Q2 2023 Theratechnologies Inc Earnings Call
Good morning, ladies and gentlemen, thank you for standing by all the Faro Technologies' second quarter and half year fiscal 'twenty two 'twenty three earnings call.
We must remind everyone that all figures on this call are quoted in U S dollars.
At this time all participants are in a listen only mode.
Following today's presentation, we will conduct a question and answer session for analysts.
So we provided at that time for you queue up for questions.
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I would like to welcome Oh, that's for my everyone. Today's conference call is recorded today Wednesday July 12, 2023 at 830, a M eastern time.
I will now turn the call over job Sedrah Malawi of lifestyle Advisors Malawi. Please go ahead.
Thank you operator, and good morning, everyone on the call today will be Sarah Technologies', President and Chief Executive Officer, Mr. Paul Vivek, and senior Vice President and Chief Financial Officer, Mr. Philip to book.
The Q&A session, we will be joined by Christian Marcellus Senior Vice President and Chief Medical Officer, and Mr. John Leisure the Companys Global commercial officer.
To begin I'd like to remind everyone that remarks today contain forward looking statements regarding the company's current and future plans expectations and intentions with respect to future events.
Forward looking statements are based on assumptions and there are risks that results obtained by therapy technologies may differ materially from those statements as such the company cannot guarantee any forward looking statements will materialize and you are cautioned not to place undue reliance on them.
The company refers current and potential investors to the forward looking information section Sarah technologies management's discussion and analysis issued in this morning and available this morning and available on SEDAR at Www, SEDAR Dot com and on Edgar at Www Dot FCC Dot Gov.
Forward looking statements represent Erik technologies expectations as of this morning July 12 2023.
Additionally, today the company is using the term adjusted EBITDA, which is not a financial measure under international financial reporting standards high FRS or U S. Generally accepted accounting principles U S. GAAP adjusted EBITDA excludes the effects of items that primarily reflect the impact of long term investments and <unk>.
Financing decisions rather than the results of his day to day operations Sarath technologies believes that this measure it can be a useful indicator of its operational performance and financial condition from one period to another.
Many uses this non <unk> measure to make financial strategic and operating stations reconciliation of adjusted EBITDA to net loss is sound and our M. D and E issued this morning available on SEDAR and Edgar at the web address as mentioned earlier.
With that I would now like to turn the conference over historic Technology's, President and CEO , Paul look back.
Thank you John and good morning to everyone on the call today.
As we are well past the halfway mark of the Canada year, we remain prudent in managing our commercial goals and oncology pipeline to align with our fundamental objectives earlier.
Earlier this year, we committed to a recalibration of the business that would see us focus on the commercial enterprise and enable us to become it just hasn't been the audits.
Today, I will be sharing a number of key actions in support of this approach, which will propel us towards profitability, while advancing our promising oncology program.
I hope that everyone had the opportunity to join our call.
On our lead PDC candidate Xuzhou syntax, Elzinga short time, which took place last month.
I'll follow with two significant milestones in early June a poster presentation at nasco, showcasing new efficacy and safety data from our phase one trial.
As well as the Fda's agreement to our amended protocol.
Key opinion leaders doctors blend down.
Now from MD Anderson Cancer Center, the study's principal investigator and co investigator Doctor IRA Weiner from Armigerous Cancer Institute presented early Phase one trial results provided insights about how this data informed the protocol amendment and shared several patients.
In case studies about the real life impact of sooner.
Andrew sort time.
If you missed this call I encourage you to review the present, Jason and webcast replay on our website.
The preliminary safety and efficacy data from the phase one trials were extremely well received by the scientific community. During Astal, whereas this is serious work poster representation expressed deep interest in our novel sort one receptor target.
As a recap key highlights from this study included preliminary signs of anti tumor activity noted and 36%.
It may be pretreated patients with two partial responses in seven patients with prolonged stable disease.
As previously communicated sugar sales and new store tie this returning to make money with an updated protocol. The protocol amendment is designed to improve our therapeutic window of our novel <unk> extend its duration of therapy and ultimately maximize the probability of success for the trial.
The updates Angel would it change the frequency of administration to weekly dosing and then they have a weight of the patient.
Those with high grade serous ovarian cancer.
Population in which preliminary indicate it's been observed thus far.
<unk> election in adults also been refined to focus on those who are less heavily pretreated with no more than one taxane failures in a maximum of base prior of cancer treatment regimens.
The amended the study is a modest 5656 design with two different dosing regimens that are with thing within the efficacious range for Yoga studios it actually all dangerous hard time.
So not worth pharmacokinetic and Pharmacodynamic analysis, we decided to switch from body surface area dosing twin equivalent weight based dosing.
Based dosing should optimize efficacy and minimize toxicity for the 16 patients will be enrolled in the next part of the phase one study.
Furthermore, the funding for dosing up to 16 phase one patients is firmly embedded in our 'twenty three and 'twenty four it budgets.
We're now generating outreach to potential partners for the additional phases of development of pseudo syntax Alexandra short type as well as capitalizing on the full potential of our sort one technology as a game changer and nighttime cancer, It's Eric.
As I see the team is busy reactivating trial sites, and we expect to resume patient enrollment.
In the coming weeks.
We plan to keep the market well inform of our activities and Amgen announced around recruitment updates throughout the remainder of the year.
At the pace, we're going we believe that by the end of the first half of fiscal 'twenty, four we will be able to announce preliminary safety and efficacy data.
Okay.
Moving onto the period's results. We are disappointed to report a commercial water that was negatively impacted by several factors.
First starting at the end of 'twenty, two specialty pharmacies builds up larger than necessary inventory in anticipation of expected higher demand.
Second in an effort to improve our gross to net we renegotiated the contract terms with a large specialty pharmacy, which resulted in the lowering of their overall inventory levels.
Both of these one time events impacted revenues through April of this year at which time the overstock of inventory levels was depleted.
With me and you wouldn't see us and we are confident this is behind us now.
On a positive note based on the changes made to contract terms with the one specialty pharmacy. There are technologies, we will see a significant annual savings in distribution costs moving forward.
We're also happy to report that in the first two quarters of fiscal 'twenty three.
New prescription growth versus the same period last year grew 26%, but christa as V and 8% for two bars, though despite new market entrants, having made the competitive landscape even more dynamic than before.
While anticipating a much stronger second half of 'twenty, it's really the loss in sales during the first half of this year will not be recoverable in the current fiscal year.
So as a result, we are recasting top line guidance to 82 to 87 from 90 to 95 million dollar as previously forecast.
This said, we will not let this unfortunate situation stand in a way of our strategic objective to being adjusted EBITDA positive by year end and beyond.
This profitability target that's been built into our operating plan since the beginning of the year and is an integral part of our strategic shift to stage gate R&D expenses and move towards a focus on our commercial business.
As such in addition to reducing R&D activities that were already announced toward the latter part of 'twenty three in full year 'twenty four.
We are implementing an additional $5 5 million reduction in.
R&D annualized spend.
This will mean more program reductions as well as head count reductions.
These measures will further pave the way towards profitability.
It is certainly the most difficult part of today's call and equally the most challenging news to share in my tenure as CEO was there are technologies.
The changes announced today will largely focus on right sizing the RMB area of the company, while customer facing activities will be maintained to avoid any disruption to our commercial operation.
We certainly recognize the impact that the reorganization will have on our employees, especially on those who are directly affected and we are committed to approaching the changes in the most you manage that way.
This moment if there is a journey it is a necessary thing to do for our business in our evolution as a commercially focused biotech.
Before I finish I'd like to turn it back to Laura commercial enterprise and take a closer look at the forward progress being made to further differentiate our HIV brands and expand our product portfolio.
Same triggers the IV push was introduced we have witnessed 80% regardless of the user's transition to this new faster and more convenient method of administration.
You may recall, the initial FDA approval for IV push westward the maintenance dose only.
We have now also submitted to the M D and application for IV push that illustration of the trocar Zoe loading dose.
And just last week, the FDA agreed to a prior approval labeling supplement which is subject to a six months review instead of a prior approval efficacy supplement which is subject to a 10 month review, thus assigning them to do FID date of December 14 2023.
As people with HIV continued to move away from oral pill regimens and there are limited options for those warm multidrug resistant. We're now seeing a very real sustainable long term niche for our franchise with the peering with regards though with long acting Injectables and we have generated T data to some.
This shift in the treatment paradigm.
At the 17th annual American conference for the treatment of HIV.
We shared results for first of its kind study in HIV comparing the true Boswell clinical trial experience to a match real world non sugar as a cohort.
This is the largest dataset the longest follow up with regards though since our phase III data.
The data showed that the use of <unk> was associated with favorable biologic outcomes as compared to non regardful regimens used in routine care and handle the treatment experienced people with HIV.
Ultimately the potency and durability after Basel as observed in this analysis bolster the clinical rationale for its use in regimens for heavily treatment experienced patients and could have important clinical benefits for these individuals.
And with a grifter S V, where I'm moving ahead with I'll remind extension activities and will transition the marketplace to its new generation assays formulation and once approved we firmly believe that the new formulation will improve patient experience and adherence and expect the supplemental biologics license application for ethane to be filed by.
The end of September of this year.
With a review period of six months approval. It can potentially happened by the end of the first quarter of 'twenty four.
To remind you that this will come with strangers IP protection, but yesterday termination and expected additional gross.
In addition to growing our two anchor assets. We are very active on the business development front, we have a very real opportunity to further accelerate our growth through bolt on accretive acquisitions of existing brands, which can be quickly added into our commercial platform.
As we move forward with our new streamline organizational structure the remainder of the year will be guided by our laser focus on our advancing on advancing our commercial initiatives, including the search for new products and partners as well as the rapid restart of our phase one trial and I'll call. It.
Yeah.
With this I would like to turn the call over to Philip to discuss our financials.
Got it.
Paul Good morning, everyone.
So all of the revenue for the three months period ended December 31, 2023 was $17 5 million compared to $19 $3 million for the same year ago period, representing a decrease of eight 9% year over year for.
For the second quarter of fiscal 2023, net sales will be grouped a S. V reached $10 9 million compared to $11 4 million in Q2 of last year, representing a decrease of roughly 5%.
The decrease was mainly the result of a drawdown of inventories at one of our large specialty pharmacies.
This pharmacy had built up larger than usual inventories in the fourth quarter of 2022 in anticipation of stronger demand and higher than usual price increases.
Following discussions with this group we have determined that the situation is largely resolved.
In the months of May and June 2023 are back to normal levels.
Sales have been grouped a S. V were also impacted by larger than usual rebates to government payors.
Situations also impacted net sales for the six months period ended may 31st which amounted to $23 $6 million compared to $23 1 billion in the same period in 2022, representing growth of one 9%.
In the second quarter of fiscal 2023.
<unk> net sales amounted to $6 $7 million as compared to $7 $9 million for the same quarter of 2022, representing a decrease of $14 7%.
Lower sales with regards of work a result of the inventory adjustments.
Bob.
And further inventory drawdowns at another specialty pharmacy.
With which we renegotiated contract terms, resulting in the lowering of their overall inventory levels.
These new contract terms will be beneficial to it there are technologies of the future, resulting in recurring annual savings.
Net sales of <unk> were also impacted by greater than anticipated rebates to government payers find.
Finally, with regards to EMEA sales decreased also attributable to a lesser degree on our decision to stop commercializing the product in Europe in 2022.
All in all while sales in the first half of 2023 were below our expectations. It does not affect our goal to become adjusted EBITDA positive by year end as we will implement additional cost saving measures immediately as discussed by Paul a few moments ago.
In the period cost of sales decreased to $4 9 million from $7 8 million in the same quarter fiscal 2022.
The decrease in cost of goods sold was mainly due to a charge last year up $2 3 billion arising from the non production of scheduled batches of a rooftop I've worked canceled due to the planned transition to the F. Eight formulation of CASM Orland.
No such charge was recorded in 2023.
Cost of sales is also lower than last year.
When it included an amortization charge of $1 $2 million in connection with the settlement of the repurchase of the Brookfield was from Serrano in 2018.
This asset was fully amortized during the first half of last year.
This charge was zero in the second quarter of fiscal 2023.
R&D expenses amounted to $10 4 million in the three months period ended may 31, compared to $11 1 billion for the same year ago period.
R&D expenses. This year include a provision of $3 million related just to Docetaxel and assort type material, which could expire before we're able to use it in our clinical program.
Excluding this provision R&D expenses are down significantly from the second quarter of 2023 compared to last year, mostly as a result of lower lower spending on our oncology program.
Selling expenses decreased to $6 5 million for the second quarter of 2023 compared to $50 4 million for the same three month period last year or a decrease of close to 9 million. The decrease is due in large part to a charge of $6 $4 million taken last year related to the ACA.
Celebrated penetration of Beach regards all commercialization rights for the European territory. Following our decision to cease commercialization activities at territory during that quarter.
This also led to a decrease overall spending commercialization activities.
Excluding this charge selling expenses decreased from $9 million to $6 $5 million this year or a decrease of 28%.
G&A expenses in the second quarter of 2023 amounted to $3 $7 million.
As compared to $4 8 billion for the second quarter of 2022, or a 23% decrease the decrease in G&A is largely due to our decision to terminate the commercialization activities of <unk> in Europe during the second quarter of 2022.
Net finance costs increased to $2 million in Q2, 2023 compared to $1 $6 million in Q2 of last year. The increase is mostly related to the interest.
On the marathon credit facility.
Adjusted EBITDA for the second quarter of 2023 was negative $6 $1 billion versus negative $11 7 million in the same period last year.
While this number is a significant improvement over last year. It's important to note that adjusted EBITDA was affected by a $3 million charge related to the Docetaxel sensor tide.
Just described.
While sales were lower than anticipated Q2, R&D selling and G&A spending during the quarter were all significantly lower than last year.
This is even before the additional spending cuts discussed by Paul which is why we are confident in our ability to become adjusted EBITDA positive by year end.
We will continue to monitor expenses closely as we have done since the beginning of the year and we'll continue to adjust while closely tracking revenues.
We ended the second quarter of fiscal 2023, with $25 $4 million cash bonds and money market funds operations used $3 $6 million in cash in the second quarter compared to $1 million in the second quarter of last year and variations in operating assets and liabilities provided policy.
If cash flow of $4 6 million, mostly due to decreases in inventories and prepaid expenses and the decrease in accounts payable.
This was offset by a decrease in accounts receivable.
With that we will be back for final comments, but first we will now open the call to take your questions.
Yes. Thank you at this time, we will begin the question and answer session.
Well. That's a question you May press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble the roster.
And today's first question comes from Louise Chen with Cantor.
Oh.
Thanks for taking my questions.
Interested in learning more about your cost savings measures.
Can you provide more color on your anticipated expense for R&D and SG&A for the rest of the year. Thank you.
Thank you for your question. So Philip do you want to provide color on R&D spending for the rest of the year. As we said you know we will be implementing a class and.
Fence reduction in R&D to rightsize that.
<unk> it will have an immediate impact and therefore the savings will be.
Reported for the last part of this year, but more expense reduction will be implemented Asbury plant, we already at going for 'twenty for Philip do you want to provide additional color.
Well on the selling and the G&A I think end of Q2 and Q1 are a good proxy for the remainder of the year are there any expense reductions are for this year are mostly on the R&D side, we've always.
We've been mentioning since the beginning of the year that you know we have a lot of projects that were in.
In the earlier part of the year, such as the to the backyard of static water that we were that we were manufacturing.
The intramuscular version of <unk>.
Though these expenses should be behind us more and more over the year or so.
Look for a further reductions in R&D and the latter part of this year.
Get it into into 2024 as well.
Well thank you for the question.
Thank you Anna.
The next question comes from Bill <unk> with Canaccord Genuity.
Good morning, and thank you. So can you can you quantify what was the impact on revenue in 2022 of the of the buildup in inventory you also gave us some metrics on new prescription trends.
Do you have the the the comparable metrics for total prescription growth.
And then finally towards the end you mentioned characteristics are you you mentioned potentially folding and other products into the commercial portfolio. So what characteristics are you looking for in a potential bolt on acquisition and how would you think about financing that thank you.
Thank you for your question, so I'm going to answer the latter part of your intervention and John will focus on our top.
Top line sales and prescription data as part of your question.
You know, we we firmly believe that we have built capabilities.
That can actually be very useful for four hours Dallas. If you were to identify a product that we can actually bolt onto our platform at what I call. When I say platform I mean, all of these frac structure in sales that we currently have.
As previously said it could be an HIV could be an HIV it changed that but he could also be a in a different category something small something that could be in the field of metabolic disorder that would allow us to actually deploy resources in a similar way that we.
We're doing it currently for the HIV products, we have and we know and we're already in discussion with many companies at the our assets out there that R&D prioritize by some companies and I think that if we were to be able to make one of those acquisitions it could be immediately accretive.
It is a in our journey towards producing EBITDA positive data. So John I will turn to you now for explaining a little bit at the top line in the last six months, but also the prescription data as you as you see it now.
Yes, we have very strong new prescription growth I think was highlighted a grifter growth was 28%.
And new prescriptions and that both with regards Atlantic roughed up we're exceeding our new prescription estimates that we are we set out at the beginning of the year.
Challenge isn't as was highlighted early later last year the second half of last year, we saw.
Little bit softer enrollments and.
I think that's translated into a little bit of a buildup in inventory and then on top of that we were looking to improve our gross to net as well as well as decreased returns and we changed some of our contracts that resulted in about three quarters a million of annual savings but had the.
The negative impact of some inventory drawdowns.
Those are the two key events from last year and then this year again very strong.
<unk> growth.
Thank you John .
Thank you. Thanks for your question next question.
Okay. Thank you.
Thank you and the next question comes from Joseph <unk> with Jones trading.
Thank you for taking the question I wanted to ask about the estimated size of the patient population as Youre narrowing development of Docetaxel and the sore tide approximately how many ovarian cancer patients do you think could benefit in the U S and other major markets.
And I also wanted to clarify if patients with endometrial cancer will be included.
Thanks, So just a sense for your questions. So I'll turn to our first four.
What type of ovarian cancer and will we have endometrial cancer patients include.
Included and John you May speak to a market size when it comes down to the indication that we can have at the end of this journey and Chris Young.
I just and thank you for the question. So we're focusing on the largest population of ovarian cancer, which is the high grade serous ovarian cancer that will be enrolled in this study.
This is based on the data that we have seen in our earlier results showing efficacy.
In ovarian cancer patient.
At the moment, we will be focusing on the mic in two states Sunday, which won't be a total of 16 ovarian cancer patients, but I'll start out and if we see signs of it if I can see we can probably enroll additional patients in either endometrial cancer or T. M. D. C. That's the first time that's correct.
Okay.
The only thing to add.
Well I think that.
The market size is pushing out like that I outlined.
The sales volume there really depend on what the what we see in terms of efficacy, but we definitely we've done some work there we think there's a place for the drug clearly in later lines of therapy. As you know there is a lot of unmet need in ovarian cancer. So.
We think there's substantial opportunity there for an early stage of vacation.
Justin Thank you for your question.
As you know.
We decided to focus on one indication, where we believe we have the highest probability of success in the short term now is this worth one receptor is highly expressed in many other solid tumors. So we think that we are we have applications way beyond ovarian cancer, but in a way to actually win.
And with rapidly and in a way to manage cost the best possible way, we decided to take an approach that is different from the approach that we have taken the first time around and be extremely laser focus on one cancer type, where we know that we've recorded already signals of efficacy. So first this one.
Dan I believe that partnering with other.
Other companies that have aspiration are in in that bringing new treatment to what to the marketplace.
Will it be something feasible that soon this wave report back to back efficacy data.
In the first part of 'twenty 'twenty, four and I can say also that Theres a great deal of interest were congregating different technology that can actually be.
Brought to the cancer cells through the sort one receptor as well so there's many things going on and again you know ovarian cancer is a card that we're playing at the moment and we are absolutely believed based on you know what we have been told by the experts in the category that we've got enough going on and going for us.
To win in the marketplace and get an approval with that indication and then get going and get going with more thanks for your question Justin.
Got it thank you.
Thank you and the next question comes from Andre Uddin with a research capital.
Thanks, Eyal, Hi, Paul Phillips Krishna John .
In terms of your business development activities for out licensing.
What does a potential Nash partner need to see is it. The F is it the F. Eight formulation does not need to be approved and can you just talk a little bit how discussions are going there. Thanks.
Well thanks, Andrew for the question you know we haven't updated our you know the.
I worked shoulder. This morning on this because there is nothing new to say, but this is a very dynamic market. The Nash market is very dynamic some companies coupons failing some companies now see this as a true potential I think that we have something to offer that is further down its developing.
Based on the fact that the drug has shown its safety profile over the over over the years, having the feight formulation, obviously will be a big plus but we always intended to start the phase III clinical program that the feight formulation anyway. So whenever we're approaching you know a different company.
It is with the ethane, it's gonna be coming with a higher much.
Much higher concentration lower volume of administration with the potential to package. This in a pen. So you know what what is missing is not much quite frankly, its just to actually find companies that want to actually invest the type of money that is needed to team up with us. So we keep on being active.
Are.
We absolutely believe that Madrigal data inaccuracy data I'm reading positive will be you know sparking additional interests of our program and we will report back to our our shoulders.
If there are any new development.
Coming in coming up at this time do you want to add anything to that yeah.
Yeah, the only thing I'd make on your question for the use of DSA.
As we have mentioned before we already completed the Biopharma lunch studies, showing bioequivalence between the eight and the F. One the initial formulation that was on the market and it is ready to use in a clinical trial, even if it's not yet approved by the FDA on theater M. D. F. Eight file is moving well and we're on target.
As mentioned by Paul our submission in September of this year.
That's useful.
And just looking at Canada is there an opportunity to out license for cars, though in a grifter.
It's a good question Adrian I looked into it before myself upon arrival Ah I I think that.
There could be an interest, but quite frankly, if it's like Europe . It could become a distraction are getting reimbursement in Canada province by province is very very tedious and although whether it would be certainly some potential for these two medicines by focusing our activities that we have.
Done it in the U S. I think this is where our time attention and spending is best deployed and trying to foster additional growth in the U S market and having our own capabilities now.
Gotta be more ambitious and that is why we've been on the outlook for accretive.
Deals and we're not going to rest before we basically find opportunities done and completed.
Okay, that's great and just could you also just discuss the triggers a rebate situation, that's a little bit and a little bit more detail on what happened there.
Sure. They didn't do you want to provide more insights on that.
The different rebates in the front part towards maybe the gross to net factor yeah. There's a few.
Factors that we don't really control the patient mix Andre so.
I think in the Q2, the patient mix was not as favorable so we give rebates to Medicaid.
We don't give rebates to Medicare and commercial Payors.
So if the if the patient mix changes more towards Medicaid that affects our our rebates.
We also some of the government payers aren't really good at providing us with invoicing.
And sometimes we'll get a bunch of invoices from previous quarters. So that doesn't really help us we try to have as much provisions as we can but in this quarter, we got more.
And then we expect it so.
It should be a onetime event.
Going forward, we expect that to be to come back to costs.
And that's just one last question if you could just provide a little bit of an update on the E. R. M formulation of triggers off that'd be great.
Randy I'm formulations.
Yes, I am.
Relation the analysis are ongoing at the moment and for submission before the end up the year.
Okay. That's great. Thank you.
Thank you Sandra.
Thank you and once again. Please press Star then one if you would like to ask a question.
And the next question comes from Andrea <unk> with National Bank.
Yeah.
Hey, Yeah. Good morning, Thanks for taking my question. The first one is a bit of a follow up on the question that wood basket privately, but when youre looking at adding new assets can you talk a little bit on how do you plan to fund this new assets I mean, especially in the context of the liquidity breach or the liquidity covenant breach on but that's fine.
Thank you yes.
Let me say it again, we would not actually take on and aboard Trinity. If the product is not approved yet with you know uncertainty when it comes down to a product being approved we're looking for something that can be accretive and we would deploy.
Sources in a way that we're not making our EBITDA story, you know going backward. So I just wanted to say it again it has to be accretive are rapidly accretive. So Philip do you want to provide color on the funding or do you sort of you sort of opportunities yeah.
Yeah, So just maybe a comment on that.
Our relationship with marathon. So we obviously had very close discussions with them, they're very open to helping us so.
These are production productive discussions going on they have always said that they would support us in expanding the business. So they're still they're still interested in that we're also talking to some investors who are looking to deploy capital.
If we have some some.
Accretive.
Opportunities now.
You know that in the past, we've always been pretty.
Our creative and kind of minimizing the outflows that we are.
That were.
That we make in the steel so obviously.
You know we are looking at ways to finance. These deals that are that are creative and different.
Okay. Thank you.
Good color. Thank you and then if I can just pull up a little bit more on that on that marathon alone I mean, the liquidity that you need to to sort of beef up but it would be felt by the end of the quarter. I mean are you looking at something like you did before perhaps more warrants or what's kind of like the thinking through it to get back to the liquidity that you need all that covenant.
Well, we're still right now they just lowered the liquidity covenant and so we're looking to continue discussions with them before the end of this month to kind of finalize where it will be a it's a little bit early to determine exactly how it's going to how it's going to play out but right now they just provided us a lower liquidity.
And without.
Anything extra.
Okay. Thank you.
Last one for me is that one on the new guidance is that delta between the old and the new more related to the gross to net that you got in Q2, I mean, since you know already or how much you had in inventory or can you is it possible to be to break down the delta between how much was.
Inventory and how much was growth yes.
Yes. Some of that is is obviously the inventory is like I said, we follow inventories at the specialty pharmacy level.
<unk>.
Since we internalized Salesforce, we developed a very good tracking system. So we have a much better outlook on that.
But you know the sales that we've lost or not regaining.
The gross to net issues are.
Are mostly behind us as well.
So.
That's kind of what we're seeing we're being maybe a little bit more conservative, but we're confident with these numbers until the end of the year.
Okay. Thank you very much.
Thank you.
This concludes the question and answer session I would now like to turn the call of a pile of west for any closing comments.
Yeah.
First of all there's a few questions.
Team on the on the webcast. So the first one is around.
The timing for.
The cancer trial.
When we're expecting to get back into clinic, if we're expecting to keep the market up to rest as to where we are.
The answer is yes, I think it's telling you can speak to that but as we speak.
The new protocol is being analyzed and approved by the different hospitals from an ethics point of view isn't that the situation and.
I think what is very important to know at this time around is that we do not pass to Jos one patient at a time correct. We can't actually those are the patients in parallel so Christiana you wanted to.
Provide additional absolutely. Paul then we are expecting some sites are working with private <unk> are usually better faster.
And we're expecting the restaurants, a final response from one of the private <unk>. Some of the sites will be activated and be ready to start screening patients in July .
As Paul has mentioned.
The six patients for the first cohort the first dose.
Could be recruited at the same time that we don't expect the long period of time to recruit those patients.
We will need to wait three months from the last patient enrollment to look at the adverse events and after that we'll be able to enroll an additional six patients. Therefore, we think that by mid next year, we should have some.
Signs of efficacy and a data on safety as well.
And we intend, yes, we intend to actually update the market.
When we have when we are making progress we are very very keen to actually get going with the first six you know we know that we have something that can actually win. So we will report back as soon as possible.
And there are a few questions on the competitive dynamics around triggers so mostly for John .
Switch to non pill regimen then.
What we're seeing with <unk> and stuff like that.
Yes.
<unk> continues to be a lot of interest in the non pill regimens.
Suddenly cause recent launched has generated a lot of interest we're seeing a lot of interesting combination utilization and.
How are tracking a number of patients that are using both semi guidance regards though.
We still track where Kobe are relatively closely.
As you know patients are on multiple different agents. So it's not about just choosing one versus another.
And we can continue to see a trend towards.
More and more non Intel regiments.
All the other questions have been answered.
Okay, well. Thank you for attending the call today I Hope you will agree that despite having faced some unexpected headwinds in the front part of 'twenty three.
We are taking the necessary measures to ensure delivery on our commitments as such we are very close to producing adjusted EBITDA positive quarters and I can assure you would want restaurant until were delivered this to our shareholders. Thank you for attending and have a great day.
Thank you.
A question and answer session.
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