Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HLS Therapeutics Inc (HLTRF, Financial) reported a 9% growth in net sales in Canada for Q3, with a 30% increase in Vascepa sales in constant currency.
- The company reduced its Q3 operating expenses by 15% compared to the previous year, excluding the cost of goods.
- HLS Therapeutics Inc (HLTRF) made a significant debt repayment of $14 million, strengthening its balance sheet.
- The transition of primary care sales activities in-house from Pfizer is expected to result in annual net savings of about $4 million.
- The company anticipates Vascepa to contribute positively to adjusted EBITDA starting in Q4 2024.
Negative Points
- Total revenue for Q3 was $14.1 million, down from $16 million in Q3 of the previous year.
- US Clozaril sales are expected to decline by about $1 million compared to last year due to high wholesaler inventory levels.
- The company lowered its 2024 revenue guidance to a range of $56.5 million to $57.2 million, down from the previous range of $58.5 million to $59.7 million.
- Royalty revenues decreased significantly to $0.2 million in Q3 from $2.6 million in the same quarter last year.
- Cash from operations in Q3 was $1.5 million, a decrease from $5.4 million in Q3 of the previous year.
Q & A Highlights
Q: Can you talk about the trends you're seeing in terms of relative growth and consistent prescribers for Vascepa in the four key provinces?
A: Brian T. Walsh, Chief Commercial Officer, explained that consistent prescribers are defined as those who have written prescriptions four out of the last five weeks. There has been a 66% growth in consistent prescribers compared to last year, with 45% of prescribers in the quarter being consistent prescribers for Vascepa. Regionally, the biggest improvement was in British Columbia, with a 75% increase in new-to-brand writers in Q3 compared to the previous year.
Q: What percentage of new-to-brand patients for Vascepa are originating from primary care versus specialty care?
A: Brian T. Walsh stated that approximately two-thirds of new-to-brand patients are originating from specialty care, while one-third are from primary care in the most recent quarter.
Q: Regarding the expansion of the specialty pharmacy program for Clozaril in the US, what are your plans and expected impact in 2025?
A: Brian T. Walsh noted that the current program has doubled in size this year compared to last year, now representing about 10% of US units. The program has national reach, but there are regional opportunities to expand with other mental health specialty pharmacies in 2025. This growth is expected to offset any decline in the base business in the rest of the country.
Q: Can you provide more details on the financial guidance for 2024 and the preliminary outlook for 2025?
A: Craig Millian, CEO, mentioned that the revenue guidance for 2024 has been adjusted to $56.5 million to $57.2 million due to US Clozaril sales being behind plan and foreign exchange impacts. The adjusted EBITDA guidance has been raised to $16 million to $16.7 million. For 2025, they expect high single-digit percentage revenue growth from promoted products and mid-20% growth in consolidated EBITDA.
Q: What steps are being taken to strengthen the balance sheet and improve capital allocation?
A: Craig Millian highlighted that they made a significant debt repayment of $14 million in Q3, reducing net debt to $52.4 million. They plan to continue deleveraging and expect to resume share buybacks in early 2025, along with pursuing business development opportunities to expand the product portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
