Q4 2024 Knight Therapeutics Inc Earnings Call
Our results conference call.
Before turning the call over to Samira, <unk>, President and CEO of Knight.
This news are reminded that portions of today's discussion may by their nature necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward looking statements.
Unnamed Speaker: But we expect, we don't expect that to have a, like, even at the end of the day, if we get a positive outcome, we don't really believe that we think that it'll have no impact on the market. OK, that's very helpful and very helpful.
The company considers the assumptions on which these forward looking statements are based to be reasonable at the time they were prepared.
Unnamed Speaker: I'm just going to shoehorn one more in here. Really positive news on the new MOH contract in Brazil for Amazon.
But cautions that these assumptions regarding the future events.
Unnamed Speaker: I wonder, like, is there is there opportunity to? I recognize this is the single drug that you sell into the MOH. Like, is there an opportunity to to secure further contracts with that organization? Actually, that's one of the things that I'm actually really proud of, of our Brazilian team. We are, we're not only selling Ambasone, but we have been able to introduce Crescemba because of this relationship. And over the last year, we've seen some expansion of their purchasing of Crescemba as well. Fantastic.
Many of which are beyond the control of the company and its subsidiaries may ultimately prove to be incorrect.
Company and its subsidiaries may ultimately prove to be incorrect.
The company disclaims any intentions or obligations to update or revise any forward looking statements, whether a result of new information future events, except as required by law.
We would also like to remind you that questions.
Today's call will be taken from analysts only.
Should there be any further questions. Please contact Knight's Investor Relations Department via E Mail to IR at night, TX Dot com or via phone at 5144844483, I would like to remind everyone that this call is being recorded today March 20th 2025.
Unnamed Speaker: Okay, I'll hand the call over. Thank you.
Justin Keywood: Next question will be from Justin Keywood at CFO. Please go ahead. Good morning. Thanks for taking my call. Just on the 18 products that are in the early launch phase mentioned in the outlook, how should we look at that as far as contributing to financials in 2025, 2026, and beyond? So of the 18 products that are in the pipeline, Three of them are in early launch today. So that's Minjuvi, Bijuva, and Invexi, and Minjuvi is going to be launched in Mexico in this queue. We're also adding Journey PM that launches in Canada later this year.
And now I would like to turn the meeting over to you.
Samira socket: Your host Samira socket. Please go ahead.
Speaker Change: Thank you Sylvia and good morning, everyone and welcome to Knight Therapeutics fourth quarter and year end 2024 conference call.
Speaker Change: I'm joined on today's call with a mockery, our chief business Officer, and Arvind <unk>, our Chief Financial Officer.
Speaker Change: I am proud to announce that we have delivered 11 years of consecutive record high revenues since the inception of Knight in 2024, we delivered revenues of over $365 million and adjusted EBITDA of approximately $58 million.
Speaker Change: Our growth was driven by our key promoted products, which account for 75% of our total revenues.
Justin Keywood: And we're expecting to launch Tavalisse in Mexico and Brazil next year. So, they're all stepping up, and then the rest kind of come on between, and it's in our MDNA, kind of the launch dates that we expect for the rest of them, and they all step up over time. So, the $150 million, or at least $150 million, is their peak potential. So that's combined $150 million.
Speaker Change: They're promoted portfolio grew by 16% over the period.
Speaker Change: The prior year period, and has delivered a three year CAGR of more than 30%.
Speaker Change: While delivering an excellent results, we made significant progress in expanding our pipeline with five new products, we have expanded our neurology portfolio with the licensing of <unk> from Amnio and journey P. M from Collegium for all of our territories.
Justin Keywood: I assume that's Canadian dollars. Thank you. Of the 15 to be launched, is that in the next couple of years or are some of these still very early stage assets in trials or regulatory review? They go from launching as early as 26, like I mentioned, to as late as 2030. Okay, so some real early assets within that. And just as the Paladin starts to contribute, I realize there's a number of sales reps already in Canada. How should we look at that platform in Canada? How much additional revenue could that support? Will you need to have some additional hire for some new launches or how should we be looking at that?
Speaker Change: In addition, we have strengthened our partnership with house and with the addition of honest it for certain Latam countries.
Speaker Change: With respect to our branded generic portfolio, we added two branded generic molecules in oncology and hematology for select Latam countries.
Speaker Change: To date, we have a pipeline of 18 products, including recent launches, which is expected to generate peak sales of over $150 million.
Speaker Change: In addition, we further advanced our pipeline with regulatory submissions of Calgary in Canada, and have a lease in Brazil and Argentina.
Speaker Change: These submissions, we now have four innovative products, namely Calgary heavily men, Judy and hemisphere awaiting regulatory approval in multiple territories.
Speaker Change: In addition, we have five branded generic products pending regulatory approval in multiple countries.
Speaker Change: We not only executed on regulatory submissions. We also obtained several regulatory approvals, namely mean, Judy and heavily in Mexico and journey P. M in Canada, and <unk> in both Mexico and Brazil.
Justin Keywood: So, as I said last, in our call last week, one of the things is our Canadian business today is about, the Knight Canadian business today is about 60 people, a quarter of them actually are in global function. So, it really leaves about 40. We do have a lot of open positions as we prepare for the launch of Journey PM this year, Calgary early next year, and we're going to look to optimize our structure between the two companies. And as I said, also, in last week's call, the 70 million that we're really providing for the business that is Paladin, we expect that to stay flattish over the next couple of.
Speaker Change: In addition to the regulatory process, we launched two products in Canada <unk> in vaccine. The latter competes in a growing market valued at over $110 million in 2024.
Speaker Change: Outside of Canada, we launched <unk> in Brazil.
Speaker Change: Moving to our NCI be during 2024, we purchased approximately one 6 million common shares for $9 million in the first quarter of 2025, we purchased approximately 600000 common shares for $3 $3 million.
Speaker Change: I will now turn the call over to Arvind to provide a financial update on our.
Speaker Change: The financial update.
Speaker Change: Yeah.
Justin Keywood: The product acquisition is majority non-promoted legacy asset. Okay, thank you.
Speaker Change: Thank you Samira, one speaking of our financial results I will refer to adjusted EBITDA and financial results at constant currency, which are non <unk> measures as well as I, just said EBITDA per share, which is a non air force ratio.
Justin Keywood: And then just finally, on the $130 million of financial assets, any... Are there any liquidity events in the near term to anticipate? One of the things that we have seen with the investment funds is that they are a source of cash. We only have capital calls of about $5 million left on that and we do expect them to be cash flow generating. Our loans are going to be, they're also starting to pay back as well. Nothing material though.
Speaker Change: <unk> defines adjusted EBITDA as operating income or loss, excluding amortization and impairment of non current assets depreciation the impact of accounting under hyperinflation acquisition costs and nonrecurring expenses, but to include costs related to leases.
Speaker Change: We define adjusted EBITDA per share adjusted EBITDA over the number of common shares outstanding at the end of their respective period.
Speaker Change: In addition revenues in financial results at constant currency also on a non-GAAP measure.
Speaker Change: Financial results at constant currency or obtained by translating the prior year period results average foreign exchange rates in effect during the current period, except for Argentina, where we only exclude hyperinflation.
Justin Keywood: Okay, thank you for taking my question. Thank you.
Doug Miehm: Next question will be from Doug Miehm at RBC Capital Markets. Please go ahead. A couple of questions with respect to the business over the longer term.
Speaker Change: Furthermore, my discussion on the operating results, we refer to figures that exclude hyperinflation unless otherwise indicated.
Speaker Change: For the fourth quarter of 2024, we delivered revenues of over $94 million, representing an increase of $6 million or 6% versus prior year.
Doug Miehm: When you think about the mix of Canadian versus rest of world slash South America, would you expect it to remain 20 to 25% level for Canada post the Paladin deal? Or is it just going to be based on opportunities and execution pricing of those opportunities?
Osama: In 2020 for Osama mentioned, we delivered record high revenues of over $365 million, representing an increase of $22 million or 6%.
Osama: On a constant currency basis revenues increased by approximately $29 million or 9% versus prior year driven by growth across all of our therapeutic areas.
Amal Khouri: Good morning, Douglas and Amal. It's really the latter. So our, again, our approach is, and our goal is really to grow our business across all of the countries that we that we have, whether it's acquiring products or portfolios with existing sales or growth assets. And we're going to be looking at doing that across our markets. And it's really going to be, we're going to continue to do, you know, with the same level of discipline of looking opportunity by opportunity to see what makes the most sense to grow our business across the board. Right.
Osama: In 2024 hour oncology and hematology disease portfolio delivered approximately $147 6 million.
Osama: A growth of $15 million or 12% compared to last year.
Osama: This increase was driven by the continued growth of our key promoted brands, which contributed approximately $24 million of incremental revenues, mainly coming from Lindsay, Matt I can zero trust thorough as well as the launch of <unk> in Brazil.
Osama: This growth was partially offset by a decline in our mature and branded generic products due to the lifecycle and the market entrance of new competitors.
Amal Khouri: But is there a chance that based on the opportunities in Canada, we could see something in the range of 35 to 50% over the next year or two based on potential acquisitions? Or should we not think about it that way? What I would say, Doug, we're going to be opportunistic when it comes to asset acquisitions, so whether they're in Canada or somewhere else. That being said, if I look at our portfolio in Canada with the Paladin Acquisition, with Journey PM, with CalBRE, with CREXENT launch. Canada is going to start with the powder business today, where we will be getting to kind of that 20-ish percentage.
Osama: Well as the impact of Latam currencies depreciation.
Osama: Our infectious diseases portfolio delivered approximately $149 million, an increase of $8 5 million.
Osama: Or 6% compared to the same period last year.
Osama: The increase was driven by the growth of our key promoted products, including MB. So my question, Bob partly offset by a decrease in U S demand for <unk>.
Osama: As a reminder, under our sales contract with diminish of health in Brazil Moh in 2024, we delivered $24 $8 million of ambitious AUM compared to $25 2 million in 2023.
Amal Khouri: But as these products grow, it will rise as a percentage without us doing any more transactions. Okay, perfect.
Osama: In January 2025, we have sign in your contract for MB Sone with the Moh and who we expect to deliver approximately $22 $4 million in 2025.
Amal Khouri: And then just to wrap up, when you think about all these launches over the next, let's just say two years, when you think about the expense that is typically required to launch products, Number one, these are likely going to be profitable until the third year is my guess, but maybe second year. You can correct me there. But can you sort of frame how large those investments are that you're spending on all these drugs over the next while? So, you're right, you don't really hit profitability until the third year, where you're closer to break even than really profitability.
Osama: Turning to our other specialty therapeutic area.
Osama: The portfolio generated $79 million in revenues remaining relatively unchanged compared to last year.
Osama: Now moving onto gross margin.
Osama: We reported $44 3 million or a gross margin of 47% of revenues in the fourth quarter of 2024 compared to $42 4 million or 48% of revenues in the same period last year.
Osama: For the year ended December 31, 2024, we reported $174 million or a gross margin of 47% of revenues compared to $166 million or 48% of revenues last year.
Amal Khouri: You're seeing that in our guide, as to the level of spend, you're really seeing that in our guidance, right? Where you see, even with the pallet and acquisition, our EBITDA is declining, and it's declining in the range of about Eight to ten million dollars because of that investment that we're making and we expect that over the next couple of years, this year, next year, then these brands start to feed into that top line and profitability as we launch more. Perfect. Okay. So the next several years should have some good growth and then accelerating profitability as well.
Osama: The decrease in gross margin as a percentage of revenues was due to product mix.
Osama: I will now turn to our operating expenses.
Osama: Our operating expenses, excluding amortization and impairment of non current assets for the fourth quarter was $31 $2 million.
Osama: Remaining relatively unchanged compared to the same period last year.
Osama: For 2024 hour operating expenses, excluding amortization and impairment of non current assets were $119 3 million, an increase of $10 8 million or 10% compared to last year.
Osama: The increase in operating expenses was driven by an increase in marketing and medical initiatives behind the launches of <unk> and vaccine be Hoover and prelaunch activities for join APM in Canada.
Amal Khouri: Okay. Thank you. Absolutely. Thank you.
David Martin: Next question will be from David Martin at Bloomburton. Please go ahead. Good morning, this is a follow up to Doug's question. So the SG&A, the sales and marketing expenses is going to increase in 2025 based on the guidance you've given for revenues and EBITDA margin.
Osama: In addition, our R&D cost increase driven by product development activities in connection with our pipeline.
Osama: As well as the regulatory submission fees.
Osama: Lastly, our G&A costs increased due to our structure and higher compensation expenses.
Osama: As a reminder, all costs related to development activities have been expense, which typically include regulatory submission analytical method transfers stability studies and bioequivalence studies.
Amal Khouri: Beyond 2025, will you see stabilization of operating expenses or will they continue to grow? You know, once you've built out your infrastructure, will it need to grow in line with the revenue growth as the new products launch or will you reach a point of stability by the end of 2025? The infrastructure is probably going to be right-sized. There still will be more A&P that will be brand-specific given the launches that are there, but that's not going to be a significant increase. And as you roll from one launch product to the next launch product, you'll be able to redeploy the investment to the new products and ease off on the ones that were previously launched?
Osama: Moving on to adjusted EBITDA.
The fourth quarter of 2024, we reported $15 million, an increase of $2 9 million or 24% compared to the same period last year.
Osama: For 2024 reported $57 $8 million, a decrease of $2 million or 4% compared to last year.
Osama: Our adjusted EBITDA per share was <unk> 58 fence remaining related to the unchanged compared to 2020 free.
Osama: I will now cover our financial assets, which are valued at $134 million at the end of 2024.
Osama: During the year, we recorded a total net loss of $2 $8 million on our financial assets driven by the revaluation of our strategic fund investment offset by the change in the value of our shares.
Amal Khouri: So, what I would say, like, I'll give you an example in the case of. Journey PM, we're launching that this year. We're going to have a lot of investment behind it this year, we're going to have a lot of investment behind it next year, and we're going to expand that same team as we add CalPERS. Going into 26. There's not going to be that much more incremental, but there will be continued investment. But we're going to be launching IPX at the same time. That's going to require more money. But hopefully by the time I'm getting into 27.
Osama: In 2024 hour see noticed shares were revalued at $8 $3 million compared to nil in the prior year.
Osama: With respect to our strategic fund investments, we have recorded a net loss of $11 $4 million driven by mark to market adjustments.
Osama: As a reminder, our funds continue to be a source of cash in 2024, we collected $14 7 million, including $5 8 million.
Osama: Or certain contingent milestones, which were not previously recorded on the balance sheet.
Osama: Moving on to our cash flows.
Osama: In 2024 night generated cash inflows from operations of $36 million, including a networking capital increase of $20 million.
Amal Khouri: The investments behind Invexi and Bejuva will start to come off as we are investing in IPX. And that because by that time, Invexie and Bijuva have been promoted for three plus years. And that's how we're really cycling.
Osama: The investment in net working capital was driven by an increase in our accounts receivable due to both higher revenues and timing of collection as well as investments in our inventory due to timing of purchases and new product launches.
Amal Khouri: You do need investment and promotion. significant investment and promotion for the first three years, and then you can start pulling back.
Speaker Change: I will now turn the call over to them all to provide more details on our business development activities.
Speaker Change: Thank you Amit and good morning, everyone.
Amal Khouri: And what about in Latin America? I know you're building out of Mexico, but is there buildout in other countries in anticipation of launches or are you right size there? Majority of our territories are right sized when it comes to hematology and oncology. They're right sized on neurology, but more on the Alzheimer's and the, so the Alzheimer's team can support CREXONs.
Speaker Change: In the last 15 months.
Speaker Change: Our portfolio by adding five new products in.
Speaker Change: In January 24, we in licensed <unk> for Canada, and Latin America <unk> is a novel oral formulation of <unk> without that extended release capsules designed for the treatment of Parkinson's disease.
Speaker Change: Knight expects to submit cross sold in Canada uncertain Latam countries in 2025.
Amal Khouri: As we look to invest in ADHD, we may have some expansion of our team. Okay, great. Thank you.
Speaker Change: According to <unk>, yes, the carpet duopoly with open market is valued at $50 million in Canada and $120 million in Brazil, the controlled release segment.
Unnamed Speaker: That's it. Thank you.
Speaker Change: At around $15 million in each of Canada and Brazil.
Operator: Once again, ladies and gentlemen, if you have any questions, please press star followed by one.
Speaker Change: In May 2024, we announced an exclusive supply and distribution agreement for journey PM for Canada, and Latin America journey PM is an innovative extended release formulation of muscle candidates, a highly differentiated treatment option for ADHD.
Tania Armstrong: Next, we will hear from Tania Armstrong at Kennecore Genuity. Please go ahead. Good morning. Just a couple questions for me.
Unnamed Speaker: So, congrats on refining that Brazil MOH contract and just wondering if you can speak to the quarterly impact of that $22.4 million in revenue should be expected all to come early in the year, back half of the year. Hi, Tania. I think we're going to start with, from what I have from the Brazilian team, we're going to start In this queue, I'm not really sure if it's actually even already shipped or not. We're a couple weeks left in the queue and probably be done by Q3, but it's really unpredictable with the MOH.
Speaker Change: In November 2024 journey PM was approved by Health, Canada and is expected to be launched in the second half of 2025.
Speaker Change: According to <unk>, the Canadian ADHD market totaled approximately $1, two 5 billion of which the methylphenidate segments represents $500 million.
Speaker Change: And has been growing at over 14% CAGR over the last four years.
Speaker Change: In addition during 2024, we in licensed two branded generic molecules in oncology and hematology for certain territories in Latam.
Speaker Change: Furthermore, in the first quarter of 2025.
Now. The addition of <unk> from Houston for Mexico, Brazil, and certain other Latam countries.
Unnamed Speaker: And then just definitely for me with Jornet PM launching this year, could you give us an idea of peak sales expected for that drug? Sure. So, we haven't really guided on the product itself. What, as Amal said in her comments, the methylphenidate market is over half a billion dollars and growing at a rate of 14% CAGR. The one thing that I would give you as an example is FoQuest, which was the last launch in this category, prior to getting public reimbursement, had sales of $30 million. The one thing I would note there, we don't expect to get to that number, because FoQuest was for people over six years.
Speaker Change: Honestly it is used for the prevention of chemotherapy induced nausea, and vomiting, and prevention of post operative nausea, and vomiting, only seed is sold in Canada, <unk>, which was part of our original agreement with Hudson.
Speaker Change: Finally in addition to expanding our pipeline as announced last week, we entered into an agreement with endo to acquire all of the assets as Taliban.
Speaker Change: In 2024 and generated revenues of $70 million, excluding products that they had to stop commercializing or are in the process of discontinuing.
Speaker Change: The Paladin portfolio, mainly consists of mature primarily owned assets as well as promote a licensed product.
As a reminder, the purchase price for this transaction is $100 million.
Speaker Change: Plus an additional $20 million of inventory all payable in cash at closing.
Unnamed Speaker: JOURN-APM is indicated for children, so six to twelve, but what you need to know and what we have from the U.S. market is 85% of the JOURN-APM sales are pediatrics.
Speaker Change: In addition to the upfront and inventory and nice to meet the future contingent payments of up to $15 million upon achievement of certain sales milestones.
Speaker Change: These recent deals illustrates our focused approach to building on the strong platform and capabilities that we have specifically in oncology and neurology as well as our strategy to build a balanced portfolio that includes innovative growing from what it product mature cash flow generating products as well as branded generics.
Unnamed Speaker: And maybe on the $150 million in potential peak sales that you outlined in the MD&B Could you give us a sense of how much of that is attributable to products that are in early launch phase or expected to launch in the near term? So, I guess Minju, Viva, InfectC, JournA, PM, and Satellite. I would say more than half is coming from the near-term launches.
Speaker Change: I will now turn the call back to sit here.
Omar: Thank you Omar.
Speaker Change: Now onto our financial outlook for fiscal 2025, I would like to remind everyone that this guidance includes the assumption that we will close the paladin transaction in the middle of 2025 and also assumes that there is no material adjustment due to hyperinflation accounting in Argentina.
Unnamed Speaker: Okay, that's all from me. Thank you.
Andre Uddin: Next question will be from Andre Uddin at Research Capital. Please go ahead. Please go ahead, Andre.
Speaker Change: In addition, our guidance is based on a small on a number of assumptions, which are described in our press release.
Andre Uddin: I realize I usually don't discuss gross material. Can you hear me? Yes. Hi Andre. Hi, good morning everyone. I just realized you usually don't discuss.
Speaker Change: Should any of these assumptions differ the financial outlook and actual results may vary materially.
Speaker Change: We expect to generate revenues between $390 million, just $405 million and.
Speaker Change: <unk> EBITDA of approximately 13% of revenues.
Speaker Change: The decrease in our adjusted EBITDA as a percent of revenues compared to 2024 is driven by investments behind new product launches such as churn ATM in Canada, and <unk> in Mexico, as well as advancing our pipeline of 18 products through development submission and prelaunch across our territories.
Unnamed Speaker: Thank you all for joining us today. Can you hear me now? Yes. I realize you usually don't discuss gross margins, but if you look at your 18 pipeline products... So basically you have $150 million of peak sales in your pipeline product. We expect that to move the needle. And we don't, we don't really guide to gross margins, but we don't really expect. the margins really to change, they will change over, they may grow over time, but not that significantly.
Speaker Change: Our team has been extremely successful in it.
Speaker Change: Executing our Pan American ex U S strategy and has built a profitable business with a unique platform and a strong foundation from where to continue growing over the long term.
Speaker Change: Looking ahead, we are very excited that we can deliver to our stakeholders with the launches of mean, Julian Mexico, Jr, and APM in Canada and additional pipeline products.
Speaker Change: In addition, we expect to close the polygon transaction in the middle of the year. This synergistic transaction adds critical mass and significantly increases the size of our Canadian business and as a portfolio of stable cash flow generating products that will help fund our growth in Canada and Latin America.
Speaker Change: We remain well positioned to continue to execute on our mission to acquire in license develop and commercialize pharmaceutical products in Latin America and Canada.
Unnamed Speaker: Thank you.
Samira Sakhia: And at this time, we have no other questions registered, so I would like to turn the conference back over to Samira Sakhia. Please go ahead. Thank you, Sylvie.
Speaker Change: This concludes our remarks I would like to turn the open up the call for questions silly.
Speaker Change: Thank you.
Samira Sakhia: Thank you for joining Knight's Q4 and URN 2024 call. Once again, thank you for your confidence in the Knight team and for joining our call. Have a great morning. Thank you.
Speaker Change: Before we begin May I. Please remind you questions during today's call will be taken from analysts only.
Speaker Change: Should there be any further questions. Please contact Knight's Investor Relations Department via E Mail to IR at <unk> Dot com or via phone at 514484448. Thank you and if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Operator: Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines.
Speaker Change: If you're using a speakerphone you will need to lift the handset first before pressing entities and if you would like to withdraw from the question queue. Please press star followed by two.
Speaker Change: Please go ahead and Crestar one now if you have any questions.
Speaker Change: First we will hear from Michael Freedman at Raymond James. Please go ahead.
Michael Freedman: Hey, good morning, Samira mall, Arvind congratulations on finishing another strong year.
Michael Freedman: I know we had a call on this last week, but I'll start with.
Speaker Change: Question on <unk>.
Speaker Change: Im wondering how the how your acquisition of power and might adjust your business development approach in Canada and.
Speaker Change: And also how do you feel about the balance sheet pro forma this transaction. Thanks.
Speaker Change: Good morning, Nicole.
Speaker Change: I'll start with your first question.
Speaker Change: There is it does it the acquisition doesn't really change our business development approach, it's actually very much in line with our business development approach, which as a reminder of the year is really three pronged right. We look to acquire products with existing sales that will bring in profitability to help fund.
Speaker Change: The second growth vertical which is in licensing innovative products and then bringing on Brian generic. So this acquisition really is very much in line with the bulk of the portfolio as products with existing sales existing profitability and that will help fund.
Speaker Change: <unk> the launches and future growth that we have.
Speaker Change: Across all of our countries. The portfolio also has a couple of growth assets. So it really hits.
Speaker Change: It's well within.
Speaker Change: Our business development approach and we will continue going forward was the same.
Speaker Change: If you look back at the deals that we have done in the last few years. The majority of the deals are licensing deals so really bringing in our growth assets. In these products don't really these types of deals I should say.
Speaker Change: Don't really require the types of upfront purchase prices that go with it.
With this type of acquisition.
Speaker Change: And I think as we said I said on the call last week.
Speaker Change: In terms of capacity again, we have we have that we have a very strong business that with this deal is even stronger in terms of.
Speaker Change: Profitability.
Speaker Change: Cash flow generation, and we still have a lot of capacity on the debt side, if we need it to add anything.
Speaker Change: Behind the current business, but also if we if we were to do another acquisition that would require additional funding that acquisition would be coming with EBITDA and profitability. So.
Speaker Change: We're not concerned about.
Speaker Change: Capacity to do more and more deals so no change.
Speaker Change: Thanks, very much Omar.
Speaker Change: I'll ask a question just asking for an update on the situation with Colombia and Latam.
Speaker Change: The generic competitor launched.
Speaker Change: Wondering if you could describe the legacy impact youre seeing on sales.
Speaker Change: Youre seeing that generic received in the market, but the effect is on pricing and any any legal action that you and your partners might be taking.
Speaker Change: Hi.
Speaker Change: Let me be generic losing to reduce kind of in the second half of last year.
Speaker Change: We have we know that it's on the market some of our I would say.
Speaker Change: Had a small amount of sales that were in the public market, we are seeing that as a slowdown in Brazil, but.
Speaker Change: But generally the product continues to sell well and.
Speaker Change: The legal pursuit will continue but we expect we don't expect that to have.
Speaker Change: Even at the end of the day, if we get a positive outcome. We don't really believe that we think that.
Speaker Change: It will have no impact on the market.
Speaker Change: Okay. That's very helpful. Very helpful. Im just going to shoehorn, one more in here I'm really positive news on the new <unk> contract in Brazil for Amazon.
Speaker Change: Wondering like is there is there opportunity to.
Speaker Change: Hey, guys. This is the single drug that you sell into the Moh.
Speaker Change: Is there an opportunity to.
Speaker Change: To secure further contracts with that organization.
Speaker Change: Actually that's one of the things that I'm actually really proud of.
Speaker Change: Our Brazilian team, we are we're not only selling ambisone, but we have been able to introduce Chris samba because of this relationship.
Speaker Change: And over the last year, we've seen some expansion of their purchasing of Chris Samba as well.
Okay, I'll hand, the call over thank you.
Speaker Change: Thank you <unk>.
Justin keywords: Question will be from Justin keywords at Stifel. Please go ahead.
Justin keywords: Good morning, Thanks for taking my call.
Justin: Just on the <unk> products that are in the early launch phase.
<unk>.
Justin: In the outlook, how should we look at that as far as contributing to financials in 2025 2026 and beyond.
Justin: So the Aussie 18 products that are in the pipeline.
Justin: Three of them are in early launched today, So thats mean Judy.
Justin: And in vaccines and then Julie is going to be launched in Mexico. In this Q. We're also adding journey PM that launches in Canada later this year.
Justin: And we're expecting to launch <unk> in Mexico, and Brazil next year, so, they're all stepping up and.
Justin: And then the rest kind of come on between and it's in our MD&A kind of the launch dates that we expect for the rest of them and they all step up over time, so the $150 million or at least $150 million is their peak potential.
Justin: So that's combined $150 million I assume thats Canadian dollars.
Justin: And.
Justin: Thank you.
Justin: <unk>.
Justin: 15 to be launched is that in the next couple of years or some of these still very early.
Justin: Page assets in trials or a regulatory review.
Justin: The go from launching as early as 26 like I mentioned to as late as 2030.
Justin: Okay. So some real early assets within that.
Justin: And just.
Justin: As the palette and starts to contribute I realize there is.
Justin: A number of them.
Justin: Our sales reps already in Canada, how should we look at that.
Justin: I guess.
Justin: Platform in Canada like how much additional revenue could that could that support will you need to have some additional higher for some new launches or how should we be looking at that.
Justin: So as I said last in our call last week one of the things is.
Justin: Our Canadian business today is about the ninth Canadian business today is about 60 people a quarter of them actually are in global function. So it really leaves about 45, we do have a a lot of open positions as we prepare for the launch of journey APM.
Justin: This year Calgary early next year, and we're going to look to optimize our structure between the two companies and as I said also in last week's call. The 70 million that we're really providing for the business that is pallet and we expect that to stay flattish over the next couple of years.
Justin: The peloton acquisition is majority non promoted legacy assets.
Justin: Okay. Thank you and then just finally on the $130 million of financial assets.
Justin: Amy.
Speaker Change: Are there any liquidity events in the near term to anticipate.
Speaker Change: They're one of the things that we have seen with the investment funds is that they are a source of cash.
We only have capital calls of about $5 million left on that and we.
Speaker Change: We do expect them to be cash flow generating our loans are going to be they are also starting to pay back as well nothing nothing material, though.
Speaker Change: Okay. Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: Next question will be from Doug me him at RBC capital markets. Please go ahead.
Speaker Change: Hi, good morning Samira.
Speaker Change: Ah Ah moment.
Speaker Change: Couple.
Speaker Change: Questions with respect to.
Speaker Change: The business over the longer term when you think about the mix of Canadian versus rest of World Slash South America.
Speaker Change: Would you expect it to remain 20% to 25% level for Canada post the <unk> deal or is it just going to be based on the opportunities and execution pricing of those opportunities.
David: Good morning, David.
Speaker Change: It's really the latter.
Speaker Change: So our again our approach is and our goal is really to grow our business across.
Speaker Change: All of the countries that we that we have whether it's acquiring products or portfolios with existing sales or gross assets and we're going to be looking at doing that across our markets and it's really going to be we're going to continue to do the same level of discipline of looking opportunity by opportunity.
Speaker Change: To see what makes the most sense due to grow our business across the board.
Speaker Change: Right.
Speaker Change: Is there a chance that based on the opportunities in Canada, we could see something in the range of 35, just 50% over the next year or two based on potential acquisitions or should we not think about it that way.
Speaker Change: What I would say, Doug we're going to be opportunistic when it comes to asset acquisitions, so whether they're in Canada or somewhere else.
Speaker Change: That being said if I look at our portfolio in Canada with the Paladin acquisition with journey PM with Calgary with <unk> launching Canada is going to start.
Speaker Change: With the partner business today, where we will be getting to kind of that twentyish percentage, but as these products grow it will rise as a percentage without us doing any more transactions in Canada.
Speaker Change: Okay, perfect and then just to wrap up.
Speaker Change: Think about all of these launches over the next.
Speaker Change: Just two years.
Speaker Change: And you think about the expense.
Speaker Change: Typically required to launch products.
Speaker Change: Number one these are likely going to be profitable until the third year is my guess, but maybe second year.
Speaker Change: You can correct me there.
Speaker Change: Can you sort of frame how large those investments are that you're spending on all of these drugs over the next while.
Speaker Change: So youre right you don't really hit profitability until the third year.
Speaker Change: Where youre closer to breakeven than really profitability.
Speaker Change: Youre seeing that in our guide and as to the level of spend you are really seeing that in our guidance right.
Speaker Change: You see even with the polygon acquisition or our EBITDA is declining and it's declining in the range of about.
Speaker Change: $8 million to $10 million because of that investment that we're making and.
Speaker Change: And we expect that over the next couple of years this year and next year.
Speaker Change: Then these brands start to feed into that top line and profitability as we launch more.
Speaker Change: Perfect. Okay. So next several years should have some good growth and then accelerate celebrating profitability as well okay. Thank you absolutely.
Speaker Change: Thank you next question will be from David Martin at Bloom Burton. Please go ahead.
Speaker Change: Good morning. This is a follow up to Doug's question.
Speaker Change: So the SG&A the sales and marketing expenses is going to increase in 2005 based on the guidance you've given for revenues and EBITDA margin.
Speaker Change: Beyond 25 will you see stabilization of operating expenses or will they continue to grow.
Speaker Change: Once you built out your infrastructure will it need to grow in line with the revenue growth as the new products launch or will you reach a point of stability by the end of 'twenty five.
Speaker Change: The infrastructure is probably going to be right sized there still will be more A&P that will be brand specific given the launches that are there, but that's not going to be a significant increase.
Speaker Change: And as you roll from one launch product to the next launch product.
Be able to redeploy the.
Speaker Change: The investment to the new products and ease off on the ones that were previously launched.
Speaker Change: So what I would say.
Speaker Change: Give you an example in the case of.
Speaker Change: Of.
Speaker Change: John APM, we're launching that this year.
Speaker Change: We're going to have a lot of investment behind it. This year, we're going to have a lot of investment behind it next year and we're going to expand that same team as we add calibrating.
Speaker Change: Boeing into 26, there's not going to be that much more incremental but there will be continued investments.
Speaker Change: So we're going to be launching IPX at the same time, that's going to require more money.
Speaker Change: But hopefully by the time I'm getting into 'twenty seven.
Speaker Change: The investments behind <unk> and <unk>, we will start to come off as we are investing an IPX.
Speaker Change: Because by that time in vaccine <unk> are have been promoted for three plus years.
Speaker Change: And that's how we're really cycling.
Speaker Change: You do need investment and promotion.
Speaker Change: Significant investment in promotion for this first three years and then you can start pulling back.
Speaker Change: And what about in Latin America, I know Youre building out of Mexico, but is there a build out in other countries in anticipation of launches are you right sized there.
Speaker Change: Majority of our territories are right size when it comes to hematology and oncology, they're right sized on neurology, but more on the Alzheimer's and the <unk>.
Speaker Change: The Alzheimers team can support correct songs as we look to invest in ADHD. We may have some expansion of our teams.
Speaker Change: Okay, great. Thank you that's it.
Speaker Change: Thank you.
Speaker Change: Once again, ladies and gentlemen, if you have any questions. Please press star followed by one.
Speaker Change: Next we will hear from Tanya Armstrong of Canaccord Genuity. Please go ahead.
Tanya Armstrong: Good morning, just a couple of questions for me so congrats on refining that Brazil Moh contract I'm just wondering if you can speak to the.
Tanya Armstrong: Quarterly impact at that $22 4 million in revenue should we expect it all to come early in the year back half of the year.
Hi, Toni I think we're going to start with from what I have from the Brazilian team, we're going to start.
Speaker Change: In this Q I am not really sure if its actually even already shipped are not who are a couple of weeks left in the queue.
Speaker Change: And probably be done by Q3.
Speaker Change: But its really unpredictable with the moh.
Speaker Change: Okay.
Speaker Change: Sir.
Speaker Change: And then just secondly for me with the journey of PM launching this year could you give us an idea of peak sales expected for that drug.
Speaker Change: Sure. So we haven't really guided on the product itself what.
Speaker Change: Im all set in our call in her comments the methylphenidate market is over half a billion dollars and growing at a rate of 14% CAGR.
Speaker Change: One thing that I would.
Speaker Change: Give you as an example is stroke class, which was the last launch in this category prior to getting public reimbursement.
Sales of $30 million.
Speaker Change: The the one thing I would note there we don't expect to get to that number because so quest was for.
Speaker Change: People over six years journey PM is indicated for children six to 12.
Speaker Change: But what you need to know and what we have from the U S market is 85% of the journey APM sales are pediatric.
Speaker Change: Okay.
Speaker Change: Right.
Speaker Change: And maybe on the $150 million in potential peak sales that you outlined in the MD&A could you give us a sense of how.
Speaker Change: How much of that is attributable to products that are in the early launch phase are expected to launch in the near term so I guess I'm in jewelry.
Sharon: Sharon Atms I believe.
Sharon: I would say more than half is coming from the near term launches.
Sharon: Okay.
Speaker Change: Okay. That's all for me Thank you Paul.
Speaker Change: Thank you next question will be from Andre at resource capital. Please go ahead.
Speaker Change: Okay.
Speaker Change: Please go ahead Andre everyone.
Speaker Change: I, usually don't discuss gross.
Speaker Change: Sure.
Speaker Change: Can you hear me.
Speaker Change: Yes Hello.
Speaker Change: Hello.
Speaker Change: Hi, Andre.
Speaker Change: Hi, Good morning, everyone I, just realized usually don't discuss gross.
Speaker Change: Okay.
Speaker Change: So you don't heading into gross margins, but if we look at.
Speaker Change: <unk> pipeline products.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Can you hear me now.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: You can't really go ahead to discuss gross margins, but if you look at your <unk> pipeline products.
Speaker Change: So basically you have a $150 million of peak sales and your pipeline products do you expect that to move the needle on your gross margins.
Speaker Change: Any color there would be appreciated.
Speaker Change: We don't we don't really guide to gross margins, but we don't really expect.
Speaker Change: The the margins really to change the will changeover they may grow over time, but not that significantly.
Speaker Change: Okay.
Speaker Change: That's appreciate it thanks, that's all for me.
Speaker Change: Thank you and at this time, we have no other questions registered so I would like to turn the conference back over to Samira <unk>. Please go ahead.
Speaker Change: Thank you salvi. Thank you for joining nights Q4 and year end 2024 call. Once again. Thank you for your confidence in the 19 and for joining our call have a great morning.
Speaker Change: Thank you ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we ask that you. Please disconnect your lines.