Earnings Call Transcript - SCYX Q2 2022

Operator, Operator

Ladies and gentlemen, good morning, and welcome to SCYNEXIS, Inc. Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now turn the conference over to Ms. Debbie Etchison, Communications and Investor Relations. Please go ahead.

Debbie Etchison, Communications and Investor Relations

Thank you. Hello, everyone, and welcome to today’s conference call to discuss our second quarter 2022 financial results and corporate update. Before we start, let me remind you that today’s call will include forward-looking statements based on current expectations, including statements concerning our financial outlook for the future, leadership’s expectations for our future financial and operational performance, as well as our business strategy. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Please refer to our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and quarterly report on Form 10-Q, including in each case under the caption Risk Factors, in another document subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements speak only as of today, August 15, 2022. SCYNEXIS undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. The information on today’s call is not intended for promotional purposes and not sufficient for prescribing decisions. Joining us today’s call are SCYNEXIS President and CEO, Dr. Marco Taglietti; Chief Commercial Officer, Christine Coyne; Chief Medical Officer, Dr. David Angulo; and Interim Chief Financial Officer, Larry Hoffman. Following our prepared remarks, we’ll open the call to your questions. Now, I will turn the call over to Dr. Marco Taglietti, President and CEO.

Dr. Marco Taglietti, President and CEO

Thank you, Debbie. Good morning, everyone. Thank you for joining us today for our second quarter of 2022 earnings investor call. Things are moving forward nicely here at SCYNEXIS. We are now one of the leading standalone anti-infective companies, a sector marked by unpredictability and utmost urgency. We built a solid track record in drug development by achieving not only the approval of the first new class of antifungals in over 20 years, but by continuing to progress toward expanding the labeling and the use of ibrexafungerp. We launched ibrexafungerp under the brand name BREXAFEMME last summer, and we have seen a steady adoption of BREXAFEMME despite the headwinds of the macro environment. Finally, we are well capitalized to execute on our goal of building a broad, long-lasting antifungal franchise. And we have a number of upcoming catalysts in 2022 and beyond. We continue to move SCYNEXIS onward. Let me briefly summarize a few key accomplishments of the second quarter. The FDA has assigned a November 30, 2022 PDUFA date for our supplemental new drug application to expand the labeling of BREXAFEMME to include the recurrent VVC indication. If approved for this second indication, BREXAFEMME will be the only anti-fungal approved for both the treatment of VVC and prevention of recurrent VVC. This is a critical piece of our commercial strategy to build additional confidence with both payers and prescribers and drive increased prescription growth. We have also started the Phase 3b VANQUISH study of oral ibrexafungerp in VVC patients who don’t respond to fluconazole treatment. The goal of this trial is to further demonstrate ibrexafungerp’s efficacy in treating the most challenging VVC patients. With regard to hospital indications, enrollment has started for the MARIO study in invasive candidiasis with top-line results expected in 2024 and the potential approval by the end of 2024. Dr. David Angulo, our Chief Medical Officer, will provide you more details on this program and the positive results to date. Our first commercial product, BREXAFEMME, ibrexafungerp tablet, which SCYNEXIS launched in September 2021, achieved over 5,100 prescriptions and reached net revenues of $1.3 million in the second quarter of 2022, nearly double of what we did in the first quarter. We are excited by this progress as we work toward achieving our mission to meet the significant unmet needs in women’s health today and beyond. Our Chief Commercial Officer, Christine Coyne, will provide more details on our commercial plans going forward. On the corporate side, we closed the second quarter of 2022 with more than $118 million in cash, having raised successfully $45 million in April, despite the challenging times in the market. We continue to have a solid cash runway into the first quarter of 2024. This cash is expected to support our refreshed commercial launch in recurrent VVC in early 2023. We also have the resources to complete our hospital programs to enable additional regulatory filings in 2024. Larry Hoffman, our Interim Chief Financial Officer, will provide more details on our expenses and cash balance. And then, we will open the floor for a Q&A session. Now, I would like to turn the call over to our Chief Commercial Officer, Christine Coyne. Christine?

Christine Coyne, Chief Commercial Officer

Thank you, Marco, and good morning. It is wonderful to be here this morning to update you on our commercial progress. As Marco stated, our commercial organization is evolving, and I am excited to share more details. First, based on a tighter focus and sharper execution, we enjoyed significant quarter-over-quarter growth of 29% in total BREXAFEMME prescriptions in the second quarter of 2022. Key measures are trending according to our expectations, including growth in demand, new and repeat prescribers, and payer coverage. We will address each of these in more detail. As I previously stated, we are pleased but we are not satisfied. Given all we have learned over the last year from our prescribers and their patients, we are certain that we can achieve more. During this phase of our commercialization, we have created strategies to optimize our execution, prepare for the anticipated approval of the prevention of VVC indication, and enhance the HCP and patients Say No More campaign. These plans will set us up for continued success. The most significant opportunity for BREXAFEMME continues to be the treatment of VVC. Additionally, with the anticipated approval of our sNDA, BREXAFEMME will be the first and only therapy to both treat and prevent VVC, and is on track to have the broadest VVC indication. We expect that a broader label will expand prescriber confidence in BREXAFEMME along with wider utility of BREXAFEMME. Over the last several quarters, we have continually grown the number of BREXAFEMME prescribers. In quarter two, over 2,200 HCPs prescribed BREXAFEMME, representing an increase of 25% quarter-over-quarter. Our focus is to continue broadening our repeat prescribers while we continue to expand new prescriber use of BREXAFEMME with a broader range of patients. BREXAFEMME prescriptions continue to grow over the last quarter. We generated over 5,100 prescriptions in the second quarter of 2022 alone, representing a solid 29% growth over the first quarter of 2022. The second quarter prescription growth was driven by more focused field execution, sharper focus on high yield customers, more effective sales calls, and accountability paired with our new HCP marketing campaign and rapid relief messaging. In our recent HCP research audit and regional advisory boards, HCPs continue to report to us that they intend to use BREXAFEMME for their patients instead of fluconazole and other competitors. This feedback has continued to grow wave over wave as we strengthened and increased the frequency of our promotion. And we will continue to track these insights. We remain focused on our ambition to help VVC patients who are waiting for a new solution by disrupting the decades-old habit of using generic treatment and establishing BREXAFEMME as a gold standard for VVC. By the end of the second quarter of 2022, we successfully garnered coverage of more than 109 million commercially insured lives, representing 60% of the commercial universe. We will continue to sharpen our sales execution efforts to support HCPs in prescribing BREXAFEMME for women within these plans. Payers continue to see the value of BREXAFEMME and are motivated by its differentiating benefits, especially that it is fast and effective in curing VVC. During the last call, I shared with you our Say No More HCP and patient campaign. The campaign debuted at the American College of Obstetricians and Gynecologists annual clinical and scientific meeting in May with premier booth presence and surround media drivers. Our HCP awareness tactics have had an impact and increased website traffic in quarter two. The paid search advertising of our HCP media campaign has outperformed industry benchmarks and has generated over 24,000 clicks and 709,000 impressions in a highly competitive market. This further confirms that once HCPs hear about BREXAFEMME, they are motivated to learn more about a one-day treatment for their patients. Targeted patient activation advertising launched in June with tactics across multiple channels, including print and digital, all driving patients to ask their HCP for BREXAFEMME. The new patient advertising has increased site traffic to brexafemme.com, and all programs have exceeded industry benchmarks. As this is our first foray into traditional patient outreach, we are delighted to see these results, but there is more we must learn to optimize our efforts here. Recently, we conducted market research with patients to explore the topic and treatment of VVC. Here’s some of the feedback we received: excitement about having a new prescription treatment option for vaginal yeast infection, confirmation on the directness of the campaign and messaging that normalizes this topic and makes it easier to discuss vaginal yeast infection, and interest in the efficacy plus the ease and simplicity of the dosing schedule. Looking ahead to quarter three, we are executing additional exciting new patient programs that will continue empowering women to ask their HCP for BREXAFEMME. These programs include a custom BREXAFEMME ad that we’ll be playing during the Oprah Winfrey Super Soul podcast for 3 months. This podcast is expected to deliver 4.2 million impressions to our targeted audience in quarter three. We have also partnered with both national and local pharmacies and grocery stores across the country to place BREXAFEMME shelf display ads in their stores. This initiative is built to educate and empower consumers seeking information about yeast infection treatments while they are shopping for over-the-counter products. These shelf advertisements will be placed proximal to the over-the-counter vaginal yeast infection treatments, such as Monistat, and will drive consumers to ask their HCP for BREXAFEMME. We also will be rolling out a new patient video that will be placed on Hulu, YouTube, and other programmatic partners as well as in targeted OB/GYN waiting room monitors. This initiative will garner over 19 million impressions and activate women to ask their HCP if BREXAFEMME is the right treatment option for them. These focused prescriber and patient efforts complement the groundwork of our SCYNEXIS National Sales Director, whom we brought on in May, who has focused on increasing the effectiveness of our sales force effort and maximizing their impact. Over the past year, we have learned which HCPs are motivated to prescribe BREXAFEMME and where there is opportunity. Our sales team will continue to focus on these high-value HCPs. We have optimized the number of targets per rep and equipped our sales force with the necessary tools to be successful. There is a large opportunity and significant unmet need in VVC, and we’ve continued to grow quarter-over-quarter. We have momentum going into the third quarter paired with a solid strategic plan. I’m delighted with the efforts of the field team and our field leaders and our national sales leader. But there is much more work ahead, and I look forward to continuing to update you on our progress. Thank you. And I will now turn the call over to David.

Dr. David Angulo, Chief Medical Officer

Thank you, Christine. We have continued making progress towards a vision of developing ibrexafungerp for the treatment and prevention of multiple fungal infections. Earlier this year, we submitted a supplemental NDA for the indication of prevention of recurrent VVC. And as recently announced, we received notice from the FDA that our application was accepted and granted priority review with a target regulatory decision date of November 30th. This submission was based on the positive results from our Phase 3 study CANDLE. As previously reported and recently presented in more detail at the Infectious Disease Society of OB/GYN meeting in Boston, the CANDLE study met its primary endpoint with 65.4% of RVVC patients treated with ibrexafungerp achieving clinical success with no recurrence at all, either culture-proven, presumed or suspected, after treatment with ibrexafungerp. Ibrexafungerp also achieved a statistically significant superiority over placebo in a key secondary endpoint, including non-mycologically proven recurrence in 70.8% of patients. As the only fungicidal oral treatment for vaginal yeast infections, ibrexafungerp continues to demonstrate its ability to not only treat acute infections but also prevent recurrences of the disease. If this second indication is approved, BREXAFEMME will be the first and only product approved in the United States that is indicated for both the treatment of VVC and the prevention of recurrent VVC. One important attribute of ibrexafungerp is its activity against fluconazole-resistant strains, and we are generating data to better define how VVC patients failing fluconazole treatment respond to ibrexafungerp. In the CANDLE study, the patients needed to have an acute VVC episode at the time of enrollment. The acute VVC episode was treated with three doses of fluconazole on days one, three, and seven. The patients who resolved their acute episode after fluconazole treatment were then included in the main study to evaluate prevention of recurrence. However, those patients that did not resolve their acute VVC episode with three doses of fluconazole could not be enrolled in the prevention of recurrence phase of the study and were offered a single day of ibrexafungerp treatment, 300 milligrams BID in a nested sub-study. 24 patients were included in the nested sub-study and 10 of them, besides having persistent signs and symptoms of VVC after fluconazole treatment, also had documented persistent positive cultures. The majority of these patients responded well to one day of treatment with ibrexafungerp, with 71% achieving a substantial reduction or complete elimination of signs and symptoms. This positive trend was also confirmed in the subset of subjects who, in addition to having a clinical failure, also had persistent positive cultures after fluconazole treatment. Favorable clinical response after a single day of ibrexafungerp was reported in 8 of 10 subjects, 80%. The response to ibrexafungerp in this clinically challenging population is in line with the response rates observed in the broader VVC population included in our VANISH trials, illustrating the wide range of VVC patients that could benefit from ibrexafungerp, encompassing multiple scenarios within the spectrum of the disease from uncomplicated to more challenging clinical cases. We hope to expand upon these data with the recently announced Phase 3b VANQUISH study, which is aimed to further evaluate ibrexafungerp as a VVC treatment for patients who have failed treatment with fluconazole, including those in specific populations, such as immunocompromised patients. The VANQUISH study will be conducted in approximately 25 centers in the United States, aiming to enroll 150 subjects, and we are targeting to have data from this study in the second half of 2024. In addition, we continue making progress in our development programs in the hospital setting. We have already reached our target enrollment of 200 subjects in the FURI study and will soon begin study closure activities to enable completion of the follow-up of all cases by the first half of next year. This will be followed by the data Final Data Review Committee review and the reporting of the final data, which we anticipate as early as in 2024. The CARES study will follow a similar timeline. As a reminder, the CARES and FURI studies are evaluating ibrexafungerp in patients with Candida auris and other refractory fungal infections. The Synergia study has continued enrolling patients, although slowly. We are planning to complete the study and analyze the available data by the end of this year. Also, the number of patients may be smaller than initially projected. The data from this Phase 2 study, even in a smaller number of subjects than anticipated, will guide potential next steps for these development paths. Enrollment has begun in MARIO study, which is evaluating ibrexafungerp in patients with invasive candidiasis. The startup process is progressing well with multiple sites already open in the United States and South Africa, and many other sites and countries will open soon. As previously guided, we are anticipating completion of the study by the end of next year. As mentioned previously, the data from the MARIO study, along with the data from FURI and CARES studies, are intended to be supportive of an NDA submission in 2024 with an anticipated first approval for an indication in the hospital setting later that year. Also, after the completion of the Phase 1 study with the liposomal IV formulation of ibrexafungerp, we are compiling the data to enable a discussion with the FDA regarding potential development paths for this formulation. We are targeting to have this consultation by the end of this year.

Larry Hoffman, Interim Chief Financial Officer

Thank you, David. BREXAFEMME increased its net product revenues from $700,000 in the first quarter of 2022 to $1.3 million in the second quarter of 2022. R&D expense for the second quarter of 2022 increased to $7.1 million from $4.7 million for the second quarter of 2021. SG&A expense for the second quarter of 2022 increased to $15.8 million versus $12.8 million in the second quarter of 2021. The increase was driven by an increase in costs recognized to support the ongoing commercialization of BREXAFEMME. Total other income was $8.4 million for the second quarter of 2022 versus total other income of $15 million for the second quarter of 2021. During the second quarter of 2022 and the second quarter of 2021, SCYNEXIS recognized non-cash gains of $9.7 million and $15.3 million, respectively, on the fair value adjustment of warrant liabilities and non-cash gains of $200,000 and $500,000, respectively, on the fair value adjustment of derivative liabilities. Our cash balance is strong. Cash and cash equivalents in the second quarter totaled $118.7 million on June 30, 2022. That compares to $112.4 million on June 30, 2021 versus $104.5 million in cash and cash equivalents on December 31, 2021. Based upon our current operating plan, SCYNEXIS believes that its existing cash and cash equivalents and the anticipated sales of BREXAFEMME will enable us to fund our operating requirements into the first quarter of 2024. I will now turn the call over to Marco for his final remarks.

Dr. Marco Taglietti, President and CEO

Thank you, Larry, Christine, and David. Before we open the call to Q&A, I want to reiterate a few key points. We at SCYNEXIS are diligently working to realize the significant potential for ibrexafungerp as a successful, durable, and profitable antifungal franchise. We have a PDUFA date in recurrent VVC on November 30th as well as a planned readout of our Synergia data at the end of the year, and additional data collection from our FURI and CARES programs. We plan to provide updates on our progress in MARIO, which we believe can be leveraged to build a strong and differentiated hospital brand. All these indications, when taken together, would create a franchise with a potential to generate $700 million to $800 million a year in net sales in the U.S. alone. Operator? Please open the floor for questions.

Operator, Operator

Our first question comes from Luis Chen from Cantor Fitzgerald. Please go ahead.

Carvey Leung, Analyst

Hi. Good morning, everyone. This is Carvey on behalf of Louise from Cantor. Congrats on the quarter. A couple of questions here. First, we’re looking forward to your PDUFA date in November. As we are approaching that date, can you talk a little bit about the added market opportunity that it will be enabling post-approval? Secondly, it’s almost been a year since the commercial launch of BREXAFEMME. Can you highlight additional color on physician feedback from the community? Also, what level of coverage are you targeting by the end of this year? Thank you so much.

Christine Coyne, Chief Commercial Officer

Thank you for the question. The additional indication for recurrent VVC will provide our field teams with many opportunities to approach physicians again with further data that will be beneficial to them and their patients. After a year of collaboration with physicians, we have refined our target list to focus on those with the most potential, which includes the RVVC indication. New data is always valuable both for physicians and patients but also enables our representatives to present fresh information and make their sales calls more engaging. Regarding BREXAFEMME and physician feedback, we continue to receive very positive responses across all areas of intake. Our representatives offer feedback from various unbiased sources, including ATU, trial and usage panels, and market research. Overall, the feedback indicates that physicians find BREXAFEMME easy to use, appreciate the one-day dosing, and value the rapid relief of symptoms. Your last question was about coverage. Currently, we are at 109 million patient lives, approximately 60% of the commercial universe, and our target for 2023 is 65%. We are in the right range and may even be ahead, but we have to remain grounded until everything is finalized. Does that help?

Carvey Leung, Analyst

Yes. It was super helpful. Thank you so much. And congrats…

Dr. Marco Taglietti, President and CEO

If I could add, there is no better feedback than seeing how many doctors, after 25 years of using fluconazole, actually become repeat prescribers. I don’t think there is any better feedback than observing a doctor prescribing BREXAFEMME multiple times.

Operator, Operator

Thank you. Our next question comes from the line of Michael Higgins from Ladenburg Thalmann. Please go ahead.

Farhana Sakloth, Analyst

This is Farhana on behalf of Michael. Congrats on the great quarter. We have two questions. The first one is, could you provide a little bit more color on the timing of your discussions with the FDA for the Phase 1 data for the IV formulation?

Dr. David Angulo, Chief Medical Officer

Thank you for the question. This is David. We have completed our Phase 1 study, and the results were very positive. The drug formulation was well tolerated, and we achieved our target exposure. We are currently compiling all the relevant information and data from that study, along with our toxicology program, to create a comprehensive study package. This will help us understand what will be required by the FDA to integrate this formulation into our development program and to identify a fast track for approval, which we believe should be abbreviated. We are preparing to have discussions with the FDA based on this new data, and we have previously had conversations with regulatory agencies on our intravenous formulation development. We are confident that with these results, we will be well positioned for productive discussions to outline a clear development path and expedite the inclusion of this new formulation into our program.

Farhana Sakloth, Analyst

And the second question that we had was when can we expect data from the FURI and CARES studies? Is it safe to say around the first half of 2023?

Dr. David Angulo, Chief Medical Officer

We have indicated that the data submission is scheduled for 2024. We plan to conclude the FURI study by the end of this year, but it's important to note that the treatment duration for patients in the study may be lengthy, so we need to allow them to complete their treatment. Our goal is to finish all activities so that every patient has their final treatment visit during the first half of next year. After that, we will begin compiling the data and conducting data review committee meetings to ensure that the data is ready. The data should be available in conjunction with the data from MARIO, allowing us to combine all the information for a regulatory package. That is our current plan. As always, if we find a way to expedite this process, we will inform you should we have the data available sooner than anticipated.

Farhana Sakloth, Analyst

Okay, great. Thanks. And could you also just remind me for the VANQUISH study, do you have any timing for when that is expected to read out?

Dr. David Angulo, Chief Medical Officer

Yes, we are currently in the process of reinitiating all the centers for the VANQUISH study. We expect enrollment to take around 18 months, which means we anticipate having the data sometime in 2024, likely in the first half of the year.

Farhana Sakloth, Analyst

Okay, great. Thank you so much for taking our questions.

Dr. David Angulo, Chief Medical Officer

Sure. Thank you for the question.

Operator, Operator

Thank you. Our next question comes from the line of Oren Livnat from H.C. Wainwright. Please go ahead.

Oren Livnat, Analyst

Thanks. I have a few questions. To start with the BREXAFEMME commercial situation, could you provide an overview of the coverage, which you mentioned is at 60% of lives, and what kind of copays women are dealing with at the pharmacy? What assistance are you providing, both financially and in terms of helping OB/GYNs and practices obtain approval for these prescriptions? What challenges are they encountering with prior authorizations or step edits related to fluconazole? Most women have likely tried fluconazole, so I’m interested in the experience of their physicians. Additionally, are you continuing with the Say No More DTC promotions? I would like to know about your investment levels moving forward. You mentioned several new initiatives with podcasting and in-store displays; where do you anticipate SG&A trends will head in the future? I also have a separate follow-up.

Christine Coyne, Chief Commercial Officer

Thank you, good morning, Oren. It's Christine. I appreciate your question. Regarding the copay ranges, after a year, we have gathered a lot more data and observed a wide variety. Insurance carriers offer many different benefit designs, so we see out-of-pocket copays for patients ranging from $5 all the way up to $600. Most of our patients fall within the $30 to $50 out-of-pocket range, which is favorable because our research indicates that this is an acceptable range. We also offer a copay card to assist those who are cash or commercially insured but are not on formulary or lack coverage. This card can reduce copays to the $30 range, and we still have those programs in place. You inquired about advertising investments, which I will address later. From an SG&A perspective, as we move into the second year, we are continuing to collaborate with commercial payers to improve our formulary position and gain inclusion, which will gradually phase out the copay programs. Therefore, you will notice trade-offs in SG&A. Does that clarify the copay situation? I can proceed to your next question.

Oren Livnat, Analyst

Yes.

Christine Coyne, Chief Commercial Officer

I want to mention our progress with payers as we prepare for the VVC. Our national account team has done an excellent job positioning us, and I want to emphasize that payers are not always focused on our science or technology. The advancements from ibrexafungerp, particularly with RVVC, have created opportunities for our national account team to engage in discussions that enhance our overall positioning, improve access, and introduce the RVVC indication. This strong positioning is not guaranteed in a drug launch, and we’ve achieved an important milestone here. Regarding investment levels, we began implementing patient advertising this summer, which includes direct-to-patient initiatives. In my prepared remarks, I mentioned advertising in waiting rooms where patients are present. This strategy is particularly effective in OB/GYN offices, as patients who are about to see their doctor may not know how to communicate their concerns. We have advertisements for BREXAFEMME running in these settings, encouraging patients to discuss vaginal yeast infections and introducing them to our new product. This direct-to-patient approach is promising, as we experienced success in Q2 when our National Sales Director improved execution in targeted offices. By combining patient advertising in these same locations with our focused sales efforts, we anticipate fruitful outcomes. On the consumer side, I referred to our advertising initiative in my prepared remarks. We have introduced promotional materials in local and national drugstores and pharmacies. For instance, if someone is looking for Monistat, they will come across our shelf talkers in specific locations. This strategy allows us to engage motivated consumers who are contemplating a purchase to address their needs. However, it is important to note that this process involves several steps, as the consumer will ultimately need to consult with a doctor. I look forward to updating you on the outcomes of these initiatives, as I expect to see varying levels of success from both approaches. We will evaluate the results and consider reallocating SG&A resources based on where we see the best returns.

Dr. Marco Taglietti, President and CEO

Right now, in terms of SG&A expenses, we are maintaining them at a flat rate. Christine and her team are continually evaluating how to allocate resources to maximize returns. We continue to assess initiatives for potential reallocation, but we will keep SG&A flat and look for opportunities to improve it as we move forward.

Oren Livnat, Analyst

All right. And if I can be greedy on time, are you hearing any feedback from the community, KOLs or otherwise with regards to the approval of Mycovia’s product? I don’t think it’s launched yet, correct? But presumably, there is some awareness out there, and I’m wondering what kind of initial feedback you are hearing.

Dr. Marco Taglietti, President and CEO

Mycovia has received approval, but it comes with very restricted labeling because it has an extremely long half-life, meaning the drug remains in the patient's body for almost two years after treatment ends. The FDA has limited its use to women who are permanently sterile or postmenopausal. Despite these limitations, we see a positive aspect in this launch, as the product has been priced and is available through specialty pharmacies, although not retail pharmacies. Additionally, it reinforces that there are alternatives to fluconazole. We believe that once we receive our approval without similar restrictions, we will be in a strong position to offer a product that effectively addresses recurrent VVC without the associated risks of Mycovia. Overall, it's a positive development after 25 years in treating vaginal yeast infections, and we hope for the best for Mycovia as they highlight the availability of alternatives.

Operator, Operator

Thank you. Our next question comes from the line of Kumar Raja from Brookline Capital Markets. Please go ahead.

Kumar Raja, Analyst

Thanks for taking my questions. With regard to the liposomal formulation, how quickly will you be able to start a trial following the interaction with the FDA, and how should we think about these trials?

Dr. David Angulo, Chief Medical Officer

I would say we will start soon, although I can't provide a specific timeline. The manufacturing components are ready, so once we finalize the design of the study, we can quickly initiate implementation. I'm anticipating that we will need to conduct a preliminary Phase 2/Phase 3 trial, but that depends on our discussions with the FDA. We need to assess the product in patients to understand tolerability, having already tested it in healthy volunteers, and then broaden the evaluation to ensure we gather enough safety data. We aim to discuss these aspects with the FDA, and we are hopeful that the information we currently have will help us reach a reasonable and efficient development agreement.

Kumar Raja, Analyst

And with regard to the BREXAFEMME label expansion, what are the expectations of timelines for payer negotiations? And what are the expectations in terms of copay in that setting? And also, you touched on SG&A, how should we think about SG&A for the later part of the year, once potentially BREXAFEMME gets approved in the new indication? Thank you.

Christine Coyne, Chief Commercial Officer

Hi Kumar, it’s Christine. Thank you for the question. Payer negotiations have begun months ago. So, we’re always in conversations; the national account directors are always in open conversations with their customers. That’s one of the strengths of our team out there. And so, when appropriate, they brought in information to start to talk about where we’re going next with the ibrexafungerp molecule. And they’ll continue doing that, Kumar, throughout the rest of this year going into next. The other question was on SG&A, Kumar as it relates to the second indication, is that correct?

Kumar Raja, Analyst

Yes. Regarding the new indications, what are the expectations for copay, and how quickly can you achieve that? Currently, you have around 60% covered lives; how soon can you reach that in the expanded indication?

Christine Coyne, Chief Commercial Officer

Yes. I mean, again, the national account guys will have to conclude their conversations with the customers to see exactly how the payer is going to look at it, right? That’s why we started these conversations so early in the year. I think we will be directionally aligned as it relates to the copay that we discussed earlier. So, we’ll have to wait to see, Kumar, how exactly the payer treats the second indication. But again, we’re well out ahead of it, they love the molecule. It’s a different class. So, we’re in a really strong position there. And then, your last question was on the SG&A? Yes. I think, Kumar, you’re looking for kind of the balance between the two indications and promotion. So, our marketing team already is developing materials that will have both of the indications in the materials, so the field sales representatives can have the conversation about both indications. And there’s a lot of synergy in that discussion, which is really great because it makes the sales call much more efficient but also valuable to the doctors. Sometimes you get a second indication and it’s like totally different than the first indication, but this one has a very nice story, as we said earlier about BREXAFEMME being the first and only treatment for vaginal yeast infection that both treats and prevents VVC. So, there’ll be some very nice conversations in the doctor’s office with the reps. So, the SG&A will stay as it is right now because we’ve already accounted for that. And the marketing teams are already well on their way developing these materials, Kumar, because we’ll execute on this in the first quarter of next year.

Kumar Raja, Analyst

Okay. Finally, if I may sneak in, how should we think about going forward with regard to COGS?

Dr. David Angulo, Chief Medical Officer

We are always looking for ways to optimize our cost of goods. As we increase our production and sales, we create opportunities for larger production batches and potentially lower our costs. With ongoing market expansion and clinical development, we have much more favorable conditions to reduce our COGS. This trend is expected to improve as we continue to manufacture more. So, we anticipate continued progress in this area. That's what I can share with you at this moment.

Kumar Raja, Analyst

Okay, great. Thanks so much.

Operator, Operator

Thank you. Our next question comes from the line of Steve Brozak from WBB Securities. Please go ahead.

Steve Brozak, Analyst

Yes. Thanks for taking the questions. Most questions have been asked and answered, but I do have two. Can you remind us what the number of visits and number of scripts the typical patient has had so far? And I would imagine the number of scripts would have been specifically around fluconazole. But, can you just refresh us with that and I’ve got one more question after that, please.

Dr. Marco Taglietti, President and CEO

Yes, if I can start. Steve, as we have shown actually in some of our material that we have shown over time, about 40% of the patients receiving a prescription of fluconazole actually need another prescription. And actually you have about 20% of patients requiring three, four, five, or even more prescriptions. Of course, many of these repeat prescriptions will also require additional visits to a doctor. So, I think you are clearly highlighting one of the major concerns that has been so far with the treatment of fluconazole that probably due again to its mechanism of action, which is fungistatic and not fungicidal like BREXAFEMME, you have patients where some candidates will survive a treatment. Of course, patients may feel short-term improvement but then can start to grow again, because it has not been completely killed. So, I think that you are raising a very good point. And I think that probably this is one of the reasons why the doctors have been really very pleased with the treatment of BREXAFEMME. And now, I would ask maybe Christine to see what has been the feedback from doctors about this issue of patients who have multiple failures to fluconazole and use BREXAFEMME.

Christine Coyne, Chief Commercial Officer

Yes, thank you so much for that. Hi, Steve. It’s Christine. What we’re hearing from the doctors is consistent with what we've been discussing for a while now: they don't like to see their patients return, as it's not beneficial for them or for the patient. What excites the physicians is that BREXAFEMME addresses this situation and provides early symptom relief. Patients are satisfied, and doctors are not receiving callbacks or having patients return for additional products or remedies. Additionally, I observe that our physician customers experience relief because, without options, as we mentioned during the launch, they are often limited to what they have, like fluconazole or other treatments that may not be ideal. This has led to discomfort and anxiety among physicians for their patients since they couldn’t offer alternatives. BREXAFEMME has helped alleviate that concern, resulting in a very positive response.

Dr. Marco Taglietti, President and CEO

Thank you, Christine. I would like to highlight an important point regarding BREXAFEMME’s ability to help patients who have not responded to multiple doses of fluconazole. We now have solid data from the CANDLE study showing that patients who received three doses of fluconazole, which is three times the approved dosage, did not see improvement. However, over 70% of these patients responded positively to just one day of BREXAFEMME. This is beneficial for patients, as their issue is finally addressed; for doctors, since it reduces the frustration of seeing patients repeatedly returning for the same problem; and for payers, due to a decrease in patient numbers. With new data and the upcoming VANQUISH study, we are optimistic about further confirming that BREXAFEMME is an effective option for patients who do not respond to fluconazole.

Steve Brozak, Analyst

I appreciate that carryall answer and the detail. Last question, your approach with an Oprah-like audience is fascinating, but I do have on the other side of the spectrum, what inroads and what have your thoughts been around things like concierge medicine? Because obviously it’s one of those things where you start to see the practical clinicians that are going out there and taking care of their patients on a more personal, on a more focused level? What kind of inroads have you made there, if any? And what are your thoughts around that? And I’ll hop back into queue. Thank you.

Christine Coyne, Chief Commercial Officer

Yes. Thanks, Steve. Yes. There’s verticals; they’re very interesting and they do have their strengths to them. What I would say to you at this time is our marketing team has looked at a few of them and continues their evaluation of them. And as I said earlier, I think I was talking to Oren, we really have to be mindful where we put our money to make sure the return is there. So, I would say to you, Steve, our evaluation is not complete on that as of yet. And if it becomes something that is a tool for us, obviously, you’ll hear us speak of it, but to be continued at this point. Thank you.

Operator, Operator

Thank you, ladies and gentlemen, we have reached the end of the question-and-answer session. I would now like to turn the conference over to Mr. Marco Taglietti for closing comments.

Dr. Marco Taglietti, President and CEO

Thank you very much to everyone for listening to our teleconference. I want to make a brief statement that we remain very optimistic about the potential of BREXAFEMME and ibrexafungerp as a significant antifungal franchise. We also see a bright future for SCYNEXIS, as we have the resources to achieve our plans. Thank you, and have a wonderful day.

Operator, Operator

Thank you, sir. Thank you. The conference has now concluded. Thank you for your participation. You may all disconnect your lines.