Building a Leading ENT / Allergy Specialty Company Co r p o r a t e P r e s e n t a t i o n Ma r c h 1 4 , 2 0 2 2
2 Forward‐Looking Statements This presentation and our accompanying remarks contain “forward‐looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements that are not historical facts are hereby identified as forward‐looking statements for this purpose and include, among others, statements relating to: our growth strategy; potential for continued XHANCE prescription and net revenue growth and factors supporting such growth; prescription, refill and market share trends; potential effects of INS market seasonality on XHANCE prescriptions; potential early year effects on price and volume related to patient insurance; projected Company GAAP operating expenses and stock‐based compensation for 2022; projected XHANCE net revenues for first quarter and full year 2022; projected XHANCE average net revenue per prescription for first quarter and full year 2022; the potential benefits of XHANCE for the treatment of chronic sinusitis; the expectation of having top‐line results from ReOpen2 in the second quarter of 2022; the Company's plans to seek approval for a follow‐on indication for XHANCE for the treatment of chronic sinusitis, the potential for XHANCE to be the first FDA‐approved drug treatment for chronic sinusitis and the potential market expansion opportunities and other benefits of obtaining such indication; the Company's plan to secure a partnership to promote XHANCE in primary care and the prospects for, and potential benefits of, such potential partnership; and other statements regarding the Company’s future operations, financial performance, prospects, intentions, objectives and other future events. Forward‐looking statements are based upon management’s current expectations and assumptions and are subject to a number of risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward‐looking statements including, among others: impact of, and the uncertainties caused by, the COVID‐19 pandemic; physician and patient acceptance of XHANCE for its current and any potential future indication; the Company’s ability to maintain adequate third party reimbursement for XHANCE (market access); the Company’s ability to grow XHANCE prescriptions and net revenues; the prevalence of chronic sinusitis and market opportunities for XHANCE may be smaller than expected; unexpected costs and expenses; potential for varying interpretation of the top‐line results from ReOpen1 and the potential for the full data set, when available, to contain results that conflict with or are inconsistent with the top‐line results; risks and uncertainties relating to the completion and results of ReOpen2; uncertainties related to the clinical development program and regulatory approval of XHANCE for the treatment of chronic sinusitis; the Company’s ability to comply with the covenants and other terms of the Pharmakon note purchase agreement; risks and uncertainties relating to intellectual property; and the risks, uncertainties and other factors discussed in the “Risk Factors” section and elsewhere in our most recent Form 10‐K and Form 10‐Q filings with the Securities and Exchange Commission – which are available at http://www.sec.gov. As a result, you are cautioned not to place undue reliance on any forward‐looking statements. Any forward‐looking statements made in this presentation speak only as of the date of this presentation, and we undertake no obligation to update such forward‐looking statements, whether as a result of new information, future developments or otherwise.
3 Our Growth Strategy Continue to commercialize XHANCE in the ENT and allergy specialty segments in the U.S. Continue clinical development of XHANCE for the treatment of chronic sinusitis and expansion into the primary care segment to broaden our market opportunity Seek additional development candidates or approved therapies focused on the ENT and allergy specialty segments Explore business development activities for the EDS outside of the ENT and allergy segments Remain opportunistic in pursuit of select international opportunities to expand XHANCE into international markets
4 Our Pipeline
Commercializing XHANCE® (fluticasone propionate) as a Treatment for Nasal Polyps
6 We Delivered Annual XHANCE Net Revenue Increases of More Than 50% in 2020 and 2021 With Our Commercial Model $30.4 $48.4 $73.7 2019 2020 2021 ($M ) XHANCE Net Revenues +52% +59% We have a sales force of approximately 100 territory managers who target over 10,000 ENT and allergy specialists and "specialty‐like" primary care physicians In addition, we target physicians through digital and non‐personal promotion to create a total target audience of approximately 18,000 physicians Eligible commercially insured patients may obtain XHANCE for as little as $0 out‐of‐pocket through the XHANCE co‐pay assistance program Approximately 80% of commercially insured lives are currently in a plan that covers XHANCE
7 153.7 261.4 335.6 2019 2020 2021 We Delivered Strong New and Total Prescription Growth in 2020 and 2021 During a Challenging Period for the INS Market +28% +70% 67.4 88.6 112.7 2019 2020 2021 XHANCE NRx (in thousands) +27% +31% XHANCE TRx (in thousands) NRx for Intranasal Steroids Market decreased 13% from 2019 to 2020 and increased 4% from 2020 to 2021 TRx for Intranasal Steroids Market decreased 7% from 2019 to 2020 and increased 0% from 2020 to 2021 Estimated based on monthly prescription data from third parties and XHANCE preferred pharmacy network. The Market on this slide is defined as the sum of all intranasal steroid prescriptions based on monthly prescription data from third parties
8 XHANCE Market Share & Prescribers by Prescribing Frequency The Market on this slide is defined as the sum of all intranasal steroid prescriptions written by physicians in the XHANCE target physician audience of approximately 18,000 physicians. Estimated based on monthly prescription data from third parties and XHANCE preferred pharmacy network. 3.4% 5.1% 6.3% Q4 '19 Q4 '20 Q4 '21 XHANCE Share of INS TRx Within Target Physician Audience 3,432 3,729 4,059 1,599 1,704 1,884 828 1,275 1,589 Q4 '19 Q4 '20 Q4 '21 <5 TRx per Qtr 5 to 15 TRx per Qtr >15 TRx per Qtr XHANCE Prescribers 7,532 6,708 XHANCE market share increased from 3.4% to 6.3% From Q4 2019 to Q4 2021 and HCPs who had more than 15 XHANCE prescriptions increased by 92% (828 to 1,589) from Q4 2019 to Q4 2021 5,859
Potential Value of a Chronic Sinusitis Indication
10 What is Chronic Sinusitis (CS) CS is an inflammatory disease of the paranasal sinuses that is defined by the presence of at least two out of four cardinal symptoms (i.e., facial pain/pressure, hyposmia/anosmia, nasal drainage, and nasal obstruction) for at least 12 consecutive weeks, in addition to objective evidence • Disease persists for many years • Significant harm to quality of life, comparable in magnitude to CHF or COPD High Burden Prevalence • Up to 30 Million US Adults suffer from symptoms of CS and there are no FDA‐approved drug treatments • Approximately 10 Million patients are treated by a physician annually Sources: Sedaghat AR. Chronic Rhinosinusitis. Am Fam Physician. 2017 Oct 15;96(8):500‐506. PMID: 29094889. Palmer J et al . A cross‐sectional population‐based survey of the prevalence, disease burden, and characteristics of the US adult population with symptoms of chronic rhinosinusitis (CRS). Poster session presented at: 62nd Annual Meeting of the American Rhinologic Society; September 16‐17, 2016; San Diego, CA. Optinose Market Research. Data on file.
11 Successful Development of XHANCE as the First FDA‐approved Drug Treatment for Chronic Sinusitis Creates Multiple New Opportunities for Growth Up to approximately 1 Million patients with nasal polyps (NP) are treated by specialty physicians who are the current focus of our sales deployment 1 Million Up to approximately 10 Million patients with NP or CS are treated by a physician annually 10 Million Up to approximately 3 Million patients with either NP or CS are treated by specialty physicians who are the current focus of our sales deployment 3 million Today With a CS Indication For a Partner, there are 6 to 7 million NP+CS patients currently treated by a Primary Care Physician and 20 million lapsed patients that could be activated
12 Successful Development of XHANCE as a Treatment for Chronic Sinusitis Would Increase Opportunity and Address Certain Barriers to Broader Prescribing that Exist Today Insurance Today, ~80% of commercial lives are in plans that cover XHANCE, but ~half require physicians to attest that they are prescribing for the approved indication This is important because chronic sinusitis (CS) is diagnosed much more frequently than nasal polyps (NP) ~10 million patients diagnosed with CS/NP are actively treated by physicians compared to ~1 million with NP
Our Chronic Sinusitis Development Program
14 EDS Placebo 372 μg Week 24 Double Blinded Phase En d of St ud y ReOpen1 and ReOpen2 Trial Design Summary Randomized, double‐blind, EDS‐placebo‐controlled, parallel‐group, multicenter studies to evaluate efficacy and safety of XHANCE 186 μg (1 spray) and 372 μg (2 sprays) BID in subjects with CS Week 4 ReOpen1 Enrolled 332 patients with CS of which 205 Evaluable Subjects also had Nasal Polyps ReOpen2 Enrolled ~210 patients with CS without Nasal Polyps 196 μg Ra nd om iz at io n (1 :1 :1 ) Symptom Primary Imaging Primary
ReOpen1 A Landmark Phase 3 Trial in the Treatment of Chronic Sinusitis: Design and Top‐Line Results
16 Re‐Open 1: Disposition and Baseline Characteristics EDS Placebo XHANCE 186 mcg XHANCE 372 mcg Subjects Randomized 112 111 109 Subjects Who Completed Study 96 102 101 Subjects Discontinuing Early* 16 9 8 Full Analysis Set 110 110 107 Evaluable subjects with NP 69 69 67 Evaluable subjects without NP 41 41 40 Mean Baseline CSS Score 5.77 5.42 5.48 Mean Baseline APOV 68.94 68.88 68.95 Mean Baseline SNOT‐22 Score 48.0 50.94 50.81 APOV (average percent of opacified volume); CSS (composite symptom score); SNOT‐22 (Sino‐Nasal Outcome Test, 22 item) * Lack of efficacy was the most common reason for early discontinuation .
17 ReOpen‐1: Combined Symptom Score Coprimary Endpoint 1 ‐0.62 ‐1.58‡ ‐1.60‡ ‐2.0 ‐1.8 ‐1.6 ‐1.4 ‐1.2 ‐1.0 ‐0.8 ‐0.6 ‐0.4 ‐0.2 0.0 CS S Po in t R ed uc tio n LS Mean Change in CSS from Baseline to Week 4 EDS‐placebo BID OPN‐375 186 μg BID OPN‐375 372 μg BID BID, twice daily; CSNS, composite symptom nasal score. N = 110 N = 110 N = 107 ‡P ≤ .001 vs EDS‐placebo Summary Magnitude of improvement comparable to NAVIGATE I and II Treatment with XHANCE improved CSS and each of the four cardinal symptoms at week 4
18 ReOpen‐1: Average Percent Opacified Volume (Ethmoid and Maxillary) Objective CT scan Coprimary Endpoint ‐1.60 ‐5.58* ‐6.20* ‐7 ‐6 ‐5 ‐4 ‐3 ‐2 ‐1 0 Pe rc en t R ed uc tio n LS Mean Change in APOV of the Ethmoid and Maxillary Sinuses from Baseline to Week 24 EDS‐placebo BID OPN‐375 186 μg BID OPN‐375 372 μg BID N = 110 N = 110 N = 107 *P ≤ .05 vs EDS placebo. Summary First phase 3 trial to demonstrate statistically significant improvement in sinus opacification with a nasal treatment Represents an average ~20% increase in sinus patency for patients treated with XHANCE APOV, average percent of opacified volume; BID, twice daily;.
19 Illustration of APOV Improvement (Patient Receiving XHANCE 186 µg BID) 6.4% Improvement Week 24Baseline Images reflect individual results and results and may not be representative of results generally.
20 Illustration of APOV Improvement (Patient Receiving XHANCE 372 µg BID) Week 24Baseline 7.0% Improvement Images reflect individual results and results and may not be representative of results generally.
21 Secondary Endpoints and Subgroup Analysis Top‐line results are limited: full analysis is still ongoing Four defining symptoms of Chronic Sinusitis ‐ XHANCE‐ treated patients had statistically significant improvement over EDS‐placebo treated patients on each of the four symptoms (congestion, rhinorrhea, facial pain/pressure, and sense of smell) at week 4 Acute Exacerbations ‐ XHANCE‐treated patients had a reduced occurrence of acute disease exacerbation which reached statistical significance in the high dose group SNOT‐22 ‐ XHANCE‐treated patients had statistically significant improved SNOT‐22 scored by week 4 compared to EDS‐placebo treated patients CSS Outcome – the subgroup of chronic sinusitis patients without nasal polyps receiving XHANCE and the subgroup with concomitant nasal polyps receiving XHANCE had statistically significant improvement in CSS over EDS‐placebo treated patients APOV Outcome – the subgroup of chronic sinusitis patients without nasal polyps receiving XHANCE was not statistically different from those receiving EDS‐placebo and the subgroup with concomitant nasal polyps receiving XHANCE was statistically significantly improved over EDS‐placebo patients Secondary Endpoints Exploratory and Subject to Nominal Statistical Testing Subgroup Analyses Exploratory and Nominal Statistical Testing Underpowered to Detect Statistically Significant Differences
22 AEs Occurring in ≥3% of Patients and More Common Than Placebo Adverse Event (AE) EDS‐placebo BID (N =112) n (%) XHANCE 186 mcg BID (N =111) n (%) XHANCE 372 mcg BID (N =109) n (%) Epistaxis 1 (0.9) 5 (4.5) 13 (11.9) Nasopharyngitis 3 (2.7) 6 (5.4) 3 (2.8) Asthma 1 (0.9) 5 (4.5) 4 (3.7) Nuclear Cataract 0 5 (4.5) 4 (3.7) Cortical Cataract 1 (0.9) 6 (5.4) 2 (1.8) Subcapsular Cataract 2 (1.8) 1 (0.9) 1 (0.9)
23 Additional Phase 3b Clinical Trial Data Expected in Q2 2022 Recruitment Completed July 2021 Recruitment Completed October 2021 Top‐line results presented in Q1 2022 Top‐line results expected in Q2 2022 ReOpen1 ClinicalTrials.gov Identifier: NCT03781804 Enrolled 332 patients with CS of which 205 Evaluable Subjects had Nasal Polyps ReOpen2 ClinicalTrials.gov Identifier: NCT03781804 Enrolled ~210 patients with CS without Nasal Polyps
Additional Financial Information
25 XHANCE Net Revenue per Prescription $198 $185 $219 2019 2020 2021 ($ ) XHANCE Net Revenue per Prescription XHANCE net revenue per prescription ($/TRx) increased 11% from 2019 to 2021 In response to the COVID‐19 pandemic, Optinose offered the XHANCE ASSIST program in Q2 and Q3 2020 Commercially insured patients were eligible to receive 3 prescriptions of XHANCE for $0 out of pocket ASSIST drove the XHANCE $/TRx change from $198 in 2019 to $185 in 2020 The absence of the XHANCE ASSIST program and changes to our co‐pay assistance in 2021 drove the XHANCE $/TRx change from $185 in 2020 to $219 in 2021 +19% ‐6%
26 XHANCE Gross Margin Percentage and Consistent R&D plus SG&A Expense Has Enabled Revenue Growth to Translate to Decreasing Operating Loss ($000s) 2019 2020 2021 XHANCE Net Revenue 30,401 48,357 73,652 Licensing Revenues 4,230 750 1,000 Total Revenues 34,631 49,117 74,652 Cost of Product Sales 5,294 7,520 9,151 Gross Margin % 1 86.1% 84.4% 87.6% Research and Development 20,783 23,378 25,318 Selling, General and Administrative 104,155 105,438 106,633 Total SG&A + R&D 124,938 128,816 131,951 Loss from Operations (95,601) (87,219) (66,450) 1 Gross margin % as shown is calculated as (XHANCE Net Revenues – Cost of Product Sales)/(XHANCE Net Revenues) The Chronic Sinusitis Development Program Drove ~$23 Million of R&D Expenses in 2021
27 Full Year 2022 Financial Guidance XHANCE Net Revenue ‒ Expected to be at least $90 million XHANCE Average Net Revenue per Prescription ‒ FY 2022 expected to exceed $210 Operating Expense (GAAP) ‒ Expected to be between $135 – $140 million; approximately $10 million of which represents stock‐based compensation
28 Investor Relations – NASDAQ: OPTN Optinose Investor Contact Jonathan Neely, VP, Investor Relations and Business Development 267‐521‐0531 Investors@optinose.com At 31 December 2021: – $111 million in cash – Long‐term debt: $130 million – 82.2 million common shares o/s – 12.4 million options, warrants & RSUs o/s 1 ‐ Optinose is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Optinose or its management. Optinose does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. firstname.lastname@example.org www.optinose.com @optinose Analyst Coverage 1 BMO: Gary Nachman Cantor Fitzgerald: Brandon Folkes Cowen: Ken Cacciatore Jefferies: David Steinberg Piper Sandler: David Amsellem
Building a Leading ENT / Allergy Specialty Company Co r p o r a t e P r e s e n t a t i o n Ma r c h 8 , 2 0 2 2
30 Key Takeaways and Q4 2021 Highlights Consistent Commercial Execution Driving Q4 2021 Growth FY 2022 Revenue Guidance Implies Y/Y Growth of at least 22% Positive Top‐Line Results from ReOpen1 Reported in 1Q2022 +44% XHANCE Net Revenue Growth Q4 2021/Q4 2020 $240 XHANCE Net Revenue per TRx in Q4 2021 $111M Cash and equivalents as of December 31, 2021 +27% XHANCE TRx Growth Q4 2021/Q4 2020 +21% XHANCE NRx Growth Q4 2021/Q4 2020 Top‐Line Data from ReOpen2 Expected in Q2 2022