scPharmaceuticals Inc. (NASDAQ:SCPH) Q2 2023 Earnings Call Transcript

scPharmaceuticals Inc. (NASDAQ:SCPH) Q2 2023 Earnings Call Transcript August 10, 2023

scPharmaceuticals Inc. misses on earnings expectations. Reported EPS is $-0.36 EPS, expectations were $0.37.

Operator: Good day and welcome to the scPharmaceuticals Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to PJ Kelleher of LifeSci Advisors. Please go ahead.

PJ Kelleher: Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements on this conference call, other than historical facts, are forward looking statements within the meaning of the federal securities laws, including but not limited to statements regarding scPharmaceuticals, expected future financial results and management’s expectations and plans for the business and FUROSCIX. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project and other similar expressions are used typically to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance, but may involve and are subject to certain risks and uncertainties and other important factors that may affect scPharmaceuticals business, financial condition and other operating results.

These include, but are not limited to, the risk factors and other qualifications contained in scPharmaceuticals annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by the company with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Any forward-looking statements made in this conference call, including responses to your questions are based on current expectations as of today and scPharmaceuticals expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law. It is now my pleasure to turn the call over to Mr. John Tucker, Chief Executive Officer of scPharmaceuticals.

John?

John Tucker: Thank you, PJ and thanks to everyone listening to this afternoon’s call and webcast. This afternoon, I am pleased to provide an operational update before turning the call over to Steve Parsons, our Senior Vice President, Commercial for a more detailed update on the FUROSCIX launch and then Rachael Noakes, our Chief Financial Officer for a review of our financials. We will then open the call for your questions. The second quarter of 2023 represents our first full quarter of FUROSCIX commercial availability as we launched the product in late February. And while it is still early the key indicators underlying demand, including unique prescribers, total prescriptions written and in-services completed by our field sales force continue to reflect a positive trend.

FUROSCIX is being well received in the market and treating physicians are quickly gaining comfort prescribing it to their heart failure patients who can benefit from it thereby avoiding hospital admissions and readmissions that are costly to the system and inconvenient to patients. For the second quarter, we reported net revenue of $1.6 million, this despite the inventory normalizing at our specialty pharmacy partners from 17 weeks at the start of Q2 to approximately 5 weeks at the end of Q2. In addition, July was our best sales month launched to-date and our two main specialty pharmacy partners have already placed orders early in Q3. In terms of our gross and net discount from launch through the end of Q2, it is running at approximately 23%, which is well below the 35% long-term guidance that we guided to previously.

We do anticipate that GTM will continue to increase over time as contracting with payers evolves. Steve will provide a detailed commercial update shortly. But in response to these positive demand trends, we continue to evaluate our field sales force in territories to ensure that FUROSCIX is broadly accessible to heart failure patients and their treating physicians. To that end, we add an additional 10 sales territories towards the end of the second quarter. This brings our current field sales force to 54 territories and we anticipate seeing the positive impact of these additions beginning this quarter. In addition, based on the interest we have seen for FUROSCIX, we have identified the next tranche of territories and we are actively recruiting to fill these positions by the end of this quarter.

We anticipate seeing contributions from these latest physicians in Q4. Shifting now to payers, we continue to have productive discussions with commercial, Medicare Part D and Medicaid payers, in a continuing effort to make FUROSCIX broadly available to patients, at the most favorable terms possible. This involves not only securing initial coverage of FUROSCIX, but also working to have it placed on a formulary tier that will be affordable to most patients and not on the specialty tier. Reflecting our continued progress, recall that top five national health plan placed FUROSCIX on preferred formulary status across all of its commercial plans effective June 1. We remain in discussions with this plan regarding its Part D plans with the goal of securing similarly favorable formulary placement for its Medicare beneficiaries.

In addition, we obtained national Medicaid coverage of FUROSCIX effective July 1, 2023. As mentioned, we are engaged with many other health plans and we hope to have several more announcements like these in the months to come. We previously indicated that approximately 60% of all heart failure patients can access FUROSCIX under fixed tier co-pays of $100 or less and we are reiterating our goal of 75% or more over time. We are making good progress towards this goal. The market opportunity for FUROSCIX is significant and we believe it is worth reiterating. In the U.S alone, there are estimated to be 6.7 million adults suffering from heart failure, resulting in 4 million heart failure events annually. Of those, we believe 2.1 million episodes can be effectively addressed by FUROSCIX.

If we assume $3,300 per episode, which is four doses of FUROSCIX, we have the potential to access a market opportunity that is nearly $7 billion. And again, this is in the U.S. alone, there are a total of 15.8 million adults suffering from heart failure if we include the other G7 countries. At this early stage, we are seeing a wide range of doses of FUROSCIX per prescription from 2 to 12 as this is at the discretion of the treating physicians and some patients require more aggressive interventions than others. During the second quarter, we reported just over 5.2 doses per prescription. But we continue to believe that this number will trend towards 4 doses per prescription over time. Staying on the topic of market opportunity for a moment. Just recently, we received positive Type C meeting feedback from the FDA regarding the potential expansion of the FUROSCIX indication to include New York Heart Association Class 4 heart failure patients in addition to Class 2 and Class 3 for which FUROSCIX is currently indicated.

It is estimated that as many as 10% of all heart failure patients are considered Class 4 and of these we estimated that as many as 40% may benefit from FUROSCIX. So if we are successful, Class 4 represent meaningful expansion of our market opportunity when able FUROSCIX to be prescribed to the sickest heart failure patients. And based upon the feedback that we received from the agency who we believe we can file for the Class 4 indication without the need without any additional studies, we plan to do so by the end of the year. Turning now to IP, I want to cover a key development with respect to our intellectual property estate. We recently announced the issuance of key U.S. patents covering the development of more concentrated formulations of furosemide.

This enables the possibility of dosing flexibility of subcutaneous furosemide. We have completed initial solubility stability studies on multiple formulations described in the patent properties. We have identified potential product candidates and we have initiated IND-enabling studies. We also have patent applications pending, that covers similar formulations for furosemide for the treatment of congestions in patients with heart failure and also edema in patients with chronic kidney disease, an entirely new potential indication that also represents a significant market opportunity for our company. Taken together, this additional IP is foundational to our FUROSCIX lifecycle management strategy we are also pursuing similar patent protections outside of the United States.

Before turning the call over to Steve, I want to provide an update on our key performance indicators and our plans moving forward. We anticipate signing direct purchase agreements with several integrated health systems. FUROSCIX will be shipped directly from our 3PL Cardinal Health to these IDN facilities bypassing our three specialty pharmacies. As a result, those units that are shipped direct will not be captured in our prescription counts, which will no longer reflect all of the underlying demand. We are reassessing the KPIs that we intend to provide going forward. We will have a further update when we report our third quarter results in November. Finally, we were very pleased in June to announce that we have been added to the Russell 2000 Index.

Inclusion in this widely followed index will help raise visibility of our company and the key unmet need that FUROSCIX addresses along the heart failure care continuum. There is a reflection of the significant progress that we have made over the past 12 months, which resulted from tireless work on behalf of the entire team. At this point, I will turn the call over to our Senior Vice President of Commercial, Steve Parsons for a deeper dive into our launch metrics. Steve?

Steve Parsons: Thank you, John. As John indicated, the second quarter was our first full quarter of FUROSCIX commercial availability and we continue to be pleased with our progress. I will start with an update on our commercial team. We have said previously that we stand ready to add additional territories as demand patterns for FUROSCIX continue to emerge. As John indicated, toward the end of the second quarter, we added 10 territories to bring our total field force as of today to 54 territories. It is important to note that the territories we added during Q2 were added towards the end of the quarter and as such will not contribute meaningfully until Q3 when the additional sales reps have been fully trained and are conducting face-to-face in services at hospitals, doctor’s offices and heart failure clinics.

As John mentioned earlier, we have identified additional territories. We are in the process of recruiting for those positions. We anticipate contributions from these additional territories beginning in the fourth quarter. Our sales force has conducted 1,129 in-services as of June 30 compared to 518 as of March 31. In-services provide healthcare providers with training and prescribing instructions for FUROSCIX that is designed to ensure office readiness. Demo kits to train patients are provided at the completion of each in-service. Our focus on the in-service is crucial to ensuring effective use and training on FUROSCIX. The results continue to be encouraging. From launch through June 30, we had 631 unique prescribers, which is up from 194 through March 31.

For the second quarter ended June 30, we had 1,163 total prescriptions revenue. Of those, 604 prescriptions were filled and additional 279 were pending. For the prescriptions that were still pending at the end of Q2, there is a portion that we are still in process with the payers and another portion that were approved and queued waiting for direction from the prescriber on when to contact the patient. We continue to move pending prescriptions into the filled category with each day. For prescriptions that have been cancelled the reasons vary, ranging from the patient being unreachable, or hospitalized, or deceased prior to receiving FUROSCIX. And in some other cases, the patient copay was too high. Looking ahead, we would anticipate that the difference between prescriptions written and prescriptions filled will narrow as FUROSCIX is better positioned on more health plan formularies, providing quicker access for the patients and lower patients out of pocket expense.

During the second quarter, the average number of doses per prescriptions was 5.21, which is running higher than our expectation. We continue to believe four doses per prescription to be the right number long-term. In terms of distribution we continue to be pleased with the functioning of our distribution process. Thus far through our strategic partnership with Cardinal Health as our third party logistics provider. Cardinal is working well with our three specialty pharmacy partners, including our main specialty pharmacy, Biometrics. From a marketing perspective, we are engaged in broad multi-channel market awareness campaign to drive brand awareness, adoption, and commitment. This program encompasses many different activities. But some of the key ongoing activities include engagement and development of key opinion leaders, conference appearances, print and electronic collateral, and the development of both provider and patient websites among other critical tasks.

Overall, although we still have a lot of work to do, we are pleased with the continued progress and the trajectory that we are on. That concludes my update. I would now like to turn the call over to our Chief Financial Officer, Rachael Nokes for a financial update, Rachel?

Rachael Nokes: Thank you, Steve. We generated net product revenue of $1.6 million during the second quarter of 2023. And the cost of revenue was $0.4 million, yielding a gross profit of $1.2 million. Research and development expenses were $2.9 million for the second quarter of 2023, compared to $5.1 million for the comparable period in 2022. Decrease in research and development expenses for the quarter was primarily due to a decrease in clinical study and medical affairs costs, pharmaceutical development costs and employee related costs. Selling, general and administrative expenses were $12.1 million for the second quarter of 2023, compared to $4.3 million for the second quarter of 2022. The increase in selling, general and administrative expenses for the quarter was primarily due to an increase in employee related costs, commercial costs, and legal and professional service costs.

We reported a net loss of $14.2 million for the second quarter of 2023, compared to a net loss of $9.7 million for the comparable period in 2022. As of June 30, 2023, we held $102.9 million in cash equivalents and short-term investments, compared to $118.4 million as of December 31, 2022. As of June 30, 2023, scPharmaceuticals total shares outstanding was 35,849,482. That concludes the financial update, John?

John Tucker: Thanks, Rachel. This concludes our prepared remarks. At this point, we will open the call for questions.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from Glen Santangelo with Jefferies. Please go ahead.

Glen Santangelo: Yes. Thanks for the details and taking my question. Hey, John, I just wanted to follow-up on something you said in your prepared remarks around July. Because if we’re sort of looking at the Q2 sort of total script, written and filled numbers, and reconciling that with your last communication, which I think was sort of in early June, it looks like June maybe took a modest step down from – I’m sorry, yes, June took a modest step down from sort of where we were in May. But in your prepared remarks, you said July was the best month yet. And so I’m just kind of curious if you can give us a little bit more color about how things sort of trended from month to month? And if we should really be reading anything into that or maybe it’s still too early to matter the month a month volatility, but any commentary be helpful?

John Tucker: Yes. Sure. Thanks Glen, it’s John. Yes, launches are unpredictable, lumpy. And again, it’s still early, you know, we had a huge run up from May to June, from April to May, to remember over 55%. So we did see demand higher in June. And May, we saw a lot of that come in at the end of the month, at the end of the quarter. A lot of those scripts were then filled in July. And so as I said in my remarks, July is we’re off to a good start in Q3. And in July has been our – was our best month, but a lot of scripts in June came in last week of June were queued. But June demand was actually up quite a bit over May the scripts just ended up getting a lot of them getting filled in July.

Glen Santangelo: And maybe as a follow-up to that. I mean, if you look at 1,163 scripts written across 631 unique prescribers, right? That’s call it two scripts per provider. I mean, I know it obviously doesn’t work out that way. But you’re seeing a pretty broad number of unique prescribers or can you maybe talk about where you are in your in-servicing initiatives or you’re pretty much done? I thought the plan was to be relatively done by that – with that about this time, but now you’re adding sort of more territories like how should we think about the physician education piece where we are in that process and what we should be expecting in the third quarter?

John Tucker: Hey, Glen, this is John, again, I’ll turn over Steve, let me comment first, you’re absolutely correct when we add new territories, those are virgin territories. So we need to do in-services just like at the beginning. So you’re going to continue to see in-services moving forward, we’ve learned, the in-services are absolutely vital to what we’re doing. And but the second, and the second, and the third call are just as important to make this part of their practice. So, we’re still working on two things, expanding the number of writers, but making sure those writers that have written, adopted into their practice, and that just takes time and calls. I mean, a lot of times, we will walk in, yes, using a patient, they did really, really great.

I forgot that, thanks for reminding me, I’m going to – and we got to keep doing that, as we said last month or 2 months ago, the products doing great, I mean, the docs that have used it have had great results, the patients have had have a great results, it’s just going and just getting it into their practice getting it into their routine. And the unique prescribers are interesting, because in a lot of offices, there might be five or six doctors, but one nurse practitioner that does the writing. So our goal is as we continue to add territories, continue to do in services, expand the writer base, but also make sure that we’re getting back in there, continuously reminding them maybe re in service, and again, to make sure that they’re adopting and into their practice.

Steve, do you want to add anything to that?

Steve Parsons: No, that captures it well. We will continue to do in-services. We don’t count it in-service. If we do a second one at the same location, Glen, these are all unique locations, when you see the number. If we have to do another one to reach more providers, then we won’t count that. But if they asked us to go to a satellite location, or if we open new accounts, even in our existing territories, we’re going to go back to the basics, the fundamentals and do it the proper way. So we will always be doing in-services, not nearly at the clip that we were to launch, but they’ll always be a part of our execution.

Glen Santangelo: Okay, thanks for the comments.

John Tucker: Thanks, Glen.

Operator: Our next question comes from Roanna Ruiz with Leerink Partners. Please go ahead.

Unidentified Analyst: Hi, good afternoon, everyone. This is [indiscernible] on for Roanna Ruiz. Thanks for taking our questions. Maybe a quick one for John, I think in your prepared remarks, you mentioned direct purchase agreements. I’m just curious, what would the approximate contribution look like, from these agreements? How do you expect this to evolve over time? And I guess, what sort of demand are you seeing from this channel right now? And what sort of impact could this have on your overall gross net going forward?

John Tucker: For the lot there, Nick. But let me try it. I’ll start, and gross to net, it depends on the discount we offer on those IDN. We always thought the IDN is where the value proposition is the strongest, right? If you think about it, they kind of own that patient, and putting them on FUROSCIX and avoiding the hospitalization flows to the bottom line. So we’ve always thought that the IDNs are a key part of our focus. We’ve had doctors that are affiliated with the IDNs, write scripts now. But what – we feel really confident that’s going to happen this quarter, if these agreements will end up having the product directly shipped to the IDNs, the hospitals within the IDNs of pharmacies within the IDNs. And we’re working on guideline structure there where it’s really part of the treatment algorithm.

So it’s hard to say what the impact and we’ve always thought that we’d have this business. So I don’t think it’s extra business on top of what we forecast internally. It – but it’s coming in line, maybe a little longer. These things are very complicated to work. It’s not like walking into a cardiologists office detailing and having them write. There’s a number of people you got to work at IDN starting in cardiology to purchasing, to pharmacy. And so we’ve been doing that work. We think they’re coming online, and we think they’ll – it’s not in our sales now, obviously, but they will be hopefully come online this quarter. On the GTN, I don’t think, we have the 23% GTN we have said, it’s going to go up. We still think it will.

These will be part of that as these come online, but we are going to stay disciplined on our rebating strategy. We have stayed discipline. Sometimes it’s a little painful when you’re seeing high co-pays, because we’re not giving those gigantic rebates. But we think the plan long-term works, where we’re showing the value of the product. We’re showing the utilization going through these plans and their PA in it and that costs the money, and then they are dispensing it and they’re not getting rebates. So we will stay disciplined like that with the IDN. I do think from where we are in talking to the major ones, that they’ll come in under what our rebate, the maximum rebates we were thinking would be. So we feel it’ll contribute and won’t really impact the GTN

Unidentified Analyst: Helpful. Thanks, John. And then maybe, quick question on inventory. I think you mentioned you are down to five weeks by the end of the quarter. I am just wondering how you expect those inventory dynamics to play out towards the end of the year, 2024?

John Tucker: Yes. So, thanks Nick. Yes, so as I have said, we kind of normalized it down to five weeks. We think we are going to stay around here. Anytime launch, it’s just unpredictable from day-to-day, week-to-week. So, they tend to keep a little more inventory early in a launch, like right now. Eventually they will probably get down to the maybe by the end of the year or early next year to the two-week to three-week. But it’s hard, it’s up to them. We obviously stay in contact with them. But we have got a number of different locations. And with minimum order requirements, they can be sitting at any time with a lot or a little inventory. But we do think that that five-week kind of normalizes maybe works down another week or two weeks through the end of the year. But I think that’s probably where it stays.

Unidentified Analyst: Helpful. I will hop back in the queue. Thanks John.

John Tucker: Thanks.

Operator: Next question comes from Stacy Ku with TD Cowen. Please go ahead.

Stacy Ku: Thanks so much for taking our questions and congrats on the quarter. So, we have a few. First, the clinician feedback from these heart failure specialists have been very positive in RTAC. So, what are you seeing in terms of adoption patterns for practices that maybe weren’t involved in the clinical trials, or maybe from more community settings? So, where are we in terms of the boarder awareness of FUROSCIX? So, that’s the first question. And then just some follow-up on some of the metrics you provided? Thanks so much for the details. Given your improvements in payer coverage, are you willing to provide any expectation or guidance for the expected kind of fulfillment rate that we are going to see by year-end? And then last, if you are willing to provide some other [Technical Difficulty]?

Would you be able to talk about maybe those – within those adopting clinicians? Maybe what you are seeing in terms of the average number of prescriptions, any anecdotal feedback would be helpful there. Thanks so much.

John Tucker: Hey Stacy, I will say a couple of those and then turn over to Steve. So, on the fulfillment rate, we didn’t have – we only had the big commercial payer on June 1st. So, I think that’s continue to impact the fulfillment rate, and Medicaid came online July 1, which is not reflected in this fulfillment rate at all. So, we have seen the fulfillment rate tick up since June 30th. We think we will continue to do so as we move forward as payers come online. And it’s a couple of the things in fulfillment race. It’s also as Steve spoke to, doctors still in the start form, right. If we have to go back to him two times or three times or they are delayed. Now, some of those patients end up being hospitalized and we lose the patients.

So, the fulfillment rate will really be dictated by how things go with the payers, both in in getting co-pays down. We have talked a lot about that, as well as improving fill time. So, we don’t have that lag where the patient could end up being hospitalized. And also with doctors and with us, we got to continue to work with our doctors’ offices to make sure that they know exactly what the plan is going to need for them to fill the script. But we have seen the fulfillment rates start ticking up and we think as payers come online, and education continues that that will continue. Steve, do you want to talk a little bit about the engagement at the docs, heart failure specialists?

Steve Parsons: Yes. So, most of the people that we are engaging with now weren’t part of any early utilization. They weren’t part of the trials as you as you described it. Those were early adopters in the March timeframe. Now, it’s regular docs. It’s people who are dealing with this problem of patients with too much fluid and feeling badly, and asking for some extra help. And so the adoption is broadened. We are in academic places. We are in private practices. We are in communities. It’s really across the board. And I think you asked about the average number of prescriptions per prescriber, hard to say that you can do simple math and look at 1,163 and divided by unique prescribers. But there are some doctors who have only done one so far.

They started later in June. There is others that have done multiple prescriptions. So, I don’t think you can characterize it as like everybody averages to, it’s across the board. And then within an office, sometimes they all funnel to one or many prescribers. So, not really sure how to precisely answer that question. But that’s what we are seeing.

Stacy Ku: Alright. Thank you.

John Tucker: Thanks Stacy.

Operator: Our next question comes from Doug Tsao with H.C. Wainwright. Please go ahead.

Doug Tsao: Hi, good afternoon. Thanks for taking my questions. Just, I am curious, John, what’s the average fulfillment time right now that you are currently experiencing from when a script is written to when it’s being shipped?

Steve Parsons: Yes. This is Steve, I will take that. I am closer to the day-to-day reports. And I am not evading, it’s a very difficult thing. I think you have heard some doctors want to write a note right away, they say mark off, expedited 24-hour review on the form that you submit, and we get those out pretty quickly. Then there is other doctors who submit in advance, they want an answer. They want to know is it going to be covered, what’s the co-pay going to be, and we gets appropriately put it in a queue. It’s really all over the place. We do have prescriptions that are very old, that eventually get filled. And then we have prescriptions that come in and go back out the same day. So, that to have like a, an average wouldn’t really do it justice, because of all the variability and how the offices want to use the product.

John Tucker: Well, I think if you are looking at a median doc is probably better than a mean on this. Because as Steve said, like we felt scripts from March last week, right. Just were queued up and the patient got in trouble. And the doc said, send it right. But if you look at kind of a median, you are probably looking at and it depends on Friday, obviously, it’s not going to ship probably till Monday or Tuesday. But it’s probably about two days, two and a half days on median. But again, there is a lot of them that either the payer is requiring information from the doc for we – or it’s queued and it could go a month later. So it’s, we are looking at it. We have scripts that Steve said go out the same day. We have a specialty pharmacy that does courier service, and big MSAs. And those scripts get written in the morning, get cleared and go that afternoon.

That’s again, it has to be within an MSA and the plan has to approve it quickly, but that happens as well. So, it’s kind of all over the board. It’s really hard to look at that. Other than looking at what’s, because when we really can’t see if it’s cute or not, and how we read it. So, I wish we had a more precise answer, but that’s where we are.

Doug Tsao: And I am curious that what proportion of the scripts that are being written are sort of being requested to be sort of on an expedited basis. And I think you said like, if a script is written on a Friday, it can’t – probably it’s not going to go out until Monday or Tuesday. I mean ultimately, given the nature of the product, will you be able to sort of provide seven day a week coverage?

John Tucker: Steve, do you want to…?

Steve Parsons: Yes. So, I mean we have a program if the doctor really needs the patient have over the weekend, we have what’s called a QuickStart program. So, we ship something on Saturday morning. Whether the payer has processed it quickly enough or not, we will ship them product to get them through the weekend. We do that one time for a patient, because after that, there is usually a prior off, it’s been approved and things can go quickly the second time they need it. It’s really only that first time, you are using it, that there is any potential delay. And any doctor really who needs it the next day, we have a QuickStart program. It’s one dose, but it gets them through that day and gets them.

John Tucker: And the docs have samples as well, for those patients. So, between the QuickStart and the sample for an expedited doctor, we have covered that cover that gap.

Doug Tsao: Okay. Great. Thank you so much.

John Tucker: Thanks Doug.

Operator: Our next question comes from Naz Rahman with Maxim Group. Please go ahead.

Naz Rahman: Hi, everyone. Congrats on the progress so far. I just had a few questions regarding your positive Type C meeting. First of all, could you kind of give us more color on what’s the difference between the class three and class four patients? And also why do you think for us is only applicable in about 40% of those patients that have let’s say, a larger percentage of this class four patients? And finally, in those class four patients, how many doses of FUROSCIX do you think those patient will need compared to what you currently think is like for the class two and three?

Steve Parsons: So, I am going to had John try to answer some of that question. But I think that on the 40%, that’s just kind of our estimate on the market share, not really, what we – how many of them are qualified for it. Some of them we know are going to be in acute pulmonary edema and have to go to the hospital. But we think a large majority of them will need treatment in FUROSCIX as appropriate form. As far as is dosing, you are right, we would think that they would probably need more doses. But that will be governed a bit by managed care, if the quality limits on, let’s say, quality limits, let’s say it’s a script for four. But they will got to get another script for the next week or two weeks later. But we do think that’s probably those are probably higher utilization patients, then per month than the twos or threes. John, do you want to give a little bit of light on the meeting with the FDA?

John Tucker: Yes, sure. So, the big difference between New York Heart Association classifications all the way to one through four, really is based upon the amount of exercise in which a patient can tolerate. And as you go to class four, the amount of exercise with certain degrees of exertion becomes less tolerated. So, the problem with New York Heart Association classification, it’s great for clinical trials, when you really have when you have a specific way in which to measure that. But as you get into clinical practice, it becomes so subjective about how this is done. This was really the basis of the discussion back and forth with the FDA about why despite that we included mainly class two and three patients in our clinical trials, that they agreed that we would be able to expand into class four.

As the pharmacokinetics between IV and subcutaneous is not expected to be different amongst that population. That was the data and the argument which we made to the to the agency. But to answer your question directly, it’s all based upon how much exercise a person can tolerate with…

Naz Rahman: Got it. Thanks. And I guess one last question on this, is in regards to the filing, is this some, the sNDA filing? Is this something you would expect a six-month review cycle for, or are you expecting like the 1 year review for this?

John Tucker: We would not expect a 1 year review. I think there is a couple of different avenues here. Probably six months, we think there might be a way to shorten that. Again, we are not putting in any clinical data at all. It’s really just some of the device, the device documentation, and I am not trivializing how long that takes to do, but it’s a pretty straightforward review. So, we wouldn’t think it’s a, like a full 10-month review or anything like that.

Naz Rahman: Got it. Thanks for taking my questions.

John Tucker: Thanks Naz.

Operator: There are no further questions at this time. So, this concludes our question-and-answer session. I would like to turn the conference back over to John Tucker, for any closing remarks.

John Tucker: Thank you. That concludes our call this afternoon. We hope you take away from this call that we are very pleased with our progress today. And as we continue to execute on our commercial plan, we anticipate continued growth in the percentage of heart failure patients who have affordable access to FUROSCIX, which we believe will translate into a nice trajectory for both prescriptions and revenue. We look forward to providing more information during our third quarter update in November. Thank you and have a great evening.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.