scPharmaceuticals Inc. (NASDAQ:SCPH) Q2 2025 Earnings Call Transcript

scPharmaceuticals Inc. (NASDAQ:SCPH) Q2 2025 Earnings Call Transcript August 8, 2025

Operator: Thank you for standing by. My name is Danielle, and I will be your conference operator today. At this time, I would like to welcome everyone to the scPharmaceuticals Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to William from Investor Relations. Please go ahead.

William Thorpe: Thank you, operator. Before beginning this afternoon’s earnings call, we would like to highlight the following forward-looking statements. All statements made on this conference call, other than historical facts, are forward-looking statements within the meaning of 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, including the IDN distribution strategy, growth in number of prescribers, the potential SNDA filing and other regulatory approvals of FUROSCIX, the impact of the ASM program, the anticipated GCN discount for Q3, decrease of quarterly net cash flows — cash outflows for the balance of 2025, the rise of FUROSCIX dispenses as out-of-pocket expenses decrease and estimated reduction in COGS.

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. It 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-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 disclaim any intent or obligation to update these forward-looking statements, except as required by law. With that, I will now turn over the call to John Tucker, Chief Executive Officer of scPharmaceuticals. John, please go ahead.

John H. Tucker: Thank you, William, and thank you to everyone for attending this afternoon’s conference call. Today, we will begin with an overview of scPharmaceuticals’ core business and key operational highlights for Q2 2025. Following that, I’ll pass the call over to Steve Parsons, Senior Vice President of Commercial, for an update on FUROSCIX’ commercial activities. Our Chief Financial Officer, Rachael Nokes, will then share the financial results for Q2, after which we will open the line for questions. In Q2 2025, we generated $16 million in net revenue, a 99% increase over Q2 2024. We filled approximately 20,200 FUROSCIX doses, an increase of 117% over Q2 2024 and more importantly, a 45% increase in doses shipped over Q1 2025.

Q&A Session

It’s important to note that the vast majority of the increase in doses shipped came from cardiology as nephrology had just started to contribute. In our Q1 call, we discussed several key growth drivers for the remainder of 2025, including the uptake in nephrology, the evolving Part D dynamics and advancements within the IDN business. These factors position us well in Q2 and have continued to drive momentum to date in Q3. We remain confident in their continued contributions to our long-term growth strategy. In late April, we launched FUROSCIX into nephrology. Given that nephrologists are the primary diuretic managers for CKD patients and play an important role in fluid management with heart failure patients, we are seeing strong enthusiasm for FUROSCIX.

In comparing the first 8 weeks of the nephrology launch to the first 8 weeks of the cardiology launch, we have seen a faster uptake by individual nephrologists than we did with individual cardiologists. We anticipate nephrology will have a meaningful contribution in Q3 and moving forward. The growing number of Part D patients reaching their out-of-pocket maximums had a favorable impact on our Q2 performance. We have seen this trend continue into the second half of the year, which we anticipate will further enhance FUROSCIX’ market penetration and prescription growth. We are very pleased with the growth we have seen in our IDN business. Steve will speak more about this. We anticipate this segment of our business will continue to grow. We are encouraged that an ambulatory specialty model aimed at improving the upstream management of heart failure was proposed in the 2026 physician fee schedule by the Centers for Medicare and Medicaid Services on July 14, 2025.

The ASM would test whether adjusting Medicare Part B payments for specialists based on their performance on targeted quality measures results in enhanced quality of care and reduced costs. This places accountability onto the clinical specialist for unplanned heart failure hospitalizations with a specific reference to early intervention for worsening symptoms. We believe that this new ASM program may result in a significant tailwind to augment the already successful uptake for FUROSCIX. Lastly, we are on track for the submission of our SNDA for the auto-injector in the current quarter. We continue to believe that the auto-injector will be important to the long-term FUROSCIX growth trajectory with an approximate 75% reduction in COGS and an increase in our penetration rates.

We remain highly optimistic about the future of FUROSCIX, especially with the expanded CKD indication, the favorable Part D dynamics, continued IDN growth, the launch of our auto-injector and the proposal of the new ambulatory specialty model. We believe FUROSCIX is well positioned to address the significant unmet needs in outpatient management for worsening symptoms due to fluid overload in patients with heart failure and kidney disease, and we look forward to the continued growth of FUROSCIX throughout the remainder of 2025. With that, I’ll now pass the call to Steve Parsons for the commercial update. Steve?

Steve C. Parsons: Thank you, John. From launch to the end of Q2, we were up to approximately 4,700 unique cardiology and nephrology prescribers. This number continues to increase as we add more cardiology practices and penetrate into nephrology. We’ve been intentional about continuing to grow and support the cardiology market as we expanded in nephrology. Cardiology accounts for the vast majority of the 45% increase in FUROSCIX doses filled, which John reported. We expect our number of unique prescribers to increase steadily as we grow further in cardiology and expand deeper into the nephrology market. I’ve mentioned previously that our Q4 2024 sales force expansion was poised to show a significant return on investment, and that was evident in our Q2 results.

The cumulative impact of the larger team, smaller territory size and thousands of additional interactions with health care providers allowed for greater reach and frequency to both targeted and nontargeted prescribers. The extra sales force horsepower has started to hit its stride, and we expect that will continue to pay dividends over the balance of 2025. The second half of 2025 sets up nicely with a larger portion of the Medicare heart failure and chronic kidney disease population having low or no co-pays. The additional reach and frequency will benefit cardiology accounts who are still in the early portion of their adoption curve. As John stated, we are very positive about the progress of our IDN distribution strategy. Performance in this segment continues to beat our internal expectations and will accelerate as we open more new accounts every month and see reorders from some of the top systems in the country.

Targeting IDN-managed providers has been a great complement to our office-based specialty targeting. I will now hand the call over to our Chief Financial Officer, Rachael Nokes. Rachael?

Rachael Nokes: Thank you, Steve. Product revenues were $16 million for the second quarter of 2025 compared to $8.1 million for the second quarter of 2024. Cost of product revenues were $5 million for the second quarter of 2025 compared to $2.3 million for the second quarter of 2024. The increase in both product revenues and cost of product revenues for the quarter ended June 30, 2025, was due to an increase in demand for FUROSCIX further into the commercial launch and related manufacturing costs. The gross to net discount for FUROSCIX in the second quarter of 2025 was approximately 27%. We anticipate the gross to net discount in Q3 to approach 30%. The increase in GTN throughout 2025 is primarily attributable to the implementation of the Medicare Part D redesign, including the mandatory manufacturer rebates under the Inflation Reduction Act.

scPharmaceuticals ended the second quarter of 2025 with $40.8 million in cash and cash equivalents compared to $75.5 million in cash and cash equivalents as of December 31, 2024. Net cash outflows in the second quarter were lower than in the first quarter despite an increase in accounts receivable from our customers. We continue to expect quarterly net cash flows to decrease for the balance of 2025 as revenues increase due to higher anticipated volumes and a 3.5% price increase effective July 1, 2025. I’ll now pass the call back to John for concluding remarks.

John H. Tucker: In the second quarter of 2025, scPharmaceuticals delivered solid progress across our commercial, operational and financial fronts. We remain confident in our ability to scale effectively and deliver value for patients and shareholders alike. We will now open the call for questions. Operator?

Operator: [Operator Instructions] First, we have Stacy Ku from TD Cowen.

Stacy Ku: Congratulations on the quarter. We have a few questions as it seems like we have a lot of metrics that we are hopeful you guys can go through. So just first, as we think about the growth in cardiology, can you maybe talk about those Class IV heart failure patients? Like you also highlighted these patients as ideal high flyers. So maybe just talk about how the adoption rates are going and how to maximize maybe that positive clinician view there? That’s the first question is maybe just talk some more about the Class IV expansion, how that’s going. Second question is, obviously, then as we talk about maybe early days with the CKD launch, but what are your early learnings from these initial interactions with nephrologists?

And then third question is maybe talk about how fulfillment is progressing and if you believe that will be kind of a key contributor as we think to the second half, especially as you talk about kind of these — the low or no co-pays that we’re trying to start to approach?

John H. Tucker: Stacy, it’s John. Thank you for the questions. So I’ll handle the last one first, and then I’ll turn it over to Steve and/or John on the first 2. So fill rates in the second quarter obviously went up from the first quarter, and we anticipate them continuing to increase in Q3 and in Q4, kind of similar to what we saw last year in Q4. There — a lot of it has to do, as you mentioned, with the patient co-pays. They’re continuing to go down. We see more low or $0 co-pays in Q2 than we saw in Q1, and we anticipate continuing to see that accelerate into Q3 and Q4. We’re not actually reporting on the fill rate. The IDNs, as it continues to be a bigger part of the business, we don’t have visibility on fill rates there.

We get an order, we ship the order. We don’t know how many were written. We just know what we shipped. So — but the fill rates have gone up in Q2 versus Q1, and we anticipate them being higher in Q3 and even higher in Q4. So I’ll turn it over to Steve maybe to hit on Class 4 and then — or nephrology first.

Steve C. Parsons: Yes. I guess I’ll start with nephrology and how that launch is going. I think it’s important that we reiterate that the majority of the prescriptions in Q2 were for heart failure and given that the CKD launch was only about 8 weeks. And we’re not going to break out the contribution from which — here, but we do anticipate a meaningful impact from nephrology starting in Q3. The launch is progressing well. The speed of adoption and the trial by individual nephrologists is faster than it was in cardiology. Some — I’m not going to say all, but some will prescribe pretty quickly after 1 or 2 visits. And again, not saying all of them, but some of them, and that’s different than it was in cardiology. What’s a key learning?

Nephrologists are highly mobile. They move around a lot. It’s just been a little harder to track them down because they have multiple locations. They’re driving between offices, dialysis centers. So it’s taken us just a little while to get their best times, their best days, the locations. But when we do speak to them, they get it right away, and then we just have to follow up to establish those habits. Not going to talk about doses per Rx overall, but I will speak to it for nephrology because it’s different. The doses per Rx are higher than with cardiology. I think the difference is they want their patients to be dry. They don’t want extra fluid. They want them euvolemic. They say, cardiologists are just looking to reduce symptoms. So I guess that’s the color I have on the nephrology launch so far.

And then Class IV, that continues to go well. We don’t report prescriptions as Class IV anymore. So I can’t be specific with you. They just send in the prescription for do they have heart failure, do they have CKD or do they have both. But we are calling on advanced heart failure clinics. They are prescribing more than they had been. They’ll use a few more doses than on a regular patient in a general card office. Does that answer the question?

Operator: Our next question comes from Christian Clark from Leerink Partners.

Christian J. Clark: This is Chris Clark on for Roanna Ruiz. Can you please provide more granular details on the CKD launch trajectory since late April? What percent of the roughly 20,200 doses shipped in Q2 were attributable to the CKD indication versus heart failure? And separately, with cash declining to $40.8 million over the first half of 2025, can you provide updated clarity on your cash runway and the optionality you have to bolster your balance sheet in the near term, if needed?

John H. Tucker: Sure. Great. So I’ll answer the cash — I’ll answer both questions here. The vast majority — don’t forget in nephrology, we didn’t — we only had 2 months of launch in nephrology. What we’ve noticed is individual nephrologists have been faster adopters than the cardiologists were. Now Steve mentioned hard to find them sometimes because they’re in a dialysis center, they’re in 2 different satellite offices. But the reception has been faster there. We looked at the first 8 weeks of cardiology launch versus the first 8 weeks of nephrology launch. And by doctor, it’s faster in nephrology. And as Steve mentioned, they write bigger scripts. They care about drying patients out, not just relieving congestion or relieving dyspnea or whatever.

As far as the cash runway, we are laser focused right now on reaching profitability. We’re currently evaluating impacts of tariffs and FX fluctuations and increased COGS. But we still have access to, if needed, $10 million from perceptive on the royalty and another $25 million on the debt. And we look at that needed as an ability to have more capital.

Operator: Our next question comes from Naz Rahman from Maxim Group.

Nazibur Rahman: Congrats on the quarter. I have a few questions on the ASM. Could you provide some color on exactly what the time lines are that physicians are, I guess, evaluated for, for determining payments and performance penalties under the Part B payments? And I guess, when is this expected to be implemented? And who is it exactly implemented by? Is it just implemented by CMS administration? Or does Congress have to involve or anything?

John H. Tucker: Naz, this is John Tucker. Thanks for the question. I’ll let John Mohr answer those questions.

John Mohr: So right now, the rule is under review for comment. The anticipated time line for rollout is in January 2027, where data will be collected and that information will be applied to 2028 payments, and it will happen and it will occur for 5 years. It is — it doesn’t have to be voted on by Congress. This is something that CMS has the authority, just like they do for the hospital readmission reduction program. So CMS will roll this out and apply that by the findings to Medicare Part B payments moving forward for the next 5 years.

John H. Tucker: Yes. So the timing a little bit now is September 2025. So next month, the public comment period closes November of this year, 2025, guidance is implemented. And then somewhere — unclear, but somewhere in 2026, the doctors will be notified, the doctors that will be measured will be notified somewhere, we think, in mid-2026. Although it’s up for comment, our consultants, lobbyists have said they doubt there’ll be any changes to this. So we — if you’re sitting where we are, we could have wrote this bill because it just fits right into the value prop of FUROSCIX. So you can imagine that we will — as soon as that target list is named public, that those will be our priority targets for these physicians. So it is a pilot program.

So we will be — we would think that all physicians would be trying to implement this. And again, this is about reducing unnecessary hospitalizations. It’s about reducing signs and symptoms, and it’s about patient self-management of disease. That’s what FUROSCIX does. So we are incredibly happy with this from CMS.

Operator: Our next question comes from Douglas Tsao from H.C. Wainwright.

Douglas Dylan Tsao: Congrats on the progress. I guess I’m just curious — and I apologize if I might have missed it in the prepared remarks, how much of sort of patients sort of being now Medicare Part — the Medicare redesign, the redesign is becoming a bit of a tailwind because I know at the beginning of the year, there was a little bit of a headwind and you expected that it would really start to pick up steam as we went through the year as sort of patients went through their — hit their out-of-pocket max. And I’m just curious if you got a sense of where that was and how much of a tailwind do you expect to see for the rest of the year?

John H. Tucker: Yes. Doug, it’s John. So exactly, it’s turned from a headwind last year and really in the first quarter of this year to a mixed breeze, I guess, in the beginning of Q2, now turning into a tailwind. I do think it’s important to note that it wasn’t just the growth in fill rate that — I mean, we had 45% increase in units shipped quarter-over-quarter. We’re talking over 100% year-over-year, but 45% quarter-over- quarter. But it was as much driven by prescriptions, new prescriptions written as it was really by fill rate. So we’ve said all along that we think when the fill rate goes up, that doctors are more confident in writing. And we think — we hope that plays out really over the second half of the year. But the growth quarter-over-quarter was driven really by new prescriptions being written more so even than an increase in the fill rate.

But we do see it as a significant tailwind moving forward, both on units shipped to patients, but also on kind of the halo impact of physicians writing more.

Operator: We have a next question from Stacy Ku from TD Cowen.

Stacy Ku: Sorry, just a quick follow-up. You guys talked about fulfillment and the dynamics around IDN. To which extent — I understand you all do not want to set a precedent in terms of IDNs because in the past, you have talked about how lumpy it can be quarter-by-quarter. But just given that it’s becoming a bigger contributor, are you able to give us a sense of the percent of sales that were IDN based in Q2?

John H. Tucker: Stacy, it’s John. We haven’t — we’re not going to be breaking that out because it is so lumpy. But what we did say, it grew 70% quarter-over-quarter. I mean, keep growing that rate is going to be hard, but it’s becoming a significant part of the total sales, but we’re not going to be breaking that out.

Operator: That concludes our Q&A session. I will now turn the call over to John Tucker, President and CEO, for closing remarks.

John H. Tucker: Thank you again for your time today. We remain confident in our momentum and look forward to sharing continued progress as we advance through 2025. Thank you.

Operator: This concludes today’s conference call. You may now disconnect.