Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OptiNose Inc (OPTN, Financial) reported a promising start to their chronic sinusitis launch, indicating significant long-term potential for reshaping their business.
- The company achieved a 5% increase in XHANCE net revenue in Q2 2024 compared to Q2 2023, with net revenue reaching $20.5 million.
- OptiNose Inc (OPTN) increased their expectation for XHANCE net revenue per prescription for full-year 2024 to at least $250, a 20% increase compared to 2023.
- XHANCE was added to large Express Scripts' national formularies, marking the first time it held preferred Tier 2 coverage on a national formulary, which is expected to improve prescribing and fulfillment.
- The company has been successful in focusing on profitable business, moving away from lower profit and unprofitable business, which is expected to result in a healthier, more sustainable business long-term.
Negative Points
- OptiNose Inc (OPTN) reported an increase in SG&A plus R&D expenses in Q2 2024, rising by approximately $4 million compared to Q2 2023.
- The transition to a central intake pharmacy model (HUB) has been a slight headwind, as the company continues to optimize the process and familiarize HCP offices with the new fulfillment channel.
- The company narrowed its full-year 2024 XHANCE net revenue guidance range, reflecting the removal of revenues associated with lower profit and unprofitable business.
- There is a need for gradual growth in the first few quarters post-launch, as the company progressively implements insurance coverage changes and educates target prescribers.
- OptiNose Inc (OPTN) is in the early stages of their launch, and it will take time to realize the benefits of their initial efforts, indicating potential delays in achieving desired outcomes.
Q & A Highlights
Q: What are your assumptions for your path to profitability, and what level of sales do you need to reach breakeven? Also, how do you balance the sales force versus extending cash runway, and are you concerned about meeting the revenue covenant in the third quarter?
A: (Ramy Mahmoud, CEO) We plan to launch with our current sales force infrastructure, at least through the third quarter and potentially longer. (Jonathan Neely, VP of Investor Relations) We expect revenue growth of 20% to 27% this year, with a long-term peak revenue potential of $300 million. We are confident in maintaining compliance with the revenue covenant, which is $72.5 million for the third quarter.
Q: The average net revenue per prescription for the first half is $269. Is the $250 guidance conservative, and is there upside potential?
A: (Jonathan Neely, VP of Investor Relations) The $250 guidance allows flexibility for lower profit volumes to rebound and operational flexibility related to co-pay assistance. (Ramy Mahmoud, CEO) The first half included a one-time event that suppressed unprofitable volumes, so we are cautious in our estimates.
Q: How have payer engagements been regarding expanding coverage for the new indication?
A: (Paul Spence, Chief Commercial Officer) Payers are noticing increased demand due to the new indication and are approaching us for improved access and coverage. We continue to support HCPs and patients with paperwork and processes.
Q: Are you confident in meeting the third-quarter revenue covenant?
A: (Jonathan Neely, VP of Investor Relations) We are on a pathway to maintain compliance, with the third-quarter target being $72.5 million in trailing 12-month sales.
Q: What is the impact of the new indication on your commercial strategy?
A: (Paul Spence, Chief Commercial Officer) The new indication requires a shift in our commercial strategy, focusing on expanding the prescriber base and engaging high-potential HCPs. We expect gradual acceleration in adoption over the first few quarters of the launch.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
