scPharmaceuticals - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 net FUROSCIX revenue was $11.75M, up 93% year-over-year, with approximately 13.9K doses filled; seasonality and higher gross-to-net (GTN) discounts weighed on profitability, yielding GAAP net loss of $19.74M and EPS of ($0.37).
• Against S&P Global consensus, revenue modestly beat ($11.75M vs $11.63M) while EPS missed (($0.37) vs ($0.285)); management cited Q1 deductibles/Medicare resets and a higher GTN as key drivers, with fill rates improving to ~55% in April (vs ~46% in Q1) and accelerating into Q2*.
• CKD indication formally launched late April; early nephrology traction is outpacing the initial heart failure launch, with same‑day script generation noted by the commercial lead.
• Autoinjector sNDA timing updated to Q3 2025, with a potential 70–75% COGS reduction and meaningful mix shift over time; IDN channel growth is a highlighted catalyst for Q2 and beyond.
• Near-term stock reaction catalysts: accelerating Q2 volume with $0 Medicare copays entering catastrophic coverage, CKD adoption, and visibility on Autoinjector sNDA filing in Q3 2025.

What Went Well and What Went Wrong

What Went Well

• CKD launch momentum: “When we call on [nephrology], we're getting prescriptions the same day… adoption is way faster than it was in heart failure”.
• Volume and prescribers expanding: ~13.9K doses filled in Q1 (+73% YoY) and ~4,200 unique prescribers to date; IDN sales increased 119% vs Q4.
• Tailwinds building in Q2: “Fill rate… around 46% in Q1… 55% in April,” with rising $0 Medicare copays as patients hit the $2,000 cap or elect smoothing, driving higher scripts and fill rates.

What Went Wrong

• Profitability pressure: GTN discount rose to 23% in Q1 (from 19% in Q4), and SG&A increased to $21.4M, contributing to net loss ($19.74M) and EPS ($0.37).
• EPS missed consensus: ($0.37) vs ($0.285), reflecting higher operating expenses and GTN headwinds*.
• Cash decline quarter-over-quarter: cash and equivalents fell from $75.7M at 12/31/24 to $57.5M at 3/31/25, with Q1 outflows tied to incentive payments and AR growth; management expects outflows to decrease over the balance of 2025.

Transcript

Operator (participant)

Reminder, today's conference call is being recorded. I would now like to turn the conference over to Wim Thorpe, Investor Relations, to cover forward-looking statements. Wim, please go ahead.

William Thorpe (Representative of Investor Relations)

Thank you, Operator. Before beginning this afternoon's earnings call, we would like to highlight the following 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, management's expectations and plans for the business, the ongoing commercialization and marketing of FUROSCIX, the potential label expansion and other regulatory approvals of FUROSCIX, decrease of quarterly net cash outflows for the balance of 2025, the rise of FUROSCIX dispenses as out-of-pocket expenses decrease, and estimated reduction in COGS. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance.

It 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 disclaim any intent or obligation to update these forward-looking statements except as required by law. With that, I will now turn the call over to John Tucker, Chief Executive Officer of scPharmaceuticals. John, please go ahead.

John Tucker (CEO)

Thank you, William, and thank you to all for attending this afternoon's conference call. Today, we will provide an overview of scPharmaceuticals' core business and operational highlights for the first quarter of 2025. I will then hand the call to Steve Parsons, Senior Vice President of Commercial, for FUROSCIX Commercial Update. Our Chief Financial Officer, Rachael Nokes, will then provide a financial update for Q1 before we open the line for questions. We truly believe, particularly in this environment, that scPharmaceuticals is better positioned than at any point in our history. FUROSCIX is successfully penetrating a market where we had broad synergies across the healthcare ecosystem by keeping patients out of the hospital and at home, which is far greater from a quality of life and cost perspective for both the patient and the healthcare system.

We are also expanding the market into chronic kidney disease and making progress on our Autoinjector, which we think will continue to transform the company, improve and expand the patient experience, and add materially to our FUROSCIX sales. In the first quarter of 2025, scPharmaceuticals generated $11.8 million in net revenue and filled approximately 13,800 FUROSCIX doses. As we have discussed, our net revenue generated in the first quarter is impacted by the typical seasonality factors, including deductible and Medicare beneficiaries' out-of-pocket cap resets. Despite these headwinds, we did see an increase in doses filled quarter over quarter. On our Q4 2024 earnings call two months ago, we highlighted the increasing number of Part D beneficiaries who hit their out-of-pocket caps or enrolled in Medicare's copay smoothing program, particularly in March of 2025 relative to January and February of 2025.

We have seen an acceleration of this trend play out over the course of April and early May as more Medicare patients reach their $2,000 cap or are enrolled in the copay smoothing program. Historically, we have observed increased prescribing of and improved fill rates for FUROSCIX when patients have lower out-of-pocket copays. This is what we have seen so far in Q2 and see it continuing to accelerate through the balance of the year. The gross-to-net discount for FUROSCIX in the first quarter of 2025 was approximately 23%. Over the balance of 2025, we anticipate a blended GTN of approximately 30%. The increase in GTN is primarily attributable to the implementation of the Medicare Part D redesign, including the mandatory manufacturer rebates under the Inflation Reduction Act.

We view the Medicare Part D redesign as a net tailwind in 2025, given the anticipated increase of FUROSCIX fill rates and prescribing for Part D enrollees who are through to catastrophic coverage and have a $0 copay on any Part D prescription. In April 2025, we formally launched FUROSCIX in the chronic kidney disease and were pleased to announce that we began filling nephrology prescriptions in April. We believe prescribing by a nephrologist will be a meaningful growth driver for FUROSCIX for a few core reasons. One, there are an estimated 700,000 additional patients that can be prescribed FUROSCIX for their fluid management. Two, in the cardiorenal space, nephrologists are the primary diuretic managers for patients who have CKD and heart failure. Three, the concentration of targets and their focus on fluid management. Lastly, we're able to provide a positive update on the auto injector.

Our additional shelf life testing of the high silicone syringe is progressing as expected, and we are targeting filing the sNDA next quarter. We continue to believe that the Autoinjector will be meaningfully important to the long-term FUROSCIX growth trajectory with an estimated 70-75% reduction in COGS compared to the current on-body infuser and an increase in our penetration rates. Overall, we feel very positive about the long-term growth trajectory of FUROSCIX over the course of 2025. Between the CKD indication expansion and the favorable copay paradigm with Part D patients progressing into catastrophic coverage, we believe FUROSCIX is well-positioned to treat heart failure and kidney disease patients when they're experiencing fluid overload. With that, I will pass the line to Steve Parsons, scPharmaceuticals Senior Vice President of Commercial. Steve?

Steve Parsons (SVP of Commercial)

Thank you, John. Since we launched FUROSCIX in early 2023, over 4,000 unique cardiologists and nephrologists have prescribed FUROSCIX to heart failure and now kidney disease patients. We expect the number of unique prescribers to increase steadily as we further penetrate cardiology and expand into the nephrology market. With our sales force expansion in the fourth quarter of 2024, the larger team and smaller territory size has resulted in greater reach and frequency to target and non-target prescribers and has increased demand for FUROSCIX. Our improved target coverage capabilities will be especially important as we launch FUROSCIX in chronic kidney disease in quarter two and add nephrology targets and continue our penetration further into heart failure. As John already mentioned, we are very positive about the balance of 2025.

Our IDN distribution strategy is paying dividends, and as we open new accounts every month and see reorders from some of the top systems in the country, targeting IDNs is a great complement to our overall promotional efforts. Medicare patient out-of-pocket costs move to $0 when patients reach the annual maximum threshold of $2,000. We see more and more heart failure patients and chronic kidney disease patients who are meeting this threshold as the year progresses. As a result, FUROSCIX dispenses will continue to rise as out-of-pocket expenses decrease. I will now hand the call over to our Chief Financial Officer, Rachael Nokes. Rachael?

Rachael Nokes (CFO)

Thank you, Steve. Product revenues were $11.8 million for the first quarter of 2025 compared to $6.1 million for the first quarter of 2024. Costs of product revenues were $3.5 million for the first quarter of 2025 compared to $1.8 million for the first quarter of 2024. The increase in both product revenues and cost of product revenues for the quarter ended March 31st 2025, was due to an increase in demand for FUROSCIX further into the commercial launch and related manufacturing costs. scPharmaceuticals ended the first quarter of 2025 with $57.5 million in cash and cash equivalents compared to $75.7 million in cash and cash equivalents as of December 31st 2024. Net cash outflows in the first quarter included certain incentive compensation payouts and an increase in accounts receivable from our customers.

We expect quarterly net outflows to decrease for the balance of 2025 as revenues increase and other cash outflows normalize. We continue to monitor our exposure to tariffs as the market landscape changes. We currently do not expect a material impact on our supply chain costs and believe that our exposure would be mainly limited to the cost of the drug component of FUROSCIX. I will now pass the call back to John for concluding remarks.

John Tucker (CEO)

In the first quarter of 2025, scPharmaceuticals delivered solid progress across our commercial, operational, and financial fronts and believe we are in the early stages of a FUROSCIX growth acceleration. We remain confident in our ability to scale effectively and deliver value for patients and shareholders alike. We will now open the call for questions. Operator?

Operator (participant)

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Roanna Ruiz with Leerink Partners. Your line is open.

Roanna Ruiz (Senior Managing Director and Senior Biotechnology Analyst)

Hi, afternoon, everyone. A couple from me. I wanted to start with the launch in CKD as of April. What signs of growing physician traction are you seeing in the field so far? Could you talk a bit about the features or characteristics of the newer patients that are getting FUROSCIX that also have CKD?

John Tucker (CEO)

Hey, Roanna. It's John. I'll turn that over to Steve to answer the question. Steve?

Steve Parsons (SVP of Commercial)

Yeah, it's been very positive. We're getting every single day I see CKD patients' prescriptions, new accounts, nephrologists. We're also using it in heart failure, so we're seeing that as well. It's meeting our early expectations. We expect good things from this specialty, and so far, they're delivering.

John Tucker (CEO)

Yeah. I think, Roanna, we're seeing what we see is nephrology. We do not see it indicated specifically for CKD or for heart failure. We are seeing everyday nephrology scripts, and that's accelerating.

Roanna Ruiz (Senior Managing Director and Senior Biotechnology Analyst)

Got it. That helps. I wanted to follow up and ask about the increase in sales to IDNs as well in the quarter. Do you think that could continue into subsequent quarters in 2025? Any other color you can give on the cadence of orders and things like that?

John Tucker (CEO)

This is John, and Steve, I'll pass it to you in a second. Yeah. We expect Q2 to be much bigger than Q1 in IDNs. It's a key component of our strategy for a number of reasons. Doctors can order off their EMR. It goes right through the specialty pharmacy that's associated with the IDN. They can use it to facilitate a discharge. We have a big emphasis there, and we're continuing to see growth there. Someone said, does some of that cannibalize your other business. We're seeing both grow, especially in this quarter over last quarter. Significant growth, the highest we've seen yet, quarter over quarter, almost halfway through May, and it's being driven primarily outside of the IDNs, but also IDN growth as well.

Roanna Ruiz (Senior Managing Director and Senior Biotechnology Analyst)

Got it. Sounds good.

John Tucker (CEO)

Thanks, Roanna.

Operator (participant)

Please stand by for our next question. Our next question comes from the line of Stacy Ku with TD Cowen. Your line is open.

Stacy Ku (Biotechnology Equity Research Analyst)

Hey, good afternoon. Congrats on the quarter. Thanks so much for taking our questions. First question is a bit of a follow-up. We understand it's still really early days, but maybe can you talk about the CKD launch and how it's progressing in comparison, so relative to the early heart failure launch for FUROSCIX? Maybe talk about some initial signals that give you confidence in the launch. That's the first question. The second question is on reimbursement. Could you talk about access for both heart failure and maybe talk about the early experience for CKD patients? What has been the feedback there? Last question, a little bit of a kind of detailed question. What percent of your Medicare FUROSCIX patients have signed up for the copay smoothing? Are you able to kind of help raise the profile of this option?

Is there high awareness now? Just help us understand kind of the cadence of signups. Thank you so much.

John Tucker (CEO)

Sure. Thanks. Thanks, Stacy. Maybe I'll handle the last one.

Steve Parsons (SVP of Commercial)

The CKD launch and the adoption is way faster than it was in heart failure. It's not even close. When we call on people, we're getting prescriptions the same day that we call on them. Multiple prescriptions are happening from these offices. I feel like there must have been some pent-up demand. They were waiting for us to come to them. They give us comments that, "Why didn't you call on us for heart failure too? We have heart failure patients." It's been very good. When we get in and talk to them, they are responding. They can think of patients. The comparison, it's much faster.

John Tucker (CEO)

As far as the smoothing question, Stacy, it is hard for us to look at the data we see and know if they smoothen up. With one of the four major PBMs, we do see it. The other three, we are blinded to it. We are able to look at copays. We are seeing, especially in April, May, and even in March, at the end of March, more patients with $0 copays in Medicare, which tells us one of two things. They have either gone through their $2,000 out-of-pocket; they have already hit that, or they have elected for smoothing. That has accelerated our fill rate. To give you an example, in Q1 it was around 46%. In April, it was 55%. That is due to either smoothing, more patients in smoothing, or probably more patients getting through their cap, their CKD patients, their heart failure patients.

I don't think we have enough data on nephrology right now to answer your second question to say they've smoothed more or smoothed less. Again, we only see about 25% of the planned smoothing. We do see similar low copays, again, in the last two months of CKD patients and heart failure patients.

Steve Parsons (SVP of Commercial)

I think you asked about reimbursement. Reimbursement is the same as it is for heart failure. The prescriptions are mostly going through with a simple prior auth. We're not noticing any additional rejections or need for appeal. The copays are about the same. Not noticing anything different about a patient with an indication of CKD versus heart failure when it comes to reimbursement.

Stacy Ku (Biotechnology Equity Research Analyst)

Incredibly helpful. Thank you.

John Tucker (CEO)

Thanks.

Operator (participant)

Thank you. Please stand by for our next question. Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Your line is open.

Douglas Tsao (Managing Director)

Hi, good afternoon. Thanks for taking the question. I'm just curious, with the Part D redesign, we heard from one company that sort of suggested that they have visibility when patients use up their out-of-pocket expense and move into catastrophic or sort of the point where they get full coverage. Do you have that? Are you able to therefore then direct patients to go ahead and get scripts filled?

John Tucker (CEO)

We have it. Again, we look at the copays that come in. Our hub will talk to the patients, and we'll be able to alert them what their copay is. We also receive CMS claims for patients that are in catastrophic because they're listed in catastrophic because, again, the rebate is different. Real-time at the doctor's office, unless they can get the hub on the phone immediately and run that benefit verification, we wouldn't know that. Again, what we do at the hub is as soon as we know the patient copay, we'll alert the patient. If it's a large copay, we'll automatically offer them smoothing. We can't enroll them in smoothing. It has to go through the plan. We'll give them the form from the plan, give them the phone number for the plan. We're also out promoting the smoothing to doctors.

I think doctors were, as I talked about in March, a little confused at the beginning. I think they understand it now, and they're more active on their patients where they feel they're probably going to have a high copay and actually encouraging them to enroll. We have the forms at the doctor's office. We are seeing more and more smoothing patients every day. Again, the data we see, we see the $0. We have the hub that speaks to the patient and understands if the patient has gotten through their out-of-pocket.

Douglas Tsao (Managing Director)

Okay. That's helpful. And then just in terms of the CKD launch, I'm just curious, are you largely now seeing patients who sort of have the comorbidity from kidney disease and heart failure, or are you seeing evidence of patients who only have CKD getting prescriptions for FUROSCIX? Thank you.

John Tucker (CEO)

Yeah. Thanks, Doug. Steve.

Steve Parsons (SVP of Commercial)

Yeah. So we do definitely see patients with CKD only as their indication. That's clear. There is also a lot of patients who have CKD and heart failure coming from nephrology that we weren't getting before because we weren't calling on nephrology. It's a double bonus for us because now we're calling on them for chronic kidney disease, and they have a lot of heart failure patients. There are CKD-only indicated patients that are getting FUROSCIX.

Douglas Tsao (Managing Director)

Okay. Great. That's very helpful.

John Tucker (CEO)

Thanks, Doug.

Operator (participant)

Thank you. Ladies and gentlemen, that's star 11 to ask the question. Please stand by for our next question. Our next question comes from the line of Chase Knickerbocker with Craig-Hallum. Your line is open.

Chase Knickerbocker (Senior Research Analyst)

Good afternoon. Thanks for taking the questions. Just first, quick housekeeping. Can you share the doses per script in Q1?

Steve Parsons (SVP of Commercial)

7.4 was the average dose of prescripts, so it was up again from Q4. I look at it monthly. I don't see it going much more than that. It's kind of stabilized around 7, but that's what it was in Q1. Here in Q2, it's not going to 8. It's staying right around there. We might have hit some kind of a normal dose number now around that, around 7-7.4.

Chase Knickerbocker (Senior Research Analyst)

What was it in Q4, Steve? And then just any initial inkling on.

Steve Parsons (SVP of Commercial)

Sorry. 6.8, I think, is what it was in Q4. Did you say?

Chase Knickerbocker (Senior Research Analyst)

Any initial inkling on what we're going to see from CKD patients as far as doses prescribed?

Steve Parsons (SVP of Commercial)

It's been similar.

John Tucker (CEO)

It's been similar so far, Chase.

Chase Knickerbocker (Senior Research Analyst)

Got it. Just maybe following up on an earlier question. I mean, obviously, it's good to see the improvement in fill rate in April. Can you maybe just kind of share some more specifics if you can just on kind of the percentage of patients where you were seeing either smoothing or already at their out-of-pocket maximums in Q4 versus what you're seeing in April and kind of if that's kind of a big piece of that driver in April as far as that improvement?

John Tucker (CEO)

You mean from Q1 to April?

Chase Knickerbocker (Senior Research Analyst)

I do. Sorry.

Steve Parsons (SVP of Commercial)

Yeah. I mean, it's a noticeable difference of the number of $0 copays here in Q2. April and May is continuing. We had some trouble in January and February with high copays. I mean, there's no secret about that. It is like night and day. We know. We just know from that that people are getting to either sign up for smoothing or they've reached their out-of-pocket cap. That's only going to increase. I mean, nobody's going backwards from $0. Those patients can get FUROSCIX again and again this year for $0.

John Tucker (CEO)

Yeah. I mean, we've seen an improvement in the fill rate. Again, I said 55% in April. I think we've spoken about this before, the difference you see in prescriptions written when doctors can write them. I mean, we talked about the acceleration from Q1 to Q2. What we're seeing halfway through the quarter is a dramatically higher increase in dosage ship than we've seen quarter over quarter. Again, we're only halfway through the quarter than we've seen before. It's driven by two things. Obviously, driven by that much higher fill rate, but also driven by the number of scripts that are actually being written. Again, I think the scripts being written follows that fill rate up if docs have confidence that patients can get it. Docs now know about the smoothing. They know. We're out there educating. They know about the lower patient out-of-pocket.

I think they have more confidence that these scripts will get filled and their patients will get therapy. Again, it's a marked difference between. Really, we started seeing some of this in March. March was a decent month for us, but it's accelerated in April. The jump in doses filled from March to April was the biggest one month we've had and continue to see that growth in May.

Chase Knickerbocker (Senior Research Analyst)

Got it. On that front, last quarter, you gave us some just kind of overview thoughts on kind of where the street was. You performed in line to a little bit better than that in Q1. If we look at street estimates still around $74 million-$75 million, it implies kind of, call it mid-30% kind of growth sequentially on a revenue basis. Can you just kind of speak to your thoughts there? It sounds like you're seeing an inflection in volume in the first couple of months, but maybe just kind of speak to current trends.

John Tucker (CEO)

Yeah. So again, we have seen that inflection again started, Chase, really in March, and then second half of March, and then into April, and it's carried through to May. I think we feel comfortable about the full year. We feel comfortable about this quarter, Q2. I mean, we knew the headwinds we were going to face in Q1. I mean, we know we have a GTN headwind. We saw the GTN headwind in Q1, which knocked down our revenue versus Q4. We have a little bit more here, but we think we're going to way more than grow through that. Are we going to have an extra three or four points in GTN hit this quarter? Probably it starts stabilizing after that, but the growth rate we're seeing—and again, it's halfway through the quarter—but it's accelerated through April into May and from March into April.

We're bullish on this quarter. We're bullish on this year. Obviously, these trends have to continue. If you think about copays, they can only go down from here. They cannot go up. They're capped at $2,000. These are heart failure patients, chronic kidney disease patients that are on a lot of different drugs. We're going to continue to enroll them in smoothing when that makes sense. For a lot of these patients, they're going to be blowing through that cap. We really feel bullish about the balance of the year.

Chase Knickerbocker (Senior Research Analyst)

Appreciate those thoughts, John. Thanks, guys.

Operator (participant)

Thank you. Ladies and gentlemen, I'm showing no further questions in the queue. That concludes the scPharmaceuticals First Quarter 2025 Earnings Conference Call. I would now like to turn the call back over to the company for any closing remarks.

John Tucker (CEO)

Thank you once again for joining us. We look forward to keeping you updated on our progress as we believe we are well-positioned for success in 2025. Thank you.

Operator (participant)

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.