NASDAQ:OPTN OptiNose Q2 2023 Earnings Report $9.28 +0.02 (+0.22%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$9.28 0.00 (0.00%) As of 04/25/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast OptiNose EPS ResultsActual EPS$0.30Consensus EPS -$1.65Beat/MissBeat by +$1.95One Year Ago EPS-$3.45OptiNose Revenue ResultsActual Revenue$19.45 millionExpected Revenue$17.00 millionBeat/MissBeat by +$2.45 millionYoY Revenue GrowthN/AOptiNose Announcement DetailsQuarterQ2 2023Date8/10/2023TimeBefore Market OpensConference Call DateThursday, August 10, 2023Conference Call Time8:00AM ETUpcoming EarningsOptiNose's Q1 2025 earnings is scheduled for Tuesday, May 13, 2025, with a conference call scheduled at 10:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by OptiNose Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 10, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Good day, everyone, and thank you for standing by. Welcome to the OptiNos Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. Operator00:00:30I would now like to hand the conference over to Jonathan Neely, Head of Investor Relations. Speaker 100:00:37Good morning, and Thank you for joining us today as we review OptiNose's Q2 2023 performance and our plans for the remainder of the year. I'm joined today by our CEO, Doctor. Rami Mahmood and our Chief Commercial Officer, Paul Spence. The slides that will be presented on this call can be viewed on our website, optiNose.com, in the Investors section. Before we start, I would like to remind you that our discussions during this conference call will include forward looking statements. Speaker 100:01:01All statements that are not historical facts are hereby identified as forward Statements. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements. Additional information regarding these factors and forward looking statements is discussed under cautionary note on forward looking statements section of the Earnings release that we issued today as well as under the Risk Factors section and elsewhere in OptiNose's most recent Form 10 ks and 10 Qs that are filed The SEC and available at their website, sec.gov, and on our website atoptiNose.com. You are cautioned not to place undue reliance on forward looking statements. The forward looking statements during this conference call speak only as of the original date of this call or any earlier date indicated in such statements, And we undertake no obligation to update or revise any of these statements. Speaker 100:01:47We will now make prepared remarks and then we will move to a question and answer session. With that, I'll now turn the call over to Rami. Speaker 200:01:54Thank you, Jonathan, and thank you to everyone listening for joining us this morning. We appreciate you joining us for our Q2 update. I'd like to start on Slide 3. We'll 1st and only product indicated for the treatment of chronic sinusitis. Claims data suggest that CS is currently being diagnosed by healthcare providers At least 10 times more frequently than nasal polyps. Speaker 200:02:31In the current healthcare environment where off label use of branded products is increasingly constrained by payers, We believe the new indication could enable us to access a multifold larger patient audience and therefore drive strong growth for multiple years starting in 2024. We also believe the value proposition that XHANCE could offer both clinically and economically is very desirable, particularly 2nd, our supplemental new drug application for the new indication of XHANCE is being reviewed by FDA now. We submitted our application in February and with the FDA target goal date in December, we are now more than halfway through the review period. 3rd, we will show you how in the Q2 of the year we have continued to effectively execute against our previously communicated 2023 operating strategy, which is rooted in our intent to prioritize the value of investing in the potential near term launch of XHANCE as the 1st and only FDA approved drug treatment for chronic sinusitis. To briefly elaborate on this last point, I'd like to remind you that we believe there are important differences including patient prevalence, Frequency of diagnosis and payer dynamics that make the potential for return on investment from promotion of XHANCE following a potential chronic sinusitis approval Significantly greater than the return available from promotion of XHANCE as a treatment for nasal polyps. Speaker 200:04:03Because of this, we have structured our business in 2023 To materially reduce the use of cash and increase focus on profitability, while being careful to preserve infrastructure and capabilities It will be important for the successful launch of chronic sinusitis in 2024. We adhered to this strategic discipline through the first half of this year and delivered results that are better than our initial expectations. As a result of that performance, we have increased our revenue expectation for full year 2023. Turning to Slide 4. We believe future approval of XHANCE as the first and only FDA approved treatment for CS has potential to increase the number of patients for whom the product can be promoted by at least tenfold because medical claims data indicate that order of magnitude more patients are currently being diagnosed with chronic sinusitis than are being diagnosed with nasal polyps. Speaker 200:04:56The new indication would create opportunity Strong growth within our existing commercial footprint, promoting largely to specialists who see large numbers of patients with the diagnosis. The newly expanded universe of patients would also include patients cared for by physicians outside our current commercial reach and we are actively exploring commercial partnerships, Alternative selling models and other ways to facilitate future outreach to those physicians and patients. Turning to Slide 6. Previously, we announced that during the Q2, the FDA accepted our supplemental new drug application in pursuit of an XHANCE indication for treatment of patients with chronic rhinos This is a novel indication for which the agency has never previously approved any drug product. Focusing on what's next, the substantive review of safety and efficacy for this largely clinical application is ongoing And the FDA action goal date, which is based on the original submission date in February, has been set for mid December of this year. Speaker 200:05:56Our regulatory and clinical teams continue to focus on being responsive to the FDA during the review and will continue to do so throughout the entire review process. Turning to Slide 8. As a reminder, our objective in 2023 is to stabilize demand trends in our current nasal polyps specialty business with a reduced commercial footprint and materially reduced expense, while both preserving the necessary launch capabilities and improving operational efficiency and effectiveness of our commercial resources. This is intended to best set us up for successful launch of XHANCE for CS in 2024. With that objective in mind, We are pleased by XHANCE prescription demand results in the Q2 of 2023. Speaker 200:06:43Regarding prescription demand, in the Q2 of 2023, there were approximately 30,900 new prescriptions for XHANCE, an increase of 3% over Q2 2022. In addition, there were approximately 90,700 total prescriptions for XHANCE in the Q2 of 2023, an increase of about 3% compared to the Q2 of 2022. We measure breadth and depth of physician prescribing by the total number of physicians who have patients filling XHANCE prescriptions. Regarding breadth, in the Q2 of 2023, There were 8,624 physicians who had a patient fill at least one prescription of XHANCE, an increase of 4% compared to Q2 of 2022. Regarding depth, the number of physicians who had more than 15 prescriptions filled by their patients in a quarter, that number decreased by approximately 6 I'd like to note that all the data on this slide is estimated based in part on monthly prescription and inventory data from third parties And in large part also on data directly reported to us by pharmacies that are part of the XHANCE preferred pharmacy network. Speaker 200:08:02I'll also note that the Q2 2022 data that we're showing today reflects our current 2023 methodology. For reference, we've footnoted our prior estimates based on prior methodology. I'll now turn the call over to Jonathan to discuss our Q2 financial performance. Speaker 100:08:19Thank you, Rami. Turning to Slide 10. We are encouraged by our Q2 2023 financial results. They are shaped by our strategy to prioritize capital resources for As we reported earlier, OptiNose recognized $21,100,000 of SG and A plus R and D expenses in the Q2 of 2023. This is approximately a $13,000,000 or 38 percent decrease compared to Q2 2022 expenses of $33,800,000 Regarding revenue, OptiNose recognized $19,500,000 of XANTZ net revenue in the Q2 of 2023, A decrease compared to Q2 2022 net revenues of $20,600,000 This is stronger than our original expectations for the 2nd quarter. Speaker 100:09:07It is important to note that our first half twenty twenty three revenues of $31,300,000 were also stronger than what we expected when we announced our initial financial guidance for the year. Accordingly, we have raised our guidance range for full year 2023 XHANCE net revenues, which I will discuss further in a few moments. The year over year decrease in revenue in the Q2 of 2023 is a result of a number of factors, including an increase in co pay assistance driven by An increase in the proportion of volumes attributable to patients with commercial insurance that does not cover XHANCE or have not met the utilization management criteria of their insurer as well as an increase in the proportion of volumes attributable to government programs, which increased gross to net deductions. I will note that we view the prescription demand strength within the uncovered commercial patient segment as an opportunity to modestly revise our co pay assistance program In a way that exchanges some of that demand strength for increased profitability. Finally, based on available prescription and inventory data purchased from third party And on data we received directly from our preferred pharmacy network, the estimated Xant's average net revenue per prescription for the Q2 of 2023 was $2.14 A decrease compared to $2.35 of estimated revenue per prescription in the Q2 of 2022. Speaker 100:10:24What is important here is that Q2 2023 net revenue per prescription increased substantially compared to the Q1 of 2023, in line with our expected annual pattern, And these results are consistent with our prior expectations for overall 2023 net revenue per prescription. Overall, our first half results Continue to align with our intent to reduce use of cash in 2023. We reduced operating expenses by $22,000,000 or 33 percent in the first half of twenty twenty three when compared to the first half of twenty Speaker 200:10:56twenty two. Speaker 100:10:56We outperformed our initial expectations for revenue and we achieved this while sustaining product demand And maintaining the capabilities and resources that we believe will be necessary to enable a successful launch of a potential new indication for XHANCE in 2024. Turning to Slide 12. As I just mentioned, XHANCE net revenues in the first half of twenty twenty three were better than our initial expectations. As a result of that performance, we have increased our revenue expectations for full year 2023. We now expect XHANCE net revenue for the full year of 2023 to be $64,000,000 to $70,000,000 Previously, we expected XHANCE net revenue to be between $62,000,000 $68,000,000 It's important to note that we are not assuming revenues from a CS launch in our full year 2023 guidance. Speaker 100:11:38In addition, with respect to XHANCE net revenue per prescription, expect our typical historical pattern of improvement from the first half through the second half of twenty twenty three and continue to expect our average net revenue per prescription to be approximately $200 for the full year of 2023. Finally, we continue to expect operating expense defined as sales, general and administrative plus Research and development expenses for the full year of 2023 to be in the range from $88,000,000 to $93,000,000 of which approximately $6,000,000 is stock based compensation. I will now turn the call back over to Rami for closing remarks. Rami? Speaker 200:12:14Thank you, Jonathan. Before moving on to take questions, I'd like to reiterate The significance of the opportunity in front of us, which I believe has potential to reshape our business in the coming months and for years into the future. We believe an approval for XHANCE as the first and only drug indicated for treatment of chronic sinusitis would give us an opportunity to build a profitable ENT and allergy focused business by increasing net revenues and leveraging our existing commercial capabilities. In addition, as I previously noted, We are actively exploring commercial partnerships in primary care to create shared value beyond what we can create on our own in the largely specialty segment that's engaged by our current commercial infrastructure. With that, I'd like to thank you for your attention this morning and open the call for Q and A. Operator00:13:00Thank you, Our first question comes from the line of David Amsellem with Piper Sandler. Please proceed. Speaker 300:13:24Hi, thanks. This is Sarah on for David. A couple of questions. Can you speak to the payer landscape and whether it's evolved at all recently in terms of Seeing payers limit prescription to nasal follow ups and do you expect just to change after the label expansion? And additionally, how are you expecting the net revenue To evolve with upcoming expansion to CS. Speaker 200:13:45Paul, maybe you'd like to answer the first part of that question around payers and then Jonathan can address the question about the revenue. Speaker 400:13:51Sure. Thanks for the question. Yes, we really haven't seen any material change in that payer landscape related to XHANCE and coverage within nasal polyps. And so we continue to deploy our commercial efforts to optimize our prior authorization efforts As well as the fulfillment of the increasing demand in prescriptions there. As we look forward to the CS launch, we also expect that that will continue in similar fashion. Speaker 400:14:19And again, we've continued to optimize our efforts there with the payers and with our commercial deployment to make sure the access is there. So Hopefully that answers your question around coverage. Speaker 100:14:32Okay. And, Skyler, just Keeping in mind, we don't have any guidance in place for 2024 in terms of our expectations on revenues or on revenue per prescription. But I think when you look at our contracting with payers, in particular in the commercial space where most of our business Coming from many of our contracts today are written to cover the indications on the label for the product. And so we anticipate as we roll into 2024 that we have an approval in CS that much of the contracting that we have in place Today is going to be applicable to those prescriptions in the future, if they're written for chronic sinusitis or similar indication. Then I think our expectation this year, we expect revenue per prescription to come in at approximately $200 For the full year. Speaker 100:15:31And last year we reported something that was just a bit below $2.20 for the full year. But I think there are aspects of this year's expectation for revenue per prescription that are not really extrapolable into the future. We anticipate that this year there was going to be slightly less appetite on the customer side To hold inventory. And so I think when we look at on a year over year basis that that was going to be some of the downward pressure that we were Expecting and would lead us to a revenue per prescription this year of approximately $200 But in terms of That being something that would repeat itself into the future, there is I think there's a level of inventory we'll arrive at and that's something that won't be A headwind for us in the future. So we think that there's going to be opportunities that will help us improve net revenues into the future, but any net revenue per Into the future. Speaker 100:16:32With that, I think I'll turn it back over to Ramy to see if he has any summary remarks on either of those. Speaker 200:16:39I guess I'd just like to reiterate that, we feel like we have pretty good coverage today for XHANCE. And as we have said before, there's a meaningful part of that coverage that does involve prior authorizations, which frequently are Restricted to the indication to the FDA approved indications, which today, of course, is just nasal polyps. As Paul said, in future, That same coverage, wouldn't be inclusive of the new indication of chronic sinusitis. We have engaged in conversations with payers Through the 1st part of this year, we're being very transparent. And at least going into 2024, we expect our coverage to be quite similar to the way it is today. Speaker 200:17:22And did we answer your questions? Do you have any additional questions? Speaker 300:17:25Yes. That was super helpful. If I can just sneak one separate Question in, can you provide any additional color on just the launch preparedness you're doing ahead of the label expansion? Speaker 200:17:34Okay. We are actively engaged preparation for the launch, as you might expect, Paul, would you like to make any comments? Speaker 400:17:39Yes, sure. Skyler, so we're focused on many things as we Prepare for the launch. One is that we're taking a fresh product positioning approach and messaging So that we can fully seize the 1st and only positioning a new indication of XHANCE that will enable that launch And that rapid uptake. We're also assuring scalability of our pharmacy distribution infrastructure that's both within the retail setting as well as within Pharmacy Network, we continue to look at and evaluate our payer and affordability programs. So as Rami had said, we can make sure the appropriate patients can get As to XHANCE at launch, we're also refining our health care provider targeting for both our direct selling and non A personal promotion to access the larger opportunity while assuring overall efficiency within our model and our P and L. Speaker 400:18:36And then lastly, We continue to evaluate efficient options for accessing the CS opportunity outside of our current HCP promotion audience. So these are just several things that we have as we're continuing to launch plan and get ready for launch that we think will put us in a position to be ready. Speaker 200:18:55If I can just add a couple of comments. The first is, as we've said before, it is our current intent that the operating expenses Associated with the launch as we go into 2024 will be similar to the launch to the operating expenses we have today. So They may not be precisely the same, but we don't expect them to materially increase in association with the launch because we're launching largely to the Same audience with a similar footprint to what we have today. 2nd comment I'll make is that, as I mentioned earlier, We are actively pursuing as part of our planning for the launch, the possibility of a primary care partner who can expand our reach into the primary care And allow us to access the incremental opportunity associated with that. Did you have any additional questions? Speaker 300:19:41No, that's great. Thanks so much for all the color. Operator00:19:45Thank you. All right. I don't see any further questions. I will pass it back to Doctor. Rami Manmuth for final remarks. Speaker 200:20:02Okay. Well, I'd like to thank everyone for joining us this morning. Hopefully, you've heard our enthusiasm over the potential associated with our upcoming approval date in December And the fact that we're pleased with the execution so far this year against our 2023 strategy, reducing expenses While stabilizing and potentially even growing a little bit, our underlying product demand. We look forward to filling you in on our results, Q3 and hope we'll continue to perform exactly as expected. Operator00:20:35Thank you all for participating in today's conference. This does conclude the program and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallOptiNose Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) OptiNose Earnings HeadlinesOptinose Reports 2024 Financial Results, Highlights Prescription Growth and First Operational IncomeMarch 28, 2025 | msn.comOptinose reports Q4 EPS (3c) vs ($1.33) last yearMarch 27, 2025 | markets.businessinsider.comHere’s How to Claim Your Stake in Elon’s Private Company, xAIElon Musk has done it again. He’s developed a powerful new AI model that’s already turning heads — and turning the industry upside down. Some say it could threaten Google’s search engine dominance. Others believe it could mark the beginning of the end for ChatGPT.April 26, 2025 | Brownstone Research (Ad)Optinose Reports Fourth Quarter and Full Year 2024 Financial Results and Recent Operational HighlightsMarch 26, 2025 | markets.businessinsider.comSHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates GB, RDFN, PRA, OPTN on Behalf of ShareholdersMarch 25, 2025 | morningstar.comOptinose downgraded to Neutral from Buy at H.C. WainwrightMarch 22, 2025 | markets.businessinsider.comSee More OptiNose Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like OptiNose? Sign up for Earnings360's daily newsletter to receive timely earnings updates on OptiNose and other key companies, straight to your email. Email Address About OptiNoseOptiNose (NASDAQ:OPTN), a specialty pharmaceutical company, focuses on the development and commercialization of products for patients treated by ear, nose, throat, and allergy specialists in the United States. The company offers XHANCE, a therapeutic product utilizing its proprietary exhalation delivery system (EDS) that delivers a topically acting corticosteroid for the treatment of chronic rhinosinusitis with nasal polyps, as well as is in Phase IIIb clinical trial for treatment of chronic sinusitis; and Onzetra Xsail, a powder EDS device. It has a license agreement with Currax Pharmaceuticals LLC for the commercialization of Onzetra Xsail. The company was founded in 2000 and is headquartered in Yardley, Pennsylvania.View OptiNose ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:00Good day, everyone, and thank you for standing by. Welcome to the OptiNos Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. Operator00:00:30I would now like to hand the conference over to Jonathan Neely, Head of Investor Relations. Speaker 100:00:37Good morning, and Thank you for joining us today as we review OptiNose's Q2 2023 performance and our plans for the remainder of the year. I'm joined today by our CEO, Doctor. Rami Mahmood and our Chief Commercial Officer, Paul Spence. The slides that will be presented on this call can be viewed on our website, optiNose.com, in the Investors section. Before we start, I would like to remind you that our discussions during this conference call will include forward looking statements. Speaker 100:01:01All statements that are not historical facts are hereby identified as forward Statements. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such statements. Additional information regarding these factors and forward looking statements is discussed under cautionary note on forward looking statements section of the Earnings release that we issued today as well as under the Risk Factors section and elsewhere in OptiNose's most recent Form 10 ks and 10 Qs that are filed The SEC and available at their website, sec.gov, and on our website atoptiNose.com. You are cautioned not to place undue reliance on forward looking statements. The forward looking statements during this conference call speak only as of the original date of this call or any earlier date indicated in such statements, And we undertake no obligation to update or revise any of these statements. Speaker 100:01:47We will now make prepared remarks and then we will move to a question and answer session. With that, I'll now turn the call over to Rami. Speaker 200:01:54Thank you, Jonathan, and thank you to everyone listening for joining us this morning. We appreciate you joining us for our Q2 update. I'd like to start on Slide 3. We'll 1st and only product indicated for the treatment of chronic sinusitis. Claims data suggest that CS is currently being diagnosed by healthcare providers At least 10 times more frequently than nasal polyps. Speaker 200:02:31In the current healthcare environment where off label use of branded products is increasingly constrained by payers, We believe the new indication could enable us to access a multifold larger patient audience and therefore drive strong growth for multiple years starting in 2024. We also believe the value proposition that XHANCE could offer both clinically and economically is very desirable, particularly 2nd, our supplemental new drug application for the new indication of XHANCE is being reviewed by FDA now. We submitted our application in February and with the FDA target goal date in December, we are now more than halfway through the review period. 3rd, we will show you how in the Q2 of the year we have continued to effectively execute against our previously communicated 2023 operating strategy, which is rooted in our intent to prioritize the value of investing in the potential near term launch of XHANCE as the 1st and only FDA approved drug treatment for chronic sinusitis. To briefly elaborate on this last point, I'd like to remind you that we believe there are important differences including patient prevalence, Frequency of diagnosis and payer dynamics that make the potential for return on investment from promotion of XHANCE following a potential chronic sinusitis approval Significantly greater than the return available from promotion of XHANCE as a treatment for nasal polyps. Speaker 200:04:03Because of this, we have structured our business in 2023 To materially reduce the use of cash and increase focus on profitability, while being careful to preserve infrastructure and capabilities It will be important for the successful launch of chronic sinusitis in 2024. We adhered to this strategic discipline through the first half of this year and delivered results that are better than our initial expectations. As a result of that performance, we have increased our revenue expectation for full year 2023. Turning to Slide 4. We believe future approval of XHANCE as the first and only FDA approved treatment for CS has potential to increase the number of patients for whom the product can be promoted by at least tenfold because medical claims data indicate that order of magnitude more patients are currently being diagnosed with chronic sinusitis than are being diagnosed with nasal polyps. Speaker 200:04:56The new indication would create opportunity Strong growth within our existing commercial footprint, promoting largely to specialists who see large numbers of patients with the diagnosis. The newly expanded universe of patients would also include patients cared for by physicians outside our current commercial reach and we are actively exploring commercial partnerships, Alternative selling models and other ways to facilitate future outreach to those physicians and patients. Turning to Slide 6. Previously, we announced that during the Q2, the FDA accepted our supplemental new drug application in pursuit of an XHANCE indication for treatment of patients with chronic rhinos This is a novel indication for which the agency has never previously approved any drug product. Focusing on what's next, the substantive review of safety and efficacy for this largely clinical application is ongoing And the FDA action goal date, which is based on the original submission date in February, has been set for mid December of this year. Speaker 200:05:56Our regulatory and clinical teams continue to focus on being responsive to the FDA during the review and will continue to do so throughout the entire review process. Turning to Slide 8. As a reminder, our objective in 2023 is to stabilize demand trends in our current nasal polyps specialty business with a reduced commercial footprint and materially reduced expense, while both preserving the necessary launch capabilities and improving operational efficiency and effectiveness of our commercial resources. This is intended to best set us up for successful launch of XHANCE for CS in 2024. With that objective in mind, We are pleased by XHANCE prescription demand results in the Q2 of 2023. Speaker 200:06:43Regarding prescription demand, in the Q2 of 2023, there were approximately 30,900 new prescriptions for XHANCE, an increase of 3% over Q2 2022. In addition, there were approximately 90,700 total prescriptions for XHANCE in the Q2 of 2023, an increase of about 3% compared to the Q2 of 2022. We measure breadth and depth of physician prescribing by the total number of physicians who have patients filling XHANCE prescriptions. Regarding breadth, in the Q2 of 2023, There were 8,624 physicians who had a patient fill at least one prescription of XHANCE, an increase of 4% compared to Q2 of 2022. Regarding depth, the number of physicians who had more than 15 prescriptions filled by their patients in a quarter, that number decreased by approximately 6 I'd like to note that all the data on this slide is estimated based in part on monthly prescription and inventory data from third parties And in large part also on data directly reported to us by pharmacies that are part of the XHANCE preferred pharmacy network. Speaker 200:08:02I'll also note that the Q2 2022 data that we're showing today reflects our current 2023 methodology. For reference, we've footnoted our prior estimates based on prior methodology. I'll now turn the call over to Jonathan to discuss our Q2 financial performance. Speaker 100:08:19Thank you, Rami. Turning to Slide 10. We are encouraged by our Q2 2023 financial results. They are shaped by our strategy to prioritize capital resources for As we reported earlier, OptiNose recognized $21,100,000 of SG and A plus R and D expenses in the Q2 of 2023. This is approximately a $13,000,000 or 38 percent decrease compared to Q2 2022 expenses of $33,800,000 Regarding revenue, OptiNose recognized $19,500,000 of XANTZ net revenue in the Q2 of 2023, A decrease compared to Q2 2022 net revenues of $20,600,000 This is stronger than our original expectations for the 2nd quarter. Speaker 100:09:07It is important to note that our first half twenty twenty three revenues of $31,300,000 were also stronger than what we expected when we announced our initial financial guidance for the year. Accordingly, we have raised our guidance range for full year 2023 XHANCE net revenues, which I will discuss further in a few moments. The year over year decrease in revenue in the Q2 of 2023 is a result of a number of factors, including an increase in co pay assistance driven by An increase in the proportion of volumes attributable to patients with commercial insurance that does not cover XHANCE or have not met the utilization management criteria of their insurer as well as an increase in the proportion of volumes attributable to government programs, which increased gross to net deductions. I will note that we view the prescription demand strength within the uncovered commercial patient segment as an opportunity to modestly revise our co pay assistance program In a way that exchanges some of that demand strength for increased profitability. Finally, based on available prescription and inventory data purchased from third party And on data we received directly from our preferred pharmacy network, the estimated Xant's average net revenue per prescription for the Q2 of 2023 was $2.14 A decrease compared to $2.35 of estimated revenue per prescription in the Q2 of 2022. Speaker 100:10:24What is important here is that Q2 2023 net revenue per prescription increased substantially compared to the Q1 of 2023, in line with our expected annual pattern, And these results are consistent with our prior expectations for overall 2023 net revenue per prescription. Overall, our first half results Continue to align with our intent to reduce use of cash in 2023. We reduced operating expenses by $22,000,000 or 33 percent in the first half of twenty twenty three when compared to the first half of twenty Speaker 200:10:56twenty two. Speaker 100:10:56We outperformed our initial expectations for revenue and we achieved this while sustaining product demand And maintaining the capabilities and resources that we believe will be necessary to enable a successful launch of a potential new indication for XHANCE in 2024. Turning to Slide 12. As I just mentioned, XHANCE net revenues in the first half of twenty twenty three were better than our initial expectations. As a result of that performance, we have increased our revenue expectations for full year 2023. We now expect XHANCE net revenue for the full year of 2023 to be $64,000,000 to $70,000,000 Previously, we expected XHANCE net revenue to be between $62,000,000 $68,000,000 It's important to note that we are not assuming revenues from a CS launch in our full year 2023 guidance. Speaker 100:11:38In addition, with respect to XHANCE net revenue per prescription, expect our typical historical pattern of improvement from the first half through the second half of twenty twenty three and continue to expect our average net revenue per prescription to be approximately $200 for the full year of 2023. Finally, we continue to expect operating expense defined as sales, general and administrative plus Research and development expenses for the full year of 2023 to be in the range from $88,000,000 to $93,000,000 of which approximately $6,000,000 is stock based compensation. I will now turn the call back over to Rami for closing remarks. Rami? Speaker 200:12:14Thank you, Jonathan. Before moving on to take questions, I'd like to reiterate The significance of the opportunity in front of us, which I believe has potential to reshape our business in the coming months and for years into the future. We believe an approval for XHANCE as the first and only drug indicated for treatment of chronic sinusitis would give us an opportunity to build a profitable ENT and allergy focused business by increasing net revenues and leveraging our existing commercial capabilities. In addition, as I previously noted, We are actively exploring commercial partnerships in primary care to create shared value beyond what we can create on our own in the largely specialty segment that's engaged by our current commercial infrastructure. With that, I'd like to thank you for your attention this morning and open the call for Q and A. Operator00:13:00Thank you, Our first question comes from the line of David Amsellem with Piper Sandler. Please proceed. Speaker 300:13:24Hi, thanks. This is Sarah on for David. A couple of questions. Can you speak to the payer landscape and whether it's evolved at all recently in terms of Seeing payers limit prescription to nasal follow ups and do you expect just to change after the label expansion? And additionally, how are you expecting the net revenue To evolve with upcoming expansion to CS. Speaker 200:13:45Paul, maybe you'd like to answer the first part of that question around payers and then Jonathan can address the question about the revenue. Speaker 400:13:51Sure. Thanks for the question. Yes, we really haven't seen any material change in that payer landscape related to XHANCE and coverage within nasal polyps. And so we continue to deploy our commercial efforts to optimize our prior authorization efforts As well as the fulfillment of the increasing demand in prescriptions there. As we look forward to the CS launch, we also expect that that will continue in similar fashion. Speaker 400:14:19And again, we've continued to optimize our efforts there with the payers and with our commercial deployment to make sure the access is there. So Hopefully that answers your question around coverage. Speaker 100:14:32Okay. And, Skyler, just Keeping in mind, we don't have any guidance in place for 2024 in terms of our expectations on revenues or on revenue per prescription. But I think when you look at our contracting with payers, in particular in the commercial space where most of our business Coming from many of our contracts today are written to cover the indications on the label for the product. And so we anticipate as we roll into 2024 that we have an approval in CS that much of the contracting that we have in place Today is going to be applicable to those prescriptions in the future, if they're written for chronic sinusitis or similar indication. Then I think our expectation this year, we expect revenue per prescription to come in at approximately $200 For the full year. Speaker 100:15:31And last year we reported something that was just a bit below $2.20 for the full year. But I think there are aspects of this year's expectation for revenue per prescription that are not really extrapolable into the future. We anticipate that this year there was going to be slightly less appetite on the customer side To hold inventory. And so I think when we look at on a year over year basis that that was going to be some of the downward pressure that we were Expecting and would lead us to a revenue per prescription this year of approximately $200 But in terms of That being something that would repeat itself into the future, there is I think there's a level of inventory we'll arrive at and that's something that won't be A headwind for us in the future. So we think that there's going to be opportunities that will help us improve net revenues into the future, but any net revenue per Into the future. Speaker 100:16:32With that, I think I'll turn it back over to Ramy to see if he has any summary remarks on either of those. Speaker 200:16:39I guess I'd just like to reiterate that, we feel like we have pretty good coverage today for XHANCE. And as we have said before, there's a meaningful part of that coverage that does involve prior authorizations, which frequently are Restricted to the indication to the FDA approved indications, which today, of course, is just nasal polyps. As Paul said, in future, That same coverage, wouldn't be inclusive of the new indication of chronic sinusitis. We have engaged in conversations with payers Through the 1st part of this year, we're being very transparent. And at least going into 2024, we expect our coverage to be quite similar to the way it is today. Speaker 200:17:22And did we answer your questions? Do you have any additional questions? Speaker 300:17:25Yes. That was super helpful. If I can just sneak one separate Question in, can you provide any additional color on just the launch preparedness you're doing ahead of the label expansion? Speaker 200:17:34Okay. We are actively engaged preparation for the launch, as you might expect, Paul, would you like to make any comments? Speaker 400:17:39Yes, sure. Skyler, so we're focused on many things as we Prepare for the launch. One is that we're taking a fresh product positioning approach and messaging So that we can fully seize the 1st and only positioning a new indication of XHANCE that will enable that launch And that rapid uptake. We're also assuring scalability of our pharmacy distribution infrastructure that's both within the retail setting as well as within Pharmacy Network, we continue to look at and evaluate our payer and affordability programs. So as Rami had said, we can make sure the appropriate patients can get As to XHANCE at launch, we're also refining our health care provider targeting for both our direct selling and non A personal promotion to access the larger opportunity while assuring overall efficiency within our model and our P and L. Speaker 400:18:36And then lastly, We continue to evaluate efficient options for accessing the CS opportunity outside of our current HCP promotion audience. So these are just several things that we have as we're continuing to launch plan and get ready for launch that we think will put us in a position to be ready. Speaker 200:18:55If I can just add a couple of comments. The first is, as we've said before, it is our current intent that the operating expenses Associated with the launch as we go into 2024 will be similar to the launch to the operating expenses we have today. So They may not be precisely the same, but we don't expect them to materially increase in association with the launch because we're launching largely to the Same audience with a similar footprint to what we have today. 2nd comment I'll make is that, as I mentioned earlier, We are actively pursuing as part of our planning for the launch, the possibility of a primary care partner who can expand our reach into the primary care And allow us to access the incremental opportunity associated with that. Did you have any additional questions? Speaker 300:19:41No, that's great. Thanks so much for all the color. Operator00:19:45Thank you. All right. I don't see any further questions. I will pass it back to Doctor. Rami Manmuth for final remarks. Speaker 200:20:02Okay. Well, I'd like to thank everyone for joining us this morning. Hopefully, you've heard our enthusiasm over the potential associated with our upcoming approval date in December And the fact that we're pleased with the execution so far this year against our 2023 strategy, reducing expenses While stabilizing and potentially even growing a little bit, our underlying product demand. We look forward to filling you in on our results, Q3 and hope we'll continue to perform exactly as expected. Operator00:20:35Thank you all for participating in today's conference. This does conclude the program and you may now disconnect.Read morePowered by