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HLS Therapeutics reported its Q1 2025 earnings, revealing a mixed financial performance. The company posted an EPS of -$0.1016, surpassing the forecast of -$0.123, but revenue fell short at $9.16 million against a projected $12.4 million. Despite the revenue miss, the stock price remained stable at $4.49. According to InvestingPro analysis, the company currently shows strong financial health with an overall score of 3.2 (GREAT), suggesting resilient fundamentals. InvestingPro data indicates the stock may be undervalued based on its Fair Value analysis.
Key Takeaways
- EPS beat expectations, but revenue missed forecasts.
- Canadian product revenue grew by 13%.
- Cash from operations increased significantly year-over-year.
- Net debt reduced, indicating improved financial health.
Company Performance
HLS Therapeutics demonstrated resilience in Q1 2025, with a 1% year-over-year increase in total revenue to $12.6 million. The company saw a 5% rise in product revenues, driven by a 13% growth in Canadian product sales. Adjusted EBITDA surged by 41%, excluding royalty revenue, highlighting operational improvements. Cash from operations rose to $3.5 million from $800,000 in Q1 2024, contributing to a reduction in net debt to $46.7 million. InvestingPro data reveals impressive trailing twelve-month revenue growth of 14.81% and a healthy current ratio of 2.75, indicating strong liquidity position. Get access to more detailed financial metrics and 12+ exclusive ProTips with InvestingPro.
Financial Highlights
- Revenue: $12.6 million, up 1% year-over-year.
- EPS: -$0.1016, beating the forecast of -$0.123.
- Cash from operations: $3.5 million, up from $800,000 in Q1 2024.
- Net debt: Reduced to $46.7 million from $67 million a year ago.
Earnings vs. Forecast
HLS Therapeutics exceeded EPS expectations with a result of -$0.1016 against a forecast of -$0.123, marking a positive surprise. However, revenue was $9.16 million, falling short of the $12.4 million forecast, which may concern investors about sales momentum.
Market Reaction
The company’s stock price remained unchanged at $4.49, indicating a neutral market response. This stability suggests that investors are weighing the EPS beat against the revenue miss, resulting in a balanced outlook. InvestingPro analysis shows an attractive EV/EBITDA ratio of 3.03 and a strong Altman Z-Score of 8.11, suggesting financial stability. The company’s comprehensive Pro Research Report, available on InvestingPro along with 1,400+ other top stocks, provides deeper insights into its valuation and growth potential.
Outlook & Guidance
Looking ahead, HLS Therapeutics projects significant growth for Vascepa, with anticipated net sales growth of 186% in 2025. The company plans to launch in-licensed cardiovascular medicines, Nexletol and Nexlazette, in early 2026, targeting a market of 500,000 patients in Canada. Adjusted EBITDA growth is expected to be between 17% and 23%.
Executive Commentary
CEO Craig Millian stated, "We’re growing our product revenues while also increasing profitability," highlighting the company’s strategic focus. He emphasized the alignment of new medicines with HLS’s business development approach. Chief Commercial Officer Brian Walsh noted the synergy and cross-selling opportunities between the new products.
Risks and Challenges
- Revenue shortfall may raise concerns about sales growth.
- Decline in U.S. Clozaril sales could impact future earnings.
- Uncertainty surrounding the commercial launch of new products.
- Potential challenges in securing private insurance coverage for new products.
Q&A
During the earnings call, analysts inquired about the market potential for the new cardiovascular products and the company’s pricing and reimbursement strategy. Executives confirmed patent protection until 2040 and provided updates on the Vascepa co-pay assistance program.
Full transcript - HLS Therapeutics Inc (HLS) Q1 2025:
Conference Operator: Good morning, and welcome to the Q1 twenty twenty five Financial Results Conference Call for HLS Therapeutics. At this point, I would like to turn the call over to David Mason, Investor Relations, for the introductory remarks. Please go ahead, sir.
David Mason, Investor Relations, HLS Therapeutics: Good morning, everyone, and thank you for joining us today. With me on today’s call is Craig Millian, Chief Executive Officer John Hanna, Chief Financial Officer and Brian Walsh, Chief Commercial Officer. Earlier this morning, we issued a news release announcing our financial results for the three months ended 03/31/2025. This news release, along with our MD and A and financial statements, is available on HLS’s website and on SEDAR plus Please note that slides accompanying today’s call can be viewed via the webcast, a link to which is available in our earnings press release and at our website on the events page. Certain matters discussed in today’s conference call or answers that may be given to questions could constitute forward looking statements.
Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company’s annual information form, which has been filed on SEDAR plus During the call, we will refer to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA is defined in our press release and annual filings that are available on SEDAR plus and on our website. Please note that all financial information provided is in U.
S. Dollars unless otherwise specified. And I would now like to turn the meeting over to Mr. Millian. Please go ahead.
Craig Millian, Chief Executive Officer, HLS Therapeutics: Thanks, Dave. Good morning, everyone, and thank you for joining us. On our call today, I’ll review our first quarter and recent highlights. Brian will discuss product performance along with insights related to our just announced in licensing transaction. And then John will follow with a detailed look at financial results.
Following John, we’ll hold a Q and A session. Having now been in the CEO seat at HLS for two years, I’m confident the changes we’ve made have put the company in a fundamentally stronger position today than at any time since I’ve joined. We’re growing our product revenues while also increasing profitability. We continue to rapidly delever our balance sheet and are now able to explore additional ways to create value, including through business development. In Q1, we executed our plan and built on the positive momentum that we exited last year with.
Financial results were in line with our expectations, with growth in both product sales and adjusted EBITDA. We also made progress against our defined BD strategy of expanding our product portfolio at a reasonable cost and in a way that complements and leverages our existing organizational capabilities. As you’ve likely seen, this morning we announced an agreement with Asperion Therapeutics to in license and commercialize two cardiovascular medicines in Canada, NexLetal and NexLazette. We’ll discuss more details about this opportunity in a moment, but first a look at Q1 financial performance. Revenue in the quarter was $12,600,000 up 1% year over year, while product revenues were up 5%.
Canadian product revenue grew 13% in local currency, driven by a 34% increase in Vascepa revenue and a 1% increase in Clozidil sales. With our U. S. Clozidil business, we generated $2,700,000 in revenue, up 3% year over year. Consolidated revenue, as reported in U.
S. Dollars, was negatively impacted by foreign exchange and also by a decline in royalty revenue as a result of last year’s Xemphazyme royalty sale. Adjusted EBITDA grew by 41% in Q1, or 78% when excluding royalty revenue. Strong growth in adjusted EBITDA reflects our continued focus on both driving product growth and optimizing operating expenses. Along those lines, VASCEPA had its second consecutive quarter making a positive contribution to adjusted EBITDA, and we expect brand profitability will continue to improve throughout 2025.
We’ve also seen signs that the Vascepa payer mix is starting to stabilize. This is partly due to our efforts to reduce barriers for privately insured patients. Brian will talk more about this in his remarks. Finally, in Q1, cash from operations was $3,500,000 up from $800,000 in Q1 last year. And we continued to strengthen our balance sheet with net debt now at $46,700,000 compared to $67,000,000 a year ago.
In terms of our outlook for 2025, our guidance is unchanged from what we provided on our most recent earnings call. As a reminder, revenue projections for our Canadian product portfolio are presented in local currency to account for ongoing FX volatility. Importantly, we do not anticipate significant incremental spend on NEXLETOL and NEXLASET prelaunch activities, and therefore, is no change to 2025 guidance. As a reminder, for 2025, we expect 186% net sales growth for VASCEPA, Clozaril net sales in Canada to be relatively flat and U. S.
Clozaril sales to decline slightly. For our one remaining royalty interest, we expect revenue of 600,000.0 to 750,000.00 Regarding adjusted EBITDA, on a consolidated basis in U. S. Dollars, we are targeting growth of 17% to 23%. We are off to a promising start with year over year adjusted EBITDA growth of 41% in Q1.
Regarding the evolving trade and tariff landscape, we’ve taken proactive measures in Q1 to mitigate near term risks. Based on actions taken, we’re confident that any potential shift in tariff policy will not affect our 2025 financial outlook. The continued strengthening of our financial position has created new opportunities to enhance shareholder value. In Q1, we initiated a share buyback program at prices we considered to be good value, while we also pursued opportunities to expand our product portfolio. Today’s announcement of our agreement to in license Nexlitol and Nexlazet reflects this balanced approach to capital allocation.
These oral medicines are currently available in The U. S. And several European countries. Initially approved by the FDA in 2020 as a treatment to help reduce LDL cholesterol, their labels were expanded in 2024 to include broader indications for cardiovascular risk reduction in patients who are unable to take recommended statin therapy. This was based on the results of the large CLEAR Outcomes trial.
Let me highlight why we’re so excited about Nexlotol and Exlazette. These medicines perfectly align with the business development approach and portfolio expansion criteria that I’ve discussed previously. These are highly differentiated commercial stage assets that come with compelling clinical data. They’re already generating significant revenue in The U. S.
And Europe and will have considerable commercial potential when approved in Canada. Importantly, we secured these assets without requiring significant upfront capital and we don’t expect substantial additional OpEx investment is necessary for commercialization. Being complementary to Vascepa, we’ll leverage our existing infrastructure and capabilities to grow revenue and increase the profitability of our entire cardiovascular portfolio. By adding these medicines to the HLS portfolio, we’re building our reputation as a leader in the Canadian cardiovascular market. We’re also giving our sales and medical teams more reasons to connect with key opinion leaders and prescribers and to highlight the potential role each of our medicines can play in helping to manage cardiovascular risk in patients.
From a timing perspective, Asperion submitted new drug submissions to Health Canada for both products in Q4 twenty twenty four, and HLS will now be responsible for obtaining Health Canada approval. We expect approval by the end of this year, which would set us up for the commercial launch into the privately insured market in early twenty twenty six. I’d like to now ask Brian to dive deeper into the first quarter performance of Vascepa and Clozaril, and also to speak to the opportunity and next steps for our expanded cardiovascular portfolio. Brian? Thanks, Greg,
Brian Walsh, Chief Commercial Officer, HLS Therapeutics: and good morning, everyone. Let’s start with Vascepa. Q1 was another solid quarter for the brand. As you know, we we brought the primary care sales function in house in Q3 last year. To further improve our overall commercial performance as an organization, we also made changes to our HLS frontline sales leadership team earlier this year.
With this restructuring, we moved to a regional sales structure where our sales managers are overseeing both franchises. This enabled us to establish a leadership presence in the Western Provinces where we have significant headroom for growth. We also created a position reporting directly to me to manage our business in Ontario. Along with these leadership changes, we also turned over several Vascepa sales territories, which we see as an opportunity to bring in new talent and experiences. We expect the remaining open positions to be filled and full coverage of all territories to be achieved this quarter.
We have witnessed already that these changes are injecting new energy, insight and expertise into the team. We are confident that our focused marketing investments and our fully staffed sales team under a new leadership structure will further accelerate Vascepa growth throughout the remainder of the year. Our focus for Vascepa continues to be on profitable growth by driving breadth and depth of prescribing, while stabilizing the proportion of our volumes that come from the private payer segment. As shared previously, we have implemented changes to improve our payer mix. This includes shifting sales force targeting towards accounts with a greater proportion of privately insured patients, and also enhancing our co pay assistance offer for privately insured patients.
This is helping to support greater conversion and retention on the brands. The CP units grew 29% in the quarter while net sales grew 34%. The relative strength of net sales versus demand growth is partly due to the timing of product shipments, but also due to the progress we’re making to stabilize payer mix through the initiatives I just discussed. Additionally, we continue to increase both the breadth of prescribers and the depth of their prescribing. The number of consistent prescribers was up 42% in Q1, while total average monthly prescribers were up 37% in the quarter.
Turning now to the exciting business development transaction that we announced this morning. With these products under the HLS umbrella, along with VASCEPA, we are building a portfolio that positions HLS as the Canadian based company focused on reducing cardiovascular risk for Canadians. The first of these products is Nexletol, a daily oral non statin treatment that contains the novel bempedoic acid. Bempedoic acid is activated in the liver, upstream from statins, and is not activated in the skeletal muscle, avoiding muscle related side effects often experienced with statin therapy. This enables bempedoic acid to be an effective treatment to further reduce LDL on top of maximally tolerate statin therapy, as well as an alternative for those that cannot tolerate sufficient statin dosing.
NexLazette combines the daily doses of bempedoic acid and ezetimibe into one convenient daily pill. Ezetimibe is an established part of the cardiovascular reducing standard of care. NexLazette provides an option for many patients to add bempedoic acid to their existing treatment regimen without increasing pill burden. NexLazette has been shown to reduce LDL C by seventeen to eighteen percent and NexLazette by thirty eight percent. These findings supported FDA and EMA approval in 2020.
However, it was the 2023 results of the CLEAR Outcomes trial, a study in patients unable to take recommended statin therapy that demonstrated the important cardiovascular risk reduction derived from treatment with bempedoic acid. Specifically, a twenty seven percent relative risk reduction in non fatal MI and a nineteen percent relative risk reduction in coronary revascularization. The clear outcome study was published in the New England Journal of Medicine and subsequently led to label expansions in The US and Europe in 2024. As stated earlier, these products along with Vascepa provide HLS with a robust CV portfolio. For example, the Canadian cardiovascular society’s ASCVD dyslipidemia guidelines recommend both further lowering LDL for patients not at goal, but also to consider treatment with Vascepa if patients have elevated triglycerides.
So now with our expanded portfolio, we have the opportunity to partner with healthcare providers to support a broader set of patients in reducing their remaining cardiovascular risk. Current estimates suggest there are over half a million Canadians and growing who could potentially benefit from Nexletol and Nexlezad. This includes patients with elevated LDL levels and who are unable to take the recommended statin dose or who are not at their LDL goal despite being on combination therapy with statins and ezetimibe. We believe a considerable commercial opportunity exists for these products in Canada. The go to market strategy for these products integrates seamlessly with our current approach for Vascepa.
There is an extremely high degree of overlap between the target universe for these products and our current called on physicians for Vascepa. As far as upcoming catalysts are concerned, we are assuming approval by year end. Based on that timeline, we believe we plan to launch these products in Canada in early twenty twenty six and anticipate that we will establish private insurance coverage for the products in the first half of twenty twenty six. While Nexletol and Nexletol are under Health Canada review, organizationally we will commence pre launch planning activities. This will include prioritizing the work needed to prepare submissions for the health technology assessment process with CDA and NS in Q4 twenty twenty five.
These are the first steps required to pursue public reimbursement across Canada. We expect it will be approximately two years until there is broad public reimbursement, so we will stage gate investment as utilization ramps. The very high degree of alignment between the target customers for these new products and our current go to market model creates immediate operational efficiencies while maximizing our market penetration potential. While some investment will be made in materials and planning, we don’t envision a significant increase in operating expense and we believe we have the capacity in our cardiovascular team to handle these products without additional headcount. As Craig mentioned, increasing the scale of our cardiovascular franchise should help Vascepa as it will lead to greater frequency of higher value with physician interactions.
And importantly, further growing Vascepa and introducing Nexletol and Nexlazet will reduce cardiovascular events for Canadian patients, a clear benefit to them, their families, and the Canadian healthcare system. Looking now to Clozaril. Clozaril continues to be a cornerstone of our financial strength, delivering consistent revenue and cash streams quarter after quarter. And in Q1, Clozaril delivered again with growth in local currency in both Canada and The US. Growth continues to be driven by execution of our regional strategies.
In The US, we are leveraging our specialty pharmacy partnership to add new patients. The recent changes regarding the REMS program could increase overall market utilization. If that is the case, we believe we are well positioned to benefit from any resulting market expansion. In Canada, the number of patients grew slightly in Q1 and we expect the Canadian business to be steady this year as we focus on retention in Quebec, market expansion in Ontario, and market share growth in Western Canada. With that, I’ll turn it over to John to look at the numbers in more detail.
John?
John Hanna, Chief Financial Officer, HLS Therapeutics: Thank you, Brian, and good morning everyone. Starting with revenue, total revenue for Q1 was in line with expectations at $12,600,000 As I said on our call in March, there is seasonality to revenue with Q1 historically representing about 20% of annual revenue. Excluding royalties, revenue from marketed products in Q1 was up 5%. Foreign exchange changes year over year negatively impacted Q1 revenue reported in U. S.
Dollars by approximately $600,000 Canadian product sales of Vascepa and Clozaril in Q1 were up 13% in local currency. As mentioned, U. S. Clozaril Q1 sales were up 3%. These numbers reflect positive momentum built through the past twelve to fifteen months within the marketed product portfolio.
Royalty revenue was $200,000 in Q1 compared to $700,000 in Q1 last year. As you know, we sold our royalty interest in Zempazyme at the end of Q2 twenty twenty four. So while Q1 twenty twenty four included contributions from multiple royalty interests, Q1 twenty twenty five included revenue from just one royalty interest. On the expense side, we continue to show progress reducing our cost base. Q1 operating expenses comprising sales and marketing, G and A and medical regulatory and patient support were down 20%, while promoted product revenue in Canada was up 13%.
This demonstrates the positive impact of the operational efficiency efforts we made in 2024. While selling and marketing expenses will remain below 2024 levels throughout the year, quarterly expenses are expected to be moderately higher than Q1 for the remainder of 2025. This difference is due to Q1 twenty twenty five benefiting from staff vacancies, as Brian mentioned, as well as a 200,000 vendor credit, neither of which are expected to recur in upcoming quarters. Finally, cost of sales increased in Q1 largely due to unit demand growth in Vascepa. Q1 adjusted EBITDA was $3,800,000 up 41% compared to Q1 last year.
Excluding royalty revenue, adjusted EBITDA for Q1 would have increased by 78% over Q1 last year. For Q1, the direct brand contribution from Clozaril to adjusted EBITDA was $5,900,000 while the direct brand contribution from Vascepa to adjusted EBITDA was just above breakeven. For VASCEPA, this was above expectations as we had indicated on our Q4 call in March that due to seasonality, we expected a small negative contribution in Q1. Of note, in Q1 last year, Vascepa’s direct brand contribution to adjusted EBITDA was a loss of $1,600,000 Cash from operations in Q1 was $3,500,000 compared to $800,000 in Q1 twenty twenty four. Cash and cash equivalents were $17,700,000 at quarter end, up from $17,500,000 at the end of twenty twenty four.
On our last call, we touched on three priorities we have for capital allocation. They are number one, continue to deliver the balance sheet with debt principal repayments. Number two, return capital to shareholders via share buyback at attractive values. Number three, look to deploy capital to in licensed products to expand our product portfolio. In Q1, we made progress on all three fronts.
We made debt principal repayments of $3,000,000 We launched our share buyback in March making repurchases of $500,000 through to the April and we advanced discussions on in licensing Nexletol and Nexlazet, which resulted in the agreement with Hesperion that we announced today. The in licensing agreement provides for an upfront payment of $1,000,000 and an additional $1,000,000 upon Health Canada approval. In addition, it includes customary royalties on future sales, potential milestone payments tied to pricing and reimbursement, and milestone payments on the achievement of significant commercial sales targets. Beyond the initial $2,000,000 in payments, we don’t anticipate any additional milestone payments prior to 2027 at the earliest. We will fund all upfront payment upfront and milestone payments based along with associated launch costs through existing cash reserves and cash from operations without requiring additional financing.
Furthermore, as Craig and Brian have discussed, we intend to leverage current commercial infrastructure and don’t anticipate a significant increase in operating expenses will be required to launch the products. Finally, at quarter end, the principal balance on the term loan stood at CAD64.5 million, down significantly from $86,400,000 at the end of Q1 last year. As a result of our continued delevering, net debt stood at $46,700,000 at quarter end. And with that, I’ll pass it back to Craig for his closing comments.
Craig Millian, Chief Executive Officer, HLS Therapeutics: Thanks, John. In summary, we’re pleased with the results from the quarter and we’re excited to bring two new cardiovascular products into our portfolio. The work done over the past two years to focus and strengthen the business operationally is paying off with improved financial performance and greater flexibility to undertake initiatives to enhance shareholder value, such as the share buyback and portfolio expansion. That concludes my prepared remarks. At this point, I’ll ask the operator to please provide instructions for asking a question.
Operator?
Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer Should you have a question, please press the star followed by the number one on your touch tone phone, and you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star Your Your first question comes from David Martin with Bloom Burton. Please go ahead.
David Martin, Analyst, Bloom Burton: Congratulations on the quarter in licensing. Regarding the Asperium products, the 500,000 patient market opportunity seems about the same size as the opportunity for Vascepa in secondary prevention of cardiovascular disease. Do you see similar market uptake for the Spirium products as you saw with Vascepa? Or for instance, is there any lesser or greater medical need versus Vascepa?
Craig Millian, Chief Executive Officer, HLS Therapeutics: Thanks, Dave, for the question. Maybe I’ll start with some thoughts and I’ll hand it over to Brian. Yeah, it’s interesting, you know, in terms of order of magnitude, comps there. I’d say, you know, in my view, the big difference between these two opportunities is these drugs address a very well understood and well defined risk area, which is around LDL reduction, which is very much ingrained in the treatment paradigm to reduce cardiovascular risk. That’s different than our challenge with Vascepa, which was in a sense creating an entirely new paradigm, treatment paradigm with icosapent ethyl.
So they’re both terrific products with great clinical data, but I think the challenges and opportunities are a little bit different. So in some regards, you know, we have very, I think, well defined set of patient populations with a very clear unmet need, you know, based on the data and the label, one being those patients who are currently on a statin and ezetimibe who are unable to get to their LDL goal, and there’s an opportunity, you know, potentially to slot this product in before stepping up to a typically a much more expensive therapy in PCSK9s and one that requires injections, that’s one population. The other is patients who simply can’t tolerate a statin or can’t be titrated up to the clinically appropriate dosing of statin. And so these are fairly well understood patient populations with clear unmet need, and nobody questions, you know, no physicians challenge the importance of achieving LDL targets. So I think in that regard, you know, it’s early to say kind of what the penetration will be, but I think in some respects, you know, whereas with Vascepa, were kind of driving the car while trying to put the highway down in front of us in terms of really building an entire category, at least in the case of Nexlotol and Nexlazet, you know, we’re entering into a market where the value of LDL reduction is not controversial.
I don’t know there’s anything to add to that, Brian?
Brian Walsh, Chief Commercial Officer, HLS Therapeutics: Yeah, thanks Craig. Just to build on that, I think, you know, commercially, you know, as Craig said, physicians are, first very focused on LDL reduction, so this provides us an entree into that conversation and be able to bridge to added cardiovascular risk reduction with Vascepa. So we see a nice synergy between the two, the cross selling opportunity, an opportunity to introduce these products to physicians that have already well embraced Vascepa, as well as a new way to approach physicians that have yet to embrace Vascepa. So highly complementary both clinically as well as in our commercial approach.
David Martin, Analyst, Bloom Burton: Great, and what about reimbursement? Do you anticipate similar dynamics, in particular exceptional access in some provinces or do you think it’ll end up differently?
Craig Millian, Chief Executive Officer, HLS Therapeutics: Yeah, so the one thing I would say again, as it relates to and it’s just, you know, it’s early to kind of predict this, we obviously just closed the deal. But I think, again, the difference with Vascepa is there’s a clear, a very, I think, non controversial value proposition for this product in that right now, as I mentioned, typically first line agents for LDL reduction are statins, and then plus or minus ezetimibe if additional LDL lowering is required, those are generics. And then really, the goal can’t be met either because, you know, the products are insufficient to get patients to goal or because the patient can’t tolerate statin doses high enough to get them to goal, they would need to step up to a significantly more expensive therapy and one that, you know, is very much considered a big gun, so to speak, in the PCSK9s. So we think there’s a huge opportunity between generics and this rather, you know, reserved, you know, late line agent and PCSK9s for another set of oral, you know, medicines that are demonstrable, you know, efficacy and obviously there’s wide, I think, a wide range of possibilities in terms of, the economics there.
In terms of where it would be placed on formulary at this point, I think it would be premature to say. I agree, think it’s premature to say.
David Martin, Analyst, Bloom Burton: Got it, thanks. That’s it for me.
Conference Operator: Thank you. Your next question comes from George Yulubich with Clarus Securities. Please go ahead.
George Yulubich, Analyst, Clarus Securities: Thanks for taking our questions and congrats on the expansion of the product portfolio. This seems to be a great fit. Just kind of a few more details questions on what was just discussed in relation to new products. Can you give us a sense of the what percentage of that 500,000 patient population you guys expect to capture at peak sales? And also what kind of net pricing are you guys expecting for these products?
Craig Millian, Chief Executive Officer, HLS Therapeutics: Yeah, thanks, George, for the question. Maybe I’ll ask Brian for his thoughts on, you know, maybe a little bit of background on the pricing process. Sure. And then, you know, any thoughts on, again, the market opportunity as it relates to the patient population?
Brian Walsh, Chief Commercial Officer, HLS Therapeutics: Yeah, sure. Thanks for the question, George. So first, I think to the size of the population, I think we’ve been very conservative in terms of how we’ve laid out. That’s the population, 200,000 patients, for example, that we know to be on ezetimibe plus statins that are not at goal. So we think this is a very population that we can achieve meaningful penetration for.
In terms of the reimbursement process, we’ll start that work later this year, quickly after approval. We hope to get private coverage in the early part of next year and start to get adoption in the marketplace. The net price overall driver will really be where we land in the public book and that will be a process of establishing the value proposition, which as Craig laid out is very strong relative to the alternatives of injectables at what will be likely a much higher cost. So, I mean, we’re confident in that value proposition, but it’s too soon to speculate on net price at
Craig Millian, Chief Executive Officer, HLS Therapeutics: this Yeah, and maybe just add some commentary because I think, again, you know, we
Brian Walsh, Chief Commercial Officer, HLS Therapeutics: have
Craig Millian, Chief Executive Officer, HLS Therapeutics: obviously, you know, we’ve done some modeling here, but I think it’s a little premature for us to kind of speculate about what the maximum penetration will be. What I will say is I think the numbers, I don’t want to say they’re conservative when we talk about half a million, but what we’ve done here, George, is not say what’s the total number of patients that conceivably could be on this treatment, it would be actually much bigger than this. If you look at the label, the label would, you know, would be would make the drug or what we expect the label will be, of course, it’s not approved yet, so we’re speculating, but based on the indications that are available in The US, it would be actually a much larger population. So, what we’ve already done is take a slice and said, who are the patients who have clear unmet need, a really well defined set of patients where Nexletol and Nexlezet will create a very compelling clinical value to these patients and to their physicians. And those are those two populations that we described.
And again, I think half a million is, again, I think a reasonable estimate of that. We should note also that that population is growing. Ezetimibe, I think, is growing still at 6% a year or so. Statin use still continues to grow, so this is a patient, you know, these are patient populations that continue to grow. Because, believe it or not, even at this point in time, you know, there’s still a lot of patients out there who are not, you know, who are not being treated for elevated LDL cholesterol and who are at risk of a cardiovascular event.
So in terms of, you know, what the penetration could be, again, we’ll get back with those estimates, know that this is a population that we feel Nexletol and Nexletol will be very well positioned to capture a significant part of that opportunity. And again, pricing will remain to be seen, but we also think is a very compelling value proposition to both private and public payers based on this gap between first line agents and then really no other branded oral options to speak of before you get to the very expensive injectables.
George Yulubich, Analyst, Clarus Securities: Got it, got it. No, that makes sense. And that’s actually pretty helpful. Thanks guys. In terms of the patent life or exclusivity term for these products, is there anything you can share on that front?
Craig Millian, Chief Executive Officer, HLS Therapeutics: You sure can. Know, Sperion, as we mentioned at the end of last year, Sperion filed with Health Canada for data exclusivity on these products. So that would grant a period of data exclusivity until late two thousand and thirty three. And based on the product profile and the review to date, we expect that that exclusivity would be granted, that this would qualify for data exclusivity until the February. Beyond that, the products are protected by a number of patents that would extend exclusivity out to 02/1940 when those patents are issued.
George Yulubich, Analyst, Clarus Securities: Understood, understood. Thanks for that. And just one more question, kind of switching gears here on Vascepa. Can you give us an update on kind of the enhanced Vascepa co pay assistance program that you guys talked about last time? I think you mentioned at the time that the program was only reaching twenty percent to twenty five percent of privately insured patients.
Have you guys been able to increase that participation since then? And what’s been preventing you from doing so?
Craig Millian, Chief Executive Officer, HLS Therapeutics: Yeah, so I’ll ask Brian to comment on that.
Brian Walsh, Chief Commercial Officer, HLS Therapeutics: Yeah, thanks for the question, George. So we have been successful at expanding particularly the proportion of new patients that are getting access to that program. We’ve put the innovative on ramp program into pilot mode in Ontario and we’re extending that nationally so that patients can get enrolled in the program right at the pharmacy. So we’re seeing an increase in the proportion of new patients that are. I mean, the challenge to the installed base is kind of converting them to that co pay program.
But we are seeing importantly for those in the program higher rates of retention that we’ve now had the program in the market for a year. So we’re seeing at key six and twelve month points meaningfully higher rates of retention than prior cohorts that either had the lower level or no copay assistance.
George Yulubich, Analyst, Clarus Securities: Got it. That’s it from me. Thank you, guys.
Conference Operator: Thank you. There are no further questions at this time. I would now like to turn the call over to Craig Millian for closing remarks. Please go ahead, sir.
Craig Millian, Chief Executive Officer, HLS Therapeutics: Yeah, thank you. And thank you to everyone for participating on today’s call. And we’ll look forward to reporting back to you on our progress in the coming quarters and speaking again soon. Thanks. Have a great day.
Conference Operator: Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
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