HLS Therapeutics Inc.

Good morning and welcome to the Q4 and Fiscal 2025 Financial Results Conference Call for HLS Therapeutics. 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 star zero for the operator. This call has been recorded on Thursday, March 12, 2026. At this time, I would like to turn the call over to David Mason, Investor Relations, for the introductory remarks.

Thank you, Joelle. Good morning, everyone, and thanks for joining us today. With me on the call is Craig Millian, Chief Executive Officer, John Hanna, Chief Financial Officer, and Brian Walsh, Chief Commercial Officer. Earlier this morning, we issued a news release announcing the financial results for the three and 12 months ended December 31st, 2025. This news release, along with our MD&A and financial statements, is available on our 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 release and on 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+, 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. Million. Please go ahead. Thanks, Dave.

Good morning, everyone, and thank you for joining us today. On our call today, I'll review Q4 and 2025 performance highlights, the progress we've made against our priorities for the year and our path going forward. Brian will drill down further on product performance, along with an update on our cardiovascular franchise expansion. John will follow with a detailed look at the numbers. After our prepared remarks, we'll hold a Q&A session. In 2025, HLS made considerable progress against our objectives to drive profitable growth, strengthen our balance sheet, and lay the foundation for future growth by a portfolio expansion. I'll structure my remarks today around three key themes we introduced earlier last year, and then Brian and John will expand upon them. First, driving operating performance within our base business. Second, building a leading Canadian-based cardiovascular franchise with the additions of Nalendo and Nexlozent. And third, the strengthening of our financial foundation, which in turn increases optionality to deploy capital. Let's start with a look at our Q4 and full year business performance. Revenue in the quarter was $15.2 million and $55.5 million for the full year. Excluding the impact of foreign exchange and the drop in royalty revenues, product sales grew 1% for the year. Adjusted EBITDA for the quarter was $5.7 million and $19.6 million for the full year, achieving 18% growth for the full year. Strong growth in adjusted EBITDA reflects our balanced approach to driving product performance while also optimizing spend. Importantly, we're now seeing signs that the changes we made in 2025 with our cardiovascular sales force are working. The SEPA unit demand grew 23% for the year, and importantly, there was a positive inflection in the second half in new-to-brand prescriptions. And for the first time, the SEPA made a positive contribution to adjusted EBITDA for the full year. Greater operating efficiency, along with progress in de-levering our balance sheet, also drove improved cash flow in 2025. Net debt declined 23% in 2025, while cash from operations for the full year was $17.1 million, up 114% compared to 2024. As it relates to our overall operating performance, we executed on our 2025 business plan and met our most recent full-year guidance targets. The second theme I'd like to touch on is the build-out of the HLS cardiovascular franchise in Canada. In May last year, we announced the Canadian in-licensing of Nalemdo, or benpidoic acid, and Nexlozet, a pill that combines benpidoic acid with ezetimibe. In November, we received approval from Health Canada for Nalemdo, while the application for Nexlozet remains in progress. The addition of Nalemdo alongside the CIPA and eventually Nexlozet positions HLS as a leading Canadian-based company focused on cardiovascular risk reduction. These medicines are a strong strategic fit within our portfolio and represent the type of assets we've been targeting through our business development efforts. Nalemdal and Nexlazet are available in countries throughout the world where they already generate hundreds of millions of dollars in global annual sales. Successfully launching these medicines into Canada is mission critical to driving the next phase of growth for HLS. Of note, commercializing these products will not require additional headcount as we leverage our existing sales force and organizational capabilities. From a timing perspective, Nalendo is now commercially available as we made our first wholesaler shipments and booked our first sales just this month. We will have a full commercial launch with our sales force in early April and expect to see a ramp in prescribing uptake at that time. For Nexoset, we are actively engaging with Health Canada to provide the additional information they've requested and are targeting an approval by early 2027. Let me outline why we believe the Nalendo and Nexlovet opportunity may not be fully appreciated and why we're so excited about the potential for this franchise. First, the addressable market. We estimate that roughly half a million Canadians could benefit from treatment with benfidoic acid. These are patients who either cannot tolerate adequate statin doses or who remain above their LDL cholesterol targets despite treatment with statins and ezetimide. Second, the clinical profile. The CLEAR outcomes trial demonstrated compelling cardiovascular risk reduction with Nalemdo. This isn't just an LDL lowering agent. It's a medicine with proven outcomes data that fits squarely within the existing treatment paradigm. Third, the value proposition. At a list price of $4.25 Canadian per day, Nalemdo represents significant value compared to injectable medicines, which cost a multiple of that amount. Combining dempidoc acid with a xenomide and a statin can achieve a magnitude of LDL reduction comparable to PCSK9s at a fraction of the cost and with an all-oral regimen.