Medexus Pharmaceuticals Inc.

Greetings and welcome to the Medex's third fiscal quarter 2024 conference call. At this time all participants have been placed on a listen-only mode and the floor will be open for questions after the presentation. If anyone should require operator assistance during the conference please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host Victoria Rutherford, Investor Relations. Victoria. You may begin.

Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals 3rd Fiscal Quarter 2024 Earnings Call. On the call this morning are Karen Donpamont, Chief Executive Officer, and Marcel Conrad, Chief Financial Officer. If you have any questions after the conference call or would like further information about the company, please contact Adelaide Capital at 480-625-5772. I would like to remind everyone that this discussion will include forward-looking information as defined in securities laws. Actual results may differ materially from historical results or results anticipated by the forward-looking information. In addition, this discussion will also include non-GAAP measures, such as adjusted net income and loss and adjusted EBITDA, which do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For more information about forward-looking information and non-GAAP measures, including reconciliations to net income and loss, please refer to the company's MD&A, which, along with the financial statements, is available on the company's website at www.medexis.com and on CEDARplus at www.cedarplus.ca. As a reminder, Medexis reports on a March 31st fiscal year basis. Medexis reports all financial results in U.S. dollars. I would now like to turn the call over to Ken D'Entremont.

Thank you, Victoria, and thank you everyone for joining us on the call today. I'm going to start with some general comments before I dive into the usual financial and product highlights. Our third quarter results reflect yet another quarter of positive operating income and positive adjusted EBITDA. However, we believe the results also reflect certain changing business conditions affecting our operations. in particular recent adverse trends in Xfinity demand and Resuvo product level performance. In response, we have moved quickly to reduce costs, including a reduction in allocation of Salesforce resources to the products. We estimate that these cost reductions will reduce our go-forward operating expenses by approximately $4 to $6 million on an annualized basis, which would help improve our results in fiscal Q4 and subsequent quarters. For Xcinity, we will seek to maintain existing demand, but reduce investments in Xcinity's growth. With the pediatric indication as a tailwind, if and when approved, for Resuvo, we will continue to defend Resuvo's strong formulary status. We expect that our cost reduction initiative will establish a solid foundation to manage the future needs of the business and generate cash flows from operations. We look forward to increasing our focus on GLEOLAND, as an institutionally-based product that we believe will complement our commercialization activities for Triosulfan if and when that product is approved. On Triosulfan, we are pleased to report that the data collection phase of MED-ACT's effort to respond to the FDA's information request on Triosulfan is now complete. It will take time for MED-ACT to process and submit the information as part of the NDA resubmission. But progress to date remains in line with our previous expectations for this to occur in the first half of calendar 2024. Now for our key financial highlights. Our fiscal Q3-24 revenue of $25.2 million decreased from $28.7 million for the same period last year, or a 12.3% decrease year over year. The $3.5 million decrease is mainly due to a decline in sales of Xfinity over the second and third fiscal quarters of 2024 and the accumulating effect of continued effective unit-level price reductions for Resuvo. Adjusted EBITDA of $3.2 million for the quarter was a decrease compared to $5.2 million for the same period last year. The $2 million year-over-year decrease is mainly due to the decrease in revenue I mentioned, offset in part by reductions in operating expenses in the third quarter fiscal 24. We also produced a net loss of $0.5 million for the quarter, an improvement compared to a net loss of $1.5 million for the same period last year. and positive operating income of $1.6 million, a decrease compared to $2.9 million for the same period last year. Turning to our specific products, Xfinity unit demand in the United States decreased by 5% over the three and 12-month periods ended December 31, 2023. Demand continues to reflect the effects of lower observed average quantities of Xfinity consumed by newer patients, together with lower apparent adherence by existing patients and other developments in the broader hemophilia B treatment solutions market. We now believe that these emergent trends are likely to persist and as such will seek to maintain existing demand but reduce investments in Xfinity's growth with the pediatric indication as a tailwind if and when approved. We continue to engage in constructive dialogue with the FDA on that supplemental biological license application, which the FDA accepted for review in June of 2023. We remain optimistic and expect to hear from the FDA with a decision in the first half of calendar year 2024. On Resuvo, we maintained a market leading position during the quarter as unit demand remained strong. However, competition continues to adversely affect Resuvo product level revenue. We have also observed an increasing share of product level revenue attributable to government-sponsored programs, which benefit from statutory discounts and rebates, with adverse effects on total product level revenue. We also now expect that additional statutory discounts and rebates anticipated under the U.S. Inflation Reduction Act will have an incrementally adverse effect on product level revenue going forward. Rupal's unit demand in Canada remained strong during the quarter, which is reflected in the unit demand growth of 21% over the trailing 12-month period ended December 31, 2023. This strong performance reflects successful execution of our sales and marketing initiatives to sustain the product's strong performance over the seven years since the product was launched in January 2017. We continue to see Tropical Turbinafine, which we licensed in March, as a strategic fit with Rupal. Tropical Turbinafine has been widely used in other markets to treat nail fungus infections. We made a new drug submission in December of last year, and last month we learned that Health Canada had accepted the NDS for review. which we view as consistent with our plans to target a commercial launch in the first half of calendar 2025. If and when approved, this product will enter a market that we estimate to be $88 million Canadian dollars on an annual basis. On Glioland in the United States, we continue to execute our post-transition commercial plan. While it is too early to say for certain, we currently expect that product-level revenue for fiscal years 2024 and 2025 would require additional royalty payments to the licensor in order to meet the minimum annual royalty obligations set out in our license agreement although glialad performances remain lower than expected unit demand has been growing moderately over the course of fiscal 2024 and we do intend to increase our focus on the product as institution as an institutionally based product that we believe will complement our commercialization activities for triosulfate if and when that product is approved. Metal jack unit demand in Canada has increased by 17% in the trailing 12-month period ending December 31st, 2023, in spite of direct generic competition. We continue seeking to defend the product's strong market position as we continue to await the federal court's decision following the January 2023 trial in the patent litigation we initiated against Menogex's generic competitor in 2020. In sum, we continue to focus on maintaining stability of our base business and generating cash from operations, and we are confident that our quick moves to formulate and implement our recent cost reduction initiative will set the company up for success in the quarters to come. I'm now going to turn the call over to Marcel, who will discuss our financial results in more detail. Marcel? All right.