Executive Summary

Q2 2024 revenue was $20.5M (+5% YoY), with diluted EPS of $(0.07); average net revenue per prescription (ARPR) reached $309, up 44% YoY, reflecting a deliberate shift toward profitable prescriptions .
Guidance: FY24 revenue narrowed to $85–$90M (from $85–$95M), while ARPR guidance was raised to >$250 (from >$230); FY24 GAAP OpEx maintained at $95–$101M (incl. ~$6M SBC) .
Access catalyst: XHANCE added to Express Scripts’ national formularies (first time preferred Tier 2 on a national formulary), improving access for >24M lives; management expects this to ease prescribing and fulfillment and support growth .
Balance sheet strengthened: ~$55M financing in May; cash and equivalents $91.4M at 6/30/24; management reiterates runway through 2025 and expectation of positive income from operations in FY2025 .

What Went Well and What Went Wrong

What Went Well
- ARPR inflected higher: $309 in Q2 (+44% YoY) on mix and co‑pay changes; FY24 ARPR guidance raised to >$250 .
- Access progress: Express Scripts formulary addition (Tier 2 on national formularies) expected to lower friction (no PA, simple step therapy), enabling better fulfillment and uptake .
- Launch foundation: Management cites a “promising start” to the chronic sinusitis launch with expanding target engagement; “we’re pleased…good progress in the quarter” (CEO) .
What Went Wrong
- Top-line guide narrowed: FY24 revenue range cut to $85–$90M (from $85–$95M) as OptiNose reduced support for low/no‑profit prescriptions—offset by higher ARPR .
- Opex stepped up: Q2 SG&A+R&D rose by ~$4M YoY to ~$25.1M to support launch activities .
- HUB transition friction: Shift to a centralized HUB created a “slight headwind” as processes are optimized, though expected to become a tailwind .

Financial Results

Metric	Q4 2023	Q1 2024	Q2 2024
Revenue ($M)	$19.9	$14.9	$20.5
Cost of Product Sales ($M)	$2.1	$1.2	$2.0
Gross Profit ($M)	$17.7 (calc. from )	$13.6 (calc. from )	$18.5 (calc. from )
Gross Margin (%)	89.3% (calc. from )	91.7% (calc. from )	90.3% (calc. from )
SG&A + R&D ($M)	$20.2 (calc. from )	$21.7	$25.1
Net Income (Loss) ($M)	$(10.0)	$(14.1)	$(7.6)
Diluted EPS ($)	$(0.09)	$(0.12)	$(0.07)

Additional comparisons:

Q2 revenue +5% YoY vs $19.5M in Q2 2023; ARPR +44% YoY vs $214 in Q2 2023 .
Cash & equivalents: $73.7M (12/31/23), $51.6M (3/31/24), $91.4M (6/30/24) .

KPIs

KPI	Q4 2023	Q1 2024	Q2 2024
Average Net Revenue per Prescription (ARPR) ($)	$250	$227	$309
SG&A + R&D ($M)	$20.2	$21.7	$25.1
Cash & Equivalents ($M)	$73.7	$51.6	$91.4

Segment breakdown: Net product revenues are from XHANCE; no additional reporting segments disclosed .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
XHANCE Net Revenue	FY 2024	$85–$95M (May 14, 2024)	$85–$90M (Aug 8, 2024)	Lowered/Narrowed
Avg Net Revenue per Rx	FY 2024	>$230	>$250	Raised
GAAP Operating Expenses (SG&A+R&D)	FY 2024	$95–$101M; ~$6M SBC	$95–$101M; ~$6M SBC	Maintained

Management rationale: lower top-line range reflects intentionally reduced support for low/no‑profit scripts; higher ARPR offsets, leaving operating income and cash runway largely unchanged .

Earnings Call Themes & Trends

Topic	Q4 2023 (Q-2)	Q1 2024 (Q-1)	Q2 2024 (Current)	Trend
Access & Payer Coverage	Expected coverage to adapt to new label; contracts contemplate approved indications	Monitoring payer process timing; not renegotiations, process alignment to label	Added to Express Scripts national formularies (Tier 2); no PA; step therapy; >24M lives	Improving
ARPR	$250 in Q4; co‑pay changes improved profitability	$227; FY24 guide >$230; Change Healthcare disruption boosted Q1	$309; FY24 guide >$250; mix/co‑pay changes drove +44% YoY	Rising
Sales Force/Footprint	75 territories realigned to CS opportunity	Launch with current footprint; specialty focus	Maintain footprint “at least through Q3 and possibly longer”	Stable
HUB Fulfillment	Implemented hub services	—	Transition created slight headwind; expected to be tailwind post-optimization	Improving medium term
Profitability Path	—	Positive income from operations in FY2025 expected	Reiterated FY2025 positive income from operations	Intact
Capital/Runway	$73.7M cash YE23	~$100M post‑offering; runway through 2025	$91.4M cash 6/30; runway through 2025	Adequate

Management Commentary

“We’re pleased to report a promising start to our chronic sinusitis launch and good progress in the quarter.” — CEO Ramy Mahmoud .
“At the end of June, we announced the addition of XHANCE to large Express Scripts’ national formularies… first time… preferred Tier 2 coverage on a national formulary.” — CCO Paul Spence .
“We are increasing our expectation for XHANCE net revenue per prescription for full year 2024 to at least $250… [and] narrowing our full year 2024 XHANCE net revenue guidance range to $85 million to $90 million.” — CEO Ramy Mahmoud .
“We continue to expect that our existing cash and cash equivalents will be sufficient to fund our operations and debt service obligations through 2025 and that we will produce positive income from operations for full year 2025.” — Jonathan Neely .

Q&A Highlights

Breakeven/profitability: With ~90% gross margins and current OpEx structure, management sees a clear path to positive income from operations in FY2025; peak potential “at least $300M” within current specialist footprint .
Revenue covenant: Mgmt indicated confidence; trailing 12-month sales threshold ~$72.5M in Q3 and $75M in Q4; expects to maintain compliance .
ARPR guidance conservatism: ARPR YTD $269 vs >$250 FY guide allows flexibility for potential rebound in lower‑profit volumes and promotional levers; Q1 Change Healthcare disruption also noted .
Payers: Demand is driving payer engagement; payers “are seeing increased demand” and are approaching the company about improved access and coverage; operational process changes more than new contracting .
HUB: Transition has been a “slight headwind” but expected to become a tailwind as offices and processes adapt .

Estimates Context

Wall Street consensus (S&P Global) for Q2 2024 revenue/EPS was not available in our system for OPTN at the time of analysis (attempted retrieval unsuccessful). As a result, we cannot quantify beats/misses versus consensus for Q2 2024. We will update when S&P Global mapping is available.

Key Takeaways for Investors

Launch execution is tracking to plan: Early ARPR strength and expanding access (Express Scripts Tier 2) should support H2 prescription growth and improved fulfillment—key ingredients for accelerating revenue trajectory into 2025 .
Mix shift is structurally positive: A deliberate pivot away from unprofitable scripts lifted ARPR and should enhance unit economics; revenue guidance narrowed but operating income outlook and runway remain intact .
Watch access compounding effects: Express Scripts momentum could catalyze broader payer process alignment with the new label, lowering friction and increasing throughput over subsequent quarters .
Monitor HUB normalization: Near‑term operational headwinds should abate; as the HUB scales efficiently, refill rates and conversion could become incremental tailwinds .
Capital and profitability visibility: Cash of $91.4M and reiterated FY2025 positive operating income target reduce financing overhang and support continued commercial execution .
Potential upside levers: Specialty sales expansion, primary care partnerships, and DTC activation represent optionality beyond the base plan once early launch KPIs solidify .
Risk checks: Execution risk around payer process timing, HUB optimization, and physician education cadence (10–12 calls to shift behavior) remains; management is pacing investments to maintain runway .

Appendix: Other Relevant Press Releases in Q2 2024

June 27, 2024: XHANCE added to Express Scripts’ national formularies (National Preferred, Flex, Basic), covering >24M lives .
Aug 8, 2024: Q2 press release reiterating $20.5M revenue (+5% YoY), FY24 revenue guide $85–$90M, and ARPR guide >$250 .

OptiNose, Inc. (OPTN)·Q2 2024 Earnings Summary