HLS Therapeutics Inc.

Good morning and welcome to the Q1 2025 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.

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, Brian Walsh, Chief Commercial Officer. Earlier this morning, we issued a news release announcing our financial results for the three months ended March 31st, 2025. This news release, along with our MD&A and financial statements, is available on HLS's website and on CDAR+. 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 CDAR+. 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 CDAR 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.

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&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 de-lever 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, Nexlatal and Nexlazet. We'll discuss more details about this opportunity in a moment, But first, a look at Q1 financial performance. Revenue in the quarter was $12.6 million, 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 BSEPA revenue and a 1% increase in clausural sales. With our U.S. clausural business, we generated $2.7 million 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 Zempozyme 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, VSIPA 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 VSIPA 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 $3.5 million, up from $0.8 million in Q1 last year. And we continued to strengthen our balance sheet, with net debt now at $46.7 million compared to $67 million 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 NexLatal and NexLisette pre-launch activities, and therefore there is no change to 2025 guidance. As a reminder, for 2025, we expect 18% to 26% net sales growth for Visipa, clausural net sales in Canada to be relatively flat, and U.S. clausural sales to decline slightly. For our one remaining royalty interest, we expect revenue of 0.6 to 0.75 million. 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 Nexlatol and Nexlazet reflects this balanced approach to capital allocation. These oral medicines are currently available in the US 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 Nexlatol and Nexlazet. 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 the SEPA, 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, Asperian submitted new drug submissions to Health Canada for both products in Q4 2024, 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 2026. I'd like to now ask Brian to dive deeper into the first quarter performance of Asepa and Clozaril. and also to speak to the opportunity and next steps for our expanded cardiovascular portfolio. Brian?