Procaps Group, S.A.

Good day, and welcome to the ProCAPS Group Business Update Call and Webcast. Today's conference is being recorded. Please note that some statements made during this call may contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. Any statement that refers to expectations, projections, and or future events, including financial projections or future market conditions, is a forward-looking statement. The company's actual future results could differ materially from those expressed in such forward-looking statements due to a variety of risks, uncertainties, and other factors, including but not limited to those set forth in ProCAP's group's FCC filing. ProCAP assumes no obligation to update any such forward-looking statements. Please also note that past performance or market information is not a guarantee of future results. At this time, I would like to turn the conference over to Melissa Angelini, Investor Relations Director of ProCaps. Please go ahead, Melissa.

Thank you, and good morning, everyone. Thank you for standing by, and welcome to the ProCaps Business Update Call. This conference is also being webcast, and a link to the webcast is available on the ProCaps IR website at investor.procapsgroup.com. We appreciate everyone joining us today. Please note that our press release was issued yesterday and can be found on the Procax IR website. Please review the disclaimers included in the investor presentation. During this call, non-GAAP financial measures will be discussed and presented. We believe those non-GAAP disclosures enable investors to better understand ProCap's core operating performance. Please refer to the investor presentation for a reconciliation of each of these non-GAAP measures to the mostly directly comparable GAAP financial measures. Hosting today's call, we have Ruben Minsk, our CEO, and Patricio Vargas, our CFO. I will now turn the call over to ProCap CEO, Ruben Minsk. Please, Ruben, go ahead.

Thank you, Melissa, and thank you all for joining us today on our second quarter and first half of 2022 conference call. As an agenda, I wanted to provide everyone with an overview of our first half of the year's performance, as well as give an update perspective of our strategy going forward. From there, I will turn it over to Patricio to take you through some of the more detailed specifics of reference statements. At the end of our call, Patricia and I are both happy to answer any questions you may have. And additionally, please feel free to follow up as well with a post-call with either us or Melissa. Moving to slide five, I wanted to share some highlights of the quarter with you. On top-line sales and market share positions, we're doing quite well. Overall, our results show the resilience of our business's segments and portfolio diversification that continues to evolve with new products and new geographies. We posted a 14% increase in net revenues for the quarter and 12% for the first half of the year, with our CDMO business growing 20% in the quarter. In the B2C business, we posted an 11% growth in the second quarter of 2022, impacted by foreign exchange impact, supply chain challenges, and inflationary pressures. On a constant currency basis, our first half 22 growth was 18%. Our CDMO business is doing extremely well with an increase in sales of existing partners and the launch of new products. I'm also happy to report that our West Palm Beach facility commenced operations and we have seen some revenues from R&D services rendered. The investment rationale behind this acquisition was that it was incredibly important for Procafs to have a U.S. CDMO capability to better service inshore the largest pharmaceutical market in the world, as well as our European customers. We are already seeing progress on that end. The construction of our GOMI facility in the U.S. has been on track and we expect to begin operations in the first quarter of 2023. Our new divisions expect except, I'm sorry, for all our divisions, except for Diabetics, we're growing at double-digit growth rates in terms of revenue in constant currency. Our growth has remained consistent across our products, despite currency devaluation, as well as the launching of new products. Our new product launches have been a key driver of our growth, and I will share more light on this later on. Our renewal rate, that is the percentage of our revenues from recently launched products, is at 21%. This ratio is impacted by the facing of some regulatory processes. As you all know very well, the launch of a product in this industry depends on the registration approval. We do not have a specific date, only a time range. We believe the product will be approved. And today we have over 170 products under registration in different stages. As we continue to navigate through this dynamic operating environment, we remain committed to our investment to fortify our businesses' portfolio, organization structure, and value chain by increasing our production capacity, continued investment in research and development and new products, and expanding our geography footprint. On that note, as you know, during the quarter, we proudly announced the acquisition of Grupo Somar, on our entrance to Mexico. This transaction represents a very significant step forward for ProCast regional consolidation, expanding our reach into the second largest pharmaceutical market in Latin, and offers a unique opportunity to realize the significant synergies through cross-selling opportunities, leverage our innovative order delivery technologies, and cost efficiencies. Moving to slide six, I want to remind you all about the strategic rationale of this transaction. As I just mentioned, our entrance into Mexico, which is the second largest pharma market in La Dama, is an important, a very important milestone for us. First, Grupo Somar is well positioned to capitalize on the tailwinds underpinning the Mexican market and sustain a high and consistent growth rate across its different business lines. We also have growth leveraging Procaf's highly differentiated product portfolio in Mexico, and we expect to be strengthening our CDMO business with our know-how and patented technologies, which we expect to broaden our customer list and portfolios in Mexico. The second is the attractive product portfolio branded generics targeted to the private market and with leading market positions across key categories. Grupo Somara participates in segments familiar to Procaps, and both organizations complement each other's portfolio. Their well-diversified portfolio across other segments, therapeutic areas, and customers with no relevant product concentration creates also a great competitive advantage for us. Third, this will also help broaden even more the diversification of our revenues, not only with portfolio increase, but with the new region And it might upset some of the negative currency devaluation challenges that we are facing, minimizing possible operational risks. Four, increase manufacturing and research and development capabilities. Six manufacturing facilities in Mexico, which include three FDA-approved facilities, one of them being a soft-shell capsules manufacturing plant. Manufacturing capabilities for several pharmaceutical forms that will support our growth in the region. corporate manufacturing model to capitalize significant mid-long-term operational synergies based upon specialization, product capacity to fuel geographical portfolio expansion to all countries where we operate, and research and development expansion by integration with PROCAD's research and development team targeted at pipelines with very much of a regional reach. Fifth, we have a strong local management team, excellent team with ample industry experience and will stay with the company for years to come. Six, significant synergies through cross-selling opportunities and cost efficiencies. Finally, we expect to have approval by the Mexican authorities in Q3 of this year, and we'll start implementing our integration plan immediately afterwards. Moving to slide seven, another important driver to our future growth is research and development and new products. As I always say, I have said before, innovation around our proprietary oral delivery systems is very much the key to our success. We launched over 120 products in the region during the first half of this year. A few examples, deferral K, the first exclusive combination of vitamin D and K2 in Colombia and the region. We have also developed a Gumi version of this product, which has contributed to acceptance by the pediatric patients and medical community. MEN-C is the first specialized formulated oral pharmaceutical grade mint oil used for stomach intestinal disorders, such as irritable bowel syndrome. We have also launched an oncology line with Aludel, indicated as the first line therapy for men and prostate cancer, and no longer responds to hormone therapy or surgical treatment. We continue to invest close to 5% of net revenues in research and development, and we will continue to prioritize investments in our pipeline and businesses to realize the value of many near and long-term opportunities in front of us. With that, I will ask Patricio Vargas to review our financial statements before we take Q&A.