Executive Summary / Key Takeaways

• Disruptive Technology & Expanding Market: scPharmaceuticals (SCPH) is revolutionizing cardiorenal care with FUROSCIX, the first and only FDA-approved subcutaneous loop diuretic delivering IV-equivalent diuresis at home. Recent approvals for Class IV heart failure and Chronic Kidney Disease (CKD) have significantly expanded its addressable market to an estimated $12.5 billion.
• Strong Commercial Momentum: Q2 2025 saw net revenue surge 99% year-over-year to $16.04 million, with doses filled increasing 117% year-over-year and 45% quarter-over-quarter, driven by both new prescriptions and improved fill rates. The IDN distribution strategy is also accelerating, growing 70% quarter-over-quarter.
• Favorable Policy Tailwinds: The Medicare Part D redesign, with its $2,000 out-of-pocket cap and copay smoothing, is transforming into a net tailwind, significantly lowering patient costs and boosting demand. The proposed Ambulatory Specialty Model (ASM) by CMS further aligns with FUROSCIX's value proposition of reducing hospitalizations.
• Future Innovation & Cost Reduction: The upcoming Autoinjector (sNDA submission targeted Q3 2025) promises a 70-75% reduction in COGS and a dramatic decrease in treatment time, poised to further enhance market penetration and long-term profitability.
• Path to Profitability: With $40.8 million in cash and cash equivalents as of June 30, 2025, and access to additional capital, SCPH is laser-focused on decreasing quarterly net cash outflows for the balance of 2025 as revenues increase, aiming for sustained profitability.

Revolutionizing Cardiorenal Care with Subcutaneous Delivery

scPharmaceuticals Inc. (SCPH) is at the forefront of transforming cardiorenal healthcare by enabling the subcutaneous administration of therapies traditionally confined to intravenous (IV) delivery. This foundational strategy aims to optimize infused therapies, advance patient care, and significantly reduce healthcare costs by shifting treatment from high-cost hospital settings to the convenience of a patient's home. The company's flagship product, FUROSCIX, embodies this vision, offering a critical solution for fluid overload in patients with chronic heart failure and, more recently, chronic kidney disease.

The core of SCPH's technological differentiation lies in FUROSCIX, a novel formulation of furosemide delivered via West Pharmaceutical Services (WST)' on-body infusor. This innovative drug-device combination provides IV-equivalent diuresis at home, a critical advantage for patients. Clinical studies have demonstrated FUROSCIX's impressive 99.6% bioavailability, ensuring efficacy comparable to traditional IV administration. This tangible benefit translates directly into improved patient quality of life, allowing individuals to manage their condition without frequent hospital visits or lengthy clinic stays. The on-body infusor delivers an 80mg/10mL dose over approximately five hours, offering a controlled and convenient treatment experience.

Beyond the current infusor, SCPH is actively advancing its technological roadmap with the development of an 80mg/1mL autoinjector, SCP-111. This next-generation delivery system is designed to provide an even more convenient option, reducing treatment time from five hours to less than ten seconds. The autoinjector is not merely a convenience upgrade; it is projected to yield a substantial 70-75% reduction in Cost of Goods Sold (COGS) compared to the current on-body infusor. This significant cost advantage, coupled with enhanced ease of use, is expected to dramatically increase market penetration and bolster long-term profitability. SCPH has already announced positive pharmacokinetic/pharmacodynamic (PK/PD) study data for a combination product using the lead formulation and has received five Notices of Allowance from the USPTO for patents covering the SCP-111 formulation, reinforcing its intellectual property moat. An sNDA submission for the autoinjector is targeted for the third quarter of 2025.

Strategic Expansion and Market Penetration

SCPH's journey began with its FDA approval of FUROSCIX on October 7, 2022, initially indicated for congestion due to fluid overload in adults with NYHA Class II-III chronic heart failure. The commercial launch in Q1 2023 marked the company's entry into product commercialization. This initial success was further amplified by the FDA's approval on August 9, 2024, to expand the FUROSCIX indication to include NYHA Class IV heart failure patients. This expansion is strategically significant, as Class IV patients, while representing only about 10% of the chronic heart failure market, account for over 30% of heart failure hospitalizations. These patients often require higher doses, with an average of eight doses per prescription observed, indicating a substantial opportunity for home-based management.

A pivotal milestone was reached on March 6, 2025, with FDA approval of a supplemental New Drug Application (sNDA) to include the treatment of edema in patients with chronic kidney disease (CKD). This expansion unlocks an estimated 700,000 additional patients for FUROSCIX, targeting nephrologists who are primary diuretic managers for both CKD and heart failure patients. The formal launch for the CKD indication commenced in April 2025, and early results are highly encouraging. Management reports a "faster uptake by individual nephrologists" and "higher doses per Rx" compared to the initial cardiology launch, suggesting a meaningful contribution from nephrology starting in Q3 2025. This rapid adoption underscores the significant unmet need and the product's compelling value proposition in this patient population.

To support these market expansions, SCPH has strategically invested in its commercial infrastructure. The sales force was expanded to approximately 90 territories by Q4 2024, a move that has already demonstrated a "significant return on investment" through increased reach and frequency. The company's Integrated Delivery Network (IDN) distribution strategy is also proving highly effective, growing 70% quarter-over-quarter. This strategy integrates FUROSCIX into hospital systems' internal distribution and e-prescribing, streamlining the process and facilitating early discharge planning, thereby enhancing patient access and reorders from top systems.

Competitive Landscape and Differentiated Edge

SCPH operates in a competitive pharmaceutical landscape, but its focus on subcutaneous delivery for cardiorenal conditions provides a distinct advantage. While larger, diversified healthcare companies like Baxter International (BAX), ICU Medical (ICUI), Fresenius SE & Co. KGaA (FMS), Johnson & Johnson (JNJ), and Pfizer (PFE) offer a broad range of medical products, infusion systems, and pharmaceuticals, SCPH's specialized approach carves out a unique niche.

SCPH's FUROSCIX is the "first and only FDA-approved subcutaneous loop diuretic that delivers IV equivalent diuresis at home." This technological leadership directly challenges traditional IV administration methods offered by competitors, providing significantly greater patient mobility and convenience. For instance, compared to Baxter's more traditional infusion systems, SCPH's on-body infusor offers a user-friendly design for outpatient settings. While Baxter benefits from a broader range of integrated solutions and a global footprint, SCPH's agility in specialized markets, particularly with its proprietary drug-device combination, allows it to compete effectively. Similarly, against ICU Medical's focus on infusion therapy hardware, SCPH's strategy emphasizes pharmaceutical innovation for chronic conditions, offering a unique value proposition in home-based care.

The company's management explicitly states, "We're in a category where there's no competitor," highlighting its first-mover advantage in this specific subcutaneous diuretic space. This positioning allows SCPH to avoid the deep, competitive discounts prevalent in other therapeutic areas. While competitors like J&J and Pfizer possess vast R&D resources and extensive market penetration, SCPH's targeted innovation in subcutaneous delivery offers a specialized solution that these broader players do not currently match. The upcoming autoinjector further strengthens this moat by significantly reducing COGS, making FUROSCIX even more competitive on a cost-effectiveness basis, particularly against oral generic diuretics that lack predictable bioavailability.

Financial Performance and Outlook

SCPH's financial performance reflects its growth trajectory and strategic investments. In Q2 2025, the company reported net revenue of $16.04 million, a robust 99% increase over Q2 2024. Doses filled reached approximately 20,200, marking a 117% year-over-year increase and a 45% quarter-over-quarter surge from Q1 2025. For the first six months of 2025, net revenue grew 96.3% to $27.79 million compared to the same period in 2024. This growth was primarily driven by increased demand for FUROSCIX as it progresses further into its commercial launch.

The Gross-to-Net (GTN) discount for FUROSCIX was approximately 27% in Q2 2025, an increase from 19% in Q4 2024 and 23% in Q1 2025. This increase is largely attributable to the implementation of the Medicare Part D redesign, including mandatory manufacturer rebates under the Inflation Reduction Act (IRA). Management anticipates the GTN to approach 30% in Q3 2025 and stabilize in the 30-35% range for the long run in 2025. Despite this GTN impact, the Medicare Part D redesign is viewed as a "net tailwind" for SCPH. The new $2,000 out-of-pocket cap for Part D beneficiaries and the copay smoothing program are significantly lowering patient costs, which historically leads to increased fill rates and physician prescribing confidence. The fill rate, which was around 46% in Q1 2025, improved to 55% in April 2025, with further acceleration expected.

As of June 30, 2025, SCPH held $40.8 million in cash and cash equivalents, with an accumulated deficit of $404.3 million. The company has financed its operations through various capital raises, including a $53.5 million public offering in August 2024 and a transformative financing in early August 2024 that added approximately $75 million to its balance sheet. This financing also included access to an additional $25 million term loan and $10 million royalty stream facility, if needed.

Management is "laser focused on reaching profitability" and expects quarterly net cash outflows to decrease for the balance of 2025, driven by increasing revenues from higher anticipated volumes and a 3.5% price increase effective July 1, 2025.

Industry Tailwinds and Risk Assessment

Beyond its internal strategic initiatives, SCPH is poised to benefit from significant industry tailwinds. The Medicare Part D redesign, fully implemented in 2025, is a major catalyst. With 70-75% of FUROSCIX prescriptions filled by Part D beneficiaries, the lower out-of-pocket costs ($2,000 cap or $166 monthly smoothing) are expected to drive sustained demand. This shift addresses a key hurdle from 2024, where high patient out-of-pocket costs impacted fill rates.

Furthermore, the proposed Ambulatory Specialty Model (ASM) by CMS, outlined in the 2026 physician fee schedule (with data collection starting January 2027), presents a substantial opportunity. This model aims to improve upstream management of heart failure by linking Medicare Part B payments to specialists' performance in reducing unplanned heart failure hospitalizations. This directly aligns with FUROSCIX's value proposition of enabling early intervention and patient self-management, positioning it as a critical tool for physicians under the new accountability framework.

However, SCPH faces inherent risks. Regulatory and legislative changes, such as the Inflation Reduction Act (IRA) and the "One Big Beautiful Bill Act" (OBBB Act) enacted in July 2025, could impact drug pricing and Medicaid funding, potentially affecting FUROSCIX sales. Supply chain dependency is another vulnerability, as the company relies on a limited number of suppliers and contract manufacturers. Negotiations with its device manufacturer are anticipated to increase cost of product revenues by 15-25% in 2026 for the current FUROSCIX product, though the autoinjector launch is expected to mitigate this impact beyond 2026. Global macroeconomic conditions, including inflation and interest rates, could also affect capital raising efforts.

Conclusion

scPharmaceuticals stands at a pivotal juncture, transforming from a niche player to a comprehensive solution provider in cardiorenal fluid management. Its core investment thesis is firmly rooted in the disruptive potential of its subcutaneous delivery technology, exemplified by FUROSCIX and the promising Autoinjector. The company's strategic expansions into Class IV heart failure and chronic kidney disease, coupled with favorable shifts in the Medicare Part D landscape and the impending Ambulatory Specialty Model, create a compelling narrative of accelerating growth and market penetration.

While SCPH operates in a competitive environment with larger pharmaceutical giants, its technological differentiation as the sole FDA-approved subcutaneous loop diuretic provides a strong competitive moat. The anticipated cost reductions and enhanced patient convenience from the Autoinjector are poised to further solidify its market position and drive significant long-term value. With a clear focus on profitability, supported by increasing revenues and disciplined cash management, SCPH is well-positioned to capitalize on these tailwinds, making it a compelling consideration for discerning investors seeking exposure to innovative healthcare solutions.