Theratechnologies Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to TheraTechnology's second quarter and half-year fiscal 2023 earnings call. We would like to remind everyone that all figures on this call are quoted in U.S. dollars. At this time, all participants are in a listen-only mode. Following today's presentation, we will conduct a question and answer session for analysts. Instructions will be provided at that time for you to queue up for questions. Following the analyst Q&A session, investors wishing to submit questions may do so by clicking the Ask a Question link on the Webcast platform. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I would like to remind everyone today's conference call is recorded today, Wednesday, July 12, 2023, at 8.30 a.m. Eastern Time. I will now turn the call over to Mr. John Mullally of Lifestyle Advisors. Mr. Mullally, please go ahead.

Thank you, Operator, and good morning, everyone. On the call today will be Thera Technologies President and Chief Executive Officer, Mr. Paul Levesque, and Senior Vice President and Chief Financial Officer, Mr. Philip Dubuc. During the Q&A session, we will be joined by Christian Marsalis, Senior Vice President and Chief Medical Officer, and Mr. John Leisure, the company's Global Commercial Officer. Before we begin, I'd like to remind everyone that remarks today contain forward-looking statements regarding the company's current and future plans, expectations, and intentions with respect to future events. Forward-looking statements are based on assumptions, and there are risks that results obtained by Thera Technologies may differ clearly from those statements. As such, the company cannot guarantee any forward-looking statements will materialize, and you are cautioned not to place undue reliance on them. The company refers current and potential investors to the forward-looking information section of Thera Technologies management discussion and analysis issued this morning and available on CEDAR at www.cedar.com and on EDGAR at www.sec.gov. Forward-looking statements represent Thera Technologies expectations as of this morning, July 12th, 2023. Additionally, today, the company is using the term adjusted EBITDA, which is not a financial measure under International Financial Reporting Standards, IFRS, or U.S. Generally Accepted Accounting Principles, U.S. GAAP. Adjusted EBITDA excludes the effects of items that primarily reflect the impact of long-term investments and financing decisions rather than the results of day-to-day operations. Thera Technologies believes that this measure can be a useful indicator of its operational performance and financial condition from one period to another. The company uses this non-IFRS measure to make financial, strategic, and operating decisions. Reconciliation of adjusted EBITDA to net loss is found in our MD&A issued this morning, available on CEDAR and EDGAR at the web addresses mentioned earlier. With that, I would now like to turn the conference over to Ethereum Technologies President and CEO, Paul Levesque.

Thank you, John, and good morning to everyone who called today. As we are well past the halfway mark of the calendar year, we remain prudent in managing our commercial goals in Oncology Pipeline to align with our fundamental objectives. Earlier this year, we committed to a recalibration of the business that would see us focus on the commercial enterprise and enable us to become adjusted to the positive. Today, I will be sharing a number of key actions in support of this approach, which will propel us towards profitability while advancing our promising oncology program. I hope that everyone had the opportunity to join our oncology update call on our lead PDC candidate, Pseudocetaxel's Amnusortide, which took place last month. The call followed two significant milestones in early June, a poster presentation at ASCO showcasing new efficacy and safety data from our phase one trial, as well as the FDA's agreement to our amended protocol. Key opinion leaders, Dr. Funda Merrick-Bernstam from MD Anderson Cancer Center, the study's principal investigator, and co-investigator Dr. Ira Weiner from Karmanos Cancer Institute presented early phase one trial results, provided insights on how this data informed the protocol amendment, and shared several patient case studies about the real-life impact of Pseudosydexal Xanthosortai. If you missed this call, I encourage you to review the presentation and webcast replay on our website. The preliminary safety and efficacy data from the Phase 1 trial were extremely well received by the scientific community during ASCO, where visitors to our poster presentation expressed deep interest in our novel sort 1 receptor target. As a recap, key highlights from this study included preliminary signs of anti-tumor activity noted in 36% of MD pre-treated patients with two partial responses and seven patients with prolonged stable disease. As previously communicated, pseudocetaxel-xanusortide is returning to the clinic with an updated protocol. The protocol amendment is designed to improve our interpretive window of our novel PDC, extend its duration of therapy, and ultimately maximize the probability of success for the trial. The updates include a change in the frequency of administration to weekly dosing and a narrowing of the patient population to focus on those with high-grade serous ovarian cancer, a population in which preliminary efficacy has been observed thus far. Patient selection has also been refined to focus on those who are less heavily pretreated, with no more than one taxane failure in a maximum of eight prior cancer treatment regimens. The amended studies have modified six-by-six design with two different dosing regimens that are within the efficacious range for pseudocetaxels and dusortide. Based on our pharmacokinetic and pharmacodynamic analysis, we decided to switch from body surface area dosing to an equivalent weight-based dosing. Weight-based dosing should optimize efficacy and minimize toxicity for the 16 patients who will be enrolled in the next part of the Phase I study. Furthermore, the funding for dosing of the 16 Phase I patients is firmly embedded in our 23 and 24 budgets. We're now accelerating outreach to potential partners for the additional phases of development of pseudocytac cells and resort type, as well as capitalizing on the full potential of our Sort I technology as a game-changer in anti-cancer therapy. As I speak, the team is busy reactivating trial sites and we expect to resume patient enrollment in the coming weeks. We plan to keep the market well-informed of our activities and intend to announce trial recruitment updates throughout the remainder of the year. At the pace we're going, we believe that by the end of the first half of fiscal 24, we will be able to announce preliminary safety and efficacy data. Moving on to the period's results, we are disappointing to report a commercial quarter that was negatively impacted by several factors. First, starting at the end of 22, specialty pharmacies built up larger than necessary inventories in anticipation of expected higher demand. Second, in an effort to improve our growth to net, we renegotiated the contract terms with a large specialty pharmacy, which resulted in a lowering of their overall inventory levels. Both of these one-time events impacted revenues through April of this year, at which time the overstock of inventory levels was depleted. With May and June sales in, we are confident this is behind us now. On a positive note, based on the changes made to contract terms with the one specialty pharmacy, Ferratechnologies will see significant annual savings in distribution costs moving forward. We're also happy to report that in the first two quarters of fiscal 23, new prescription growth versus the same period last year grew 26% for Grifta SV and 8% for Tugarzo, despite new market entrants having made the competitive landscape even more dynamic than before. While anticipating a much stronger second half of 23, the loss in sales during the first half of this year will not be recoverable in the current fiscal year. So as a result, we are recasting top line guidance to 82 to 87 from 90 to 95 million dollars as previously forecasted. This said, we will not let this unfortunate situation stand in the way of our strategic objective to become adjusted EBITDA positive by year end and beyond. This profitability target has been built into our operating plan since the beginning of the year and is an integral part of our strategic shift stage gate R&D expenses and move towards a focus on our commercial business. As such, in addition to reducing R&D activities that were already planned for the latter part of 23 and full year 24, we are implementing an additional $5.5 million reduction in R&D analyzed spending. This will mean more program reductions as well as headcount reductions. While these measures will further pave the way towards profitability, this is certainly the most difficult part of today's call and equally the most challenging news to share to my tenure as CEO with our technologies. The changes announced today will largely focus on right-sizing the R&D area of the company, while customer-facing activities will be maintained to avoid any disruption to our commercial operations. We certainly recognize the impact that the reorganization will have on our employees, especially on those who are directly affected, and we have committed to approaching the changes in the most humanistic way. At this moment in Thera's journey, it is a necessary thing to do for our business and our evolution as a commercially focused biotech. Before I finish, I'd like to turn back to our commercial enterprise and take a closer look and the forward progress being made to further differentiate our HIV brands and expand our product portfolio. Since TraGarzo IV push was introduced, we have witnessed 80% of TraGarzo users transition to this new, faster, and more convenient method of administration. You may recall that the initial FDA approval for the IV push was for the maintenance dose only. We have now also submitted to the FDA an application for IV push administration of the Trogarzo loading dose. And just last week, the FDA agreed to a prior approval labeling supplement, which is subject to a six-month review instead of a prior approval efficacy supplement, which is subject to a 10-month review, thus assigning a PDUFA date of December 14, 2023. As people with HIV continue to move away from oral pill regimens, and there are limited options for those who are multi-drug resistant, we're now seeing a very real, sustainable, long-term niche for our franchise with the pairing of Tregazo with long-acting injectables. And we have generated key data to support this shift in the treatment paradigm. At the 17th Annual American Conference for the Treatment of HIV, We shared results for first-of-its-kind study in HIV, comparing the Tregarzo clinical trial experience to a matched real-world non-Tregarzo cohort. This is the largest dataset and longest follow-up for Tregarzo since our Phase III data. The data showed that the use of Tregarzo was associated with favorable virologic outcomes as compared to non-Tregarzo regimens used in routine care in heavily treatment-experienced people with HIV. Ultimately, the potency and durability of TRIGARZO, as observed in this analysis, bolster the clinical rationale for its use in regimens for heavily treatment-experienced patients and could have important clinical benefits for these individuals. And with EGRFTA-ISV, we're moving ahead with our line extension activities and will transition the marketplace to its new generation F8 formulation once approved. We firmly believe that the new formulation will improve patient experience and adherence and expect the supplemental biologics license application for F8 to be filed by the end of September of this year. With a review period of six months, approval can potentially happen by the end of the first quarter of 24. I'd like to remind you that this will come with strength and IP pretension for DFA formulation and expected additional growth. In addition to growing our two anchor assets, we are very active on the business development front. We have a very real opportunity to further accelerate our growth through bolt-on accretive acquisitions of existing brands, which can be quickly added into our commercial platforms. As we move forward with the new streamlined organizational structure, the remainder of the year will be guided by our laser focus on advancing our commercial initiatives, including the search for new products and partners, as well as the rapid restart of our phase one trial in oncology. With this, I would like to turn the call over to Philippe to discuss our financials.