scPharmaceuticals Inc. (SCPH) Earnings Call Transcript & Summary

Good afternoon, and welcome to the scPharmaceuticals KOL webinar. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the scPharmaceuticals website following conclusion of the event. I'd now like to turn the call over to John Tucker, President and Chief Executive Officer of scPharmaceuticals. Please go ahead, John.

Great. Thank you, Tara, and thank you, everyone, for joining. Really excited today to talk not only about FUROSCIX in heart failure, but really the first time to talk about potential use in chronic kidney disease, and have one of the top nephrologists in the country here to give us his perspective. So Tara, if we can move forward, I can talk a little bit about, obviously, our forward-looking statements. what the agenda is for today on the next slide. I'll give a quick overview on scPharmaceuticals and FUROSCIX, really focusing on just the heart failure indication here at first. And then Dr. Aaronson will take over and talk about a nephrologist's perspective on fluid overload managing and FUROSCIX's role. I'll give a very quick corporate update and then we'll go into Q&A. So that's the plan for this afternoon. So we go to the next slide, a bit about scPharmaceuticals. We're a commercial stage company. We're really committed to cardiorenal health care. And really looking for patient-centric innovations. We really came into being as a company focused on really improving the life of heart failure patients who had fluid overload by developing a subcutaneous formulation of Furosemide to be able to deliver this care in the patient's home versus in a health care setting like a hospital where everyone knows that's the highest cost setting of care. So we're really still focused there, but getting even more focused really on the cardiorenal space. If we go to the next slide, Tara? So just to talk about heart failure right now. Big global market opportunity, real clear value proposition for FUROSCIX. There's about 6.7 million adults in the U.S. that live with heart failure. We really focus on how many times a year they have a worsening event. The hallmark of that event is congestion. That happens about 4 million times. That equates to about a $9.4 billion addressable market opportunity just in the U.S. When we talk about our patients, the majority of them, as you can imagine, are over the age of 65, and congestion from worsening heart failure is actually the #1 reason they're hospitalized, which means it costs a lot to the system. About 1/3 of all Part A and Part B spending in Medicare is dedicated to taking care of heart patients. So where's the value prop for payers? Really it's significant cost savings by avoiding hospitalizations and rehospitalization. So I think Dr. Aaronson will talk a little bit about this. on how this value prop relates to CKD as well. So we go to the next slide and talk about how we address this. So Again, the goal here is to give patients 100% bioavailable FUROSCIX and give it to them at home where they can be with their family, their pets, their spouses. What we needed to do was to develop a patent, pH-neutral formulation of Furosemide that can be delivered subcutaneously. It's indicated to treat congestion doing fluid overload. It's an on-body patch pump that delivers 80 milligrams of Furosemide over a 5-hour biphasic delivery profile. We gave basically a bolus dose of 30 milligrams in the first hour, 12.5 milligrams each of the next 4 hours. And the result of that is almost 100% bioavailability, 99.6%. And that bioavailability allowed us to have equivalent diuresis and natriuresis to IV furosemide. This is what we wanted to do to show similar bioavailability and diuresis to the IV, and we're able to do that. On the next slide, this really talks about -- and again, I'm focusing on heart failure here, really focuses on the patient journey. So I talk about the 6.7 million patients in just heart failure not CKD. All of them are stable. They're on an oral diuretic typically oral furosemide or oral Lasix, the brand name, and they do fine. It's about 4 million times a year, probably about 1 million patients contribute to this 4 million times a year where they start having fluid overload, fluid retention. It's really the hallmark of worsening heart failure. When they start having this fluid overload, this edema in the gut, the oral bioavailability of the diuretics they're on, the Lasix they're on, really can go down to as low as 10%. So the patients taking on fluid, the agent they're using to maintain their fluid really stops working when they start having worsening edema. So what are the -- what happens then? So the doctor really needs to increase the diuretic. They could try to double the oral, add a non-loop diuretic, but this patient can continue to get worse. Really what they need is a predictable, 100% bioavailable Furosemide. Give them 100% very predictable bioavailable Furosemide and get that fluid off and get them back to their oral diuretic. That's what we're trying to do. It's really an acute intervention and a chronic condition where we're trying to get them back to their dry weight and get them back on their oral without having to have the IV that's typically delivered in the hospital. So this patient, before FUROSCIX, would hospitalized or would have to go to an IV clinic 5 or 6 times just to get that fluid off. FUROSCIX really enables these patients and these physicians to get the patients back to their normal dry weight without having to be hospitalized or get IV in 5 or 6 trips to a clinic. Next slide. So where does FUROSCIX kind of play in the intervention for heart failure. We kind of look at it in a couple of different windows. First off is this hospital prevention period. Worsening edema, it doesn't take hours or minutes, it really takes days, sometimes weeks. So there's opportunity when that patient first starts having signs and symptoms, maybe their weight is on -- weight is up unexplainable or they're short of breath walking up the stairs. They are in constant contact with the heart failure clinic or their cardiologists. Right there the doctor can intervene with FUROSCIX, get these patients back to their dry weight and back to where their orals respond. We know we're going to have some patients that wait too long or we're not -- we don't have 100% market share. So they're going to be hospitalized. Even if they end up at the hospital, there's an opportunity to intervene. They show up in the emergency room. This doctor can either give the patient an IV, see how they respond, send them home with FUROSCIX before they're even admitted or start up on FUROSCIX in the hospital, see how they're responding and send them home with FUROSCIX. At discharge, 2 opportunities for us here. Patients been in the bed 2 days, they're doing great, they're stable, but they still have excess fluid, send them home with a prescription of FUROSCIX, finish the job at home. Or patients been discharged to the hospital just was in the hospital for 5 days on an IV Furosemide, they come back from their post-discharge visit, they're still congested. We know half of the patients leaving hospitals for worsening heart failure exit congested right there before that patient bounces back in the hospital intervene with FUROSCIX right there, avoid those readmission penalties and just think about the patient. They've been laying on a bed for 5 days. They don't want to go right back to the hospital. So really, in heart failure, this is how we're looking at the market. Go the next slide. So that's a quick overview of FUROSCIX and FUROSCIX in heart failure. I really want to turn it over on to Dr. Aaronson to talk really about how nephrologists looks at FUROSCIX and its role. So Dr. Aaronson?

Great. Thanks for having me. Next slide. So let me start by sharing a little bit about Lincoln Nephrology and Hypertension. That's where I work. So we're a group of 10 doctors and 4 advanced practice providers who serve Western and Southern Nebraska, including Lincoln. We have about 5,000 patients in our practice, and our group collaborates and serves multiple health care systems across the region. So in our area, we work with all the major systems. And this region includes a large proportion of patients who are in the rural parts of Nebraska, and they can live hours away, and this can also include Kansas and lots of travel. And these people can be hours from the nearest clinic or hospital. So we're unique because we have to do a little of everything where we are. And we offer telehealth and also the traditional clinic visits, so hospital outside of the hospital. The other thing that we do, and I'm going to talk a little bit more about it, is this comprehensive kidney care. And John talked about the Medicare cost and burden, and so we'll develop this further. And this is really important because this is where everyone is focusing at how do we decrease the cost of care? So this comprehensive kidney care contracting model, which is a word salad and so I'll abbreviate it CKCC, it's a partnership that we're doing with DaVita right now, but it can be any type of organization where it's a complete kidney care program for people who are eligible if they have Medicare Part A and Part B. And the whole goal is to manage all of the aspects of a patient's care and it's clinical services. So it's post discharge, pre, complex medical regimens and looking at the comorbidities and doing advanced care planning to keep people well. And then offering education, trying to optimize therapy to keep people out of the hospital healthy, off dialysis and optimize their dialysis and then transplant regimen. And then finally, CKCC offers other types of telehealth using social support and support for care partners. Because as John, who did a very good job, in my opinion, talking about, it's not only about the patient, but it's about the family and the spouse. It can be a burden to go to a hospital. And so this is where the FUROSCIX will come in, and I'll talk with you a little bit more about it. So it's the name. It's the comprehensive kidney care model. Next slide. So this is a fluid overload slide, and it's -- the whole purpose of this is not just to talk about an effect but also about a cause. So it's this vicious cycle. So lots of circles here, vicious cycle, vicious cycles. And what we're going to talk about is cardiorenal, so kidney and heart and how they work together. And a lot of times, we don't know if chicken, egg what comes first. But we all are aware that fluid overload is a common symptom in consequence of heart failure and chronic kidney disease. But it's less well appreciated that fluid overload can cause both and worsen both. Now with chronic kidney disease, or CKD, fluid overload will increase the blood pressure, cause arterial stiffness and then can lead to inflammation and it can worsen protein in the urine and can reduce the GFR. And so as fluid overload, these indications may expand in the future. There's more than just heart failure. And in kidney disease, if someone is spilling protein in their urine, that can also lead to edema and congestion. So you can see how diuretics become very important to the nephrologist and also the internist and also the family practitioner. And so back to heart failure, heart failure and fluid overload taxes the heart by increasing cardiac overload. It causes dilatation of the left ventricle, left ventricular hypertrophy, neurohormonal activation and then vasoconstriction. And so there's interdependency and what ends up happening is people get congestion and they go to the hospital and they go bad. So often, these go hand-in-hand and 50% of patients with chronic kidney disease often have evidence of heart failure. But I want to point out that 50% of patients with CKD do not have heart failure, and they're at risk for developing heart failure. And so that's what we're going to focus on today because there's a lot out there for just heart failure, but there's more, and that's what we want to develop further. Okay. Next slide. So this is looking at fluid overload and that it's very common. And 40% to 50% of non-dialysis CKD patients have some degree of fluid overload, and about half of the patients on dialysis require treatment for fluid overload. They drink too much. We're trying to deal with the target weight. And so this is looking at -- there's 3 circles. So there's a circle and there's 2 circles within the circle. So the right side of the slide is talking about the pathophysiologic reasons for hypervolemia. And what you're going to get is you're going to get fluid overload and hypervolemia increases left heart filling pressures, which increased renal venous pressure and that leads to greater sodium retention and increased plasma volume. And that's that vicious cycle on the left. So that's your classic cardiorenal. And then on the right, right renal venous pressure decreases renal perfusion because you can't have forward flow through the kidney, which worsens kidney function and then it creates a feedback loop to cause fluid overload, giving that vicious cycle on the right. And when I see someone in the hospital, a lot of times, we see the overall picture, and we call it cardiorenal. We don't define one side or the other, but both can happen. So the 2 cycles coordinate their synergy. They get worse kidney and heart function. And the way to improve a lot of it is to diurese the patient. Next slide. So while fluid -- now this is also a very important point that John brought up, but I think it's important to talk about. There's a big focus on goal-directed medical therapy and putting patients on all of these pillars of therapy, and that is true. And we talk about fluid overload in the context of quality of life and symptom management, and that's also very important. But also there's other potential clinical complications of undertreated fluid overload in CKD. And these include cardiovascular and renal complications, and you're aware of that you're here and you know about this. But also what's very important, if you're focused on the cost of health care and reducing the cost. And when I talk to the different systems about reducing the cost, their eyes open very wide because they're responsible for the cost. And higher health care costs can be a burden for the patients and the health care system. And we're focused on this because we are responsible for the cost of the patient. So as a nephrologist, we're tuned into the fluid status, especially those with chronic kidney disease. Next slide. Okay. I love this because this is just furthering that point. This is a study that is talking about 500 patients with CKD Stage IV to V. And here's a fun fact that I'll share. If you have, let's say, a practice of 10 doctors and 4 nurse practitioners like mine and you have 5,000 patients, you'll get about 400 to 500 people who can apply for the CKCC, and so this is basically this study. So here, we have about 500 patients with CKD 4 to 5 whose fluid overload was measured using bioimpedance spectroscopy. So a research thing because we don't do this every day. But it's going to show a point. And the patients were classified into 3 tertiles based on the degree of fluid overload. And as you can see, the patients with the worst fluid overload, so that's an orange there, had the largest decline in their GFR, the glomerular function rate, over 1.2 years of follow-up and had the highest rate requiring initiation of dialysis. So hypervolemia is an issue, and these are statistically significant findings. So the way that we look at it is, we love goal-directed medical therapy, but too much water in the system gets in your way. And on the right there, we're talking about dialysis initiation and if a person has the highest tertile of volume in their body, that occurs. And so for our CKCC, we're trying to keep people off dialysis. We're trying to save money. All of these things are important. So we really have to try to maintain euvolemia. So like John said very well, although symptom management is very important, and we want them to feel better because we actually are also asked about that. We want to have a good quality of life. We need to maintain fluid overload in patients with CKD, and it's more than just controlling symptoms. And this study suggests that by optimizing fluid status and keeping patients euvolemic, we can prevent a further decline of kidney function and decrease the chance of requiring dialysis. Next slide. Okay. So this is what it's all about, and it took me a long time to appreciate this full disclosure. So in heart failure and CKD, if someone has hypervolemia, there's reduced and unpredictable bioavailability when it comes to the oral diuretics because the oral diuretics don't get absorbed through the GI tract as you would expect. And then they can't exert their effect on the kidney glomerulus throughout the nephron, whether they use a loop diuretic or a thiazide diuretic. And so historically, what you would do is you would just add more and more and more to try to achieve that effect or switch loop diuretics. And if they fail, then you can try to give them IV and then it just escalates from there. So it's about this mucosal edema with hypervolemia that interferes with the absorption of oral diuretics. And especially with Furosemide, it can greatly reduce the drug's bioavailability and cause highly variable bioavailability. And so here's the problem. We love protocols, and we love doing things a certain way and a certain dose of an oral diuretic you would expect a certain effect. The problem is once -- and in euvolemia, I feel that, that's true. But once someone becomes hypervolemic that variability, like John said, 10% to 100%, we just don't know. So you try it. And if that patient starts getting edema or shortness of breath or becomes fluid overload, then those oral diuretics aren't going to work. So that becomes the issue. And important to note, it's both intrapatient and interpatient. Okay. Next slide. So that's why this guy is going like this because -- or that person. Because from a practical standpoint, when we have a patient who's not responding to the oral loop diuretics adequately, we're in this rock and hard place dilemma. You have a couple of options and there are serious limitations. You can adjust the oral diuretics. You can go up on them, you can add thiazides, you can play with them, and that's what our specialty is. And cardiologists refer to us to help them with that. And the potential risk is that it doesn't work and the patient gets worse and then they crash into the hospital. And if that occurs and there's a delay, when they get admitted into the hospital, they get taken off all their goal-directed medical therapy and then you have to work to put them back on, and they can go into renal failure, they have problems with cardiorenal and it's a problem. The other option is IV loop diuretics. That's expensive. They go into the hospital. They sit there. They're there for days. John said it very well. Hospitalization has its own risks and major inconveniences because patients and families, they have to travel, they have to go there. They're in the hospital. There's issues with going to the hospital and there's costs. So it's very common. We all know this happens and it's very costly. Next slide. So this puts it all together. And this is a very real situation. 56-year-old woman with Stage IIIb chronic kidney disease. So that's going to give her an eGFR between 30 and 44. So we're going to call this moderately to severely damaged kidneys. So if you know about that heat map, if you know the space, basically CKD IIIb and she's moderately to severely damaged, and she presents with symptoms of fluid overload. So that second bullet point, she's got weight gain, she's got edema, she's got shortness of breath with minimal activity. And we've got her on as much goal-directed medical therapy as she can tolerate, and she's on furosemide of 80 milligrams twice a day. Of note, she was seen a month ago and had similar symptoms. And at that time, furosemide was increased oral from 40 now to 80 twice a day. And her creatinine is 2.1 in our blood pressure is elevated likely because she's hypervolemia. And this is a patient that could be challenging to treat because she's not really responding to the oral diuretics. So what are we going to do? Next slide. So that's where FUROSCIX can come in. So this is a study that was conducted to support the approval of FUROSCIX. And this is in a patient with chronic heart failure. But what I want to point out is that 50% of the patients in this study had CKD3 A2B, so the GFR is 30 to 59. And in this study, it's basically how FUROSCIX works. It's a 5-hour subcutaneous infusion of furosemide, which is going to mimic the pharmacokinetics of IV furosemide very closely. So the word is parenteral. And the definition of parenteral is whether it's subcu or IV, that's the same. It's not oral. And here, you're looking at the time concentration curve for FUROSCIX, 80 milligrams over 5 hours where 30 milligrams is given at first and that's in the first hour followed by 12.5 per hour for the subsequent 4 hours, and that's compared to IV furosemide given in 2, 40-milligram boluses. So that's -- so the FUROSCIX is in the blue there, and then the 2 IV pushes are in the orange with the 2 spikes, boom and then boom. Okay. So as you can see, the curves track each other very nicely and the area under the curve is almost identical. Now there is a fourfold higher peak concentration with IV, but despite the higher Cmax, the urine output and the urinary sodium excretion are similar between the 2 routes of administration. And the bioavailability, as John just said, of FUROSCIX in the study is 99.6%. 99.6%, It's essentially 100%. So it's -- this modality is like giving IV furosemide. It has very tight confidence intervals, it's predictable and it can really help out in terms of looking for a way to diurese patient. Next slide. So FUROSCIX, that's what it looks like. And this is where FUROSCIX may be useful if it's approved for chronic kidney disease because there's more to hypervolemia and fluid overload than just heart failure. And it's a potential treatment option for outpatient parenteral therapy of fluid overload in patients with CKD that can be administered at home. And so nephrotic syndrome, for example, hypervolemia, diuretic resistance. So you got 50% with heart failure and then the other 50% that do not have it. Next slide. So I just wanted to take a moment and just talk about the CKCC and [indiscernible] overview because I think that this is going to be the future. We are involved in this, and what the government is doing is they're taking patients with Medicare A and B and aligning with practices. And the patients have to have Stage IV and V and patients can be on dialysis and have a kidney transplant. There's all these different permutations, but this is the one where they're really looking at how do we decrease the cost of care and optimize the cost of care. So in order to -- now we kept growing over time. But in order to get this to happen, we aligned with 2 other very large practices that are close enough in geography to really give a flavor and to try to see if we could impact the cost of care. So we're aligned with Omaha and Des Moines. And so how it works is capitation payments are given and the KCE or kidney contracting entity is at risk for up to 100% of the total cost of care for the patients who are aligned in this setup. And what we're trying to do is, is look at, well, what is impacting the cost of care, and how do we affect that cost of care and how do we change it? And so from what John was saying, and I thought it was very well done, you can see how, done correctly, it really can make a difference in terms of affecting this cost. Next slide. So how do you do it? Well, in order to try to address this, we developed a fluid management protocol, which we're making available to all because I think it's important to do this. And it's a pilot to reduce hospitalizations and rehospitalizations for CKD patients who have concomitant heart failure with fluid overload. And it's a decongestion strategy using the resources that are already in place. And what we did on purpose is we wanted to allow the providers choice and say, "Well, you can do these things and then you decide with the patient what you think the best thing would be for them." So escalate the loop diuretic, add a thiazide, use FUROSCIX, the 80-milligram for subcutaneous use offer IV outpatient or admit or readmit to the hospital. And based on all we just shared, the FUROSCIX can become a very popular option because it keeps the people out, and it really does help provide the diuresis that's needed. Next slide. So that is going to be the end of my part, and I'm going to give it back to John Tucker.

Thank you, Dr. Aaronson. Really appreciate that. And again, we'll have time for Q&A. I'll go through a quick corporate update, first off, focused really on what's going to drive our commercial success for the balance of this year and through next year. Obviously, our label expansion, we received in August into Class IV patients, we're already seeing scripts in Class IV patients. It's actually impacting a little bit our scripts per -- I mean, our units per script as they're continuing to grow. We've talked about doing our sales force expansion. It's complete. They're all now in the field. So we're up to 90 reps now. We're still continuing and now even more so to continue to add new doctors, new clinics. The advantage of expanding the sales force, you can add frequency into some of these heart failure clinics where you need to make 10, 15 calls to break it down to different people within the clinic, but also expand our reach into some wide areas. So we'll continue to drive new riders and new accounts. And then the IDN business is continuing to grow, and it's a real focus for us now. As we get more and more deeper in the heart failure clinics, they're more and more aligned with IDN. So these are key growth factors in 2024 and through next year. If we go to the next slide, really talks about longer-term growth initiatives. I mentioned Class IV heart failure, obviously, chronic kidney disease. We have our PDUFA date in March 6. So next quarter, I get to say we got a PDUFA date next quarter, and we anticipate being able to launch very quickly after that. And then we're very excited about our auto injector. I'll walk you through the PK data in a minute, and we're still targeting an sNDA submission by the end of this year. This just gives physicians and patients another option and really reduces our cost about 70%. So if you can go to the next slide. This really captures I think what Dr. Aaronson talked about with the opportunity in CKD. There's about 6.5 million drug-treated patients. Not all of them are candidates, but we do think about 700,000 FUROSCIX addressable opportunities. If you look at our average cost of therapy, it gives you about a $3 billion market opportunity. I will say this, there are less nephrologists than cardiologists. So we actually think we can target more of this opportunity than even in heart failure. And that's one of the reasons we're so excited about it. Next slide. So what are we doing to get ready for the launch? Obviously, we're now 5 months away. We've been working on KOL identification, outreach to those physicians, those thought leaders, those clinics and offices, and really driving support there using our MSLs. We're doing a lot of market research. Everyone says, it just for us. Well, there's different needs for the nephrologist versus the cardiologists. We really want to understand that. So when we're messaging and positioning, we're doing it appropriately. We're already in the -- on the path of making marketing materials and what our outreach plan is, how many reps, how many doctors, where are these doctors, how do we structure territories? We've started to put some nephrology call points into our sales force into their call plan now. These are just for their heart failure patients, the heart failure patients that have CKD and heart failure. So not the full opportunity, but really in some of these big offices to get a foothold, to do it in service, to educate physicians, their staff on how FUROSCIX work, how to order FUROSCIX, how to support their patients? And then again, we're looking at a sales force expansion to incorporate these call points sometime around the approval. So those are just real high level on what we're doing launch readiness for CKD. Next slide. Now I'll talk a little bit about the auto-injector here. Here is the picture of it right there. We've already announced our pivotal PK results back in August. I'll go through those very quickly. We're targeting to get the NDA in by the end of this year. Again, this extends our patent gives us just a great option for doctors. And I think any doctors, any investors or analysts have talked to, they're really excited about the ability to just have a really a 2-second push for a patient. And then for us, again, reducing the COGS by 70%. If we go to the next slide. Here's our PK. It's a little different than what Dr. Aaronson just showed you on our -- on our 5 hour, but really not that different. As you see, the 2 peaks from the IV dose the same way to 40 mg boluses. Obviously, a lower peak than you see with IV, which is exactly what we wanted. But the bioavailability is considered the same as the IV. And when we looked at all of the PDs, so again, if you're don't match the peaks exactly, they -- your secondary endpoints are looking at diuresis, sodium excretion, and they all were the same between our auto injector and the IV, which is, again, the clinical barrier we need to get to. So we're really excited about how the trial ended up and how the drug is testing. So next slide. So again, we achieved the primary endpoint of a 90% confidence interval between 80% and 125%. The secondary endpoints were similar, urine output, sodium output, urinary and potassium at 6, 8 and 12 hours, well tolerated. The most common AEs were localized to injection site. Didn't see pain scores. That's something you always want look at when you're giving this concentration, but medium pain scores of 0. The systemic AEs were the same with IV and oral. So we were really excited, not just on the PK profile, the -- obviously, with all of the secondary end points, and then how it was tolerated. Next slide. So to kind of sum up on the update, the launch of FUROSCIX is still going strong. We increased revenues 33% quarter-over-quarter. This was from Q1 to Q2. We'll report Q3 mid-November. The market's big. It's $9.5 billion in heart failure, and an additional $3 billion in kidney. Lot of long-term growth initiatives. Obviously, we received the heart failure Class IV approval in August. We have a big PDUFA date for us coming up in a few months here and then a submission of the auto-injector, which we're very enthused about, and we're targeting that for the end of this year. IP is strong, 2035 for our 5-hour for FUROSCIX infuser, the product on the market now, then [indiscernible] 2040 for the Autoinjector. In a good cash position. We reported $38.5 million at the end of June that did not include the $75 million we raised in August in our financing event. So strong cash position, launch progressing well, big market and long-term growth initiatives moving forward. So that's the story. Next slide. So I think I'll turn it now back over to Tara and for the Q&A. Tara?

[Operator Instructions] So our first question comes from Stacy Ku at Cowen.

Great. And again, I appreciate the detailed presentation. So we had a few questions. First for Dr. Aaronson. So can you talk about what percentage of your CKD alone patients are not well controlled on kind of 3 different oral agents as we think about oral Furosemide, bumetanide and [indiscernible], so just kind of the 3 different agents and what percentage just don't do well in all 3? And then as we think about the CKD approval in March, do you think this is going to kind of lift all boats, increased prescribing in CKD patients, but also those that have concomitant CKD heart failure? Just help us understand kind of the treatment paradigms we think about patient has edema is treated by the heart failure patient or it's split between nephrologists who kind of takes care when there's an emergence scenario? And then last question is, what do you think about FUROSCIX when it's being used in CKD alone? Do you think it's going to be split more in preventing hospitalizations or post discharge. So those are kind of our 3 questions for Dr. Aaronson. And then for SC, we have a question around kind of who you're targeting. Are you trying to go after community settings for heart failure and CKD, or are you looking at kind of the centers of excellence where there's more severe patients so more high flag patients?

Dr. Aaronson, I want you answer your questions first, and I'll address the last one.

Okay. So let's do them one at a time. So what was the first question?

What percentage of your CKD alone patients are not well controlled on 3 oral agents?

So we see a referral population. So frequently, what happens is many of the patients that get into us because we have months wait, end up being diuretic resistant and have needs to get on goal-directed medical therapy and have problems with diuretic resistance. And so it's a high percentage, I would say probably 50% to 60%. And so we work closely with the cardiologists in order to provide assistance to the primaries. And as John said, what ends up happening is, there are a lot more cardiologists than nephrologists. And so we provide the guidance and then people end up following our lead, and it's more of an influence more than anything else. Now in terms of 3 agents, there really isn't 3 unless there's a heart failure situation where you're trying to get them on, let's say, furosemide and then if they're fluid overloaded, then maybe add the metolazone and then maybe spironolactone for that benefit that's there. But what I found is that if the higher doses of the furosemide don't work, then a lot of times, metolazone doesn't really help you because there's that bowl edema. And so it really depends on the practice that you're looking at, whether or not that thiazide will help or not. And so the purpose of this is, if you have somebody who is not responding, whether it's because it's too much salt or because they're just not responding because of the bioavailability, then this can be a benefit. So that's what I would say. What was the next one?

That's helpful. And then as we think about kind of your perspective on the CKD loan approval, do you think this is going to lift all boats in terms of describing?

Yes. Okay. So this is my take on that. And so it's interesting because I do think it is going to raise all the boats because let's just use, for example, the SGLT2 class of medications or the GLP-1s. So what happened was, for the longest time, nephrologists wanted to get albumin to creatinine ratio. Because if there's a protein in the urine, what can end up happening is there can be more problems with getting diuretics to work and volume overload. And we would request it and request it. Well, with the influence of industry and with all the posters and with all of the repeating saying how important it is as albumin in the urine is a marker for cardiovascular morbidity and mortality and showing the graphs, that created a sense of urgency and that sense of urgency then was brought to the primary care space and the cardiology space and people started being aware. Because really for chronic kidney disease, there's only -- there's a tip of the iceberg, and we can get you information on that. But there's a lot of chronic kidney disease that isn't even diagnosed. And so this isn't going to be a nephrology thing, this is going to be all hands on deck because there's a lot of fluid overload that is basically treated by primary care. So I do outreach, and the outreach that I do, there's a patient who has CHF and who has CKD, and they want to do more of a palliative approach to try to keep a patient out of the hospital because they keep having to admit and they don't want to do dialysis. She's like 95%. And so what we did was worked together so that they can do it because I don't have the bandwidth going out there once or twice a month to do it. So I see a lot of potential here in the right population in order to allow for this to happen.

Okay. That's helpful. And it kind of leads into our last question. Where you think FUROSCIX might be used in the kind of preventing hospitalization scenario or more in the post charge, obviously, understanding it's going to be used in both scenarios?

So basically, what I think is going to occur is one of the strategies to help is to identify people who are going to have risk for fluid overload. And then knowing that patient have it available on hand. So there's other therapies in the market where that's done. So the potassium binders, for example, the people with heart failure, those who have devices, and it's been challenging to address their diuretics, the frequent flyers. And for those people literally have it ordered. You can have, once a prior approval occurs, you can order 5, 8, 10 and then they can have it so that they don't have to go to the hospital and go through all of the shenanigans, if you will, to have it available And so a lot of providers struggle with having this. So having this option can be very beneficial. And getting the word out, I think, is really going to help. And so that's why this protocol that we developed that we're trying to share -- and every time we show it to somebody, people's eyes, they really do light up. Because having more -- here's my take on it, and I helped develop this, but so full disclosure. But having people just monitor, monitor, monitor without having tools to do something about it can be very frustrating as you watch someone just fill up with fluid and then you just send them to the hospital. And so what this does is, if you have people who can get this, have it at the right time and then place it, it prevents problems and it prevents cost associated with all of these hospitalizations. And that's where I think the utility will at least start.

That's helpful.

And then, Stacy, I think you had a question, how are we looking at targeting this? I think the answer, centers of excellence, obviously, we're going to be there and when our MSLs are already in there. But we think it's kind of both approach into kind of community nephrology as well. And the expansion will allow us to do that. We're excited about -- we know that there's a nephrologist that take care of the failure part of that patient that has CKD and heart failure. So this allows us to actually target additional percentage of the heart failure market as well.

Our next question comes from Roanna Ruiz at Leerink.

So I had 2 for the KOL. So first one was, I know you talked about the fact that heart failure and CKD can be closely interrelated. I was curious if with broadening FUROSCIX label, could that help enhance diagnosis and management of these patients that first present with fluid overload? And how does that improve some of the efficiencies around the hospital management of these patients? And then secondly, for the KOL, was curious, thinking about the overall fluid overload management protocol, many different choices and options of oral diuretics versus IV, et cetera. Where do you think that FUROSCIX could slide into that protocol? And how long would nephrologists broadly start getting used to that?

Okay. So thanks for asking that question -- questions. Those are 2 good ones. So the CKD issue is, we have patients who have fluid overload. But right now, in order to get this approved, they have to have heart failure. It doesn't matter what stage, they have to have it otherwise, they don't get it. And so there are other reasons for fluid overload. And so if the indication for CKD occurs, then we can be more proactive. So we take that protocol and you just cross out requires heart failure and you just put heart failure, CKD, and it's literally that simple. And we just can't wait for that because really -- and this is my take on fluid overload. Heart failure is one part of it, but there are so many other reasons for a patient to have hypervolemia, and this can apply in all of those situations. So acute kidney injury is related to that. Looking at buy-in, every nephrologist I talk to needs a tool like this because this problem is very common and -- at least in America. So in Europe, it's different. But in America, people are not going higher than 800 of Lasix. They're just not. And so sometimes they'll come in and then do a trip, but we're all trained a certain way. And so sometimes people say, well, go higher, higher, higher doses. It's just not happening. It's not a standard of care. We abide by a certain standard of care. I don't see people giving 400, 500 milligrams. And so there have been studies that have shown that when they compare the FUROSCIX to these crazy high doses, the FUROSCIX does better. And so people really -- they love it. And so I think this is going to adopt very quickly if the coverage is right. And so I think that would be the key factor is if a person can get it and they can work through it and they have access to it in the right amount of time. And so that's why when we're doing our protocol for the CKCC patients, what we're trying to do is be very proactive for those people we are worried about who will have fluid overload. Because if you have to worry about getting approval or this or that, there may be a time crunch factor. And so for the first set of questions, that's where, if you miss it on the initial hospitalization, we're trying to get it so that they're not rehospitalized. The other thing I'll say, and I think it's important is -- and it's about -- John said it, getting the word out there. Until you have used it and see it, people have to get around the fact that -- and this is just an education thing. The fact that the subcutaneous works just as well as the IV. So it's -- and after you've done it enough times, it -- you see that it works. But it's just -- it's amazing to see that actually happen.

Got it. That helps. And one question for scPharmaceuticals management as well. I was just curious what learnings that you've gotten from the ongoing FUROSCIX launch in heart failure? Could you pull forward and start to leverage for leaning more into CKD and breaking into the nephrology prescriber base?

Yes, it's John. I'll take that one. Yes, I think there's quite a few learnings from obviously, the importance of in-services and how to make the in-service as informative as possible without taking 6 hours. I think we're getting way better at doing that. The patient experience as well. And that really comes down to, I think, when we originally launched, we were really about educating physicians about the need for the drug where it fits into their therapeutic options and maybe less time with some of the practice managers on how the ordering works and how -- what's needed and how to train the patient. We'll have more demo units out there. And then for the patient experience, at the hub, we're now almost all electronic prescribing. And I think the hub experience for physicians is much better now. And so -- and I also think, even in positioning the drug, some doctors think early on in the heart failure kind of looked at us as well, right before they go to the ER, we're going to give them FUROSCIX. And that's just hard. It's hard because, well, everything has to work perfectly. If they're about to jump in an ambulance and you decide to prescribe FUROSCIX, it's probably too late, probably the patient should go to the hospital. So I think educating doctors on treating early, which is best for the patient, but also logistically is best, I think those are some of the key learnings that we're going to take into nephrology as well.

John, can I add to that, please?

Sure.

so Roanna, it's John Mohr. I think one of the things that we learned and that we heard with heart failure is that obviously, CMS was really, really focused on cost of care and penalizing hospitals for high numbers of readmissions. And so our message was a lot focused on that cost. And don't get me wrong. Cost is important. But as we've begun to talk with more and more nephrologists, and Dr. Aaronson did a wonderful job of highlighting some of the clinical implications of fluid overload and how that it's not just a symptom of the disease, but actually can lead to cause worsening of the other. And how it has an impact on lowering GFR and that lowering of GFR has an impact on shortening time to dialysis and the overall outcomes of patients and the criticality of fluid overload, sodium overload, it's not just about symptoms and the cost of the health care there's an overall issue with the outcomes that patients -- the worst outcomes that patients have as they -- if this issue is not honed in on and addressed. And I believe that with the nephrologist understanding how all that stuff comes together, and as we begin to educate the nephrologists on the heart failure part and the heart failure doctors on the nephrologist part and this collaboration between clinicians, I believe we have a dramatic opportunity to improve the overall outcomes of these patients with these conditions. Dr. Aaronson, anything more to add to that, that piece of it?

So I think you nailed that point, and it's not that scPharmaceuticals has to do that on their own. I mean this is common now with all the goal-directed medical therapy as well, meaning that all of these different therapies have a place. And so it's as though all of pharma is helping each other try to make this happen and try to educate the providers because it can't just be a silo of nephrology or cardiology or internal medicine, it's everybody working together at multiple touch points, if you will, in order to make this happen. So this fits in very nicely. If you look at the big picture of the cardiorenal metabolic syndrome, to add that third word, just to say, what are we going to do to really improve the quality of life. Because whether they're in the hospital or in their home, they can't do the GDNT or the GDMT if they're fluid overloaded and congested. So I feel like this is the missing piece that everyone is going to be attracted to.

So our next question comes from Chase Knickerbocker at Craig-Hallum.

I really appreciate you all doing this. Just first for me, and then I have a follow-up. So Dr. Aaronson, kind of asked this question in a different way. What percentage of patients do you see that you think are kind of prime candidates that you would realistically use FUROSCIX with? Is it kind of all of those uncontrolled diuretic resistant patients that you mentioned? It would just be kind of great for you to describe the patient profile that is kind of ideal that you could see yourself realistically using FUROSCIX with and kind of what percentage of patients that is in your practice?

So I would say probably 2 to 3 a week for a very busy practice for people who are just not able to -- and that would be me. For people who are just not -- so here's another way to look at it. I'm not good with percentages. I think I got to be in math, but another way to look at this is, and maybe these guys can do a better job at this, but there's 2 ways of approaching this problem. One is the point of care when you see somebody in front of you? And then the other is, is when you look at a panel of patients who are at risk. And so we're doing both. And so for our whole CKCC population, we're literally going through everybody. And we're saying, does the person have coverage? If they have coverage and they can benefit to keep them out of the hospital, what's the benefit for them to have it because it's so important to keep them out of the hospital. So then you have 500 and you got to go through all those and make all that work. So all of a sudden, there's a lot of people there. And then there's the point-of-care approach where people are starting to gain, gain, gain, gain, and then you want to intercede. And so that 1 to 2 per week, I think is realistic because the goal is to use this as a way to -- for congestion to decongest and then get them back on their oral diuretics. But in the big picture, there are a lot of patients who fit this. I just don't know, John. I mean, could you have better numbers for me?

i think that there's a lot more information and data coming out. It's Kidney Week and the team is out in San Diego at American Study nephrology, and we're presenting some data there. And although the Heart Failure Society of America meeting was canceled because of the hurricane, there were still some posters and some things presented there as well. And what I would say is that, for [ heart fit ], thinking of the heart as the pump, Chase, and the kidney as the filter. If your filter is working fine, you have heart failure without kidney disease, you're probably going to be all right. You're not going to really have those worsening symptoms. But -- and Dr. Aaronson, correct me if I'm incorrect. But as your kidney function decreases, the chances of having issues with volume overload increases as well. So when it comes in terms of proportionately speaking, these patients that -- and Dr. Aaronson, you have mainly class -- Stage III, IV and V CKD in your practice. You don't even have Stage I and Stage 2. They're managed somewhere else. But I would say that the population of patients that you manage within your practice, a majority have those risk factors for decreased response to oral diuretics because that's the population. Those are the variables that have shown to be associated with worse response to oral diuretics. So that patient population is kind of concentrated in that nephrology group. They may have heart failure, they may not, but that group right there is at high risk. So it's sort of a -- there's more in that pie. And then with nephrologists, there's less nephrologists than there is cardiologists so they become even more concentrated as what John was kind of getting at as well. So did I answered that question, good for you, Chase, you good there.

Yes. I think I'm going to add one last thing to that, John. I think what Dr. Aaronson said that these 500 patients. So there's -- when we talked a little bit, Dr. Aaronson did about kind of looking at patients that you know we're going to get in trouble and let's go ahead and clear them and potentially get drug and when they do run in trouble. So I think Dr. Aaronson, you said about 500 patients you currently have?

Correct.

So there's the...

And that's just us.

So there's a lot of patients out there, and we're working with our group right now to process those patients. So there's a new patients every week, but there's this whole group of patients that can benefit from treatment.

Right. And then the other thing is when it comes to heart failure and then there's devices and MEMS, so those are people where getting them early makes a difference. And then in the hospital, every patient who's a heart failure patient who gets discharged, there's so many there that, that -- with readmissions, looking at those and say, well, if there is a risk of increasing the weight and edema to prevent them from getting rehospitalized. So there's just all of these opportunities to use this to keep them out. Another example, at least where we are, is the distance. So we see people who travel hours to come to see us. And so sometimes it's hard to say, well, come see your provider in a week when they have to travel 2.5 hours. And so for different reasons, if they gain and they have something that they can do with their house, they don't have to make that trip to see. And so we've had really good luck with it. The other thing is just in terms of the quantity. So we have a patient who -- and this is what got me attracted to FUROSCIX in the first place, who got admitted and was very expensive just for IV because she was 10 liters over. So she gets discharged and it happens again and then we use this. And now we just keep refilling it because it helps keep her out of the hospital. And it's very beneficial because she can use it, and we're trying to do it in a way that works for her.

Yes. Very helpful, guys. And then just last for me, maybe for SC. Kind of what do you expect kind of from payer treatment here? You expect it to kind of be prior to be consistent with heart failure, single step through -- in oral diuretic? And then Dr. Aaronson, on those same lines, just kind of talk through your experience with the prior authorization for FUROSCIX so far and the usage that you've had?

Chase, so on the first part, yes, our talking to the payers will be a single step through on an oral electronic look back.

From my standpoint, it's been variable. So we've had people where it's been $15 for 8. And then for others, it's been cost prohibitive, and that's for the Medicare population if someone has insurance, then they get it. Sometimes it's been bought down. And so it really does depend on the particular situation. I don't know if that changes as more people appreciate the value of it. So that is possibly something that may prevent its use.

I can talk a little bit about that. We -- I think we've said publicly, there's still about 30% of our patients -- Medicare patients that have coinsurance where the co-pay is prohibitive, as Dr. Aaronson said. We're constantly working on getting that number down. We do know patients are going through the donut hole now and into catastrophic where they're capped at $3,300 this year. So we do see co-pays continuing to come down. They're down about 30% from Q1 now. We're very excited about next year where patients out of pockets are capped at $2,000 and they're smooth. So it's going to be $166 a month. I think UnitedHealthcare put out a -- puts out something yesterday talking about how quick people -- patients are starting to realize what that change looks like. So we're continuing to working on it this year. We are seeing co-pays come down. We still do have a percentage of Medicare patients that have high co-pays. We're confident that's going way down next year, where all patients will have access at a cap of $166 a month.

So our next question comes from Doug Tsao at H.C. Wainwright.

Thanks for hosting the session. A couple of questions for Dr. Aaronson. First, I'm just curious how many episodes of fluid overload most of these patients have? And would you anticipate potentially using FUROSCIX? And then I guess you referenced to a patient where it sounds like you're -- you'd keep refilling the scripts for that patient because FUROSCIX is managing to sort of keep her out of the hospital. But I'm just curious, is there come a point where bringing the patient in to monitor to them and sort of just assess what's going on has some value? And do you think that, that's going to be something that physicians are going to need to get comfort with before sort of using the product to its full potential?

So that's a good question, and thank you for that. I think that the person that I'm treating this way, she is close to end-stage kidney disease. And so we know why she has fluid overload. And the whole point is to keep her out and keep our off dialysis. And so admission to the hospital isn't going to change anything. It's just going to cost the patient or the system money. And so it really is -- if there's a person in front of me, I treat the person in front and then we approach it that way. But if we can't figure it out, of course, you bring them in and you figure it out and then go from there. And then when it comes to devices and different approaches, these MEMS are becoming very popular where you put a device in, and it's you're looking at the PAD, the pulmonary artery diastolic, to try to optimize the volume status and cardiology works very closely with nephrology depending, and then they just individualize it to the patient, and they try to see how much fluid can come off. I don't think that this is meant to replace all the other goal-directed medical therapy. I think the whole purpose of this is for congestion. But the market for this is so large because -- and maybe I just see a referral population, but fluid overload is a huge problem, and John showed these initial numbers. And so I don't want to minimize that. It's a huge problem. And right now, the tools that we have, the missing piece here is that the subcutaneous, which I think is really going to fill these holes. And so we've had really good luck with it. I think the education is -- like we said before, is getting the providers who are not aware, aware that it works just as well as IV. But uptake is just like any other product. Just like the SGLT2s, you're going to have your early adopters and that you're going to have people who take a little bit longer. So I don't know how the market forces are going to interact in order to make that happen. But I know that when we have skin in the game, it's very important for us to try to do our best to optimize the persons' well-being, keep them out of the hospital and use things that are going to work to get them back on track to go from there. Otherwise, we're not going to do it because that makes no sense for us.

Great. That's helpful. And Dr. Aaronson, for my first question, just how many episodes per year would you anticipate using FUROSCIX for patients?

So right now, it'd be like 1 to 2 per week in terms of new is what we would do and then doing the panel to have it available is what -- but for me, I am very aggressive. I use a lot of goal-directed medical therapy. And so what I will share is, and I'm very -- I feel very comfortable saying this. When people come to us, we're the best of the best. And it's not hubris or anything like that, but these -- the patients here have everything. And so there's good, better and best, and I feel that we're the best. So if you're just good, you're going to have a lot more exacerbations if people are not on all the goal-directed medical therapy. So there's going to be a lot more of these exacerbations and people are going to need a lot more of the diuretics to get them euvolemic. If people are on everything else, of course, they're not going to require the hospitalizations or these other problems that occur. And so that's why I want to temper that because one person's experience and what they need and the HCC codes and the level of morbidity really does depend on your patient population and what you see. So -- and again, John, both Johns, I mean, they may be able to have a better feel because they're talking with people all over the country. But I love this as a way to just keep people out when I've done everything possible for a patient, and they're coming in, and I'm like, what, this blocks you.

I guess, maybe I wasn't clear in. I'm just trying to understand for an individual patient, how many times a year would you potentially expect using FUROSCIX?

Right. Okay. I understand. So it depends on how sick they are and their level of compliance. And the other thing about the CKCC that's important to say is that we don't choose them. They they're given to us based on where they're at. And so we have to deal with it. We can't cherrypick. We can't do any of those things. And that's why this is such a good looking at it. So if someone is not adherent, and they use a lot of salt or they're not taking their medications, they can be -- require prescription after prescription. But the goal is, is not to continue to use this over and over and over again. The goal is to use this as a rescue therapy for hypervolemia. So I would say, in a particular individual who gets hospitalized maybe 2 or 3 times per year would probably be reasonable. But the goal is as little as possible. The problem is that the human body works the way that it does, and so it's required. The goal isn't to put them on it is to just deal with the hypervolemia that occurs.

Thanks, Doug. I think we have time for one more.

So our final question comes from Naz Rahman at Maxim.

I just have a couple of questions for Dr. Aronson. So the first one is on your fluid management protocol, how often or how many -- what percentage of patients do you find progressing from FUROSCIX to IV peruse and potentially hospitalization. And my second question is based on everything you've seen, is there a certain amount or certain profile allocation you might profile actively write for [indiscernible] for CKD?

So right now, it's not a -- let me do the second one first. Right now, it's not approved for CKD, so you can't get it. So all of them. Yes. Okay. Absolutely. So once approved, we want everyone to get it. Yes, all of them because that's how well that this works. So if you're trying to keep someone out of the hospital, and a lot of these people, what we're going to try to do is if people are on diuretics and they have edema, and we're struggling with that, any one of those people who applies we want to have some on board because then they have it in their house and they can use it if they need it. And that's a way to just -- it's like a get out of jail free card with the hospital being the jail, right. So right now, the issue is, with CHF, they have to have that and we have to -- that's the panel that we're looking at versus the point of care. In terms of progress, we have had fails. And so when that occurs? I would say I've had maybe 4 or 5 that it hasn't worked either because of the fact that we couldn't get it quick enough. The patient came in too late. And so we're trying to optimize this as we go. They called the cardiologist and the cardiologist wasn't really familiar and the cardiologist said, let's do a proper, if you will. So there's a lot of room for growth, I think. And with education, we looked back and we said, "Well, maybe we can do things different. So I don't think this is going to necessarily fix everything because sometimes we can do things different. The other thing is sometimes what we would do is we could do 1 twice a day as opposed to 1 every day, but then you need to have it. And so if things get out of whack or they're so far up in fluid sometimes and someone asked the question, it was provocative where if they need to come into the hospital, we are going to admit them to the hospital. So this isn't going to prevent everybody. It's just going to hopefully take a group of people that we can avoid admission and go from there or readmission.

So I think that's -- I think we're overall already. So I want to thank everyone for attending and especially thank Dr. Aaronson. That was great, very informative. And a few other questions, just follow up directly with the company. But I appreciate everyone for joining. And again, Dr. Aaronson, thank you so much. That's great. Have a great day. Thank you.