Welcome to the Jefferies Healthcare Conference. My name is Dennis Ding, biotech and spec pharma analyst here at Jefferies. I have the wonderful pleasure of having Endivier Pharmaceuticals here. We have the CEO, Joe Ciafani, as well as the CFO, Ryan Preblich, here with us.

Thank you, Dennis.

So before we kind of go into the Q&A, we'd love to give you the opportunity to make some opening comments around Endivier, you know, what you guys are trying to do, and just sort of the tremendous progress you guys have made over the last year.

So, look, first off, I want to thank you and the Jeffries team for the opportunity to be at the conference. We're certainly excited to be here to tell the end of your story. I do want to give the disclaimer that we will be making forward-looking statements, and I would encourage people to look at our financial disclosures for a description of the company and associated risk factors. So look, right now at Endivier, we're head down in the execution of the Endivier Action Agenda. 2025 for the organization was a year in which we accomplished a lot in what was phase one, generate momentum, which was first and foremost about getting sublocate moving in a strong direction while concurrently making sure we were making all of the necessary investments to drive sublocate and to grow long-acting injectable penetration while simplifying the organization and making sure we're only investing in that of which is essential we had a strong year it gave us a great setup as we entered phase two accelerate of our action agenda where we expect to see sublocade accelerate throughout 2026 from a dispense unit perspective and we expect to see an immediate acceleration of the bottom line at a much faster rate. And that's exactly what we saw in the first quarter. We had a very strong quarter, which resulted in us raising our full year guidance in a material manner on our Q2 call. I would say in the second quarter, we're seeing very strong trends. So we're very confident in how the business is trending relative to our revised guidance nearly every metric in support of supplicate is trending strongly and as an organization we're continuing to get better from an execution perspective which is important for us we have a lot of work to do to get to where we ultimately want to be and we anticipate that we're going to be in position as we make the turn to the back half of the year to enter phase three of our action agenda which we refer to as the breakout phase where we will then focus on enhancing and diversifying the growth profile of the company through commercial stage acquisitions and the point one comment there that I want to make is we're very confident in the durability and the growth trajectory of sublocate we're also in a position where we'll be growing or we'll be leveraging not growing our cost structure and so we when we think about transitioning to the breakout phase we will assess opportunities with urgency but we will execute in a very disciplined and methodical manner because the reality is we don't have to do anything we have a strong and growing business and a cost structure that isn't we want to do the right deal at the right time yeah thanks for that

So, obviously, Sublocate is the biggest driver of the business and of valuation. You had a very strong Q1, not much seasonality with Sublocate relative to what you see with many of your peers. And then Q2, you just mentioned very strong and encouraging trends, which is fantastic. So, you know, as you go through 2026, the comps, you know, the year-over-year comps do get a little bit tougher. Yeah, you guys are still reiterating mid-teens dispense unit growth. So I guess what is driving that confidence? You know, what are, you know, what is getting physicians, you know, using Sublicate more to reach for Sublicate more?

Yeah. So, look, when you look at our revised guidance and what it is that we believe is happening in support of Sublicate, first and foremost, we've put a lot of effort into doing better in pulling through the commercial opportunity. So relative to what we were anticipating coming in the year, based off what we saw in the first quarter, we believe commercial will contribute more to the overall business. The second thing is our dispense unit growth has been very strong, but in particular, our new patient starts. So in the first quarter, people really follow the year-on-year new patients being up 29%. In my view, the more interesting part is coming off a very strong fourth quarter, sequentially, new patient starts were up 10%. And that gives us a lot of confidence moving forward from a dispense unit perspective. Now, what we believe are the drivers there is, one, we are getting better every day in terms of our commercial execution with our customer interfacing teams, whether it's sales professional to physician, whether it's management of our specialty distribution network. but we're also very clearly now seeing signs that our consumer which is the biggest bet we're making which is around educating and activating the patient to go have discussions with their prescribers are having it is having an impact and we believe that will continue as the year goes on right so maybe talk a little bit more about that last point around activating consumer you guys have been investing in DTC and you know December January February you guys have comment on positive trends are you i mean it seems like you are seeing that pull through you're driving more patients at the top of the funnel yes yeah so look when you look at the consumer interestingly in the first quarter not only was the lai market up 23 there was an interesting dynamic lai penetration did not have not improved sequentially and that's because the overall market the orals grew faster than what it had historically been growing which is a positive in our view because consumer all boats should rise with the high tide and remember we source over 95 percent of long-acting injectable starts off of transmucosal buprenorphine now when you look at impact of consumer we've talked a lot about metrics like what we would call quality metrics people going to our physician locator so with sublocate a physician has to be authorized to do the injection in the first quarter we had 30,000 visits to our sublocate physician locator site our search activity is at an extremely high level if you look at our CRM where prior to initiating our consumer in October of 2025 we were enrolling about 60 people a month we've been averaging over 1,200 a month. We now have 10,000 people who we're able to communicate with, and importantly, a key indicator is driving awareness. So awareness of sublocate amongst patients who had been on or were currently taking transmucosal buprenorphine was very low, and we've seen a significant increase in patient awareness of sublocate. That awareness This drives action conversation, which leads to the patients getting on product. And our new patient numbers continue to be very strong as we're in the second quarter through May.

If I can summarize that real quickly. So you're seeing market growth, but you're also seeing orals growing faster than long-actings, maybe perhaps because DTC and patients who are new patients, they start on suboxone. Right before at some point they transition over to sublocate is that kind of like a fair assessment?

I would say yeah The summary should be the consumer we believe is having impact because we're seeing the overall market the LAI market grow and we're seeing sublocate new Patient starts continue to strongly progress off of really strong Quarter since we've started the consumer What is the typical patient journey to get on sublocate?

Is it historically to go through Suboxone or some of the orals?

So like I said, I don't think there is a typical journey for somebody who's struggling with opioid use disorder. What I can tell you is very few people start first treatment out of the gate with a long-acting injectable. So over 95% of patient starts are people transitioning from an oral over to a long-acting injectable. And usually it's after an up-and-down journey, and they've hit a point of, I'd say, a different level of commitment to their recovery. Because remember, when you're on a long-acting injectable, you're going to have control for an extended period of time versus taking an oral. You can choose to stop taking it if you wanted to continue with that behavior. so I'd say it's a more committed patient that is very serious about their recovery when they choose to go on a long-acting injective okay one of the other things that you called out was just around improving the dynamics at the specialty pharmacy level so can you just kind of elaborate that in terms of like where you guys were last year and like this sort of incremental improvements that you're seeing yeah so there were five specialty pharmacies we identified where we were losing we were only converting four out of ten patients so start form would come in we are dispense shield we call it we were converting four out of ten to a start that's in comparison to our overall network where we convert eight out of ten and what's interesting in those five their business skews to commercial which is an area where I think sublocate is under indexed meaning the commercial payer so we've put a lot of focus last year for six months trying to understand what was happening what's getting in the way of the conversion interestingly prior to implementing what we would refer to as bona fide enhanced services in the first quarter just with that operational focus we saw the commercial performing better than what we were expecting now to give you perspective a on a full year basis a one-point improvement in commercials worth eight million dollars so you don't have to move it a lot for it to have a meaningful benefit we now have just implemented in all five of those specialty pharmacies the enhanced bona fide services which we expect for the remainder of this year and as we go forward will ultimately bring those SPs in line to our overall network so we're excited about it okay historically I believe Medicaid has been around 65% of sublocate in terms of dispense using units is that right and then commercial is is the balance it was I'd say Medicaid's higher maybe closer to 70 The commercial was about 25%. And I think it's important to note Medicaid will always be the dominant payer for sublocate, but at 25%, we're clearly under-indexing relative to where we believe commercial should be.

Yeah. Okay. So then you're seeing improvements on the commercial side, which is fantastic. Fantastic. Can you comment on just sort of where pricing is between those two channels? I think Medicaid typically has the lowest price, so as there's a mixed shift in the business more towards commercial, could there just be a natural pricing tailwind? Right.

Exactly. So that's when Joe mentioned for every one percentage point gain in a channel mix, it's about $8 million on a full year. So Medicaid definitely typically has a higher level of rebates compared to commercial, so there is a difference in the net price per unit.

Can you comment on, like, how much of a difference on net price? You miss 100% of the shots you don't take. Okay, well, so you're seeing improvements in that part of the business, right? And the net price will be a tailwind as that eventually, you know, grows. Maybe it's 20% now, maybe 30, 40% is where it should be, but Medicaid is still going to be a big portion of that business. But in terms of actual volume, right, like when you talk with the prescriber, what's been the feedback from them last year, and how has that changed this year?

Yeah, so I don't think the prescriber feedback is changing. I think the behavior that has changed is the ability of our sales professionals to consistently articulate and educate the prescriber on the sublocate story, inclusive of the enhanced label. Physicians who have prescribed sublocate, their experience has been positive, and it distinguishes itself on its efficacy and the impact that it can make in the life of somebody struggling with OUD in their recovery journey. so if you look at market research one of the things we're encouraged by when we ask physicians what their future intent is they see themselves prescribing 30 percent more supplicate so the physician aspect i think we're in a very strong position we're seeing a pickup so more physicians are utilizing the accelerated second dose which was one of the label enhancements they're seeing positive impact with that so that's encouraging and the rapid initiation is clearly a differentiator in the eyes of the prescriber the key thing I come back to is the patient awareness was low and so we are seeing and our belief was in driving awareness and educating the patient and activating them to go have that conversation with a prescriber who understands sublocate and has had a positive experience with it is really what's starting to have impact so I am curious because you know there is another competitor in the market right and you are spending a lot on DTC on

raising awareness but at the same time you're also you know you know you're also using sublocate as a brand right so presumably that would be a little bit stickier right as you're driving more patients into the funnel there would be a preference towards sublocate is that what you are seeing or you know how should we think about that because like yes the long-acting category should grow with all these DTC efforts but should there actually be a preferential shift towards sublocate versus prexalty yeah look so with sublocate you have the first and number one prescribed product that for now seven quarters has seen stabilizing

market share in the mid 70% so obviously as we make those investments number one we're a patient centric company we want patients to be treated whether it's an oral whether it's sublocate which we believe is a differentiated long-acting injectable or the other LAI so our first focus is to the patient but obviously at the level we're investing and I've been clear we're investing beyond what our models suggest we should and we're committed to doing that for the next many years that's how strongly we believe in the importance of that that yes we as the market leader are going to get a disproportionate benefit in terms

of the brand at LAI and that's what we're saying understood okay so you know as you guys make progress on on that front right and you know what about suboxone like like that's another big portion of the business it sounds to me like there is some there is a benefit in terms of keeping that around as a way to funnel eventually funnel patients into supplicate should we expect I guess in terms of revenue on Suboxone this year for it to be flattish relative to last I appreciate that there are generics out there as well.

Yeah. I'll let Ryan comment on that. But the one point I want to make, we're not, Suboxone and transmucosal buprenorphine, of which it's predominantly genericized, is an important resource for physicians in the treatment of patients. my commentary is that's the source of long-acting injectable starts so that's where keeps the box zone was the leading branded product it serves as a tail product within our portfolio at this point and I'll let Ryan talk a little bit about how to think of its performance for the year yeah it's still you know the branded film product does compete against four generics it comes

down to the net price to maintain that access with the payers and what I would say there is that the pricing has been constructive and and you know reasonable since 2025 and even to the first quarter of 2026 so what we said is that you know our current projection is moderated share erosion on film and you know a stable pricing for the balance of the year okay typically when a generic player wants to uh you know erode price a little bit are there specific time points through the year where it would be logical for them to do it or they could just uh you know cut price whatever they want at their discretion they can do it anytime anytime okay but so far we're assuming to be clear

stable price in 2026 understood okay um so would love to talk a little bit around you know about medicaid right so some of this you know this uh you know medicaid funding and the expansion and all that stuff that's starting in 2027 there was a you know ruling that was disclosed yesterday or a draft or whatever you want to call it it does seem like there were some incremental uh additions to what's classified as substance use disorder relative to the earlier draft um so can you just share some of your thoughts on that and maybe opine on some of the nuances around early recovery, active recovery, stable recovery, and the potential impact to supplicate, if any.

Yeah, so look, big picture, we have felt the political environment, inclusive of the big, beautiful bill, was very supportive of opioid use disorder, of substance use disorder. So it was not something we were concerned about on a going forward basis to be candid with regards to the interim final rule it was much more positive than what we would have anticipated in particular around continuity of care so it has obviously maintained the frailty exemption which applies to people with opioid use disorder, substance use disorder. In the initial phase of 27, it's a patient attestation that will enable them to continue their therapy. We were not anticipating that. And when you then look at from a administration and claims data, we believe that's going to result in more continuity.

So big picture we think sublocate is well positioned we were very encouraged by that ruling and we expect sublocate to be a durable growth driver for the foreseeable future okay so you don't necessarily have a because you know this you know it does depend on how this gets implemented right and how much each individual states will have a say in this or like how they would implement it but there was some language around you know if you are considered in stable recovery meaning more than five years on treatment you wouldn't be considered medically frail so you wouldn't there wouldn't be an exclusion you know in terms of the workers requirement to you like what do you think about that specific part of the language do you think that could be an issue at all look I hope and pray every day that patients will get to five years and not be struggling with opioid use disorder.

The reality of sublocate, as an example, the average patient gets five injections. The data strongly suggests benefit at 12 months. So I think overall, when you look at the big picture, you have an accommodative, both at a federal and state level, and compassion to people who are living with opioid use disorder. Corporately, we advocate, we certainly hope, everyone who should get coverage with Medicaid gets that and if you take a big picture of the landscape in the United States 8 million people are misusing opioids 5 million people are diagnosed with opioid use disorder 2 million are being treated with buprenorphine there is abundant opportunity for us in doing the right thing by patients to have a durable growth driver and the ebb and flow of medicaid really minus the humanistic perspective of wanting everyone to have coverage is not going to impact our ability to realize what we're setting out to do with sublocate

understood um so you guys recently on q1 uh raised guidance just you know almost across the board so now we're looking at you know ebda in the 600s um but i guess you know as you look at the business Because if Sublocate does accelerate, and it seems like there's a scenario where it could accelerate faster than what you're saying, which is mid-teens, how much of that benefit would flow to the bottom line versus get reinvested in additional DTC and maybe even pipeline or BD?

Yeah. So we raised our revenue. We held our OPEX. The simple way to think of our OPEX, remember, post the pipeline decisions, we're currently winding down our R&D organization. We're continuing to do work from a G&A perspective. We're not where we need to be from a cost structure perspective. In 2026, the way to think of our OPEX guidance is if we identify things with the money that we're saving that we believe would drive sublocate in 26 or 2027 we will come to the high end of the guide to the degree that there aren't things that are worthy of investing in we'll let those dollars drop and come to the low end of the guide and what I can tell people sitting here today we are leveraging not growing our cost structure on a going forward basis so in 2027 we certainly aren't going to be above 450 million on the high end of the 2027 guide and we could potentially

be lower but the big picture is supplicate will continue to accelerate we will be leveraging not growing our cost structure and we will have additional margin improvement sure um and when you're talking about you know reinvesting supplicate and identifying opportunities like i guess what is exactly on the, you know, so to speak, menu, right, of things that you could continue to invest in.

Yeah, well, because there's another product in the category, I'm not going to get into what's on the menu specifically, but what I would say the likely area that we would be dialing up investment further would be around the consumer.

Okay, and that would be incremental to the magnitude of DTC that is already accounted for in your opex guidance yeah if we opted to do that okay yeah um and in terms of that level dtc spent um like how committed are you in terms of doing this for the next several years or would you use if would you do dtc for 12 to 18 months and then just kind of reevaluate like how are you thinking about that we're committed for the next many years okay and in my experience with dtc you have to be committed one to a relevant level of spend and then to a sustained level of spend it's not something that you pulse up and down so we're committed to it for

the long haul what is that relevant amount of spend in your eyes what is that relevant amount of spending yeah I'm not gonna get into spending and how much we're putting behind it the only comment I'll make there is we are over investing relative to what our models suggest because what we're not gonna do when you have a wonderful growth driver like sublocate that has the ability to transform people's lives and in the cool part and create value for the shareholders of endivier we're not going to look back five years from now and be disappointed and either where sublocate is or long-acting injectable penetration and the reason that we're not happy about where it is is because the leader in the space that make the investments to educate and drive awareness of long-acting injectables. So that's our commitment.

In the last three minutes, maybe we can talk about BD. You know, as you guys enter phase three, Joe, you mentioned there's this urgency, right? There's this urgency at Indivere to go out and look at assets.

So I guess, you know, high level, what is on your radar and how are you going to best leverage the the cost structure that you guys have developed yeah so first off I want to emphasize where we will urgently assess we will methodically and systematically execute because the reality is we don't have to do anything we have a strong durable business and a great growth driver and sublocate we also have a meaningful in our view disconnect between the intrinsic value of the company and where our shares are currently trading so as part of capital allocation we will continue to the degree that persists to buy back our shares and i think you know we just did a 175 million dollar accelerated share repurchase program from a bd perspective we are looking to enhance and diversify the growth profile of our business we're focused on commercial stage assets only we will be establishing a new strategic beachhead so it won't be OUD we're because of that we're generally therapeutically agnostic we wouldn't go into oncology gene therapy or things like that but we have a lot of flexibility we want differentiated brands we think that's critical to get reimbursement which is critical to commercial success we want runway in in front of these assets and the only comment I would make is the final comment is once we establish that new beachhead we want to make sure post integration that there are then assets to buy that we could leverage what would be a new commercial infrastructure understood so so it sounds to me like it could be something outside of substance use disorder it will definitely be so Okay.

And when you say diversify, it's not necessarily diversify away from Sublocate, but away from OUD and substance use.

Sublocate will be an anchor for this company for a long time. It's a long and durable growth driver. Part of our thesis is that as we enhance and diversify the growth profile of the company, not only will we find an economically good deal for our shareholders, there's the potential for multiple expansion. as we diversify the revenue beyond just the sublocate and OUD revenue that we have, which will also create value for the shareholders.

What would you view as meaningful in terms of the revenue contribution, either when you guys buy it at the time that you buy it or perhaps at the time of peak sales?

Yeah, so look, we factor in it has to be over $200 million peak sales potential. More so than targeting specificity around revenue, look, we have a strong balance sheet. We've been clear we'd be comfortable going up to three times leverage on the balance sheet. I would add any deal we do would need to be a creative the year we did it, if not year one, the following year. And I think one of the things that we prioritize is not just the additive impact to the top line, but we want to make sure that there's meaningful synergy when you're bringing the two organizations together as another way to create value for our shareholders.

Sure. All right. Well, I think that's all the time that we have today. Thank you so much, Joe and Ryan, for being here. And I hope you have a great conference. Okay. Thanks, Dennis.