scPharmaceuticals Inc. is a pharmaceutical company committed to transforming cardiorenal healthcare through patient-centric innovations. The company has a strong focus on developing and commercializing products that optimize the delivery of infused therapies, advance patient care, and reduce healthcare costs.
Founded in 2013 and headquartered in Burlington, Massachusetts, scPharmaceuticals has established itself as a leader in the pharmaceutical industry with its FDA-approved product, FUROSCIX. This revolutionary subcutaneous loop diuretic therapy has the potential to significantly improve the treatment of fluid overload in patients with chronic heart failure.
scPharmaceuticals' Journey: From Inception to Commercialization
scPharmaceuticals LLC was initially formed as a limited liability company under the laws of the State of Delaware on February 19, 2013. On March 24, 2014, the company was converted to a Delaware corporation and changed its name to scPharmaceuticals Inc. The company's primary focus was on developing and commercializing products that could optimize the delivery of infused therapies, advance patient care, and reduce healthcare costs.
In November 2017, scPharmaceuticals completed its initial public offering, raising $92.7 million in net proceeds. This significant milestone followed earlier private placements of preferred stock, which had raised $56.7 million. However, the early years as a public company were not without challenges, as scPharmaceuticals incurred substantial operating losses while concentrating on research and development of its product candidates.
To support its ongoing operations and advancement of its pipeline, the company conducted additional public offerings in 2020 and 2022, raising $50.2 million and $46.6 million, respectively. scPharmaceuticals also utilized at-the-market equity offering programs in 2019 and 2021, generating a total of $29.6 million. These financing activities were crucial in providing the necessary capital to continue developing its product candidates and prepare for potential commercialization.
The company reached a major milestone in October 2022 with the FDA approval of its first product, FUROSCIX, for the treatment of congestion due to fluid overload in adults with chronic heart failure. This approval marked scPharmaceuticals' transition from a development-stage biotech to a commercial-stage pharmaceutical company. To support the commercialization of FUROSCIX, the company secured additional funding through a credit agreement and revenue purchase and sale agreement in August 2024, raising a total of $125 million.
Expanding the FUROSCIX Opportunity: Chronic Kidney Disease and Autoinjector Development
In addition to the successful commercialization of FUROSCIX in the chronic heart failure market, scPharmaceuticals has been actively pursuing opportunities to expand the reach of this innovative therapy.
In May 2024, the company submitted a supplemental new drug application (sNDA) to the FDA, seeking to expand the indication of FUROSCIX to include the treatment of edema due to fluid overload in adult patients with chronic kidney disease (CKD), including nephrotic syndrome. The FDA accepted this sNDA for filing in July 2024, and the anticipated Prescription Drug User Fee Act (PDUFA) goal date is March 6, 2025. If approved, FUROSCIX could play a crucial role in the management of fluid overload in CKD patients, as the current standard of care, oral loop diuretics, have limitations in acute fluid spikes.
Furthermore, scPharmaceuticals has been actively developing an 80 mg/1 mL autoinjector for FUROSCIX. In August 2024, the company announced positive top-line results from a pharmacokinetic/pharmacodynamic (PK/PD) bridging study, which demonstrated that the autoinjector achieved similar bioavailability and urine output as the current on-body infuser. The autoinjector, if approved, has the potential to significantly reduce manufacturing costs and provide a more convenient treatment option for healthcare providers and patients.
Transformative Financing and Strategic Positioning
In August 2024, scPharmaceuticals completed a transformative financing transaction, which included a $75 million term loan facility and a $50 million revenue participation agreement. This infusion of capital is expected to fund the company through expected profitability, strengthening its financial position and enabling it to continue investing in the commercialization of FUROSCIX and the development of its pipeline.
The company's strategic positioning is further bolstered by the expansion of the FUROSCIX indication to include NYHA Class IV heart failure patients, as well as the anticipated approval for the treatment of edema in CKD patients. These market opportunities, combined with the potential launch of the FUROSCIX autoinjector, position scPharmaceuticals for continued growth and the delivery of innovative solutions to cardiorenal healthcare providers and patients.
Financial Overview
As of September 30, 2024, scPharmaceuticals reported cash and cash equivalents of $91.5 million, providing a solid foundation to support its ongoing operations and strategic initiatives. In the third quarter of 2024, the company generated net revenue of $10 million for FUROSCIX, a 24% increase from the previous quarter and a 164% increase from $3.8 million in Q3 2023.
The company's research and development expenses for the third quarter of 2024 were $3.5 million, while selling, general, and administrative expenses were $21.3 million. The increase in SG&A expenses was primarily attributable to costs associated with the company's transformative financing transaction and the expansion of its commercial operations.
For the full year 2024, scPharmaceuticals is expected to report net revenue in the range of $36.2 million to $36.5 million, compared to $13.6 million in 2023. The company's fourth quarter 2024 net revenue is expected to be approximately $12 million to $12.3 million, representing 99% growth over the fourth quarter of 2023.
In terms of annual performance, scPharmaceuticals reported revenue of $13.59 million for the fiscal year 2023, with a net loss of $54.81 million. The company's operating cash flow for 2023 was negative $59.24 million, and free cash flow was negative $59.28 million.
For the most recent quarter (Q3 2024), scPharmaceuticals reported revenue of $10.03 million and a net loss of $35.10 million. The increase in net loss was primarily due to one-time charges related to the extinguishment of debt and accounting for the new financial instruments entered into in August 2024.
The cost of product revenues for FUROSCIX increased to $3.31 million in Q3 2024, compared to $1.08 million in Q3 2023, due to the higher sales volume. The gross-to-net (GTN) discount for FUROSCIX in Q3 2024 was 15.7%, slightly above the previously guided range of 10% to 15%.
Liquidity
scPharmaceuticals' liquidity position remains strong, supported by its recent financing activities and growing revenue from FUROSCIX sales. The $125 million raised through the term loan facility and revenue participation agreement in August 2024 has significantly bolstered the company's cash reserves. This improved liquidity position enables scPharmaceuticals to fund its ongoing operations, continue its commercialization efforts for FUROSCIX, and invest in the development of its product pipeline.
As of September 30, 2024, the company reported the following key liquidity metrics:
- Debt/Equity ratio: 1.71 - Cash and cash equivalents: $91.48 million - Available credit line: $75 million term loan facility, of which $50 million was drawn at closing and another $25 million available subject to certain conditions - Current ratio: 8.08 - Quick ratio: 6.89
Product Segment and Market Opportunity
scPharmaceuticals operates in the Pharmaceuticals segment, with its approved product FUROSCIX and pipeline of product candidates. FUROSCIX is a novel formulation of furosemide delivered via an on-body infusor device, approved by the FDA in October 2022 for the treatment of congestion due to fluid overload in adults with New York Heart Association (NYHA) Class III-IV chronic heart failure.
FUROSCIX represents the first and only FDA-approved subcutaneous loop diuretic that can deliver IV-equivalent diuresis at home, avoiding the need for hospital admission. The company estimates the total addressable market opportunity for FUROSCIX in the United States to be approximately $12.5 billion, encompassing both chronic heart failure and chronic kidney disease.
Future Outlook and Guidance
scPharmaceuticals has provided the following guidance and outlook for its operations:
- For the balance of 2024, the company anticipates the FUROSCIX GTN to stay in the 10% to 15% range. - In 2025, the FUROSCIX GTN discount is expected to increase up to 35% by the end of the year, driven by the Medicare Part D redesign. However, the company believes the impact on GTN will be more than offset by the lower patient co-pay due to this redesign. - scPharmaceuticals is projecting a FUROSCIX fill rate of 65% in 2025, which they believe could be higher, driven by the Medicare Part D redesign and patients' ability to smooth their co-pays. - The company is targeting submission of a supplemental new drug application (sNDA) for the FUROSCIX autoinjector in January 2025. - scPharmaceuticals continues to focus on expanding the FUROSCIX indication to include treatment of edema due to fluid overload in patients with chronic kidney disease (CKD), with an sNDA filing under review by the FDA and a PDUFA date of March 6, 2025.
Risks and Challenges
As with any pharmaceutical company, scPharmaceuticals faces several risks and challenges that investors should be aware of. These include the company's reliance on the successful commercialization of FUROSCIX, the potential for delays or setbacks in the development and approval of the FUROSCIX autoinjector, and the ability to expand the FUROSCIX indication to include CKD patients.
Additionally, the company operates in a highly competitive and regulated industry, which may impact its ability to maintain its market position and pricing power. Unfavorable changes in reimbursement policies or pricing pressures from payers could also pose challenges for scPharmaceuticals.
Conclusion
scPharmaceuticals is a pharmaceutical company at the forefront of revolutionizing cardiorenal healthcare through its innovative therapies and patient-centric approach. The successful commercialization of FUROSCIX, the potential expansion of its indication, and the development of the FUROSCIX autoinjector position the company for continued growth and the delivery of transformative solutions to healthcare providers and patients. With a strong financial position and a robust pipeline, scPharmaceuticals is well-equipped to capitalize on the significant opportunities in the cardiorenal healthcare market. The company's focus on driving commercial adoption of FUROSCIX while advancing its pipeline to expand product indications and delivery options demonstrates its commitment to addressing unmet medical needs and creating value for stakeholders.