Q4 2025 BioSyent Inc Earnings Call
Speaker #1: Name is René Gorum. And I'm the president and CEO of the company. Today you'll hear that we closed out a very solid year in 2025.
Speaker #1: And today's presentation will touch on our recent oral science acquisition, but the results that I'll be reviewing with you are for the period ended December 31, 2025, which is before our March acquisition date, of oral science.
Speaker #1: I will be discussing oral science, but for more detail on the transaction, I encourage you to also look at our February 9 deal announcement press release, and our March 2 deal closing press release.
Speaker #1: And our MDNA and financial statements for the period that I'm reporting on for you today. I want to draw your attention to our forward-looking disclaimer; no doubt I will be making some forward-looking statements in today's presentation.
Speaker #1: Since I presented to you last, there have been some changes in our brand slide. So you see now we've added a number of the brands that are promoted and distributed by oral science and added those to our specialty pharmaceutical brands as well.
Speaker #1: So back to a bioscient inc. ending December 31 presentation. This is X. Any business results from oral science. So you see for the quarter, our revenue reached just under 9.7 million, up 10% from the year ago.
Speaker #1: That's Canadian Pharma International Pharma and our legacy business. Our EBITDA for the period was just over 2.5 million. That's up 13% to the year ago.
Speaker #1: And our net income after tax was just under $2 million. A lift of 23% versus the year ago. And you see that both our EBITDA and our net margins stayed strong for the quarter.
Speaker #1: On a full-year basis, our revenue exceeded $43 million. And that was up 23% to the year ago. Once again, Canadian Pharma International Pharma and legacy combined.
Speaker #1: Our EBITDA was just over 12.1 million. An increase of 30% to the year ago. And our net income after tax was just over $9 million, up 24% to the year ago.
Speaker #1: Once again, EBITDA and net income margin staying strong for the year. On a business unit, or brand basis, you see here the Canadian Pharmaceutical business was up 3% in Q4, up 13% for the full year.
Speaker #1: There are some puts and takes in the mix here. The things that the notable ones that I'd like to point out for you in the Canadian Pharmaceutical business: Acoma GSIC, we have now exited the Acoma GSIC business.
Speaker #1: We have long communicated that to shareholders and investors. And the last month that we recorded any sales was January. So we're out of that business.
Speaker #1: And I'll be speaking about that again and you'll also notice that the Gelclair notably read on this slide that we have paused promotion of Gelclair at the moment, pending the outcomes of a four clinical trials that we have underway.
Speaker #1: And we'll have more to report when we have those results. Overall, our international pharma business had a solid quarter and a very strong year at over 300% growth.
Speaker #1: Keep in mind that includes 2.4 million of new sales and so a new additional sales from the Tabelia International business, which we acquired in September of 2024.
Speaker #1: Our legacy business also had a strong year, both on a quarter basis and on a full-year basis. And you see how that summed up to total company revenue of $43% growing $43 million, I should say, for a full year growing 23% to the year ago.
Speaker #1: So then how did that translate to earnings? You see here that we earned $78 cents for the full year. That was $17 cents in the quarter.
Speaker #1: Q4 of 2025 represented our 62nd consecutive profitable quarter. We came profitable in mid-year of 2010. And since then, we have been consistently profitable in the business.
Speaker #1: You see the $78 compares quite favorably over Historica, the historic quarter the year ago, 62, and even back to 54 cents two years ago.
Speaker #1: So I'd like to touch on a couple of highlights. For the year, we made the Tabelia acquisition. And towards the end of '24, we started shipping in the first quarter of '25.
Speaker #1: And we've subsequently shipped into '26. That now will feature likely as a quarterly revenue business. So take some of the lumpiness out of our international business.
Speaker #1: We paid a 5-cent quarterly dividend for a total of 20 cents paid last year in dividends. That was an 11% increase versus 2024. In April of '25, Faramax was named the number one oral iron supplement amongst doctors and pharmacists in Canada.
Speaker #1: That was the 10th consecutive year. And I would say stay tuned. We expect to get more information on how the survey went recently. And we expect that information to come I believe it's in April.
Speaker #1: For the year, we repurchased 19 and a half thousand shares. So repurchased and canceled under our NCIB. For those of you that follow us fairly closely, you'll have a good idea of why we paused our NCIB as we're working on the oral science transaction and we had a solid expectation that we would be deploying capital into that transaction.
Speaker #1: And we just wanted to keep some powder dry for that eventuality. Turning now to '26 highlights. Clearly, the most notable is our acquisition of oral science.
Speaker #1: We announced that in early February. And closed the transaction on the 1st of March. And announced it on March 2nd. And you'll then be seeing results of our business going forward, including this quarter that we're in, results of which will be announcing in May.
Speaker #1: We'll include one month of the oral science business. On March 13th, we paid a quarterly dividend. That dividend was an increase of 10% versus the prior year quarterly dividends.
Speaker #1: So we're now at 5 and a half cents a share. So on a full-year basis, one can look forward to a 22 cents a share.
Speaker #1: Paid in dividends this year. Given the fact that there's an armed conflict in the Middle East, I think it's appropriate to talk about geopolitics, trade, and economy.
Speaker #1: So we're tracking the situation with the war in the Middle East for both for direct and indirect impacts on our business. And certainly at this point in time, we don't expect any positive impacts.
Speaker #1: We're assessing downsides at this point in time. I would say that there's nothing specific to report. We do business with Faramax in the Middle East.
Speaker #1: We have several customers there. And we have made shipments already this year to the market. We have further orders that are in production. We have prepayments against those orders.
Speaker #1: And we have every intention that the goods will be flowing. However, we've also got to be mindful of the situation. And we're monitoring closely.
Speaker #1: I'd say at a kind of a higher level, the percentage of our business that is now flowing through Faramax into the Middle East is quite a bit lower than it was four or five years ago.
Speaker #1: And that's just because overall the business has grown. So the impact materiality of this situation on our business, I think, is quite manageable. With respect to trade and tariffs, there's nothing new to report.
Speaker #1: I have spoken about this in the past. We do not ship into the United States with the pharmaceutical business. We do not ship into the United States on the oral health business.
Speaker #1: And so the fact that there are tariffs on certain products and certain product categories being applied by the United States has not affected our business.
Speaker #1: So nothing's changed there. I know that the free trade agreement that we have is going to be reviewed. It's in the queue to be reviewed this year.
Speaker #1: Subject to confirmation of whether that occurs or not. I think a fairly dynamic situation as well. So far, the Canadian economy has been resilient.
Speaker #1: Unemployment is up slightly. 6.7% most recently reported versus 6.6% in the year ago period. Though wages are up 3.9%. So the Canadian consumer/Canadian patient seems to be hanging in there.
Speaker #1: That is something we keep our eye on. Of course, we have several cash pay products. And they're premium products, both in the pharmaceutical and in the oral health business.
Speaker #1: So they're essentially with premium value-added products. And we rely on the purchase decisions and the consumer and the patient to value those products for solving or addressing a need.
Speaker #1: And to pay that premium. So at this point in time, we've seen no impact on demand. For the Canadian business and the Canadian consumer.
Speaker #1: Let's move on now to some comments about our oral science acquisition. So oral science is a privately owned Canadian distributor owner and distributor of specialized healthcare products for dental hygiene and oral health.
Speaker #1: The share purchase agreement closed on March 1st. We acquired 100% of the issued oral science shares from shareholders and founders of Oral Science. The purchase price of 25 and a half million included 6.3 million in working capital and let me be clear about included.
Speaker #1: In other words, when we took possession of the company, it had 6.3 million dollars of working capital in it or that was the expectation.
Speaker #1: And in fact, there was 2 million dollars of excess working capital in the business as they had a strong January and February and so our cash inventory and receivables are greater than negotiated by 2 million dollars.
Speaker #1: So there is an earn-out, a performance earn-out that is conditioned on EBITDA performance and will be concluded at the end of 2026. And we do have royalties on the future sales of one product in the portfolio.
Speaker #1: So the purchase price implies a 6.2 times EBITDA. And if you recall a different number in previous communication, that is because, of course, oral science has closed off their year.
Speaker #1: And they had some growth in EBITDA in the fourth quarter. So on a trailing 12-month basis, we essentially implies a purchase price of 6.2 times of EBITDA.
Speaker #1: Part of the purchase price was in shares of Biosyent. So the shareholders and founders, key management of Oral Science, are now shareholders of Biosyent.
Speaker #1: To the tune of about 2% of our Biosyent issued shares outstanding. And Oral Science Inc. is now a wholly owned subsidiary of Biosyent. We'll continue to operate Oral Science as a standalone oral health business unit of Biosyent.
Speaker #1: And the operations core operations will continue in Brasard, Quebec, which is in suburban Montreal. So a little bit about the Oral Science business. This is a growing revenue stage oral health company.
Speaker #1: They've got a track record of developing and in-licensing and distributing both while in-licensed and owned products. The company was founded in 2003. About a third of the sales of Oral Science last year were from proprietary products owned brands and about two-thirds from in-licensed.
Speaker #1: And that splits roughly half and half between sales to dental clinics across Canada and sales to consumers either through the pharmacy channel or direct to consumer direct to patient through various online platforms directly from Oral Science.
Speaker #1: The business model itself, quite similar to Bioscience, where we own some of our brands and the intellectual property and trademarks. We have contract manufacturing.
Speaker #1: Very similar to Oral Science. So the model is similar. This adds a new therapeutic area for us. In 2025, Oral Science had just under 31 million dollars in revenue.
Speaker #1: This is using ASPE accounting. So this will be one change when we start reporting consolidated results there are some modifications to how financials are reported for private companies versus IFRS for Bioscient.
Speaker #1: And for that same period of time, EBITDA was 4.1 million dollars. The company itself had a strong growth track record. Showing around a 15% compound annual growth rate on the revenue side.
Speaker #1: And obviously, profitable through that process as well. So why don't take a couple of minutes to talk about the financing of the acquisition and kind of give you a peek at balance sheet impacts.
Speaker #1: So we paid 25 and a half million dollars plus 2 million dollars for excess working capital. So that was satisfied in combination through 16.3 million dollars in cash liquidity on our balance sheet when we closed.
Speaker #1: We took on 8 million dollars of debt from the Royal Bank, who have been our long-term banker. 6 million in a term loan and 2 million dollar revolver.
Speaker #1: We also paid 3 million dollars of Bioscient common shares. I've already spoken on that on a previous slide. And a portion of the previously intended cash purchase price was satisfied in 200,000 dollars worth of RSUs granted on the closing date.
Speaker #1: We expect the debt that we took on for this acquisition to be fully repaid in 2026. And in fact, the day after the transaction closed, we reduced the debt by a million and I think it's been further reduced by another million dollars.
Speaker #1: So we're now the eight is down to six and we expect the debt to be definitely repaid by the end of this year. It's highly likely that the debt will be fully repaid by the end of the third quarter of 2026.
Speaker #1: I will be speaking more on NCIB and dividends, but please know that our intention is to continue with dividends. That's evidenced by the fact that we not only are continuing, but have increased our dividend.
Speaker #1: And we also intend to be active buying back our shares through the NCIB. So our board has allocated capital to that as well. The right-hand side of the slide just gives you an indication of kind of what our cash position was pre and post closing.
Speaker #1: The balance sheet was strong at 17 million of cash on the day after we closed or the day we closed. And you can see how the asset non-current assets went up with the acquisition.
Speaker #1: And we took on the bank debt, which, as I've indicated, is on its way down. I'm going to spend a couple of minutes just reinforcing the strategic rationale for our acquisition of Oral Science.
Speaker #1: Off the top, the transaction builds scale in our revenue and profit. I'll show you in a couple of minutes pro forma combined what that looked like for the year-ending December 31st of 2025.
Speaker #1: But it was a significant build in revenue and profitability. It's strategic use of capital to accelerate our growth. And to build resilience across the company.
Speaker #1: It's really through a diversification of our revenue streams. The Oral Science business is well diversified in the first place. And that diversification then further adds to the Bioscient existing pharmaceutical business.
Speaker #1: And importantly, this is essentially given us a new platform to go hunting for new opportunities for in-licensing and acquisition, both in pharmaceutical spec pharma and also in oral health.
Speaker #1: So what do we look like going forward? We have our pharmaceutical business, which is organized along community and women's health, specialty products, and international business.
Speaker #1: So international customers, Pharamax and Tubelia. There's the oral health business. I have spoken in previous communication about some opportunities to acquire new customers for owned brands of oral science.
Speaker #1: And we will be doing that. And then, of course, we have our legacy business, which I guess over time continues to represent a smaller and smaller percentage of total, but it had a very strong performance in 2025.
Speaker #1: So we'll continue to look for opportunities to expand the business, to grow, to diversify our revenue streams. We'll just now be doing that both in pharmaceutical and in the oral health platforms.
Speaker #1: So for a moment back to the pharma business. I mentioned Pharamax, been a strong performer, continues to be a strong performer with 10 years number one recommended amongst doctors and pharmacists.
Speaker #1: It has featured strongly in our activity with launching innovation products and making acquisitions over a six-year period of time, starting in the I'll call it the summer of COVID when we launched Tubela.
Speaker #1: And you can see here a number of product launches and a couple of acquisitions that being Tubelia Global in September of '24 and Oral Science just recently in March of '26.
Speaker #1: So as we look back to the first year that we came profitable, that was 2010. I made reference to that a couple of minutes ago on an earlier slide.
Speaker #1: So you see here the evolution of our business on a revenue and profit basis. The green bars representing revenue. Over that period of time, a 15-year period using 2010 as the base year, our revenue grew by 26 times and our net income after tax, which is the solid blue line, grew by a factor of 173 times.
Speaker #1: When we came profitable, we had two of our current products in our portfolio. Pharamax and Protected, which is our legacy product. And on the right-hand side, you can see now what's in the portfolio.
Speaker #1: And we've also added in the graphic. We've added Oral Science. So having done that, let us show you what that looks like as if we had owned Oral Science for the full year of 2025.
Speaker #1: So this is a pro forma look at the business. If we added Oral Science to the performance of a revenue performance of Bioscient, as we've already walked you through, you can see revenue in excess of 70 million dollars on a combined basis.
Speaker #1: So in essence, take that looking forward as a pro forma basis for us to continue to build our business and generate incremental cash flow from operations.
Speaker #1: That leads us to a quick look at the cash portion of the balance sheet. You can see our history on this is showing you December 31st.
Speaker #1: 23, 24, 25. You can see we were in a range of cash. We were managing that through NCIB and dividend payments. And we obviously since this period has been reporting now, this period, we've deployed capital into acquisition of Oral Science.
Speaker #1: So they're obviously been changes here that I've already walked you through. In '25, we had cash from operations of 9 million dollars. Just to remind you, I just told you a few moments ago, but 9.1 million dollars of net income after tax.
Speaker #1: So strong kind of cash correlation to NIAT. Modest buyback activity. NCIB of 200,000 dollars for the year. I've explained why. We paid 2.3 million dollars in dividends, finished the year just under 33 million dollars of working capital.
Speaker #1: So strong focus on execution of our strategy drove a trailing 12-month return on equity of 24%. And then, of course, we deployed the cash into Oral Science.
Speaker #1: So I've been talking about this graphic for a number of years. Up until 2024, we were primarily executing our strategy through in-licensing and organic growth of previously in-licensed products.
Speaker #1: We have now made two moves in acquisition. Tubelia and Oral Science. So we're deploying capital into product launches into acquisition. Our strategy is focused around our revenue growth and profit growth, diversifying our revenue streams and taking decisions in the business with a long-term in mind.
Speaker #1: So continually focused on growth and longevity simultaneously. Our business model is capital light and cash generating. That has not changed with the addition of Oral Science to our portfolio.
Speaker #1: We'll continue to pay quarterly dividends and, as I've mentioned, we will also opportunistically look for moments when we can acquire shares through NCIB. To date, we have deployed 6.9 million dollars into dividends and we've bought back shares of 22.6 million.
Speaker #1: So we're now creeping up on 30 million dollars return to shareholders. And our business, as I mentioned a couple of slides ago, has grown consistently and significantly over that period of time.
Speaker #1: A quick wrap-up on our cap table. In essence, I'd like to just take a moment here and remind the viewer and listener that we have not issued any share options in the business now.
Speaker #1: It goes to six or seven years. We have replaced share options with RSUs. And we use our strong balance sheet to go into the market by Bioscient shares.
Speaker #1: And hold them in trust for our obligations as they come due under the RSU plan. So we have not been diluting through management and director compensation or managing the business as owners.
Speaker #1: Because we are significant owners as a group. Just want to draw your attention to one further item on this slide if you're kind of used to seeing us do a calculation PE and enterprise value EBITDA multiple.
Speaker #1: This is calculated for the purpose of this slide as Bioscient as a standalone business for the period ending December 31st of 2025. Of course, on a go-forward basis, those numbers would change quite significantly when we combine the Oral Science business.
Speaker #1: So we look forward to reporting that business performance to you in the future. A quick reconciliation of our EBITDA, which we're required to give you I'll end on this slide and just remind you that Bioscient is a profitable, well-capitalized business.