a novel topical nitric oxide-releasing medication for viral skin infections. Our NDA is based on a phase 3 program that demonstrated clinical evidence of efficacy and a favorable safety profile. As I mentioned, clinical trial data from the B-SIMPLE4 trial were published in 2022 in JAMA Dermatology. If approved, this product would satisfy an important patient care need, largely displacing in-office procedures that are often cumbersome, painful, and time-consuming. molluscum contagiosum has no standard treatment of care today. More than 70% of molluscum patients go untreated. The market is prime for a topical self-administered or caregiver-administered therapy. The market potential is large, with 6 million patients in the U.S. today and approximately 1 million new patients annually. Approximately 90% of pediatricians have a wait and see approach. We believe the lack of at-home options results in many undiagnosed cases. berdazimer gel 10.3% has the potential to become a first-line therapy for molluscum. Dermatologists and communities will lead the way, and we expect pediatricians to follow. As I mentioned, there are no FDA-approved treatments today. Our NDA is in the review cycle, and we are expecting the review to be complete by the goal date of January fifth, 2024, again, just nine months away. As we respond to FDA information requests, we are also investing in a successful launch in 2024. Specifically, we are planning to build awareness and excitement for our potential product among our customers and our employees to educate healthcare providers about the disease and the treatment options to deliver the best possible access program. Based on our market research, we expect favorable access with payers to prepare our existing commercial organizations and to protect our proprietary platform technology with patents both nationally and globally. We are committed to the medical dermatology community with our diverse portfolio of promoted products and with strong development pipeline. Our commercial unit is built to expand disease states within the medical dermatology area such as molluscum and to other specialty areas such as pediatrics. I'll now hand the call over to our Chief Operating Officer, John Donofrio, to provide an update on the successes of our commercial unit in 2022. John. Thank you, Paula, and good morning, everyone. Our commercial organization provides an established foundation for the potential berdazimer launch with an ideal complement to our R&D and manufacturing expertise. Our commercial capabilities include an integrated platform with supply chain, patient access and distribution with the sales and marketing team ready to scale for the future. We start with supply chain management of our third-party suppliers, along with an optimized demand management process and distribution capabilities to both wholesalers and direct network pharmacies. Our market access strategy focuses on favorable insurance coverage volume, complemented with patient affordability programs to ensure patients have affordable access to our medications. Our dedicated marketing team has significant experience in dermatology with demonstrated success with brand and disease state messaging and education. Our team has extensive launch experience across numerous therapeutic areas, both in competitive selling and medical education, providing a solid foundation for our potential future launches. We have also built strong professional relations engagement with our healthcare practitioners and key opinion leaders across the country. Our sales organization consists of four regions and 42 territories with the ability to reach more than 4,000 healthcare practitioners across the country. We're extremely excited to prepare for the potential launch berdazimer gel 10.3%. While we're excited about the future, let's review our pro-promoted product growth in 2022. I'm pleased to report that our promoted products delivered strong double-digit prescription growth for the full calendar year. All three brands exceeded targets established at acquisition, and each outperformed the growth in their respective markets. We are also pleased to see similar strong double-digit prescription growth for the fourth quarter, demonstrating our continued focus on execution of our commercial plans, strong prescriber base, and solid promoted product portfolio. I will now provide additional highlights in each of our promoted products. Rhofade is the number one prescribed treatment for persistent facial erythema, PFE, or facial redness, owning approximately 90% of the market. Our growth strategy is to continue the expansion of the PFE market and increase the number of rosacea patients treated for redness. Q4 prescription volume of 40,791 prescriptions was just shy of an all-time high set in Q2, and total prescriptions for December exceeded 15,000, the highest ever monthly total for the brand. We're also extremely excited about the opportunities outside the U.S. for Rhofade, starting in Japan, with strong potential to expand in other markets. As we Complete our first full year on the market with Wynzora, we have established a strong base of prescribers. We have a partnership and collaboration with MC2 Therapeutics for the sales and marketing of Wynzora in the U.S. for plaque psoriasis. As we've covered in our previous calls, new competitor launch in Q3 have challenged the use of topical steroids for psoriasis. You can see the impact and reduction of total prescriptions from Q2, and we have primarily remained flat for the second half of the year. However, despite the strong competition, Wynzora managed to finish Q4 with no loss in market share within the topical psoriasis market. Today, Wynzora outperforms all competitors on average number of total prescriptions per writer or productivity. We are confident in the continued use of topical steroids for the treatment of plaque psoriasis going forward and the benefits that Wynzora brings to patients who need and desire quick relief. Our growth strategy continues to focus on increasing brand awareness and the continued expansion of our writer base. MINOLIRA is an oral minocycline for the treatment of acne, offering weight-based flexible dosing for patients with the first-ever biphasic delivery system. We've seen significant growth in prescriptions since increasing our promotional efforts on the brand this year. We delivered our largest growth in MINOLIRA prescriptions during the third quarter and are extremely pleased with the 68% growth in Q4 versus last year. The reduction in Q3 all-time high was part due to seasonality and competitive supply challenges in Q3. MINOLIRA's strong growth in 2022 was a highlight in the overall market that declined 10% throughout the year. Overall, we're extremely pleased with the performance and continued prescription growth of our promoted brands. Thank you, I will now hand it over to John Gay, our Chief Financial Officer. Thank you, John. Our December 31, 2022 year-end represents our first fiscal year in which we have fully consolidated results from our commercial business. I'll remind you that when I refer to year-to-date figures, this represents 295 days of activity based upon our March 11 acquisition. I would like to let our listeners know that we are not yet in a position to provide guidance as it relates to Q1 and full year 2023 revenues or EBITDA. As of December 31, our year-to-date commercial business reported total revenues of 21 million. Net product sales included in our commercial business's total revenue was 11.5 million for Rhofade, 1.6 million for Wynzora, and $1.6 million for MINOLIRA, with other products in our portfolio contributing 1.1 million year- to- date. In addition, our commercial business also reported licensing and collaboration revenue of 5.2 million, comprised primarily of the 5 million out-license agreement for Rhofade, signed in December of 2022 for the Japanese territory with Sato Pharmaceuticals. For our promoted product portfolio, Rhofade prescriptions have continued to grow with a year-over-year increase of 33%. We continue to see market opportunity for improvement in Wynzora, which John mentioned launched in Q3 of 2021. In addition, MINOLIRA prescriptions have continued to grow with a year-over-year increase of 61%. As of December 31st, 2022, our year-to-date R&D business reported total revenues of 2.7 million. This amount related to the Sato agreement related to the Japanese territory out-license of two of our product candidates, including berdazimer gel 10.3%. I will now provide a bit more detail on our fiscal year 2022 financial results, which expands on the information filed this morning with our earnings release and in our annual report on Form 10-K. Total cost of goods sold was 7.4 million for the year ended 2022. Cost of goods sold includes the cost of procuring finished goods from our third-party manufacturers, sales-based royalty and milestone expenses, and other third-party IP licensing costs. For the year ended December 31st, 2022, we recognized net product revenue-related royalty expense of 4 million within cost of goods sold. This amount included our current obligations to third parties, in addition to amounts related to the accounting presentation for the MC2 license agreement of 1.4 million. one point two five million was included in cost of goods sold as part of the Sato Rhofade license and collaboration upfront payment for the Japanese out-license agreement due to a third party. Our R&D business incurred research and development expenses of 16 million for the year ended December 31, 2022, compared to 20.4 million in the prior year. The decrease of 4.6 million was primarily driven by decreased clinical costs associated to the timing of the B-SIMPLE4 trial totaling 7.7 million, offset by an increase of 3.1 million of costs related to regulatory activities, stability testing, CMC, and material costs to support our berdazimer gel 10.3% NDA filing. On a consolidated basis, SG&A expenses were 34.1 million for the year ended December 31, 2022, compared to 12.3 million for the prior year. The increase of $21.8 million was primarily due to 13.7 million of selling, general, and administrative expenses incurred to support the conduct of our commercial operations acquired during the year, 4.7 million of transaction-related expenditures related to the EPI Health acquisition, 1.1 million of investment costs related to the SB206 pre-launch strategy and commercial preparation, and 2.3 million of facility and depreciation, personnel, and other general and administrative costs. For the year ended December 31st, 2022, we also had 2.9 million of other income, which was composed of a 4.3 million gain on debt extinguishment related to the promissory note issued in March of 2022 in connection with the EPI Health acquisition, partially offset by 1.4 million of interest expense incurred prior to the settlement of that promissory note in July of 2022. On a consolidated basis, total revenue was 23.7 million for the year ended 2022, compared to 3 million for the prior year. Consolidated net loss was 31.3 million for the year ended 2022, compared to 29.7 million for the prior year. Our commercial business net loss for the year ended 2022 was 1.8 million, and our R&D business net loss for the year was 29.5 million. As it relates to our balance sheet, as of the end of the year, we had a total cash balance of 12.3 million and accounts receivable totaling 22 million. Since December thirty-first, 2022, we closed a registered direct offering for gross proceeds of 6 million. We received the Sato upfront payment of 5 million related to the Rhofade out-license agreement. We have continued to use our 15 million accounts receivable-backed factoring facility executed in December of 2022, which provides working capital in an amount that is up to 70% of our commercial business's gross eligible receivables. We will need additional funding to support our planned future operating activities in berdazimer gel 10.3% product candidate and our business in general. We believe that our cash balance as of December 31, 2022, plus expected receipts associated with product sales from our commercial product portfolio and the proceeds of the March 2023 registered direct offering will provide us with adequate liquidity to fund our planned operating needs into the latter part of the second quarter of this year. Variability in our operating forecast, driven primarily by commercial product sales, timing of operating expenditures, and unanticipated changes in net working capital may impact our cash runway. We are tirelessly working to obtain the additional funds necessary to get to a potential approval and launch of berdazimer gel 10.3%, if approved, including evaluating potential strategic opportunities, while at the same time conserving cash by delaying or deferring certain expenditures. We have been pursuing and will continue to pursue additional capital through a broad range of financing strategies and other strategic alternatives. Other potential funding activities may include equity financings, convertible debt, or capital from other sources or traditional debt financings. With that, I will turn it back to Paula. Thank you, John Gay, and thank you, John Donofrio. Listeners, you've heard an update regarding our lead asset, berdazimer gel 10.3%, our commercial operations, and our financial update and status. Novan is in a solid position to succeed with a potential approval and the infrastructure to support a launch. We are therefore focused on driving towards the potential approval of berdazimer, on aligning our commercial infrastructure to support a potential launch, on continued growth of our marketed products, Rhofade, Wynzora, and MINOLIRA, and on pursuing additional ex-US out-licensing opportunities. In closing, we at Novan remain focused and excited for our future. Thank you. Operator, you may now open the line for questions. Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. The first question comes from Jonathan Aschoff with ROTH. Thank you. Good morning, guys, and congrats on the increasing sales. You guys have definitely, you know, talked about some of the special items that have led to, I guess, like a 74% COGS for the fourth quarter. You know, what can you say about gross to net for 2023? Also, you know, should R&D drop substantially in that year, I mean, in this year versus last year? Thanks, Jonathan. Good morning. This is John Gay. Thanks for the question. So to your point, make sure I touch on all of them. COGS, you're correct. There is some atypical activity for the current quarter as it relates to the Sato agreement. As it relates to your question on gross to nets, you know, I'll give a little bit of background as you know, but I think it might be helpful. You know, the components of gross to net or GTN deductions can really be categorized into two parts. You know, first, the actual activity based upon the number of prescriptions filled for our patients in a given period. Second, estimates used to project future activity or prescriptions not yet filled for patients. That's the channel inventory held at wholesalers or for our pharmacy direct customers. Both components, both those GTN components, you know, consider the most, you know, if you think about the most significant line items for those deductions, it's comprised of payer rebates, co-pay coupons, and reserves for products. Each, you know, each period, we update our gross to net deductions for both parts, both the actual and the estimated. The actual activity can, you know, vary based upon the numbers and method of how prescriptions are effectively filled by our customers. You know, for example, you know, what insurance program they're covered by, what healthcare plan they're on, and which PBM is utilized. In addition, the mix of coverage of PBM versus coupon will vary by the underlying patient. This product mix and changes period-over-period will impact the actual GTN deduction and may move up or down over time. The estimated activity or that part of the gross to nets can also vary based on how we utilize historical trends, paired with assumptions to project future deductions based on channel inventory, open lots, and other factors. During the fourth quarter, you're right, we saw TRx increase for certain products, for Rhofade, for example, but we also saw a decline in the period-over-period gross margin for that. This was based upon the gross to net deductions based on actual activity. As it relates to the payers and coupon mix, and our estimates, which is based upon historical trends and year-end accounting adjustments. You know, both the commercial and finance teams are working closely, you know, with our partners to work towards optimizing both the payer and coupon mix, if you will, and we'll continue to focus on improvements in the near term. John Donofrio, do you have any thoughts on that? Yeah. Great. Thanks, thanks, John. Jonathan, thanks for the question too. I think as you know, probably the industry issue across the board with some challenges, and we have seen some increased rebates and some challenges at the pharmacy. We've already started to implement in 2023, a better partnership with the PBMs to ensure that the coverage that we have acquired is actually pulled through at the pharmacy level. We've also looked at a co-pay card redesign to ensure the business rules that we set in place to make sure there's access, but also profitability on our scripts is implemented. We're also looking to implement an eHub service to help facilitate the scripts and ensure that our scripts go through to follow the coverage that we've won and earned, as we focus on 2023. I think there's some critical operational programs that have already been started or that will be implemented in Q2 to ensure you see that kind of being just a bump for Q4 versus an ongoing trend. Thank you, Jonathan. Okay. The second part of that question was the R&D drop. Should that be substantial this year versus 2022? Obviously, you know, with the reduction of the clinical trial. It will, you know, we ended up the year, you know, down as it relates to prior periods, clearly because of the costing nature of the clinical trials. We will continue to have R&D expenses as it relates to the activities associated with the regulatory process, right? As we continue to move toward the PDUFA goal date at January of next year, we will continue to have R&D costs associated with that or what costs that will be categorized as R&D because obviously, prior to approval, the nature of those expenditures will be categorized as R&D. I think it's fair to say that we will continue to have, you know, a relatively consistent R&D spend as we move toward the regulatory approval process. Okay. you know, does the year-end 2022 cash of 12.3 include the 5 million that was booked in the fourth quarter, or does it not include that? It was, that was not included, Jonathan. We had it as an account receivable, but we did collect that in January. How much of it is paid out to a third party? One point. Twenty-five I think $5 million. 25%. 25%. Okay. How much of the 15 million facility has been used? At the end of the year, we had 10.3 million as it relates to, you know, what had gone through as of the balance sheet date. You can see it in our statement of cash flows. We had almost 20 million of usage, is 18 million or so, in the fourth quarter. Okay. There's no subsequent event footnote in the Form 10-K about usage subsequent to the fourth quarter end? Well, that's correct. We continue to utilize it at our discretion. That's correct. I think it's fair to say that, you know, just the nature of a commercial business and the nature of our payables and accounts receivable cycles and timing with our customers and vendors, it's advantageous to have a working capital line, that we do continue to utilize it's all again, subject to our growth sales and activity from a TRx perspective. Okay. Thank you very much, guys. Certainly. Thanks, Jonathan. Operator? Yes. Thank you. The next question, Oren Livnat with, H.C. Wainwright. Thanks for taking the questions. I was hoping to talk bigger picture as you look forward to the SB206 potential approval in January. Can you just talk about what you're able to do with the EPI business in place in terms of, I guess, priming the pump, so to speak? As you know, like you said, you're only theoretically nine months away, and you've got boots on the ground already. What are your reps able to do now before a product's approved in terms of education, if anything, in terms of awareness building in molluscum? Also when you think about a potential catalyst in another in-office procedure for Verrica's product getting approved in July, potentially, what kind of impact do you think that has on awareness in the space? You know, do you think that helps or hurts you guys heading into a January approval of your own? I have a follow-up. Thanks. Okay. Thanks, Oren. Our reps, we are not able to train them or prime the pump because we do not have an approved product. Our sales reps are aware and are excited to potentially have something to begin to talk to their healthcare providers about, but they cannot do so until it's approved. If you will, the only way to prime the pump is through education, and we do that with our medical affairs group. We actually have four individuals in our medical affairs group, and three of them are dedicated to really SB206, and that is around publications, presentations at meetings, be it abstracts or posters or, you know, full-on presentations. We were active at the AAD, the American Academy of Dermatology meeting, which was just two weeks ago. We were very active there and had a late breaker presentation that Dr. John Browning, one of our KOLs, presented, and that was very exciting for us. That's how we can get out and build awareness. With reference to Verrica, they will build awareness for the disease of molluscum if they are approved. They have a PDUFA date in late July. Again, this is for a procedure. As I said, we believe that once, if approved, we would likely be the first-line therapy because it is a prescription take-home gel, topical treatment once a day versus a procedure that is potentially requiring three or four, you know, doctor's visits. We believe because roughly 70% of patients today go untreated because there is no FDA-approved treatment, you know, we believe that there are patients that will begin to hear and be offered this, you know, it's really not a new procedure, it's a new way of delivering the same product, cantharidin. We have a novel new chemical entity that, again, is a prescription benefit as opposed to a medical benefit. Those are some of the differences. Okay. Thanks. Just when you talk about preparing with your existing commercial infrastructure for that launch, can you remind us, I guess, how much, you know, how much of that SB206 market is addressable with your current infrastructure versus how much you think you would need to scale up more and add on to your capabilities to actually launch it? Yeah. No, it's a good question. Thank you, Oren. We will begin with the dermatologist because, you know, as I mentioned in my statement that, you know, we believe that the dermatologists will be the first to prescribe berdazimer gel if it's approved. We believe that in a community, the pediatricians know the dermatologists to whom they refer their patients for the treatments, because generally pediatricians don't offer these in-office procedures. After they begin to see that the dermatologist is offering a prescription, you know, they will look to the dermatologist as the key opinion leader in their community, and then the pediatricians will follow. There are a large number of pediatricians in the U.S. It's a very difficult market to call on with reps. We are planning for digitally informing them once, you know, the product is approved. That's the way we would do that. It wouldn't necessarily be increasing our number of reps at this point. Preparing the field also means looking at the payer access and preparing for that, and then preparing ourselves to train a sales force. You know, we are limited by our funds or lack thereof. This preparedness is an investment that we will make as funds are available. Okay. You kinda just segue to one more follow-up on payer prep. Can you just remind us, you know, how. What's your thinking on pricing? I know it's early, but, you know, have you done any more, you know, since the data is out, since you filed, you know, have you been doing more payer outreach and research and refining your thinking around likely, you know, next monthly pricing around the product? Yeah, we did some market research in August of last year. You know, we continue to have some discussions, but in terms of payer research, it was from August, and it was pretty much in line with the, you know, maybe a bit of an increase from what we had seen in 2019 when we went out and did that research. We've, we've updated it and, you know, we haven't given guidance, but I know our analysts have been looking at, you know, anything between, you know, $500-$1,000 per kit. Okay. A kit is weeks. Sorry. Yeah. Go ahead. Did me interrupt? Yeah, I was just saying in a kit is for four weeks of treatment. All right. Appreciate the time. Thank you. Thank you. Thank you. I'm sorry. Yes, the next question comes from Jeff Jones with Oppenheimer. Hi, guys. Congratulations on the quarter, and thanks for taking the question. I guess two questions. In terms of cash needs to... which you've spoken to in terms of where you get later, latter part of 2Q, what are you looking at to get through the year? What does that allow you to do in terms of building up for sales and marketing prep for launch? Any update on discussions with Sato or others around further ex-US partnering for Rhofade? Okay. Yeah, thanks. Thanks, Jeff. I'll take the first question as it relates to cash needs and S&M prep. Yeah, if you look at back at kind of the historical activity that we had during 2022, we were, you know, utilizing about 8 million-10 million of cash on a quarterly basis. You know, going forward, in a Q1, that should probably look similar. You know, really, as it relates to from here forward for the rest of the year, it's going to be dependent upon to Paula's comment just a moment ago, the amount of activity that we do to prepare the market, if you will. That, that number can vary, but I think it's fair to say that, you know, if we, you know, look at that activity, you know, I think the prior year numbers call it, you know, eight- 10 on a quarterly basis. We can probably bring that down, you know, 2 million on a, on a quarterly utilization, just based upon some of the cost conservation measures that we're doing, and, you know, also paired with, the amount of activity we're able to do as it relates to preparing the field. You know, again, that can be variable, again, dependent upon our access to capital. As it relates to, Sato- Yeah. Ex-US. In ex-US, we have active discussions going on in many countries, in Asia, Pacific, Europe, Canada, others. There is interest. I was going to qualify that, but there is interest in Rhofade because it is a very good product and a number of companies and countries are interested in that. We continue to progress those discussions. You know, as always, as we can, or when we can, we will share the detail of those discussions and those potential agreements. Thanks for asking. Just a quick follow-up on Sato. I believe they had a limited time to exercise rights in certain additional territories. How much time was left on that, or has that expired? It has not expired. We've got a couple months to go before that expires. We are aware and, you know, we'll proceed elsewhere if for some reason that doesn't move forward. There is interest, in addition to Sato. Great. Thanks, guys. Thanks. Thanks, Jeff. Thank you. The next question comes from Jennifer Kim with Cantor Fitzgerald. Hey, good morning. Thanks for taking my questions. I have two here. Maybe on the first, following up on a prior comment. The digital investments that you're currently planning, what degree of additional investment would go into that? Is there a way to think about your potential reach through digital investment or an analog to other similar approaches to launches? My second question is, I know you're not in a position to provide guidance just yet, but is there anything you can say on, I guess, expectations on the cadence of growth over time and maybe when you believe you'll be in a position to provide guidance? Thanks. Thank you, Jennifer. I'll take the first. John Gay will take the second or they'll divvy it up. I think in terms of the digital investment and the investment for the, you know, potential launch of berdazimer gel is, you know, for us is, you know, measuring over time and balancing over time the funds available and the win, etc. I think one thing to say is that it's not just sales and marketing, but it's also manufacturing. It's to be able to launch in 2024, and hopefully in the first half of 2024, you know, we need to manufacture product. You know, I'll put that spend ahead of, you know, some of even the sales and marketing, you know, to make sure that we have the product available and then put that spend into 2024 if we don't have it to spend in 2023. It's a matter of, you know, how much you put in is how much you get out. We will continue to evaluate and balance our funds with the investment in our potential launch. Jennifer, good morning. I'll take the first part of that. The second part of your question, maybe ask John Donofrio to weigh in. You know, as it relates to guidance, you know, like you said, you know, we continue to evaluate that. Keep in mind, you know, it's been, roughly nine months from a fiscal period that we've shown consolidated results. I think we're still working through that and both internally with the board on how to approach potential guidance as we goes forward. That being said, as it relates to, you know, product or TRx growth and prescription growth, we continue to focus on that. And maybe, John, you have some comments on that going forward. Yeah. I think as you can tell, Jennifer, just the momentum we've had throughout the years across our products, we've had a few ups and downs in the psoriasis space, but we've continued to be the market leader and expand persistent facial erythema, and we expect to continue to do that. That's what our goals are and our objectives are for 2023. I think to Paul and John's both point, the continued investment around that, we've demonstrated, but that will also be dependent on funds going forward. We do expect to still grow that market and still see significant opportunity in the oral antibiotic market with MINOLIRA. Again, we feel like we've leveled out with the noise of the new competitors in the topical psoriasis market, and we expect to see a rebound in that. We're, we're, you know, again, we're not giving guidance per se, but our brand plans, our tactics, we talked about SB206 and berdazimer plans. We, we have, you know, plans for all three products. They've all been initiated over in a national sales meeting in early March and are being active. We would expect to continue that momentum that we've seen. All right, thanks for taking my questions, guys. Thank you, Jennifer. Yes, sure. Thank you. The next question comes from Kemp Dolliver with Brookline Capital Markets. Thank you. Good morning. This is based on backing into the numbers and could be off, but the Wynzora fees look like they are down or sequentially or just in broad terms, fairly depressed versus last few quarters. Could you talk, a, is that correct? Then, b, could you just discuss what's going on behind that? Yeah. Good morning, Kemp. This is John. Thanks for your question. The Wynzora piece, you know, keep in mind, a couple of things. One, subsequent to the acquisition, the accounting presentation and treatment of Wynzora, did evolve a little bit over time. If you're looking period over period, there could be some artificial changes. Effectively, you know, the agreement with Wynzora, the way that it works is that, you know, the agreement is that we're the, you know, distributor and commercial partner for MC2 Therapeutics and for that product. We effectively recognize all the revenue because we get cash as it relates to the product sales, but we do effectively remit 85%, if you will, back to MC2 Therapeutics, because effectively, and we show that as a COGS, because effectively that's the way that this agreement works, right? The net-net, if you will, is the residual 15%. Yeah, as it relates to changes in the fees, quote, unquote, or the part of the MC2 Therapeutics agreement that goes through COGS, you know, that can vary based upon, you know, Wynzora or net product revenue. Again, like I said, we've also had some presentation changes during the quarter or I'm sorry, during the year, I should say. Okay. Looking at the underlying script trend is still a reliable measure of what the fees would be on a normalized basis. Yes. Okay, great. You know, just shifting to Rhofade, and the activity there. I think the one question in my mind with regard to how that's impacting you is, looking at the competitor's data, it looks like they're, you know, they're doing the typical thing at a launch, a lot of sampling, very depressed, net to gross. Despite the fact you do have rebate agreements in place, you are somehow having to respond. The discussion around coupons or in the pharmacy and the like, you know, don't seem to, the full explanation to that. I'm just trying to understand in that context of this initial period of virtually free product out there, if that's real in the final analysis, that just responding to that is what you're dealing with? This is John Donofrio. I'll take that. I think you hit a few points in just the gross and net dynamic of payer rebates have increased not only for new market entrants, but also for products on the market like Rhofade. We continue to still have strong coverage across all the major players that's been with Rhofade for a while. We have seen increased rebate percentages. I think where the challenge and opportunity is still what's going on at the pharmacy. We've seen less scripts being adjudicated through that coverage through numerous reasons. You know, I think we've identified that. We're working with the payers and the pharmacies to ensure that those scripts that are coming through are not getting rejected and they're following the business rules and the contractual obligations that have been set up. I think that's a primary driver of some of the correction you've seen. You know, we continue to see good coverage. As far as our competitors goes, really no one competes in the redness market, per se. The new products are all still going and got the anti-inflammatory. Yes, they've come out with heavy sampling and heavy discounts. We did mention in my commentary too, you know, Rhofade at this point of its life cycle still has very, very, very favorable co-pay card rules, and we're looking to assess that and ensure that we meet the optimal, that we still have patient affordability, which is still important, but that we can bring optimal value back to Novan. So that's being assessed as well. As you know, there's a lot of analogs out there of what that means, and we think we're very comfortable with some of those opportunities going forward, especially with Rhofade, with the solid writer base that we do have. Yeah. Thank you. The increased rebate act, the increased rebate levels, that's something that's carrying through in 2023 as part of your annual discussion with the plans. Is that correct? Yeah. We're banked for 2023, so we're already having conversations for 2024. Our contracts go through 2023. Yes. The experience we have in 2022, no changes for 2023 for the rebate%. Great. Thank you. You're welcome. Thank you. Thank you. The next question comes from Jonathan Vandermosten with Zacks. Good morning, Paula and John. Regarding gross margin, we saw a lot of volatility in 2022 for a number of reasons that you mentioned. How should we think about it for year product gross margin for 2023? Will it be as volatile? You know, if we look at kind of the full year percentage there, what way directionally should we think about that going product gross margin? Thanks, Jonathan. For sure there's a little bit of a breakup. I think you were asking about the gross margin on a product basis and the volatility we've seen, and then what it looks like going forward. Yeah. I think, you know, again, if you think about it, you know, like I said in the prepared remarks, that margin's impacted by a couple of different things. You know, the true product COGS, if you will, you know, our COGS number, like I said, includes the royalties and the milestones, et cetera. If, like you think about true product COGS, I mean, that, you know, that's going to be a pretty consistent margin, if you will, as it relates to product COGS as a percent of our gross margin of NPR, net product revenue. You know, so that's, you know, roughly 88% or so. We would expect that to continue as it relates to the product portion of COGS on a go-forward basis. Where we'll see some variability, it will be, again, in the royalties and potential milestones. Great. Thank you. When we look at Selling, General and Administrative and how do we split that between, I guess, sales and marketing and General and Administrative for this year? Yeah. If you think about, again, bifurcating, if you will, the SG&A, you know, from the, our commercial business, it was about, you know, almost not quite 14 million. Quarter- over- quarter, that spend has stayed, you know, Q4 to Q3 has been kind of relatively consistent. You know, as it relates to, you know, what part of that relates to marketing, et cetera, you know, that is also staying consistent again, as it relates to our activities. Yeah. I don't know the exact percentage, but I would say it's fair to say that we expect our, you know, G&A as it relates to our or SG&A, I should say, for the EPI Health business to stay, you know, between 4 million and 5 million on a quarterly basis. Okay. Final question on, you know, when we finally if we see approval for SB206, how will that incrementally affect sales and marketing expense as that's rolled out? I mean, I know you have a lot of excess capacity, but there might be some other demands that need to be made. How should we think about that in 2024, assuming approval? Yeah. I mean, I think there will obviously be some increase, but, you know, part of the main benefit of having the acquisition of EPI Health is that it will greatly reduce the amount of marketing spend, quote-unquote, that'll be necessary for 206. I was going to say too that the sales, I think stays the same, and it's the marketing that might be what increases as we try to, you know, market. As I mentioned earlier, it's going to be relative to the financing... The amount of activity. The funds that we have, how much we are able to market the product, you know, ahead or at launch. Great. Thank you. Thank you, Jonathan. Thanks, Jonathan. Thank you. The next question is a follow-up from Oren Livnat with H.C. Wainwright. Thanks for accommodating the follow-up. You mentioned earlier on the call, John, when discussing R&D that, you know, a top priority is certainly progressing the manufacturing activities, so you're ready to launch if and when the time comes. Can you just talk, can you guys talk about in general, what is left to do on that front? Is it just, you know, crossing T's and dotting I's and manufacturing, you know, keeping things in compliance? Are you going to actually ramp up and build launch quantities ahead of January? Is that in your financial plan? I guess also just de-risking-wise, are there any things left to do that in your mind represent, you know, I guess, risk, gates you passed with regards to manufacturing? Are there things that need to be verified still in terms of scale up, or inspections with the FDA? Thanks. Thanks, Oren. You know, we are on track for, you know, the January 5th PDUFA goal date, and the normal course of that standard review. We here are producing in Durham, North Carolina, our drug substance and we have submitted what we need to submit and, you know, we are on track. I mean, there are usual processes that you go through, in terms of process validation, et cetera. All of that is ongoing. No risk that we are aware of. You know, we continue to, you know, progress and want to move toward manufacturing or a potential launch. In terms of that, you know, de-risking and how much do you do, you know, ahead of an approval, you know, the mid-cycle review would come sometime this summer. I think once we get through that, we'd like to be in a position to begin to manufacture product that would be, you know, available for a launch. I think John wanted to add. Just to your point on it as it relates to the costing piece of that, Oren, I mean, obviously anything that we do from preparing for launch, you know, in addition to what Paula just mentioned as it relates to product preparedness, you know, that is going to continue to be rolled up into R&D expenses to my earlier point on an earlier question, which is why we're going to see effectively the same level of R&D spend, you know, next year that we did this year. But to Paula's point, that amount of cost will be able to, you know, get us to a point of the initial launch. Thanks. Thanks for the clarity. Sure. Thank you. This concludes the question and answer session. I would like to turn the floor to Paula Brown Stafford for any closing comments. Okay. Thank you, operator. Thank you all for joining, for really good questions this morning and extended call. You know, Novan is in a solid position to succeed, you know, with this potential launch. We're on track for our January fifth PDUFA date. We remain focused and excited for our future and appreciate you being on the journey with us. Thank you. Have a great day. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.