Q3 2023 Theratechnologies Inc Earnings Call

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Speaker 1: Good day and welcome to the Ferra Technologies Q3 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Good day and welcome to the Faro Technologies Q3, 2023 earnings conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation there'll be an opportunity to ask questions.

Speaker 1: To ask a question, you may press star, then 1 on your touch tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to John Mullally. Please go ahead.

To ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please.

Please note. This event is being recorded I would now like to turn the conference over to John Malone. He please go ahead.

Thank you operator, and good morning, everyone on the call today will be <unk> Technologies', President and Chief Executive Officer, Mr. Paul Lubbock, and senior Vice President and Chief Financial Officer, Mr. Philip to Buck.

Speaker 2: On the call today will be Thera Technologies President and Chief Executive Officer, Mr. Paul Levesque, and Senior Vice President and Chief Financial Officer, Mr. Philip Dubois.

Speaker 2: During the Q&A session, we'll be joined by Dr. Christian Marsalis, Senior Vice President and Chief Medical Officer.

During the Q&A session will be joined by Dr. Christian Marcellus Senior Vice President and Chief Medical Officer.

Speaker 2: and Mr. John Leisure, the company's Global Commercial Officer.

And Mr. John Leisure the Companys Global commercial officer.

Before we begin I'd like to remind everyone that our remarks today.

Speaker 2: today contain four looking statements regarding the company's current and future plans, expectations, and intentions with respect to future events. Four looking statements are based on assumptions and there are risks that results of paint by Thera Technologies make different materially from those.

They 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 <unk> technologies may differ materially from those statements that the company cannot guarantee any forward looking statements will materialize and you're cautioned not to place undue reliance on them.

Speaker 2: As such, the company cannot guarantee any forward-looking statements will materialize in your precautions not to place undue reliance on them.

No.

Speaker 2: The company refers current and potential investors to the forward looking information section of Thera Technologies Management, Discussion, and Analysis issued this morning and available on CDER, www.seederplus.ca, and on EDGAR at www.sec.gov. Forward looking statements represent Thera Technologies' expectations as of this morning, September 26, 2023.

The company refers current and potential investors to the forward looking information section, it's Eric I'll start technologies management's discussion and analysis issued this morning and available on SEDAR Www, Cedar plus dossier and on Edgar at Www SEC Gov forward looking statements represent their technologies expectations.

As of this morning September 26 2023.

Speaker 2: Additionally, today the company is using the term adjusted EBITDA, which is not a financial measure under International Financial Reporting Standards, IFRS, or US Generally Accepted Accounting Principles, US GAAP. Adjusted EBITDA excludes the effects of items that primarily reflect the impact of long-term investments in finding smooth decisions rather than the results of day-to-day uploads.

Additionally, today the company is using the term adjusted EBITDA, which is not a financial measure under international financial reporting standards <unk>.

Our S. Four 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 financing decisions rather than the results of J&J operations. Their technologies believes that this measure can be a useful indicator of its operational performance and financial condition.

Speaker 2: Ferro Technologies believes that this measure can be a useful indicator of its operational performance and financial condition from one period to another. The company uses this non-IFRS measure to make financial decisions about the future.

One for the company uses non ifr's measure to make financial.

Speaker 2: strategic and operating decisions. Reconciliation of adjusted EBITDA to net loss is found in our MD&A issued this morning available on CDER and on EIGER at the web addresses mentioned earlier.

Strategic and operating decisions reconciliation of adjusted EBITDA to net loss is found in our MD&A issued this morning available on SEDAR and on Edgar at the web address is mentioned earlier.

Speaker 2: Investors can also follow the company on LinkedIn and Twitter and sign up for alerts on Thera Technologies investor website at TheraTech.com. With that, I would now like to turn the conference over to Thera Technologies President CEO , Paul LeVec.

Investors can also called the company on Linkedin, and sweaters and sign up for alerts I'm, sorry technologies Investor website at <unk> Dot com with that I would now like to turn the conference over to synthetic technologies, President and CEO Paul Vivek.

Okay.

Speaker 3: Thank you, John . Hello everyone and good morning. I'm pleased to report that we have made fantastic headway across our strategic objectives as outlined in this morning's press release.

Thank you John Hello, everyone and good morning, I'm pleased to report that we have made fantastic head way across our strategic objectives as outlined in this morning's press release, our financial and operating operational planning for the remainder of the year and into 'twenty, one and four is well in hand and in spite.

Speaker 3: Our financial and operational planning for the remainder of the year and into 2024 is well in hand. And in spite of headwinds in the last quarter, we have learned much from both our successes and setbacks. Which is exactly why we are pleased to report a positive outlook for the remainder of the year.

Those headwinds did last quarter, we have learned much from both our successes and setbacks, which is exactly why we are pleased to report a positive outlook for the remainder of the year.

Speaker 3: For example, our quarterly revenue has demonstrated a solid recovery from the most recent period, and we've crossed major milestones in the development of our pipeline and the lifecycle management of our products.

For example, our quarterly revenue has demonstrated a solid recovery from the most recent period.

And we'd cross major milestones in the development of our pipeline and the lifecycle management of our products.

Speaker 3: With that, today's call will be quick and straight to the point as our primary goals in the near and medium term are clear and remain set. I want to remind everyone that our sights are zeroed in on advancing the objectives that drive the whole of our business forward, and most importantly to maintain a strong cash balance and discipline around long-term financial objectives.

With that today's call will be quick and straight to the point as our primary goals in the near and medium term our tier I remain set on.

I want to remind everyone that our sites are zeroed in on advancing key objectives to drive the whole of our business forward and most importantly to maintain a strong cash balance and discipline.

Around long term financial objectives.

Speaker 3: In this arena, we are laser focused on revenue strength and improvements to our bottom line.

In this arena, we are laser focused on revenue strength and improvements to our bottom line.

Speaker 3: We have and will continue to be stringent with our operating expenses so that the adjusted business profitability we have just reported is a fixture of our ongoing financial plan.

We have and will continue to be stringent with our operating expenses. So that the adjusted EBITDA profitability. We have just reported is a fixture of our ongoing financial plan.

Speaker 3: This is a course for success and I cannot emphasize it enough.

Yes, this quarter towards success and I cannot emphasize it enough.

Speaker 3: We also strongly believe that our pipeline progress cannot and should not be underestimated. We are executing on the promise of extending future revenue generation of the commercial business through line extensions of our HIV products, in particular with the FDA's submission of the eGRIFTA F8 formulation, which we announced yesterday.

We also strongly believe that our pipeline progress and not and should not be underestimated. We are executing on the promise of extending your insurer revenue generation of the commercial business through line extensions of our HIV products in particular with the FDA submission.

Mr eight formulation, which we announced yesterday.

Speaker 3: We're also committed to capitalizing on the development of our lead anti-cancer agent, pseudo-cytaxel, and do SORTAI.

We are also coming into cannibalizing on the development of our lead anti cancer agent pseudo sidak sells into a short time.

Speaker 3: As you know, we are working hard to meet Phase 1 clinical trial milestone timelines and report results as quickly as possible in 2024.

As you know we are working hard to meet phase one clinical trial milestones timelines and report results as quickly as possible in 'twenty to 'twenty four.

Speaker 3: I would also like to mention a goal that is very important tied to our operational planning, which is respecting our desk covenants with our land.

I would also like to mention of course that is very important tie into our operational planning, which is respecting our debt covenants with our lender I am so pleased to share that we have worked together with marathon to modify our covenants and that we're storing progress this season.

Speaker 3: I am so pleased to share that we have worked together with Marathon to modify our covenants and our story progresses.

Speaker 3: These important changes include, among others, removing the increase in the liquidity covenant, which would have stepped up to $30 million should be a paid not be approved before March 31, 2024.

These important changes include among others, removing the increase and the liquidity covenant, which would have stepped up to $30 million should DSA not be approved before March 31 2024.

Speaker 3: Changing the revenue covenant to an adjusted and bit-n-up base covenant.

<unk> the revenue coming into an adjusted EBITDA base covenants.

Speaker 3: and changing the liquidity requirements down to $15 million over time as I registered a bit of a decrease.

And changing the liquidity requirements down to $15 million over time, and so we're just did EBITDA increases.

Speaker 3: These adjustments to the loan competence can be seen as a testament to the rising confidence in our ability to execute on the company's stated goals for the year. Additionally, the new terms will allow fair technologies greater flexibility in our quest to deliver better profitability and even stronger financial out.

These adjustments to the loan covenants and be seen as a testament to the rising confidence in our ability to execute on the company's stated goals for the year. Additionally, the new terms will allow allergies greater flexibility in our quest to deliver better profitability and even stronger financial outs.

Speaker 3: Jumping into our financial progress. In July , we announced measures to realize a 5.5 million in cost reduction for 2024. But a certain type of expense management, we are already seeing the impact of this measure.

Jumping into our financial progress in July we announced measures to realize a $5 5 million in cost reduction for 2020 four.

But it's really tying to expense management, we are already seeing the impact of this measure.

Speaker 3: We're happy to report that we recorded a just an event of 2.2 million in the third quarter.

We're happy to report that we recorded adjusted EBITDA of 2.2 million into third quarter.

Speaker 3: Not only was this critical milestone achieved far before the end of the fiscal year, which was promised in January , but it also marked the significant improvement quarter over quarter.

Not only was this critical milestone achieved RMB four at the end of the fiscal year, which was promised in January but it also marks a significant improvement quarter over quarter. These.

Speaker 3: These results put the company in a positive, just a bidda range of 10% of revenues. And we're confident this figure can be improved in the coming quarter.

These results, but the company in a positive adjusted EBITDA range of 10% of revenues and we are confident this figure can be improved in the coming quarters.

Speaker 3: This is the result of a significant reduction in R&D and operational expense.

This is the result of the significant reduction in R&D and operational expenses.

Speaker 3: And now with the completion of a number of key projects, such as studies required for our FDA submission, significant expenses are by my does.

And now with the completion of a number of key projects such as the studies required wherever NDA submission Cigna.

Significant expenses are behind us.

Speaker 3: This prostability gives us the agility to seek favorable terms across our strategic endeavors, even accelerating our top line.

This profitability gives us the agility to see favorable terms across our strategic endeavors, even accelerating our top line too.

Speaker 3: To elaborate further, our US commercial capabilities are primed to scale up for Bolton, a creative products and new partners.

To elaborate further our U S commercial capabilities are prime to scale up for bolt on accretive products and new partnerships. Our fixed costs are also optimized and we anticipate ongoing future leverage as we increase the intrinsic value of our technologies.

Speaker 3: Our fixed costs are also optimized and we anticipate ongoing future leverage as we increase the intrinsic value of their technology.

Speaker 3: Additionally, we can confidently move forward with the 2024 launch class of our approved commercial product.

Additionally, we can confidently move forward with the 'twenty 'twenty four and one class of already approved commercial products.

Speaker 3: Let's take a closer look at our HIV business. For fiscal year 2023, we are tightening our guidance, expecting to finish the year with revenues of 82 million to 85 million.

Let's take a closer look at our HIV business for fiscal year 2023 we are tightening our guidance expecting to finish the year with revenues up 82 million to 85 million.

Speaker 3: Our top line has recovered and we report third quarter revenues of 21 million up from a very difficult second quarter that was impacted by build-up of inventory as previously discussed.

Our top line has recovered and we report third quarter revenues of $21 million up from a very difficult second quarter that was impacted by buildup of inventory as previously discussed.

Speaker 3: In the third quarter, new prescription growth continued on a strong path, and we expect results to follow in two-four of this year, heading to next year.

In the third quarter, new prescription growth continued on a strong path and we expect results to follow in Q4 of this year and.

And into next year.

Speaker 3: Just yesterday we announced another commercial milestones having filed the S.D.A. applications for the new generation of eGrip. The S.V. The end-based formulation with the FDA.

Just yesterday, we announced another commercial milestones having filed ESP early applications for the new generation of a grip days E E. S. H formulation with the F D. A.

Speaker 3: In accordance with the agency's filing review period, fair technologies expect to receive an acknowledgement letter within 30 days along with the Piduva Gold Day.

In accordance with the agencies filing review period, sorry technologies expects to receive an acknowledgment letter within 30 days along with them to do so call date.

Speaker 3: as discussed in the previous quarter, the new formulation has several improvements over prior generations, including frequency of reconstitution, and will immediately replace the current F4 formulation once launched.

As discussed in the previous quarter, the new formulation that several improvements over prior generations, including frequency of reconstitution and will immediately replaced the current export formulation once launched.

Speaker 3: The FAA formulation is patent protected until 2030-33 in the US and will support revenue growth in 24 in beyond.

D F. A formulation is patent protected until 'twenty 33 in the U S and will support revenue growth in 'twenty four and beyond.

Speaker 3: And this is coming at the right time. In our interactions with HIV health care providers, we are seeing an increase interest in identifying and treating patients with excess visual effects.

And this is coming at the right time, and our interactions with HIV health care providers. We are seeing an increased interest in identifying and treating patients with access visual fat.

Speaker 3: The same momentum holds true for innovations with Trevars.

The same momentum holds true for innovations with regards.

Speaker 3: Following completion of the intramuscular study, we are analyzing the data and our contract for a Q4 filing of an S-VLA seeking approval for traversal pion.

Following completion of the intramuscular study we are analyzing the data and are on track for a Q4 finally on the Nash BLA seeking approval for its regards so I am.

Speaker 3: In the meantime, we are waiting at the approval for IP push administration of the Trogarzo loading dose, a decision which is expected in mid-decebe.

In the meantime, we are awaiting FDA approval for IV push illustration of the trocar, so loading dose decision, which is expected in mid December .

Speaker 3: We believe introduction of the simplified first dose of Trogorzo by IV push, followed by the eventual option for IAM administration will help minimize the daily field burden for multi-trog resistent patients, and serve as a gateway for neutral gorgorzo scripts in combination with other injectable threads.

We believe the introduction of the simplified first dose of <unk> by IV push full.

Followed by the eventual options, where I am administration will help minimize the daily field burdens for a multi drug resistant patients and serve as a gateway for neutral gorsel scripts in combination with other injectable therapies.

Speaker 3: Rapping up with oncology and workinical trial progresses on track. Usal from the press release issued on August 30th at all five of the US-based pseudo-Sidact-1000 new sortite Phase 1 clinical trial heights have been activated to simultaneously screen and roll in those advanced ovarian cancer patients.

Yeah.

Wrapping up with oncology, where clinical trial progress is on track you saw from the press release issued on August 30th at all five of the U S. B pseudo syntex, alza and <unk> phase one clinical trial sites, and then activating to simultaneously screen enroll and dose and Vance.

They're in cancer patients.

Speaker 3: A six-side basin can, no it's finalizing its startup activity.

A sixth site based and can now use finalizing its startup activity.

Speaker 3: Full details about the study design, parts-patient criteria, and contact information for the sites can be found on clinicmotrials.gov.

Full details about the study design largest patient criteria and contact information for the sites can be found on finical trials Dot Gov.

Speaker 3: I am pleased to share that we already have a number of patients consented in actively being screened, and we look forward to announcing the first patient those shorts.

I am pleased to share that we already have a number of patients consented inactive leading screen and we look forward to announcing the first patient dosed shortly.

Speaker 3: Additionally, investment in our oncology program remains stage-gated with funding for the dosing of the 16 Phase I trial patients firmly embedded in our 23 and 24 budget.

Additionally investments in our oncology program remains stage gate it with funding for the dosing of the 16 phase one trial patients firmly embedded in our twenties ran 24 budgets.

Speaker 3: Parttering discussions continue for the additional phases of development of students at Excel and do sort time.

Partnering discussions continue for the additional phases of development after lucid Nextel seduce short time.

Speaker 3: Looking ahead, we expect a first interim analysis or preliminary safety and efficacy data from the study by mid-year 20.

Looking ahead, we expect a first interim analysis or preliminary safety and efficacy data from this study by mid year 'twenty 'twenty four.

Speaker 3: Finally, our Nash asset is still in play and we remain open to research partnerships as the environment for metabolic therapies is opening up.

Finally, our Nash asset is still in play and we remain open to research partnerships as the environment for metabolic therapies, it's opening up.

Speaker 3: With this, I'd like to turn the call over to Fidip, who will be going over the period financials in detail. Fidip, thank you.

Well this I'd like to turn the call over to Filip, who will be going over the periods financials in detail.

Thank you Paul and good morning, everyone.

Speaker 4: The Italian revenue for the three-month period ended August 31, 2023, was 20.9 million compared to 20.8 million for the same year-old period.

Consolidated revenue for the three months period ended August 31, 2023 was $20 9 million compared to $20 8 million for the same year ago period.

Speaker 4: While revenues were flat year over year, this performance reflects a nice recovery from the 17.5 million in Q2, which was affected by a number of factors discussed in our Q2 call.

While revenues were flat year over year. This performance reflects a nice recovery from the $17 5 million in Q2, which was affected by a number of factors discussed in our Q2 call.

Speaker 4: But the third quarter of fiscal 2023, net sales of Egrifta SV reached $13.2 million compared to $12.9 million in June 3 of last year. Higher net sales of Egrifta SV were a result of a higher selling price but were somewhat hampered by higher rebates to government payers.

But the third quarter of fiscal 2023, net sales of <unk> SV reached $13 $2 million.

Compared to $12 9 million in Q3 of last year.

Our net sales would be grifter S E.

Salt of a higher selling price that was somewhat hampered by higher rebates government payers.

Speaker 4: Robin Sales and the Grift at SB for the first nine months of the year stands at 2.1%. Mostly the result of the negative inventory situation during our second quarter and higher rebate.

Robin sales would be grifter as V for the first nine months of the year stands at two 1%, mostly the result of the negative inventory situations during our second quarter and higher rebates.

Speaker 4: Tornado NET sales in the third quarter of fiscal 2023 amounted to $7.7 million compared to $7.9 million for the same quarter of 2022, representing a decrease of 3.3% year-over-year.

<unk> net sales in the third quarter of fiscal 2023 amounted to $7 $7 million compared to $7 9 million for the same quarter of 2022, representing a decrease of three 3% year over year.

Speaker 4: Lower sales of Targarzo were a result of our decision to stop commercializing the product in the European territory Where we recorded sales of 517,000 in the third quarter of 2022 As well as slightly lower unit sales in North America, which were offset by our higher selling

Lower sales of <unk> were a result of our decision to stop commercializing the product in the European territory, where we recorded sales of 517000 in the third quarter of 2022 as well as slight slightly lower unit sales in North America, which were offset by a higher selling price.

Speaker 4: into two cost of goods sold decreased to $5 million from $5.3 million in the same quarter in fiscal 2022.

In Q2 cost of goods sold decreased to $5 million from $5 3 million in the same quarter in fiscal 2022.

Speaker 4: The decrease in cost of good sold was mainly due to the higher proportion of the e-gripped at SV sales, which carries a higher gross margin than traversal.

The decrease in cost of goods sold was mainly due to the higher proportion of itchy grifter, SB sales, which carries a higher gross margin central Gaza.

Speaker 4: I'm happy to report that through rigorous management of spending, aren't they selling and doing expense for all lower this year when compared to the third quarter of 2022? Helping us achieve our stated objectives of becoming a justity but not positive before your end.

I'm happy to report that through rigorous management of spending.

R&D selling and G&A expense were all lower this year when compared to the third quarter of 2022.

Helping us achieve our stated objective of becoming adjusted EBITDA positive before yearend.

Speaker 4: R&D expenses decreased by 36% in the third quarter of 2023, compared to the same period last year, mostly due to the lower spending on our oncology program, lower spending in Europe , as well as lower spending following the near completion of our lifecycle management projects for both Egrista SV and regards.

R&D expenses decreased by 36% in the third quarter of 2023 compared to the same period last year, mostly due to the lower spending on our oncology program lower spending in Europe as well as lower spending following the near completion of our lifecycle management projects for.

Both of <unk> SV and regards.

Speaker 4: Delling expenses decreased to 6.7 million for the third quarter of 2023 compared to 8.4 million for the same three month period last year or a decrease of 1.7 million dollars.

Selling expenses decreased to $6 7 million for the third quarter of 2023 compared to $8 4 million for the same three months period last year or a decrease of $1 $7 billion.

Speaker 4: The decrease in selling expenses in the third quarter is mainly related to higher expenses incurred in the same period of 2022 related to the setting up of our internal field force in the United States, as well as several, several costs incurred following our decision in 2022 to exit the European market for regards.

The decrease in selling expenses in the third quarter is mainly related to higher expenses decreased in the same period of 2022 related to the setting up of our interim field force in the United States as well as severance severance costs incurred following our decision in 2020 to exit the European market.

First regards.

Speaker 4: Felling expenses should continue to stabilize as our focus on top and bottom line growth remains our main objective for the foreseeable future, and hence we will not be compromising on customer facing activity.

Selling expenses should continue to stabilize our focus on top and bottom line growth remains our main objective for the foreseeable future.

We will not be compromising on customer facing activities.

Speaker 4: GNA expenses in the third quarter amounted to $3.7 million as compared to $4.2 million for the third quarter of 2022 or a 12% decrease.

G&A expenses in the third quarter amounted to $3 $7 million as compared to $4 2 million for the third quarter of 2022 or a 12% decrease.

Speaker 4: The decrease in GNA expenses is largely due to our decision to terminate the commercialization activities of Tervarzo in Europe last year. GNA expenses are also stable compared to Q2 Fissure.

Decrease in G&A expenses is largely due to our decision to terminate the commercialization activities with regards though in Europe last year.

And G&A expenses are also stable compared to Q2 this year.

Speaker 4: As you can see from our reduction in R&B, selling, and G&A expenses, we have right-sized the organization to ensure that we are well on our way in our journey towards becoming adjusted even.possess.

As you can see from our reduction in R&D, selling and G&A expenses, we have right sized the organization to ensure that we are well on our way in our journey towards becoming adjusted EBITDA positive.

Speaker 4: As a result of this, we are pleased to report the Justin H. Bittock for the third quarter of 2023 of $2.2 million versus negative 3.9 million in the same period last year and negative 6.1 million in the second quarter this year.

As a result of this we are pleased to report adjusted EBITDA for the third quarter of 2023 of $2 2 million versus negative $3 9 million in the same period last year and negative $6 1 million in the second quarter. This year.

Speaker 4: The significant improvement is due to the number of measures put in place during the year to control spending, as well as lower R&D spending, reflecting the completion of many lifecycle management projects.

This significant improvement is due to the number of measures put in place during the year to control spending as well as lower R&D spending, reflecting the completion of many lifestyle lifecycle management projects.

Speaker 4: Net Finance cost in the third quarter included interest of $2.2 million, consisting of interest on the credible senior notes issued in June 2018 of $128,000, and the interest of $2.1 million on the loan facility. These were offset by a non-cash gain on the re-evaluation of the warrants, issued in marathon at the beginning of this year.

Net finance costs in the third quarter included interest of $2 2 million consisting of interest on the convertible senior notes issued in June 2018 up 128000 in interest of $2 1 million on the loan facility.

These were offset by a noncash gain on the reevaluation of the warrants issued to marathon at the beginning of this year.

Speaker 4: We ended the third quarter of fiscal 2023 with 22.9 million cash bonds and money markets.

We ended the third quarter of fiscal 2023, with $22 9 million in cash bonds and money market funds.

Speaker 4: During the quarter, we received net proceeds of $19.7 million from the second tranche of the Marathon alone facility, and we redeemed the remaining $27.5 million of convertible debentures. And as of today, no convertible debentures remain outstanding.

During the quarter, we received net proceeds of $19 $7 million from the second tranche of the marathon load facility and we redeemed the remaining $27 5 million of convertible debentures.

And as of today, no convertible debentures remain outstanding.

Speaker 4: As Paul briefly described, we agreed to modify certain covenants in the grid.

As Paul briefly described we agreed to modify certain covenants in our credit agreement.

Speaker 4: The main change will be that we will no longer be required to hold $30 million in cash equivalence. Should the F.A. formulation of the Griff does not be approved by the end of March 2024? Has announced we have filed the SBLA with the FDA yesterday and this change in coveted reflects marathon full confidence in the timely approval of the formulation by the FDA.

The main change will be that we will no longer be required to hold $30 million in cash and equivalents should the feight formulation of the group's debt not be approved by the end of March 2024.

Operator: Good day and welcome to the Theratechnologies Q3 2023 earnings conference call. All participants will be in list and only mode. Should you need assistance please signal conference specialists by pressing the star key followed by zero.

As announced we have filed the S BLA with the FDA yesterday and this change in covenant reflects marathons full confidence in the timely approval of the formulation.

Operator: After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then one on your touch tone phone. To withdraw your question please press star then two. Please note this event is being recorded.

Yeah.

Speaker 4: I will be back for final comments, but first, we will now open the call to take your questions.

With that I'll, we'll be back for final comments, but first we will now open the call to take your questions.

Okay.

John Mullaly: I would now like to turn the conference over to John Mullaly, please go ahead. Thank you operator and good morning everyone.

Thank you.

We will now begin the question and answer session.

Speaker 1: To ask a question, you may press star then one on your touchtone phone.

To ask a question you May Press Star then one on your Touchtone phone.

John Mullaly: On the call today will be Theratechnologies President and Chief Executive Officer Mr. Paul Lvesque and Senior Vice President and Chief Financial Officer Mr. Philip Dubuc.

Speaker 1: If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question...

If youre using a speakerphone please pick up your handset before pressing the keys.

John Mullaly: Early Q&A session we've joined by Dr. Christian Morsalis, Senior Vice President and Chief Medical Officer and Mr. John Leasure, the company's global commercial officer. Before we begin I would like to remind everyone that remarks today contain four lifting statements regarding the company's current and future plans, expectations and intentions with respect to future events. Four lifting statements are based on assumptions and there are risks that results obtained by Theratechnologies made different materially from those statements.

To withdraw your question. Please press Star then two.

Speaker 1: At this time, we will pause momentarily to assemble our rough.

At this time, we will pause momentarily to assemble our roster.

John Mullaly: As such the company cannot guarantee any forward lifting statements will materialize in your caution not to place undue reliance on them. The company refers current and potential investors to the Forward Look and Information Section and Theratechnologies Management, Discussion and Analysis issued this morning and available on cedar www.steederplus.ca and on edger at www.suc.gov. Forward look and statements represent Theratechnologies expectations as of this morning, September 26, 2023. Additionally, today the company is using the term adjusted eva-da which is not a financial measure under international financial reporting standards, ISRS or US generally accepted accounting principles, US gap.

Speaker 1: Our first question comes from Justin Walsh with Jones Trading. Please go ahead.

Our first question comes from Justin Walsh with Jones trading. Please go ahead.

Hi, Thanks for taking the questions.

Speaker 2: Can you provide additional color on feedback you've received from patients and physicians on the potential of a AgriFTA MDV versus AgriFTA F?

Can you provide additional color on feedback you've received from patients and physicians on the potential of a grifter M. D V versus a grip that F. D. Do you have like a sense of how you anticipate the new formulation driving sales momentum assuming that it's approved.

Speaker 5: Do you have like a sense of how you anticipate the new formulation driving sales momentum assuming that...

Speaker 3: Thank you, Justin, for the question. I'll turn to John who has a hands-on research on this. But obviously, if you take a look at the way this F4 formulation that we have on the market has to be reconstituted, we believe that the one once a week of reconstitution in a very small volume of injection can be beneficial for creating a better patient experience. So, John , what do we have from a research point of view?

Thank you Justin for the question I'll turn to John .

As our hands on.

Our research on this but obviously you know if you take a look at the way. This S. Four formulation that we have on the market has to be reconstituted we've made even though one once a week reconstitution and a very small volume of injection can be beneficial for creating a better patient experience. So John .

John Mullaly: Adjusted eva-da excludes the effects of items that primarily reflect the impact of long-term investments and financing decisions rather than the results of day-to-day operations. Theratechnologies believes that this measure can be a useful indicator of its operational performance and financial condition from one period to another. The company uses this non-IFRS measure to make financial strategic and operating decisions. Reconciliation of adjusted eva-da to net loss is found in our MDNA issued this morning available on cedar and on edger at the web addresses mentioned earlier.

Do we have from a from a research point of view, yes, I think what we mainly expected to increase the duration of therapy.

Speaker 4: Yeah, what we mainly expect is an increase in duration of therapy.

Speaker 4: We don't think it's going to be a major change in a reason to prescribe, but it's certainly much more convenient for the patients. It only has to be reconstituted once a week. It doesn't need to be refrigerated. And I think that's going to be a big health from patients. And that's what we've heard back from feedback from them already.

We don't think it's gonna be a major change in our reserve to prescribed but certainly much more convenient for the patients that only has to be reconstituted once a week doesn't need to be refrigerated and I think that's going to be a big help from patients and that's what we've heard back from feedback from them already.

Speaker 5: Got it, thanks. One more question for me if I can. I believe you mentioned that it was budgeted in for this year and next, but I was wondering if you could comment on expectations for R&D spend as enrollment begins to pick up for the Phase 1, Sudosate Axles and Disortite.

Got it. Thanks, one more question for me if I can I believe you.

You mentioned that it was budgeted in for this year and next but I was wondering if you could comment on expectations for R&D spend as enrollment begins to pick up for the phase one so docetaxel <unk> type trial.

John Mullaly: Investors can also follow the company on LinkedIn and Twitter and sign up for alerts on Theratechnologies investor looks like at Theratechnx.com.

Speaker 3: Well, as we previously said, just in our spending in oncology, it's firmly embedded. So it's about $5 or $6 million over the late of 23 and then into 24. But the pressure for reducing expenses will come simply because many of our ongoing programs in clinical development.

Well as we've previously said adjusting our spending in oncology is firmly embedded so it's it's about five or $6 million over in late 'twenty, three and then into 'twenty four.

Paul Lvesque: With that, I would now like to turn the conference over to Theratechnologies president C.E.L. Paul Leveck. Thank you, John. Hello everyone and good morning. I'm pleased to report that we have made fantastic headway across our strategic objectives as outlined in this morning's press release. Our financial and operating operational planning for the remainder of the year and in 2021 and for his well-in-hand. And in spite of headwinds in the last quarter, we have learned much from both our successes and setbacks, which is exactly why we are pleased to report a positive outlook for the remainder of the year.

But the pressure for reducing expenses will come simply because many of our ongoing programs in clinical development.

Speaker 3: are just completed. So I stress the I-M formulation. We're doing the final analysis at the moment. We will continue to have significant medical affairs supporting the business.

Our just completed so why I stress the I am formulation, we're doing the final analysis at the moment, we will continue to have significant medical affairs supporting the business, but we expect that the R&D line as it is today in our P&L, we will continue to go down simply because.

Speaker 3: But we expect that the BND line as it is today in our P&L will continue to go down simply because some major programs are going away. Could Sandy want to further comment? No, that's that's mainly it. Just in the IAM is the analysis is ongoing. There won't be any activity next year.

Paul Lvesque: For example, our quarterly revenue has demonstrated their solid recovery from the most recent period and we've cross-major milestones in the development of our pipeline and the life-cycle management of our products. We drive the whole of our business forward and most importantly to maintain a strong cash balance and discipline around long-term financial objectives. In the Serena, we are laser focused on revenue strength and improvements to our bottom line. We have and will continue to be stringent with our operating expenses so that the adjusted business profitability we have just reported is a fixture of our ongoing financial plan.

Cause some major programs are going away. It sounds you want to further comment.

That's mainly it Justin the Uh huh.

The analysis is ongoing there won't be any exits next year 48, we have some activity this year and that no longer be required next year and that's mainly the reduction on this page. So so just and we can name Med D. I M formulation DSA formulation that is behind US now that back to your static water that we had to manufacture.

Speaker 3: 40 of eight we have some activity this year that's no longer be required next year then that's mainly the reduction on this stage. So, so Justin we can name the IAM formulation, the SAE formulation that is behind us now the bacteria static water that we had to manufacture.

Speaker 3: at one point, the human factor study for the F-8 that was cumbersome and expensive. So there's a slew of activities that will be reduced now, but certainly not to the point that it will compromise a ribidity to generate new prescriptions. The way that I see the commercial model is having a very engaged sales team, but also the surround noise all around it with medical affairs.

Sure.

One point the human factors study for D. S S.

Eight that was cumbersome and expensive. So there is a slew of activity that will be reduced now, but certainly not to the point that it will compromise our ability to generate new prescriptions. The way that I see the commercial model is you know having a very engaged sales team, but also the surround noise all around it.

With medical affairs, and marketing activities. So that we can pull the patient in and this is what we have created we've got great capabilities and marketing she loves and medical and we think that this is going to make the difference again and next year as we want to grow the business.

Speaker 3: and marketing activity so that we can pool the patient in. And this is what we have created. We've got great capabilities in marketing, sales, and medical. And we think that this is going to make a difference again and next year as we want to grow the business.

Paul Lvesque: This is towards our success and I cannot emphasize it enough. We also strongly believe that our pipeline progress cannot and should not be underestimated. We are executing on the promise of extending future revenue generation of the commercial business through line extensions of our HID products and in particular with the FD submission of the AgriFTA F8 formulation which we announced yesterday. We are also committed to capitalizing on the development of our lead anti-cancer agent, pseudo-state tax cells and do so in time.

Great. Thanks for taking the questions.

Thank you.

Speaker 1: Our next question comes from Andre Uden with Research Capital. Please go ahead.

Our next question comes from Andre Uddin with research capital. Please go ahead.

Speaker 6: Thank you. Good morning, Paul, Philip, Christian, and John . Thanks to see that you're adjusted if it does now positive.

Good morning, Paul Philippe here Krishnan and John .

Nice to see that your adjusted EBITDA is a positive.

Speaker 6: So you're assuming FD approval of the F8 formulation, if we assume that that does occur, would revenue growth primarily be driven by the F8 formulation in 2024?

Okay.

Paul Lvesque: As you know, we are working hard to meet face one clinical trial milestone timelines and report results as quickly as possible in 2024. I would also like to mention a goal that is very important tied to our operational planning which is respecting our debt covenants with our lender. I am so pleased to share that we have worked together with Marathon to modify our covenants as our story progresses. These important changes include, among others, removing the increase in the liquidity covenants which would have stepped up to $30 million should the FD not be approved before March 31st, 2024.

So you're assuming FDA approval of the FAA formulation, if we assume that that does occur would revenue growth.

Primarily be driven by the FAA formulation in 2024.

Speaker 3: Well, I mean, I'll repeat this a bit what I said, but the end-alternative job does see if he has anything else to say. But you know, capturing patients with the F4 is when we're asking our customer facing people to do. And in fact, we're growing the number of NRA.

Well I mean, I I am repeating a bit what I said, but I'll turn to John to see if he has anything else to say, but you don't capturing Ah patients with the S. Four is when we're asking our customers facing people what to do and in fact.

Paul Lvesque: Changing the revenue covenants to an adjusted a bit of base covenants and changing the liquidity requirements down to $15 million over time as our adjusted a bit of increases. These adjustments to the loan covenants can be seen as a testament to the rising confidence in our ability to execute on the company's stated goals for the year. Additionally, the new terms will allow for our technology's greater flexibility in our quest to deliver better profitability and even stronger financial paths.

We're growing the number of N our ex U.

Speaker 3: you know well over 20% compared to last year so we are already in a good position the F8 will certainly facilitate that but become I believe you know a better formulations of the peer patient experience thus having an impact mainly on duration of therapy. John do you want to further comment?

Well over 20% compared to last year. So we are already in a good position E. F. Eight will certainly facilitate that but become I believe you know a better formulation or the patient experience, that's having an impact mainly on duration of therapy. John do you want to further comment.

Speaker 4: I mean, it will certainly help an idea of a driver next year. The full year impact next year will not be as much as it won't be a full year of the launch, but we definitely expect it to be a driver. But as Paul said, we're continuing to see enthusiasm on the front end of enrollment's increased interest in treating the economic facts. And so, enrollments are very high. We're encouraged by that. And we think that's probably going to be the biggest driver moving forward.

It was certainly a help and be a bit of a driver next year.

All year impact next year will not be as much there won't be a full year of the launch, but we definitely expect it to be a driver, but as Paul said, we're continuing to see enthusiasm on the front end of enrollments increased interest in treating a domino effect.

Paul Lvesque: Jumping into our financial progress in July, we announced measures to realize a 5.5 million in cost reduction for 2024. But through tight expense management, we are already seeing the impact of this measure. We're happy to report that we recorded adjusted a bit of 2.2 million in the third quarter. Not only was this critical milestone achieved before the end of the fiscal year, which was promised in January, but also marks a significant improvement quarter over quarter.

And so enrollments are very high we're encouraged by that and we think that's probably going to be the biggest driver moving forward.

Paul Lvesque: These results put the company in a positive, just a bit, a range of 10% of revenues, and we're confident this figure can be improved in the coming quarters. This is the results of a significant reduction in R&D and operational expenses, and now with the completion of a number of key projects, such as studies required for our FDA submissions. Significant expenses are behind us. This profitability gives us the agility to seek favorable terms across our strategic endeavors, even accelerating our top line.

Speaker 6: Okay, thanks for clarifying that. And just in terms of Trogarzo intramuscular formulation, you have to know what the volume is that's injected and also how often do you have to inject that formula?

Okay. Thanks for clarifying that and just in terms of triggers though intramuscular formulation do you happen to know what the volume is that the injected and also.

How often do you have to inject.

Formulation.

Speaker 3: Thank you, Andre. This county wanted to take that on. Yeah, the drug product is exactly the same. Then the patient will need to inject twice 2.3 ml.

Thank you Andre Michel do you want to take Donna Yeah.

The drug product is exactly the same than the patients will need to inject twice two three ml.

Speaker 3: This is at the moment what's mixed for the, in the IED bus, if you want, for the injection debris.

At the moment, what's mix for the <unk> Bush if you want for the injection every two weeks and this is every two weeks there will be two injection about tune them out for the patient you have to understand that this is something which is a water base a monoclonal antibody then.

Speaker 3: two weeks. And this is every two weeks, there will be two injections about two a mile for the patient. You have to understand that this is something which is water based. I'm not going to ask about it. Then it's very well torrated by the patient. We had some new studies during the conduct of this study. And it's very well perceived and well accepted by the patients. Then we think that that will also have an impact.

It's very well tolerated by the patients.

We have some.

Paul Lvesque: To elaborate further, our US commercial capabilities are primed to scale up for Goldton, a creative products and new partnerships. Our fixed costs are also optimized, and we anticipate ongoing future leverage, as we increase the intrinsic value of Theratechnologies. Additionally, we can confidently move forward with the 2024 launch class of our approved commercial products.

Studies during the conduct of this study.

And it's it's very well perceived and are well accepted by the patients and we think that that will also have an impact.

Speaker 3: And we believe it will be administered in pharmacies, which is not the case now for the IV point. Well, it could be in pharmacies, sort of like, and it will be much easier in terms of access for patients to get their injection.

And we believe it will be administered in pharmacies, which is not the case now for the IV.

It could be in pharmacies are sort of like it will be much easier in terms of access for patients to get their injection.

Paul Lvesque: Let's take a closer look at our HIV business. For fiscal year 2023, we are tightening our guidance, expecting to finish the year with revenues of 82 million to 85 million. Our top line has recovered, and we report 3rd quarter revenues of 21 million up from a very difficult second quarter that was affected by build-up of inventory as previously discussed. In the 3rd quarter, new prescription growth continued on a strong path, and we expect results to follow in Q4 of this year and into next year.

Okay. That's great. Thank you.

Speaker 1: Next question comes from Andrea Lennon with National Bank. Please go ahead.

Our next question comes from Andrea <unk> Leno with National Bank. Please go ahead.

Speaker 3: I, good morning. Thanks for taking my questions. I'm congrats on that positive EBD up. The first question I wanted to ask is that if you can talk a little bit about the mixture or the combination or the interaction rather of volume and price for the sales of both products into physical kits.

Hi, Yeah. Good morning, Thanks for taking my questions and congrats on the positive EBITDA.

The first question I wanted to ask if you can talk a little bit about the mixture of the combination or the interaction rather of <unk>.

Volume and price for the sales profile of both products into fiscal Q3.

Speaker 3: Yes, thank you, Henry. So as I mentioned, both volumes were pretty flat, but we did take some price increases. We gave larger remates because of the patient mix. All in all, for both products, stable unit numbers and a little bit of price increases. Also, for Trogarzo, remember that we had some sales in Europe last year, which we didn't have this year.

Oh, yes, thank you andriy.

Paul Lvesque: Just yesterday, we announced another commercial milestones having filed the FDA applications for the new generation of Agriptized V, the end-based formulation with the FDA. In accordance with the agency's filing review period, Theratechnologies expects to receive an acknowledgment letter within 30 days along with the PEDUFA gold date. As discussed in the previous quarter, the new formulation has several improvements over prior generations, including frequency of reconstitution, and will immediately replace the F4 formulation once launched.

So as I mentioned, both the volumes were pretty flat, but.

We did take some price increases we gave.

Larger rebates because of the patient mix so all in all.

For both products are stable.

Unit numbers and a little bit of price.

Creases and also for <unk> remember that we.

We had some sales in Europe last year, which we didn't have this year.

Speaker 4: Thanks, Philip. And just a quick follow up on that. I mean, was there a pullback in volumes over the summer? I mean, because I think on the last update, I think volumes are growing 27% for a 30% for a drift on 80% for a trucker or something along those lines.

Thanks, Philip and just a quick follow up on that I mean was there a pullback in volumes over the summer I mean, because I think on the last update I think volumes are growing 27% for at Griffith done eight or 9% for truecar or something along those lines.

Paul Lvesque: The FAA formulation is packed and protected until 2033 in the U.S., and will support revenue growth in 24 and beyond. And this is coming at the right time. In our interactions with HIV healthcare providers, we are seeing an increased interest in identifying and treating patients with excess visual fat. The same momentum holds true for innovations with Trogarzo. Following completion of the intramuscular study, we are analyzing the data and are on track for a Q4 filing of an S-BLA seeking approval for Trogarzo IM.

Speaker 4: Yeah, so what we're seeing as is, I said, is correct that on the front end, we're seeing increased interest in treatment. We're seeing a lot of new patients coming in, a double digit growth, new enrollments. But we did see early in the year, a little bit of a churn in the patient base and refilled.

Yeah.

What we're seeing as I said it is correct that the ink on the front end, we're seeing increased interest in treatment and we're seeing a lot of new patients coming in double digit growth.

New enrollments, but we did see early in the year, a little bit of a churn in the patient base and refills.

Speaker 4: And that sense corrected and has been on an upswing since Q2 and now is above where it was. So we are seeing overall growth of the total patient base above where it was last year, but it's not as much as we would expect with the increase in enrollment due to this period early in the year where we had this turn of the patient base.

And that since corrected and it's been on an upswing.

Since Q2, and now is above where it was so we are seeing overall growth of the total patient base above where it was last year, but it's not as much as we would expect with the enrollment and increase enrollment due to this period earlier in the year.

Paul Lvesque: In the meantime, we are waiting at the approval for the IV push-instration of the Trogarzo loading dose, a decision which is expected in mid-December. We believe the introduction of the simplified first dose of Trogarzo by IV push followed by the eventual option for IM administration will help minimize the daily field burden for multi-trogresistant patients, and serve as a gateway for neutral Trogarzo scripts in combination with other injectables.

Where we had this is churn of the patient base.

Speaker 3: Okay, thanks for the John . And yet one more question. Just this is more a little bit looking into Q4 because implied Q4 revenue, I mean seems pretty strong, sequentially a year over a year. I'm assuming that is mostly volume from the interest you're seeing or do you have any price increase embedded on that one? I mean, in addition to what you've already done.

Okay. Thanks for that John and yet one more question. Just this is more a little bit looking into Q4, because the implied Q4 revenue.

It seems pretty strong.

Sequentially and year over year I'm, assuming that is mostly volume from the interest youre seeing or do you have any price increase embedded on type one I mean in addition to what you've already done.

Speaker 4: Yeah, that'll mainly be volume. We don't have any price increase planted.

Paul Lvesque: Rappling up with oncology or clinical trial progresses on track, you saw from the press release issued on August 30th at all five of the U.S, based pseudosidactylsendusortite phase 1 clinical trial sites have been activated to simultaneously screen and roll and those advance all their in cancer patients a six site basin can now is finalizing its startup activity full details about the study design for its patient criteria and contact information for the sites can be found on clinical trials dot gov. I am pleased to share that we already have a number of patients consented and actively being screened and we look forward to announcing the first patient dose shortly.

Yeah that that'll mainly be volume, we don't have any price increase plan in Q4 and traditionally. This is this is the pattern that we've seen before Q4 has always been very strong.

Speaker 3: Yeah, and traditionally this is the pattern that we've seen before. Q4 has always been very strong.

Speaker 3: and obviously we're counting on this and the following the issue that we had in the second quarter regarding inventory buildup we are extremely extremely you know

And obviously, we're counting on this end and following the issue that we had in the second quarter regarding inventory buildup, we are extremely extremely.

No.

Speaker 3: focused on inventory at hands at the pharmacy level, so we control what's happening. And we have all of the reasons to believe that the Q4 is going to unfold, the way that we've seen it in previous years, and that we should actually complete 2023 within the guidance that I've just given today. So we're confident based on the way we're capturing patients.

Focused on inventory at hands at the pharmacy level. So we control what's happening and we have one of the reasons to believe that the Q4 is going to unfold the way we've seen it and previous years and that we should actually complete a 2023 within the guidance that I just.

Given today, so we're confident based on the way, we're capturing new patients are in the way that they were converted into getting a scripts and getting on the medicines that we will get there and it's going to pave the way for a good 21 important because don't forget that our performance. This year you.

Paul Lvesque: Additionally, investment in our oncology program remains stage gated with funding for the dosing of the 16 phase one trial patients firmly embedded in our 23 and 24 budgets. Parts ring discussions continue for the additional phases of development of pseudosidactylsendusortite. Looking ahead, we expect a first entry in analysis or preliminary safety and efficacy data from the study by mid-year 2024.

Speaker 3: And the way that they were converted into getting a script and getting on the medicines that we will get there And it's gonna pave the way for a good 2024 because you know, don't forget that that were performance this year You know has been set back significantly by the second quarter and the inventory situation that we've described So if you take that away and we're run great now

You know it has been setbacks significantly by the second quarter and the inventory situation that would describe so you take that away and we're run rate now is significantly over $82 million.

Speaker 3: significantly over $82 million.

Paul Lvesque: Finally, our national asset is still in play and we remain open to research partnerships as the environment for metabolic therapies is opening up.

Speaker 3: That's great to hear. Thanks, Fallen. And one last one for me, you mentioned the Open and Remarstball of still continuing to look to expand the commercial portfolio. Can you talk a little bit about the quality, the type of assets that you're seeing out there, and your multiples, and any color you can share on that regard?

No that's great to hear thanks, Paul and one last one for me you mentioned in the opening remarks, Paul off it's still continuing to look to expand the commercial portfolio.

Philippe Dubuc: With this, I'd like to turn the call over to Fidip who will be going over the period's financials in detail. Thank you, Paul.

Can you talk a little bit about that.

The quality of the type of assets that youre seeing out there and multiples and any color you can share on that regard.

Philippe Dubuc: Good morning, everyone. Consolid revenue for the three month period and in August 31st, 2023 was 20.9 million compared to 20.8 million for the same year-old period. While revenues were flat year-over-year, this performance reflects a nice recovery from the 17.5 million in June 2, which was affected by a number of factors discussed in our two-two call. For the third quarter of fiscal 2023, net sales of Egrifta SV reached $13.2 million compared to $12.9 million in June 3 of last year.

Speaker 3: Yeah, so we've sent before that it could be an HIV. We have obviously capabilities and we're calling on roughly 2,800 HIV providers in the US and they treat the bulk of the HIV patients.

Yeah. So we said before that it could be in HIV, we have August capabilities, and we're calling on roughly 2800.

The HIV providers into U S. Indeed treat the bulk of the HIV patients. We also said that it could be an HIV adjacent type of business is something that is not necessarily a specific HIV therapies, but I say RMB to HIV patients are using and looking at the capabilities that we've built in.

Speaker 3: We also said that it could be an HIV adjacent type of business or something that is not necessarily a specific HIV therapies, but a therapy that HIV patients are using.

Speaker 3: And looking at the capabilities that we've built in the field and in my management team and in training and all other aspects of, you know, our goals market model, we could take on small metabolic.

Feel that me and my management team.

Training at all other aspects of our you know our go to market model, we could take on small metabolic.

Philippe Dubuc: Higher net sales of Egrifta SV were a result of a higher selling price, but were somewhat hampered by higher rebates to government payers. Robin sales of Egrifta SV for the first nine months of the year stands at 2.1 percent. Mostly, the result of the negative inventory situation during our second quarter and higher rebates. Turnarzo net sales in the third quarter of fiscal 2023 amounted to $7.7 million compared to $7.9 million for the same quarter of 2022, representing a decrease of 3.3 percent year-over-year.

Speaker 3: Small metabolic is very similar to a rare disease type and it's fact the business that we have is very much like rare disease because we're calling on you know very few You know house care providers, but at the same time we've got Products that are using niche and you're reimbursed at high price because they provide high value So this is very much like a rare disease

Small metabolic is very similar to a rare disease type and in fact, the business that we have is very much like rare disease, because we're calling on you know very few you know.

Health care providers, but at the same time, we've got a product that's already using niche and they are reimbursed at a high price because they provide high value. So this is very much like a rare disease. So and they are some rare disease products that could actually very much fit our model, where we could have to actually build.

Speaker 3: So they are some rare disease products that could actually very much fit our model.

Speaker 3: where we could have to actually build another sales team, but providing that the...

Philippe Dubuc: Lower sales of Tergarzo were a result of our decision to stop commercializing the product in the European territory, where we recorded sales of 517,000 in the third quarter of 2022, as well as slightly lower unit sales in North America, which were offset by our higher selling price. In 2.2, cost of goods sold decreased to $5 million from $5.3 million in the same quarter in fiscal 2022. The decrease in cost of goods sold was mainly due to the higher proportion of the eGrift at SV sales, which carries a higher gross margin than Targarzo.

Another sales team.

But providing that the product is you know.

Speaker 3: you know, deprioritized by a big pharma or already on the market, it would drive already some accretive, you know, sales and bottom line. And therefore, we would not hesitate for the right agent to build another field force because we do have infrastructure in sales, marketing, medical and the back office to take on bolt-on initiatives. And that is why we're so happy now that we were able to renegotiate some of the confidence with Parathon. We've got a clean deck moving forward and we think that we could.

Prioritize by a big pharma or already on the market It would drive already some accretive.

And bottom line and therefore, we would not hesitate for the right agent to build another field force because we do have the infrastructure in sales marketing medical and the back office to take on bolt on initiatives and that is why we're so happy now that we were able to renegotiate some of the covenants with.

Marathon, we've got a clean deck moving forward and we think that we could providing that we put our hands on the right asset accelerate our journey towards profitability I.

Speaker 3: providing that we put our hands on the right asset, accelerate our journey towards profitability by looking for bolt-on acquisition type. Bye bye.

Philippe Dubuc: I'm happy to report that through rigorous management of spending, R&D selling and G&A expense were all lower this year when compared to the third quarter of 2022, helping us achieve our stated objective of becoming adjusted even dot positive before year end. R&D expenses decreased by 36% in the third quarter of 2023 compared to the same period last year, mostly due to the lower spending on our apology program, lower spending in Europe, as well as lower spending following the near completion of our lifecycle management projects for both eGrift at SV and Targarzo.

You know looking for bolt on.

Acquisition type.

To answer your question.

Speaker 6: Yes, mostly just one quick follow up is that in terms of you seen any changes Let's say over the last year in terms of the multiple or IRRs or however it is that you that you value this Bolt on F

Yes, mostly just one quick follow up is that in terms of have you seen any changes, let's say over the last year in terms of a multiple or irr's or however, it is that too that you value. This a bolt.

Bolt on assets.

Speaker 4: Did it do one, two, one, comment? No, and actually the products we're going after aren't really, you know, in auctions or we kind of dig through far, big pharma, they're portfolio when we reach out. So we're not really in competition with anyone else. Okay.

They didn't want to Oh, no it actually.

Products were going after aren't really.

In auctions or we kind of dig.

Dig through five big pharma their portfolio and we reach out so.

Philippe Dubuc: Selling expenses decreased to 6.7 million for the third quarter of 2023 compared to 8.4 million for the same three month period last year or a decrease of $1.7 million. The decrease in selling expenses in the third quarter is mainly related to higher expenses incurred in the same period of 2022 related to the setting up of our internal field force in the United States, as well as severance costs incurred following our decision in 2022 to exit the European market for Targarzo.

We're not really in competition with anyone else.

Okay. Okay understood. Okay. Thank you.

Speaker 1: Again, if you'd like to ask a question, please press star then one. Our next question comes from Bill Mine with Canacord. Please go ahead.

Again, if you'd like to ask a question. Please press Star then one our next question comes from Bill mine with Canaccord. Please go ahead.

Okay.

Hi, This is kathleen on for Bill. Thank you for taking our question on the oncology phase one trial with the update coming now in mid 2024.

Speaker 1: On the oncology phase one trial with the update coming now in mid 2024.

Speaker 1: What can we expect in terms of patient's numbers there? Another way of asking the question, do you expect the data at that point to address the toxin in the prior study? And how much is that gating partnership interest? Thank you so much.

What can we expect in terms of patient numbers there.

Philippe Dubuc: Selling expenses should continue to stabilize as our focus on top and bottom line growth remains our main objective for the foreseeable future and hence we will not be compromising on customer facing activities. GNA expenses in the third quarter amounted to $3.7 million has compared to $4.2 million for the third quarter of 2022 or a 12% decrease. The decrease in GNA expenses is largely due to our decision to terminate the commercialization activities of Targarzo in Europe last year and GNA expenses are also stable compared to Q2 this year. As you can see from our reduction in R&B selling and GNA expenses we have right sized the organization to ensure that we are well on our way in our journey towards becoming adjusted even positive.

Another way of asking the question do you expect the data at that point to address the toxin and the prior study.

And how much is that getting partnership interest. Thank you so much.

Speaker 3: So, Christian, you may want to talk about the expectation on Canada's partnership. Yeah, absolutely. The, as Paul mentioned before, the fights in the US are recruiting patients at the moment. There are a number of patients in screening that we're expecting to complete the first quarter of patients. What we have in the protocol, there's a court of six patients, the first dose, which is 1.75 milligram per gig every week for three weeks and a week break.

So could you may want to talk about the expectation I can't address partnership yeah, absolutely the as Paul mentioned before to five sites in the U S are recruiting patients at the moment there are a number of patients in screening and we're expecting to complete the first quarter of patients what we have in the protocol.

There is a cohort of six patients.

First dose, which is 175 milligram per kg.

Every week for three weeks and we are.

Speaker 3: After those six patients will be initiated on treatment, we wait three months to look at the at-terson and profile and we'll restart after that based on a good safety profile. Six other patients at 2.5 milligram per kilogram every week.

After dose six patients among these initiated on treatment, we wait three months to look at the adverse event profile and will restart after that based on the good safety profile six other patients at two five milligram per kilogram every week.

Philippe Dubuc: As a result of this we are pleased to report adjusted EBITDA for the third quarter of 2023 of $2.2 million versus negative $3.9 million in the same period last year and negative $6.1 million in the second quarter this year. The significant improvement is due to the number of measures put in place during the year to control spending as well as lower R&D spending reflecting the completion of many life cycle management projects.

Speaker 3: And with those 12 patients, I think that we will have a fairly good sign if there are signs of efficacy by men next year.

And with those 12 patients I think that we will have a pretty good sign.

If there are signs of efficacy by mid next year after.

Speaker 3: After the six patients at the higher goes, the VA also wanted us to include in other four patients for a total of 10 patients in this court, 2.5 milligrams. Then total, it will be 16 patients, but as we go based on the data that we have seen so far, based on the disease stabilization that we have seen in a number of patients, we think that we will have clear signs of efficacy by Ms.

After the six patients at the higher dose and he also wanted US to include four patients or a total of 10 patients in this cohort two five milligram in total it will be 16 patients, but as we go based on the data that we have seen so far based on the disease stabilization that we've seen.

Philippe Dubuc: Next finance cost in the third quarter included interest of $2.2 million consisting of interest on the convertible senior notes issued in June 2018 of $128,000 and interest of $2.1 million on the loan facility. These were offset by a non-cash gain on the re-evaluation of the warrants issued in marathon at the beginning of this year. We ended the third quarter of fiscal 2023 with 22.9 million in cash bonds and money market funds.

And the number of patients.

That's what we'll have clear signs of efficacy by mid next year.

Speaker 3: So from a partnership point of view, I said before, and it's still true. We have many companies at the table very interested by our TH1902, but also the platform of the technology we have.

So from a partnership point of view of what I said before and it's still true we have many companies at the table, they're interested by outward th 19 O two but also the platform on the technology we have.

Speaker 3: However, at this stage of the game, we're only months away from having additional critical efficacy humans to report, then a lot of companies will want...

However at this stage of the game were only months away from having additional clinical efficacy in humans to report there are a lot of companies will want to.

Philippe Dubuc: During the quarter, we received net proceeds of $19.7 million from the second charge of the marathon loan facility, and we redeemed the remaining $27.5 million of convertible debentures. And as of today, no convertible debentures remain outstanding. As Paul briefly described, we agreed to modify certain covenants in agreement. The main change will be that we will no longer be required to hold $30 million in cash and equivalence.

Speaker 3: you know, to actually wait until they see the back-to-back efficacy data that we think we're going to have. Keep in mind that we've already released a lot of information at AECR, but also at ASCO, that shows that we actually had clinical benefits in many patients, but now that we have a tighter protocol, we believe that in ovarian cancer, we're going to strike more often and be able to move on to the next phases of development.

To actually wait until they see the back to back efficacy data that we think we're gonna have keep in mind that we've already released a lot of information at ACR, but also at <unk> that shows that we actually had clinical benefits in many patients, but now that we had a tighter protocol, we believe that in ovarian cancer.

We're going to strike more often and be able to move on to the next phases of development, but what I can say in addition to that is that our platform is being noticed and we see a great deal of interest for important partnership activities at the labs, because people actually see what our receptor does.

Speaker 3: But what I can say in addition to that is that our platform is being noticed and we see a great deal of interest for partnership activities in the labs because people actually see what our receptor does and by congregating some technologies to our peptide, they would have access to the cancer cells in a more efficient manner, just like our TH19-02 is getting into the cancer cells more effectively.

Philippe Dubuc: Should the F.A, formulation of a grift not be approved by the end of March 2024 has announced we have filed the S.B.L.A, with the FDA yesterday. And this change in covenant reflects marathon full confidence in the timely approval. On the formulation by the FDA.

By country eating some technologies to our peptide they would have access to the cancer cells in a more in a more efficient manner, just like our th 19, which always getting into the cancer cells more effectively.

Philippe Dubuc: With that, Paul will be back for final comments, but first we will now open the call to take your questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.

Speaker 3: So there's lots of development on college and that's why I think that, you know, while we're focusing on turning the organization profitable and it first a bit of positive.

So theres lots developing on oncology and that's why I think that you know what we're focusing on turning the organization profitable first EBITDA positive.

Speaker 3: We don't want to abandon this great card that we have in oncology. We just want to stage gate defending, which is exactly what we're doing at the moment. We believe that the next phases of development, whether at the labs or whether in the clinic, will come through partnerships. As I said, we have many oncology companies that have seen what we have reported. I feel very optimistic for the meeting.

We don't want to abandon this great card that we have in oncology. We just wanted to stage gate, the spending which is exactly what we're doing at the moment and we believe that the next phases of development, whether it's in the labs or whether in the clinic and will come through partnerships and as I said, we have many oncology companies that have seen what we have reported.

Philippe Dubuc: At this time, we will pause momentarily to assemble our roster.

And I I feel very optimistic for the future.

Justin Walsh: Our first question comes from Justin Walsh with Jones Trading. Please go ahead. Hi, thanks for picking the questions. Can you provide additional collar on feedback you've received from patients and physicians on the potential of a Grifta MDV versus Grifta SV? Do you have like a sense of how you anticipate the new formulation driving sales momentum, assuming that it's approved? Thank you, Justin, for the question. I'll turn to John who has a hands-on research on this, but obviously, you know, if you take a look at the way this F4 formulation that we have on the market has to be reconstituted, we believe that the one, once a week, a reconstitution in a very small volume of injection can be.., the beneficial for creating a better patient experience.

Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Paul Levec for any closing remarks.

This concludes our question and answer session I would like to turn the conference back over to Paul It back for any closing remarks.

Speaker 4: There's a few questions that came in on the webcast. So most of them are related to the 1902 trial and relating to the timing. Are we seeing?

Well Theres a few questions that came in.

On the webcast so.

Are they more related to the 92 trial.

Relating to the timing are we seeing.

Uh huh.

Speaker 3: You know, patients coming in soon, what's the, you know, has there been more delays than what we expected? And what's our thoughts on enrollment? Does it sound like you want to clarify? Yeah, this is more of us what we were expecting, but as we had announced, one of the changes, like some of the changes of the protocol were really the selection of patients.

Patients coming in soon what's the has there been more delays than what we expected.

What's our thoughts on enrollment as John do you want to clarify this is more or less what we were expecting but as we had announced one of the train like some of the changes of the protocol, where we lead the selection of patients there.

Speaker 3: then what we're doing in that study is that's for selecting patient that I

Then what we're doing in that study is that's for selecting patients that have less vaccine. Prior exposure. It will be a maximum of one failure on taxane and a lower number of prior treatments. Therefore, the selection of patients and it's a bit more difficult than what we had in the past, but we.

Justin Walsh: So, John, what do we have from a research point of view? Yeah, Justin, I think what we mainly expect is an increase in duration of therapy. We don't think it's going to be a major change in a reason to prescribe, but it's certainly much more convenient for the patients. It only has to be reconstituted once a week. It doesn't need to be refrigerated, and I think that's going to be a big health from patients, and that's what we've heard back from feedback from them already.

Speaker 2: less taxing prior exposure. It will be a maximum of one failure on taxing.

Speaker 3: and a lower number of prior treatments. Therefore, the selection of patient is a bit more difficult than what we had in the past, but we do believe that this is the best way to move forward in order to show it, because you would this trial. Yes, and do not forget that all the patients can be recruited.

Do believe that this is the best way to move forward in order to show efficacy with this trial, yes, and do a do not forget that all the patients can be recruited at the same time you know what it's not one patient at a time that the sites are now activated we could have patients enrolling.

Justin Walsh: Got it. Thanks. One more question for me, if I can. I believe you mentioned that it was budgeted in for this year and next, but I was wondering if you could comment on expectations for R&D spend as enrollment begins to pick up for the Phase I, Sudosa Paxels and Disortide Trial. Well, as we previously said, Justin, our spending in oncology is firmly embedded, so it's about $5 or $6 million over the late of 23 and then into 24, but the pressure for reducing expenses will come simply because many of our ongoing programs in clinical development are just completed.

Speaker 3: at the same time. You know, it's not one patient at a time. The fights are now activated. We could have patients enroll in dose at the same time. So once the ball gets rolling, he could accelerate very nicely.

Dosed at the same time, so once the ball gets rolling it could accelerate very nicely.

Speaker 4: The last question on the status of discussions with our auditors regarding the going concern opinion in view of the marathon changes. Well, it's a little bit early to have discussions, but obviously we had some they are aware of the changes and it was viewed very favorably with auditors and the audit committee yesterday. So we'll see come November once the status is complete.

And the last question on the status of discussions with our auditors regarding the going concern opinion in view of the marathon changes.

Well, it's a little bit early to have discussions, but obviously we had some.

They are.

Aware of the changes and.

It was viewed very favorably with the auditors and the audit Committee yesterday.

Justin Walsh: So, I stress the IM formulation. We're doing the final analysis at the moment. We will continue to have significant medical affairs supporting the business, but we expect that the R&D line, as it is today in our P&L, will continue to go down simply because some major programs are going away. Could Sandy want to further comment? No, that's that's mainly it. Justin, the IM is the analysis ongoing that won't be any activity next year.

So we will see come November .

What's the status.

And that's it for questions Paul.

Speaker 3: Thank you, everyone, for attending the call today. As discussed, we have made great progress towards achieving all of our goals for the year. Today's Q3 results demonstrate that we have turned a corner for Q4 and beyond. And that will be known-

Thank you everyone for attending the call today as discussed we have made great progress towards achieving all of our goals for the year to date Q3 results demonstrate that we have turned the corner for Q4 and beyond.

And there will be no turning back with the submission of DSA formulations for the two D. M D. Achieving adjusted EBITDA profitability ahead of schedule, our significant reduction in operating expenses and the increasing confidence entrusted to us by marathon, we are enabling long term value creation for the inverse.

Speaker 3: With the submission of the FAA Formulations for the FDA, achieving adjusted a bit of profitability ahead of schedule, our significant reduction in operating expenses, and the increasing confidence and trust into what my marathon, we are enabling long-term value creation for the investors, war with us on this road to growth and ongoing profitability.

Justin Walsh: For the F8, we have some activity this year that will no longer be required next year, then that's mainly the reduction on this stage. So Justin, we can name the IM formulation, the SA formulation that is behind us now, the bacteria static water that we had to manufacture at one point, the human factors study for the F8 that was cumbersome and expensive. So there's a slew of activities that will be reduced now, but certainly not to the point that it will compromise or ability to generate new prescriptions.

<unk> War with Us on this road to growth and ongoing profitability.

Speaker 3: Ferrod Technologies is determined to maintain this upward trajectory.

Technologies is determined to maintain this upward trajectory. Thank you again and see you soon on the Q4 call and in the upcoming commercial medical and Investor meetings I have a great day.

Speaker 3: Thank you again and see you soon on the Q4 call and at the upcoming commercial, medical, and investor meetings. Have a great day.

Speaker 1: Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Justin Walsh: The way that I see the commercial model is, you know, having a very engaged sales team, but also the surround noise all around it with medical affairs and marketing activity so that we can pull the patient in. And this is what we have created. We've got great capabilities in marketing, sales and medical, and we think that this is going to make a difference again next year as we want to grow the business. Dennis. Great. Thanks for taking the questions. Thank you.

Andre Uddin: Our next question comes from Andre Uddin with Research Capital. Please go ahead. Thank you. Good morning, Paul, Philippe, Christian and John. It's nice to see that you're adjusted if a dog's now positive. So you're assuming an FDA approval of the F8 formulation. If we see that that does occur, would revenue growth primarily be driven by the F8 formulation in 2024? Well, I mean, I'll repeat this a bit with what I said, but an alternative to John to see if he has anything else to say.

Andre Uddin: But you know, capturing patients with the F4 is when we're asking our customer facing people to do. And in fact, we're growing the number of NRX, you know, well over 20% compared to last year. So we are already in a good position. The F8 will certainly facilitate that, but become, I believe, you know, a better formulation for the patient experience, thus having an impact mainly on duration of therapy. John, do you want to further comment?

Andre Uddin: I mean, it will certainly help an idea, a bit of a driver next year. The full-year impact next year will not be as much, because it won't be a full year of the launch, but we definitely expect it to be a driver. But as Paul said, we're continuing to see enthusiasm on the front end of enrollment's increased interest in treating the successful dental fact. And so enrollments are very high. We're encouraged by that. And we think that's probably going to be the biggest driver moving forward. Okay. Thanks for clarifying that.

Andre Uddin: And just in terms of Tregorzo intramuscular formulation, do you have to know what the volume is that injected and also how often do you have to inject that formulation? Thank you, Andre. This county wanted to take that on? Yeah, the drug product is exactly the same, and the patient will need to inject twice 2.3 ml. This is at the moment what's mixed for the, in the ID push, if you want, for the injection every two weeks.

Andre Uddin: And this is every two weeks, there will be two injections about 2 ml for the patient. You have to understand that this is something which is a water base. I'm not going to ask about it. Then it's very well-terrated by the patient. We had some new studies during the conduct of this study. And it's very well perceived and well accepted by the patients. Then we think that that will also have an impact.

Andre Uddin: And we believe it will be administered in pharmacies, which is not the case now for the ID push. Well, it could be in pharmacies, sort of like, and it will be much easier in terms of access for patients to get their injection. Okay. That's great. Thank you.

Andrea Leno: Our next question comes from Andrea Leno with National Bank. Please go ahead. Hi, good morning, thanks for taking my questions and congrats on that positive EB-Dop.

Philippe Dubuc: The first question I wanted to ask is that if you can talk a little bit about the mixture or the combination or the interaction rather of volume and price for the sales of both products into fiscal Q3? Yes, thank you, Andre. So, as I mentioned, both volumes were pretty flat, but we didn't take some price increases. We gave larger remates because of the patient mix. So, all in all, you know, for both products, stable unit numbers and a little bit of price increases. And also for trovars, though, remember that we had some sales in Europe last year, which we didn't have this year. Thanks, Philippe.

Philippe Dubuc: Just a quick follow-up on that. I mean, was there a pullback in volumes over the summer? I mean, because I think on the last update, I think volumes are growing 27% for a grift on 8% or 9% for trovars or something along those lines. Yeah, so what we're seeing, as I said, is correct that on the front end, we're seeing increased interest in treatment. We're seeing a lot of new patients coming in, a double digit growth in new enrollments.

Philippe Dubuc: But we did see early in the year, a little bit of a churn in the patient base and refills. And that sense corrected and has been on an upswing since Q2 and now is above where it was. So we are seeing overall growth of the total patient base above where it was last year. But it's not as much as we would expect with the increase in enrollment due to this period early in the year where we had this churn of the patient base.

Philippe Dubuc: Okay. Thanks for that, John. And yet, one more question. This is more a little bit looking into Q4 because he implied Q4 revenue. I mean, seems pretty strong sequentially in year over year. I'm assuming that is mostly volume from the interest you've seen, or do you have any price increase embedded on that one? I mean, in addition to what you've already done. Yeah, that'll mainly be volume. We don't have any price increase plan.

Philippe Dubuc: Thank you for. Yeah. And traditionally, this is the pattern that we've seen before. Q4 has always been very strong. And obviously, we're counting on this and following the issue that we had in the second quarter regarding inventory buildup. We are extremely, extremely focused on inventory at hands at the pharmacy level. So we control what's happening. And we have all of the reasons to believe that the Q4 is going to unfold the way that we've seen it in previous years.

Philippe Dubuc: And that we should actually complete 2023 within the guidance that I've just given today. So we're confident based on the way we're capturing the patients and the way that they were converted into getting scripts and getting on the medicines that we will get there. And it's going to pave the way for a good 2024 because, you know, don't forget that our performance this year has been set back significantly by the second quarter and the inventory situation that we've described. So if you take that away and we're run great now, it's significantly over $82 million.

Philippe Dubuc: That's great to hear. Thanks, Fallon.

Paul Lvesque: And one last one for me, you mentioned in the opening remarks, Paul, still continuing to look to expand the commercial portfolio. Can you talk a little bit about the quality, the type of assets that you're seeing out there, any multiples, and any color you can share on that regard? Yeah, so we've said before that it could be an HIV. We have obviously capabilities, and we're calling on roughly 2800 HIV providers in the US and they treat the bulk of the HIV patients.

Paul Lvesque: We also said that it could be an HIV adjacent type of business, so something that is not necessarily a specific HIV therapies, but a therapy that HIV patients are using. And looking at the capabilities that we've built in the field and in my management team and in training and all other aspects of our Gold Market model, we could take on small metabolic. Small metabolic is very similar to a rare disease type, and in fact the business that we have is very much like rare disease because we're calling on very few healthcare providers, but at the same time we've got products that are using niche and you're reimbursed at a high price because they provide high value.

Paul Lvesque: So this is very much like a rare disease. So they are some rare disease products that could actually very much fit our model where we could have to actually build another sales team. But providing that the product is deep prioritized by a big pharma or already on the market, it would drive already some accretive sales and bottom line. And therefore we would not hesitate for the right agent to build another field force because we do have infrastructure in sales, marketing, medical and the back office to take on bolt-on initiatives.

Paul Lvesque: And that is why we're so happy now that we were able to renegotiate some of the covenants with Parathon. We've got a clean deck moving forward and we think that we could providing that we put our hands on the right asset, accelerate our journey towards profitability by looking for bolt-on acquisition type. Have I answered your question?

Paul Lvesque: Yes, mostly just one quick follow up is that in terms of you seen any changes, let's say over the last year in terms of the multiple or IRRs or however it is that you value this bolt-on assets. Did it do one, two comments? No, and actually the products we're going after aren't really, you know, in auctions or we kind of dig through Parathon Big Pharma, their portfolio and we reach out so we're not really in competition with anyone else. Okay, understood.

Unknown Executive: Okay, thank you. Again, if you'd like to ask a question, please press star then one.

Unknown Executive: Our next question comes from Bill Mine with Canacord. Please go ahead. Hi, this is Kathleen on for Bill. Thank you for taking our question. On the oncology phase one trial with the update coming now in mid-2024, what can we expect in terms of patients members there? Another way of asking the question, do you expect the data at that point to address the toxin in the prior study? And how much is that gating partnership interest? Thank you so much.

Christian Marsolais: So, Christian, you may want to talk about the expectation on can address partnership? Yeah, absolutely. The, as Paul mentioned before, the five sites in the US are recruiting patients at the moment. There are a number of patients in screening that we're expecting to complete the first quarter of patients. What we have in the protocol. There's a court of six patients, the first dose, which is 1.75 milligram per gig every week for three weeks.

Christian Marsolais: And a week great. After those six patients will be initiated on treatment, we wait three months to look at yet for seven profile and we'll restart after that. Based on a good safety profile, six other patients at 2.5 milligram per kilogram every week. And with those 12 patients, I think that we will have a pretty good sign if there are signs of efficacy by mid next year. After the six patients at the higher dose and the AV also wanted us to include in other four patients for a total of 10 patients in this court at 2.5 milligram, then total, it will be 16 patients.

Christian Marsolais: But as we go based on the data that we have seen so far based on the disease stabilization that we have seen in a number of patients, we think that we will have clear signs of efficacy by mid next year. So from a partnership point of view, I said before and it's still true. We have many companies at the table, very interested by our TH1902, but also the platform of the technology we have.

Christian Marsolais: However, at this stage of the game, we're only months away from having additional clinical efficacy humans to report that a lot of companies will want to actually wait until they see the back to back efficacy data that we think we're going to have. Keep in mind that we've already released a lot of information at ACR, but also at ASCO that shows that we actually had clinical benefits in many patients. But now that we have a tighter protocol, we believe that in ovarian cancer, we're going to strike more often and be able to move on to the next phases of development.

Christian Marsolais: But what I can say in addition to that is that our platform is being noticed and we see a great deal of interest for partnership activities in the labs, because people actually see what our receptor does. And by congregating some technologies to our peptide, they would have access to the cancer cells in a more efficient manner, just like our TH1902 is getting into the cancer cells more effectively.

Paul Lvesque: So there's lots developing on oncology, and that's why I think that, you know, while we're focusing on turning the organization profitable and first a bit more positive, we don't want to abandon this great card that we have in oncology. We just want to stage gate defending, which is exactly what we're doing at the moment. And we believe that the next phases of development, whether at the labs or whether in the clinic, will come through partnerships. And as I said, we have many oncology companies that have seen what we have reported, and I feel very optimistic, in the future.

Unknown Executive: This concludes our question in the answer session.

Paul Lvesque: I would like to turn the conference back over to Paul Lvesque for any closing remarks. Well, there's a few questions that came in on the webcast. So most of them are related to the 1902 trial and relating to the timing. Are we seeing patients coming in soon? What's the, you know, has there been more delays than what we expected? And what's our thoughts on enrollment? Does it sound like you want to clarify?

Paul Lvesque: Yeah, this is more or less what we were expecting, but as we had announced one of the changes like some of the changes of the protocol were really the selection of patient. Then what we're doing in that city is that's for selecting patient that have less vaccine prior exposure. It will be a maximum of one failure of vaccine and a lower number of prior treatments. Therefore, the selection of patient is a bit more difficult than what we had in the past, but we do believe that this is the best way to move forward in order to show if they can see what this trial.

Paul Lvesque: Yes, and do not forget that all the patients can be recruited at the same time. You know, it's not one patient at a time. The sites are now activated. We could have patients enrolled in dose at the same time. So once the ball gets rolling, it could accelerate very nicely. Absolutely.

Unknown Executive: The last question on the the status of discussions with our auditors regarding the going concern opinion in view of the marathon changes. Well, it's a little bit early to have discussions, but obviously we had some, they are aware of the changes and it was viewed very favorably with auditors and the auditing yesterday. So we'll see come November. What's the status for people?

Paul Lvesque: And that's it for questions of all. Thank you everyone for attending the call today. As discussed, we have made great progress towards achieving all of our goals for the year. Today's Q3 results demonstrate that we have turned a corner for Q4 and beyond. And there will be no turning back with the submission of the F8 formulations for the F2D FDA, achieving adjusted a bit of profitability ahead of schedule, our significant reduction in operating expenses and the increasing confidence and trust into was my marathon.

Paul Lvesque: We are enabling long-term value creation for the investors, war with us on this road to growth and ongoing profitability. Ferrod Technologies is determined to maintain this upward trajectory. Thank you again and see you soon on the Q4 call and at the upcoming commercial medical and investor meetings. Have a great pleasure.

Operator: Thank you for attending today's presentation. You may now disconnect.