Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• scPharmaceuticals Inc (NASDAQ:SCPH) reported a 24% increase in net revenue from the second quarter of 2024, reaching $10 million.
• The company has expanded its sales force and territories, which is expected to drive future revenue growth.
• The acceptance of the NDA filing by the FDA for the treatment of edema in chronic kidney disease patients could open new market opportunities.
• The company completed a transformative financing deal, adding $75 million to its balance sheet, extending its cash runway through expected profitability.
• Positive feedback from healthcare providers on the new FSIC direct patient services hub, which streamlines prescription submissions and tracking.

Negative Points

• The company reported a net loss of $35.1 million for the third quarter of 2024, significantly higher than the $15.6 million loss in the same quarter of 2023.
• The gross-to-net (GTN) discount increased to 15.7%, above the guided range, impacting revenue negatively.
• High patient copays during the coverage gap led to a lower fill rate for prescriptions, affecting sales.
• Selling, general, and administrative expenses increased significantly to $21.3 million, driven by costs associated with new financial agreements.
• The company faced challenges with coverage gap rebates, which affected both GTN and patient fill rates.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with SCPH.

Q: What do you think the doses per prescription could look like for FSIC in CKD relative to heart failure? A: Steve Parsons, Senior Vice President of Commercial, stated that early research suggests it will be similar to class two and class three heart failure patients, in the 6 to 6.5 range.

Q: With the potential auto injector, if approved, what do you think the rate of on-body diffuser versus auto injector could be in the long term? A: John Tucker, CEO, mentioned that they expect over 90% of usage to shift to the auto injector based on initial market research, although some patients may continue with the on-body diffuser.

Q: Is there any expected seasonality that we could see in Q4? A: Steve Parsons explained that the fourth quarter is the biggest opportunity due to increased hospital visits for fluid overload around the holidays. Some doctors may preemptively prescribe to manage potential issues during this period.

Q: Regarding class four patients, what percentage do you think will be class four as you exit the year, and how is the initial nephrology detailing going for CKD? A: John Tucker noted that about 10% of prescriptions are currently for class four patients, with expectations for growth. Steve Parsons added that nephrologists have shown positive reception, as they lack access to IV treatments in their offices.

Q: Can you explain the dynamics that led to a slower end of the quarter than expected? A: John Tucker attributed the slower end to coverage gap rebates affecting GTN and patient copays, leading to higher abandonment rates. However, he noted that these issues should improve in Q4 as patients move into catastrophic coverage.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.