scPharmaceuticals Inc. (NASDAQ:SCPH) Q4 2023 Earnings Call Transcript

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

Douglas Tsao: Hi, good afternoon. Thanks for taking the questions and congrats for the progress. John, I’m just curious in terms of the change health, I mean, what percent of your business has been affected by this? Because it was really just united in that one pair?

John Tucker: No. Doug, it’s really — you think of United, United owns or often owns, United owns change. But our specialty — most of all of the specialty pharmacies and of the payers use Change Healthcare. The adjudication of the scripts go through change. You could say all of our scripts for that period of time and ongoing are impacted. Now that said, it was really slow for a couple of days, because what happened was everything had to be called in manually and everyone was doing the same thing. It was incredibly slow. We have managed workarounds. There is another system in place called Relay that one of our other specialty pharmacies utilizes. We were able to move business there. That’s slow as well. But I think the work around has started to work and really what we need to do and what we’re focused on is making sure, we ship all of those scripts that were caught up, when it was totally down and we didn’t have a workaround.

I’m not saying you’re saying it’s working smoothly now. It’s obviously with the workaround working better. I think the specialty pharmacies are getting better at working through the limitations in the system. We’ve heard that, it will be coming back online, here next week. We are going to continue to work. We have asked especially pharmacies to put more people on, to man the phones, to ship the drug. If you ask what percentage of our business got impacted, the question would be what percentage of the business, what percentage of units prescribed aren’t going to ship that should have shipped? That’s the question. It’s relevant. It’s impossible for us to give you that final answer right now. We have recovered a good portion of it. Have we recovered all of it so far?

No. The good thing is we’re still seeing the demand come in very robustly. The docks are still riding and they’re riding more than they’ve ever written. We just need to be able to keep up, shift what’s coming in now and then deal with those that are still sitting in the system.

Douglas Tsao: Okay. That’s helpful. And then also just, in terms of nephrology, are you starting to see any off-label scripts being written? I mean, I know it’s challenged in terms of getting paid for, but I’m just curious, some plans or some outlook.

John Tucker: We have it. When we mentioned that we go to some nephrologists. You’ll see a lot of times even the cardiologists will say, boy, they have heart failure and CKD, I just let the nephrologists take care of it. That’s on label for us. That’s part of our heart failure TAM is those patients, even if they’re cared for by a nephrologist. That would be on label. Now if it’s Class IV, it wouldn’t be, but if it’s two and three and it’s in nephrologist and they have heart failure, then that’s all labeled and will get filled. If they wrote it and it was CKD, first off, we wouldn’t be promoting that at all. Second off, it probably will not be filled.

Operator: Our next question comes from the line of Chase Knickerbocker with Craig-Hallum.

Chase Knickerbocker: Good afternoon, guys. I’ll share my congrats on the progress as well. Maybe to start, where are we at from an average time for adjudication of the PAs perspective? And give me the average time, I guess, before the change health care disruption? And then since then, should we just think of it as those a lot of those adjudications have just been almost completely paused and that’s what’s causing this underlying disruption that you’re talking about that again everybody is experiencing?

John Tucker: Yes. We couldn’t tell you what the average time is, since change went down. I mean it’s variable and we’ve got workarounds now. We still have our primary specialty pharmacy that goes through change that is adjudicating claims for change and then they get triage to relay, if there’s an issue. That is an impossible question for us to answer due to — now again, the thing here is the data itself is very hard, to even get your hands on. We know the scripts coming in that we can see clearly. It’s what’s going out, when they went out. And again, we’ve got a workaround that involves a couple of other specialty pharmacies. The data is kind of some report, it differently. After change, there’s just no way this soon we can tell what that is. I don’t know, Steve, if you want to talk about that before the change.

Steve Parsons: Not ever trying to be evasive, but it’s really multifactor question on how fast prescriptions get filled. It depends on what the doctor wants. We have two ways for the doctor to order the product. They can check expediting 24-hour review, meaning they wanted as quickly as possible or they can check coverage and cost determination. That one that’s more of the layaway and that could sit there after it’s approved very, very quickly with a known co-pay that could sit there for weeks until the doctor wants to call it down. Now let’s just focus on the ones where they say, “I want it as fast as possible.” Our brand promises will get them something the very next day. Let me get a quick answer from the payer. And we reached the patient, we are able to ship it for next-day delivery.