Intersect ENT (XENT) 2 Aug 192019 Q2 Earnings call transcript

Good afternoon, and welcome to the Intersect ENT Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

I would now like to turn the conference over to Intersect ENT’s CFO, Jeri Hilleman. ma’am. ahead, go Please

Nancy. you, Thank

me today Tom Executive and Gallahue, is our newly Kieran West, CEO. our appointed Chairman; Joining President and

begin, remind to forward-looking meaning I’d we federal we of make the statements you laws. securities will within Before that like

update new of a performance, studies, results as reimbursement limitation, our reports materially from forward-looking of codes contained our statements and include, from sales without as other these based clinical or the risks and or time products coverage, which herein. to outlook could those disclaim file detailed Actual we events of procurement current differ financial in force well revise are and anticipated upon growth, We any of risks the approval assumptions timing estimates obligation such which for SEC. and forward-looking and in with to result statements time indications any and as uncertainties, undertaking

call the over Kieran. turn now I’ll to

and everybody, thanks afternoon, Good us. for joining

Tom Tom will his will considerable these the remarks experience over we’re the calls some have call with to Let us of in been the discussions in and helm. thrilled course, at a investor call, week Intersect later just has to by talents future me for along with make now and start welcoming the Tom ENT. and and lead Jeri.

Let’s now turn to our business. a review of

to the able significant. of June, detailed has role expanded was which a more of opportunities As early This past proximity May view this at I as continue I particularly us, with in provided and Lisa’s engaged broader the ahead an level. I in with following exit our view see operating company me a to business

of people the Intersect, dedicated to great and lives knowledgeable who have are at improving here patients. We

portfolio We and poised ENTs. deliver strong have product clinical value to technology to a pipeline

strengths, overcome. confident developed that well ENT platform will near-term are these Along innovation. with are for opportunities Intersect capabilities challenges I a create am meaningful there and and also R&D Our challenges,

would to messages. we like call, convey core On today’s three

is expectations. first acknowledging performance that of or has recent our Intersect the ENT your The not met

as the issues we dug The already we to we is And have have firmly that begun in, second we address face addressable. fact, them. in are believe that

The is industry-leading execution and pipeline are feel Tom growth. leading. confident brings, And our focus market remain and products the people core technologies with that a that return to will those third of path our on we us strengths

Okay.

Let’s into it. get

performance of has As our been since noted, disappointing. the launch SINUVA

have aiming clinical always Intersect three While the better and desired innovation, long months to the on the focused spent whys, not we two translated of has a is areas. commercial understanding delivering history product past this, critical of Recognizing it achieve results. to

understanding dynamics. PROPEL and demand ordering customer First,

commercial SINUVA Second, to third, improve And of what emphasis and assessing on our an execution. can the adoption. product fundamentals with access priorities clarifying do SINUVA we and

Okay.

with of remains having being start Let’s our benefit backbone of introduced a used enterprise. the today PROPEL, PROPEL years was over ago, now which patients. discussion XXX,XXX to seven

adding through new We have products undergoing are become users, products. care of and family and the we patients of usage indications the by for polyp expanding frequency adoption this new family has proud sinus and standard introducing grown PROPEL that surgery, of

fact, system, delivery additional our gained straight an of insertion last we physicians Mini option PROPEL clearance In just FDA offering the stent. for week,

prior from and PROPEL, SINUVA diverted of introduction had tactics the that sales reduction those commercial With the success. on attention our associated our of built

historically that SINUVA adoption pipeline this challenges market market sales the the access. and and on longer-term built for of of insufficient work product left has unexpected development expansion SINUVA growth demand our significantly Our PROPEL. focused force and And time

with of but physicians balance. switch past, working usage, appropriate focusing its or in high responded the to focus time commercially orders. their to less by PROPEL’s clinical of and on rather question this selective full clear, PROPEL, benefits volume a offering end be off with understanding a we discounts available broaden primarily was not as activity, To of we on on Instead switch done of on have

While factor our away been moving natural challenges have we part this. been from they major force last inner the address the flow in discounted to orders growing demands by have taken of and high-volume steps a business, demand, have latter competing totality sales sought not the of We already of to market in correct and us the these year. expanding

the were prioritized and market true not case, a force in needs campaign past. expansion effective. for in development and highly as However, across PROPEL prioritized sales be the to sustained market organized, our development an focus And market

one, we targeting are proposition; strategic of bring existing development, focus market our new physicians. with via demand on usage Going driving renewing to and marketing PROPEL designed product forward, and expanding and and and number three, customers programs targeted refreshed two, Number patients our clinical value which both education that implementing includes: to customers; are clinical disease

the from We for back renewed customer the on a on revenues stock reducing began potentially orders in that We discounting continue QX impact development year. focus remainder orders renewed on plan scale and that I market adjustment short-term order just to activities. mentioned. we the end shell This result to revenues lowering at shift larger in balance will to of this the the quarter. felt immediately to volume adverse Additionally, its higher in of decided and

stronger Importantly, fundamentals future. approach will back the will in more predictable business to and for we growth yield believe basics position additional, the sustainable and PROPEL

to turning SINUVA. Now

functioning, that making access we are Our organized assessment process. more overall a strides and market predictable providing in is

J effective than earlier code are gratified quarter October schedule. of week that ago, a X, typical We over an CMS’s an a just date issued CMS with anticipated

and and this this to payers news about look We pleased communicating advancement. with very with forward are physicians

for submission which code having turn reimbursement use potential and J of that product expect Typically, be codes welcomed broader We are SINUVA. use in access, a SINUVA that physicians of use specific by will ordering. may evaluating encourage or buy-and-bill streamline

of XXX with with start since clinical treated have patients been QX. the commercialization treatments physicians. physicians now patients aspects administered by in from have strongly Feedback these product been Since the launch, over On basis, is SINUVA favorable. of metrics about on XXX a of increase approximately X,XXX the an

However, the access and for only physicians the buy need been and in users ordering favorable. pending of physician feedback to buy-and-bill more ease streamlined XXX fact, product have regarding so many deferred a And not process. some the date, product, specifically, has patients in total have engaged bill of XXX To ordering. access the

team. to streamline product channel us this? we data more information recently for accessibility expanded which education, access reimbursement that see. flow physician via do reimbursement expanded how specialty several These access. through available training us Two, improving fix And three, think providing we solutions So have physicians across we solutions want begun greater to what especially One, practice have get will to include: we Fortunately, implement providing through our product pharmacies. relationships, field effective to

program, by a commenced on the product. who On that help SINUVA unique the physicians the understand master effort for clinical information SINUVA team, physicians’ solution. designed as classes nasal field more the have effectively about offices of reimbursement process provide those burden caregivers is class and used sales our patients a and first innovative These to combined educational and led we our access reimbursement intended through their polyps and guide point, are and also will for considering teams. This our leveraging field program is

questions contact a the specialist reimbursement team, new educating benefit reimbursement specialist of more able freeing and to the coverage expanded there answer sales bandwidth the informed recently in of and reimbursement our operate triple a make having helping are to offices questions to force serve. we directly approach field clinical reimbursement now we physicians’ benefits. a way, in discuss point This our of up has offices primary With answering from

able physician patient status. stay informed to staff office the engaged, their once they and of want Next, are to be

working partners the from the and prior to accessibility product through approval are for access. our We with way submission to initial authorization, information all improve

enable and more will SINUVA take Better time reimbursement the information our teams spend greater without process. sales operate while will staff capability answer effectively to less needing administration, also flow to questions on the help on about status. time office and confidence gaining This to automation

product with launch available J no the by to status SINUVA support appears we code commercial year, Thus, access to pharmacies. and channel product we expanding working that appropriate distribution no At unclear improve opportunity be partners the with selected last including was our Thirdly, payer specialty now we pleased and network, for are to coverage, available. are new specialty launch, usage. a and dispensing distributors

buy pharmacies specialty the from important As product. and recall, offices to the to you the receives are product physicians’ to SINUVA directly without provide Instead, care may payer. needing reimbursement physician the of they takes pharmacy specialty as distribution

allow for contracts, by on patients While pharmacies specialty benefits, comprehensive for who from access pharmacy opening patient several pharmacies that up specialty broad doors. for via their allowed previously payer we access established have our many large closed and encouraged have the interest current are based more coverage

code. opportunity a over are covered few now that which of SINUVA’s where believe This J significantly. now, and assess payer options commercial reasons is There an an we area exciting XX% this interest, following improved coverage, including year and for activity, change lives, a assigned reimbursement have our in positive we of at of emerging commercially demand

And partners are potential SINUVA excited by data and with year-end. new to with contracts significant prospect streamline of we we engaged further partners. ahead discussions implementation, adding while navigating in the have are We access work

patients, need but it. with to believe access will do major process will that become both should we reduce in delivering that buy-and-bill for buy path it expect forward expectations. of Further, access attractive to physician deliver that gratifying with our the don’t some the code, buy and and We greater J more dependency specialty and access simpler for bill. and product the burden believe a a on do have bill use pharmacy a aligned we those step will It’s eliminate

to of a meaningful to are path in ensure about be a positive physicians to this from patients accessing position the receive continue feedback enthusiastic efficacy and SINUVA have innovation. patients to deserving We and

least interim, prepare currently SINUVA We support code a broader early efforts our sales getting full and new to at putting XXXX. J availability. to specialty the force of In in by timing pharmacy year-end, will for rollout are onboard one the partner leveraging in physicians using continue

Let’s integrating the that all we points now in transition to our of outlook, on this call. touched

are to refocus the and position we market creating As for sales work demand. force we in organic on our capacity on growth, development to

and develop clinical are further expand of to the We selling to the market. PROPEL returning basics

access to code. not For SINUVA, just doctors realize the J but using product to we the do the assigned early superior newly described expect expect introduce XXXX, currently have support when with meaningful growth to until continue I will along that product, we

strategy, year, the with progress providing initiatives performance outlook year to with now are versus full this flat described. on updates I’ve we be our our the transparency for Consistent revising last financial and

demand. Moving as this, with on margin course, beyond revenue, gross tightly we should is also touch of aligned

which of for resources XX% and and one XXXX date with some products, we growing on to This production drug, combination manage a to are regulated need we to stated outlook of inventory, XX%. significant of and absorbed been to considerations. as overhead producers gross has margin As our previously track demand and appropriately devises rising as quality with remain well expect regulatory

will and guidance smaller However, cost as which overhead higher we gross process we are volume. provide development This these expect year. in of over adversely quarters. volume line below next for we expenses with recent Accordingly, production increase our impact that reduction quantify spread we in will our we our costs that near-term our production unit lowering XXXX view we will produced a revenue, margin, when which our

this but important it’s we a are fully we our we taking true to ramp strongly as business. said, success more view for revenue believe company a and product focus needed SINUVA. more near-term costs Overall, on production growth as long-term normalized positioning With that to steps and This utilize to infrastructure. for we basics, to with note to expect and transitory, PROPEL we that we growth, will reshape return the a are return grow that that our impact

and experienced has to to affect to realize who products joined innovative to course, takes pipeline. this the company and of deliver. vision Tom our potential me it evolution, execute and of the brings a who knows dig an leader Of growth expressly West, This how to

have focused a best. Tom is to such have and excited and Tom’s these reasons perform we’re qualities compelling organizations candidate made cohesive to experience his that the teams at caliber and into motivating organizations management growth, through challenging to We’re their transitions and onboard. a experiences and precisely CEO of with and It driving and leading sustainable thrilled building him

juncture, to I’d to a this say like Tom? few words. At invite Tom

Thank you, Kieran.

of Intersect the let First, Board be I approached the to innovation about to join am by substantial open intrigued ENT, could. physician in When how sinusitis. and was is I as joining ultimately needs, company’s me here patient to commitment potentially immediately I me with me and saying I how pleased drew a Intersect learn category setout much unparalleled am in. be as and digging chronic to to very excited What scale unmet

revealed My diligence the family PROPEL of and the differentiated SINUVA proven and products. clinical also benefits of

potential for background next We in by And navigating. building success are complementary have the I is capabilities company is the executional eyes reinvigorating taking wide there the innovation executional growth my and level. and are products, that and upon to the strengths, strong the have, with evidence-based ENT existing offerings candidly, Intersect currently we that commercial I space. with to was also and well drawn open, enormous believe ENT pipeline suited that challenges

establishing experienced execution upon execution clear attention of processes, accountability career my throughout may to that detail, dependent by success driven and decisiveness. the simple, It is deeply a of culture management excellence, but kind seem I’ve

these Success say against will full well-defined base. by I having that strongest rests Intersect at best order on Intersect ENT, people I’m and and bring is the appropriate build to that to our in talent our I’m most objectives. see purpose, the I strengths upon unleash talent the talent execution to is impressed fit to eager set also for potential.

to to in. that be Bottom existing the talent unrelenting and and is progress. and the I’m with two prospects. deliberate in rewarding of committed digging speaking belt, very nearly I look our assets. order busy With strongest maximize clear bringing to I’m under clear my prospective there indeed line, while by encouraged work you I weeks effort and is done, forward strengths our to strengths as it am we and And

call turn the our remarks. back Let to for on additional Jeri to me then to financials now Kieran over touch and

from the of SINUVA flat of the Thank we revenue million year million our included well as year, in anticipating With for outlook an half the especially revenue in into in total $XX.X last the PROPEL, the $X.X second calendar of as of the quarter growth touch we half, what of from on year, growth double first X% in are million, you, the taking a the second of back Tom. XXXX. To flat decline $XX.X realized for account essentially with quarter, quarter reported revenue QX.

levels. of in realign product, to And we characterize remain margin XX% modest strategy to XX% anticipate as with XX% first half revenue the for process track PROPEL we current and second revenue the quarter improved XX%. sales noted, in SINUVA guidance Gross our our guidance year to the XX%, year. development. anticipated remainder in our as by back expect declines range maintain the will be expenses margin than slightly Overall, lower previous for the outlook our to we was for reflecting Gross the half in approximately of period we at as Kieran on of

our we available inventory near-term quarters. recent anticipate to volumes lower our with than align producing Looking have we revised outlook plans in demand and ahead have margin, gross to XXXX production and

which As will to is our indicated. overhead, over ongoing be XXXX margins costs, of gross about volume, result, a X/X lower typically Kieran a lower as our leading allocated production production

expanding of of we Regarding outlook the the balance the of million end earlier. are partnership in as implementation $XXX invest are to capabilities OpEx, with closer range in upper believe we SINUVA come our associated access as we to to million, over and maintaining costs the $XXX likely but described year product

have cash ramp cash quarter with revenue believe we in position We a usage continue a cash that to position work $X.X end of in we the as quarter strong million was second to our XXXX. the of $XX.X the Finally, at net million.

Let call back turn Kieran. to now the me

I’d and remiss touch our discussing In our of future, important Jeri. if Thanks, an our driver pipeline, I business didn’t our be potential. on innovative longer-term

considerable skill delivery drug in leverage built product identified ways in development. have We and to several ENT knowledge that and further have

we reached discuss point and are program One the balloon, of has drug-coated publicly. ASCEND programs, where clinical trials in these the the to

stated results reporting enroll and continue QX and study patients completing in end with by the end line on of year. top track enrollment to of the We guidelines our are the this by of previously

As our could safety with drug-coated upon XX-patient this assess for upon depending Based study ASCEND and that and clinical sinus warranted. conversations It technology also possible designed serve is as a balloon. of further study is a balloon may compared with a reminder, to results, be FDA plain our study pivotal efficacy submission. study a

findings, review the better the upon a have will clinical trial We designed that is of sense to for superiority. show but

system commercialize delivery options customers Mini As with when I we the further ethmoid PROPEL forward to provide sinus. recently straight are outset, in Mini the mentioned moving placing to to at PROPEL PMA-approved plans our the

to a nominal fee offer this begin in expect system to We QX. commercially for

let me see summarizing our as So by we are think path and we forward. what we conclude where

with We’re of drug benefits and into practice. physician-administered partnerships success, history may challenge believe through offer and with are of further new true a innovation first a making we the excited progress company We navigating the and physicians are we ENT introducing capabilities. impactful the

In and long-term a advantage. provide skills addition, building capabilities we to designed are differentiated

goal live to delivery of as valuable white and We solving are technology bring open market. localized drugs innovative their to unique time up devices place is us the for stand we future alone this capability for for over We problems the ENT developing to an that see drug physicians putting space capabilities we will industry difficult patients. a pipeline, in where opportunities Our and for intersection leveraging at in today. expanding create

the device. false reimbursed, market, drugs product and can are or drug By regulated focus defined developing walls is needs, on or to a by that of customers building the how capability to our on deliver centered and both delivering we solutions devices not to their

firming simplify up our to reinvigorate products to that while rebalancing the PROPEL invest access and in SINUVA partnerships innovative market. committed the to will bringing further are continuing family, to efforts We

once With strength, innovation areas strong positioned leader to diligent provider to believe execution again these be three and we deliver Intersect will and growth. a of sustainable against and attractive that physicians ENT

for Jerry, open to the line your I address Tom you on and and attention, would the your questions. and Thank please will up lines? remain time Nancy, your you

question-and-answer first now from go And Marcus [Operator question JP Please Instructions] Morgan. Thank ahead. comes We’ll from the begin you. the Robbie session.

off, Tom, And role. on first the Great. new congrats

it, you. Appreciate Robbie. Thank

questions for Three quick me.

and now it much understand need First, could when start, And and down they where are what and help stocking levels XXXX? did to XXXX come you are maybe the half how in contributed of us first to?

Yes.

a something couple product, – access give there, past the in there SINUVA good also is was last was has very been bit this digging a that you and once the inefficient. okay? getting clear of understanding the trying to organization. going So but for balance that feedback to pretty little get the context better the discussed we’ve opportunity, that relatively the process been SINUVA and significant was clear the into months, we of sales and as very is process, clinical much Once on sales just of it’s the behavior I’m obviously, of launched, is a What’s product what

and spent things result, in spending this highlight, of So in – the the balance, of – SINUVA pleasures in market. awesome but over at in I’ve before, great support to field to of is our And digging was product commercial I they switch, develop an seen customers last access force, that our they guys. substantial a I that my is sales the an in time balance trying time change these lot in again, organizations off one change organization one switch, and you not time, that process in of there by should a months saw amount way. trying of two a where a on as with should

customers. that they through the which what bit from of pull ended a balance the one development the But up they started is doing drives reference to things in PROPEL, market the of side these away is

bit the last sudden, something process just was really grew on sort transactions behavior in through was the more a support by six bit And the more customers, on so over a little bit and sort with side on of where over field time. of the or that anything less wasn’t so so little it the bit PROPEL probably little that up was in that pull a it the quarters, with maybe was a SINUVA, it the bit built

about few revenues, ballpark. X%, Just or annual it this sort so, in points the the X% total is percentage of a to gets right guage talking though, we’re maybe so you of

just So on really to that to going and going on of should not our working of I be priorities a work doing, substantial make see what’s back which help through, we’re as customers over us development, to thing two, or right that inventory the be off customers product. one, turn say process our demand be impact market on balance that to any a the building our and given of It’s three we to quarters, way for priorities sort that work is Does it’s the the period. we’ll its able long-term PROPEL focus Robbie? that sense,

I question that. second Maybe on Yes. to just follow-up had

clearly past the As the years PROPEL access look year that the was rebounding year, clouded were deprioritized seeing what last the growth. were, at issues, Contour time given but it in SINUVA. focusing sort in trends you’ve on to little given reps SINUVA, how a underlying This the not of much I we’re spending as business, few

not issue self-inflicted us help you could So issues? and tease is issue, penetration but how XXXX versus a of out XXXX just more market and a an XXXX, understand much

tease been say And always the and year, activity what away fully from from of not insignificant. challenges One granular is when they from of support. pull Yes. is SINUVA in self-inflicted wouldn’t It’s level. hard trying will gradually that the were that I portion we’ve away at an that, half mean it say it, a I two to reps I as of out areas. But say that the I that example, have But we that. was the first sales to diversion with the

that from get when your away don’t customer. you fundamentally – just You it’s

improved. some spend issues. has of the people. going the dealing of escalations add We did It with time You’re to

the So the an chose the in there we that PROPEL the balance. sales we pulled away efforts level, in has from our But coaching daily to manage development. been during on the organization, balance market improvement way that activity way on the period we time

success that really senior with was success There basic about reps, way look lot use leader It’s that increased stories utilization to if a the engage where stuff that sales physician frankly, like – dealing their of you the sounds wasn’t sharing fundamentals, a was we customer, you formally that a about kind it we sharing methods is there tackling. wasn’t at blocking stories like fundamentally a blocking using but PROPEL of know of PROPEL. given things get quite points. I the tackling, helps and additional and

So PROPEL basics that our growing you penetration do there execution, the of base. getting helping get to back We by is I – physician understand what execute think? ability this the focusing to to with can of think the and with And basics business. expanding back substantial left on that Tom, utilization

of Yes. if team could early thing one sales a number the is add weekend. in I and Hey see with saying say Seattle back-to-basics, physician up saturated. sales that the I opportunity still primary on selling. very that embracing are that Robbie, clinical generation it, encouraging but folks last would a market I it’s demand our And is, certainly the is aren’t focus time education at summit a obviously days, spent our to They

can the for – So where momentum but towards me encouragement early how that organization’s as too basics to to we we great quite go, to back I is high. gives think me quantify,

maybe where me. revenue given growth in and XX% quarter, then XX% was grow Okay. for just And R&D last surprised the I see the is. to SG&A

just going? And those over dollars is help how Thanks. out being where are to So spent? maybe could think the that where understand looking you and where about spending maybe going it’s us future,

Yes. Jeri. this Hey is Robbie,

In that added that’s – ASCEND development R&D, that studies terms the that product. we’ve the answer simplest for and clinical the the on we work trial for and expanding product of are is

that activities. and investment increasing in pipeline other also an it’s So some

additional team differential. On of lot compensation all that changes a really overall flagged access, the call, supporting the things a some to field has sales some support was that investment talking as increasing do expense SG&A And side, has in in reimbursement to things. is also with additions and market management association the stock-based and with that also, last in in it to on side about work continuing the and SINUVA of Kieran our and been drives the then

So I think really it’s those key factors.

a Thanks Okay. lot.

question next Please from go of Our Bob from Bank comes Hopkins America. ahead.

Thank Two and you, and good welcome, Tom. quick things. afternoon,

First, was there’s any Can don’t path to balloon from that likely the really sense give data? curious the generated interested know more Just said your way path any and may do you on need that or commentary, drug-coated us you I here? idea likely? could which a weight a to – pivotal if as Or data note, what’s positive you a because in you trial. a you today is have be no at you more the point this new

early question, a it’s weighted comment can I Bob. just at sort No, But guestimate too a we don’t give of, good that. that. I on for Yes. that us it’s to know average, think

to required something that Yes. If understanding study. further if that the and clinical very study. a that it depend meet really subgroup things continue we on with going But it’s the It’s be pursue probably likelihood our that results. in there’s analysis we other significance pivotal would the trial there through would and or endpoints good clarity is

data. to do really we see the So need

like discussion – just a a where quarter we’re had doing sort not because sort it and to the around, sounds second I It at – SINUVA of, the on PROPEL been or now. impact. on far on of right big fourth is it’s so working second time this on question And or obviously, really "here’s what then and there’s Okay. third is challenged frankly feel both or hasn’t good okay, change." here’s that all, why are

be I’m specifically And So helpful to example is going And were doing change maybe can that will what wasn’t concrete summarize like, if Thank may that what specifically curious you what is of you kind kind forward? a you. of working? it give of just changing?

maybe major point had a example after is and the that really that that good I we we that’s Bob, take one to partners And with challenges with of contracts you to the I’ll partners, payers. would in Because cut the launched, with answer did have question, as the of engaged that. pharmacy. initial we as specialty area first one know, not the we’ve is of the

the to directed payers that product and under buy to had And basically the for specialty for model. submit and be use did that authorization that, meant prior as however directly approved had SINUVA doctors which the fulfilled they buy-and-bill distributors, patients, reimbursement the so through of for

that those believe product. if pharmacy that, it’s of the authorizations it patients product, and could specialty that doctors a we where make – where don’t number the lot purchase have a went to the again to physicians that’s have would through flow the be prior specialty We benefit a access and pharmacy, easier provided material for streamlined a by

change engagement been least and the have specialty some the pharmacy. around really have at the through we having that it product of and When clinical of we having distribution feedback those, J with for today the able in the enthusiasm and code terms we have more the we with have product. And could that assets of the a of of specialty through get product, verification and pharmacies didn’t use having discussion coverage, flowing launched channel established profile to flow

we I year. because I highlighted some is had elements I’ve it So have couldn’t the is that these doors of different last of we access aspects to that open one talked about, think

says on challenges problems. to of were fundamentally So is us put bodies build the in And of a into causing more back some process cause is addressing of the getting process, the us addressing a way is it sustainable the Yes. that available what what two the attacking that the back if is was issues. This in what can gets things. issue which of shift One second and inefficiencies, quarters, is you that right? these root a what’s When last it access to just fundamentals the the bodies down, which that was little several boil bit. was at to I more to

X.X thoroughly that question potentially it quick underlying – the that, for challenges thought? that ask the is isn’t with last I launch and there’s now I understand the thing. what reason Is product quite part that that you demand of – kind And code. the this of is the One in, years you’re just J

six We’re, quarter. sort of, quarters million a and still roughly in $X in at

just so a it’s far curious, isn’t demand we of and part wondering bit if modeling, of the underlying this for I’m just – on were miscalculation it originally little below what product? So

Physicians been about access, couple their for last feedback the up ask, clinical is to juice and the of out and not question think from product. tell process. ENT them of The get now I’ve in patients. it’s the it I that’s with months. that issues love to the is substantial are that and sort of the field the around meeting weekend, we’ve The all worth this you, right? of was utility Sort first bring Tom question. last great squeeze they of got same right at I one,

with great very barriers is the So we a get us. of product in front still a We just opportunity to way. that the of comfortable remain got out this

a that in thing – historically way, This also do after into to little to have by is drug around that want not second perspective. amount pivot building you, I that’s physician-administered developed on we And a tell been that. just got of which or need space to a the company what builds but device very either capability. in it’s fall The having that white this to us, I comes it whether There’s this solutions access mind. is just on the SINUVA keep drug this from look barrier, capability, at our that side. not and marketplace exciting device my rather but false it that, may this capability ability

the remain blockers comfortable of to juice the just we way. we So worth and got squeeze, get out the is the

very Great, much. thanks

Thanks, Bob.

ahead. go comes Newitter question Please SVB Leerink. from next Our Richard from

on Rich. Hi, is Jaime for this

you versus are was were I’ll with, talking year pharmacy. shifting dial like reasons last just in and of balance, that go-forward going first reliance pharmacy guys about. it question like It you for So sort more the some was talking the perspective, from point two towards specialty how specialty about kind guess, a buy-and-bill reliances? start I if back the the year we to seems ago, a like I seems curious of buy-and-bill to a of,

be more is pharmacy, that with back transitioning to ultimately, get something and a outlook to And starting that’s initially gauge, the trying you on to specialty it what is partnerships is pharmacy buy-and-bill reliance in reliant will as where these specialty of less something there? of pharmacy, more of if just And now buy-and-bill place? kind specialty I’m

Jeri. Jaime, Hey it’s

avenues, insurance patients. think of often about two driven and payer As they the you by are the different coverage the

what So that that referenced comfortable get place of are doctor these they do with call, and remain is the putting the look part that why as for ways in product the we’re adopt net-net is educational that going channels in so the and to access will they really of to programs both product, Kieran partly of it.

of think a blend specialty through to we pharmacy following distributors. the and it’s But have product nice also specialty good

For go to specialty a commercial the example, pharmacy. lot through specialty have – patient go will the payers patients continue to But of through distributor. potential Medicare

a think really can’t with. to be. the going flow be or at think is we we the a most comfortable balance But will something quantify predict physicians having balance or what I point having good that good will this So be

a with you something risk? out just on to people database? there’s EOB in guys the on building see Okay. Are Or an that’s little out to are is trying this bit from surgeons And around sidelines you’re resonating how and know, build referenced I of that payoff just, still because hesitant still going have Kind that? starting a taking past little towards conversations then the bit database. of the the

a lot think work that EOBs and of of in buy-and-bill, can place a see for and code. defined doctors of many still high substantial it has I was provides and we that that want a just the that there with profit. confidence a but of remains J There do realize of Yes. comfortable have really the think the for that I reference level are submission does factor a reimbursement number the also going and It definitely that, into number J more reimburse gotten is we a little hassle product. code streamline to some there They bit

we like the an talking have needle partnered other been J important definitely really It’s EOB I with about, code with So But things the move needle, think and approach softened were I these faster EOBs. tool. a effective are really think to the to the and things gotten at the all the more trial moving pace.

know the in. And been then running just last the great. about you kind me, my Are force got outlook end on of you have questions. chronic have the for with just conversations competitive for – any if recently one I Okay, has squeeze – that June therefore being all at changed what any it sales and least into one Thanks I guys physicians that, and Doobie your of SINUVA? potentially at with with could taking polyps. approval more at

Yes.

largely monoclonal in the antibodies I this on think the has the at focus space. been allergy point

a as therapy and really our has of, are high got that We that ENTs as I SINUVA opportunity. comorbidities a certainly really you feel others aware strong a it very does. and profile for at things may very so SINUVA that think independent, that see Jaime, look market it patients very patient expensive has is different is clinical impacting don’t than compliance is thrilled? other and with we you’re requiring something high

Yes, sorry. Thanks.

Okay. Thanks, Jaime.

from The you. go from ahead, Guggenheim. Please next Pasquale Chris question sir. Thank comes

Thanks. Kieran, SINUVA the appreciate challenges you has the with thoughts your on date. had to walking through company

adding about been off now. specialized year of the issues of support to and we’ve plate for reimbursement think try a I about some talking those take the rep

place you a like organization have perspective just you do you’d I the from understand, go today way to resources like in commercial from division angle, attack headcount it? within at the or forward, responsibility to least want to the a So from feel that

by look you execute time the side that he’s the quite the issues the matter to and getting he’ll this we driven the jobs from his it’s I a at be able a right always – the and Tom and you them You mix sure and the people bodies right capabilities look the and of the assessment own digging in give make in to them think right? that be to staffing as they Yes. point. if from Obviously, commercial of we’re business, to at balance be make between right want comes over at place to efficient. deep. also in, do me both, fundamental right more addressing have in because he’ll optimization perspective of But staffing but tools and a are

R&D, their their couple right? going fully beginning, say and look months, we to and as as into get dealing entrenched. the going staffed, XXXX, understanding engaged we team fully six customer So So have months to reimbursement – been well Well under belts, right? that’s educated, have are I field get we’re forward the let’s a of that next over reimbursement with to about have of point, base

we year R&D So SP running. by up you believe the staff. end, have another full got We’ll and

and want would it, enablement, which J greater will I channel simplify at enablement that established code, minimize technology and working we’ll technology couple on months. have the that don’t to we a point for are within have of of You to some that been a have

we’ve next that, four think, So this SINUVA. positive really gets growth that events different and together come of the I year, building that wave of, got of end us, toward out sort into

So excited it’s part of it. what about gets us

think the surrounding tools. So I we people, more right importantly, them right I do we’re with the think have and

now. about speaks – in is And question the for all Tom, as the why jump Bob’s we’re SINUVA, together it is and lingered how pieces to just of long adoption it’s to as rate and add reality puzzle The getting this to earlier it of And that. has. the maybe

added past, Pharma running point, the have the at architecture kind reimbursement of J XX%, we the it to code and only capability reimbursement have specialty we up to Kieran’s in While covered do of be. need and where we lives now

coming that pieces as knowledgeable Add it now out coming together. that more reimbursement capable J with the we player the field, as October. wish and to might evidence never are hitting that Adoption team that has And in all is drive any it’s in along, clinical get and our underneath now quick be, there the us to as in strongly beyond new we’re code and been all will and feet a coming but XXXX it.

better J Thanks over target want for confidence and just in that. piece I to been the because specialty time. Initially code. a pharmacy understand moving it has a the the feels six of little like years buy-and-bill And bit it was

specialty Now almost place, got that in relationships. we’ve the Pharma the this of J code upgrading

second Or be major feel do going you momentum? third that start piece to commercial guys need to do do getting side? or can in about year XXXX is ultimately need the see that and can Is talking you you just going months the partner the this start what you confident before wanted getting before to we or three into to one online online that really four six we’re start of a this end to the on

we be a of next just think, trail capable will us, a more to broadly that biggest SPs, capable couple the we one year. think capable by by adding for most months, think the and another highly capable good highly couple the extremely and be of we’ll Maybe probably I get want before year. running the that and we early, end of up But SP may in shape.

year the following one call of in probably towards QX. another sometime one I’d end and So this

Thanks.

Capital Our Please comes from Ravi sir. from Berenberg next question Misra Markets. go ahead,

there? are you Ravi,

The Mr. question ahead, Misra, Jaffray. Matt phone your unmuted? is O’Brien your Please go line comes sir. open? Piper Is from next from

A Hi Farshchi Kevin ones everyone, this Matt. for me. on quick actually is few for

revision but meaningful on wanted around force just of seeing XXXX. point disruption. finer disruption we’re one for quarter understand Definitely core the that SINUVA, sales outlook pretty a a because of the I the from to put PROPEL First,

or business? large I thinking highly am I’ll Or on place? given strategies you follow-up if the penetration in in which so more outlook And So to return and in activities Thanks you there well, is, talk new putting alluded utilization growth this necessary ask the do my majority you wrong, what customer about just really you’re with? think much. exactly you’re how the that changed of could drive as What utilization customers demand much in PROPEL, risk-adjusted accounts being you core the available. about expectations is XXXX? could and that to I use through specifically market is for more all development do just have this isn’t to demand your a and potential you think

Yes.

let I second at into weave its me get one So way the will it. first question, actually think the

that impact. process yields a So but to is longer for market a development the see bit a longer-term benefit you takes little

that’s through, some trying real and wave the sitting and sure you that Transactionally, away an customers shelves the, rising side your to And of, larger the why feel timing, and we’ve of make basics back focus getting what be may you the the sort been is that they in it with particularly, feel negative from on before orders, when right? on these do quickly. you you move short-term is more that work you to the and balance work pull any make to sure impact of fundamentals. got feel on So their that inventories

a lot pain for short-term looking more long-term gain bit way simplistic it. It’s of is at a of little

little of rate of annual size, The a during working revenue affects utilization over to period. actually us a new higher of unfortunately it couple see off is growth a points, that than sales, because we work bit. try even your drives for that two the So – would and our actually that percentage off of and quarters, good to the expect when bit flat actually inventory that them of time what you’re it one towards if or the sort product you the is news a company fundamental couple

his not market So them the that that to more given development just do can in there’s there we reps that there that believe drive do with Tom and use are to still opportunities with feel right it’s patient believe initial the using customers it product conversations said there’s a what there when are to comes fundamentals we some fundamentally, short-term, we utilization you a do where are to frequently. are sales opportunities back penetration, go to on the just thing work I’ll and earlier

the using make yield that’s patient. patient efficacy and So right? the dividends. do decision for in the to the and we them we basics, going that’s that for clinical help what’s going the it doc that XX%, evidence is understand think clinical be again, could it what And them best XX% we’re to or back is might to And of XX% more appropriate help it

thanks. great, Sounds

you. Thank

would Mr. closing [Operator turn conference to session. for back West I Tom the like remarks. Instructions] This concludes to our over any question-and-answer

today. we you here and appreciate against optimism Yes. all to for we’ll with the before work your excited work us. and back of strategies very that and the We be thanks excited interest on Thank Thanks is greatly us with potential support. since you, joining our and I’m our much. progress to report

today’s The attending conference has presentation. now concluded. Thank you for

now may You rest the enjoy and disconnect of day. your