scPharmaceuticals Inc. (SCPH) Earnings Call Transcript & Summary

Greetings. Welcome to ScPharmaceuticals Top Line Results from FREEDOM HF trial. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll turn the conference over to Hans Misto. Hans, you may now begin.

Thank you, operator, and thank you all for participating in today's data the FREEDOM HF study hosted by ScPharmaceuticals. Joining me are John Tucker, Chief Executive Officer; and John Moore, Senior Vice President of Clinical Development and Medical Affairs. Joining them are Daniel Ben Simon, MD of Cone Health a Hospital system in North Carolina; and Mr. Jim Kenny, President of JT Kenny, a managed care consulting practice in Wafa Mass. Today's agenda will be as follows: John will discuss the unmet medical need in congestive heart failure. And John Moore will review the design and methods and objectives of the FREEDOM HF study. After John Moore has completed his presentation, Dr. Ben Simon and Mr. Kenny will offer their perspectives on the top line findings from FREEDOM HF. We will then open the call up for questions. For those of you on the webcast, if you have a question that you would like to pose to the speakers, you may submit your question to questions at lifesciadvisors.com and they will be read to our participants. By way of background, Ben Simon is a Duke trained advanced heart failure cardiologists who serves as the Medical Director of the advanced heart failure and mechanical circulatory support program at Cone Health. Dan is a member of the Education Committee of the Heart Failure Society of America and is on the Board of the Labor Brody Cardiovascular Research Foundation. His current research interest is developing heart failure at home networks. He serves as a consultant and active member of the Scientific Advisory Board for Novartis Baring or Ingelheim, ScPharmaceuticals, Sensible Medical and Inmet. He is also the Medical Director for Wellsky, a national leader in providing post-acute home health services for patients with heart failure and other chronic diseases. Jim Kenny is President of JP Kenny LLC, a managed care consulting practice in Waltham Mass. He's been an active member of the Academy of Managed Care Pharmacy for 30 years, serving 7 years on the Board of Directors and recently completing his term as immediate past President of the organization. Jim worked at Harvard Pilgrim Health care for over 38 years with 30 years of experience working on pharmaceutical and PBM contracts, and he has experience in commercial, Medicare, Managed Medicaid and health exchange benefit plans. After the close yesterday, ScPharmaceuticals Pharmaceuticals released results from the FREEDOM HF study. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, the company's examination of operating trends and future financial expectations, are based upon the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. ScPharmaceuticals disclaims any intention or obligation as except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, July 14, 2021. And with that, I will now turn the call over to John Tucker.

Great. Thank you, Hans. And again, what we'll go through today, I'll spend some time on the unmet need of heart failure. I'll turn it over to John Moore to talk about freed in the objectives, design and methods. Then again, John will go through top line data and then have some insights from Dan and Jim. So to talk about the unmet need in heart failure and why we did this study. So we know there's about almost 6.5 million Americans that have heart failure that's expected to increase to over 8 million people by 2020. They're going to hospital, on average, over 1 million times a year, these patients are hospitalized because of heart failure. These costs, which are huge right now are expected to increase from $21 billion to almost $70 billion in 2030. These costs are driven by the cost of hospitalization and what's driving the heart failure hospitalization, it's worsening signed in symptoms of congestion. So how do you impact these massive costs that are coming from heart failure it's really to reduce that burden of hospitalization, either through avoiding that initial hospitalization admission or readmission due to heart failure. This slide kind of dictates the issue, and this is Slide #6. Heart failure patients represent about 11% of Medicare. So 1 in every 10 patients in Medicare has heart failure. But they're 41% of the admissions to the hospital, all Medicare and 53% of their readmissions. So that's really what's driving the cost. So to address this overwhelming burden to the financial system and to patient care, you need to address the hospitalizations and rehospitalizations. We talk about the cost of a hospitalization. If you look at a heart failure-specific hospitalization, it's around 14,000. But then there's all the ancillary costs that go with that hospitalization, which are another $6,000. So for a patient, if we let a patient get so far down the road in treating it congestion, that they end up in the hospital, it will cost a system $20,000 a for that admission or readmission. Slide 8, we talk about where can you intervene? Where can you develop a therapy that can address these cost of admission and readmissions. You really have to address it in 1 or 2 areas, either in that prevention window where that patient first starts showing up with signs and symptoms of congestion. And this doesn't happen over minutes or seconds. It happens over a day, sometimes week where a physician can -- a patient can call a physician and say, my can't get my ring off my finger, I'm swollen, my ankles are swollen were that physician can either over the phone or bring them in and say, well, you're starting to fail on your orals. We need to do something. That's a place to intervene to prevent a hospitalization. And then once that patient is hospitalized, for whatever reason that gets patient gets into the hospital, they're discharged from the hospital. We know through all the stats that 50% of these patients are discharged "wet." These patients are at a real risk to bounce back in the hospital. Not only does it cost the system on over $20,000 but CMS has said, this is a serious enough problem, we're going to penalize hospitals and physicians for excessive readmissions. So when that patient is discharged, they come back for their day 3 post-discharge visit. And there's still signs of signs and symptoms of congestion, weight, swelling, right there, that doctor can intervene right there, that doctor needs to intervene to keep that patient from being readmitted into the hospital. So how are we going to solve that? This is Slide 9. It's [indiscernible], which is our investigational therapy that really provides IV equivalent furosemide. This is the #1 diuretic patients are using. They're all on oral furosemide. They get in trouble, the bioavailability of the oral dramatically decreases down to 10%. These patients need IV strength. The only place to get it is that $20,000 hospital admission or readmission. So we've developed a way to give IV strength furosemide at home. We have a patented formula that goes out to 2034 of a pH neutral furosemide, and we've worked with West Pharmaceuticals to develop an infuser, a way to actually give the furosemide over 5 hours to keep that patient out of the hospital. So this infuser with cartridge about the size of an iPhone a little smaller, replaces a day in the hospital. Four of them replace a $20,000 hospital visit and the associated costs. And that's why we did the FREEDOM study to really show can you decrease those costs associated with heart failure by using forosics. So with that, I'm going to turn it over to John to talk through Freedom and the top line results. John?

Great. Thank you, John. It's really a pleasure today to provide the top line results from the Foros real-world evaluation for decreasing hospital admissions and heart failure or the FREEDOM HS study. So this study was a study that was designed by payers for payers to evaluate the economic impact of hospital avoidance with the management of worsening heart failure due to congestion in patients presenting to the emergency department by discharging them with FUROSCIX with the clinic follow-up. We aimed to leverage the information that John Tucker was talking about earlier is that when a patient shows up to the emergency department with worsening heart failure symptoms, 90% of the time, they are admitted into the hospital and 50% of the time that hospitalization will be may be unnecessary. The majority of patients presenting to the emergency department are not in the need of an acute intervention beyond just simple decongestion. And few patients during hospitalization undergo invasive diagnostic testing or therapeutic procedures that require intense monitoring. So really, the objective here was to compare those differences in health care resource utilization and direct medical cost per heart failure when patients are treated with FUROSCIX with clinic follow-up. In addition, we're evaluating the -- we evaluated the safety of FUROSCIX as well as quality of life and patient satisfaction. This is an open-label comparative study with an adaptive sample size design, ranging from 34 to 75 patients who presented to the emergency department with worsening heart failure. We preplanned an interim analysis at the first 10 subjects to complete the 30-day follow-up to confirm the final sample size. The patients were discharged from the ED to home received FUROSCIX and we calculated the cost differences between the FUROSCIX patients and the control -- the comparator patients, utilizing an economic database, the driven Health Analytics database. So the primary endpoint for the study was the difference in 30-day overall and heart failure related costs between the 2 groups with a number of secondary end points Today, I'm going to focus on the top line results, which are the heart failure-related health care costs and the heart failure-related hospitalizations, heart failure-related emergency department visits and heart failure-related clinic visits. So the key entry criteria, the inclusion and exclusion. This was a study looking at patients 18 to 80 with heart failure, new York Heart Association Class II to III heart failure who's presenting to the ED with worsening symptoms. Patients had to exhibit signs of extracellular volume expansion and after initial emergency department evaluation had to be stable for discharge. And this provides additional information on the study design. So patients that presented to the emergency department were evaluated and assessed. And when included, they were discharged from the emergent apartment to home with a clinic follow-up on day 2 to day 4. The match comparators were identified from a claims database. These were patients that presented to the emergency department, but were hospitalized for less than 3 days. We tracked all health care resource utilization for the subsequent 30 days and applied the cost of those health care resources to both groups and looked at the difference in those health care costs between the 2 groups. So as we conducted an interim analysis that was prespecified based upon the first 10 subjects that completed their 30-day follow-up. We conducted this in March of this year. Based upon these results, the statisticians recommended to stop the study enrollment early because of a significant cost benefit that was being observed in the heart failure primary endpoint with the FUROSCIX group. We talked about these interim results with our principal investigators our payer advisers and health economics experts and determined and decided to stop enrollment in May 2021 with all patients currently enrolled to complete their 30-day follow-up. So this slide shows the demographics and the baseline characteristics of the overall group as well as broken down by by treatment phase. So overall, we included 90 subjects in the analysis population, where 24 subjects were randomized -- were included in the FUROSCIX group with 66 comparators that were matched to the FUROSCIX group. Let me spend a few moments talking about how matching was done. First, we started with the Truven database and included 370,000 inpatient hospitalizations just to start. We then applied our inclusion and exclusion criteria to those 370,000 claims and ultimately, dwindle down the potential comparator group to 1,600 patients. We then applied matching criteria based upon 7 key variables that have been shown in the literature to be predictive of hospitalization, and those 7 variables are shown here. The 2 groups were balanced according to the variables that have been associated with hospitalization And so in all we really matched to approximately 20 different variables from the claims database in order to ensure that the groups were, in fact, comparable. This slide demonstrates the primary endpoints of the 30-day heart failure-related health care costs. In the FUROSCIX Group, the overall average cost to manage these patients in the 30-day funnel period was $2,920 compared to the comparator of $20,673 for a difference of $17,753 which was highly statistically significant. Of note that this difference does not include the cost of FUROSCIX as the price of FUROSCIX has not yet been determined or finalized. However, with the large difference in the cost between the 2 gives us a buffer zone of how we can really price this product competitively. Slide #18 shows the secondary endpoints of the 30-day heart failure hospitalizations, heart failure ED visits and clinic visits. In the FUROSCIX Group, there was 1 subject that was admitted to the hospital for worsening heart failure, resulting in a 96% of patients enrolled to be kept out of the hospital for that initial hospital avoidance. Of note, all 66 comparators had an initial hospitalization for heart failure and 7 patients or 10.6% had a readmission in the subsequent 30 days for heart failure. The number of emergency department business, both groups had an initial emergency department visit and the costs were included for those and then had the equal number of emergency department visits as well. Patients in the FUROSCIX Group, all 24 had a clinic visit associated for heart failure was designed by per protocol. Talk a little bit about the safety. So there were 60 adverse events reported in 21 subjects that received FUROSCIX. Most of the adverse events were mild to moderate in severity, were unrelated to study drug, and the most common adverse events were associated with the infusion such as infusion site pain and bruising as well as dizziness, which is associated with decreased volume loss and consistent with the IV and the oral formulation. We did have 5 subjects who experienced serious adverse events and none of these serious adverse events were to turn to be related to FUROSCIX and all of the serious adverse events resulted in non-heart failure related hospitalizations. And no subjects discontinued the study due to an adverse event. So in conclusion, the use of FUROSCIX allowed for the outpatient management of heart failure patients presenting to the emergency department with worsening congestion despite their oral diuretic use. This initial heart failure hospitalization was avoided and persisted across the subsequent 30 days, and this resulted in a significant reduction in 30-day heart failure related costs compared to the matched comparator group. The most common adverse events observed were the infusion site pain, bruising and dizziness. So with that, I'd like to turn it over to Dr. Ben Simon to provide his clinical perspective of the results of this study. Dr. Benson?

Thanks, John, and good morning, everyone, and thanks for joining us. I've been asked to give a few thoughts on the clinical significance of the FREEDOM HS data. And I think what what's been presented already really, really speaks for itself. I would just like to reiterate a few things that we went over. And I think people realize that this is a small trial with focus on cost of care was payer design. But I think what we have here from a clinical perspective is completely landmark. For the first time, we have shown that we now have a tool and a strategy that we can take patients who come to the ER with mild to moderate heart failure decompensation. And actually, u-turn them, we can divert them out of the ER and get them back home safely. That's not a thing that was in our toolbox before because we didn't have the pharmaceuticals or the agents to make that successful. And let me give you a little bit more background on that. I think John Tucker really said it very well upfront. What John pointed out was congestion or volume overload is the main reason our patients get admitted to the hospital for heart failure. It accounts for over 90% of all admissions. It's the management of volume. So if you look at the slide that we have up here on the screen, we used to think that as patients began to develop volume overload, they would get pretty symptomatic pretty quickly. But over the past couple of years with invasive hemodynamics with Cardio Men's and some other devices, we actually learn that there's about a 14-day run-up between the onset of initial congestion and hospitalization. And if you see, there's really an exponential rise in the last 3 or 4 or 5 days between volume overloaded and symptoms. And this is where patients really start to get symptomatic start calling the office, showing up in the [indiscernible], I need help. And what happens at the exact same time, this is when their oral diuretics stop working. There's got edema, there's slowed GI motility and the drugs that they've relied on for so long now don't work. They double their dose. We try a lot of things. And all of a sudden, we say, wow, things just keep getting worse and they're on the steep slope to the ER. So this sort of phenomenon has trained us as heart failure docs, ER docs, once they show up, there's not many things left to do. You can bring the clinic every day and try to give them IV Lasix, which takes a lot of time and resources. And we've clearly shown that 1 day of IV Lasix in clinic is not enough. People still get admitted even if you try to jump start them. So we've really now become a customer of the fact, okay, if they're not responding to their orals, the best thing to do is, hey, let's just put them in the hospital for 3 or 4 days, get the fluid off, reset them so that we can continue to treat them. And that's what we've become program to do. And the question is, -- Is there opportunity here to do it differently? And John, if you pull up the next slide. This is some of the work we've done in our ER. And what we did is we took a divide to actually directly measures lung water in our patients and normal lung water is somewhere between 20% and 35%. And we measure in patients coming to the ER who get admitted for heart failure. What do they look like? How volume overloaded are they? And what we found is that over 60% of the patients or just about 60% of patients who came to our ER had mild to moderate volume overload, 40% has had severe volume overload, we think those patients should be admitted and treated appropriately, but 60% of the 1 million admissions perhaps that come through the ER perhaps could be avoidable if we had the right tool. And what I think what FREEDOM HF shows is that, listen, we now know that this strategy works. We can do other 24 patients that came to the ER realize that all of those patients, the ER doctors said, we are going to admit you. It wasn't, oh, I think you can go home maybe. So these patients, the doctor said, you're coming into the hospital, and that's when they got enrolled in the trial and the trial was able to u-turn them safely back home and you see the numbers are just staggering. So I think really, when you look at the data in completely, I think this is really 1 of those trials. Even though it's a small trial, that I call a win-win-win. It's really a win for the medical community. We now have a tool that allows us to keep patients out of the ER and out of the hospital at a time when we are just overcrowded. We have the worst nursing staffing short as you've ever seen. It is very, very hard to find beds for patients, patients stay in the ER for 12, 24 hours. It's a win for patients. These patients come, they're running out of resources, their oral diuretics aren't working. And now there's a way for them to get back home, avoid hospitalizations and all the risks that come with a hospitalization. You get a little confused at night, you fall, you get a hospital-acquired infection, somebody puts a Foley catheter and you there are a lot of things that can happen to you when you're in a hospital that we would like to avoid. And finally, it's a win for our payers and a tremendous cost savings for a problem that, as John Tucker showed, probably accounts for the highest number of admissions in our Medicare population. It is probably the biggest opportunity we have to fix a problem that has really been paying us plaguing us. So I'll stop there. I look forward to answering any questions about the clinical significance during the Q&A section. I'd like to leave a little bit of time and turn the stage over to Jim Kenny for more on the pharmacoeconomic implications of what we found in this trial. Jim?

Thank you, Dan. Good morning, everyone. What's really exciting about this study is it was designed by and for payers. So with payer input, we obviously focus on how we reduce spend, how do we reduce medical expenses. And this study really demonstrated that quite impressively. Great p-value. We're very familiar with furosemide, we're familiar with the IV and the oral. The drugs themselves are inexpensive. But when you admit a patient to the hospital, that's where the expense obviously comes in, as you saw in the data from John more earlier. And really, it shows that subcutaneous furosemide can be administered and works and works effectively versus IV. As far as the data goes, we always want to be able to identify appropriate patients when we have a new product or a new device and it's very simple here. These are patients who are failing orals. So there's no question as to who the right patient is. No plan is going to be looking to take a patient who's being maintained on oil and push another alternative. But when they are feeling that oral, the alternatives here make good sense. And I like Dan's comment about a u-turn of these patients. Obviously, we try to avoid ER visits, we try to avoid hospitalizations or reduce both of those. And in this case, the opportunity for quite nicely. Now they may get to the ER, but if we u-turn them and avoid that hospitalization, there's clearly opportunity for significant savings there. The data was highly statistically significant. We saw that the small number of patients didn't really deter our perspective the value of the study. We can see clearly with a difference of 17,000 to 20,000 or more on a per patient basis. And regardless of where the payer is located in the country, there's a big enough difference here that the savings will translate broadly across the country. If you're in an area where the costs are slightly different, there's still a significant difference there that makes it quite impressive. And as far as managing these heart failure patients from a plan perspective, as John Tucker indicated, 1/3 of these patients in Medicare are spending their time based on Part A and Part B expense in heart failure. So we know it's the most expensive area for us as it relates to Medicare lives and certainly an expensive 1 for those commercial patients with heart failure. Bottom line is it's patients who are failing oral -- And if we can keep them out of the hospital, we can save significant dollars. And ultimately, that's what the plan's objectives are. It's to manage patients appropriately and to save medical resources and use drugs efficiently and effectively. And now I'll turn it back over to John, I believe For our Q&A.

Great. I want to thank John Moore, Dan and Jim. Obviously, we're very pleased with these results. So before I close, I just wanted to open it up to Q&A. So let me turn it back to Hans for Q&A.

Include the formal part of today's presentation. Before we turn the call over to the operator to open it up for Q&A. [Operator Instructions] With that, operator, please go ahead and poll for questions on the telephone line, if you would.

[Operator Instructions] Our first question is from the line of Douglas Tsao with HCM.

Just as a starting point, these patients in Freedom HF were presenting to the ER before they are prescribed FUROSCIX. I'm just curious on [indiscernible] would you feel comfortable prescribing this to a patient? Or would you like to use this as a patient before they actually present the ER, just maybe when they start symptoms and that call in to the clinic?

Yes, great question. So I think the opportunity -- I think the opportunity here is just that, right? The ER is sort of the final common pathway. If you can send people home from the ER, that's I think that's as tough as it gets, right? Getting a patient in the ER showing that this works and being successful with this drug in an ER population means we're really on to something yes. Now what you're choosing to do is move it up the road a little bit, and somebody calls the clinic and said, "Doc, I've doubled my Lasix for the past 2 days. I just can't get it off. That is the perfect time say, hey, you have a couple of these at home. We've trained on, you have a couple of these at home, take 2 of them, 2 or 3 doses depending on where you are from your weight and get yourself back to baseline. It's the person as John Tucker, also point out, almost 50% of patients who get discharged in the hospital, go home with volume overload. And the job isn't done and they get back home and their oral Lasix still isn't working fully. It's another time when they're calling and say, "Hey, the fluids coming back, what do I do? Previously, we're helpless, we're not helpless anymore.

And just as a follow-up, I was just curious in terms of running the study, did you control for -- potentially for geographic differences in terms of utilization in the control group?

Yes, we did. When we matched our control group, our comparator group was matched by geographical distribution. Now the geographic distribution, it was divided into 6 areas of the United States, so you could begin to ask, Doug, is even though Maine and New Jersey are in the same geographic area of the United States due to practice pattern still hold hold true and are similar between those 2 groups. But I think even more importantly is that we looked at the database, we've applied all of our inclusion criteria to that initial 370,000 patients in the claims database and dwindled that down to 1,600 and then further applied criteria that are associated with readmission to the hospital. And so at the end of the day, we feel very comfortable and confident that the 2 groups are comparable with those demographics and characteristics that are predictive of hospitalization.

Yes. I'd like to add 1 more thing to that, John. These are -- these weren't low-lying fruits 62% -- first of all, the ER doctor said, all of these patients are coming in. And then 62% of these patients had greater than 1 heart failure hospitalizations in the past 6 months. Some of these were a good part of these are real frequent flyers. These are people who are expecting to get kind of had trouble and expecting to get admitted for IV diuresis. And to be able to get these people home and get home safely and successfully in my mind, was a huge win for this trial.

Operator, I do have some questions that have come in from the web. Perhaps you want to just go ahead and repoll and then I can go to these questions.

[Operator Instructions] Please proceed.

Great. So we have a couple of questions that have come in. The first 1 is, is it an issue in your mind that the study is nonrandomized. And what was the underlying rationale for that trial design?

Yes, sure. I'll start that one, and then I'll turn it to Jim and Dan for their perspective. So Obviously, when designing a clinical trial, randomization is one we would strive for. And as we began to look at the question that we wanted to answer here, doing a randomized study where a patient at the ED was randomized to either receive versis or to go home on oral loop diuretics and track those patients there. That was going to be difficult because, as Dan said, that all these patients were showing up to the emergency department already failing their oral therapy. So we got input from heart failure experts as well as the medical ethicist that really said randomizing patients once they get to the ED failing their oral therapy randomizing them back to their oral therapy was just not going to be possible. So we then said, okay, well, let's randomize the patients when they show up to the emergency department to either go into the hospital and receive IV or go home and receive FUROSCIX. And when we looked at that, we would have ultimately ended up with the same point that we are today by doing with our current methods, is that all the subjects would have been admitted into the hospital that were randomized to the hospital group and all of the subjects that were randomized to FUROSCIX would have gone home. So we really consulted with our health economics experts to really leverage the robust data within the Truven Health Analytics database in order to develop a matching scheme across multiple variables in order to ensure that we have a group of patients that represent that 50% of patients that were -- had potential -- that could have their hospitalization potentially avoided when showing up to the emergency department. So I'll turn it to Dan and to Jim to give their perspective on randomized study versus our message here.

I think you summed it up really quite well about the things that you have to take into account in these clinical situations. The other thing you have to realize this is the first time this has been done, right? You're now -- This is -- as I said before, this is landmark. You have shown that in this patient population, which is a difficult patient population and historically only has 1 way to be treated and that's in the hospital. You've been highly successful at keeping them out over 30 days. And so I think we've really now set the stage to do something larger if we wanted to. But I think this is a drug we're familiar with, right? It's -- we all know Lasix, we all understand how it works. We all know what the role of Lasix is to do. It really is, can the strategy is FUROSCIX good enough? And can the strategy of sending people home to be safe enough to do it, you showed it. I mean this is what Freedom is all about. And I think without question, an ER doc or heart failure doc looks at this and says, "Well, I get it. So we know at Lasix does subcu FUROSCIX works, let's do it. So I think it really proved this point. Jim, thoughts?

Yes. I would just say from the payer perspective, I mean, you both summed it up well. We know the product works, the oral is failing. It's really a site of care question, right? Can we avoid hospital and move these to a less intensive site of care, which would be at home, if you will, using FUROSCIX and plans do that all the time, right? We know if we can avoid a hospitalization if we can reduce that medical side of the ledger, we can we can save a significant amount of money. And in my mind, that doesn't require randomization here. It's a very simple equation. We can alter the site of care and save significant hospital utilization.

That's great. Thank you very much for those responses. I do have a follow-up question or a second question. And maybe more in relation to the reimbursement. But are there concerns that PBMs will treat FUROSCIX differently, whether it's a Medicare Part B prescription drug plan or a Medicare Advantage plan?

Yes, I can take that question. I think that this likely would be covered as an outpatient drug, obviously, right? It's an outpatient product. So that would likely apply to the Part D benefit, right? So if you have a PDP formulary or a PDP plan as opposed to a Medicare Advantage with drug benefit. Obviously, the PDP plans, the drug alone are trying to save money. But there's going to be a lot of pressure from plans to use a product like this because where the real expenses in this population is not the cost of furosemide. The cost is in the hospitalization side. So clearly, if there was any resistance on the part of a formulary management, whether it was a PBM or someone a PDP formulary for Medicare, the plans would sufficiently push back against that. And they may, in fact, try to implement some type of program, right? I think Dan gave us a name, we could call it the U-turn program, right? But there might be an opportunity to say, we want to outreach the providers and encourage them to try to identify some of these patients early on in that cycle of fluid overload. And since it's very interesting as Dan presented in the graphic, the length of time that, that takes. So it's a great opportunity to intervene earlier in that process and not wait until that last minute when they hit the ER. Clearly, if they hit the ER and we u-turn them out, that's fine. But if we can identify that patient a little bit earlier before they get to the ER, now not only did we save the hospitalization, we also save the cost of the ER visit

Okay. That takes care of it for me for questions from the web operator.

We do have 1 question over the phone from Craig Moss of Morgan Stanley.

John, could you give us an idea as to when you would expect to get final approval on this product and be ready to market this product?

Sure. So this is John Tucker. We had an update 2 weeks ago from our Type C meeting with the FDA where came to agreement with the FDA on all the remaining tests we needed to do, benchtop tests. So we've done all of our clinical work. We have no additional device modifications. So we're finishing making the batch of devices that we'll do the testing on. So we'll finish making those here in the next week or so. We sterilize them for a week and then we put them in the oven at artificially age them, and then we run the design verification testing. So all of that should be wrapped up early in Q4, then we would finish writing and submit the NDA sometime in Q4. We anticipate a 6-month review as per our communication with the FDA. So approval somewhere in Q2 of next year. We've been doing quite a bit of commercial work and medical affairs work to get the market ready and this data really helps us on the managed care side. we should be able to launch fairly quickly after the formal approval from the FDA.

At this time, I will turn the call back to John Tucker for closing remarks.

Great. Well, again, I want to thank Dan and Jim and Hunter hosting and really wanted to thank all of the physicians and nurses and site coordinators who took part in the trial. It's not easy doing a trial during COVID and a special thanks out to the patients who enrolled, again, went to the hospital with heart failure agreed to be randomized in a trial and went home. So again, we're real pleased with the results, but just really wanted to thank all the all the participants and the team here at ScPharma to conduct this study. So again, thank you very much, and everyone, have a great day.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.