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spk10: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Thera Technology's second quarter 2024 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 the presentation, we will conduct a question and answer session with 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 a question may do so by clicking the Ask a Question link on the webcast platform. If anyone has any difficulties hearing the conference, please press the star key followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, Wednesday, July 10, 2024, at 8.30 a.m. Eastern Time. I will now turn the call over to John Leisure, Global Commercial Officer at Thera Technologies. John, please go ahead.
spk05: 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 DeBoek. During the Q&A session, he will be joined by Dr. Christian Marcellet, Senior Vice President and Chief Medical Officer, and myself, 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 their technologies may differ materially from those statements. As such, the company cannot guarantee that any forward-looking statement 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's discussion analysis, issued this morning and available on CEDAR at www.cedarplus.ca and on EDGAR at www.sec.gov. Forward-looking statements represent Thera Technologies' expectations as of this morning, July 10, 2024. 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 investment 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 on EDGAR at the web addresses mentioned earlier. Investors can also follow the company on LinkedIn and X and sign up for alerts on TheraTechnology's investor website at theratech.com. With that, I would now like to turn the conference over to our President and CEO, Paul Levesque.
spk03: Thank you, John. Hello, everyone, and good morning. I am pleased to be reporting on TheraTechnology's financial results for the second quarter ended May 31, 2024. Today's call also puts us past the halfway point of what is shaping up to be a promising year. As you will hear in a moment, our second quarter was very strong. The top line has recovered and we continue to demonstrate strength on the bottom line. In fact, for the first time in the company's recent history, we recorded a positive net income. We expect these trends to continue. In a mere 18 months, We have delivered financially on what we set out to do. Today's results marked the beginning of a new and profitable journey, sending the important message that we are on track to deliver growth and value for shareholders. This quarter, we witnessed a return to revenue growth with a reverse trend from what we saw in the first part of the year and as compared to the same period in 2023. Moving forward, and now that inventory levels have returned to normal levels, we expect sales for the second half of 2024, which is typically our stronger period, to be more in line with demand. In addition to reporting $22 million in revenue, we recorded $5.5 million of adjusted EBITDA this quarter, which is a solid 25% margin. Moreover, the company has realized an impressive $12.3 million in adjusted EBITDA over the past four quarters. This achievement paves the way for our full-year objective. With these positive indicators in hand, I can confidently reaffirm our guidance for full-year 2024 revenues between $87 and $90 million and an adjusted EBITDA in the range of $13 to $15 million. This puts us in a strong position to realize new opportunities for business development that complement existing business drivers. With that, let's now take a closer look at our engine of growth, Egrifta SV. Egrifta SV remains our priority brand, with performance metrics showing consistent growth. Momentum in new prescription growth continued from Q1, marking a year-to-date increase of 13% in new enrollments, and 16% in unique patients compared to the same period last year. Moreover, we are tracking the number of unique prescribers, which is also steadily increasing. As a result of the significant noise around weight loss driven by GLP-1s, our customers expect to see an increase in patients in the future with central adiposity who are seeking treatment. A GRIFTA-SV is the only FDA-approved medication to treat excess abdominal fat, specifically in people with HIV. We are actively leveraging these new market dynamics so that the GRIFTA-SV will be uniquely poised to benefit patients and shareholders. Let's turn to the FH formulation of Tesamorin for a moment. During our last earnings calls, I shared information on the type A meeting with the FDA and some details on the important feedback we received on our file. We are still addressing the FDA's questions and will provide an update upon resubmission. The FDA has confirmed a four-month review. Now on to oncology and our ongoing Phase I clinical trial of pseudocytaxels and dusortide that were lead investigational PDC candidates. Our team presented a poster at ASCO in Chicago demonstrating signs of long-term efficacy in a manageable safety profile of pseudocetaxel xanthosortide in patients with solid tumors. In an updated analysis from parts one and two of the trial, pseudocetaxel xanthosortide induced durable disease stabilization up to 45 weeks, lasting beyond treatment completions. The results suggest a unique multimodal mechanism of action distinct from other cancer therapeutics. Additionally, investigators observed an early efficacy signal primarily in female cancers with 7 of 16 participants or 44% achieving a clinical benefit. In March, we announced that the study's medical review committee had deemed the dose level safe in the first cohort of patients in Part 3 of the trial. I'm very pleased to confirm now that we have fully recruited for the second cohort of the study. Six patients have completed the first treatment cycle at the higher dose of 2.5 mg per kg and are evaluable for safety. In parallel, We are engaging with potential partners for additional developmental steps around TH1902 and our overall Sort 1 positive technology platform. To no surprise, many of our contacts are eagerly awaiting results from Part 3 of the trial. There is also a keen interest in the science we have advanced with three new PDCs using the same payloads as ABC technology, such as Exaticat. The momentum we have generated was palpable at the recent BioInternational meeting in San Diego, where we actively engaged with a number of interested parties in addition to highlighting and pursuing products for acquisitions and commercial partnerships. As the team continues to follow up from this key industry event and other business development activities, it is evident that our refocused commercial position has put us in a position of strength, to achieve our most important objective of value creation for all shareholders. With this, I'd like to turn the call over to Philippe, who will go over the peerage financials in more details. Philippe? Thank you, Paul.
spk06: Good morning, everyone. As expected and as reported in April during our Q1 conference call, revenues rebounded in the second quarter, and we recorded net sales of $22 million for 25% growth versus the same quarter last year. Furthermore, I want to highlight that the efforts to reorganize the cost structure of the company are paying off, with $5.5 million of adjusted EBITDA or 25% of revenues, and we recorded a net profit of about $1 million for the quarter, or $0.02 per share. I want to take this opportunity to thank everyone at Thera Technologies for their continued effort to continued support of our efforts to become profitable, as this has been a significant turnaround in the past 18 months, which was marked by a number of challenges. For the second quarter of fiscal 2024, net sales of a Grifta SV reached $16.2 million compared to $10.9 million in Q2 of last year, which represents a 49% increase year-over-year. Recall that Q2 was 2023 sales were negatively affected by inventory drawdowns. As mentioned previously, inventory levels have reverted to normal levels and should continue to be stable going forward. For the six-month period ended May 31st, T-GRIFTA revenues have grown 9.4%, a level which is more in line with what T-performance indicators such as new enrollment and total unique patients are showing. Tragarzo net sales in the second quarter of fiscal 24 amounted to $5.8 million compared to $6.7 million for the same quarter last year, representing a decrease of 13.4% year over year. The decrease was mainly due to lower unit sales in the quarter as compared to last year, mostly as a result of competitive pressures in the multidrug-resistant segment of HIV treatment, where Tragarzo remains an important part of the treatment arsenal but has lost market share to new market entrants in the segment. In the second quarter of 2024, cost of sales came in at $4.5 million, down from $4.7 million in the same quarter of fiscal 2023. EGRFTA costs were affected by a $251,000 provision related to the production of the F-8 formulation, since the product is not yet approved. Excluding that provision, gross margins for IGRIFTA were 92%. For Garzo, margins were 48.5%, consistent with the terms of the time at agreement. Again, in the second quarter of 2024, the rigorous management of spending in R&D and G&A helped us achieve a fourth straight quarter of near-flat positive adjusted EBITDA as established as an objective early in the 2023 fiscal year. Adjusted EBITDA in the past four quarters was $12.3 million, which puts us in a very good position to achieve our stated guidance of $13 to $15 million per fiscal 2024. R&D expenses again decreased substantially in the second quarter of 2024 compared to to the same period last year, mostly due to lower spending on our oncology program, as well as lower expenses following the near completion of our lifecycle management projects, OriGriffa SV and Regarzo. R&D expenses came in at $4.7 million versus $10.4 million last year, or a 55% decrease. Selling expenses came in at $6.3 million for Q2 2024 compared to $6.5 million for the same three-month period last year. Selling expenses should continue to be stable in the future as the focus on top and bottom line growth remains our top objective. G&A expenses in the second quarter amounted to $3.1 million as compared to $3.7 million for the second quarter of 2023 or a 17% decrease. The decrease in G&A expenses is largely due to our decision to focus on our U.S. commercial operations and on controlling expenses. Again, these expenses are expected to stabilize going forward. As you can see from our reduction of expenses in R&D and G&A in the past four quarters, we have now right-sized the organization to ensure that we're well on our way in our journey towards showing strong growth in adjusted EBITDA. As a result of this, we are pleased to report adjusted EBITDA for the second quarter of $5.5 million versus negative $6.1 million in the same period last year, a significant improvement of over $11 million, a combination of a strong top line as well as a realignment of spending. Net finance costs in the second quarter amounted to $2.2 million and included interest of $2.3 million on the marathon loan facility. As per the credit agreement, we will be starting the reimbursement of the principal in the next few weeks, and the loan will be amortized over the 36-month period beginning on August 1st of this year. We ended the second quarter on solid financial footing with cash, bonds, and money market funds amounting to $36 million, while we ended the quarter with $60.6 million drawn on the marathon facility. I'm also happy to report that we recorded a net profit of close to $1 million, or two cents per share, in the second quarter of 2024. As Paul briefly alluded to in his remarks, we are confirming our guidance this morning for revenues of $87 to $90 million for fiscal 2024, and adjusted EBITDA of $13 to $15 million, which includes the spending on our oncology program this year, pointing to continued strong performance of our commercial operations for the remainder of the year. As previously mentioned, any additional spending on oncology after completion of the Phase I trial will be carried out through partnerships. So this program will no longer affect our adjusted EBITDA in 2025 and beyond. With that, Paul will be back for final comments, but first we will open the line to take the questions from analysts, and we will also take questions from the web platform.
spk12: Operator?
spk10: We will now begin the question and answer session. To ask a question, You may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble the roster. The first question today comes from Andre Uddin with Research Capital. Please go ahead.
spk11: Thank you, Operator. Good morning, everyone. Nice to see the companies back in black again. Just wondering, do you have a rough idea of when we should see the final data readout for 1902? Thank you.
spk03: Thank you, André, for the question. Christian is next to me. Christian, I've just said that we're fully recruited, that actually the six patients have completed the full cycle, the first cycle. When do you think we could have signals?
spk04: Yeah, André, the way the protocol is built, similar as the first phase of the trial, the CT scans are done at every second cycle. And usually to see, to assess if you have a response, you need to have a confirmation. Then you need to have two CT scans in a row with a confirmation that you have either stable disease or decrease in the tumor size. Then we're talking about a follow-up, minimum follow-up for much. Then in the fall, we should have some. If we have some sign, we should have a read in the fall.
spk11: Okay.
spk04: Thank you, Andre.
spk11: Okay, thank you. And just in terms of... One more question, just in terms of the F8 formulation, when do you approximately expect the FDA four-month review to begin?
spk04: Is that... Tim, do you want to... Yeah, as we had explained during the Q1, the questions from the FDA were related to microbiology, immunogenicity, and manufacturing. We had the type A meeting to clarify everything to ensure that we would be able to provide the appropriate data to the FDA. Then we're still working on those data and we'll inform the market as soon as we will be able to submit the dossier.
spk11: Okay. Okay. That's great. That's it for me. Thank you.
spk02: Thank you, Andre.
spk10: The next question comes from Justin Walsh with Jones Trading. Please go ahead.
spk15: Hi, congrats on the continued strong execution, and thanks for taking my question. I was wondering if you could provide any updates on your efforts to find potentially accretive assets to bolster your product portfolio.
spk03: Thank you, Justin. As you can imagine, we were extremely active at JPMorgan at the beginning of the year. We were very active at Bayo recently. We had over 45 meetings during the week, and most of them were related to finding additional companion for either the existing bag that we have in Salesforce or creating another bag in areas where we have expertise and could actually leverage our go-to-market model. So there's lots of conversations going on with many companies that have these sort of assets that may not be a priority for them but could represent an opportunity for us. John, do you want to add anything to what I just said?
spk05: We've advanced a lot of discussions, and we have a lot of interesting assets that we're looking at. We're committed to making sure that we get the right asset for us and that we don't overpay on these things. So all I can say is there's a lot of opportunities, and we've advanced a number of these and hope to have more information shortly.
spk15: Great, thanks. And I was wondering if you could provide any feedback you received from the ASCO presentation. Curious about the level of potential interest as you seek partners for that asset.
spk04: Christiane? Yeah, we had very good, like the poster was very well attended at ASCO. And as you mentioned in the data that were presented is that we have disease stabilization and like clinical benefit in about 44% of the patients. And people are very curious about the reason as to why. We spoke with our main investigators and usually you don't see disease stabilization. If you give a cytotoxic in that patient population, very advanced patient population, a new one, just a cytotoxic, usually when you stop the treatment, you see a progression in the tumor. It starts to regrow very rapidly. In our case, we think that that could be related to the other mechanism of action that are linked to TH-19-02, mainly the one that is like inducing the immune cells infiltration, more or less like immunotherapy to some extent. Then it was well attended, and we had very good questions. It was similar also at AACR regarding the other PDCs that we have. It's raised also significant attention.
spk15: Great. Thanks for taking the question.
spk02: Thank you, Justin.
spk10: As a reminder, if you would like to ask a question, please press star and 1 to enter the question queue. The next question comes from Luis Chen with Kantor. Please go ahead.
spk14: Hi. Good morning, everyone. This is Carby on for Luis from Kantor. Congrats on the progress. A couple questions from us. First, on Tesla Moreland F8 SBA, given the four-month period, are you still on track to receive potential approval sometime this year? Secondly, you spoke about advancing your three additional PDCs. Can you talk more about other targets? Are these all sort one or is it some other target? And also on potential indications. Thank you.
spk03: So let me take the first question on Tessa Moreland and the FAA. Our goal is still to actually get an approval before the end of current fiscal year. This is what we've said. We're working hard on addressing the questions, as Christian said. They fill the questions in three different areas, and we have advanced all of the areas. We'll package what we have, and our intention is to file when ready and get an approval before the end of the year. Christian, when it comes to the additional PDCs, do you want to expand on that?
spk04: Yeah, this is a great question. And again, our technology is aiming or targeting the SORT1 receptor. And even if we do different PDCs with different payloads, we think that there's room for all of those PDCs. The first one was using a payload that is already used as a single agent, docetaxel, but there are many reasons to use it. as to why we wanted to test that PDC and we saw signs of efficacy. But the other PDCs that we are working on or we are using payloads that are used in the ADC technology. As an example, the Exatican payload is not used as a single agent, but it is used in the ADC technology, and the preclinical data that we have seen so far are extremely good. We have other PDCs where it's still confidential to some extent because we're working in patent, and we also see some very good results. The one thing that we were also able to do in terms of experiment, it's the first time now that we have significant amount of two PDCs, enough to conduct animal data. And we did the combination of two PDCs, PH1902, as well as the SN38 one, not the exotic one, but the SN38, which is the same class of drug. And the results of the combination of those PDCs were extremely good. With half of the dose, we had synergistic activity. And we think that that technology eventually could be a very good way to bring two very potent cytotoxic inside the cell with a relatively good safety profile.
spk03: So in a nutshell, the additional PDCs we have will complement what we have that is in the clinic, which is our PDC-TH1902 with docetaxel. But we've received significant improvements. inbound interests who are conjugating also additional modalities such as radioisotopes. For now, we have not advanced that, but we will actually be very opportunistic, and we believe in the sort one technology, and therefore any partner who would like to actually team up to advance these sort of modalities could actually participate. you know, be creating something very strong in the marketplace one day. So we are open to all kinds of partnerships, and I think that we have a platform that is very, very versatile.
spk13: Got it. Thank you so much.
spk10: There are no further audio questions at this time. I'd like to hand the call back over to the teams.
spk06: Thank you, Paul. There's a few questions on the F8 and on Cage 1902 which were answered, so we're done.
spk03: Okay. Well, thank you, everyone, for attending the call today. The second quarter has well positioned us to meet 2024 annual revenues between $87 and $90 million and an adjusted EBITDA in the range of $13 to $15 million. As previously said, we have become net income positive for the first time in recent history thanks to our focus and dedication towards this new profitability journey. Again, thank you immensely for your support. Enjoy the summer and see you soon in our third quarter reporting. Have a great day.
spk10: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you. Thank you. you Thank you. Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Thera Technology's second quarter 2024 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 the presentation, we will conduct a question and answer session with 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 a question may do so by clicking the Ask a Question link on the webcast platform. If anyone has any difficulties hearing the conference, please press the star key followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded today, Wednesday, July 10, 2024, at 8.30 a.m. Eastern Time. I will now turn the call over to John Leisure, Global Commercial Officer at Thera Technologies. John, please go ahead.
spk05: 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 DeBook. During the Q&A session, he will be joined by Dr. Christian Marcellet, Senior Vice President and Chief Medical Officer, and myself, 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 materially from those statements. As such, the company cannot guarantee that any forward-looking statement 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 Analysis Issued this morning and available on CEDAR at www.cedarplus.ca and on EDGAR at www.sec.gov. Forward-looking statements represent TheraTechnology's expectations as of this morning, July 10, 2024. 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 investment and financing decisions rather than the results of day-to-day operations. Thorough 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 on EDGAR at the web addresses mentioned earlier. Investors can also follow the company on LinkedIn and X and sign up for alerts on Theratechnology's investor website at theratech.com. With that, I would now like to turn the conference over to our President and CEO, Paul Levesque.
spk03: Thank you, John. Hello, everyone, and good morning. I'm pleased to be reporting on TheraTechnology's financial results for the second quarter ended May 31, 2024. Today's call also puts us past the halfway point of what is shaping up to be a promising year. As you will hear in a moment, our second quarter was very strong. The top line has recovered and we continue to demonstrate strength on the bottom line. In fact, for the first time in the company's recent history, we recorded a positive net income. We expect these trends to continue. In a mere 18 months, we have delivered financially on what we set out to do. Today's results mark the beginning of a new and profitable journey, sending the important message that we are on track to deliver growth and value for shareholders. This quarter, we witnessed a return to revenue growth with a reverse trend from what we saw in the first part of the year and as compared to the same period in 2023. Moving forward and now that inventory levels have returned to normal levels, we expect sales for the second half of 2024, which is typically our stronger period, to be more in line with demand. In addition to reporting $22 million in revenue, We recorded $5.5 million of adjusted EBITDA this quarter, which is a solid 25% margin. Moreover, the company has realized an impressive $12.3 million in adjusted EBITDA over the past four quarters. This achievement paves the way for our full-year objectives. With these positive indicators in hand, I can confidently reaffirm our guidance for full year 2024 revenues between $87 and $90 million and an adjusted dividend range of $13 to $15 million. Equally, this puts us in a strong position to realize new opportunities for business development that complement existing business drivers. With that, let's now take a closer look at our engine of growth at Grifta SV. Agrifta SB remains our priority brand, with performance metrics showing consistent growth. Momentum in new prescription growth continued from Q1, marking a year-to-date increase of 13% in new enrollments and 16% in unique patients compared to the same period last year. Moreover, we are tracking the number of unique prescribers, which is also steadily increasing. As a result of the significant noise around weight loss driven by GLP-1s, our customers expect to see an increase in patients in the future with central adiposity who are seeking treatment. Egrifta SV is the only approved medication to treat excess abdominal fat, specifically in people with HIV. We are actively leveraging these new market dynamics so that the Egrifta SV will be uniquely poised to benefit patients and shareholders. Let's turn to the FH formulation of Tessa Morin for a moment. During our last earnings calls, I shared information on the Type A meeting with the FDA and some details on the important feedback we received on our file. We are still addressing the FDA's questions and will provide an update upon resubmission. The FDA has confirmed a four-month review. Now on to oncology and our ongoing phase one clinical trial of pseudocetaxel xanthusortide that were lead investigational PDC candidates. Recently, our team presented a poster at ASCO in Chicago demonstrating signs of long-term efficacy in a manageable safety profile of pseudocetaxel xanthusortide in patients with solid tumors. In an updated analysis from parts one and two of the trial, Pseudocetaxel xanthosortide induced durable disease stabilization up to 45 weeks, lasting beyond treatment completion. The results suggest a unique multimodal mechanism of action distinct from other cancer therapeutics. Additionally, investigators observed an early efficacy signal primarily in female cancers with seven of 16 participants or 44% achieving a clinical benefit. In March, we announced that the study's medical review committee had deemed the dose level safe in the first cohort of patients in part three of the trial. I'm very pleased to confirm now that we have fully recruited for the second cohort of the study. Six patients have completed the first treatment cycle at the higher dose of 2.5 mg per kg and are evaluable for safety. In parallel, we are engaging with potential partners for additional developmental steps around TH1902 and our overall Sort 1 positive technology platform. To no surprise, many of our contacts are eagerly awaiting results from Part 3 of the trial. There is also a keen interest in the science we have advanced with three new PDCs using the same payloads as ADC technology, such as Exaticat. The momentum we have generated was palpable at the recent BIO International meeting in San Diego, where we actively engaged with a number of interested parties, in addition to highlighting and pursuing products for acquisitions and commercial partnerships. As the team continues to follow up from this key industry event and other business development activities, it is evident that our refocused commercial position has put us in a position of strength, to achieve our most important objective of value creation for all shareholders. With this, I'd like to turn the call over to Philippe, who will go over the peerage financials in more detail. Philippe? Thank you, Paul.
spk06: Good morning, everyone. As expected and as reported in April during our Q1 conference call, revenues rebounded in the second quarter, and we recorded net sales of $22 million for 25% growth versus the same quarter last year. Furthermore, I want to highlight that the efforts to reorganize the cost structure of the company are paying off, with $5.5 million of adjusted EBITDA or 25% of revenues, and we recorded a net profit of about $1 million for the quarter, or two cents per share. I want to take this opportunity to thank everyone at Thera Technologies for their continued effort continued support of our efforts to become profitable as this has been a significant turnaround in the past 18 months, which was marked by a number of challenges. For the second quarter of fiscal 2024, net sales of Agrifta SV reached $16.2 million compared to $10.9 million in Q2 of last year, which represents a 49% increase year-over-year. Recall that Q2 was 2023 sales were negatively affected by inventory drawdowns. As mentioned previously, inventory levels have reverted to normal levels and should continue to be stable going forward. For the six-month period ended May 31st, eGRIFTA revenues have grown 9.4%, a level which is more in line with what key performance indicators such as new enrollment and total unique patients are showing. Tregazo net sales in the second quarter of fiscal 24 amounted to $5.8 million compared to $6.7 million for the same quarter last year, representing a decrease of 13.4% year-over-year. The decrease was mainly due to lower unit sales in the quarter as compared to last year, mostly as a result of competitive pressures in the multidrug-resistant segment of HIV treatment, where Tregazo remains an important part of the treatment arsenal but has lost market share to new market entrants in the segment. In the second quarter of 2024, cost of sales came in at $4.5 million, down from $4.7 million in the same quarter of fiscal 2023. EGRFTA costs were affected by a $251,000 provision related to the production of the F8 formulation, since the product is not yet approved. Excluding that provision, gross margins for IGRIFTA were 92%. For Garzo, margins were 48.5%, consistent with the terms of the time at agreement. Again, in the second quarter of 2024, the rigorous management of spending in R&D and G&A helped us achieve a fourth straight quarter of near-flat positive adjusted EBITDA as established as an objective early in the 2023 fiscal year. Adjusted EBITDA in the past four quarters was $12.3 million, which puts us in a very good position to achieve our stated guidance of $13 to $15 million per fiscal 2024. R&D expenses again decreased substantially in the second quarter of 2024 compared with to the same period last year, mostly due to lower spending on our oncology program, as well as lower expenses following the near completion of our lifecycle management projects, OriGriffa SV and Regarzo. R&D expenses came in at $4.7 million versus $10.4 million last year, or a 55% decrease. Selling expenses came in at $6.3 million for Q2 2024 compared to $6.5 million for the same three-month period last year. Selling expenses should continue to be stable in the future as the focus on top and bottom line growth remains our top objective. G&A expenses in the second quarter amounted to $3.1 million as compared to $3.7 million for the second quarter of 2023 or a 17% decrease. The decrease in G&A expenses is largely due to our decision to focus on our U.S. commercial operations and on controlling expenses. Again, these expenses are expected to stabilize going forward. As you can see from our reduction of expenses in R&D and G&A in the past four quarters, we have now right-sized the organization to ensure that we're well on our way in our journey towards showing strong growth in adjusted EBITDA. As a result of this, we are pleased to report adjusted EBITDA for the second quarter of $5.5 million versus negative $6.1 million in the same period last year, a significant improvement of over $11 million, a combination of a strong top line as well as a realignment of spending. Net finance costs in the second quarter amounted to $2.2 million and included interest of $2.3 million on the marathon loan facility. As per the credit agreement, we will be starting the reimbursement of the principal in the next few weeks, and the loan will be amortized over the 36-month period beginning on August 1st of this year. We ended the second quarter on solid financial footing with cash, bonds, and money market funds amounting to $36 million, while we ended the quarter with $60.6 million drawn on the Marathon facility. I'm also happy to report that we recorded a net profit of close to $1 million, or two cents per share, in the second quarter of 2024. As Paul briefly alluded to in his remarks, we are confirming our guidance this morning for revenues of $87 to $90 million for fiscal 2024, and adjusted EBITDA of $13 to $15 million, which includes the spending on our oncology program this year, pointing to continued strong performance of our commercial operations for the remainder of the year. As previously mentioned, any additional spending on oncology after completion of the Phase I trial will be carried out through partnerships. So this program will no longer affect our adjusted EBITDA in 2025 and beyond. With that, Paul will be back for final comments, but first we will open the line to take the questions from analysts, and we will also take questions from the web platform.
spk12: Operator?
spk10: We will now begin the question and answer session. To ask a question, You may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble the roster. The first question today comes from Andre Uddin with Research Capital. Please go ahead.
spk11: Thank you, operator. Good morning, everyone. Nice to see the companies back in black again. Just wondering, do you have a rough idea of when we should see the final data readout for 1902? Thank you.
spk03: Thank you, André, for the question. Christian is next to me. Christian, I've just said that we're fully recruited, that actually the six patients have completed the full cycle, the first cycle. When do you think we could have signals?
spk04: Yeah, André, the way the protocol is built, similar as the first phase of the trial, the CT scans are done at every second cycle. And usually to assess if you have a response, you need to have a confirmation. Then you need to have two CT scans in a row with a confirmation that you have either stable disease or decrease in the tumor size. Then we're talking about a minimum follow-up for months. Then in the fall, if we have some sign, we should have a read in the fall.
spk11: Okay.
spk04: Thank you, Andre.
spk11: Okay, thank you. And just in terms of... One more question, just in terms of the F8 formulation, when do you approximately expect the FDA four-month review to begin?
spk01: Is that?
spk04: Do you want to? Yeah, the, as we had explained during the Q1, the question for, from the FDA were related to microbiology, immunogenicity, and manufacturing. We had a type A meeting to clarify everything to ensure that we would be able to provide the appropriate data to the FDA. Then we're still working on those data and we'll inform the market as soon as we will be able to submit the dossier.
spk11: Okay. Okay. That's great. That's it for me. Thank you.
spk02: Thank you, Andre.
spk10: The next question comes from Justin Walsh with Jones Trading. Please go ahead.
spk15: Hi, congrats on the continued strong execution and thanks for taking my question. I was wondering if you could provide any updates on your efforts to find potentially accretive assets to bolster your product portfolio.
spk03: Thank you, Justin. As you can imagine, we were extremely active at J.P. Morgan at the beginning of the year. We were very active at Bayo recently. We had over 45 meetings during the week, and most of them were related to finding additional companion for either the existing bag that we have in Salesforce or creating another bag in areas where we have expertise and could actually leverage our go-to-market model. So there's lots of conversations going on with many companies that have these sort of assets that may not be a priority for them but could represent an opportunity for us. John, do you want to add anything to what I just said?
spk05: We've advanced a lot of discussions, and we have a lot of interesting assets that we're looking at. We're committed to making sure that we get the right asset for us and that we don't overpay on these things. So all I can say is there's a lot of opportunities, and we've advanced a number of these and hope to have more information shortly.
spk15: Great, thanks. And I was wondering if you could provide any feedback you received from the ASCO presentation. Curious about the level of potential interest as you seek partners for that asset.
spk04: Christiane? Yeah, we had very good, like the poster was very well attended at ASCO. And as you mentioned in the data that were presented is that we have disease stabilization and like clinical benefit in about 44% of the patients. And people are very curious about the reason as to why. We spoke with our main investigators, and usually you don't see disease stabilization. If you give a cytotoxic in that patient population, very advanced patient population, a new one, just a cytotoxic, usually when you stop the treatment, you see a progression and the tumor starts to regrow very rapidly. In our case, we think that that could be related to the other mechanisms of action that are linked to TH1902, mainly the one that is like inducing the immune cells infiltration, more or less like immunotherapy to some extent. Then it was well attended, and we had very good questions. It was similar also at AACR regarding the other PDCs that we have. It's raised also significant attention.
spk15: Great. Thanks for taking the question. Thank you, Justin.
spk10: As a reminder, if you would like to ask a question, please press star and 1 to enter the question queue. The next question comes from Luis Chen with Kantor. Please go ahead.
spk14: Hi, good morning, everyone. This is Carvey on for Luis from Kantor. Congrats on the progress. A couple of questions from us. First, on Tesla Moreland F8 SBA, given the four-month period, are you still on track to receive potential approval sometime this year? Secondly, you spoke about advancing your three additional PDCs. Can you talk more about other targets? Are these all sort one or is it some other target? And also on potential indications. Thank you.
spk03: So let me take the first question on Tessa Moreland and the FAA. Our goal is still to actually get an approval before the end of current fiscal year. This is what we've said. We're working hard on addressing the questions, as Christian said. They fill the questions in three different areas, and we have advanced all of the areas. We'll package what we have, and our intention is to file when ready and get an approval before the end of the year. Christian, when it comes to the additional PDCs, do you want to expand on that?
spk04: Yeah, this is a great question. And again, our technology is aiming or targeting the SORT1 receptor. And even if we do different PDCs with different payloads, we think that there's room for all of those PDCs. The first one was using a payload that is already used as a single agent, docetaxel, but there are many reasons to use it. as to why we wanted to test that PDC, and we saw signs of efficacy. But the other PDCs that we are working on, we are using payloads that are used in the ADC technology. As an example, the Exatican payload is not used as a signal agent, but it is used in the ADC technology. And the preclinical data that we have seen so far are extremely good. We have other PDCs where it's still confidential to some extent because we're working on patent, and we also see some very good results. The one thing that we were also able to do in terms of experiment, it's the first time now that we have a significant amount of two PDCs enough to conduct animal data, and we did the combination of two PDCs, TH1902 as well as the SN38 one, not the exotic one, but the SN38, which is the same class of drug, and the results of the combination of those PDCs were extremely good. With half of the dose, we had synergistic activity, and we think that that technology eventually could be a very good way to bring two very potent cytotoxic inside the cell with a relative limited safety profile.
spk03: So in a nutshell, the additional PDCs we have will complement what we have that is in the clinic, which is our PDC-TH1902 with docetaxel. But we've received significant inbound interest for conjugating also additional modalities such as radioisotopes. For now, we have not advanced that, but we will actually be very opportunistic, and we believe in the sort one technology, and therefore any partner who would like to actually team up to advance these sort of modalities could actually participate. you know, be creating something very strong in the marketplace one day. So we are open to all kinds of partnerships, and I think that we have a platform that is very, very versatile.
spk13: Got it. Thank you so much.
spk10: There are no further audio questions at this time. I'd like to hand the call back over to the team.
spk06: Thank you, Paul. There's a few questions on the F8 and on Cage 1902 which were answered, so we're done.
spk03: Okay. Well, thank you, everyone, for attending the call today. The second quarter has well positioned us to meet 2024 annual revenues between $87 and $90 million and an adjusted EBITDA in the range of $13 to $15 million. As previously said, we have become net income positive for the first time in recent history thanks to our focus and dedication towards this new profitability journey. Again, thank you immensely for your support. Enjoy the summer and see you soon in our third quarter reporting. Have a great day.
spk10: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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