Medexus Pharmaceuticals Inc.

Good morning, everyone, and welcome to the Medexus Pharmaceuticals fourth fiscal quarter and 2024 fiscal year conference call. At this time, all participants are in a listen-only mode, and we will be opening for questions following 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 at Medexus. Over to you.

Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals fourth quarter and fiscal 2024 earnings call. On the call this morning are Ken D'Entremont, Chief Executive Officer, and Marcel Conrad, Chief Financial Officer. If you have any additional questions after the conference call, or would like further information about the company, please contact us 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 reconciliation to net income and loss, please refer to the company's MD&A, which, along with the financial statements, are available on the company's website at www.medexus.com and on Cedar Plus at www.cedarplus.ca. As a reminder, Medexis reports on March 31st fiscal year basis. Medexis reports financial results in U.S. dollars. I would now like to turn the call over to Ken Donchamont.

Thank you, Victoria, and thank you to everyone for joining the call today. We are proud of the financial results we reported for fiscal year 2024. We believe both, we achieved both record revenue of $113.1 million and record adjusted EBITDA of $19.5 million for fiscal year 2024, together with solid operating income of $10.8 million and a modest net loss of $0.02 million. We responded swiftly to the adverse trends affecting our business. and we are pleased with the initial progress of our ongoing expense management initiative, which is reflected in our financial results for fiscal Q4 2024. Before I go into detail on our base business, I will provide some color on a positive development in the regulatory process for Triosulfan, a key pipeline opportunity for Medexis. Earlier this month, we were informed by MEDAC, our licensor for Triosulfan, that the FDA had accepted for review Med-Act's April 2024 resubmission of the new drug application for Triosulfan. We expect that the FDA will complete its review and issue a decision by October 30th of this year. We remain optimistic about the prospect of a Triosulfan approval in the U.S. and about Triosulfan's potential in the U.S. market. because we continue to believe that Triosulfan would prove to be the gold standard in this therapeutic space as it has in Europe and in Canada. If approved by the FDA, we expect that Triosulfan would have a meaningful impact on Medexis' total revenue. Given this positive development and the revenue opportunity for this product represents, we intend to begin making judicious investments in personnel to make sure we can hit the ground running if and when approved. That being said, we would not expect significant revenue from Trio Sultan until early fiscal year 2026, being the second quarter of next year at the earliest. As a reminder, under the terms of our amended U.S. license agreement for Trio Sultan, we are now in a negotiation period to agree with MED Act on any adjustments to unpaid milestones, including those that would become payable following approval. These negotiations could result in adjustments to the amount and or timing of these payments. And to be clear, we are under no obligation to make any milestone payments before the effective date of any such amendment. In the meantime, we are pleased with the performance of our base business this quarter, despite some headwinds. Fiscal Q4 2024 revenue of 26 million decreased by 2.6 million compared to Q4 2023 or a 9.1% decrease year over year. Adjusted EBITDA of 4.4 million for the quarter was a decrease compared to 4.8 million for the same period last year. We produced that income of 0.8 million for the quarter a decrease compared to net income of $6.9 million for the same period last year, and a positive operating income of $0.8 million, a decrease compared to $2.7 million for the same period last year. Turning to our specific products, vicinity unit demand decreased by 6% over the trailing 12-month period ending March 31, 2024. We now believe that a challenging situation and environment together with anticipated impact of the U.S. Inflation Reduction Act will impact product level revenue going forward. We will continue to maintain existing demand bolstered by our now approved pediatric indication as a tailwind, but we have reduced investments in growth. Under SUPO, we maintain a market leading position during the quarter as unit demand remains strong. We continue to see the increased impact of product-level revenue attributable to government-sponsored programs. This impacts product-level revenue as these programs benefit from statutory discounts and rebates, including under the US Inflation Reduction Act. Repel unit demand increased by 21% over the trailing 12-month period ended March 31, 2024. We expect that, following the end of the product's market exclusivity period in January 2025, Rupal will face generic competition in Canada. As is typical in such situations, generic competition will likely prompt us to execute effective unit-level price reductions. We continue to see Tropical Turbinophene, which we licensed in March 2023, as a strategic fit with Rupal. Health Canada's commitment to review our tropical terpenefine new drug submission, submitted in December 2023, brings us a step closer to making the product a viable treatment option for fungal nail infections in Canada and is consistent with our plans to target commercial launch in the first half of calendar 25. 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, we continue seeking to maximize product level revenue. Although Glioland performance in the US has remained lower than expected, unit demand has been growing moderately over the course of fiscal 24 as new customers adopt the product. MetalJect unit demand in Canada increased by 13% in the trailing 12-month period ending March 31, 2024. Following a trial in January 2023, Canada's federal court declined to uphold the Canadian patent for MetalJet, which we sought to defend in response to the at-risk launch of a generic version of MetalJet. While this outcome is disappointing, we previously adjusted our commercial strategy, and so we expect this outcome to have limited impact on the company and the product. In sum, we continue to focus on maintaining stability in our base business and generating cash from operations as we prepare for the revenue opportunities presented by our pipeline products. I will continue with some updates on our leadership team. With the successful completion of fiscal year 24, Marcel Conrad, who has served as our CFO since June 2021, has chosen to depart Medexis to pursue other opportunities. Marcel's last day will be this Friday, June 28. long-standing succession plan, we have appointed Brendan Bushman, who joined Medexis in June 2019 and has worked closely with Marcel through Marcel's entire tenure to step into the CFO role. Among other great qualifications, Brendan has extensive experience building and leading finance and accounting teams through periods of rapid growth, which continues to be our objective for Medexis. I look forward to continue to work with Brendan in his new capacity. I'd also like to thank Marcel for his years of service on the Medexis senior management team. I wish him all the best in his future endeavors. In addition, effective Monday, June 24th, we appointed Richard LaBelle as our chief operating officer. Richard will now oversee all day-to-day business operations across Canada and the United States and ensure they align with our strategic goals. This expanded role builds on his demonstrated success in leading Canada's Canadian operations, among other things. Also effective Monday, Mike Edelman, who has been an important part of the Medexis team since joining as part of our Xfinity acquisition, has departed the company. My congratulations to Richard on this expanded role, and I'd like to thank Mike for his extensive service to Medexis. I and the rest of the Medexis team wish him all the best. To wrap up this update, I'm confident there will be a seamless transition in the CFO role and that this strategic career organization will ensure our ability to embark on the next chapter of Medex's growth story. I will now turn the call over to Marcel, who, one last time, will discuss our financial results in more detail. Marcel?