scPharmaceuticals Inc (SCPH) 2022 Q4 法說會逐字稿

Greetings and welcome to the scPharmaceuticals fourth-quarter and full-year 2022 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, PJ Kelleher and LifeSci Advisors. Thank you, Peter -- PJ, you may begin.

Thank you, operator. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. All statements on this conference call, other than historical facts, are forward-looking statements within the meaning of the Federal Securities laws including but not limited to, statements regarding scPharmaceuticals' expected future financial results and management's expectations and plans for the business and FUROSCIX.

The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance, and may involve and are subject to certain risks and uncertainties, and other important factors that may affect direct business, financial condition, and other operating results.

These include, but are not limited to the risk factors and other qualifications contained in scPharmaceuticals' annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed by the company with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements.

Any forward-looking statements made in this conference call, including responses to your questions, are based on current expectations as of today, and scPharmaceuticals expressly disclaims any intent or obligation to update these forward-looking statements, except as required by law.

It is now my pleasure to turn the call over to Mr. John Tucker, Chief Executive Officer of scPharmaceuticals. John?

Thank you, PJ, and thank you to everyone listening to this afternoon's call and webcast. This afternoon, I'm pleased to provide an operational update on the initial stages of the FUROSCIX commercial launch.

Before I turn the call over to Rachael Nokes, our newly appointed Chief Financial Officer, for a review of our financials. While it has only been a few weeks since we announced the launch and commercial availability of FUROSCIX on February 20, initial interest among patients, providers, and payers is very high, reflecting the important role that FUROSCIX can play in the heart failure treatment paradigm, either pre-hospital admission or post-discharge.

As we have said before, we believe FUROSCIX is a true game changer as it allows patients, for the first time, to access IV-equivalent furosemide based on similar systemic exposure and diuresis in the comfort of their own homes. Our own proprietary research suggests that among heart failure specialists, cardiologists, and nurse practitioners' intent to prescribe FUROSCIX ranges between 93% and 96% and intent to prescribe within six months ranges between 86% and 89%.

This research underscores the openness to a different approach to the treatment of heart failure. We believe we are well financed and have assembled a highly experienced commercial team that hit the ground running, making contact with top-tier hospitals, clinics, and physicians in their respective territories. I'm confident that we will see strong uptake and quickly get FUROSCIX to the many heart failure patients who stand to benefit from it.

Taking a step back or for the benefit of those may be new to the story, in October 2022, we received FDA approval for FUROSCIX, a proprietary formulation of furosemide delivered by an on-body infuser, the outpatient treatment congestion due to fluid overload in adult patients with New York Heart Association Class II and Class III chronic heart failure.

FUROSCIX is not indicated for use in emergency situations or in patients with acute pulmonary edema. The FUROSCIX infusor will deliver only an 80-milligram dose. We believe this represents a significant advancement in the management of heart failure with the potential for improved outcomes for patients and material cost savings to healthcare payers, most notably the Centers for Medicare & Medicaid Services who represent Medicare, the single largest payer for heart failure-related medical services.

Furosemide is the most widely used oral and parenteral diuretic available for patients with congestive heart failure. But the bioavailability of oral furosemide decreases and becomes highly variable during episodes of worsening symptoms. As symptoms worsen, patients are often hospitalized to be treated with IV furosemide. By contrast, FUROSCIX allows patients to access IV-equivalent furosemide based on similar systemic exposure and diuresis in the comfort of their own homes. FUROSCIX is administered subcutaneously with the West Pharmaceutical Services' SmartDose on-body drug delivery system technology, delivering an 80-milligram dose over a period of five hours.

Heart failure is a significant financial pain point for both healthcare payers and hospitals. It's been estimated that up to 90% of patients presenting to the emergency department with symptoms of worsening heart failure are admitted to the hospital and 50% of these admissions may be potentially avoided. The average cost of a heart failure-related hospital admission for Medicare patient is nearly $19,000. It is no surprise that the Centers for Medicare & Medicaid Services has put significant resources in place to look for solutions to this problem.

Treatment of heart failure is estimated to be 32% of annual Medicare Part A and Part B spending, a staggering $123 billion. Further, hospitals face significant reimbursement pressure under the current heart failure payment structure. The average length of stay for heart failure patients is 5.2 days, while CMS reimburses just 3.9 days under the current DRG. Hospitals also face exposure to financial penalties resulting from readmission under the hospital readmission reduction program, which includes heart failure as one of its focused conditions.

Our clinical development program is focused on the safety and efficacy of FUROSCIX, as well as the pharmacoeconomic benefits to the system, a prospective clinical trial FREEDOM-HF, without positive results in July of 2021. The study design focused on select patients who presented to the emergency room with a worsening heart failure event and were treated with FUROSCIX at home as opposed to being admitted to the hospital. The results of the study with patients treated with FUROSCIX had heart failure-related costs that were lower by an average of $16,995 versus historically matched comparators. And this result was achieved with a very high rate of statistical significance with a P value less than 0.0001. While this analysis excludes the cost of FUROSCIX since pricing had not been established at the time of the study readout, the conclusion remains unchanged.

More recently, we announced positive results from a Phase 2 pilot study, AT HOME-HF, that compared FUROSCIX with the treatment-as-usual approach in chronic heart failure patients presenting to a heart failure clinic with worsening congestion, requiring augmented diuresis. Among the key findings, subjects randomized to FUROSCIX had a 37% reduction and the risk of a heart failure hospitalization at day 30 relative to patients randomized for treatment-as-usual.

We are pleased with the results of these two studies, which added significantly to the growing body of clinical and pharmacoeconomic evidence favoring FUROSCIX versus the current standard treatment protocol. The market opportunity for FUROSCIX is significant. In the US alone, there are estimated to be 6.7 million adults suffering from heart failure, resulting in 4 million heart failure events annually. Of those, we believe 2.1 million episodes can be effectively addressed by FUROSCIX.

If we assume $3,300 per episode, which is four doses of FUROSCIX, we have the potential to access a market opportunity that is nearly $7 billion. And again, this is in the US alone. There were a total of 15.8 million adults suffering from heart failure if we include the other G7 countries.

Turning now to the launch. We put a strong commercial team in place that is led by Steve Parsons, our Senior Vice President of the Commercial. We have 40 field territory sales representatives, fully trained and conducting face-to-face in-services at hospitals, doctors' offices, and heart failure clinics, targeting the approximately 150 to 200 HCPs and 10 hospitals per territory, in-services provide HCPs with training and prescribing instructions for FUROSCIX, designed to ensure office readiness.

Demo kits to train patients are provided with completion of each in-service. The focus on the in-service is crucial to ensuring effective use and training on FUROSCIX. Our sales force has conducted approximately 307 in-services to date, with many of these in-services lasting one to two hours, as physicians desire to have training done throughout the entire office or clinic. This reflects the interest in FUROSCIX by healthcare providers.

The sales team is a specialized force that can target top hospitals and clinics efficiently and effectively. They are focused on building strong relationships with the key constituencies at these clinics through an educational and consultive approach. Depending on the launch trajectory, we stand ready to add more reps in the field as needed to maximize clinic and patient access to FUROSCIX.

In terms of distribution, we are pleased with the seamless functioning of our distribution process thus far through our strategic partnership with Cardinal Health as our third-party logistics provider. Cardinal is working well with our three specialty pharmacy partners, including our main specialty pharmacy BioMatrix. Cardinal has shipped the initial inventory to the specialty pharmacies, which will be recognized as revenue in the first quarter.

As a reminder, we recognize revenue when FUROSCIX moves from Cardinal to the specialty pharmacies. So Q1 revenue will reflect initial stocking at the specialty pharmacies. We have already seen initial patient prescriptions being filled and shipped to patients next day. FUROSCIX Direct, our reimbursement support hub, provides benefits investigations for physicians to determine insurance coverage and patient out-of-pocket costs. Our specialty pharmacy partners provide device training with patients and are available 24 hours to answer questions about the use of FUROSCIX.

From a marketing perspective, we have engaged in a broad, multi-channel market awareness campaign to drive brand awareness, adoption, and commitment. This program encompasses many different activities, but some of the key ongoing activities include KOL engagement and development conference appearances, print and electronic collateral, and the development of both provider and patient website among other critical tasks.

In terms of reimbursement, we are pleased that all Medicare Part D and Medicaid beneficiaries will have reimbursed access to FUROSCIX since day one of the launch. We estimate that approximately 60% of all heart failure patients will have fixed-tier co-pays of $100 or less. We continue to meet with many large national and regional Medicare Part D and commercial health plans, and those discussions have been productive. Our goal remains to achieve 75% of patients with access to FUROSCIX under fixed-tier co-pays by the end of this year.

Turning to our balance sheet, in November, we were able to add $50 million of gross proceeds through a public offering of common stock. This fall, the $100 million secured debt facility that we announced with Oaktree Capital Management in October, $50 million of which was made available to us upon the signing of the agreement. The remaining $50 million will be made available in two additional, $25 million tranches based on the achievement of pre-specified commercial milestone. With these financings, we believe we are well funded to execute a very successful launch.

Finally, in December, we announced the promotion of Rachael Nokes to the position of Chief Financial Officer. Rachael brings tremendous experience and leadership to the CFO role and her promotion maintains organizational consistency at an important time for the company. We are excited to celebrate this well-deserved recognition of her expertise and contributions. I will now turn it over for her comments. Rachael?

Thank you, John. As of December 31, 2022, we held $118.4 million in cash, cash equivalents, restricted cash, and investments. Our year-end cash includes net proceeds from the successful $50 million equity offering that we completed in November, plus the first $50 million tranche under our debt financing agreement with Oaktree. We did use some of the proceeds from the Oaktree transaction to prepay all amounts due under the credit facility that was outstanding at the time.

Now I will cover a few income statement items. We reported a net loss of $9.2 million for the fourth quarter of 2022 compared to a net loss of $7.3 million for the comparable period in 2021. For the full year 2022, we reported a net loss of $36.8 million compared to a net loss of $28 million for the full year 2021. The reported full-year net loss was favorable to our guidance range of a full-year net loss of $38 million to $41 million.

Research and development expenses were $2.3 million for the fourth quarter of 2022 compared to $4.5 million for the comparable period in 2021. The decrease was primarily due to a decrease in clinical study activities, device development costs, and regulatory consulting. For the full year 2022, we reported research and development expenses of $15.5 million compared to $16 million for the full year 2021.

General and administrative expenses were $7.2 million for the fourth quarter of 2022 compared to $2.2 million for the comparable period in 2021. The increase was primarily due to an increase in employee-related costs, commercial preparations, and legal costs. For the full year 2022, we reported general and administrative expenses of $20.6 million compared to $9.8 million for the full year 2021.

The increase was primarily due to an increase in employee-related costs and commercial preparation costs. Based on our current operating plan, we expect our operating cost to increase in 2023 as we support the launch of FUROSCIX, including investments in marketing and a field sales force. As of December 31, 2022, we had 34,257,916 total shares outstanding.

That concludes the financial update. John?

Thanks, Rachael. This concludes our prepared remarks. At this point, we will open the call for questions.

(Operator Instructions) Glen Santangelo, Jefferies.

Yeah. Thanks for taking my question. Hey, John, I just wanted to follow up on some of the comments that you made in your prepared remarks, I think you were sort of talking about your interactions you're having with the various Part D plans and I -- and if I heard you correctly, I thought you said that you hope by the end of this year, you hope to have maybe 75% of the patients under contract with a co-pay of less than $100 per. And I'm not sure if I heard all that correctly. I was wondering if you could just sort of walk us through again in a little bit more detail where you stand right now with all your Part D negotiations just so I can sort of put it all in perspective. Thanks.

Yeah. Hey, Glen, thanks for the question. This is John, and I think I can ask Steve to fill in a little bit.

Yeah. So we've kind of stated a number of times that our goal for the end of the year, and it's not just for Medicare Part D, it's for all of our patients. And so again, we have a mix of Medicare Part D, which is the predominant payer commercial. And then we also have Medicaid. So our goal is greater than 75% of all of the patients to have fixed-tier co-pays under $100 by the end of the year.

We do know now [Omnia], we've been very successful. We think there's one very small plan that might put us in the specialty tier, but our team has been really successful in keeping FUROSCIX out of the specialty tier in both commercial and Medicare Part D plans. As you know, specialty tier incorporates coinsurance which is what we want to stay away from. So we've been successful with getting -- keeping it out, especially tier.

We've also gone through P&T at all, but one of the of the major plans and have had successful P&T meetings at all, and we're still awaiting one plan to have that P&T. We're still in active negotiations around rebates. The good thing is with the advantage -- with advantage -- Medicare Advantage, the patients will that fixed-tier co-pays of under $100. So we're still negotiating on moving those co-pays down. Our goal is a significantly lowered co-pay than $100, and we'll rebate to get their plan.

We're not going to -- we know the most important thing is patient affordability. So we'll be rebating to -- with the plans and we're negotiating with them now to lower the co-pay and to add to that 60% that has a co-pay -- has co-pays under $100 and try to actually get that up even higher than 75%. That includes the commercial plans as well. And we can't say the name, but we've had a recent big, big win there. We're a preferred formulary status, which would bring co-pays well under that $100 on one of the two or three largest plans on the commercial side. So I don't know, Steve, if you wanted to add anything to that? That was a long answer.

No, I think it's accurate. We use $100 as the high watermark for the patients we're talking about. 60% of the patients should be at $100 or less. Many of them, much less. Remember, of course, that in Medicare Part D there is a group of low-income subsidy patients. Those are dual eligibles. There are lower-income Medicare patients, and they'll have a co-pay of about $10, whether they get three doses, four doses, five doses, six doses, it's the same co-pay.

So we use $100 to be the high water on about 60% of patients. There's still some others that we are pursuing in an improved co-pay situation, but it's a really good place to start.

And we've seen them. We've seen scripts come in for commercial Medicaid and for Medicare Part D, and we fulfilled all of those. We filled those scripts for all three of those on those major payers in the market.

All right. Well, I appreciate all the details. Thanks. Maybe I can just ask Rachael a quick follow-up question. And in the prepared remarks, you also talked about the number of sales reps that you have currently, and I think I missed that number as well. So I was wondering if you could just sort of give us that.

And then Rachael, I think you said that the Q1 revenues will probably be a little bit front-end loaded with some of the specialty pharmacy stocking, and then you plan to make some additional investments in marketing and the sales force. And I was wondering if you could just -- I get it, you don't want to give any guidance at this point, but maybe could you just discuss a little bit about the cadence of how the year should look and give us a sense for if first quarter will be disproportionately high on the revenues and then will sort of tail off before we build up? And the expenses, should that just be a constant build throughout the year? Any sort of color you can give us would be helpful. Thanks.

Hi, Glenn. This is Rachael. I'll speak to the cost first. And so what we were saying is that we expect that the Q1 or 2023 expenses to be higher to continue to increase from 2022 because we are putting that -- we have now -- have the full commercial infrastructure, so the full 40-person sales force, as well as we continue to invest in marketing as well. So that was really a reflection of what to expect in 2023 versus 2022.

And then regarding the revenue.

Yes.

John, I don't know if you want to talk about that.

Yes. Sure. Let me finish the expenses. So Glen, if your question is, is it going to be linear from here? You know, the reps started the end of January. So Q1 on the expense side is probably going to be lighter and we do anticipate adding reps later in the year. We haven't given time. So I wouldn't say it's directly linear because again, Q1 will be a little lighter because the reps didn't start till the end of January, but it should be pretty flat except for the addition of sales reps potentially as early as Q2.

As far as revenue, we launched February 20, and in order to launch, you had to have inventory in our specialty pharmacies. So I think when you look at Q1 revenues, it will be predominantly that stocking inventory. We haven't given guidance, but I wouldn't think that stocking inventory would, you know, would preclude revenue in Q2, Q3, Q4, all of that. It's just initial stocking inventory to make sure that the products there on the shelf when a physician puts a script in. So I hope that answers your question.

Yup. That's good. Thanks for the color.

[Nick Asic], SVB Securities.

Hey, everybody. This is Nick Asic on Roanna Ruiz. Congrats on the launch and all your progress so far and thanks for taking our questions. Maybe first on FUROSCIX, could you give us a little more clarity around which external launch metrics you plan to share and which you'll be focusing on the most?

Sure, Nick, this is John, and I'll talk a couple, and maybe, Steve, you can add to it. Some of the key things we'll start communicating as early as May Q1 earnings call would be kind of a number of new prescribers that are -- probably used FUROSCIX, average length of script, which is a big thing for us, as I think we've said we anticipate three to four, so we'll be able to report on that. It will still be early data, but it will give us some directional things.

Steve, what other things are you thinking of communicating quarterly?

We'll talk about the number of targeted heart failure hospitals and clinics that have activated with at least a couple of patients on therapy. We'll talk about the number of unique patients that have been treated so you can see the breadth of that. We'll talk a little bit more about Medicare Part D payer formulary wins and placement statuses as that arise, as we have more information. And of course, net sales.

So I think those are the things, Nick, And I'm going to quote that's what we're anticipating. We're three weeks in data. I think we want to understand what the most -- what's the most beneficial things to communicate to the street. And those are the things -- I think you learn. Those are the things we're planning on now. I think they could change in two months, but we just want to make sure we're communicating what we think are the most telling things in the progress of the launch.

Yeah. That's very helpful. But I also had a quick follow-up as well. I was wondering if you could give us a sense of some of the commercial strategies you've been implementing to drive awareness among patients, prescribers, et cetera, maybe which ones you've had the most success with so far.

Steve?

Yes. So we we're doing the traditional things, digital advertisements in the key targeted journals -- journals associated with the Heart Failure Society of America, heart failure nurses. At launch, The American College of Cardiology sent out an e-mail blast announcing FUROSCIX's availability to about 15,000 members that are dealing with heart failure. The Heart Failure Society of America did the same thing on our behalf. We're continuing to do digital ads, banner ads announcing our campaign, announcing the availability of FUROSCIX.

So it's what big pharma does. It's omnichannel marketing, like others do just very, very targeted towards the folks that we are going after in the early launch period.

And if we were we -- as you know, we're in a pre-launch, brand awareness campaign and actually, we're able to measure that prior to launch. And we're really impressed with what we saw with aided awareness on the brand name and then unaided awareness as well. So it's a good baseline.

We've been very, very happy with the interest we've seen in the field. We've had phone calls into various people in the office asking if they could talk to a rep. We've had a number of inquiries on the website. We've had reps in the field that have walked in, and doctor will be -- doctor's office will tell them that they're booked. And then we talked a little bit about what we're doing. And the nurse comes back and says, we're scheduling a lunch we have for tomorrow. Will you come in and do an in-service?

These in-services are really key to us. We really think it's just critical that these offices and clinics know exactly who use FUROSCIX on and how to use it. So we're teaching the doctor, teaching the staff on how FUROSCIX works, how to use it. And as importantly, how to show patients.

Now we want the offices interacting with those patients and training them, but we're also supporting the patients with instructions for use with videos online, videos that they can access, as well as calls from the specialty pharmacy, FaceTime with any questions they have. So these in-services have been great. The interest, the doctors are polling in their entire staffs.

Sometimes we're doing two or three sets of in-services in an office that can last one to two hours at some of the biggest hospitals from Duke, to -- Steve?

Northwestern.

Northwestern.

Emory.

Emory. WashU. I mean, just exactly where we wanted to be. So we're really enthused with the awareness of the product when we launched and then the enthusiasm to talk to us when we're out there.

Very helpful. Thanks for all the updates. I'll hop back in the queue.

Stacy Ku, Cowen.

All right. Thanks so much for taking our questions. We did have a few. So first, can you give some background about that initial clinician outreach and talk a little bit more about your goals and expectations and the clinician base. I believe you said in the past, it's around 6,000 patients for the 40 reps. So any additional details or timing would be appreciated. So that's the first question.

And then the second question is around your ability to, I'm guessing, track FUROSCIX scripts from your three specialty pharmacies. So can you just give some really early expectations for how this month is progressing. Are you happy? And I know you've talked about the stocking inventory. So how should we just be thinking about the bolus of initial patients initially for the clinicians that might be aware of FUROSCIX? That's our second question.

And then third, you've talked about previously potential targets, patients that are being captured before hospitalization as prevention or post-discharge, just to see -- to make sure they're completely dry. So is there any, I guess, very, very early initial color on where these patients are coming from? Thank you so much.

Great. Stacy, thanks. This is John. Let me just sum up the questions, the number of doctors were targeting, and initially what are we hearing out there; and then three, patient types. So Steve, do you want to tackle those?

Yes. I think we've shared previously each territory have about a minimum of 150 targets, up to 200. They can add those as they're making their way through the territory, learning more about who's involved in patient care, whose involved in initiating prescriptions. So anywhere from 6,000 to 8,000 would be our target list that we could see regularly. Of course, there'll be outliers where we see occasionally some people.

But our commitment would be to see 150, very, very routinely, many times a year, covering about 450 hospital communities. So all the doctors that are in and around that hospital, on the campus, in their medical buildings, in their cardiology clinics. So that's the targeting.

You asked about Rxs, we get a report every day. We can see all the prescriptions every single day from our specialty pharmacy and all the different distribution centers. It comes into the central hub. And so far, we're pleased. Like we're saying -- we're seeing, as John said, we're seeing Medicare prescriptions, we're seeing Medicaid prescriptions, we're seeing commercial prescriptions. And it's what we hope to see.

Yeah, it's funny where some of the things we're seeing, we saw a prescription for 180 units the other day, which is --

Too many.

Too many, really because we don't want the plans to start looking at that and putting quantity limits on it. So yeah, we've been pleased by what we're seeing from a demand standpoint as well. On the patient types, it's interesting and this is why sometimes it's a little -- you got to be careful what you see early. We are seeing like this group of patients where the doctors that know FUROSCIX is coming, have kind of teed them up. And as soon as we detail them in, and in-service some, I think it's important to note, Stacy, that you just can't order FUROSCIX unless you've seen us unless we've done it in-service and detailed you on the drug.

So you can't get the FUROSCIX Direct form without having engaged with us. We are going to make sure that the usage is appropriate and that the patients have good experience. So we've had a lot of these in-services. They have gone well. The reps, to be able to see their whole territory, which -- after we conduct all the in-services, we'll probably be on a four- or five-week cycle. So we haven't even talked to all of our doctors yet because these calls are taking one to two hours, but that's what's most important to us right now.

So if you go back to the patient types, it is these patients they have in the queue, they all call them and say we have something for you now and actually put them on, put them on drug there. So -- and then obviously, patients coming in on sick visits, patients that are coming back after being discharged from the hospital, and patients that they know are going to be in and out of the hospital or need IV treatment every month, a couple of days a month. They're going ahead and prescribing FUROSCIX for those patients.

So these kind of the patient type we thought maybe with a slight caveat that we didn't quite expect the bolus of patients that the doctors had queued to ready to go when we walked in. But -- so that's where we are. I hope I answered -- we answered your questions. Steve (multiple speakers).

That's very helpful. And just to confirm, before you had said in your prepared remarks, you said one to two hours for your services and then you had said 300 something is the number of clinics that you've now service just to make sure since you sound like you're really taking the time to make sure. Is that correct?

So that's not all the calls. (multiple speakers)

Okay. Not all the calls. (multiple speakers)

But to set up, the in-service, you're going to walk into the doctor's office and schedule the in-service. Now we have had opportunities where we walked in and we drop right into an in-service, but typically want to schedule a line sure in in-service. Because it's not a [one-minute] call. Now, these calls we'll start making more and more calls as the in-services -- we start in-servicing all the offices. But it's really a key metric for us is, is these in-service. So we've done about 3,000 calls and over 300 in-service to date.

Okay. Thank you for that clarification.

Douglas Tsao, H.C. Wainwright.

Hi. Good afternoon and thanks for taking the questions. So John, maybe as a follow-up, and then I guess when you think about the in-service, what is the key goal of that and are you changing or potentially changing a behavior or a way that physicians might or -- thought about using the product, but then they have the in-service and they have a better understanding of how to best deploy FUROSCIX?

It's -- Doug, I'll let Steve answer that. I will say this, one thing that, um, that's been interesting is that we always say it's going to take a couple of calls to change a doctor's behavior. We're seeing doctors immediately after an in-service with a script. So a lot of them are waiting for this and are aware of it. But that's one thing that I think we've seen -- and again, I think it has to do with the depth of the in-service and the knowledge of the patients and the fact that we've said all along, they've used IV-equivalent furosemide their entire career. So this isn't kind of a new molecular entity, but Steve, you want to talk more about.

No, I think that's a good insight. We have changed people's minds on where they think they would use as they broadened it. And I think everybody comes into the FUROSCIX experience with, okay, I know exactly where I think I'm going to use it. I think I can think of a few patients. And then after spending an hour with us or two hours with us, and nurses weighing in, saying things that doctors don't necessarily hear everyday, medical assistance, the advanced practice providers.

We have broadened their consideration pool for who FUROSCIX can help. And so the change of behavior remains to be seen, but the change of mind is definitely taking place and it's getting broader. So that's been a good experience.

And how can you tell -- so it's going from what to what most commonly?

Some doctors think this is going to be great to use after someone's been discharged from the hospital to prevent a readmission. Some doctors think the best way to avoid a readmission is to never have an admission in the first place. And so they are catching them on the front end. Some doctors they are asking us about could they finish the job a little earlier at home and once they're stabilized in the hospital. So I can't say everybody has the same opinion, Doug. It's just when they hear our full story, I think we open their mind to all three of those potential use cases.

Okay, great. Thank you so much.

Thanks, Doug.

Naz Rahman, Maxim Group.

Hi, everyone. Congrats on a recent launch and thanks for taking our question. Just on your target hospitals and target HCPs, could you give some color on what percentage of them you've already reached out to? And it obviously sounds like the in-service points are key, but could you also talk a little about what the response rate has been for your digital promotion efforts.

Hey, Naz. It's John, let me turn that over to Steve. So Steve, you want to?

So the way we target is, it's hospital-based, and then it's all the doctors around that hospital, what we call heart failure community. So we have Decile 10 hospitals. We have Decile 9 hospitals. We have Decile 8, all the way down. We're focused on the Decile 7 through 10. On the Decile 10, I think we've hit 90% of them so far. We're calling on doctors in and around the community. Decile 10 hospital has the most heart failure admissions and discharges in the United States relative to their peers.

I think at Decile 9, we're like high 80% reach. And again, we're not selling into the hospital. It's where we go fishing. It's where all the patients are. And so we talk to all the specialists in and around there. So we've -- Decile 8 are probably high 70s.

I mean, our strategy has been to focus there first and try to hit all the doctors associated -- affiliated with those hospitals that where we know they're taking care of heart failure patients with fluid overload. That's been the focus so far. I can't tell you exactly what the reach to every individual target physician is so far, but I can tell you the focus on those decile hospitals.

So we've made over 3,000 calls. Our target list is 8,000, but probably 6,000 are realistic [C dot]. So -- but I wouldn't say that 3,000 means we've hit 50% because a lot of these calls, convinced to make the call get the in-service. We're really focused on the big clinics and the big prescribers early. So if we had to make an estimate right now on what percentage of our target universe we've said, I'd say it's in the 40% range of our total targets.

And again, that will keep expanding out. But, you know, Naz, it's really important. We're 3.5 weeks in from our data and we need these in-services. It's obviously key. We're looking at the hit rate from an in-service to a prescription versus just the call, and it's vastly different. So that's why we know these in-services are really important.

Great. And I have just one follow-up question on the actual reimbursement. I understand it's very, very early days, but relative to scripts being written, do you have an idea of what's kind of in the fill rate for the scripts and how many of them require prior off. Like how of the prior offs like seems to go through and also like what happens when a patient gets a letter of medical necessity, do the letters of medical necessity go through relatively seamlessly?

So we have seen the prior offs as we anticipated and even in our negotiations with the payers, both commercial and Part D. It's the right medicine. They should have failed on oral diuretics, so they shouldn't be sitting here. So that's the prior off we're seeing, is that it's they have to have fail on oral diuretics and its electronic look back.

So it depends on the plan on how fast the scripts are going through. Some of them are right off the bat, instantaneously. Some of them if it's FPA. It might take time. Medicare is a 24-hour turnaround time or was it promotional plans, some of them are fast. Some of them aren't so fast. But a lot of times that with any new product -- and we're looking at three, 3.5 weeks with the new product. You're going to go through a PA. You're going to go through people getting comfortable with it. I think as we move forward, formulary status has come online that it'll even be quicker. But again, it's just plan by plan right now.

Got it. And did -- do the letters of medical necessity go through?

Yes. Yeah. Medical exceptions. We don't have to have letters of medical necessity written, but if it is a prior off, that is initially denied. And then there's an appeal process, a very clear appeal process. Usually they're asking for just more information than the doctor providing the first-time [face sheet], history and physical, whether they had gotten many labs done, bloodwork, things like that, that they didn't -- just didn't get. If they satisfy that, and more often than not, it's approved.

Got it. Thanks for taking my questions.

Thank you.

Thank you. There are no further questions at this time. I'd like to turn the floor back over to John Tucker for any closing comment.

Well, thank you, thank you very much. Appreciate it. We look forward to updating everybody as we move forward. And everyone, have a great evening. Thank you very much.

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