$ACRX EARNINGS CALL Live w/ Viewers

Their report is in. I haven't opened it yet. I was waiting for you guys to do so.

Um, okay, all right, Lolo, let's see Millennial do that with like real money, okay? I want to see him do that with half a mil. I want to see him half a mil his fortune. Into $1,100. I want to see him dump $100K into ACRX and move it. I would love to see that.

I want to see that too, now that you mentioned it.

Uh, let's be honest, if I had $100K, I wouldn't be in ACRX. I'd be in Biogen, and you know it.

Weird, weird.

Oh, weird.

It's like it changes.

The whole strategy is different when you have more money is how it goes.

Yes.

Nobody's ever— nobody has ever contested that. I remember someone telling me once, it's like, yeah, you know, the reason why I'm so wealthy is that I don't buy cheap shit. I buy expensive shit. Starts out— Win small. As you get big, win big.

So I'm just, huh?

Okay.

Interesting.

ACRX results are in. Let's see how we did.

Daniel, how he blew up an account. I didn't blow up.

He doesn't consider it blown up.

Oh, good.

He said he had a Or was it $100?

And I got pregnant because someone slipped and fell with his dick out. Yeah, okay.

I don't consider taking a $500 option account into $100 and then bringing it back a blown up account. I don't. In an options account with $500, my mind blown up is it's gone. The 3rd quarter represented one of ACRX's most active and successful quarters Since 2012.

Why'd you read it like that?

Down 7.2%.

Millennial did the thing that Redemption is, is, is criticizing a certain someone about. So get off my nuts.

By the way, Teeny, yeah, but I don't know that guy.

He's just some schmuck that I started reading and said that this math doesn't add up. The, the reason why I'm criticizing him is because that dude is showing like, you know, saying that he has 200x, 200% something growth or whatever, but there's like literally no basis for that.

There's—

it's just all over the goddamn place. Uh, Lionel didn't add— re-add to his positions in— sorry, he didn't re-add to his accounts, not like this guy did. Um, ACRX, uh, ACRX last quarter did $0.3 million in product sales. This quarter, $1.4 million.

Excuse me.

Virgin Galactic misses. Shocker, they're not selling anything yet.

I hate this shit. It's like clockwork. You, you tell one telemarketer to take you off of the do not or put you on the do not call list, and then 5 minutes later you have another telemarketer calling you. It's just, what the fuck?

Um, How are earnings? We're waiting. We're gonna go into the earnings call at 4:30. So it's about 15 minutes out here.

I don't know what I need to do. But all of a sudden, when I got a new number with my dad, I just started getting a fuck ton of spam calls and people trying to buy my land that I do not own. Yeah.

What carrier do you have?

AT&T.

Uh, get RoboKiller for your iPhone. It's pretty good. And then a Google Voice number and just give everyone that isn't, um, like friends and family, their Google Voice number.

Nice.

Yeah, T-Mobile spam block is clutch.

I'm trying to tie— I'm going to be switching carriers soon because I want to get off my dad's and be Solo dolo, but T-Mobile's worth a fuck.

I like them a lot.

If your dad— if your dad wants to keep you on there, I would keep on there. If he's gonna pay for it, let him pay for it. Yeah, I remember when people asked me about financial advice, they're like, I really should move out of my parents' house. I was like, Fuck no, bro. That's every dollar you can put into your fucking 401 early in life. You know, that thing's gonna be like 10 times its size when you retire.

Yeah, just move out when you retire.

I put a quarter of my first Microsoft paycheck into my 401 when I was 19. Everybody thought I was stupid. I was like, I'm living at home, I don't need it. Then I moved out. Everything changed.

Yep, it does.

Okay, I didn't really move out, I got kicked out, but still, I'm gonna say I moved out.

The initial quote is, 3rd quarter represented one of our most active and successful quarters since Tasuvia's approval. We've made significant progress revenue growth strategy highlighted by oral and dental surgery.

Oh, AJ, what did you buy?

Oh no.

Okay, so the initial note is, uh, 3rd quarter represented one of our most active and successful quarters since Dasuvia's approval. Made significant progress on revenue growth strategy highlighted by oral and dental surgery collaboration with Zimmer Biomet. So we knew about that before. In addition, Dasuvia's Department of Defense— so their DoD JDF, we knew about that with the new Army contract. Recent publication of data supporting that's what they've been pumping and seeing sales on. The rate. Okay, so the two big things here. These are the big things that we're going to be watching for on the earnings call, and I'm not just talking to my my stream. I'm talking to anybody that's in the Discord that's interested in ACRXs. The rate of scheduled formulary reviews is big, and the progress with the DOD. They expect initial ordering of Desuvia for deployed troops. In the fourth quarter. So those are the two big things that we got to listen for on the call is which formularies are they talking to? At what pace did they see those formularies coming on board? And the order from the DOD.

I feel like AJ planned that.

Karim Big Dreams, thanks for following, man. Much appreciated. 4th quarter is from October to December.

Should I do it? Well, he's gonna be really mad if I say this. You ready?

Yeah, say it.

He's gotta come off mute because then he isn't talking to his chat. I gotta check TOT.

Sorry, what do you want to say?

Oh, they went down a bit. But Millennial, why should we listen to you? It's not your play.

That's true.

You wouldn't know anything about it. You haven't been watching it since the beginning.

How do you sub? Uh, on Twitch there is a button next to follow that says sub.

I bet you his, his cost average has to be like a quarter or something like that.

Like, uh, no, I have a better entry than he does, which is hilarious.

No way.

Better entry and better sizing.

Wow. But Millennial, you know, the person who would know most about it would be the one I'm sorry, I can't say this with a straight face. I'm a terrible actress.

Ah, see, the fun thing with this is I'm expecting my, like, Discord inbox— it's about to blow up, right? It's about to just like blow up with people going, "They missed on earnings. You were wrong," and it's like pretty sure I've said conclusively over and over and over again that the play was not on earnings. The play was on military spending budget being approved at the end of the month. So I'm just waiting on it. I'm waiting on the Seeking Alpha headline to drop and for me to get bombarded with, "They missed on earnings." Good luck. Who cares if their earnings did good or bad if the stock price is not reflective of it doing good or bad and it's actually going in your favor? I mean, does that really matter? Your average is $1.79. I think you have a better average than I do. No, I've got $1.76. I got $1.76. On ICR, right? Yeah, because I keep increasing my— because I keep increasing my position. I sold half to get into space and make a bunch of money over this past month. Right. And then I bought back in. So I've got more shares than I've ever had in it. But my, my DCA is up.

Oh.

So I'm not going to lie. Like, I was going to buy—

guilty or something.

Yeah, I was going to say, I'm not going to lie. I'm waiting for earnings to buy more.

I mean, if it's a buy the dip on it, I will be thrilled because Space is about to announce— Space should announce tonight on their earnings what their launch date is, which will let me know when I can get back into ACRX for more. I just hope that the launch date is before the, before the budgetary approval from the US Army. Excuse me, my poochie is scared. I feel better about my $146 entry now. You should be feeling so good.

I got you one up. I got one up.

You're at 145?

Uh, somewhere between 1.1 and 1.2.

Oh, nice.

That's because I Martin Gail myself in.

Wow, Rita, this coming from the person— this coming from the person who laughed at someone else.

I just heard that.

That's right, you throw some shade, throw it right down too.

To be fair, I remember her saying she has a much sizable position she'd rather not talk about.

Oh yeah, that's true.

And that was like, she went up in position.

I remember the day that she kind of just let slip in conversation that she had finally broken and got into AC/DC. She's like, oh yeah, I'm in it. More than I should be. Balls deep into it.

Yeah.

Surprising thing was that I wasn't in it. All right, so we do have the dates. The SpaceX launch or the space launch is between November 19th and 23rd. So the Thursday to the Monday is the window that they're looking at. So get your space tendies here. Get your space tendies here.

So Roku beat. Chalker, but they're at close price right now.

Uh, my opinion on Ride and Workhorse is that the hype is done. I, I'm not going to get into Ride and Workhorse, uh, because of the hype. Uh, they've already done their SPAC. That, that's it for me. Seabay died. I'm okay with that because I actually have a put and a call. I'm okay with that.

I was gonna say, if you have one share of ACRX, does that count as Being in it? Yep.

Yep.

That's my Robinhood account.

How's Hish's profile doing? Or portfolio doing?

He was up 40% at one point on that $1 profile. I don't know what he's still at, but he was up 40% at one point.

That's hilarious. One share of everything.

Oh, Carrot's here. Carrot's here for the ACRX earnings. Of course. Of course. I'm so confused right now.

Hey, Millennial, why should we listen to you? This isn't your play.

You shouldn't. Uh, to be clear, guys, uh, and that's an excellent point that Martini brings up, uh, I am in no way a financial professional. Everything that I do is complete memery and degeneracy. Nobody should ever listen to Millennial do anything because he's a complete assclown. Um, that's my official position on this. Millennial is an ass clown. All he trades in is dog shit, and nobody should ever, ever, ever even consider touching the things that Millennial does because he's a complete idiot.

All I heard was Millennial's an ass clown. I mean, I'll just be honest.

Um, now I actually was staring at his t-shirt while he was saying that and thinking of the hashtag he has on his fucking chest. It says Craveable. Don't touch anything I touch.

Ooh, Square.

Ah, fuck, that's a lot.

Uh, in other news, Glu Mobile beat. So that's, uh, that mobile gaming stock we were looking at. That did well.

Um, oh my God.

What?

No, you're good. I'm sorry, I'll mute myself.

Everyone scares us when they go, oh my God. Okay.

Yeah, because my heart just sank. because of something that happened at work just now, so I'll mute.

Oh, okay. Good evening.

Stop, Stovey.

I don't know, I saw it and had to post it.

Okay, I gotta come back off mute just to react to— what the fuck is that?

I want this to— The stream earlier. Um, stream died is all. Stream died is all. That's all that happened there was stream died. Uh, yeah, I did mute you guys, um, because I wanted to—

You take me down, I post another.

I just wanted the stream to be able to hear what it was I was saying.

I don't know what to say. I'll just look away.

It's like a car crash. You can't look away.

Um, so we're gonna go here.

Seriously, Stoby, for the love of—

Okay, I, I, I— 2 is fun. 3 is too much. See?

Yeah, exactly.

See, I've had my fun with 2. I'm good.

Hi, WDD.

I just found out my 4 o'clock meeting is canceled, so yay.

I have a question.

If earnings aren't announced yet, why does my stock tank 12%? Insider trading at its finest.

Buy the dip?

Exiled.

Did the, did the results come out?

No.

We're just waiting for the earnings call?

No site I checked has the results, and the call's in half an hour.

Which one is it?

Ultimates.

AYX.

AYX.

Hey, AJ, is that from Trailer Park Boys?

Oh God.

Yeah.

Yeah, I thought it was. I couldn't think of the guys. Randy, right? Yeah, it's Randy.

I call TSG Mr. Leahy all the time. No one ever noticed. Oh, can you be a Turtle Trader?

Yeah, Turtle Trader is one of the most genius ships.

They've had great success not only playing that portfolio but actually teaching people to trade it. So I'm glad you enjoyed that read. Um, I do not— I don't— Karim, I typically do not trade the EV sector. FSR was a bit of an exception to that because of the SPAC on it. I don't typically trade it. WPRT is the only thing that I really have a position in, in the green energy sector. So yeah, Carrot, I'm keeping ACRX through earnings. It doesn't matter. Call starts in 1 minute. It's got elevator music playing right now. Sorry, where are we looking? They quadrupled from their last quarter. I'll take that. I'll take a 400% increase quarter over quarter in sales. Second to third of this year. If you want to look at last year, it's even bigger. It's like 900%. So you got to be like— My focus is between medical and customer service for sure.

Were we looking? I was looking at the news bot for it.

Yeah, I popped up that article.

Are you on TD right now?

Yeah, I popped up the article. I saw it. Why wouldn't why would nobody sell me their 250 ACRX call for five cents? Would have stuck to.

Peloton is trending up after hours. Oh, down after hours.

You know Peloton is a thing when you see Airbnb listings showing with Peloton bike in the headline.

Yeah, uh, it's dropped from $126 to $119 after earnings.

I'm seeing ACRX at 185 right now, so I'm okay with that. It's all gonna come in on the guidance here, and if they say that we have any more than 1 or 2 formularies looking at this in the next 2 to 3 months, that's just massive. If they say more than 2 to 3 formularies, then I'm gonna lose my mind. If they tell me Air Force or Navy, I'm gonna lose my mind. And if it goes down tomorrow, you better believe I'm maxing my margin. How long will the call take?

Going to margin? You're gonna destroy that account.

God, don't blow it.

Blow it up.

Here we go.

But we've established that's different for different people.

Management, this is only 10% my account. I am up 288% for the year.

No, margin affects us all, even the great millennial.

Welcome to the XLRX 3rd quarter 2000.

Get the fuck out of here.

This call is being webcast live on the events page, just the investor section of XLRX website at xlrx.com. This call is the property of XLRX and Any recording, reproduction, or transmission of this call without the express written consent of XLRX is strictly prohibited. As a reminder, today's call is being recorded. You may listen to a webcast replay of this call by going to the investor section of XLRX website. I would now like to turn the call over to Rafi Asadorian, XLRX Chief Financial Officer. You may proceed.

Thank you for joining us this afternoon. Earlier today, we announced our 3rd quarter 2020 financial results in a press release. This press release and the slide presentation accompanying this call are available in the Investors section of our website. With me today are Vince Angotti, our Chief Executive Officer, and Dr. Pam Palmer, our Before we begin, I'll remind listeners that during this call, we will make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements involve risks and uncertainties regarding the operations and future results of Accel-Rex. Please refer to our web press release in addition to the company's periodic, current, and annual reports filed with the Securities and Exchange Commission for more information. discussion of the risks associated with such forward-looking statements. I'll now turn the call over to Vince.

Thank you, Rafi, and good afternoon, everyone. I hope you and your families are remaining safe and healthy, and we appreciate you joining our call today. Last quarter, we introduced the 4 pillars driving our planned revenue growth strategy. Today, I'll update you on the progress made during the 3rd quarter on each of these pillars, which was significant and and encouraging to see. In fact, the 3rd quarter was our most successful quarter since DSUVIA was approved. We have momentum on all fronts, which we expect to continue as we enter into 2021. As you may recall, our first 2 pillars, the Department of Defense and specialty markets with partners, require minimal AccelRx commercial infrastructure to support revenue growth. We expect these 2 pillars to drive earlier revenue growth for DSUVIA as the hospital and ASC customer growth continues to ramp.

So remember, that's important. The, the formulary approval is important.

After about 18 months post-Dysuvia approval, demonstrable progress towards military use was finally made when a positive Milestone C review was achieved in April. Since then, in September, we announced that Dysuvia was added to the Joint Deployment Formulary, and in that same month We were also awarded a $3.6 million U.S. Army contract to purchase DSUVIA for DOD study. As a reminder, the positive Milestone C review provided for DSUVIA to be included in all the Army sets, kits, and outfits for deployed troops effective in their new fiscal year, which began on October 1st. As such, we expect the initial ordering of DSUVIA for deployed troops in our 4th quarter. We're awaiting an indication from the Army on the expected timing and volume of DSUVIA purchases for their new fiscal year, and we expect the purchases to be somewhat irregular throughout the year, which could make quarterly revenues in the early stages of the rollout somewhat uneven. The recent addition to the joint deployment formulary extends DSUVIA's availability to all branches of the Department of Defense. And was an important step forward in gaining broader awareness and acceptance as a standard for managing acute pain across the military. For reference, we estimate the Army represents about 65% of all deployed troops. Separately, as mentioned, in September the DoD awarded Accelerx a $3.6 million contract for the purchase of DSUVIA. The contract covers the purchases for up to 4 years and will be used for studying the use of DSUVIA across multiple trauma situations. We're looking forward to continued work with the DOD to advance the DASUVIA's training and use to become a new standard of care across the military. Our second pillar, accessing large non-core specialty markets through partnerships, is similar to the first pillar in that it requires minimal AccelerEx commercial investment. These are large market opportunities but less concentrated than the hospitals and ambulatory surgery centers and would be more difficult for our small commercial infrastructure to effectively access. Therefore, we intend to collaborate with companies with larger commercial infrastructures already serving these specific markets that'll benefit both organizations and broaden the availability of DSUVIA to more healthcare providers. Our first partnership under this pillar was signed in July with Zimmer Biomet for the oral and dental surgery markets. This is the perfect example of how we intend to open up the Suvia's use into other medically supervised settings outside of hospitals and ambulatory surgery centers. Zimmer Biomet has just completed training of their initial wave of 31 sales representatives for a soft 4th quarter launch, with the broader rollout to their 250+ dental division sales representatives expected next year. We're very excited for them to begin initiating sales calls to inform their customers about the benefits of DSUVIA. This is a large market segment of greater than 7 million surgeries with an unmet need that DSUVIA can address. Examples of other specialty markets we believe may also have potential opportunity for partnerships are in plastic surgery, emergency medical services, and ENT physicians. And similar to how we created initial demand in the oral and dental surgery market, which led to a collaboration with Zimmer Biomet, we're approaching the plastic surgery market by running a small pilot with a couple of virtual sales representatives focused on office-based plastic surgeries. We've experienced that this market makes adoption decisions quickly, and thus far the pilot is productive. We'll, we'll further evaluate its expansion or collaboration opportunity based on the results. Our core focus with our internal commercial team remains on the hospitals and ambulatory surgery centers. These customers have longer review cycles, and COVID has certainly had an impact on the progress that was being made. However, the 3rd quarter represented our highest end-user demand since the launch of DSUVIA. A significant catalyst for our team has been the publication in August about the real-world use of DESUVIA in the perioperative settings from Dr. Twentenstrand.

This is what we've heard from patients.

If you haven't listened to our KOL webcast held on October 7th, please go to our website and listen to the archived recording. The significant benefits to the patients and the hospital systems are clear after hearing both Dr. Twentenstrand and Dr. Casavalle explain their experience with DESUVIA from a patient care, opioid stewardship, and pharmacoeconomic perspective. Our commercial team has continued to receive positive feedback—

No, wait a second.

—from physicians as this data has been introduced to them, and even more importantly, as they begin to use DSUVIA. We see this data as a true momentum changer and are awaiting the release of data from other similar studies, including Dr. Casabal's manuscript that has been submitted for publication.

They haven't dropped that yet, Martini.

I shared on the KOL call the results of Dr. Casabal's study are very similar to that of Dr. Twentstrand's, demonstrating the consistency of DSUVIA's perioperative impact on IV opioid utilization and PACU throughput. Also, we expect data from 2 investigator-initiated trials at prestigious institutions, Cleveland Clinic and Brigham and Women's Hospital will further support the benefits of DSUVIA compared to the current standards of care. Realizing DSUVIA is a paradigm shift away from typical IV opioids, we believe continued generation of real-world data will be the foundation for DSUVIA's adoption. To that end, we continue to receive strong interest for investigator-initiated trials, including proposed studies, for example, in sickle cell patients presenting to the emergency department, retinal surgery in the elderly, and DSUVIA's application in emergency medical services settings.

Now, with COVID impacting the healthcare system—

Sickle cell EMS are big. Including delayed formulary reviews during the 2nd and 3rd quarters, we shifted our commercial team focus to accounts that had already reviewed and approved DSUVIA for use. To that end, in 3Q, 73% of commercial customers were reordering customers, and greater than 90% of the commercial doses shipped were reorders as well.

That's huge. People that bought it once are buying it over and over and over.

Those metrics indicate growing comfort with DSUVIA's use. In fact, September was our highest end-user demand month to date.

Yes!

Also supporting the growth within the hospital and ASC pillar is our recently restructured co-promotion agreement with La Jolla Pharmaceuticals. We've agreed for La Jolla to focus on 9 separate distinct territories in which they'll promote the Suvia. Notably, these 9 territories are occupied by La Jolla reps who were previously trained under the prior co-promotion agreement and do not overlap existing Accelerx territories. Our 4th and final pillar for revenue growth is business development, and we continue to aggressively explore the addition of products to add to our portfolio to support the productivity of our commercial resources. I'll now hand the call over to Rafi to take you through the financials.

Thank you, Vince. We continue to remain prudent with our cash as we launch DSUVIA. We ended the 3rd quarter with $43 million in cash and short-term investments, which is consistent with the 2nd quarter. The 3rd quarter was our best product sales quarter Since DSUVIA's launch. Revenues for the 3rd quarter of 2020 were $1.4 million, driven primarily by product sales of $1.3 million. This compares to $0.3 million of product sales in the 2nd quarter of this year. Gross profit was negative for the quarter, primarily as a result of the revenues not exceeding our fixed overhead costs, plus $0.2 million of a reserve for for short-dated inventory that was produced for development purposes prior to approval. Importantly, once the high-volume packaging line is installed and running commercial batches, we will realize a close to 60% reduction in unit cost. As an update, the factory acceptance test of this equipment began in Germany this week.

Nice.

Pending COVID-related restrictions, Our current estimate is for installation at our contract manufacturer to occur at the beginning of next year, with first commercial batches after all approvals are received beginning in the first quarter of 2022. We are continuing to evaluate alternatives to accelerate timing to ensure we are able to meet future demand needs from the DoD and other customers. Our cash operating expenses or combined R&D and SG&A, excluding stock-based compensation and depreciation, in the 3rd quarter of 2020 was $7.3 million compared with $7.3 million in the 2nd quarter. We expect the 4th quarter cash operating expenses to remain in the $7.5 to $8 million range. We continue to focus on investing in the areas that will have the most positive impact on the launch, and remain prudent in our overall cash spending. With that, let me turn the call back over to Vince.

Thanks, Rafi. It's certainly been a very productive 3rd quarter laying the foundation for future success. I'd now like to open the line up for any questions you might have. Operator?

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Michael Higgins from Leidenburg.

Thanks, thanks guys. Thanks for taking the questions. First one comes from the end there, Raffi. You had mentioned the manufacturing that was starting up. Just trying to get a sense for how the supply is matching up with the potential ordering from the DOD. It looks like you'll have greater economies of scale in shipping to the customers in Q2. Might that affect the ordering and shipments, or do you think you have enough product to meet the needs of the DOD in the next 6 months or so?

Yeah, Michael. And let's add in, but we do have enough product on hand and are able to produce sufficient amount of product on a monthly basis.

That's a good question.

And that's what we expect the demand to be. Again, we are still waiting for input from the DOD on what the expected purchases will be this year. But in our semi-automated process, we believe that we'll be able to meet that demand. And just to add, I mean, we've encountered delays from COVID to getting that equipment in, but we've been able to get that testing done. Just this week it started, which we've accelerated. And hopefully we can continue to find ways to get that accelerated, get it into the contract manufacturer, and start producing commercial batches.

At a significantly reduced cost.

That's awesome.

Yeah, sounds like it. And then second question, if I could, is on how do you decide, you know, outside the ASCs and hospitals— actually, let me rephrase that. Inside the hospitals and ASCs, how do you pick which PIs, which investigators to go with? You've mentioned plastic surgery, but You know, which, uh, which docs and which hospitals do you, uh, do you greenlight, uh, to do more pharmacoeconomic studies?

Well, I think it's important for the investigator-initiated trials, the investigator actually comes to us. So a lot of them, um, you know, we'll hear about a disease from a colleague. Or their own personal use, and then they'll get an idea for a novel way to study it or to use it, and then they'll approach us for any sort of investigator-initiated trials.

And I think it's important to realize that of our first couple, I mean, these are clearly high-profile institutions that approached us.

No, it's not even mouth-to-mouth, GXL. It's not even mouth-to-mouth. Mouth-to-mouth would be ACRX, just talking to these people, trying to convince them to study it. These people don't even need to reach out to them. They're seeing ACRX and going, we want to study that.

Uh, you know, I think COVID has hit some of the manuscripts and the journals a bit hard. So, um, we're hoping to get a couple— well, to see a couple more papers coming out in the next few months. But there is— it seems like there's been a little bit of a slowdown with COVID but we are excited about some upcoming manuscripts.

Sounds good. I appreciate it. I'll jump back in the queue. Thanks, guys. Thanks, Mike.

Our next question comes from Ivan Seigerman from Credit Suisse.

Fuck this guy.

Hey, guys. Thank you for taking my call.

I hate this guy.

So just looking at kind of the opportunity outside of the hospital, outside of the Army, I know you're working with Zimmer Biomet for kind of the Oral surgery space. Um, any, any other kind of spaces where you think that this—

where Desuvio would be best suited?

Plastic surgery and EMS. Open your damn ears.

Profitability and, you know, how the trajectory of your P&L looks. When, when do, when do we start to see profitability? I guess, you know, what level of revenue do you need to see to kind of outpace, um, your expenses? Um, and are you on track for that to happen maybe next year? Or is it kind of something later on?

Thank you.

Second question is a good question.

Thanks, Evan. I'm going to turn the first part over to Pam on which types of segments we think outside of the hospitals and ASCs might be most appropriate. We mentioned plastics. We mentioned ENT. But Pam can elaborate further as to why in this cascade as things are moving from hospitals and ASCs to these office-based surgeries.

Yeah, so I mean, as we've seen over the past, you know, 20 years, there's been a huge shift from hospital-based operations to ASCs. So now we know total hips, total knees, spine surgeries, et cetera, are all being done in ASCs. The more minor procedures that were occurring in the ASCs are now being pushed into procedural suites, and specifically plastic surgery is one of them. That's for a couple of reasons. Number one, because they can be safely done there, but also— It's much less expensive. This is often a cash-paying population. So if they only have to pay as a patient for the surgery and not for the expensive surgery center and an anesthesiologist, they would rather have their low-volume liposuction, for example, done in a plastic surgeon's office in his procedural suite. Because there's not a med exec team, there's not a P&T decision-making team there, it's literally one physician. We found that that adoption there is occurring much more rapidly. So that's one area we're excited about. Similarly, ENT surgeons, so ear, nose, and throat surgeons, also have minor procedures that they do that they're now starting to do more and more in their own procedural office. Also, the surgeons get paid more money. In fact, they have higher pro fees when they do this in their office versus when they're doing it in ASC. So these are just 2 examples. Oral surgery, we've already talked about with Zimmer. All of these are procedures that are done in procedural suites, usually outside of an ASC, where they really find pain management a challenge. And that's where Dysuvia comes into play.

And I'll just add one comment that they'll all qualify under REMS. So we'll continue to evaluate each of those. From the finance perspective question, Rafi?

Yeah. Hey, Evan. In terms of— we've not given sales guidance, Evan, as you know. In terms of the break— yeah, in terms of trying to get to like a positive EBITDA and the timing there, you can take, you know, our $7.5 to $8 million of cash operating expenses, and we don't expect significant increases on that in the near term. You know, maybe as new territories get opened up, as new hospital systems come online, a little bit, but, you know, that's going to work probably. And we haven't given all that guidance, but you can use that $7.5 to $8 million as a proxy. And as we also bring on the high-volume line, and first quarter of 2022, we hope we're running commercial batches under that, that the cost, the margin and the cost of sales will come down significantly.

Yes, Karim, that would be covered.

In terms of cash flow breakeven, we've said publicly is by Q4 2022, we will be cash flow positive on that, including debt service and everything.

Okay, cool. Thank you for the color. I appreciate it.

Thanks, Adam.

This concludes our question and answer session. I would like to turn the conference back over to Vincent Gotti for any closing remarks.

All right, we're out of there. Let me unmute the Discord guys here and we can go through it. All right, I is back. Hello. Thoughts?

Thoughts? You want thoughts from us?

I think Rita's. scouring through numbers right now.

I was, uh, no, it's just because Koyfin was wrong, so it, it, it screwed with my brain a little bit. Um, but I saw that the revenue number is $1.4 or $1.3, I can't remember.

Yeah, $1.4.

So yeah, that's kind of a blowout quarter for them. I don't, I don't care if they miss because that's against expectations. It's still kind of, kind of crazy.

I mean, yeah. So guys, what we're talking about here is, uh, consensus was 6.4 million, even though they had only done 200,000 in sales the previous quarter. Uh, the fall— a year ago, um, they had only done 600,000 in sales quarter Over quarter. So, um, the consensus was a 900% increase on this. Um, so while they did not come in at a 900% increase, what they did come in at was, um—

Where are you getting the 900%? Or what is the increase that you're tracking to? I'm trying to—

So, uh, here, let me pull it up. Uh, where was that? Where was that sales number? Oh, it wasn't in here. It was in. So the 1.3 million is up from 0.3 last quarter, and then last year Q3 they did. Last year, Q3, they did $0.61 million. So they've doubled year over year. So quadrupled from quarter to quarter and up 100% year over year. Mm-hmm. I'm okay with that. And that's without the military orders in yet. So it's just on sales inside hospital formularies. That's without the Army sales coming at the end of the month. So remember, guys, with ACRX, The play was not on earnings. It's great that we just had earnings and it is confirming that they've got good numbers, but the sales are up 100% year over year without the US military, the US DOD orders in. We still don't know what those orders are going to look like until the end of November, probably early December. Pair that with what they're saying with those independent studies coming out. We know that there's 2 studies at least that are investigator-led studies. So somebody came to them and said, we really want to test your drug in this environment. The two studies that they've had to date have been amazing. The those are the ones that showed that they cut PACU times by 34%, opioid use by 50%. That's massive. That's huge for any hospital out there. The calculations that we did on the bed savings on that are here in the spreadsheet. If you are a small hospital that is only operating on a single bed. You would save close to $8 million a year off of that. If you are a larger hospital with 16 beds, you would save close to $126 million a year based off of their numbers, which is nuts. That's that's batshit just to switch over, just to stop using fentanyl or codeine or traditional. painkilling meds. All you have to do, you don't have to change anything else, you just have to use this instead and you save anywhere from $8 to $126 million. Is it going to be used for pregnant women? I very much doubt it's going to be used for pregnant women. I have to go into that, but, um, think this drop is overdramatic? What's the drop to $160? I think this is a buy the dip for me. I'm gonna be trying to take this back up to at least $10,000 of holdings for me in this. Everything that I just heard said that in Q4, Q1, what we can expect is a 60% reduction in cost on production of the medicine itself. They will have Lahola, Zimmer Biomet, both of their sales teams going full tilt. Post-birth, yes, Karim, but not, not as a, not like, oh well, you know, you can have an epidural or you could have Dasuvia. I don't think that they would give you desuvia instead of an epidural. Um, but La Jolla, Zimmer Biomet, their sales teams are coming online in Q4. Um, plastic surgery, dental sales, uh, eyes, near— eyes, ear, and throat. Um, that's what they're going after Q4, Q1. And military spending, uh, we have end of November. So in my book, if you are already showing, uh, a year-over-year increase of 100% without those in place I would expect that we see an absolutely monumental Q4 for them, followed by an even better Q1. Keep in mind also that we are in— keep in mind that we are also waiting on the effects of the second wave of COVID So if you go to— if you go to the current FDA shortage list, this is available to everybody. But you can go to this FDA shortage list and it's going to let you know which drugs they're running out of or do not currently have enough of. So let's go down this list and see what we can find as far as painkillers, amphetamines, that kind of stuff. So amphetamine aspartate, there's one painkiller. You've got azithromycin. You've got— no, azithromycin is an antibiotic. That's not a painkiller. Um. So you've got your amphetamines, you've got dexamethasone. That's, that's for heroin, right? Diazepam. Uh, disulfiram. Fentanyl.

Fuck fentanyl.

Hydrocortisone. Hydromorphone.

Ketamine.

Ketamine is what— and most people say ketamine is not a— ketamine is not a painkiller. You're right, it is a paralytic, but they are so short of pain medications that they have been using ketamine as a painkiller. So they've, they've just been making people go catatonic instead of giving them painkillers because they are so short on painkillers. So ketamine is one to take note. They are now short of ketamine as well. Lidocaine shortage, shortage, shortage. Morphine sulfate shortage. OxyContin shortage. Propofol and remfentanil. Remifentanil is resolved, so not currently in a shortage, but it was in a shortage. So the majority of painkillers that are being used currently to intubate people, anybody that's on a respirator, those are— those painkillers are required. Most of them are in shortage, which means Dasubi is just sitting there going, we got an idea. My PT on ACRX has been $10, $8 to $10. But we will see what we will see. How do you learn about pharmaceuticals? I'm lost when it comes to this stuff. So was I. I read an awful lot of medical papers to learn what I am going through right now. Waiters tomorrow, as far as we know, it's an estimate. How many can they produce? They don't know. But what they're saying is that they have sufficient supply to supply the US Army. So that's big enough. Dr. Krieger, I'm happy that you didn't have to watch Fox News and you were able to watch Martini and I do the election instead. I know I'm tooting my own horn, but I personally think we did a better job of it. At least people had a lot more fun watching us than the major media. sources. Do these biocompanies factor in these future customer market share shortages you mentioned in their future guidance? No positive cash flow until Q4 2022 seems far out. So I think ACRX is once bitten, twice shy. On their FDA approval, they should have skyrocketed. And instead, they were greeted with the FBI saying opioids is bad. So no sooner did they get approval that the FBI came out and said opioids are bad. We don't need more opioids, which caused ACRX to just kind of even though they had FDA approval and slowly they had been getting approvals from joint formularies, from new hospitals, from plastic surgery, from dental, from and they just are slowly getting this ball rolling and rolling and rolling. So what you saw was them committing to long-term $7.5 to $8 million in expenses, uh, for each quarter. Um, what they're looking at as far as top-line revenue goes is, uh, $1.3 to $1.4 for this quarter. They're saying they've already seen in September the most orders that they've ever had for ACRX, and they are expecting that to continue into Q4, um, with the addition of military budgeting as well. So Um, the Army orders, Air Force orders, and Navy orders will be coming in in Q4 as well, on top of Zimmer Biomet and La Jolla actually dedicating their sales staff to putting this thing out. So, um, you've got a whole bunch of positive catalysts through Q4. Um, with that being said, what is a reasonable amount of growth from, um, the $1.3, $1.4 million that they did this quarter or in Q3? Um, given that he's saying that September they're seeing the best sales that they've ever seen, You pair all those other things in, I'd be thrilled to see them come in somewhere around $3 million, which is still only half of their operating expenses, but they also have cash on hand. So for me, we—

Hold on. How is September the best month they've ever had if last quarter they were at $2.9 million in revenue? They break that out by product. Was it their other product, whatever that other one is?

It was probably on Delviso. But let's look at their— go to ACRX here. Military spending is end of November, military budget approval. It's a beautiful dip. It is. That's what I'm looking at it as, is it's a beautiful dip.

Um, like, I, I understand the seasonality, which is why they do quarter over quarter for everything, right?

Yeah.

Like, all sales are seasonal, so you have to make apples to apples. Um, did they start to go to direct or something? Because it's all of that revenue is sitting in contract Sales with what was that contract manufacturer or contract seller? Zimmer Biomet.

Mm-hmm. Yeah, so Zimmer Biomet trained their sales team in Q3 and now have 30 to I think he said 30 or 40 dedicated sales agents that are selling just this to their existing clientele. So last quarter, their top line revenues inflated because the Army gave them a one-time exclusive order to test Desuvia against fentanyl. Right. So they bought up— they bought up a whole pile of stock to start the RFP, the request for proposal on testing against fentanyl for military usage, which is also good news down the road, guys, because they're looking to remove fentanyl use from Military deployment almost entirely. They want to replace all the fentanyl that's currently being used with the Subia, which is a big deal. That would give them a monopoly on field kits and pain medication in the field for the U.S.

Army, which is kind of a big deal.

Why is it a good dip? So. You've got a company that we are heading into what is already an opioid shortage into a second wave of COVID So the opioid shortage already being an atrocity is only going to get worse, and there aren't enough solutions out there. You've got US military that is approved to add this into every field kit and every operative setting in the US Army, US Navy, and US Air Force. That's a huge deal. That's a lot of spending, and it's stable spending when it's a military budget, right? So the initial orders from the Army should bump this up as a positive catalyst over the next two months. The two independent studies, the independent investigations, are going to be another boost for this in the interim, in the near term for catalyst, and Q4 numbers coming out on sales from La Jolla and Zimmer Biomet. are also going to be positive Q4 catalysts for it. So the other thing that they mentioned that they haven't mentioned to us before, which is kind of a huge deal as far as a company not outsourcing their drug production. So a lot of these biopharm companies will just pay somebody like BNTX to produce their medication for them. ACRX is keeping that medication production in-house, and they've reduced the cost of that production by 60%.

Wow.

Uh, in Q4 with our— excuse me, not Q4, into Q1 when they start running this machine. So they are going to increase the amount of orders that are coming in while at the same time reducing the cost of production on the drug by 60%. Um, so for most of you that are in business, uh, if we take it something simple like I sell these pens, what if I told you that I sold every one of these pens and I sell it to you for $2, but it cost me a dollar? Okay, so that's what we're starting with. Then I tell you, except I know that the U.S. Army is running out of pens, and all the hospitals in America are running out of pens, and they're all going to buy our pens into Q4 and Q1. And you go, okay, well, that's pretty good. Okay, well, what if I told you that instead of costing me a dollar to make this, it now costs me 40 cents to make it? See what I mean? Increase sales, reduce, reduce production costs. Big deal.

Hey, what's the uptake rate? The re-up rate?

Um, I don't know.

I'm also seeing that the, uh, some big, uh, big insiders are buying, by the way, in the filings. I don't know if you've looked at that.

Um, for those of you listening to the call that, that were trying to understand why I got upset when Evan Seigerman came on the line, um, about— I'm about to show you why. So on ACRX, there are currently 4 analysts if you don't count me. Um, those other analysts other than Evan Seigerman— so Michael Higgins was another guy on the call, uh, he's currently got a $5 buy on it. Um, AC Wainwright or HC Wainwright is also on here with a $7. Uh, Brandon Folks is on here with a $9. Credit Suisse, Evan Seigerman is on here with an 84-cent price target on this thing. Um, he has a sell rating on it. This guy is the bane of my existence as far as ACRX is concerned. But insider bidding on ACRX.

I mean, I don't know if you look at that kind of stuff, but I do.

I do. Yeah, I do. I just see the insider trading on this. I don't see the hedge funds picking it up. Do you have a—

can we see his tip ranks? Can we see his tip ranks so I can laugh my ass off?

Please, please, please. Mine or Evan Seigerman's?

I mean, we can laugh at yours too if you want, if you feel left out.

Okay guys, so my issue with Evan Seigerman. Okay, this is my TipRanks. This is tipranks.com. You guys can check out my portfolio on here anytime. Just 2 seconds here, guys. I will be right back.

I'm sorry you're sick, Panda. Have a good night. Huh?

I'm muted. They're like, you're muted. Okay, so Evan Seigerman, guys, uh, 48% success rate, 11.9% return. As an analysis of biopharma, he is currently tracking VRTX, Amgen, MRTX, and Biogen. Okay, so these 4 stocks I broke this down a little bit earlier when my internet was dropping out, but this gentleman right here, this would be the equivalent in tech of you saying, "Oh yeah, yeah, I'm a tech analyst. I follow Facebook, Google, Netflix, and IBM, and my analysis on those four stocks is you should buy them." Okay, when we get into the actual weeds of biopharma. Um, which is mostly what I trade in. Uh, some people would call it dog shit. Um, but the weeds of biopharma, he's got, he's got, he's got a currency thing, the Great Britain Galápagos something or other here.

Space cowboy.

Which is not bio at all. But, uh, these bio stocks here, uh, Insight, he's got a hold on, so don't do anything with it. It'll be just fine and go sideways, which is true of most bio in between the $50 and $150 range. they tend to just go sideways. Um, Gilead, he sees an upside to, um, a 17% upside. And, uh, this coverage started 2 months ago. Um, for anybody familiar with COVID remdesivir has been talked about for how long? Since like February. He's, he's just hopped on it in the last 2 months and said that you should hold it. Um, Satsuma Pharmaceutical and ACRX and AIMT. Okay, these are the— these guys are the dogshit in the weeds. ACRX and STSA, he says that you should sell them. So to review, this phenomenal Wall Street analyst from Credit Suisse says the big guys in the bio sector you should buy, the guys in the middle will go sideways, you should hold them, and the little guys— I've got a couple of them in there too just to show you that I, I watch the entire bio sector— and you should sell the little guys. K, K, capital K. Uh, okay, now you can make fun of my dogshit portfolio. Um, 57% success rate. Um, what you'll see, guys, is I started using this tool in May, and being the basic bitch that I am, I didn't actually learn how to use the tool. I just put in all— every trade that I had taken from January to May into a single month, apparently that when you enter in that you took a play on the day and then immediately closed out all of those plays, a lot of those plays are going to show as a loss. So because I'm a basic bitch, I cucked my own portfolio in May on this because I put every trade that I took from January to May into a single month, entering and exiting it in like 5 minutes. Um, oops. Since then—

Oopsies.

Since then—

Something wrong with the platform. You should be able to put post or Old dates.

You can, you can, you can do that, but only if— so before you close the position out. So like, if let's say, oh crap, I took a position in Mattel today and I forgot to put it into my portfolio, what I could do is go in here, go to— oh shit, did I not put Mattel in here? I may actually get to show you guys this, this live.

Um, but the problem is because you closed it out.

Right. The issue is because I closed it.

And you can't say when you closed it?

No. No. So, yeah. So, the issue is I closed them out. So, what's done is done.

So, can you basic bitch this thing for me?

From what I understand, you can set the entry date, but you can't set the exit date.

Well, what you can do is say I— Yeah, so you can say I entered with this amount of stock at this price, but once you close it, that's it. You can't go back and edit that once you've closed it.

Which makes sense.

Yes.

And you can't go back and edit your previous trades, but right, you— that doesn't mean you can't. Had you known, you could have done it the right way.

Yeah, yeah.

Okay, so there was the, the inability to edit a previously Rectify trade is what's the issue.

Yeah.

Unless you get support from admins and, and so forth.

Yeah. And I'm not, I'm not gonna bug them for that shit.

But he could be like, he could just go in and say, I bought Peloton like 5 months ago.

Yes.

Could he do that?

Yes. In, in the portfolio holding, yes.

But he could only close it today.

Yeah, he could close it and say he closed it last week as well. The, the thing is, once you close it, you can't go back and edit anything of that trade. Yeah. And he made the mistake of opening, closing on same day.

Yeah. Um, so it didn't have my correct entries, and it also didn't have my correct exits. Um, it just took everything that I had— well, it didn't, it didn't do anything wrong. I did it wrong. Um, I entered and exited on the same day. Blue Job and It's Just Beans, thanks for the follow. Much appreciated.

Any kind of portfolio tracking software is open to manipulation and yeah, effery unless it's linked directly to your brokerage. You can always manipulate the system to show any results you want to show.

Yeah. So that being said, from June onward is accurate. So June, I went sideways, down 0.06%. That was the question.

You really wanted to know, Rita.

Um, the following month I was up 9.6%. The next month, uh, sideways 0.34%. Following month I was up 5.5%, where the entire market was down 5.5%. Uh, sideways again, up 0.06%. The following month I'm up 9.8%. Um, so typically what I'm seeing is I enter positions on a month and then these positions are paying out from earlier in the year, and then I have a month where I enter positions so I don't really make gains. I make gains, and then I enter positions and I make gains. My hope is that I've actually been able to cycle this where I have plays that are going to come out this month, but I've also entered a lot of plays this month. So I'm hoping next month I also see gains as well, and I've, I've broken out of this one-on-one-even, one-on-one-even. But I, I'm also okay with, uh, when I'm not crushing, uh, the S&P, the best advisors on this platform I'm not losing any money either. I'm even. And then the months that I am up, um, I mean, I'm up compared to everybody— the S&P, the, the best performing people on this platform, everybody. So not bad. Uh, we'll see how tomorrow goes. Uh, I'm hoping to break below the 50,000 out of 198,000 professionals. Um, that'd be a great Great first year for me. Who's the number one trader on TipRanks? Do you want it by sector or Wall Street analyst? I'll open up both. The top Wall Street analyst is a guy named Brent Braslin for Piper Sandler. He has a 76% success rate, which is not too shabby given that that's out of 389 ratings. He's got a 294 out of 389 with an average return of 26.7%. So that's nothing— not too freaking shabby.

What does he cover?

Tech, I guarantee it. Yeah, sector technology. He's a tech player. And of note, guys, of the top 25 analysts, number 1 tech, 2 tech, 3 tech, 4 tech, 5 tech. It is tech all the way up until 14 where you get a healthcare analyst. And this lady, this lady, this lady has all credibility in my books for you to be batting 76%. Rate in the bio sector, I am very impressed. Um, very, very impressed. So this lady here gets nothing but my utmost appreciation in a— in an extremely difficult sector to trade. Um, this lady here kicks some ass, and, uh, she gets my millennial thumbs up. Well done. Uh, the other thing that I like with hers is It's not all super high-priced bullshit. She plays long equity bio on the buy side. She finds things that she likes and she finds things that she thinks are overpriced. Nothing too crazy as far as the upsides or downsides, with the exception of Progenity, which she's got as 135% potential upside, which makes me really want to look at this, but I haven't. Now, this is the top individual investors, guys. So this is just degens like you and me. The number 1 on this is a SaaS financial guy. So this is an Indian financial firm, I imagine, but success rate of 49% with an average return of 290%. Year to date, he's up 357%. His portfolio risk is quite high, which isn't surprising with those returns. Success rate 63%, 51%, 54%. So for me to break into these guys' level here, I need to up my average return. But my success rate is pretty close to what's happening here. Just got to up the average returns. But that being said, guys, this is it for the ACRX earnings call. I appreciate you guys swinging through, checking it out. Blue Job, It's Just Beans, Korean Big Dreams, thanks for the follow, guys. Big Pancake fan, who's not? You guys rock. I'll be back tomorrow morning.

Didn't didn't you have another ticker to look at?

Uh, not on stream. Uh, that's something I'll dig into off stream.

All right.

But for, for this here, that's the ACRX earnings, guys. I hope that was helpful for those of you who've never seen a bio earnings call. That's kind of what they look like. They like to use pictures as well because sometimes you get lost in the weeds, but that's typically what you would see in most bio calls. Uh, but I will catch you guys tomorrow morning.