UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ______________. Commission file number: 001-38241 OPTINOSE, INC. (Exact name of registrant as specified in its charter) (State of other jurisdicti ...

Financial Data and Key Metrics Changes - For the full year 2020, XHANCE net revenues increased by 59% to $48.4 million compared to 2019, with total prescriptions rising by 70% and new prescriptions by 31% [6][8] - Operating expenses for 2020 were $129 million, a 3% increase from 2019, reflecting disciplined expense management despite pandemic challenges [8][32] - Average net revenue per prescription for Q4 2020 was $211, while the full year average was $185, a decrease of 6% from 2019 [31][39] Business Line Data and Key Metrics Changes - New prescriptions for XHANCE reached 24,600 in Q4 2020, a 7% increase from Q3 2020 and a 16% increase from Q4 2019, marking the highest quarterly new prescriptions since launch [19][20] - Refill prescriptions increased to 49,300 in Q4 2020, comprising approximately two-thirds of the XHANCE business [21] - Total XHANCE prescriptions in Q4 2020 were approximately 73,900, representing a 36% growth over Q4 2019 [22] Market Data and Key Metrics Changes - XHANCE market share increased from 3.4% in Q4 2019 to 5.1% in Q4 2020, despite a declining overall market [25] - The breadth of physician prescribing grew, with approximately 6,700 physicians having patients fill at least one prescription of XHANCE, a 14% increase from Q4 2019 [27] Company Strategy and Development Direction - The company aims to drive revenue growth for XHANCE and complete clinical trials for chronic sinusitis, with expectations for improved business conditions in 2021 [61] - The partnership with Kaleo is expected to enhance market access and prescription growth as pandemic conditions improve [13][68] - The company is focused on expanding its target physician audience to approximately 18,000, including additional physicians reached through the Kaleo partnership [23][90] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, anticipating a gradual return to pre-pandemic norms and increased patient volumes [66][69] - The company expects to achieve at least $80 million in net revenues for 2021, with potential upside driven by improved market conditions and recognition of XHANCE's role in treatment [34][67] Other Important Information - The company expects top-line data from at least one pivotal clinical trial for chronic sinusitis by the end of 2021, despite delays due to the pandemic [18][48] - OPN-019, a new product candidate, is being developed for potential use in COVID-19 prevention and treatment, with a pilot clinical trial expected to start in April 2021 [52][55] Q&A Session Summary Question: What gives confidence in achieving at least $80 million in revenue for 2021? - Management indicated that the $80 million floor reflects current market conditions and anticipated improvements in patient volumes and access to physician offices as the year progresses [66][67] Question: What is the enrollment status for the chronic sinusitis trials? - Management expects to complete enrollment around mid-year, with top-line data anticipated by year-end [71][72] Question: Where are share gains coming from in a declining category? - Share gains are attributed to increased usage from existing prescribers and the addition of new prescribers, with expectations for further growth as access improves [78][79] Question: What portion of prescriptions are currently off-label for chronic sinusitis? - Approximately one-third of prescriptions are specifically coded for nasal polyps, with some off-label use for chronic rhinosinusitis [80] Question: How is data quality being managed in clinical trials during the pandemic? - The company is implementing measures to ensure data quality and patient enrollment despite challenges posed by the pandemic [84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2020 OR ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________ to ______________. Commission file number: 001-38241 OPTINOSE, INC. (Exact name of registrant as specified in its charter) (State of other jurisdiction of incorpo ...

OptiNose, Inc. (NASDAQ:OPTN) Q3 2020 Results Conference Call November 5, 2020 8:00 AM ET Company Participants Jonathan Neely - Vice President, Investor Relations Peter Miller - Chief Executive Officer Ramy Mahmoud - President and Chief Operating Officer Vic Clavelli - Chief Commercial Officer Keith Goldan - Chief Financial Officer Conference Call Participants Stacy Ku - Cowen David Steinberg - Jefferies Brandon Folkes - Cantor Fitzgerald Rafay Sardar - BMO Operator Ladies and gentlemen, thank you for standi ...

Q3 2020 Performance Highlights - XHANCE net revenue increased by 78% compared to Q3 2019[5, 24] - XHANCE TRx (total prescriptions) grew by 61% in Q3 2020 compared to Q3 2019[5, 12] - XHANCE net revenue per TRx was $224 in Q3 2020, an increase from $164 in Q2 2020[5, 24] - XHANCE achieved a 5.7% market share within the target physician audience in Q3 2020, a 2.7% increase compared to Q3 2019's 3.0% share[5, 16] - New prescriptions of XHANCE increased 23% in Q3 2020 compared to Q2 2020 and increased 29% in Q3 2020 compared to Q3 2019[9] Financial Position and Guidance - Cash and equivalents were $143 million as of September 30, 2020[6, 30, 32] - Full year 2020 operating expense guidance is lowered to between $127 million and $132 million, including approximately $10 million in stock-based compensation[5, 26] - The company qualified to draw $20 million from a debt facility due to Q3 2020 XHANCE net revenues exceeding $14.5 million and expects to draw it by early 2021[5, 26] Strategic Initiatives - Successful launch of kaléo co-promotion on October 1st[5, 30] - Physicians who had more than 15 XHANCE prescriptions filled by their patients in a quarter increased by 73% from Q3 2019 to Q3 2020 (1,153 versus 665)[19]

[Note Regarding Forward-Looking Statements](index=4&type=section&id=NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements in Form 10-Q, based on current expectations, subject to risks, and not subject to future updates - Forward-looking statements cover various aspects including the impact of COVID-19, XHANCE product development and commercialization, OPN-019 development, future revenue growth, operating expenses, and capital requirements[9](index=9&type=chunk) - Statements are subject to numerous risks and uncertainties that could cause actual results to differ materially, as discussed in this Form 10-Q and the annual report on Form 10-K under 'Risk Factors'[11](index=11&type=chunk) - The company disclaims any obligation to update forward-looking statements, even if new information becomes available, advising readers to consult future SEC filings[12](index=12&type=chunk) [Market, Industry and Other Data](index=6&type=section&id=MARKET%2C%20INDUSTRY%20AND%20OTHER%20DATA) This section cautions that the report's market data, estimates, and projections are inherently uncertain and may differ from actual results - The Form 10-Q includes estimates, projections, market research, and other data from independent third parties, third parties on the company's behalf, and the company itself, concerning markets for XHANCE, market access, and prescription data[16](index=16&type=chunk) - Information based on estimates, projections, or similar methodologies is inherently uncertain, and actual results, events, or circumstances may differ materially[16](index=16&type=chunk) [Part I — Financial Information](index=7&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim consolidated financial statements and detailed notes explaining the company's financial position and performance [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets present the company's financial position, detailing assets, liabilities, and stockholders' equity as of specific dates | Metric | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Total Assets | $181,024 | $172,650 | | Total Liabilities | $153,341 | $111,067 | | Total Stockholders' Equity | $27,683 | $61,583 | | Cash and cash equivalents | $143,134 | $147,144 | | Long-term debt, net | $105,013 | $74,531 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations detail revenues, costs, and net loss for the reported periods, highlighting performance changes | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net product revenues | $15,436 | $8,667 | $32,770 | $19,320 | | Licensing revenues | $0 | $3,730 | $0 | $4,230 | | Total revenues | $15,436 | $12,397 | $32,770 | $23,550 | | Total operating expenses | $33,320 | $32,206 | $99,538 | $96,230 | | Loss from operations | $(17,884) | $(19,809) | $(66,768) | $(72,680) | | Net loss | $(21,214) | $(28,808) | $(75,922) | $(85,058) | | Net loss per share (basic & diluted) | $(0.43) | $(0.69) | $(1.62) | $(2.06) | [Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) The Consolidated Statements of Comprehensive Loss present net loss and other comprehensive loss components, primarily foreign currency translation adjustments | Metric | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net loss | $(21,214) | $(28,808) | $(75,922) | $(85,058) | | Foreign currency translation adjustment | $13 | $(12) | $(17) | $(22) | | Comprehensive loss | $(21,201) | $(28,820) | $(75,939) | $(85,080) | [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement details changes in stockholders' equity, reflecting impacts from stock compensation, net loss, and common stock issuances | Metric | December 31, 2019 (in thousands) | September 30, 2020 (in thousands) | | :-------------------------- | :------------------------------- | :------------------------------- | | Total Stockholders' Equity | $61,583 | $27,683 | | Stock compensation expense (9M 2020) | N/A | $7,857 | | Net loss (9M 2020) | N/A | $(75,922) | | Sale of common stock, net of offering costs (9M 2020) | N/A | $33,405 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows summarize cash generated from or used in operating, investing, and financing activities, showing net cash changes | Metric | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | $(67,049) | $(72,709) | | Net cash used in investing activities | $(460) | $(485) | | Net cash provided by (used in) financing activities | $63,502 | $(2,302) | | Net decrease in cash, cash equivalents and restricted cash | $(4,018) | $(75,507) | | Cash, cash equivalents and restricted cash at end of period | $143,147 | $125,504 | [Notes to Unaudited Interim Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Interim%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited interim consolidated financial statements, covering key financial aspects [1. Organization and Description of Business](index=12&type=section&id=1.%20Organization%20and%20Description%20of%20Business) This note describes OptiNose, Inc. as a specialty pharmaceutical company focused on ENT and allergy, with XHANCE as its primary commercial product - OptiNose, Inc. is a specialty pharmaceutical company focused on developing and commercializing products for patients treated by ear, nose and throat (ENT) and allergy specialists[31](index=31&type=chunk) - XHANCE (fluticasone propionate) nasal spray, 93 mcg, is the company's first commercial product, approved by the FDA in September 2017 for the treatment of nasal polyps[31](index=31&type=chunk) - The company has two ongoing Phase 3b clinical trials evaluating XHANCE as a treatment for chronic sinusitis[31](index=31&type=chunk) [2. Liquidity](index=12&type=section&id=2.%20Liquidity) This note discusses the company's cash position, future capital needs, and ability to draw additional funds, emphasizing ongoing financing requirements - As of September 30, 2020, the company had cash and cash equivalents of **$143.1 million**[32](index=32&type=chunk) - The company expects to draw an additional **$20 million** from the Third Delayed Draw Notes by early 2021, having exceeded the XHANCE net sales and royalties threshold for Q3 2020[33](index=33&type=chunk) - Additional capital will likely be required in the future through equity or debt financings, partnerships, collaborations, or other sources to meet debt service obligations and fund planned development and commercial activities[34](index=34&type=chunk) [3. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=3.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of financial statement preparation, use of estimates, and key accounting policies for revenue recognition and credit risk - The unaudited interim consolidated financial statements have been prepared in conformity with US generally accepted accounting principles (GAAP)[36](index=36&type=chunk) - Management makes estimates and assumptions that affect the reported amounts of assets and liabilities, and actual results may materially vary from these estimates[40](index=40&type=chunk) - Revenue from XHANCE sales is recognized when customers obtain control of the product, with the transaction price including estimates of variable consideration such as provider chargebacks, trade discounts, product returns, government rebates, payor rebates, and patient assistance programs[46](index=46&type=chunk)[47](index=47&type=chunk)[50](index=50&type=chunk) [4. Inventory](index=18&type=section&id=4.%20Inventory) This note breaks down inventory components (raw materials, WIP, finished goods), valued at the lower of cost or net realizable value | Inventory Component | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------ | :-------------------------------- | :-------------------------------- | | Raw materials | $2,733 | $1,227 | | Work-in-process | $2,137 | $676 | | Finished goods | $4,456 | $1,581 | | Total inventory | $9,326 | $3,484 | - Inventories are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis[63](index=63&type=chunk) [5. Property and Equipment](index=18&type=section&id=5.%20Property%20and%20Equipment) This note details the company's property and equipment, net of accumulated depreciation, and reports the depreciation expense incurred for the reported periods | Asset Category | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Computer equipment and software | $1,113 | $1,112 | | Furniture and fixtures | $366 | $366 | | Machinery and equipment | $3,139 | $3,142 | | Leasehold improvements | $609 | $609 | | Construction in process | $474 | $70 | | Less: accumulated depreciation | $(3,293) | $(2,247) | | Total Property and equipment, net | $2,408 | $3,052 | - Depreciation expense was **$473 thousand** for the three months ended September 30, 2020 (vs. **$286 thousand** in 2019) and **$1.0 million** for the nine months ended September 30, 2020 (vs. **$877 thousand** in 2019)[64](index=64&type=chunk) [6. Leases](index=18&type=section&id=6.%20Leases) This note describes the company's lease agreements for office space, storage, and equipment, presenting recognized operating lease assets and liabilities | Lease Metric | September 30, 2020 (in thousands) | | :-------------------------- | :-------------------------------- | | Non-current operating lease assets | $5,999 | | Current operating lease liabilities | $1,904 | | Non-current operating lease liabilities | $4,236 | | Total operating lease liabilities | $6,140 | - On September 18, 2020, the company amended an existing office lease agreement to extend the term by three years[65](index=65&type=chunk) [7. Accrued Expenses and Other Current Liabilities](index=19&type=section&id=7.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note details accrued expenses and other current liabilities, including product revenue allowances, SG&A, R&D, and payroll expenses | Liability Category | September 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Product revenue allowances | $15,540 | $12,858 | | Selling, general and administrative expenses | $5,349 | $5,544 | | Research and development expenses | $4,363 | $3,379 | | Payroll expenses | $6,686 | $7,810 | | Total accrued expenses and other current liabilities | $37,281 | $32,514 | [8. Licensing Revenue](index=20&type=section&id=8.%20Licensing%20Revenue) This note details licensing agreements, outlining payments and royalties, noting no licensing revenue recognized in the reported periods - Under the Inexia License Agreement, the company received a **$0.5 million** upfront payment in Q1 2019 and is eligible for up to **$8 million** in development milestone payments and **$37 million** in sales milestone payments, plus tiered royalties[71](index=71&type=chunk) - Under the Currax License Agreement, the company received a **$3.7 million** upfront payment in Q3 2019 and is eligible for an additional **$0.8 million** in escrow, a one-time **10%** royalty on Onzetra net sales over **$3 million** for 2020, and a **$1 million** regulatory milestone[73](index=73&type=chunk) - No licensing revenues were recognized by the company during the three and nine months ended September 30, 2020[73](index=73&type=chunk) [9. Long-term Debt](index=20&type=section&id=9.%20Long-term%20Debt) This note describes the Pharmakon Senior Secured Notes, detailing terms, payment schedule, and covenants, with the company in compliance - The Pharmakon Senior Secured Notes provide up to **$150 million** in debt financing, with **$80 million** issued on September 12, 2019, and an additional **$30 million** (First Delayed Draw Notes) on February 13, 2020[74](index=74&type=chunk) - The company has the option to issue an additional **$20 million** (Third Delayed Draw Notes) by February 15, 2021, having achieved the XHANCE net sales and royalties threshold for Q3 2020[75](index=75&type=chunk) - The notes bear interest at a fixed rate of **10.75%** per annum and are scheduled to mature on September 12, 2024, with quarterly interest payments and principal payments beginning December 15, 2022[79](index=79&type=chunk) - As of September 30, 2020, the company was in compliance with all covenants, including maintaining minimum trailing twelve-month consolidated XHANCE net sales and royalties, and at least **$30 million** of cash and cash equivalents[82](index=82&type=chunk) [10. Employee Benefit Plans](index=22&type=section&id=10.%20Employee%20Benefit%20Plans) This note outlines the defined contribution retirement plans maintained for US and Norway employees, and the associated costs incurred by the company - The company maintains a defined contribution 401(k) retirement plan for US employees, with approximately **$105 thousand** recorded in accrued liabilities for the company match as of September 30, 2020[88](index=88&type=chunk) - Defined contribution pension plans are maintained for Norway employees, incurring costs of **$5 thousand** for Q3 2020 (vs. **$4 thousand** in 2019) and **$15 thousand** for 9M 2020 (vs. **$15 thousand** in 2019)[89](index=89&type=chunk) [11. Stockholders' Equity](index=22&type=section&id=11.%20Stockholders'%20Equity) This note reports on common stock activity, including a public offering that generated net proceeds, and details outstanding common stock warrants - On August 18, 2020, the company closed an underwritten public offering of 6,000,000 shares of common stock at **$5.60** per share, resulting in **$33.4 million** in net proceeds[90](index=90&type=chunk) - As of September 30, 2020, the company had 52,080,552 shares of common stock issued and outstanding[19](index=19&type=chunk) - Outstanding warrants include 1,866,831 shares at an exercise price of **$8.16** (expiring November 1, 2020) and 810,357 shares at **$6.72** (expiring September 12, 2022)[91](index=91&type=chunk) [12. Stock-based Compensation](index=23&type=section&id=12.%20Stock-based%20Compensation) This note details stock-based compensation expense, summarizes stock option and RSU activity, and describes the employee stock purchase plan | Expense Category | 3 Months Ended Sep 30, 2020 (in thousands) | 3 Months Ended Sep 30, 2019 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | 9 Months Ended Sep 30, 2019 (in thousands) | | :-------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Cost of product sales | $25 | $33 | $113 | $78 | | Research and development | $334 | $90 | $922 | $617 | | General and administrative | $2,267 | $2,312 | $6,822 | $6,857 | | Total stock-based compensation | $2,626 | $2,435 | $7,857 | $7,552 | - As of September 30, 2020, 8,157,752 stock options were outstanding with a weighted average exercise price of **$9.19**, and 1,499,456 Restricted Stock Units (RSUs) were outstanding[95](index=95&type=chunk)[98](index=98&type=chunk) - The unrecognized compensation cost related to unvested stock options was **$14.1 million**, to be recognized over an estimated weighted-average amortization period of 2.13 years[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results, discussing business updates, COVID-19 impact, and financial performance [Company Overview](index=26&type=section&id=Company%20Overview) This section reaffirms OptiNose's focus as a specialty pharmaceutical company in ENT and allergy, highlighting XHANCE and ongoing trials - OptiNose is a specialty pharmaceutical company focused on developing and commercializing products for patients treated by ENT and allergy specialists[104](index=104&type=chunk) - XHANCE is approved for the treatment of nasal polyps and is currently being evaluated in two Phase 3b clinical trials for chronic sinusitis, with top-line results expected in the second half of 2021[104](index=104&type=chunk) [Business Updates in Response to the COVID-19 Pandemic](index=26&type=section&id=Business%20Updates%20in%20Response%20to%20the%20COVID-19%20Pandemic) This section details operational adjustments due to COVID-19, including virtual work, adverse impact on prescriptions, and withdrawal of revenue guidance - In mid-March 2020, the company transitioned to a full-time, virtual work environment, with sales representatives (territory managers) beginning virtual detailing of XHANCE[106](index=106&type=chunk) - XHANCE prescription growth was adversely impacted by the COVID-19 pandemic, particularly during 'shelter-in-place' efforts from late-March through May[106](index=106&type=chunk) - XHANCE prescriptions increased **11%** from Q1 2020 to Q2 2020, and another **11%** from Q2 2020 to Q3 2020, but the rate of growth was below pre-pandemic expectations[107](index=107&type=chunk) - The company withdrew its previous XHANCE revenue guidance for 2020 due to the uncertain duration and magnitude of the negative impact from the COVID-19 pandemic[107](index=107&type=chunk) [Additional Business Updates](index=27&type=section&id=Additional%20Business%20Updates) This section provides key performance metrics for XHANCE, including prescriptions, market share, and prescribing breadth, plus manufacturing and trial updates | Metric | Q3 2020 | Q3 2019 | YoY Growth | | :-------------------------------- | :------ | :------ | :--------- | | Total XHANCE Prescriptions | 69,000 | 43,000 | 61% | | XHANCE New Prescriptions | 23,000 | 17,800 | 29% | | XHANCE Refill Prescriptions | 46,100 | 25,200 | 83% | | Physicians with ≥1 XHANCE patient fill | 6,443 | 5,075 | 27% | | Physicians with >15 XHANCE prescriptions | 1,153 | 665 | 73% | | Metric | Q3 2019 | Q4 2019 | Q1 2020 | Q2 2020 | Q3 2020 | | :---------------- | :------ | :------ | :------ | :------ | :------ | | XHANCE Market Share | 3.0% | 3.5% | 3.8% | 5.6% | 5.7% | - Manufacturing delays occurred in Q2 2020 due to COVID-19 but did not interrupt commercial or clinical supply; currently, all manufacturers are on time, and appropriate inventory levels are maintained[109](index=109&type=chunk) - The projected timeline for top-line results from chronic sinusitis trials remains in the second half of 2021, despite COVID-19 related pauses in patient enrollment[109](index=109&type=chunk) [Sales, Marketing & Distribution](index=29&type=section&id=Sales%20Marketing%20%26%20Distribution) This section outlines the company's commercial strategy for XHANCE, including sales force, co-promotion, patient programs, and distribution channels - The company has approximately **100 territory managers** targeting over 10,000 ENTs, allergists, and 'specialty-like' primary care physicians, supplemented by digital and non-personal promotion[114](index=114&type=chunk) - A co-promotion agreement with kaléo, initiated in July 2020, expands XHANCE promotion to an additional audience of nearly **6,000 prescribers**, about half of whom are outside Optinose's current target[115](index=115&type=chunk) - The XHANCE Co-Pay Savings Program offers eligible commercially insured patients a **$0** co-pay for the first prescription and low subsequent co-pays (**$0**-**$50**); the ASSIST program for COVID-19 patients closed to new patients at the end of June 2020[116](index=116&type=chunk) - As of September 30, 2020, approximately **75%** of commercially insured lives have contracted XHANCE coverage, though payors may impose restrictions like prior authorizations[117](index=117&type=chunk) [XHANCE Development](index=30&type=section&id=XHANCE%20Development) This section focuses on the XHANCE clinical trial program for chronic sinusitis, with top-line results expected in the second half of 2021 - The company initiated a clinical trial program to pursue a follow-on indication for XHANCE for the treatment of chronic sinusitis in the U.S., aiming to be the first FDA-approved drug therapy for this condition[119](index=119&type=chunk) - Top-line results from both ongoing Phase 3b chronic sinusitis trials are expected in the second half of 2021[119](index=119&type=chunk) [OPN-019](index=30&type=section&id=OPN-019) This section announces OPN-019 development, combining EDS with an antiseptic, anticipating streamlined development due to existing components - Development of a new product candidate, OPN-019, combining the proprietary nasal Exhalation Delivery System (EDS) with an antiseptic, was initiated in June 2020[120](index=120&type=chunk) - In vitro testing of a candidate formulation showed a **4-log** (**99.99%**) reduction in SARS-CoV-2 virus count[120](index=120&type=chunk) - Streamlined and accelerated development is anticipated because components of the drug-device combination product candidate are currently commercially available in the U.S[121](index=121&type=chunk) [Financial Operations Overview](index=30&type=section&id=Financial%20Operations%20Overview) This section overviews consolidated statements of operations components, including net product revenues, licensing revenues, and various expense categories - Net product revenues from XHANCE sales were **$15.4 million** for Q3 2020 and **$32.8 million** for 9M 2020[124](index=124&type=chunk) - Average net product revenues per prescription for Q3 2020 was approximately **$224**, an increase from **$164** in Q2 2020, primarily due to reduced copay support and the sunsetting of the ASSIST program[125](index=125&type=chunk)[126](index=126&type=chunk) - No licensing revenues were recognized during the three and nine months ended September 30, 2020[128](index=128&type=chunk)[130](index=130&type=chunk) - Research and development expenses are expected to continue for the foreseeable future, driven by XHANCE chronic sinusitis development and other product candidates like OPN-019[133](index=133&type=chunk) [Consolidated Results of Operations](index=33&type=section&id=Consolidated%20Results%20of%20Operations) This section compares the company's financial performance for reported periods, analyzing changes in revenues, operating expenses, and net loss [Comparison of three months ended September 30, 2020 and 2019](index=33&type=section&id=Comparison%20of%20three%20months%20ended%20September%2030%2C%202020%20and%202019) This sub-section analyzes financial performance for Q3 2020 vs. Q3 2019, highlighting increased net product revenues and a reduced net loss | Metric | Q3 2020 (in thousands) | Q3 2019 (in thousands) | Change | | :-------------------------- | :--------------------- | :--------------------- | :----- | | Net product revenues | $15,436 | $8,667 | +$6,769 | | Licensing revenues | $0 | $3,730 | -$3,730 | | Total revenues | $15,436 | $12,397 | +$3,039 | | Total operating expenses | $33,320 | $32,206 | +$1,114 | | Net loss | $(21,214) | $(28,808) | +$7,594 (reduced loss) | - Research and development expense increased by **$1.0 million**, primarily due to clinical expenses for XHANCE chronic sinusitis trials and pediatric studies (**$0.8M**), personnel costs (**$0.3M**), and OPN-019 regulatory expenses (**$0.1M**), partially offset by a **$0.2 million** decrease in consulting expenses[142](index=142&type=chunk) - Selling, general and administrative expense decreased by **$0.7 million**, mainly due to COVID-19 related expense delays/non-incurrence (**$1.3M**), decreased XHANCE sales expenses (**$0.8M**), and lower professional fees (**$0.6M**), offset by increased PPN partner service fees (**$1.4M**) and personnel expenses (**$0.6M**)[143](index=143&type=chunk)[144](index=144&type=chunk) [Comparison of nine months ended September 30, 2020 and 2019](index=35&type=section&id=Comparison%20of%20nine%20months%20ended%20September%2030%2C%202020%20and%202019) This sub-section analyzes financial performance for 9M 2020 vs. 9M 2019, showing increased net product revenues and a reduced net loss | Metric | 9M 2020 (in thousands) | 9M 2019 (in thousands) | Change | | :-------------------------- | :--------------------- | :--------------------- | :----- | | Net product revenues | $32,770 | $19,320 | +$13,450 | | Licensing revenues | $0 | $4,230 | -$4,230 | | Total revenues | $32,770 | $23,550 | +$9,220 | | Total operating expenses | $99,538 | $96,230 | +$3,308 | | Net loss | $(75,922) | $(85,058) | +$9,136 (reduced loss) | - Research and development expense increased by **$1.5 million**, primarily due to clinical expenses for XHANCE chronic sinusitis trials and pediatric studies (**$0.8M**) and personnel expenses (**$1.0M**), partially offset by a **$0.4 million** decrease in consulting expenses[149](index=149&type=chunk) - Selling, general and administrative expense decreased by **$0.3 million**, mainly due to COVID-19 related expense delays/non-incurrence (**$5.0M**), decreased DTC marketing (**$1.4M**), and lower professional fees (**$0.9M**), offset by increased PPN partner service fees (**$4.0M**), personnel expenses (**$1.8M**), insurance/infrastructure (**$0.7M**), and market access (**$0.6M**)[150](index=150&type=chunk)[152](index=152&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses historical net losses, current cash position, cash flow activities, and future funding requirements, including debt details - The company incurred net losses of **$75.9 million** for the nine months ended September 30, 2020, and **$85.1 million** for the same period in 2019, resulting in an accumulated deficit of **$503.9 million** as of September 30, 2020[154](index=154&type=chunk) - Cash used in operating activities decreased by **$5.7 million**, from **$72.7 million** for 9M 2019 to **$67.0 million** for 9M 2020, primarily due to increased revenue and receivable collections[156](index=156&type=chunk) - Cash provided by financing activities was **$63.5 million** for 9M 2020, driven by **$33.4 million** net proceeds from a public offering and **$30.0 million** from the First Delayed Draw Notes[158](index=158&type=chunk) - The company expects its existing cash, plus an additional **$20.0 million** draw from the Pharmakon Note Purchase Agreement, to provide adequate capital through the receipt of top-line data from chronic sinusitis trials and fund operations into 2022[171](index=171&type=chunk) [Off-balance sheet arrangements](index=39&type=section&id=Off-balance%20sheet%20arrangements) This section states that the company did not have any off-balance sheet arrangements during the reported periods, as defined by SEC rules and regulations - The company did not have, and does not currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC[172](index=172&type=chunk) [Contractual obligations and commitments](index=39&type=section&id=Contractual%20obligations%20and%20commitments) This section summarizes contractual obligations as of September 30, 2020, including operating leases and long-term debt, detailing amounts and schedules | Obligation Type | Total (in thousands) | Less than 1 year (in thousands) | 1-3 years (in thousands) | 3-5 years (in thousands) | More than 5 years (in thousands) | | :------------------ | :------------------- | :------------------------------ | :----------------------- | :----------------------- | :------------------------------- | | Operating leases | $4,326 | $1,683 | $1,971 | $672 | $0 | | Long-term debt | $147,454 | $11,989 | $76,720 | $58,745 | $0 | | Total | $151,780 | $13,672 | $78,691 | $59,417 | $0 | - The company is also obligated to purchase a minimum number of products per month from one of its suppliers or potentially be subject to a payment of **$5,000** per week for such month[173](index=173&type=chunk) [Critical accounting policies](index=40&type=section&id=Critical%20accounting%20policies) This section refers to critical accounting policies and estimates in the annual Form 10-K, noting no material changes - The Critical Accounting Policies and Significant Judgments and Estimates included in the annual report on Form 10-K for the year ended December 31, 2019, have not materially changed[174](index=174&type=chunk) [Recent accounting pronouncements](index=40&type=section&id=Recent%20accounting%20pronouncements) This section directs readers to Note 3 of the unaudited interim consolidated financial statements for a description of recent accounting pronouncements - Refer to Note 3 to the unaudited interim consolidated financial statements for a description of recent accounting pronouncements applicable to the company's consolidated financial statements[175](index=175&type=chunk) [JOBS Act](index=40&type=section&id=JOBS%20Act) As an emerging growth company, OptiNose irrevocably opted out of the extended transition period for new or revised accounting standards - As an 'emerging growth company,' OptiNose has irrevocably elected to 'opt out' of the extended transition period for complying with new or revised financial accounting standards[176](index=176&type=chunk) [Item 3. Qualitative and Quantitative Disclosure About Market Risk](index=40&type=section&id=Item%203.%20Qualitative%20and%20Quantitative%20Disclosure%20About%20Market%20Risk) This section states that as a smaller reporting company, OptiNose is not required to provide qualitative and quantitative disclosures about market risk - The company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures, concluding their effectiveness, with no material changes in internal control [Evaluation of Disclosure Controls and Procedures](index=40&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated and concluded the effectiveness of disclosure controls and procedures as of September 30, 2020 - Disclosure controls and procedures are designed to ensure that information required to be disclosed in SEC reports is recorded, processed, summarized, and reported within specified time periods[178](index=178&type=chunk) - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[180](index=180&type=chunk) [Changes in Internal Control over Financial Reporting](index=40&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This sub-section reports no material changes in internal control over financial reporting during the three months ended September 30, 2020 - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the three months ended September 30, 2020[181](index=181&type=chunk) [Part II — Other Information](index=41&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors in the annual Form 10-K, with an updated focus on the adverse effects of the COVID-19 pandemic - Readers should carefully consider the risk factors described in the annual report on Form 10-K for the year ended December 31, 2019[182](index=182&type=chunk) - The coronavirus (COVID-19) pandemic has and may continue to adversely affect the company's business, results of operations, and financial condition[183](index=183&type=chunk) - Impacts of COVID-19 include hindered ability to detail XHANCE, reduced patient visits, potential negative effects on prescription growth and net revenues due to increased unemployment and changes in insurance coverage, and potential impairment of clinical trial enrollment and supply chain[184](index=184&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed as part of this Form 10-Q, including corporate documents, certifications, and XBRL data files - The exhibits include certifications of the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[195](index=195&type=chunk) - Inline XBRL Taxonomy Extension documents (Exhibits 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104) are filed as part of this report[195](index=195&type=chunk) [Signatures](index=44&type=section&id=SIGNATURES) This section contains the official signatures for the Form 10-Q report, confirming its submission by authorized personnel - The report was signed on November 5, 2020, by Keith A. Goldan, Chief Financial Officer (Principal Financial and Accounting Officer) of OptiNose, Inc[200](index=200&type=chunk)

Financial Data and Key Metrics Changes - OptiNose reported $10.3 million in net revenue for XHANCE in Q2 2020, with an average net revenue per prescription of $164, a nearly $40 increase from $126 in Q1 2020 [20][21] - Total prescriptions for XHANCE grew 84% year-over-year, with new prescriptions increasing by 20% compared to Q2 2019 [16][14] - The company maintained its financial guidance for operating expenses, expecting them to be between $131 million and $136 million for the full year 2020 [24] Business Line Data and Key Metrics Changes - XHANCE prescription volume continued to grow, with total prescriptions reaching approximately 62,500 in Q2 2020, reflecting an 84% growth over Q2 2019 [16][7] - New prescriptions for XHANCE were 18,700, a 20% increase compared to Q2 2019, while refill prescriptions surged to 43,800, a 139% increase year-over-year [14][15] - The number of physicians prescribing XHANCE increased by 40% year-over-year, with over 6,209 physicians having at least one patient fill a prescription [17] Market Data and Key Metrics Changes - XHANCE's market share increased from 2.2% in Q2 2019 to 5.6% in Q2 2020, marking the strongest share growth since its launch [12] - The company noted that despite COVID-19 disruptions, there remains significant headroom for additional growth in the XHANCE market [9] Company Strategy and Development Direction - The company announced a co-promotion partnership with kaleo to enhance promotional reach and frequency for XHANCE, targeting nearly 6,000 prescribers [8] - OptiNose is focused on growing XHANCE and building a leading ENT and allergy company, with plans to explore partnerships for future product development [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of XHANCE despite COVID-19 challenges, noting that patient visits to ENT and allergy practices began to improve as public health restrictions lifted [7][11] - The company expects to see continued growth in prescriptions as patient volumes recover, particularly in the late summer and fall [60] Other Important Information - The company has a strong balance sheet with $125 million in cash as of June 30, 2020, which is expected to fund operations until at least the second half of 2021 [9] - OptiNose is developing a new program, OPN019, aimed at delivering an antiseptic to combat COVID-19, leveraging its proprietary nasal Exhalation Delivery System [26][28] Q&A Session Summary Question: Can you help quantify the components of the delta in net revenue per prescription? - Management explained that the lower starting point in 2020 was influenced by annual insurance deductible resets and the impact of the ASSIST program, which provided free prescriptions to patients [32][33] Question: Can you provide some color on the economics of the kaleo partnership? - The partnership will involve kaleo calling on approximately 6,000 physicians, with half being new customers and the other half already in the OptiNose universe, enhancing frequency of contact [36][38] Question: Can you elaborate on the patient funnel seen in July? - Management noted that patient volumes are down between zero and 25% depending on geography, but the category appears to be normalizing, which could lead to a tailwind in the second half of the year [41][42] Question: What are the expectations for adding new patients given modest recovery for in-house visits? - Management indicated that new prescriptions are returning to pre-pandemic levels, with physicians creating safe environments for patients to return to offices [54] Question: What is the long-term strategy regarding reimbursement for XHANCE? - Management stated that they have good access with 75%-80% commercial access and do not plan to be more aggressive on rebates, believing the product brings real value to payers [72][73]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ______________. Commission file number: 001-38241 OPTINOSE, INC. (Exact name of registrant as specified in its charter) Delaware 42-1771610 (State ...

OptiNose, Inc. (NASDAQ:OPTN) Q1 2020 Earnings Conference Call May 7, 2020 4:15 PM ET Company Participants Jonathan Neely - Vice President of Investor Relations Peter Miller - Chief Executive Officer Keith Goldan - Chief Financial Officer Vic Clavelli - Chief Commercial Officer Conference Call Participants Ken Cacciatore - Cowen & Company David Amsellem - Piper Sandler David Steinberg - Jefferies Operator Ladies and gentlemen, thank you for standing by and welcome to the OptiNose Q1 2020 Earnings Call. At th ...

| --- | --- | --- | --- | |-------|-------------------|----------------------------------|-------| | | | | | | | Specialty Company | Building a Leading ENT / Allergy | | | | | Corporate Presentation | | | | | May 7, 2020 | | 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 statement ...