Apotex Health Corp.

Welcome to the EPODx First Quarter Fiscal 2027 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press zero for the operator. Please note, this event is being recorded. I would now like to turn the conference over to Kevin Mannix, Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Our press release for the company's first quarter financial results and business update became available at 6 a.m. Eastern time this morning and can be found on the investor and news section of our website and Cedar Plus. Before we start, we'd like to remind you that all amounts discussed on this fall are denominated in Canadian dollars unless otherwise indicated. Please note that the statements made during this call may include forward-looking statements and future-oriented financial information regarding Apotex and its business. These statements are made as of the date hereof, and Apotex assumes no obligation to update or revise them except as required by applicable securities laws. These statements are based on certain assumptions and involve significant risks and uncertainties and are not a guarantee of future performance or results. Please refer to risk factors in the forward-looking information sections of the company's public filings, which include, without limitation, Apotex's MD&A, its earnings press release issued today, and its IPO prospectus for additional information. During this call, we will reference certain non-IFRS financial measures. Please see our earnings press release and MD&A for a description of these measures and reconciliations to the most directly comparable IFRS measures. On today's call, we are joined by Jeff Watson, Apotex's President and Chief Executive Officer, and Brian McClellan, Chief Financial Officer. Also joining us for the Q&A portion of today's call are Christine Bader, President of Apotex USA and LATAM, and Martin Aries, President of Apotex Canada and Rest of World. Jeff will spend the next few minutes providing you with key highlights from the quarter and a progress update on our strategic initiatives. Brian will then walk you through the financial performance and outlook for the business, and then we'll open the call for Q&A. And with that, I'll hand the call over to our CEO, Jeff Watson. Jeff.

Thank you, Kevin, and good morning, everyone. Thank you all for participating in our call today. Before turning to the highlights, I'd like to frame the quarter through the lens of our growth strategy. Our journey of health strategy is our roadmap for sustainable growth and long-term value creating. It reflects clear choices about where we play and how we win. We are focused on the Americas, anchored by our leadership position in Canada, expanding selectively into higher value platforms, including specialty generics, biosimilars, and branded medicines. We leverage the strengths that have defined Apotex for decades. Strong commercial execution, a deep pipeline of more than 480 planned launches over the next five years, and a manufacturing network built to deliver reliable supply at scale. Together, we believe these capabilities position us to drive growth, expand margins, and allocate capital in a disciplined manner. We delivered a solid start to fiscal 2027 by remaining focused on what matters most, discipline execution, prudent capital allocation, and long-term value creation. Across the business, we're continuing to see the benefits of a more diversified portfolio. Strong launch execution, productivity initiatives that are delivering results, and investments that are expected to strengthen our future growth profile. As I walk through the next several slides, you'll see how those priorities translated into operational and financial performance during the quarter before Brian reviews the results in greater detail. Our first quarter as a public company reflects continued execution against our journey of health strategy. During the quarter, we strengthened the business in a number of important ways. We completed our upsized IPO, reduced our debt by paying down our previously outstanding Perry Pursuit term loan in the amount of $800 million, launched several first-to-market products, completed the Cumberland portfolio expansion, and continue to execute productivity initiatives targeting more than $100 million of savings in fiscal 2027. We also continue to make good progress at our Richmond Hill facility, advancing remediation activities and preparing our new sterile manufacturing line for qualification. Although we cannot comment on the exact timing of an FDA inspection, based on the progress achieved to date, we currently expect to be ready for FDA reinspection by the end of calendar year. As previously disclosed, we made a commercial decision to halt production of U.S.-found ophthalmic products from our Opta 2 line as we focused on efforts on qualifying our state-of-the-art Opta 3 line. We expect to begin production for the U.S. generic ophthalmology market upon successful re-inspection by the FDA. We've also been closely monitoring recent comments from the U.S. administration regarding potential tariffs on imported generic pharmaceutical products. While there remains uncertainty regarding the scope, timing, and ultimate outcome of any such measures, Apotex has a long history serving the U.S. market and benefits from a significant North American manufacturing footprint. With the majority of our U.S. found products produced in Canada, we remain engaged directly and through industry associations with the U.S. administration on how our footprint can be leveraged to benefit a North American onshoring initiative that we share with both the US and Canadian governments. As we recently announced, we entered into a manufacturing partnership with Halo Pharmaceuticals, whereby we agreed to fund a sterile injectable line of which we will get committed volume capacity. These are partnerships that we are continuing to evaluate, and based on our targeted approach to portfolio execution, we will consider additional opportunities that are specific to the US market. Overall, we continue to believe that supply chain reliability, patient access, and pharmaceutical security will remain important considerations as these discussions evolve. We delivered a solid financial performance which was slightly above our expectations. Excluding the impact of generic Revlimid or VLLP in the prior year, revenue grew approximately 2% supported by strong growth in Canada and contributions from new product launches. We also closed the quarter with margins in line with our full year expectations. Our pipeline execution remains on track with continued momentum across key first-to-market opportunities and an in-year launch revenue expected to exceed 10% of total revenue. Looking ahead, we remain focused on execution. Our launch momentum is in line with our expectations And we are introducing fiscal 2027 guidance, including upper mid single digit revenue growth, excluding the impact of VLLP and an adjusted EBITDA margin of approximately 30%. Overall, we are pleased with the start to the year and remain focused on executing our journey of health strategy. Turning to slide six, our revenue mix reflects both the benefits of a diversified business model and the impact of product-specific dynamics between periods. Canada represented 49% of revenue in the quarter and delivered strong growth of 11%, supported by recent launch activity and increasing semiglutide demand. The U.S. represented 43% of revenue, while our international business continued to provide geographic diversification. As communicated earlier, from a business line perspective, year-over-year mix was influenced by the absence of contributions from the first-to-file launch of Nelotinib that benefited the prior year period. We view this as launch calendar timing and have a similar launch plan in the third quarter of this year. More importantly, recent product launches contributed meaningfully to growth during the quarter, reflecting strong execution of our launch strategy and our continued focus on first-to-market and differentiated opportunities in both Canada and the United States. Overall, we believe the quarter highlights the strength, balance, and resilience of the Apotex portfolio and supports our belief in long-term growth opportunities across the business. Turning to slide seven, this quarter provides a good example of how we're executing against our pipeline and positioning the business for long-term growth. As we discussed during the IPO process, we are targeting more than 480 product launches over the next five years. While the size of the pipeline is important, our focus remains on pursuing opportunities where we believe we have meaningful competitive advantages and can create sustainable value. During the quarter, we continue to make good progress on semaglutide, maintaining a leading position as the current sole supplier of generic Ozembic in Canada and securing first-to-market approval for generic Rogovi. In the U.S., we also launched Citigliptin and Citigliptin Metformin under shared exclusivity. And last month, we expanded our U.S. hospital portfolio to the launch of Enjuvite vitamins. Together, these milestones reflect the strength of our development, regulatory, legal, and commercial capabilities, as well as our continued focus on differentiated and first-to-market opportunities. Overall, we remain confident in the depth of our pipeline and the contribution of it to our growth over time. Turning to slide eight, the Cumberland portfolio expansion transaction represents an important step in the continued evolution of our U.S. business. As we've discussed previously, our strategy is not simply about adding products. It's about building a more diversified portfolio with a greater presence in higher value markets where we can leverage our commercial and operational capabilities. The transaction adds a portfolio of established branded medicines across hospital, specialty, and institutional channels, while also bringing dedicated commercial infrastructure that strengthens our ability to compete in these markets over the long term. Importantly, this expands our presence in therapeutic areas such as acute care, oncology, infectious disease, and gastroenterology, while diversifying our revenue base within the United States. We view the Cumberland portfolio as a strong strategic fit that supports our journey of health strategy and reinforces our commitment to building a more diversified and resilient business. When viewed alongside our launch execution, pipeline progress, and financial performance in the quarter, the Cumberland portfolio expansion transaction demonstrates the disciplined approach we're taking to position Apotex for long-term growth. With that, I'll turn the call over to Brian to review our first quarter financial results and fiscal 2027 outlook in more detail.