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spk02: Thank you for joining us here today. I am Chris Naprawa. With me on the webcast today is Alvaro Torres, Chief Executive Officer, and Joel Friedman, Chief Financial Officer, and I am Chairman of the Board. Just before we begin, some forward-looking statements. Please note the following caution respecting forward-looking statements, which is made on behalf of Chiron Life Sciences and all its representatives on this call. The statements made on this call will contain forward-looking information that involves risks and uncertainties, including those introduced by COVID-19 pandemic. Actual results could differ materially from the conclusion of the forecast or projection of the forward-looking information. Certain material factors, assumptions were applied in drawing the conclusion and making the forecasts and projections reflected in the forward-looking information. additional information about the material factors that could cause actual results to differ materially from the conclusions, forecasts, and projections of forward-looking information forecast reflected in the forward-looking information contained in the Chiron Life Sciences filings with the Canadian and provincial securities regulators, which are available on CDAR on the website cdar.com. Now, with that, it's my sincere pleasure to call on Alvaro Torres, CEO and Director.
spk00: Thank you, Chris. Thank you, everybody, for joining in. Good morning. This is our first call for the first quarter of the year. I would say that we're very excited about the results that we've been able to produce, and particularly in the path that we're going forward with this. So four years ago, we founded this company with the goal of improving the quality of life of patients and consumers all across Latam and Europe. Our vision is to reach one million pages and we want to do this in a sustainable manner, being able to change as many lives as possible with a very unique approach as a B2C type of company. I think despite all the obstacles we've had, particularly the last 15 months, we've been able to start showing tremendous growth, which I think is starting to be a guideline of where we're going to be in the future. So, for looking at the first quarter and the overview, what we've been able to accomplish, we're able to present revenues of $2.8 million in the Q1 of 2021. That is 49% growth over Q1 2020 last year and 13% growth over last quarter. I think what's interesting about the are attributable to medical cannabis, and that starts to show the trend of what we're building in terms of how our services revenues are becoming a platform for growth of medical cannabis. This last year, cannabis revenues were 5% of our entire revenues for the year, and now we're turning to 20%. We had a record quarter in terms of gross profitability, $1.1 million before fair value adjustments, and that's 171% growth over Q4 last year and 149% over the same quarter of 2020. And we're particularly mindful because we're still in the middle of this pandemic. I think what's interesting that we're able to start seeing how medical cannabis profits, which are for this quarter and have been for the last 18 months about 90% gross profits. And that's now becoming a very big part of our profitability as a company with 45% of our revenues coming from medical cannabis. I'd like to point out that we started sales in Colombia last year in March. We are now selling four countries, Colombia, Peru, Germany in the first quarter, and the U.K. And our plan for this year is to continue to expand that into Brazil and Mexico. So this is how we look at how the growth of the company has been growing. that we have been experiencing, it gives me a lot of optimism about the way that we're going and how our business is building in a sustainable way and growing very, very fast. Look at what's happening in Colombia in particular, which is the first country where we started having medical cannabis sales. We'll start to see that the number of patients that we've been able to grow We've had more than 7,500 patient prescriptions in the first quarter of 2021. That's 120% growth from Q4. As you look at this trend, you're starting to see that we are on the right path in an exponential manner. And we're really just starting to scratch the surface of what can be accomplished in Colombia, which is the first country where we start sales. And the more positive we feel about Colombia, the more positive we feel that our business model is going to be able to be translated into other countries like Panama and Europe. So far, our expectation is to be able to fill and sell more than 20,000 prescriptions by the end of May next week, which is a tremendous accomplishment, particularly under the circumstances that we have had so far. If we look at what has been driving that growth, it's not happening by accident. 60% of those 3,500 units that we were able to sell are coming from insurance companies. And that is three times as much as we had in Q4 of last year. After that, we talk about how good the product is doing for the patients. And when we have patients that are saying 90% of our patients are improving their primary condition because of the product that we sell, that's creating a model around our business as well. When we are able to talk about how do we convince more insurance companies, right now we're only talking to one that has been covered. And now we're in the plan of being able to convince the rest of the insurance companies in Colombia to include the protocols to include medical cannabis. When we start to show them that after these 12 months, we have patients that are able to save, with our program, up to 60% of the annualized cost of treatment for things like neuropathic pain, that is starting to become a real appealing news and really appealing conversation with insurance companies, which gets me very excited about how we're going to be able to continue our growth and be able to expand our insurance coverage basis. In Colombia, an average patient of neuropathic pain costs an insurance company of almost 6,000 Canadian dollars a year. And now we're proving and showing the real-life data to insurance companies that we're able to save 60% of that cost. We now have 10 health centers and satellite clinics in Colombia, three main in Bogota. We've been opening satellite clinics in major cities all across Colombia. And that is starting to also show the growth that's going to fuel our business in the next couple of years. And at least at last and most importantly, the retention that we're getting from our patients. When we're able to talk about 50% retention rate, You're talking about sustainability, this growth that we're experiencing, and the one that we will see in Q2, Q3, Q4, and next year are happening because we got insurance growth, because our patients like the product, because there's a retention rate. And that is the basis towards a sustainable growth of the company. So I think all these things have been working out for the last 15 months, but I would say Q1 starts to really show that all these things are coming into play. And this growth that you're seeing here is the type of growth that we are anticipating for the rest of the year and that we will anticipate that we can do in the rest of the countries that we are targeting. So when we talk about Colombia and being that proof of concept, I think we're in a very unique position to show that we have a very unique business model that is replicable, that is very hard to copy from somebody else because of the obsession that we have on this type of metric. When we look at the rest of Latin America, what we have been doing what we were planning to do. I think Peru in Q1, we had 175% more prescriptions than in Q4 of last year. And with this growth, that's why we decided to open our first clinic in Peru. This will be Serenia's first foray into international markets. As you can see below, we are opening the clinic next week. The advertisements, the branding, all of that is already starting to happen. In this case, we partnered with a leading clinic in Peru called Montezur. This is a clinic that has more than 91 doctors with service units such as oncology, dermatology, traumatology. And this is going to be replicating our business model, being able to capture demand, being able to bring in and start converting medical cannabis patients with medical cannabis. Just a couple of weeks ago and a month ago, we were able to start bringing doctors from Peru to Colombia, to train and know how to prescribe cannabis, the Chiron and the Serenia way in a responsible manner. Now all these doctors are going back to Peru and they're going to be replicating their business model in a country that's, you know, 35 million people. So very excited about, you know, making our company the first medical cannabis clinic with international operations. I think that's the type of things that make our company thrive. As I said before, we're thriving to get into Mexico and Brazil. We have an ongoing medical education program with the Tech of Monterrey. As of today, all the supply agreements, chain agreements have already been in place. We haven't announced it because we've been focusing on how to start execution rather than just announcing what, you know, LOIs and finalized deals for production. But all of those things are in place. And for those of you who have known Carmen for a long time, you know, We have a very unique regulatory understanding and commercial. We know how to get product compliant away from Colombia to other countries. I'm going to do the same in Mexico. We're planning to start opening our Serenia, one Serenia clinic in Mexico starting second half of next year. The same in Brazil. It's our first patients are imminent. We're working on all the supply chain issues, being able to transport the product logistics and such. But we're very comfortable with the timings that we have to start our first sales in Brazil. And at the same time, we're working to be able to open in Sirenia in the second half of this year. So, you know, when I look at what's going to happen in December of this year, we're going to be continuing to grow in Colombia, have our first clinic in Peru that's going to show us the same type of growth we're having in Colombia. and start to get this business model in Mexico and Brazil, with a first-mover advantage that I think it's going to make our company in a very unique, unique, unique position. So when we talk about Latam, it gets very excited about the growth that we've been having. And I would say that Q1 starts to show also what we've been able to accomplish in Europe. We've been talking about Europe for quite some time. I'm happy to say that we had our first sales in 2020. Germany in late Q1. And that is a tremendous opportunity for us, as we keep seeing that our education platforms and everything that we've been working for are starting to pay dividends. You know, this is, Germany will make Cairo's fourth country and the second country with medical cannabis insurance. And, you know, we already started also expanding our offering of different types of medical cannabis packages in the UK. As you know, we are the exclusive LATAM supplier to Project 2021, which has reported the first results of the study, and in some cases, the high THC using Chiron's own THC flower. And these results are amazing, not only because they already talked about the the benefits of medical cannabis against other medications, but also because this is breaking the barriers of doctors and prescriptions. And I think if this company knows one thing how to do is how to educate doctors and convert and making sure that they understand why medical cannabis can be an alternative. We recently exported our generics from Colombia into Europe. I think in the medium term, that's gonna provide us a very significant mode out around the quality of our products. So, you know, as we are now in the middle of Q2, We're very optimistic about the growth in sales in Europe for this second quarter and beyond. We are already expecting more than 300% of growth in sales in Germany as we stand today before the end of this quarter. And that type of growth we're going to keep seeing in those markets. I think that's going to start to show investors and shareholders that these diversification strategies in the time in Europe with a first-world advantage It's going to provide for us a very sustainable growth and de-risk our company from issues such as currency risk and things like that. So when we talk about Europe, we'll be talking a lot about more. Europe is going to start becoming a big part of our revenues and a very big part of our growth for us. And so I think everything that we've been doing with 2021 and with Germany has taken some time, but I think we're on the right track and starting to show the execution and sales that get us very optimistic about how big that market can be for our company. When we look at, as of today, some of our biggest revenues come from our health services that, if you recall, we acquired about two and a half years ago. I think the progress we've been making in this quarter are showing why we're growing. We had revenues of $2.2 million in the first quarter in the clinics. That's up 23% from the same period last year, particularly for a business that's very cyclical. That's very important, particularly if you consider that we're still in the second or third wave of COVID in Colombia. Our gross profit gross margin increased 25%, which is 250% more than what we had in last quarter. And that is happening because we're able, even in these circumstances, And I think that we see this as the company being able to grow our quarterly services. We have 32,000 quarterly patient services this quarter. That's up 14% from last quarter and 20% from a year ago. In the middle of the pandemic with shutdowns and all this social unrest that you may have heard about, I will address in a minute, we've been able to expand our clinics into different cities. We are now opening in Medellin, Cali, Bucaramanga, Armenia, Pereira, Ibagué, And what we're seeing is the appetite and the interest of patients to be able to find a new alternative. And that growth that we've been investing on is going to continue to fuel that growth rate that we just talked about in Colombia. And when we see how we've been able to educate doctors and convince them, now we're seeing 200% growth in the daily prescriptions that doctors are giving for medical cannabis. in only a span of three months and that number has nowhere to go back up because the more evidence the more education we're providing for the doctors and the more retention we get from patients the more willing to prescribe our doctors are because they're feeling a lot more comfortable with the quality of our product with the service we're providing and you know with response from insurance companies so doctors prescriptions are increasing our patient services are increasing and i have to say again and this is happening during the worst time When you think about April of last year when we were doing 88 prescriptions per month, and today we're doing three times that on a daily basis. And how we're going to keep doing that, I think it's very exciting times for the company and the growth, and particularly on the business model that we set out to have from the very beginning since we started this company as a B2C company. So with that, I'm going to leave it to Joel Freeman, our CFO, to discuss some of our financial aspects and cash position and revenue base and cash flow from operations. And then I'll go back just to give all of you an outlook of where we're seeing the company go within the next 12 months and beyond. So thank you. And, Joel, please take it away.
spk01: Thank you, Alvaro. Q1 was an exceptional quarter for Chiron with record revenues, record gross profits, and the highest gross margins recorded to date given the steep growth in medical cannabis sales. We continue to prudently manage our balance sheet and expenses as we execute sales in four markets. Digging a little deeper, the company recorded record revenues at $2.8 million in Q1 2021, a 49% increase from Q1 2020, and a 13% increase from Q4 2020. During the quarter, revenues from health services increased 23% from the prior year quarter and were flat compared to Q4 2020. However, gross profits from health services increased as a result of higher service volumes year over year and contributions from higher margin services, such as surgeries. In Q1, medical cannabis revenues surpassed $500,000 for the first time, increasing 141% sequentially from Q4 2020. Quarter-on-quarter growth was supported by the company's expanding clinic network and the introduction of insurance coverage in December 2020. Additionally, we saw continued growth in Peru and the UK and a commencement of sales in Germany. In total, European sales were roughly 10% the total medical cannabis sales. Gross profit before fair value adjustments was 1.1 million, reflecting 150% increase from Q1 2020 and 171% increase from Q4 2020. Gross margins at 36% overall represented a high for the company driven by contributions from medical cannabis sales, which continue to generate high margins. As Alvaro mentioned, in Q1, medical cannabis sales made up 20% of our revenue versus only 5% in 2020. That 20% of revenues contributed 50% of our gross profits. As our future growth is being driven by medical cannabis, these contributions are expected to continue to increase quarter over quarter. Our medical cannabis margins remain high in the 90% range for consecutive quarters. I would point out that gross profits from medical cannabis are mainly a result of sales in Colombia in the current quarter, where pricing has been stable in Colombian pesos. However, approximately 10% of medical cannabis sales and gross profits in Q1 2021 were contributed by European operations, which are accounted for on a net basis, contributing gross margins of 100%. And as Alvaro mentioned, we expect these contributions to increase significantly as we move forward. While sales in Peru increased over 175% over 2020, due to the early stages of the market development, overall contributions were not significant in Q1. Additionally, as Alvaro indicated, we saw stronger margins on the clinic side due to the type of services offered and operating efficiencies. Moving on to expenses, SG&A expenses in Q1 2021 decreased 9% from the prior year to roughly $6 million as the company continues to prudently manage resources with the ongoing pandemic. one notable increase in the quarter related to corp as a result of significant increases in insurance premiums due to market dynamics in the insurance industry outside of the company's control while this expense will continue throughout 2021 i would note that the cash used to purchase the dno insurance flowed through working capital this quarter with an offset to our prepaids so we will not have to incur the cash expense on an ongoing basis throughout 2021 As a partial offset going forward, expense recognition for previously accrued signing bonuses dating back to 2019 ended in Q1 2021. On an adjusted EBITDA basis, Q1 2021 was a $4 million loss compared to an adjusted loss of $5.9 million in Q1 2020 and the loss of $4.3 million in Q4 2020. From medical cannabis sales, which come with that high gross margin, we expect this to continue to trend in a downward state. Moving on to a couple of highlights on the balance sheet. At the end of Q1, the company had $12.5 million in cash and working capital balance of $22.5 million. The net cash used in operating activities before changes in working capital was approximately $5 million which is expected to decrease going forward as sales in medical cannabis continue to increase quarter over quarter and contribute these high gross profits. Changes in working capital and reductions in outstanding obligations including our accounts payable and accrued liabilities contribute to the total net cash used in Q1 of $8.5 million. As noted, this was driven by the one-year impact of approximately $2.4 million related to insurance costs and $1.5 million reduction in accounts payable. Capital purchases were quite minor in the quarter as our significant capital investments are behind us. And now I'll turn it back to Alvaro to discuss the near-term outlook.
spk00: Thank you, Joel. Thank you, everybody, again. When we look at the outlook, of course, I cannot help but feel optimistic, particularly when you start to think about where we're coming from. We started medical cannabis sales in Colombia in our company in March 19, the day before the pandemic started, and we had to close down for four months in our country. And I think the fact that we're able to grow this, be so resilient and You know, with all these conditions, it's getting me very optimistic about what we can do once these things are over. Colombia is getting on a good path towards vaccination. The mayor of Bogota just announced yesterday that a full opening of the city is starting June 8th. And all of this just provides a lot of positivity, even with all the situations that are happening. And so when we look about where we are today and why we're excited about the future, I will point a couple of things. You know, even as we see the end of April, We've already done 44% in April than the entire number of prescriptions that we wrote for the Q1. So when we are able to look at that, even with these situations and the shutdowns and lockdowns and all these things, it gets us very excited about what we can accomplish. We still have one month of our business, particularly in Colombia, and as we start growing in Peru. So being able to see at the end of April with that situation, I think it's very exciting. I cannot hide my optimism about Germany and Europe. As I said before, it's been a long time because we've been working a lot on how to build our moat and our sustainable advantage, which is really what all of this is about. Today, we're looking already at growth in Germany. only one month after we already started sales. And so the way we're looking at that, it allows us to counter risk, a lot of this currency risk that we've been having because we are right now primarily exposed to Colombia. But being able to start operating two continents, one of the reasons we did that about a year and a half when we brought in the management team from Europe, we have been doing a tremendous job in these particular conditions. So that means we're growing in Colombia, we're growing in Germany, we haven't finished the quarter, we're going to launch our first clinic in Peru, and we're working to get our clinics going in Mexico and Brazil. Now, you probably may have noticed a couple of days ago we announced a very unique and I would say unprecedented campaign in Colombia. I don't really think there's anything like that ever been done. a national campaign where 21 more clinics are providing free consultations so that we can provide more access to people in Colombia. And the way we look at that, the more access, the more our business will keep growing. Our business really depends on two things. new cannabis prescriptions and returning patients. We have to think about those things at the same time. In a country that has 6 million people with potential conditions that can be treated with medical cannabis, we are only on the first 9,000. I mentioned before that by the end of this month, we'll be able to reach 20,000. We announced 19,000 prescriptions in our press release. But what I'm trying to convey to you is that by next Monday and the rate that we're growing, we'll be closing on our first 20,000 prescriptions since we started sales. Now, if you look at what Q1 and Q2 are going to look like, you know, 2020 will be just, if you remember, it's a year where we had to do a lot of things without a lot of uncertainty, but the growth that we're seeing on a month-to-month basis, it's very, very exciting. So, you know, even with our cash position as it is right now, and when we look at the next nine to 10 months, you know, we have to remind a couple of things. First, insurance coverage is up. When we talk about 60% with only one insurance company, that has nowhere to go but up. But of course, that's what I mean for us, the ability to to continue to sell and to continue to collect, which are the two things that the company is going to be focused on the next eight months, at the rate that we're going. When we look at Q1 versus Q4, anybody who looks at our business last year would say, our clinic revenues are very significant. Well, that is going to start changing very soon. We start to see that path in Q1, as 20% of our revenues are now medical cannabis. And the next nine to 10 months, that will certainly be a start looking the other way because, you know, our clinics are a base for demand. And now we're looking at how do we collect all these receivables that we're getting from insurance companies, how do we continue to permanently manage our cash so we can keep growing. And, you know, our expectation for growth in Mexico and Brazil is limited right now to be able to open that first clinic. And there's many ways that we can do that. In Peru, for instance, we're doing a joint venture in Peru. So we're now learning only how to do our business, but how to convey to other partners that they can take some of these financial responsibilities when opening a business like that, that is proven to be very successful. So in Peru, for instance, where we have a partner like Montesur, we're doing a joint venture with Chiron. and the Montessori are working together to bring patients to educated doctors. And, of course, that has some, of course, a split in terms of revenues and profitability, but it also allows us to manage our cash a lot better. So we are in a position where growth matters a lot. And, you know, I think hopefully we can convey to all shareholders and all those persons that the way that we're growing is something that has a lot of potential still. I mean, we are only one year into our sales in the worst of conditions possible. And I think that's going to be once those conditions start to decrease, which is hopefully going to happen very soon, we're going to be doing a lot, a lot better. Because a company like this that's been able to do this in a disciplined way and manner is going to be able to achieve great things. When we look at Germany, we look at UK, we look at Mexico, Colombia, Peru, Brazil, and the unique way that we're growing, it gets us, of course, very excited about the future. So the outlook for the company, as I see today, it's very optimistic and And when I look at where we were a year ago, only a year ago, and when I look at what markets like U.S. and Canada, where they were the first year since they started sales, I think there's a lot of positivity that we have to have in our company and in the team that's been able to work in our management of cash, particularly on our recurring cash and how we're going to continue to work to be able to work on more sales and more collections. So with that, I would like to thank everybody. We're going to take a couple of the questions. I'm going to try to... to go through as many as we can. If I've already spoken about it, then I will say so. So, as I said before, yes, we talked about 19,000 prescriptions in our press release. What we're talking about today is the milestone, the 20,000, which will happen by next Monday. I think it's great that we're able to talk about it on a daily basis, which, you know, as I said before, one year ago, we were doing one-third prescriptions than what we're doing on a daily basis, and I think that's That's just really where we can grow. We're talking about the cumulative. I already spoke, the 20,000 are from where we started, but that number is just increasing and increasing. When we talk about cash flow to Ete, Brasilia, Mexico this year, Dan, I would say, as I said before, there's many ways that we are entering these countries. In the way of Peru, it's the first time that we're trying to do a joint venture so we can capitalize on everything we have built as a company. We don't necessarily need to do this ourselves as we have done in Colombia. And so there's many ways that we are going to be able to do that. But certainly Brazil and Mexico opening one clinic, it's our goals for next year. And we're now in the middle of conversations with several potential partners so that we can do that together and keep growing our business in a very unique, unique way. By educating doctors from Felix, educating doctors and insurance companies, does this help your competitors succeed as well? Well, to be honest, Felix, I do certainly hope so. I think, you know, Chiron has been taking a lot of responsibility and bearing a lot of this in Colombia. We welcome that challenge. But it is also clear that we need a lot more, a lot more access. Part of the campaigning that we're doing in June without these 21 clinics is to open up a lot more access. We know what we have. We know that we're educating doctors. We know we have a clear leadership position here and that we will have it in a time, but it's also clear that it cannot be one company's responsibility alone. The more insurance companies get into this, the more market we can tackle. I mentioned before, there's 6 million people in Colombia alone that suffer from chronic pain, anxiety, depression, neurological conditions. It's going to be hard to do that by ourselves, but the more that we open this up and the more doctors are willing to prescribe, the more patients are more open to that, it's just going to create tremendous growth for our business, particularly because of the first mover advantage that we have, and the fact that we're able to open these gates. I think being first is not necessarily always the best, but in our case, it gets us to see the jungle a lot faster than everybody else. When we talk about, from Tony, Guess which quarter of the year might you be expecting with profitability? I think we are on the path towards cash flow neutrality. The two issues that we need to continue to work is increasing of new medical cannabis patients and collection. The more we keep growing with insurance companies, the more our corporate finance strategies on cash collection are going to happen. are going to matter a lot, but the way that we're growing and the way that our medical cannabis will then eventually one day be, you know, 80% of our revenues versus today, which is only 20%, that collection is going to start making us into that profitability and that cash flow neutrality. But, you know, at the rate that we're going, there's no reason to think that we cannot do that, you know, even before the next 12 months. A big part of that will be our growth in Europe, and our less reliance and dependence on the currency risks that we're having in Latin America, and that was always being part of the plan. And I think today is something that investors are waiting for, but I think starting Q2, you will start seeing that that strategy of double dual continents is gonna start to pay off big dividends for us in terms of neutrality, cash neutrality, and in terms of currency risk. From Derek, how worried should we be about the downgrade of Colombia's credit rating and how that impacts China's business and stock? Derek, of course, there is no news that Colombia is having some difficulties the last month, downgrading some social unrest and, of course, the COVID pandemic. From what I see, I got to tell you that we are focused on patients, clinics, and the downgrade doesn't necessarily affect us directly. It may have some, of course, affect the country as a whole, but at this point, we've been... able to grow in the worst of conditions. And I think it's the other way around. As the pandemic starts to go down, as vaccines are going up, now the major of Bogota and the major of every city is opening up the cities more because we need it as a country. That is going to help us to continue to acquire more and more patients. In terms of that credit rating, I think there's a lot of work that needs to be done. But also remember that our strategy is not to focus on Colombia alone. Of course, I'm talking about Colombia today because that's the first country we started. But what I said before, you start to see Q2, you'll start to see that diversification of risk happening. which I think is important for shareholders because we cannot be just a focus on one single country as much as I am from here. But that's one of the reasons we're looking at Europe. And in the next two years, we are looking at a market in Europe that's going to be much, larger than Latin America. So that hedging, you will start to see that impact in the next couple of quarters, and that will certainly reduce the risk that we are now exposed to Colombia.
spk02: If I might just add on that one, Alvaro, that as we diversify these revenue streams in different countries. Of course, it's a natural hedge against currency risk, but also, you know, expect to see continued high margins in all these places in the way that we're going about this business. So I think it's important to highlight that, that you're going to see not only improved revenues but continually strong margins in all these places because of the way that we approach the business in a vertically integrated way. There's a question here, Alvaro, that just came in about educational initiatives and explain how that makes a concrete difference. I'm going to let you answer that one, but I think every unit of medicine that we've sold is a direct result of our education program.
spk00: Yes, that's a very good question because anybody who's been in the cannabis business has heard the word education for many, many years. I think what we're doing particularly insightful and very different is that we're combining the theory of education with actual evidence that starts with empirical evidence at the clinic, then evolves into observational evidence, and then it will start becoming real-world evidence. The way that we are training doctors, I'll give you the example of Peru. How do we open a clinic in Peru, Mexico, Brazil? It's not just by giving them the education to take Monterey. It's by taking all these doctors to the clinic in Colombia, stay here for two weeks, learn from a clinic that's today prescribing 250 prescriptions per day. and get to see this empirical evidence that's going to increase your willingness to prescribe. Now, of course, on top of that, we are providing systems for the doctors all across where they can have medical boards, discuss different cases, and that is what's bringing that willingness to prescribe up. Now, this year, we are expecting to start making our first publications in index publications. The impact those publications with real-world data is going to have on the willingness to prescribe with doctors All across Latam and all across Europe, I cannot underestimate it. I think that the more that we start showing evidence, the more we can convince doctors. I think that evidence that we're providing doctors is one of the reasons why that willingness to prescribe is happening. It's not happening certainly by accident.
spk02: I think you touched on a real important thing there, Alvaro, which is that education, then that results in prescriptions and that results in data. And the more data we have, the better decisions we can make, the more work we can do with regulators, with insurance companies and others, because we have actual real evidence now with 20,000 patients. All that data is ours and it helps us bring out new products and it helps us certainly enter new markets smarter. more efficiently, cheaper each and every time. So I think we have time for maybe one more question here.
spk00: Yes, and maybe on that, Chris, before that, I was looking at a question from Bradley on insurance. I want to repeat something that I said before. I hope it wasn't lost. When we talk about insurance companies, we're talking about health and economics. That's basically the two equations. I said before that in Colombia, because we have our pain clinic, we know that a patient with neuropathic pain can cost to the insurance companies $6,000 per year. That's a lot of money. 88% of that comes from bupremorphine, pregabalin, morphine, and tramadol. It's amazing. And what we've been able to do with real patients with those insurance companies is to show them we can save you an annualized cost of 60% of those $6,000. That is how we are going to continue to convince insurance companies. It's going to happen with real-world evidence. Nobody else is doing that, and certainly we'll open some more doors for everybody else. But the more we keep doing that and the more we keep having patients, because some of these patients are paying for this out of pocket. So the pressures are coming because not only is it better health-wise, not only can we show that you can have a lot of economic savings, but also your patients are asking for it. And I think just to keep you of what's going to happen in the next 12 to 18 months, all these evidence we're going to take to every single country of Latin America. We got it done in Colombia. We'll get it done in everywhere else. It's not going to happen immediately, but that is going to happen the more evidence we have. So just on that point, answering that question from Bradley, Chris, maybe, yes, we have time for one more.
spk02: Just maybe a final word on Mexico.
spk00: Yes, so Mexico has two regulations. One is the medical, that's already been passed and approved. And what everybody's thinking about is the adult use regulations. As we all probably know or may not know, that has been pushed to September for a different vote because of the dynamics of the House of Representatives and the Senate. It's undoubted that that will provide a tremendous catalyst for everybody in Latin America, but From our perspective, we've been working in the medical for a long time. Right now, as I said before, we already have in place all the supply chain agreements that we need to have to be able to get our product in Mexico. And as I said before, we were the first company to sell in Colombia, first company to sell in Peru, first company to export genetics to Europe. We certainly know what we're doing when it comes to shipping compliant product in different jurisdictions. So what we're working on right now is to find the right partners, to find the right ways to open our Serenia Clinic, second half of this year. I am very confident we're going to be able to do that. And in the meantime, keep educating the doctors with the tech of Monterrey. Start looking for those doctor partnerships where we can eventually launch those type of access programs that we're doing in Colombia. So Mexico is coming. We have a great relationship with Mexico, even with our with our board, a member of our board of directors. And whatever happens with adult use, that's just a parallel regulation. I think, in fact, it opens up a lot more opportunities for us in the short term.
spk02: I think with that, we're going to wrap it up. I think we've answered just about every question there so far. And I just want to, once again, thank Alvaro and the entire team for putting up a tremendous quarter in a very, very difficult time in the market and getting through that and having record revenues. We've already let you know that Q2 is looking superior to Q1 in a meaningful way, and we're on the right path. And, you know, the products that we're selling are very high margin. And we believe very, very strongly that we're on the right path here. So I want to thank you all for your tremendous support. Thank the team for the tremendous work that they've done. And always reach out to us on the website and our emails and on socials, and we're always happy to answer your questions. With that, I think we'll wrap it up.
spk00: Thank you, everybody. Thank you, Chris. Thank you for joining, and please be attentive. We have a lot of good news coming.
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