Good morning and thank you for joining us on today’s conference call to discuss Baudax Bio’s full year 2020 financial results. This is Claudia Styslinger and I am joined today by Gerri Henwood, President and Chief Executive Officer; John Harlow, Chief Commercial Officer; and Ryan Lake, Chief Financial Officer.

On today’s call, Gerri will provide some introductory remarks and business update, John will discuss the progress made on the commercial launch of ANJESO, and Ryan will discuss the financial highlights. Following today’s prepared remarks from Gerri, John and Ryan, we will open the call for questions.

Earlier this morning, we issued a press release detailing our financial results for the full year 2020. The press release along with the slide presentation that we will reference for today’s call is available on the events page of the News and Investors section of our website at baudaxbio.com.

Please note, the slides for today’s presentation are viewer controlled. Before we begin our formal comments, I will remind you that various remarks we make today constitute forward-looking statements pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements related to our financial outlook.

These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations and forecasts and can be identified by words such as anticipate, believe, could, estimate, expect, intend, may, plan, predict, project, grow and other words as similar meaning. The following are some of the factors that could cause our actual results to differ materially from those expressed in/or underlying our forward-looking statements.

The ongoing economic and social consequences of the COVID-19 pandemic, including any adverse impact on the commercial launch of ANJESO or disruption in supply chain, our ability to maintain regulatory approval for ANJESO, our ability to successfully commercialize ANJESO, the acceptance of ANJESO by the medical community, including physicians, patients, healthcare providers, and hospital formularies, our ability and that of our third-party manufacturers to successfully scale up our commercial manufacturing process for ANJESO, our ability to produce commercial supply and quantities and quality sufficient to satisfy market demand for ANJESO, and our ability to raise future financing for the continued product development and ANJESO commercialization. This list of important factors is not all inclusive.

Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the risk factors and the management’s discussion and analysis section of Baudax Bio’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and any other quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC’s website.

Any information we provide on this conference call is provided only as of the day of this call, February 16, 2021 and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise. In addition, any unaudited or pro forma financial information that maybe provide is preliminary and does not purport to project financial positions or operating results of the company.

Actual results may differ materially. I would now like to turn the call over to Gerri Henwood.

Gerri?

Thank you, Claudia and good morning everyone. We hope those of you who are joining us today are keeping safe as we would like to now turn to giving you an update on Baudax Bio and the ANJESO status.

If you could turn to Slide 5 in the presentation that is both on our website and that has been in K, we are making progress in spite of the pace being impacted by our current pandemic. Unfortunately, it is still effective, had gone through a little bit of a low, came back with a roar in the fall as you know and is so present although we hope with vaccinations and with some abatement in infection rates that we will see further progress, but it has disrupted formulary meetings and elective surgery schedules on a continuing basis.

Q4 vials sold grew by 58% versus the third quarter in spite of these COVID headwinds and our average account purchases increased by 63%. More than half of our accounts reordered in 2020 and that increased to 60% in the fourth quarter.

As of January of this year, ANJESO is on contract with the three largest GPOs in the United States, Vizient, Premier and Health Trust. I would like to now turn the meeting back to John to give us more color and more detail on the commercial launch highlights.

John?

Thank you, Gerri and good morning everyone. Now, turning to Slide 7, I will give a highlight of our commercial efforts.

While Q4 brought continued COVID-related challenges to our launch efforts, we remain encouraged by our progress and positive feedback shared by the early adopters of ANJESO. We continue to see significant quarterly approach in vials used by end customers that is hospital and ambulatory surgical centers despite COVID-19 headwind.

This increase is coming from a wide variety of specialties, including usage in a variety of orthopedic procedures and expansion in hospitals with colorectal procedures and a wide variety of general surgical procedures. As Gerri mentioned, ANJESO is also now on contract with the three largest GPOs, Vizient, Premier and Health Trust, which is finalized in January.

As we continue to navigate the ongoing pandemic and see our slower rate of adoption of ANJESO than we would have expected without COVID-19, our third-party market research is encouraging. In a large survey conducted in late fourth quarter, more than one-third of MDs suggest increase in utilization over the next 6 months.

And while limited customer access has created challenges generating awareness, HCPs noted many of our selling messages to be highly compelling. So, our current team is focused on the top drivers of ANJESO adoption, which are driving awareness, working with advocates to facilitate formulary inclusions and order set implementations.

The team is also focused on deepening usage, where ANJESO is already on formulary through order set implementation, which also has been impacted by COVID and depresses faster growth in our pull-through abilities. Moving to Slide 8, we see an increase in both end customer units and the number of formulary wins.

In 2020, almost 70 institutions added ANJESO to their formulary and we have seen that number already increase since the beginning of 2021. The number of vials sold to end customers increased by 58% in the fourth quarter versus the third and the number of vials sold to hospitals and ASCs increased over 80% during that same time period.

The average quarterly orders per account and the reorder rates both increased by 60% in Q4 versus Q3, which suggests a deepening usage pattern. Other important metrics include growth in the number of hospitals ordering during the fourth quarter and the purchases from ASCs nearly doubled.

In summary, we are seeing average weekly sales orders, sizes and units per account continue to increase month over month. Slide 9 provides three blinded real examples of how the timing of early adoption varies by account size for a large ASC that is represented here.

The team was able to build advocacy, secure P&T approval and generate usage in about 3 months. That account is now consistently ordering 30 to 50 units per month and affiliated hospital has begun ordering now.

In the second example, a midsized hospital, it took approximately 6 months from our initial touch point to order set implementation in orthopedics. This hospital has ordered a total of 200 – approximately 200 units over multiple orders and now additional units are being ordered at its affiliated ASCs.

In the final example, the team did a great job securing a P&T win at a very large, well-known academic medical center. The timeline to P&T approval was approximately 20 weeks and although that may sound long, it surpassed our estimated pre-COVID timeline of about 9 months.

In this case, the hospital has started to use the product, but still waiting for order sets across multiple service lines to be implemented. Once this occurs, we believe a significant uptick in usage will happen given the size of the hospital, along with the positive views on how ANJESO can help them and their patients.

And all three of these victories, COVID has impacted the entire process and these examples show how the pandemic has dampened the naturally slow adoption curve seen historically, with most hospital product launches. We believe, however, that we can continue to replicate these wins as we raise awareness and educate healthcare providers on the benefits of ANJESO for the management of moderate-to-severe pain in the acute care setting.

We are looking to achieve that through cost effective and innovative ways as shown on Slide 10. Our current team is focused on developing advocacy, working to secure P&T wins and pull-through with core accounts.

To support our current team, we launched a virtual telesales team to help increase awareness and broaden usage in a cost effective way. This team deployed in December, it had early success increasing awareness of ANJESO in hospitals not currently targeted by our sales team.

Another approach deployed in late January enlist individuals with a medical device background and previous relationships with orthopedic surgeons to further expand our access and reach in orthopedics. We have seen early successes with its cost effective approach and we believe that through the collective efforts of the team awareness and uses of ANJESO should continue to increase.

Our efforts plus the continued positive feedback from early adopters gives us reason to believe in the long-term potential of this product. With that, I would like to turn the call over to Ryan to review the financial highlights.

Ryan?

Thanks, John. Good morning, everyone.

Just to note to, our 10-K for the fiscal year ended December 31, 2020 was filed with the SEC this morning. So, please review that filing in connection with today’s presentation.

Looking at Slide 12, the revenue recognized in our financial statements under GAAP is not reflective of the deepening usage pattern both in accounts and reorders to end users just described by John, which is why sharing the metrics around the end user volumes and growth that you saw earlier in the deck is really important to providing insight into our commercial launch trajectory. Revenue in our financial statements is recognized at the time of shipment to our four distribution centers, once title and risk of loss and control has passed taking into account various estimates that we make of what we believe is not likely of reversal, so for example, taking into account estimates for gross to net deductions, discounts, rebates, returns and charge-backs.

We have raised, as you can see, noted on this slide, approximately $55 million gross or over $50 million in net proceeds over the past several months and our cash and cash equivalents at the end of the year was over $30 million prior to executing on the additional capital financings in Q1 of 2021 that raised net proceeds of approximately $28.5 million. Turning now to Slide 13, for year-over-year comparison of our income statement, the R&D expense line item decreased significantly by approximately $11 million from the prior year due to the cost-cutting measures that we have taken approval of ANJESO and really our vigilant focus on the commercial launch of ANJESO.

And as you will recall, we made significant cost reductions that impact our previous expense forecasts for 2021 that are expected to result in over $10 million in annualized savings and personnel on other related costs. The SG&A line item increased as a result of our commercialization efforts with regard to ANJESO, including the addition of sales personnel and our marketing and medical affairs costs and efforts.

What I think is important to note is the net loss reported for the fiscal year ended 2020 include non-cash charges of over $31 million. These non-cash charges relate to amortization of in-process research and development costs that began once ANJESO was approved by the FDA.

There is also changes in the net present value of the risk adjusted discounted cash flows for contingent consideration that are non-cash and mark-to-market expenses on warrants that are also non-cash. This net loss also includes, as we noted last quarter, one-time cost associated with our restructuring and reduction in force efforts that we executed on during the fourth quarter of approximately $1.7 million.

So, excluding all of those non-cash items in the cost saving measures, our cash used in operations for fiscal year ‘20 was approximately $43 million. So, with that, I will now turn the call back to Gerri for closing comments.

Gerri?

Thanks, Ryan. I would actually like to loop John in for another second before I get to my closing remarks, because I think there is a little piece of good news that will be helpful to report, John.

Yes, thanks, Gerri. The one other thing I wanted to add to my comments is today actually represented our largest day of orders.

We just received a report early this morning, which I just received. So I wanted to share that good news with everyone.

Back to you, Gerri.

Thanks, John. So in closing, I just want to recap some of the key takeaways from today’s call although not quite every level that we might have thought pre-COVID we are seeing significant progress being made with ANJESO despite the impact of our pace because of what’s going on with COVID-19 formulary meetings and elective surgeries.

The number of vials sold in the fourth quarter had significant growth compared to the third quarter more than 50% despite these headwinds. Account purchases increased by 63% during 2020 and more than half of accounts reordered in all of 2020 and this was 60% for the fourth quarter.

As you know, we are on contract now with the three largest GPOs in the U.S., very important for access for a lot of our customers. And in addition to that, the formulary wins continue to increase, learn where to go but making good progress and we think we will see more substantial progress with the product in 2021.

We are confident in our execution to-date. We think we are well positioned to educate physicians and other healthcare professionals about ANJESO’s benefits for managing moderate-to-severe pain in a wide variety of surgical settings.

We are working with this surgical and anesthesia community to drive adoption of ANJESO and have it incorporated into standard team management protocols. We are excited for what lies ahead and we look forward to keeping you updated in the months and the quarters to come.

I will now turn the call over to the operator for any questions.

Thanks for taking the questions. So, just a couple.

So Gerri, I was wondering if you can elaborate on the P&T committee reviews and what I am specifically interested in is the pace of getting meetings with P&T committees, what you expect will be the review time or lag time? And then just talk maybe generally how the pandemic currently impacting reviews just being able to get in front of P&T committees and being able to get sort of an expeditious review and kind of what your expectations are currently and how you think the next few months in terms of reviews will play out?

Thanks.

Thanks, David. Sure.

So, just as a setting, I think you are aware of it that our full audience may not be because of the impact of COVID on elective surgery throughout the U.S. in a sort of consistent manner in certain localities, but in a whack-a-mole manner and others whereas the disease peaks and then subsides, our audience, hospitals in the United States, according to the American Hospital Association, have lost over $100 trillion in 2020.

So they are very focused on trying to get the disease under control and to get back to doing more elective surgeries. And it is in that vein they are also looking at anything new, not just of anything new coming in for the P&T committees as not their number one priority as it might have been in other times.

So, P&T committee meetings, sometimes get scheduled and then rescheduled and rescheduled and rescheduled, I would say that, that is more the norm than not for us where you are scheduled, for instance, you are scheduled for November, but the actual meeting takes place in January or early February. And some of that is because of conflicting priorities of clinicians and other members of the P&T committees.

They are called to do clinical loans. Most recently, we have had some really amazing stuff deferred, because people were on product vaccination initiatives obviously a key part of getting things back to more normal runs.

So, we don’t think we will be back to sort of normal, I – we would have expected from the day we launch, we would have expected that it would take us probably a full 2 years to get on [Technical Difficulty] for all of the institutions that we are targeting, which is not all of the hospitals that are our target market. We still think that it will take that long, but we think we will make – if we look at from zero, if you will, we would not have expected really to have much in the way of P&T committee meetings in the summer anyway, you would have expected some starting in September and those kind of slid to October and November in timing and many of those happen, but a portion of those get moved into Q1.

So, I think we would expect it would still take us a further 2 years to get on to all the institutions that we have targeted, assuming that the vast majority of those we would get on, but oftentimes and we saw this with often a sort of comp that we look to in non-COVID times that often took 1, 2 or 3 P&T committee meetings until we were finally approved, so, they were approved rather to the poor health economics there was understood and we are trying to have learned from that in the way that we approach with the data that we have. So, I think we will be not able to as clearly predict as we would like in this quarter from the first quarter successive, probably the second quarter, but we would expect that we would continue to make progress in those quarters, but that it would become more meaningful as we get to the second half of ‘21 and beyond.

Is that helpful?

Yes. That’s helpful.

And then just another question I had is on the hospital versus ASC mix, I just wanted to get a sense from you as to what you think the hospital versus ASC mix may have been in the absence of the pandemic? And I guess going forward with normalization assuming normalization, how you think that hospital versus ASC mix will evolve?

I think that’s a great question. And in the absence of pandemic, we would have expected to see some early adoption by ASCs for trial usage rolling into more traditional adoption by hospitals where more of the surgeries in numbers were taking place.

Right now because of the impacts of inpatient facilities with elective surgeries, we are seeing little more of a skew to ASCs and perhaps the patient – reported patient reluctant in some cases to have surgery in an inpatient setting versus a full day or outpatient setting that may influence things as we go forward. But we continue to be targeting the bigger institutions that do have their own outpatient surgery departments often covering covered by those same formularies.

But we think that over time we knew before we got to the launch of the product last year that there was a general, although gradual movement toward outpatient facilities for some of the major orthopedic procedures, for instance, for the remaining total hip and that CMS was providing a way for that to include Medicare patients as well. Commercial insurers for uncomplicated cases were encouraging folks to move in that direction.

So, we think we will see institutional approvals where they have an even deeper ability to do numbers of patients over that may shift over the next couple of years to do a little bit more on the ASC side than we would have predicted before, but before we probably would have said more like 60:40 or a little bit more than that 60 favoring hospitals, 40 ASCs. I think it may turn out to be fully that way with the movement of patients to more in the surgical settings where their cases are not complicated enough to do them.

Great, thank you.

Thanks, David.

Great. Thanks for taking the question.

I just had one on the promotional activities you talked about in terms of the territory advisors and the ortho outreach, can you just talk about how focused these efforts were on certain targets or geographies and how we should think about the potential to build on or expand these activities throughout 2021?

Sure. I am going to ask John to step in and then I will wrap it up at the end.

John, do you want to respond to that?

Yes, sure. So, our current targeted effort is a combination of both our current sales organization as well as our customer outreach for – with our telesales team as well as the territory advisors.

We have a handful of territory advisors around the country and they are working very closely with our sales team given their deep experience in orthopedic and helping really give us greater access and penetrations there. What our goal is, is in the geographies that we are currently covering around the country is as we hope to see a deepening of usage then we would continue to add on whether it is additional sales representatives or other types of promotional activities to increase the depth and breadth of usage in those geographies.

So it really is dependent upon the geographies, the receptivity, and quite frankly, the adoption. So, in one of the cases that I used in the slide deck and one of the large academic medical centers and that’s a geography where we are looking to add on very quickly to take advantage of that win.

So it’s difficult to predict that we will continue to scale up moving throughout 2021 as we see the trends support those decisions. Gerri, back to you.

Thanks, John. So, Jason, if I could just sort of amplify a little bit, when we made the decision in the early part of the fourth quarter to trim back our sales growth to conserve expenses especially during the pandemic that was when we started to work on and then to subsequently implement some of these other strategies to help us look at even in the pandemic which of these could help us be more successful.

And we are really using that as a guide for okay, this appears to be working, it’s working in more than one geography let’s adopt it to other geographies. We are trying to not follow our sword into battle in terms of formularies hoping that we will get formulary wins, but rather working to get formulary wins and then stepping for pull-through so that we are in a prudent position in terms of using our resources to try and get more appropriate, especially through the pandemic.

And as we see pandemic recede, that may give us a little bit more breathing room, but that’s kind of the step wise where we are looking at it right now.

Okay, great. And then can you give us any color on the growth of the number of physicians that are using the product in the centers that are reordering?

I see most is still a small number of physicians per institution, but just any dynamics there that speak to how the growth can build over time?

Yes. So, when we get information about purchases, it is sometimes even a challenge to get it down to the institutional level, but the more significant purchases you can’t get to that level.

John, do you want to speak to a little bit of the deepening within institutions and what your sense is right now of that?

Yes, absolutely. So, if one of the great challenges is you maybe aware in this marketplace is that when a vial is sold to an individual institution, you don’t know who ultimately uses the product.

All of our institutions that have ANJESO on formulary or where we have usage, obviously, we have built strong advocacy, because those champions have asked for the product. They are using the product.

And what we are seeing the early traction is we have a handful in a given account, let’s call it, 2 3 4, either surgeons, sometimes even the pharmacy director or the anesthesiologist champion for the product and then usage begins and what the goal there is had to use that individual clinicians experience and help expand the depth in a given account. So, I would say, it’s tough to give a number on the total number of physicians who have tried the product, it’s certainly larger than the number of formularies where we are on, because we are also getting usage in certain accounts where we are not on formulary yet, it’s part of that process there.

But we are encouraged that we continue to see on a daily basis more clinicians using the product based on the feedback through the various channels that we receive it.

John, if I could add that – Jason, they are often associated with orthopedic groups, tend not to be solo practitioners as you may know. And so getting into an orthopedic group and getting one color or two to start using it does help spread it to the rest of the group and make them attend.

We are open to a new service on a deeper understanding of the product and where it can be used and so on. And we expect over time that, that’s going to lead to further outreach and further spread of the use of that product within that practice and then obviously trying to get other large orthopedic practices of those same institutions.

That’s great. Gerri, thanks for taking the questions.

Thanks for the question, Jason. Appreciate it.

Good morning, Gerri. Thanks for taking my questions.

Question for you and then maybe John encouraging to see the early uptick in hospitals alongside the ASCs. Question is with surgeons practicing perhaps in both settings, I am wondering if those who are the ASCs, who then see ANJESO in the hospitals, push for more of the ASCs that they are looking at it.

Is there any sort of cross pollination that happens between one center and the other when you have surgeons who maybe upgrading in both cases? And then a follow-up question.

So John, do you want to do that?

Yes, good question, [indiscernible]. And that’s absolutely the case and that was our pre-COVID pre-launch strategy of targeting strategic ASCs where surgeons could get experience in an environment where the barrier to use a product is often lower and then bring that experience forward through an affiliated hospital and help champion the product through that formulary process.

So, what we are seeing play out is that exactly whether we are seeing it go, quite frankly, both directions where we are getting usage at an ASC and then that clinician brings it forward with his and her peers to the hospital setting that is affiliated and vice-versa and when the one example that I shared in the slide deck at a midsized hospital, we were able to get on formulary or orthopedic outpatient use in that midsized hospital. And as clinicians got experience there then they brought it to other ASCs that are affiliated and more importantly where they practice that.

So we are seeing the deepening of usage go across settings of care as you said as surgeons move around to different locations where they operate.

Okay.

I think we are having had the J-code since October has helped us in those settings because there are some ways that they can try where it’s going to be cost neutral because of the pasture on to the J-code for those who have Medicare patients, etcetera.

Got it. Okay, great.

And then my other question is from my understanding opioids have been used more during the COVID-19 period last year, it’s just been on the rise for various reasons. I am just wondering if that has had any impact in either direction on ANJESO in terms of the motivation by centers to adopt non-opioid analgesic things?

I will use an example of one institution where I know the Chief of Medicine treat well. And they were very active in early recovery after surgery protocols pre-COVID, but kind of during COVID, it was import in a storm, whatever we need to do to, to get through it, I am not saying that they lost track of that objective, but there was such a mix of patients with other issues and the very particular infection control techniques, etcetera, but I think it did not get the growth emphasis that they had hoped for at that institution.

And my sense is it is similar to that institution in other places in the country and in fact that unfortunately, but not necessarily associated with just acute usage of opioids. Opioid related deaths grew tremendously during 2020.

So, we think it’s an issue that hospitals relate to that they would like to be doing more to move in that direction. I think as we see greater vaccination and more case control over the members of COVID patients hospitalized, I think that’s something that will see more emphasis placed on they will get back to that.

And I think we have a role in pain relief. Without that, we have an even better role if we can help them in their goal to have this early recovery after surgery protocols implemented with less opioids.

Got it. Great.

Thanks for taking the questions.

Thanks very much, [indiscernible].

Thank you very much, operator. In closing, I just want to thank everyone for taking the time to have joined us on this call.

We are actively working to grow ANJESO’s success and to help with the adoption of ANJESO in institutions and look forward to keeping you posted on progress as we go forward. Hope you have a great rest of your day.

Thanks. Bye.