Good afternoon. Thanks for joining us at TD Cowen’s fourth Annual Healthcare Conference. I'm Stacy Ku, one of the biotech analysts, and I'm here with my colleague, Vish. We'd like to welcome John Tucker, CEO of scPharmaceuticals, to our fireside chat, as well as Steve Parsons. Thank you all for joining today. We're very excited to discuss the ongoing launch of FUROSCIX for the treatment of congestion due to fluid overload in patients with chronic heart failure. We're now a year into the FUROSCIX launch, and the consultant checks have really continued to come back incredibly positive. IV-like efficacy, really easy to use. With that, we'd like to just dive right into Q&A. So Steve or John, if you'd like to provide some brief background on FUROSCIX and the value proposition, any opening remarks on the ongoing launch, although we kind of stole your thunder there. Sure, I'll jump in. For those of you who don't know what FUROSCIX is, our scientific founder was a cardiologist and realized, and this was back in 2000 and probably 2014, that a number of patients were just lying in hospital beds to receive IV Lasix. Yes, some of them had presented sick, really sick, and had to be stabilized, but then after being stabilized, would just stay in the hospital for three, four, five days after stabilization, receiving IV diuretics, and sometimes just two doses over four hours, and they were still in the bed 20 hours later. So that was really the idea of the company, was to—how can we, how can we move this treatment, give them the same level of care and move it home? The first challenge was you can't deliver IV Lasix subcutaneously. You can't, you can't do it. It's got a pH over, and really, our healthcare system isn't set up to do IV at home. It doesn't get reimbursed, and it's a logistical nightmare. So we set out to find a way to do it. The first thing we needed to do was three things with the drug: get it equivalent, bioequivalent to IV Lasix. That was challenge one. Challenge two was make sure when we did that, that it had a pH neutrality, was a pH of 7.4. And then three, the most difficult thing, was keep it stable in solution. Furosemide wants to have a pH of nine. That's where it's comfortable. So we were able to find a formulation, and obviously create IP around it, that was pH neutral and stayed in solution. We now have stability data over three years on the drug in solution. So we solved that challenge. We met with the FDA and said, "Okay, we've been able to do this. What does a regulatory path look like forward?" And was really, show that you're equivalent to the IV in a PK/PD study. So we were able to do that. We used an ambulatory pump and showed that these patients could receive subcutaneous Lasix, subcutaneous furosemide, at a pH neutral and have a IV like PK. Now, to do that, we had to program the pump to give a bolus dose over the first hour, 30 milligrams over the first hour, and then 12.5 milligrams each of the next fours hours to mimic the IV of the PK. Able to do that, the PK was almost identical, the diuresis was almost identical, so we knew the drug worked. And we knew we could get approval with an ambulatory pump and send patients home, so they could be home, receiving 100% bioavailable Lasix at home. But that's not the patient experience you want. Yes, they're out of the hospital, but they're still tethered to a pump walking around their house. So we started working on a patch pump, a wearable pump that the patient could wear at home and not interfere with their activities and daily living. These are heart failure patients. They're older, they're sick. They tend not to be incredibly active, skiing and playing soccer, but they wanna do the things they wanna do. They wanna go on a walk with their pet, they wanna go to the neighbors, they wanna go for a drive, they wanna go to the mall. We were able to work with West Pharmaceutical Services, finally, who had the technology, a wearable patch pump. They were working with Amgen on Repatha at a three and half ml dose. We worked with them and created a 10 ml dose that could... The The patient—all the patient does is put it on their stomach, push the button, and they receive 80 milligrams of 100% bioavailable furosemide, and keeps them out of the hospital, and allows them to do all the things they wanna do. So we actually received approval in October of 2022. It is a drug device combo, regulated as a drug. It's Part D benefit. Obviously, had the CDRH consult. It's a drug device combo. We have great IP on our drug product to 2034, on the device to 2035. But real practical moats of entry, I mean, our infuser, it has a motor, it has sophisticated software, it has a battery, it has needle guards, it has a special gauge that if for some reason the patient got up suddenly and the needle would come out, the device knows it and will accelerate the delivery on the next couple of pumps so that patient catches back up. Why that's all important? First off, it's a barrier to entry to any other product, not just a generic, but any other product in the category. These are heart failure patients. They're really sick. The FDA is not gonna allow a product that's not 99% effective 95% of the time to be approved because of the fragility of these patients. So we think the moats of IP and the moats to practical entry, no generic company is gonna be able to make a product like this. Really give us great coverage. ... And it's interesting that you go in this level of detail, 'cause when you talk to the clinician, they just say, "It's really easy to use. The patient knows how to use it, and we love it." Really, so- What do you like about the launch, Steve? How it's going, what we're getting. Well, I, I think the most important thing, anytime you launch a product, is does the product live up to what the, what the market expects? In every case so far, the product delivers. We get the physician's attention. It does exactly what we said it was gonna do. When patients are taking oral diuretics, and their symptoms are worsening, and they're feeling badly, and they're raising their hand saying: "Can you help me? I need some extra help," and they use FUROSCIX, they get immediate gratification. The very next day, they are feeling much better, and they get all this fluid off that you would normally have to be in the ER or in the hospital for multiple days. The first thing I'll say about the launch is that the product is working, and that's the most important thing. You won't be able to keep a good product down. Now, the question is: how fast can you accelerate the adoption? So one more comment from our clinicians. They've also said that the target market for FUROSCIX is pretty easily identifiable, and they know them very well, right? They're in their clinics, they see them, they're repeat offenders. So just want to talk a little bit more about, as you're focusing on your launch, first, the infrastructure. Talk about how you're establishing your infrastructure, and then talk about the patients. So the patients are self-identifying. You know, they can't ignore their symptoms. Their symptoms are shortness of breath, they have to sleep sitting up, upright in a chair, 'cause when they're prone, they can't breathe. They've gained lots of weight, they have edema everywhere, so it's very easy. They self-identify 'cause they're feeling badly, and they ask for help. Most of them have been referred from the primary care doctors no longer dealing with them when they have these kind of symptoms. They've been referred to a cardiologist, and many of them, if they've been hospitalized once or twice, have even been referred further to a subspecialist, a heart failure specialist. So for us to cover the physicians that are taking care of these patients, it's a much smaller group. We don't need a sales force of five00. Right now, we have six8-70 territories, and we can cover six0% of all the doctors taking care of these patients. To get further, you know, we could expand. I think the peak we would go to would be, like, 12five-130 to get 90%. But it's very narrow. It's not big, like some primary care products. And the doctors are generally accessible. It's not just the cardiologists who take care of these patients. It's a lot of nurse practitioners and physician assistants working under the supervision of the cardiologist, who delegates to them for the diuretic dosing, the adjustment of diuretics and the guideline-directed medical therapy. So, we have great access to these physician extenders, advanced practice providers. So, we feel like we're right-sized for now. We're having very good access, and adoption has been meeting our expectations. There's about six.five million patients with heart failure in the U.S. A lot of them are actually taken care of by primary care. They're right in the oral Lasix. They're doing great. It's the 1.five million that get into trouble, and to your point, you know, the, what the doctors call them, unfortunately, are frequent flyers. These are patients that will have two, three, five, six, seven events of year or events each year of worsening heart failure. We've had so many patients call us, and we played one at the national sales meeting that went to Steve of, "Oh, my God, I've been in the hospital six times in the last year. You've saved my life. I haven't. I don't have to go to the hospital anymore. I can stay home with FUROSCIX." And I tell, you know, the team all the time, these are our-- they're patients, but they're our grandmothers, they're our mothers, and they're our fathers. So it's really critical what we're doing, and again, the response from the patients and the physicians has been incredible. Yeah. So, Steve, do you wanna walk through the different scenarios that FUROSCIX is currently being used? We kind of alluded to it, but just talk about, right now, obviously, how it's being used, and then think about, in the future, how you expect the kind of FUROSCIX adoption to change. Sure. So these patients, as John said, you know, they'll have an episode of worsening heart failure where it's just too much fluid. They can't compensate for this excess fluid anymore, and they need some extra help. So these are patients who are worsening, and if they don't get a reset of their fluid, if they don't get it to stop, they'll eventually be in the ER, and if you get to the ER, you're admitted into the hospital 90% of the time. So the doctors, the nurse practitioners, they're trying to work to prevent them from getting so bad that they have to go to the ER, and they have to be admitted. So that's one patient type. Then there's the patient who was missed. The doctor, you know, didn't—wasn't able to intervene or did, but it didn't work, not with FUROSCIX, but just in general, or they went there in the middle of the night. They went there on a weekend. Those patients are admitted. They, they get treatment six6% of the time. All they get when they're in there is IV diuretics, nothing more sophisticated than that. They have to get all this fluid off, and it takes several days. But with the healthcare system now, some of the payment to the hospitals is less than what they actually need to cover the, to cover the patients, so they're very anxious to see the patient discharged.... As soon as they're feeling better, even if they're not completely dry, they'll ask the patient if they'd like to go home, and what happens is they go home with some residual fluid. They're not completely dry, so it doesn't take very much for them to get in trouble again in the next couple of weeks when they're back home. That's why the readmission rate for heart failure is one of the highest in, of all the disease states, and they have programs to try to reduce that. So there's an opportunity to treat the patient after they've been discharged, but they get into trouble again shortly within that, you know, 30-day period post-discharge. They're really sensitive about readmissions during that period. So FUROSCIX is wonderful in that period of time. I think readmission rates are somewhere in the 2five%-30% rate for those types of patients, so FUROSCIX can be used there as well. And then in the future, we believe that some of the hospitalists and some of the administrators in hospitals would love to see the patient admitted, treat them for just a couple of days, and then send them home to finish the job at home. So not, not a break, not waiting until they get in trouble again, but just go home with a couple of doses of FUROSCIX and finish your diuresis there. So those are the three, I think, patient types. The one that we're getting the most utilization in right now is that pre-hospital, pre-admission, where the patients are, you know, worsening, and they're trying to avoid the initial admission. And I think we're seeing- Steve, can you talk about the- a little evolution, too. Steve's absolutely correct. We're seeing the usage pre-hospitalization, but I think physicians are starting to realize that, "Boy, I'm gonna double the orals." They're gonna do it. A patient's gonna call, and the first thing they're gonna say is, "Double the orals." It's a bioavailable issue. They're given 80, they're absorbing eight. so boy, if I give them 1six0, they'll absorb 1six. I'm fighting maybe a losing battle, but I got to do something. I think we're hearing physicians now say, "Boy, I could keep doing this for six, seven, eight days on doubling the oral. Maybe it works. Cross your fingers, maybe it works, or I'm just gonna intervene now. I'm just gonna go now and get this fluid off. Why should my patient be suffering for five days, and probably half the time end up in the hospital anyways, when I can intervene right now? Here on the street, we like to get some metrics. So, Steve, do you want to talk about the current split of the patients that are treated in the clinic pre-admission versus those that are treated post-hospitalization, and of course, where you expect that long-term shift to change? So this is an area where I don't have hard data about this because when the prescription comes in, it doesn't tell us, are they pre-admission or post-discharge? Just, that's not visible to us. What we do know anecdotally, we talk to doctors every single day. The reps ask them questions on where they're using it. We also can see the size of the prescription, and if you're preventing a hospitalization, the patient has been living in the community with fluid overload. They've probably procrastinated a little bit, you know, "Well, I, I've felt worse." When they finally tell the doctor, they're probably, you know, quite overloaded, and they need more doses. So we are seeing some prescriptions that are five and six doses, and then we're seeing other ones that are three doses or four doses. So we think that's telling us that more of it is being used. Well, we can see 7five% of the prescriptions are in the five-six range, and that's offset by about 2five% that are in the three-four range, and so it's our-- We're discerning that it's more in the pre-hospitalization period, and the doctors are confirming that anecdotally. So it's, that's an interesting scenario, as I think that's above kind of your expectations, but clearly, the clinicians are trying to write as many prescriptions or kits as they can. So where do you think that will net out in the steady state, and how is that working from a managed care perspective? So I think there's a couple things that'll move that. I think originally we had given guidance to four. We thought that would be what it is. We're now at about five.six units per script, which is, again, higher, higher than we thought. We still think that'll moderate down. We don't think now that it'll get down to four. What's gonna moderate it down? A couple of things we think. We do think the eventual shift from the pre-hospitalization, where they're getting five or six, to that post-discharge, where a patient just got out of the hospital, they've been in five days, they've had five days of IV diuretics, they come back, they still need some additional diuretic management. They're not gonna hit them with five or six. They're gonna hit them with two or three there. So as the use case shifts, also for the patient that's being discharged from the hospital, even if they've been in there for three days, they do-- they don't need six more to finish the job, they probably need three. And then, with more payers coming on board, we do, like with UnitedHealth, we're on their national formulary on the commercial side, and that's at four units. So as we have more contracts like that, we could see the four-unit per script, not per month, come into place that will moderate that down. Steve, I know you're focused on kind of reimbursement. Obviously, a huge value proposition as you all launched with, I think, 100% Medicare Part D and Medicaid coverage, and lots of, you know, good payer wins last year. But just walk through your process right now. You're focused on getting preferred formulary and improvement in copay requirements. So just walk through expectations in terms of the improvements you expect to see in the next few quarters. Yeah, so we were fortunate. You know, I've launched many brands over the years in my 30-year career, and you usually struggle quite a bit to get coverage. Not, not, not copays, but just to get coverage at all, having to step through multiple other brands in the therapeutic category. We haven't had to do that. Our product is only used when they've failed on the generic oral chronic diuretics that they're on. And our patients only need the product when that's no longer sufficient. So for us, we meet that requirement of stepping through something. So 90% of our—it's still a prior authorization, but 90% of them are approved. It's great coverage in that regard, because they meet that minimum requirement. Then it becomes: what's the patient's out-of-pocket copay? So you have approval, but depending if you're Medicaid or you're commercial or you're Medicare, you could have a different responsibility to get the prescription. For us, we like to say our goal is to get 75%-80% of the patients to have a copay that's a fixed amount of $100 or less. That's our stated goal, and that's what we would be willing to rebate for and contract for. Today, without paying big rebates and deep discounts to Medicare Part D plans, we have about 70% that have a copay of $100 or less. 70% of all the patients, seven out of every 10 patient, has a copay of $100 or less, and the average is not $100. The average is less, is $2six. Now, there are 30% of the patients who still have a copay of 100 or more. Some of them have what's called a percentage coinsurance. They've signed up for generic type Medicare Part D formularies, and for them, the copay is out of reach in some cases, and they will decline. So that's the gap that we still have to close, and the question is, how much, how much is that worth? Because, again, 70% of them are getting it very affordably, and they're not declining treatment. Okay, wonderful. There are a lot of nuances around, I think, what you allude to, which is the fulfillment rate, right? There's the copay piece, and then also, some clinicians write for emergency situations, right? They're putting it on the side. So just walk through, how are you getting a sense of how these written prescriptions roll into kind of, future use versus kind of this copay piece that you're working through? Yeah, so any retail brand, I'll just use my experience, you don't usually get to see how many were written. All you get to see is how many were filled, and so, but we've been reporting how many have been written and how many have been filled, so we're, you know, a little more detail than you would normally get from a retail launch. But we thought it was important so that our investors could see that there's great demand for this product while we work to increase the percentage of those that are filled. Now, there is a drop-off. We have about 1five or 1six% of the prescriptions that get to the hub, where it's a cancellation. Now, that could be canceled because the prescription wasn't needed anymore. Sometimes the doctors will write a prescription for FUROSCIX while they're doing standard of care so that it's ready to go if it doesn't resolve with standard of care. In that case, they don't, they don't fill the prescription. There's cases where, for whatever reason, you can't, you can't reach the patient. They don't pick up their phone when, when the pharmacy calls to say, "We have this available for you," and they're lost to follow-up, and there are situations where the copay is in that 30%. So of the 100% written, there's about 15%-16% are canceled. They're truly gone. The number that gets filled is a timing thing sometimes. We consistently have five0%-55%, fivesix% of them are filled at any given time. The remainder, what's going on with the remainder? Now, they're not canceled, but they haven't been filled yet. It's about, I'll say, 30% at any given time. Those are still what we call pending, meaning the payer hasn't given an answer yet on whether it's approved or not, or it was approved. A lot of them, 20% of them were approved, but the patient didn't need it yet. The doctor had pre-ordered it. You have an approved copay, an approved product. The prior authorization is good for a year, but it's in layaway. They're waiting for it to be called down when the patient needs it. That's about 20% of them. So, at any given time, you know, we're always gonna have some that are still pending. We'll always have some that have been canceled. At the end of a quarter, we have to report. It's a question of, on that day, on that last day, how many have been filled out of how many have been written? For example, in December, you know, there's something called Holiday Heart, where patients get into trouble around the holidays. They have indiscretion with too much sodium, too much fluid, too much everything. The doctors know this is coming, and they order the product in advance just in case. A lot of those prescriptions that were written in December got filled in the first week of January, and so it looks like they're unfilled. Yeah. So I think, you know, no brand ever gets to 100%, and again, we made the decision to report the scripts written just to give more information to the street. I think the layaway phenomenon is a little different for our drug. I don't think you typically see that. But again, it's because the doctors know these patients are gonna get into trouble. They've seen them five times in the last year, so I'm gonna get this cleared, ready to go. So that's a phenomenon we're always gonna have. We don't discourage it. We filled a script the other day from October that a doctor had put on layaway, knowing this patient's gonna get in trouble. So we're not discouraging that. It causes a little confusion on the reporting, but it's gonna get shipped. So that's why we're doing it that way. ... Steve, you kind of nicely segue into your pre-announcement, or John, if you can take a sip of water before you answer. Yeah. For Q4 and 2023. So just remind us, what details can you provide? And- Yeah ... you kind of alluded to a little bit of that seasonality, so- Yeah, so- What adoption did you see? So we pre-announced back in early January the quarter from $59 million to $61 million on net sales, which is about a 60% increase over Q3. So that's Q3 to Q4 was about a 60% increase. We also announced for the year, you know, right around the $13five million, $13five million number, both above consensus, something like that. And you know, that's kind of all we gave. We gave cash $76 million. We're gonna be reporting more of the launch metrics next week when we do our earnings. Okay, wonderful. If you could just comment really briefly on the early demand for FUROSCIX in 2024. Just your thoughts around the guidance of $38.5 million. And of course, should we see more seasonality quarter to quarter? And obviously, Q1 is typically a seasonally weak quarter for everyone in the pharmaceutical industry. So just curious your thoughts there. Yeah. So, you know, what we've said is for the year, which I think is the $39 for the year, the consensus, that we're comfortable with that. Q1, as you said, is historically, probably the slowest year. We do have some seasonality, as Steve mentioned in Q4 with the holidays. So we saw really good demand in January and February so far, or January and February. You know, Q1 has headwinds, you know, out-of-pockets reset. You know, we did... You know, we're still monitoring the impact of the Change Healthcare issue. You know, we get to see everything coming in. You know, you don't-- we're a little blind on some of the data right now. It feels like- Yeah ... they paid up, and that got worked out, so we don't think there'll be a material impact. But yeah, the demand through the first two months was real strong. Okay, wonderful. Just really briefly on gross to nets. Obviously, as you progress with reimbursement, things might change, but how do you think that's gonna evolve this year? Where may they go to in the long term? So we ended up last year at 18%. We will not end it at 18% this year. I guarantee you that. And that's not necessarily a bad thing. You know, Q1, without-of-pocket resetting and patients going into the donut hole, heart failure patients get in the donut hole pretty quickly. They get out pretty quickly, but they get in pretty quickly. So you'll see just a natural GTN evolution as patients move in and out of the donut hole, into catastrophic. And then on top of that, you're gonna see more contracting. We'll be smart on it, but you are gonna see more contracting, and we're doing it for two reasons: to lower patients out of pocket in that 30% that Steve talked about, and to increase adjudication, or to decrease adjudication time, so patients can get it faster. And we'll rebate for those two things. We haven't agreed to the outrageous demands of the PBMs. They haven't agreed to our miserly approach, but I think we'll find a middle ground there. That GTN, we've said 3five% for the year. I think we're sticking with that. Okay. Last question, before we move to some of the pipeline. [crosstalk] Okay. Just the IDN contribution, it's something that's coming on board more recently. Just talk a little bit about that and where you expect it's gonna contribute at peak. Yeah, so we really haven't broken it out. We've said that IDNs have kind of always been in the forecast. We think it's a- it makes all the sense in the world, right? They own the patient from ER costs, doc costs, pharmacy costs, hospitalization costs. We did sign a contract with Kaiser in October, shipped them... or no, in November, excuse me, shipped them in late December their initial order. They have since then put in their program, did giant in-services across a lot of the Northern and Southern California. So we really are, really feel excited about, especially with Kaiser, that that is gonna end up being... You know, is it gonna be 20% of the business? Probably not, but it's gonna be impactful. Plus, on top of that, you know, we have individual VAs ordering. We get national VA, then that is gonna be a bigger—that, that's the bigger of the two IDNs, and that could be a material chunk of, of business. But we're also looking at some of the smaller IDNs, that we're working on as well. You always think Kaiser, you think Geisinger, you think the VA, but there's a number of them out there that we have a kind of unique opportunity with a Medicare product to be in some of those hospitals that serve a lot of the underrepresented people, without it really impacting our 340B pricing. So I think you're gonna see it become more and more. They take time, they're integrated systems. It's a system, but we think it'll be a material amount of our business. Okay, wonderful. And last comment, I know we're running on time. You do have some underappreciated kind of long-term opportunity for FUROSCIX. So just talk about how you're expanding to the Class IV heart failure patients and also CKD patients, so. Yeah, so, so we have growth initiatives for this year. Obviously, you know, continue to open new accounts. We saw the highest doctor, amount of doctors writing in the last quarter. It'll be higher this quarter. Continuing moving forward, we have the IDN business, we have the opportunity with payers, but then we have a Class IV indication, which we filed in October. We expect approval in, at the latest, in August. 10% of the population, we represe- we think it's, it's palliative care patients. They're just laying there getting IV or lay- going to the hospital six times a year. We'll expand our sales force to get into that market or to service that market better. We'll file for kidney, CKD. This is edema and kidney. We'll file for that next month. We'll also start our PK study for our low volume. This is an auto-injector. We'll start our PK study next month. To remind you, the auto-injector, it's a two- or three-second push. It's 80 milligrams and one cc. It's better for the environment, lowers our COG 70%. We'll have a 90%+ margin product. So if you think about the company, we're continuing the trajectory of the launch. We'll file two NDAs this year, and we'll have two NDAs approved within the next 12 months, and three NDAs approved within the next 24 months. So it's really an exciting time with what we're doing on our product management and then the continued progression of the launch. Wonderful. Thank you so much for your time today. Thank you.