I was half expecting some sort of note regarding sales traction, is it just me or is a lot of stuff bundled together in the P$L.

At first glance hard to split off what might have been one of costs related to the launch that won't reoccur this FY.

Think i ran 85m of cost in my forecast for this year coming year but was hoping it might end up being less.

Need to have a good look through this today. They do usually report at the last minute for whatever reason.. but was expecting it during the day not after the close.

Only noteworthy thing I think is that if this is correct to assume accounts receivable for June is $2.85m against gross sales of $8.34m than that gives 34% GTN for that month supporting the point that the PA units are getting approval the following month.

GTN

@Schwerms I see what you've done there to ask about whether GTN got to 34% in June. You've assumed that Receivables = a month's sales. Is that right?

If a component of the receivables is aged more than a month, then GTN would be less than 34%.

I've checked the Annual report and at top of Page 12 they write: "Sofdra’s gross to net (GTN) indicators have tracked positively with month-over-month increases,

leading to a 23% GTN yield by June exit." They also reported this in the 4C, and put it on the slide in Canaccord Conference. (below)

On Expenses

$95m = a lot.

But $20.5m was paid in shares = non cash. So cash expenses were more like $75m. (My focus here is cash runway, not shareholer value!)

Cash payments to Employees and Suppliers and other payents was $88m.

The $88m cash payments were phased as $11.66 (Q1), $23.07 (Q2), $20.78 (Q3) and $32.43 (Q4)

I think you are right in that a decent chunk of that is launch costs, including all the inventory they built, plus platform set up.

However, the 4Q number is the real concern. However, a big chunck of that was product manufacturing, and they've said they don't need to do much of that in 1H FY26.

If true, 1Q-FY26 should fall back to mid-to-high $20s, driven by increased headcount of salesforce.

So it's a pretty lumpy picture, and I think therefore quite important to track quarter by quarter and to break out "product manufacturing" from "staff and other" cost.

So, at 1Q FY26, I am going to look as how cash payments (excluding product manufacturing) is trending over the last several quarters.

@mikebrisy yes I would assume receivables as of June 30 is a months sales for June, they said they are paid by SendRX not the insurers so I wouldn't think they have anything running too far over the 30 days?

From the 4C's I pulled that they spend 29.8m on product manufacturing, so 8m on marketing which could cover some of the digital attempt.

I do still think from my previous notes they are reporting month end GTN not factoring in the delayed approval for the PA units,

Would you think most of the additional regulatory costs in 25 VS 24 were approval related given approval came in July and you would expect them to reduce this coming FY?

Even the operating costs in the 4th quarter, are the 5m of cost for the raise / borrowing costs included in the 14.3m of operating costs from the 4c?

Summary of Individual 4C's

Also on another note, what do you suppose the trade payables are? some inventory and some of the Copay costs?

@Schwerms a few thoughts on your post from the weekend:

Regulatory

The high regulatory costs in FY25 relative to FY24 surprised me somewhat, but I can run the Legal fee, insurances and regulatory back into 2023 to be able to make sense of it.

$BOT announced the NDA was under review in Dec 2022, so in FY23. So a lot of the regulatory costs will have been incurred prior to that.

They then had the setback over labelling in 1H FY24, and this will have incurred additional costs, including for the Human Factors Study, which was completed later that same half, and I don't think would have cost a huge amount. However, they then had to resubmit and update the regulatory dossier in early 2H FY24, and ultimately received approval just before the end of 2H FY24.

So from a regulatory perspective, I don't think they would have need to have spent a lot in FY25, so perhaps legal fees and insurances were more of the costs here? I mean through FY25 there would have been a lot of agreements signed with payors as well as in setting up the plaform. Signing a lot of contracts, means a lot of legal fees.

GTN

Under revenue recognition, I assume that PA units are not recognised as revenue (gross sales or net revenue) in the month the script is fulfilled. The ultimate 70% conversion to full reimbursement of PA units is risky enough that I would have thought they couldn't recognise it early. (But I am no accountant, and this is way outside my area of competence!) My assumption is that PA units contribute to Gross Sales, Revenue and GTN once they are approved.

I could have this wrong. I went back over the recording ("Nightmare of HyperHidrosis ...") and I was unclear after listening to Howie step through the 4 buckets.

To be honest, I haven't spent too much time thinking about this. Yes it matters when we are looking at very rapidly growing monthly sales in the first few months, but as long as everything is being reported on a consistent basis from month to month, I am more interested in the relative differences (i.e. trajectory) of scripts and revenues, as well as the drop off in GTN that will occur in Q1 and Q2, due to the Deductubles reset.

It will be interesting to see the GTN trajectory when we get the next quarter's update, i.e., is it looking to end up more like 30% or 40% - that difference matters a lot!

Thanks Mike, so probably won't see as high a costs this coming FY with all the contracts etc in place, won't count on it being smaller but any reduction is a bonus.

On the GTN from what I can see they recognise the Gross during the month as everything matches up with the total scripts and the assumed gross price of approx 965US / 1500 AUD or there abouts. Should be clear in the next quarterly unless they go and report it all in a new format..

Where do you think the total spend for this coming FY may land now you have seen the full year report?

Its not that clear to me where the copay falls in all of this unless we technically don't pay it we just received our net revenue after it all washes out

The Share based payments we would expect to heavily reduce as well right? All the incentive programs etc are set now for staff and management

"Where do you think the total spend for this coming FY may land now you have seen the full year report?"

@Schwerms I will get back to you on that. It's on my post-reporting season work plan to have a look at this, but not urgent, as the SP is so depressed I don't envisage taking any decision on this one for a while.

But you make a good point about legal - the demand for external counsel services now that the agreements are in place - should be significantly reduced. And with no ongoing new regulatory activity, there is an opportunity for this line item to come back significantly I'd hope.

I expect management to be sharpening their pencils on cost management. The messages we've heard on reallocating marketing to support expanded sales force at no additional cost, indicates to me that they got this particular memo!