Title

Presentation

scPharmaceuticals Inc. beats earnings expectations. Reported EPS is $-0.35, expectations were $-0.4.

Operator: Good afternoon, and welcome to scPharmaceuticals Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management’s prepared remarks, we will hold a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the conference call over to Nick Colangelo, Investor Relations to forward-looking statements. Nick, please go ahead.

Nick Colangelo: Thank you, operator. Before beginning this afternoon’s earnings call, we would like to highlight the following forward-looking statements. All statements on this conference call other than historical facts are forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding scPharmaceuticals’ expected future financial results, management’s expectations and plans for the business, the ongoing commercialization and marketing of FUROSCIX and the potential label expansion and other regulatory approvals of FUROSCIX. The words anticipate, believe, estimate, expect, intend, guidance, confidence, target, project and other similar expressions are used typically 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 scPharmaceuticals’ business financial condition and other operating results. These include but are not limited to the risk factors and other qualifications contained in scPharmaceuticals annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by the Company with the SEC to which your attention is directed. Actual outcomes and results may differ materially from what is expressed or implied by these forward look 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’ expressively disclaims any intent or obligation to update these forward-looking statements, except as required by law.

With that, I will turn the call over to John Tucker, Chief Executive Officer of scPharmaceuticals. John, please go ahead.

John Tucker: Thank you, Nick, and thank you all for joining this afternoon’s conference call. Today, we’ll provide an overview of the Company’s core business and operational highlights for the fourth quarter of 2024, a commercial update from Steve Parsons, our Senior Vice President of Commercial, is with an overview of our fourth quarter and full year 2024 financial results from our Chief Financial Officer, Rachael Nokes. We will then open the line for questions. Overall, although we’re satisfied with the FUROSCIX commercial growth over the course of 2024, we were especially encouraged by what we saw in Q4, accumulating a net revenue of $12.2 million at the midpoint of the $12 million to $12.3 million range that was previously announced in January.

For the full year 2024, scPharmaceuticals generated $36.3 million in net FUROSCIX revenue, representing approximately 167% increase in net revenue year-over-year, driven primarily by the increased awareness of FUROSCIX, further expansion into the Class IV heart failure patient population and increased reach and market penetration in Q4 due to our larger commercial sales force. The gross to net discount for FUROSCIX in the fourth quarter 2024 was approximately 19% at the high end of the range we provided in January. The increase in GTN is primarily due to the continued payment of coverage cap rebates in Q4 and the impact of the Medicare redesign on inventory in the channel. We expect the long-run GTN discount for FUROSCIX to be in the range of 30% to 35% for 2025.

As we have stated previously, while we do take a hit on our GTN with the Medicare redesign, we believe FUROSCIX is uniquely positioned to benefit from the $2,000 out-of-pocket maximum for Part D beneficiaries or for these patients enrolling in the smoothing option over the balance of the year. As we approach the end of the first quarter, we have seen evidence of more patients this month hitting their out-of-pocket caps or enrolling and smoothing than we did in either January or February. As a reminder, and reflected in today’s financial results, the FUROSCIX demand and fill rate significantly increased when patients’ out-of-pocket costs are lower. With the Medicare redesign fully implemented in 2025, patients will progress into catastrophic coverage faster, which should lower out-of-pocket co-pays or they will enroll in the CMS smoothing program with approximately 70% to 75% of our prescriptions filled by Part D beneficiaries.

We believe the Medicare redesign will serve as a tailwind and enhancing our commercial strategy and supporting organic growth of FUROSCIX. As previously announced on March 6, 2025, the FDA approved the supplemental new drug application for FUROSCIX to expand its indication to include the treatment of edema in patients with chronic kidney disease. Fluid overload, which occurs in over 700,000 cases annually, is one of the most prevalent symptoms of CKD and requires intervention. Given the opportunities to intervene prehospitalization or post discharge, FUROSCIX has played potential to play a significant role in managing edema in patients living with CKD. This resonates strong nephrologists we have aged with to date. Steve will provide an overview of our precommercial activities and expectations for the CKD launch in greater detail, though I do want to highlight that we expect to fully launch the CK indication in April and already have seen prescriptions from nephrologists.

Based on the awareness level we saw in our initial awareness filing usage market research among nephrologists as well as preliminary call points, we remain confident that the FUROSCIX expansion into CKD patients will prove to be a meaningful growth driver for the FUROSCIX franchise. Turning to the Autoinjector. We are pleased to provide a positive update following additional shelf-life testing. We have seen encouraging data with the enhanced silicone syringe and the testing conducted thus far. We are targeting a mid-year submission of the Autoinjector sNDA pending the results of remaining testing. Though delay in the filing was disappointing, we remain confident this will be a critical advancement in our product pipeline. We are very pleased with the feedback we’ve received and the performance of FUROSCIX in the market and believe that with the expanded sales force, the CKD indication and the Medicare redesign, we are well positioned for 2025.

With that, I will pass the line to Steve Parsons, scPharmaceuticals Senior Vice President of Commercial. Steve?

Steve Parsons: Thank you, John. I’m pleased to share that since the beginning of the FUROSCIX commercial launch in February 2023, over 3,800 unique providers have prescribed FUROSCIX to their patients. This represents a 23% increase over the course of the fourth quarter compared to the third quarter. During the fourth quarter of 2024, we filled approximately 13,300 doses of FUROSCIX, up 23% from the 10,800 doses in the third quarter of 2024. We’ve continued to see the average number of doses per prescription increased to 7.4 doses per prescription, largely due to the increased number of doses written for more patients with advanced heart failure in Class IV. As a chronic kidney disease prescription begin to be written, we anticipate the average number of doses written per prescription will stabilize, as we expect CKD patients will likely require 5 or 6 doses more comparable to the prescript size of the earlier-stage heart failure patients.

As John mentioned earlier in the call, we’re expecting to start filling FUROSCIX prescriptions for CKD in April, leveraging our expanded field sales force and learnings from the FUROSCIX heart failure launch, we have designed to focus commercial plan to cover the highest volume nephrology targets with smaller, more manageable territories for our sales reps. The smaller territories allow our reps to access the offices with the most CKD patients and make more visits to those prescribers than was possible with the larger geographies. Importantly, this approval will put us into a large segment of cardio renal treaters where approximately 50% of patients have both CKD and comorbid heart failure and are being treated by nephrology specialists. We believe these patients represent an ideal population who could benefit from FUROSCIX.

Our FUROSCIX-direct patient services hub continues to reduce friction from the prescribing process increasing ease of ordering and prescriber transparency. We’re encouraged by the feedback we’ve received from health care providers on our patient services hub, streamlining their entire prescribing process from timely prior authorization to prompt patient co-pay reporting and successful delivery to the patient. We expect the new hub to contribute to our patient treatment volume growth over the long term. Lastly, there’s been good feedback from the IDN and hospital systems that were contracted with around their satisfaction with the prescribing process and efforts to streamline FUROSCIX access for their prescribers and patients. That concludes our commercial update.

I will now hand the call over to Rachael Nokes, Chief Financial Officer of scPharmaceuticals to review our fourth quarter and full year 2024 financial results. Rachael?

Rachael Nokes: Thank you, Steve. FUROSCIX revenues for the fourth quarter of 2024 were $12.2 million compared to $6.1 million for the same period in 2023. For the full year 2024, scPharmaceuticals reported $36.3 million in product revenue compared to $13.6 million for the full year 2023. This represents approximately 167% annual growth of net revenue generated by FUROSCIX. The increase was due to an increase in demand for FUROSCIX further into commercial launch. Cost of product revenues for the fourth quarter of 2024 were $4.0 million compared to $1.8 million for the same period in 2023. For the full year 2024, scPharmaceuticals reported $11.4 million in cost of product revenues compared to $3.8 million for the full year ’23.

The increase was due to an increase in demand for FUROSCIX further into commercial launch and related manufacturing costs. Research and development expenses were $3.2 million for the fourth quarter of 2024 compared to $3.3 million for the fourth quarter of 2023. This decrease in quarterly research and development expenses is primarily due to a decrease in pharmaceutical development costs, offset by an increase in clinical study costs. For the full year 2024, research and development expenses were $12.1 million compared to $11.8 million for the full year 2023. This increase in annual research and development is primarily due to an increase in clinical study costs, device development costs and patent costs. The increase was partially offset by a decrease in pharmaceutical development costs, quality consulting and shipping and storage costs.

Selling, general and administrative expenses for the fourth quarter of 2024 were $21.4 million compared to $16.2 million for the same period of 2023. This quarterly increase in selling, general and administrative expense is primarily attributable to an increase in employee-related costs, commercial preparation costs and patient support. scPharmaceuticals selling, general and administrative expense for the full year 2024 were $77.6 million compared to $53.4 million for the full year 2023. This annual increase in selling, general and administrative expense is primarily due to an increase in employee-related costs, commercial preparation costs, costs associated with financing transactions, patient support, professional service costs and FDA user fees.

The increase was partially offset by a decrease in insurance costs. For the fourth quarter of 2024, scPharmaceuticals reported a net loss of $18.8 million compared to a net loss of $13.8 million for the fourth quarter of 2023. scPharmaceuticals reported a net loss of $85.1 million for the full year 2024 compared to a net loss of $54.8 million for the full year 2023. scPharmaceuticals ended 2024 with $75.7 million in cash and cash equivalents compared to $76 million in cash, cash equivalents and short-term investments as of December 31, 2023. As of December 31, 2024, scPharmaceuticals had 50,095,689 shares outstanding. That concludes scPharmaceuticals’ financial update and our prepared remarks.

John Tucker: We will now open the call for questions. Operator?

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Stacy Ku with TD Cowen. Your line is open.

Stacy Ku: Congrats on the year and the CKD approval. So, on the upcoming launch for — so on the upcoming CKD launch, big picture, can you discuss the potential opportunity that this represents for FUROSCIX? And then second, then drilling down on the launch itself. Can you — it’s encouraging to see some early prescriptions coming in from nephrologists. So, can you discuss some of the early work that you have been doing in terms of reaching out to nephrologists? And then what are your expectations for the launch starting in April? Will access be seamless? Is there additional payer dynamics here? And how do you expect adoption will turn on to the rest of the year? And do you expect this would impact HF adoption as well?

John Tucker: It’s John Tucker. Thanks for those questions. I’ll try to remember them all. So yes, we’ve — the feedback from nephrologists, we have been in some of the larger offices on a real limited basis. Keep in mind that even before we received the kidney indication, it was indicated for patients that had heart failure and CKD. So, we did use that opportunity to go into some of the larger nephrology offices to establish a presence, do some in services. And we did see scripts for a nephrologist early on for their heart failure patients. So, we think it gives us a big leg up there, having already identified, done in services in some of those large offices. We did an awareness trial and usage study baseline in cardiology before we launched a baseline in nephrology before we launched, and it was about 3x higher in nephrology.

We’ve been obviously working with the KOLs. We’ve identified both national, local and regional KOLs. And we’ve been outreaching to them. We’ve been at the conferences. So, we think we’re going to be in a position to launch this and have a quicker uptake than in cardiology. Steve, I don’t know — or John, if you want to add anything to that, I’m sure I didn’t hit all.

Steve Parsons: I’d just add that in a — when you’re walking into a nephrologist office, at least 50% of those patients also have concomitant heart failure. I think the other piece is that there’s about 10,000 nephrologists and 30,000 cardiologists. So, it’s a much more concentrated area as well. So, all those things together give put us in a position where we believe that there’s an opportunity for growing growth.

John Tucker: Yes. I think there was a question about impact of the launch, we’ll do a full launch in the midpoint of April. There’ll be some revenue impact in Q2, but mainly in Q3 and Q4, would we see the lift from nephrology.

Steve Parsons: And the payer work, we’ve done, there’s — it’s the same brand. It’s all under the same NDC code. So, we have alerted all of the plans, notified them of the indication expansion that no pushback on really on nephrology scripts that came in before as long as they were coded for heart failure. So, we think the payers, they pick it up automatically based on their data feeds. We’ll have it all loaded by the time we’re out in the field with the indication.

Operator: Our next question comes from the line of Glen Santangelo with Jefferies. Your line is open.

Glen Santangelo: John, I just wanted to sort of get your high-level take on a couple of things. I mean it seems like the Company continues to make good solid sequential progress, but just sort of looking back. The product has been commercially available for over two years now. And just sort of knowing you, I’m sure you wish the slope of the ramp was even steeper than what you’re seeing. And so, I’d love to just sort of get your retrospective looking back over the last year to maybe what hurdles you’ve seen in place that are maybe making it a little bit harder to get adoption at which — the pace with which you hoped? And I don’t know if you think it’s more of a an access issue or prescribing issue, a user issue, recognizing that obviously expanding the sales force, getting Class IV, and getting to CKD indication are all going to help, obviously, in ’25. But would love to get your take as to what really could accelerate the ramp here?

John Tucker: Yes, Glen, thanks for the question. Yes. So yes, I think I said in my — in the opening remarks, satisfied with the year, although we’re really pleased by what we what we saw in the fourth quarter. And it wasn’t just the numbers. It was kind of how docs had really started positioning the product differently in their minds. So, we look at this year and looking back at last year, the headwinds we had last year were really based on patients out of pocket. So, you say access to physicians is a challenge for everybody who needed to get around it and when we’re doing that, just like everybody else’s. But it’s really for patient access. And when their co-pays are really high, and last year, your max out of pocket was $4,000.

There was no smoothing. So, you had a headwind with patients out of pockets. This year, with the Medicare redesign, we really think this works in our favor. In that the patient cap out-of-pocket cap goes down all the way to $2,000. So, it’s cut pretty much in half and the patients can enroll in smoothing. Now beginning of the quarter, there was a lot of confusion with the patients and the physicians about that, how that work. But we’re really starting to see the impact of that here. It’s when we know from what we saw, especially in December, what we’ve seen whenever patients’ co-pays are lowered, that our fill rate goes up and our demand goes up. It’s like a halo impact over the physician. So, if I could wave my one for last year and change one thing, it would have been, hey, patients have had this low out-of-pocket they have this year.

So, we’re really excited about this year. So, when we talk about tailwinds, I mean in the redesign, you take a couple of point hit to your GTN. But I think what’s key for us and why we might be a little different than some companies who are looking at this and just say, hey, it’s just a hit to our net revenue. It’s not to ours. We weren’t paying these big rebates. We weren’t on preferred status anywhere. We were suffering through high co-pays last year. And all of a sudden, these co-pays are going to go down. And yes, we’re going to have to pay a small rebate to Medicare, but we didn’t have 50% rebates out there to start with. So, where some companies are just taking the penalty of a mandatory rebate. Yes, we’re taking a small penalty, but we’re getting access to these patients where they have low co-pays.

And when the doctors no patient have low co-pays, they write more freely. So, we really think the redesign really plays out well for us. Obviously, the kidney launch — but again, as I said, well, we’re satisfied with 2024. We’re not comping up it down because there’s so much more we can get and so much more we’re going to do. And I really think the tailwinds set up this year for us to do just that.

Glen Santangelo: Right. That’s really helpful. I appreciate that. Maybe I just have one quick financial follow-up. John, I understand why you all don’t want to give guidance at this stage, but I’m sure you pay attention to consensus estimates that have revenues up 130% next year. And when you look at sort of this increase in the gross to net that you’re talking about, recognizing there’s all these growth drivers. I don’t know if you can give us any sort of guardrails around that. And I would say the same for sort of cash, right? I mean you got $76 million, but how would you assess the burn rate relative to maybe some incremental commercial costs you might need to incur to penetrate these nephrologists and I’ll stop there.

John Tucker: Sure. So, on the second question, when you look at our burn rate, again, when our revenue goes up, that burn rate is going down. And our commercial costs will go up just marginally here. Even if you added 20 reps, that adds $1.5 million a quarter. That’s to your burn if you did that. So, we really see that the, call it, the burn going down because OpEx stays fairly flat, but our revenue is going to continue to increase every quarter. So, we said based on our plan, where our cash is good to get us all the way there. As far as giving guidance, it’s hard I think this year for everybody who’s got one product in Medicare is going to be a little difficult because you don’t really know what the impact of the redesign is.

Again, you know you’re going to get mandatory rebates. But you don’t know when a patient goes from initial coverage into catastrophic. But again, for us, the fact that the patients are going to have co-pay, $0 co-pays, $0 co-pays for all of their drugs. It just opens up a huge opportunity for us. So, it’s hard for us to give guidance when that GTN is kind of not known. But if you look at last year, we’ve increased 167% over the year before. We’ve increased our sales force by 30%. We’ve added an indication in CKD, which is 700,000 more patients and doctors that are more accessible and we have the tailwinds of the Medicare redesign. So, when I look at where consensus is, I’m like, yes, we’re real positive on that just because of those tailwinds.

And I know there’s a bit of a headwind with the GTN increasing. But again, for us, it’s different. We did not have preferred status. We were paying 50% for last year. So, we didn’t have access to those patients. We have access to those patients this year. And again, we’ve seen time and time again, when patients have low co-pays two things happen, fill rates go up and docs write more drug. Those two things happen, it’s really going to — you’re going to see really a dramatic change in our fill rate and then in man.

Operator: Our next question comes from the line of Roanna Ruiz with Leerink Partners. Your line is open.

Roanna Ruiz: A couple from me. So, could you talk a bit about your thoughts on whether you could possibly push for more favorable payer coverage for FUROSCIX now that you have two indications? And I was also curious, thinking about the Medicare redesign this year, how much education or awareness building would be needed to make sure physicians and patients are aware of some of the benefits that might come through for FUROSCIX?

John Tucker: Great. Roanna. Thanks, John. Yes, on the second part, so we’ve been out — CMS’ rule was October 15 last year. They were supposed to notify the patients, CMS and their plans and their pharmacies of patients that were going to go into catastrophic. I can tell you, I think, I told you at the conference last from what we could see that didn’t happen or the patients were confused. So, we’ve been out educating the doctors that we obviously can’t talk directly to patients, but we’ve been out educating doctors about the smoothing opportunity and the staff. And whenever a script comes in, our hub will notify all patients, every patient. Here’s a situation you can enroll in smoothing based on where they are and how much of their out-of-pocket that they’ve already spent that they can enroll in smoothing, but your cap.

And if you do that, all of your drugs have $0 co-pay. So, we really think that, yes, it probably had a slower start than any of us and CMS included thought from education mainly to patients in some of these patients, as you know, are older, confuse, maybe think it’s a scam or something. So, we’ve spent a lot of time. And it’s not just us. I think every pharmaceutical company that’s selling in Medicare is out there talking to doctors and staff and educating them. But the best education really takes place when they call in to 1800-406 direct and get educated by our hub on their options. Steve, do you want to talk maybe a little bit about the payers?

Steve Parsons: Yes. We like our position with payers this year, our coverage, particularly when the patients get to catastrophic and they have a $0 co-pay. There’s a lot of pharma companies that have gotten themselves in trouble with offering big discounts that stack on top of the mandatory 10% and 20% that’s required by Medicare this year. So, there’s people with 65% to 70% — 75% rebates. We’re happy that we didn’t do that. They’re in competitive categories and they need to because only one brand is going to do well. The other brands will be — you’ll have to through the main preferred brand to get to another brand. We don’t have to do that. Patients are on oral generic diuretics now. And when that’s not enough, FUROSCIX is approved, is covered.

And co-pays, they’re good for some patients now, other patients, it’s going to take a while, but for the balance of the year, we really think co-pays are going to be really good for FUROSCIX. So, we’re not looking to change our position. It would cost an awful lot to do it. and we don’t think we need to.

John Tucker: Yes. We know some brands that are at a 50% to 55% base formulary discount, and they got the 20% added on top in Medicare. And they’re sitting at 75%, 80% GTN. And what did they get for that additional 20%, they got nothing because they were already paying the 50% or 55% to be — to have those low co-pays. We get the low co-pays this year. Now again, they have to work through it, but we’re seeing that happening. We get the low co-pays without having spent that 50% rebate. So, we — again, we took some pain last year, obviously, with some of these high out-of-pockets for these patients. But we didn’t give the shop away by giving those giant rebates. And I think we’re in a better position for that.

Roanna Ruiz: Yes. That’s super helpful. And last one for me. I think you mentioned earlier in the CKD patients, might likely need 5 to 6 doses. So, I was curious if you’re already seeing that in the early nephrologist prescriptions or any trends that you’re noticing out of the gate?

Steve Parsons: There’s been a few. That’s true. And there’s they’re about six, sometimes someone will strive for eight and sometimes someone will only do four if they have a quantity like a Medicaid or something, but it’s averaging around five to six.

John Tucker: Yes. And those are on, keep in mind, those are not CKD patients. Those are heart failure patients written by nephrologists until I mean maybe we’ve had a couple of kidneys. We’ve got a couple of kidneys, okay. I’m sorry that have come in the last week that are averaging about the same.

Operator: Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Your line is open.

Douglas Tsao: Can you guys hear me?

John Tucker: Yes, we can hear you, Doug.

Douglas Tsao: Okay. So just curious, I mean, I think you touched on it a little bit, but as we head into the CKD launch, obviously, you expanded the sales force, but I’m just curious from a sort of a promotional standpoint or sort of frequency of interaction or detail, how will this compare to when you first launched the product? Will you be able to maintain the sort of higher rate of interaction that you’ve established in heart failure since the sales force expansion?

John Tucker: Yes. The lifting is a little heavier. I mean, heavier at the beginning when you first open up an account with the in-services getting it set up on the hub. But that over call that decreases. So, we do think we can keep the frequency in heart failure we need as we launch it into nephrologists. So, we’re not — we’re not concerned about that. We think it just makes a more productive rapid they’re driving into Topeka and they can go on the cardiologists to heat failure clinic and one or two nets. It just — it makes it way more efficient. So yes, we’re not — when we look at kind of how the territories are built, we’re not concerned about that.

Douglas Tsao: And so, does that suggest though given the need to do the in-services for CKD over the — in 2Q that there might be slightly fewer touches to some of the heart failure specialists, the cardiology?

John Tucker: Steve, do you…

Steve Parsons: Yes. I mean we’re going to continue to call on the best and most productive cardiologists who’ve adopted FUROSCIX, we will have no problem covering those. It’s true. There’s a little bit of a trade-off to add thousands of nephrologists. You’re going to have to leave a few of the non-productive cardiologists to decide. But you heard earlier the nephrologists are seeing patients who have heart failure and chronic kidney disease. They share the patient with some of the cardiologists that we might not go to anymore, but we’re going to pick up that patient in the nephrology office. And we might get more heart failure prescriptions because we’re in so many more nephrology office, and they tell us, this is our domain.

I mean, we’re the experts on fluid and cardiorenal and the kidney is what diuresis. So, we think we’re going to be fine. We’re going to cover a lot of heart failure patients who we would have tried to cover in a cardiology office will now pick them up in a nephrology office in addition to the CKD patients.

John Tucker: And Doug, I think if we see that or feel that we react by at that point, expanding the sales force. We still want to see how — what the lift looks like there, what the good territory looks like, before we commit to doing that. But that’s clearly our plan is to add to the group. We originally had planned to put it all in one sales force. I think our thinking has started to evolve a little that maybe there would be a separate nephrology sales force, but I think we need to get out there for a quarter ago and see if that makes sense.

Douglas Tsao: Okay. Great, that’s really helpful. And I guess I’m just curious because I know there is a lot of overlap between the kidney and heart failure patients. Are you able to sort of distinguish between them as you sort of go in and promote? And what I mean by that is, do you worry that there’s sort of some duplicative effort because you’re promoting to the cardiologist and then you’re also promoting to the same nephrologist and he’s sort of already thinking about those patients.

Steve Parsons: I don’t look at it as duplicative. When you can get increased region frequency on docs who are treating the same patient. We don’t care which one of the doc starts FUROSCIX as long as somebody does. So, and it will reinforce if the nephrologist starts the patient on FUROSCIX and the cardiologists seem wow, yes, maybe I need to use FUROSCIX on some of my other patients. Like there’s an additive effect to it. It is not duplicative.

Operator: Our next question comes from the line of Jason McCarthy with Maxim Group. Your line is open.

NazRahman: It’s Naz on. Just a couple. The first one is on CKD. In terms of the reimbursement paradigm, could you kind of walk us through what the split is between commercial versus like government payers? Is it the same as heart failure? Or is there a different split there?

John Tucker: Steve?

Steve Parsons: It’s pretty close. I mean it’s not young people who progress to chronic kidney disease. It’s still something that comes with age and disease progression and lifestyle. They may be a little younger, but there’s still predominantly Medicare age 65 and older. There’s a little bit more in Medicaid. I think that impacts people with lower income, sometimes progress, and get sicker faster, but it’s not wildly different.

Nazibur Rahman: Got it. And my last question, I guess, on a high level, relative to everything that’s sort of been having in D.C. and some potential disruption government. Have you seen or are you expecting any disruptions in terms of payment for FUROSCIX, have you seen any of that or expecting any of that from any of the government plans?

John Tucker: We haven’t seen anything. We don’t expect anything. I can speak with the CKD review and approval. They met all of their time lines and communicated with us all the way through. So, we don’t anticipate any disruption there from CMS either. Nothing we’ve heard, nothing we’ve seen.

Operator: [Operator Instructions] Our next question comes from the line of Chase Knickerbocker with Craig-Hallum. Your line is open.

Chase Knickerbocker: John, maybe just a follow-up on the redesign. I mean are you kind of already seeing an impact to fill rates and general demand in the quarter as a result, are you seeing lower co-pays? Or is it going to take a couple of orders to educate the patients on smoothing or for them to hit that lower $2,000 out of pocket?

John Tucker: There’s a couple of things there. So, we have seen recently more patients enrolled in smoothing. And it depends on the plan. Some plans such as probably shouldn’t list the plans where you can see that the patient is smooth. Some plans all you see is a $0 co-pay. And you have to assume that they either smooth or that they’ve already reached their cap. It was — I think we’ve talked about it in the first part of the quarter, there was a lot of confusion for patients. They didn’t understand what smoothing was, all of their deductibles and out-of-pockets reset at the $2,000 level. And again, there wasn’t what we could see — and I think we’ve confirmed this with other companies that there wasn’t many patients in our world that had enrolled in the smoothing.

Now we have seen recently those co-pays go down. We’re seeing 0s. And then we’re seeing what I would call a stub payment where the patient pays $200, why would they pay $200 they just hit their out-of-pocket cap or they sign up for smoothing in March and they have a $200 payment. So, it again started out slower than we had anticipated with the smoothing and the knowledge at the position and the patient level. But again, what we’ve seen in the last few weeks here has been way more but these $0 co-pays and affordable co-pays than we saw in the first part of the quarter.

Chase Knickerbocker: Got it. And maybe just on Q1. Last year, that transition from Q4 to Q1, you still grew volumes about 15-ish percent. Obviously, you’ve got a lot of drivers in the model this year. I mean, any thoughts on kind of volume growth sequentially into Q1. And then on gross to net in Q1, I know 30% to 35% for the year. But do you get to the bottom end of that range in Q1? Or is it more like 25%?

John Tucker: It’s probably more like 25% in Q1. But I got to be careful on that because what’s impossible for us to know right now is if a patient is in catastrophic at our initial stage. So, we’re modeling it, we work with our consultants to model it. We think it’s closer to that 25% than it is to 30%. Now again, we think all the patients will be in catastrophic by the end of the year, and it will be closer to that 30%, 35%. So, every company has their headwinds in Q1 around patient deductibles resetting, co-pays, resetting all of that. We still will grow in Q1 on units shipped are to sit here today to understand exactly what that what that GTN discount is going to be. I mean we model it all the time. We work with our consultants. But until a claim comes in for a patient, you don’t know if that patient — where they are how many doses they receive, which can change that. But our best kind of thought right now based on our modeling is around 25%.

Chase Knickerbocker: Got it. And then just a couple of quick ones. Maybe on — in Q4, could you share the fill rate, just to see how that’s continuing to improve. And then just on margins in SG&A for 2025. Is it the right way to think about SG&A to kind of annualize Q4 or maybe some directional help there? And then should we see some gross margin improvement in 2025, just on volume?

John Tucker: Yes. So, I think, honestly, I think annualizing Q4 right now is the way to do it, we’ll let you know. Roughly, it will stay that area. R&D might tick up a bit as we get through the — all the work on the Autoinjector and getting that filed here midyear. But I forgot the first one — the fill rate, Steve, you want to talk about the fill rate?

Steve Parsons: Yes. So good news, better news. Fill rate overall for Q4 was it just a tick higher than Q3, 53% change not anything dramatically better. But in December, this is what gives us confidence for this year. Co-pays were low, zero in many cases, we had a 58% fill rate in December. So, we were — we know what can happen when patients get into a good access situation. So — that’s why we have good feelings about this year because patients will get to that at some point at different times for different patients.

John Tucker: And if more patients roll smoothing, again, their co-pays are $0. And again, over 58% in December, which we think is one of the reasons we’re so confident this year that, that fill rate goes up, again, Q1, you’re going to have the typical — the ductable reset, patients haven’t reached their out of pockets and if they didn’t smooth. But we think, again, based on what we’ve seen when patient co-pays are low, we know the fill rate goes up. And we know demand increases. And we’re already seeing that demand increase in March.

Chase Knickerbocker: Yes, I think that’s encouraging. And just quick on gross margin, any thoughts on ’25 there?

John Tucker: Rachael, do you have any thoughts on the gross margin in ’25 being different?

Rachael Nokes: No, I don’t anticipate it to be — we’re going to see a big impact on gross margin with the Autoinjector when that certainly introduced but.

John Tucker: But probably not too much here, maybe a point or so with volume as we work with West. But again, the big impact on margin is the Autoinjector.

Operator: Thank you. Ladies and gentlemen, I’m showing no further questions in the queue. That concludes today’s conference call. Thank you for your participation. You may now disconnect.