scPharmaceuticals (SCPH) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (unaudited) Presents unaudited condensed consolidated financial statements, highlighting decreased assets and cash, increased liabilities, a shift to negative equity, and increased net losses despite higher product revenues Condensed Consolidated Balance Sheets | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change (%) | | :-------------------------- | :------------------------------- | :----------------------------- | :--------- | | Cash and cash equivalents | $75,655 | $40,809 | -46.0% | | Accounts receivable, net | $11,721 | $19,409 | 65.6% | | Inventory, net | $13,903 | $14,573 | 4.8% | | Total current assets | $105,849 | $78,729 | -25.6% | | Total assets | $107,519 | $80,255 | -25.4% | | Total current liabilities | $14,876 | $20,430 | 37.3% | | Total liabilities | $94,199 | $101,571 | 7.8% | | Total stockholders' equity (deficit) | $13,320 | $(21,316) | -260.0% | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | | Product revenues, net | $8,054 | $16,041 | 99.2% | | Cost of product revenues | $2,300 | $5,011 | 117.8% | | Research and development | $2,677 | $4,098 | 53.1% | | Selling, general and administrative | $17,508 | $21,226 | 21.2% | | Total operating expenses | $22,485 | $30,335 | 35.0% | | Loss from operations | $(14,431) | $(14,294) | -1.0% | | Net loss | $(17,090) | $(18,024) | 5.5% | | Net loss per share | $(0.44) | $(0.34) | -22.7% | | Metric (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :--------- | | Product revenues, net | $14,156 | $27,793 | 96.3% | | Cost of product revenues | $4,085 | $8,482 | 107.7% | | Research and development | $5,403 | $8,729 | 61.6% | | Selling, general and administrative | $34,955 | $42,633 | 22.0% | | Total operating expenses | $44,443 | $59,844 | 34.7% | | Loss from operations | $(30,287) | $(32,051) | 5.8% | | Net loss | $(31,198) | $(37,766) | 21.0% | | Net loss per share | $(0.80) | $(0.70) | -12.5% | Condensed Consolidated Statements of Stockholders' Equity (Deficit) | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Common Stock (shares) | 50,095,689 | 53,290,227 | | Common Stock (amount) | $5 | $5 | | Additional Paid-in Capital | $379,809 | $382,939 | | Accumulated Deficit | $(366,494) | $(404,260) | | Total Stockholders' Equity (Deficit) | $13,320 | $(21,316) | - Accumulated deficit increased by $37.8 million from December 31, 2024, to June 30, 2025, primarily due to net losses[26] - Total stockholders' equity shifted from a positive $13.3 million to a deficit of $21.3 million[26] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Change ($) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Net cash used in operating activities | $(37,928) | $(33,250) | $4,678 | | Net cash provided by investing activities | $29,320 | $0 | $(29,320) | | Net cash provided by (used in) financing activities | $298 | $(1,596) | $(1,894) | | Net decrease in cash and cash equivalents | $(8,310) | $(34,846) | $(26,536) | | Cash and cash equivalents at end of period | $38,504 | $40,809 | $2,305 | - Net cash used in operating activities decreased by $4.7 million (12.3%) for the six months ended June 30, 2025, compared to the prior year[29] - Net cash provided by investing activities decreased significantly from $29.3 million in 2024 to $0 in 2025[29] - Net cash used in financing activities was $1.6 million in 2025, a significant shift from $0.3 million provided in 2024[29] Notes to Condensed Consolidated Financial Statements Note 1. Description of Business and Basis of Presentation Details the company's focus on subcutaneous drug delivery, its accumulated deficit, cash position, and liquidity outlook for the next 12 months - scPharmaceuticals Inc. focuses on developing and commercializing products for subcutaneous administration of therapies previously limited to intravenous (IV) delivery[32] - As of June 30, 2025, the Company had an accumulated deficit of approximately $404.3 million[35] - As of June 30, 2025, the Company had cash and cash equivalents of $40.8 million[36] - The Company's existing cash and cash equivalents, along with funds available under the Revenue Purchase and Sale Agreement, are expected to be sufficient to meet its cash commitments for at least the next 12 months[37] Note 2. Significant Accounting Policies Outlines key accounting policies, including the fair value option for financial instruments, revenue recognition for product sales, and expensing of research and development costs - The Company elected the fair value option to account for the Credit Agreement and the Revenue Purchase and Sale Agreement (Perceptive Financing)[51][52] - Revenue from product sales (FUROSCIX) is recognized at the net sales price, including estimates for sales discounts, rebates, co-pay assistance, and product returns[54] - Research and development costs are expensed as incurred[61] - The Company operates in one segment, with the chief executive officer as the chief operating decision-maker[69] Note 3. Net Loss per Share | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(17,090) | $(18,024) | $(31,198) | $(37,766) | | Weighted-average common shares outstanding | 38,984,745 | 53,719,662 | 38,968,438 | 53,698,138 | | Net loss per share — basic and diluted | $(0.44) | $(0.34) | $(0.80) | $(0.70) | - Potentially dilutive securities (stock options, warrants, unvested restricted stock units) were excluded from diluted net loss per share computation as their effect would be anti-dilutive[74] Note 4. Inventory | Inventory (in thousands) | December 31, 2024 | June 30, 2025 | | :----------------------- | :---------------- | :------------ | | Raw materials | $4,784 | $5,815 | | Work-in-process | $7,012 | $6,780 | | Finished goods | $2,107 | $1,978 | | Total Inventory | $13,903 | $14,573 | - Total inventory increased by 4.8% from $13.9 million at December 31, 2024, to $14.6 million at June 30, 2025[76] - Allowance for excess, damaged and obsolete inventory increased from $100 thousand to $135 thousand[76] Note 5. Property and Equipment | Property and Equipment (in thousands) | December 31, 2024 | June 30, 2025 | | :------------------------------------ | :---------------- | :------------ | | Office equipment | $27 | $27 | | Office furniture | $85 | $85 | | Computer equipment | $15 | $15 | | Leasehold improvements | $9 | $9 | | Less: Accumulated depreciation | $(80) | $(88) | | Property and equipment, net | $56 | $48 | - Net property and equipment decreased by 14.3% from $56 thousand at December 31, 2024, to $48 thousand at June 30, 2025[78] - Depreciation expense for the six months ended June 30, 2025, was $8 thousand, down from $11 thousand in the prior year period[78] Note 6. Accrued Expenses | Accrued Expenses (in thousands) | December 31, 2024 | June 30, 2025 | | :------------------------------ | :---------------- | :------------ | | Sales allowances and related costs | $2,690 | $6,889 | | Employee compensation and related costs | $5,203 | $4,137 | | Contract research and development | $644 | $1,685 | | Revenue purchase and sale agreement | $971 | $1,283 | | Manufacturing costs | $330 | $882 | | Consulting and professional service fees | $529 | $789 | | Royalty | $317 | $406 | | Other | $18 | $11 | | Total accrued expenses | $10,702 | $16,082 | - Total accrued expenses increased by 50.3% from $10.7 million at December 31, 2024, to $16.1 million at June 30, 2025[79] - Sales allowances and related costs increased by 156.1% to $6.9 million, and contract research and development increased by 161.7% to $1.7 million[79] Note 7. Fair Value of Financial Instruments | Liabilities (in thousands) | December 31, 2024 (Level 3) | June 30, 2025 (Level 3) | | :------------------------- | :-------------------------- | :---------------------- | | Term loan | $51,350 | $51,200 | | Revenue purchase and sale liability | $27,840 | $30,240 | | Total | $79,190 | $81,440 | - The fair value of the term loan and revenue purchase and sale liability are measured using Level 3 inputs, with the term loan valued using a binomial lattice model and the revenue purchase and sale liability using the Monte Carlo simulation method[85][86][87] - The fair value of the revenue purchase and sale liability increased by $2.4 million from December 31, 2024, to June 30, 2025[85] Note 8. Financial Liabilities Details the $75.0 million term loan facility and the $50.0 million revenue purchase and sale agreement, including associated warrants and prepayment of prior obligations - The Company entered into a Credit Agreement on August 9, 2024, establishing a $75.0 million term loan facility, with $50.0 million funded (Tranche A) and $25.0 million available (Tranche B) subject to conditions[91][137] - Borrowings under the Term Loan bear interest at one-month term SOFR (3.25% floor) plus 6.75% margin, with no scheduled principal repayments before August 9, 2029[92][138] - Warrants to purchase 300,000 shares of common stock were issued to lenders, with an exercise price adjusted to $4.00 per share[93][138] - The Company also entered into a Revenue Purchase and Sale Agreement for up to $50.0 million, selling a tiered single-digit percentage of FUROSCIX net sales[99][142] - Proceeds from the Perceptive Financing were used to prepay all outstanding obligations under the Oaktree Agreement on August 9, 2024, including a $1.0 million exit fee and a $2.6 million prepayment premium[102][108][178] Note 9. Stockholders' Equity (Deficit) Reports on the August 2024 public offering that generated $53.5 million in net proceeds and the status of the At-the-Market program - On August 13, 2024, the Company completed an underwritten public offering of 13,875,000 shares of common stock and 500,000 pre-funded warrants, generating net proceeds of $53.5 million[112][113][147][179] - As of June 30, 2025, no shares were issued under the 2024 At-the-Market (ATM) Program[110][177] Note 10. Stock-Based Compensation | Stock Option Activity (in thousands, except share and per share data) | Number of Shares | Weighted Average Exercise Price | | :---------------------------------------------------- | :--------------- | :------------------------------ | | Outstanding, December 31, 2024 | 5,530,823 | $5.89 | | Granted | 1,792,652 | $3.40 | | Forfeited | (127,960) | $5.31 | | Expired | (18,695) | $8.12 | | Outstanding, June 30, 2025 | 7,176,820 | $5.27 | | Vested and exercisable, June 30, 2025 | 4,248,599 | $5.98 | | RSU Activity (in thousands, except share data) | RSUs | Average Grant Date Fair Value (per share) | | :--------------------------------------------- | :-------- | :---------------------------------------- | | RSUs outstanding, December 31, 2024 | 736,229 | $5.87 | | Granted | 851,747 | $3.33 | | Released | (188,236) | $5.97 | | Forfeited | (37,880) | $5.15 | | RSUs outstanding at June 30, 2025 | 1,361,860 | $4.29 | | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $410 | $406 | $775 | $765 | | General and administrative | $1,081 | $1,113 | $2,156 | $2,049 | | Total | $1,491 | $1,519 | $2,931 | $2,814 | - Unrecognized compensation expense for unvested options was $6.3 million, to be recognized over a weighted-average period of 2.4 years[120] - Unrecognized compensation expense for unvested RSUs was $3.6 million, to be recognized over a weighted-average period of 2.9 years[120] Note 11. Commitments and Contingencies | Year Ended December 31 (in thousands) | Total Minimum Lease Payments | | :------------------------------------ | :--------------------------- | | 2025 | $196 | | 2026 | $384 | | 2027 | $367 | | 2028 | $369 | | 2029 | $249 | | Thereafter | $0 | | Total | $1,565 | | Less imputed interest | $(317) | | Total Lease Liability | $1,248 | - Weighted-average remaining lease term for operating leases was 4.0 years as of June 30, 2025, with a weighted-average discount rate of 11.6%[125] Note 12. Segment - The Company operates in a single segment, with the chief executive officer as the chief operating decision-maker[69][127] | Segment Net Loss (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenues, net | $8,054 | $16,041 | $14,156 | $27,793 | | Cost of product revenues | $2,300 | $5,011 | $4,085 | $8,482 | | Research and development expenses | $2,164 | $3,585 | $4,438 | $7,750 | | Selling, general and administrative expenses | $16,148 | $19,800 | $32,271 | $39,954 | | Segment net loss | $(17,090) | $(18,024) | $(31,198) | $(37,766) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and operations, covering FUROSCIX commercialization, strategic financing, revenue and expense trends, liquidity, and critical accounting policies OVERVIEW Provides an overview of FUROSCIX's expanded FDA approvals, the development of an autoinjector, its estimated market opportunity, and recent dose fills - FUROSCIX, the first and only FDA-approved subcutaneous loop diuretic, was approved for NYHA Class II/III chronic heart failure in October 2022 and expanded to NYHA Class IV heart failure patients on August 9, 2024[132] - FDA approved FUROSCIX for the treatment of edema due to fluid overload in adult patients with chronic kidney disease (CKD) on March 6, 2025, with product launch commencing in April 2025[133] - The Company is developing an 80mg/1mL autoinjector for FUROSCIX, targeting an sNDA submission in Q3 2025, which is expected to significantly reduce manufacturing costs[135] - The total addressable market opportunity for FUROSCIX in the United States is estimated at $12.5 billion for patients with chronic heart failure and CKD[136] - Approximately 20,200 FUROSCIX doses were filled in the quarter ended June 30, 2025[136] Perceptive Financing Details the $75.0 million term loan facility and $50.0 million revenue purchase and sale agreement, including associated warrants and financial covenants - On August 9, 2024, the Company entered into a Credit Agreement establishing a $75.0 million term loan facility, with $50.0 million funded on the closing date and $25.0 million available subject to conditions[137] - The Company also entered into a Revenue Purchase and Sale Agreement for up to $50.0 million, selling its right to receive a tiered single-digit percentage of net sales of FUROSCIX[142] - Warrants to purchase 300,000 shares of common stock were issued to lenders, with an exercise price adjusted to $4.00 per share[138] - Financial covenants require maintaining at least $5.0 million in cash and cash equivalents and meeting minimum quarterly net sales targets[140] 2024 Public Offering Reports on the August 2024 public offering of common stock and pre-funded warrants, which generated $53.5 million in net proceeds - On August 13, 2024, the Company completed an underwritten public offering of 13,875,000 shares of common stock and 500,000 pre-funded warrants[146] - The net proceeds from the offering were $53.5 million[147] COMPONENTS OF OUR RESULTS OF OPERATIONS Explains the components of product revenues, cost of product revenues, research and development, and selling, general and administrative expenses - Product revenues, net, consist of net sales of FUROSCIX, recognized upon customer receipt, net of allowances for discounts, fees, returns, and rebates[149] - Cost of product revenues includes third-party manufacturing, packaging, freight, and royalty expenses, with an anticipated increase of 15-25% in 2026 due to device manufacturer negotiations[150] - Research and development (R&D) expenses are expensed as incurred and are expected to increase with new product development and enhancements[151][155] - Selling, general and administrative (SG&A) expenses are expected to increase to support FUROSCIX commercialization and corporate infrastructure[153] Results of Operations Comparison of Three Months Ended June 30, 2024 and 2025 | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Increase (Decrease) | | :-------------------- | :------------------------------- | :------------------------------- | :------------------ | | Product revenues, net | $8,054 | $16,041 | $7,987 | | Cost of product revenues | $2,300 | $5,011 | $2,711 | | Research and development | $2,677 | $4,098 | $1,421 | | Selling, general and administrative | $17,508 | $21,226 | $3,718 | | Loss from operations | $(14,431) | $(14,294) | $(137) | | Net loss | $(17,090) | $(18,024) | $934 | - Product revenues increased by $8.0 million (99.2%) due to increased demand for FUROSCIX[154] - R&D expenses increased by $1.4 million (53.1%), primarily due to device and pharmaceutical development costs[157] - SG&A expenses increased by $3.7 million (21.2%), mainly driven by employee-related and commercial costs[158] Comparison of Six Months Ended June 30, 2024 and June 30, 2025 | Metric (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Increase (Decrease) | | :-------------------- | :----------------------------- | :----------------------------- | :------------------ | | Product revenues, net | $14,156 | $27,793 | $13,637 | | Cost of product revenues | $4,085 | $8,482 | $4,397 | | Research and development | $5,403 | $8,729 | $3,326 | | Selling, general and administrative | $34,955 | $42,633 | $7,678 | | Loss from operations | $(30,287) | $(32,051) | $1,764 | | Net loss | $(31,198) | $(37,766) | $6,568 | - Product revenues increased by $13.6 million (96.3%) due to increased demand for FUROSCIX[165] - R&D expenses increased by $3.3 million (61.6%), primarily due to pharmaceutical and device development costs[167] - SG&A expenses increased by $7.7 million (22.0%), mainly driven by employee-related and commercial costs[168] LIQUIDITY AND CAPITAL RESOURCES Discusses the company's cash position, expected sufficiency of funds for the next 12 months, anticipated future expenditures, and potential additional funding sources - As of June 30, 2025, the Company had cash and cash equivalents of $40.8 million[174] - Existing cash and cash equivalents, including available proceeds from the Revenue Purchase and Sale Agreement, are expected to be sufficient to meet cash commitments for at least the next 12 months[174] - The Company expects to incur substantial additional expenditures for FUROSCIX commercialization (sales force expansion, manufacturing capacity) and research and development[180] - Additional funding may be sought through equity, royalty-based, or debt financings if needed[180][182] CASH FLOWS | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(37,928) | $(33,250) | | Net cash provided by investing activities | $29,320 | $0 | | Net cash provided by (used in) financing activities | $298 | $(1,596) | | Net decrease in cash and cash equivalents | $(8,310) | $(34,846) | - Net cash used in operating activities was $33.3 million for the six months ended June 30, 2025, primarily due to net loss and increased operating assets[184] - Net cash provided by investing activities was $0 for the six months ended June 30, 2025, compared to $29.3 million in the prior year[186] - Net cash used in financing activities was $1.6 million for the six months ended June 30, 2025, primarily due to payments on the revenue purchase and sale liability[187] CRITICAL ACCOUNTING POLICIES AND ESTIMATES Confirms no material changes to critical accounting policies and estimates since the last annual report - There have been no material changes to the critical accounting policies and estimates disclosed in the Annual Report on Form 10-K for the six months ended June 30, 2025[189] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks from foreign currency exchange rates, primarily Swiss franc and Euro, which are currently deemed immaterial. Additionally, it faces interest rate sensitivity risk, as the fair value of certain liabilities (term loan and revenue purchase and sale liability) is affected by changes in market interest rates and the company's credit rating, potentially impacting future earnings - The Company is exposed to market risks related to changes in foreign currency exchange rates (principally Swiss franc and Euro) and interest rates[190][191] - The fair value of the term loan and revenue purchase and sale liability, accounted for under the fair value option, will increase as market interest rates decrease and may fluctuate based on the Company's credit rating[191] Item 4. Controls and Procedures Management, including the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2025 - Disclosure controls and procedures were evaluated as effective at the reasonable assurance level as of June 30, 2025[194] - No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2025[195] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not aware of any legal proceedings or claims expected to materially adversely affect its business or financial condition - The Company is not currently aware of any legal proceedings or claims that are believed to have a material adverse effect on its business, financial condition, or results of operations[197] Item 1A. Risk Factors Updates risk factors, emphasizing the potential adverse impact of new healthcare legislation on marketing approval, commercialization, drug pricing, and reimbursement - Investing in the Company's common stock involves a high degree of risk, with no material changes from previously disclosed risk factors other than those stated[198] - Recently enacted and future legislation, including the Patient Protection and Affordable Care Act (ACA), American Rescue Plan Act of 2021, and Inflation Reduction Act of 2022 (IRA), may increase the difficulty and cost for obtaining marketing approval and commercializing FUROSCIX, and may affect prices[199][203][205][206] - The Inflation Reduction Act of 2022 (IRA) requires manufacturers of certain drugs to engage in price negotiations with Medicare, imposes rebates for price increases that outpace inflation, and redesigns the Medicare Part D benefit[205][206] - The One Big Beautiful Bill Act, enacted in July 2025, imposes significant reductions in Medicaid program funding, which could adversely affect FUROSCIX sales[209] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Reports no unregistered sales of equity securities or use of proceeds for the period - No unregistered sales of equity securities or use of proceeds to report[214] Item 3. Defaults Upon Senior Securities Reports no defaults upon senior securities for the period - No defaults upon senior securities to report[215] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[216] Item 5. Other Information Reports no Form 8-K disclosures, no material changes to board nominee procedures, and no Rule 10b5-1 trading arrangements adopted or terminated by directors or officers - No disclosure in lieu of reporting on a Current Report on Form 8-K[217][219] - No material changes to the procedures by which security holders may recommend nominees to the board of directors[219] - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by any director or officer during the three months ended June 30, 2025[219] Item 6. Exhibits Provides an index of exhibits filed with the Quarterly Report, including corporate documents, warrants, certifications, and XBRL documents - The Exhibit Index includes corporate documents (Certificate of Incorporation, By-laws), warrants, certifications (Principal Executive Officer, Principal Financial Officer), and Inline XBRL Document Set[222] Signatures Contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission - The report was signed on August 7, 2025, by Rachael Nokes, Chief Financial Officer of scPharmaceuticals Inc[228]