Operator:
Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Theratechnologies First Quarter 2025 Earnings Call. We would like to remind everyone that all figures on this call are quoted in U.S. dollars. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session with analysts. Instructions will be provided at that time for you to queue up for questions. Following the analyst Q&A session, investors wishing to submit a question may do so by clicking the Ask-a-Question link on the webcast platform. [Operator Instructions] I would like to remind everyone that this conference call is being recorded today, Wednesday, April 9, 2025 at 8:30 a.m. Eastern Time. I will now turn the conference call over to Joanne Choi, Senior Director, Investor Relations at Theratechnologies. Joanne, please go ahead.

Joanne Choi:
Thank you, Drew. Good morning, and thank you for joining Theratechnologies first quarter 2025 Earnings Call. On today's call, we are joined by Paul Levesque, Theratechnologies' President and Chief Executive Officer; and Philippe Dubuc, Senior Vice President and Chief Financial Officer. After the prepared remarks, we will open up the call for your questions, where we will be joined by Dr. Christian Marsolais, Senior Vice President and Chief Medical Officer; and John Leasure, the company's Global Commercial Officer. Before we begin, I'd like to remind everyone that today's remarks contain forward-looking statements within the meaning of securities laws, including our financial and business outlook. Actual results may differ materially from historical performance and those forward-looking statements implied herein. These statements, together with the assumptions underlying them and the risks related thereto are outlined in detail in the forward-looking information section of Theratechnologies MD&A issued this morning and available on SEDAR+ and on EDGAR. Forward-looking statements represent Theratechnologies' expectations as of this morning, April 9, 2025. Additionally, the company is using the term adjusted EBITDA, which is not a financial measure under IFRS or U.S. generally accepted accounting principles U.S. GAAP. Adjusted EBITDA excludes the effects of items that primarily reflects the impact of long-term investment 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 EBITDA to net loss is found in our MD&A issued this morning, as well as on SEDAR+ and EDGAR as mentioned earlier. Thank you. I will now turn the conference over to our CEO. Paul?

Paul Levesque:
Thank you, Joanne. And good morning, everyone. I'm pleased to report on our fiscal first quarter ended -- ending February 28 with total revenues of $19 million, representing 17% growth from the same period last year. The strong performance on a relative basis was driven by the strength of our lead asset, the EGRIFTA SV, which continues to carry the best momentum we have seen since its market introduction. There are two main reasons for this. First, excess visceral abdominal fat or EVAF, is increasingly being recognized by the medical community as a potentially serious condition requiring attention and treatment. There is also strong supporting evidence linking EVAF with increased cardiovascular risk and metabolic disease, which I will expand upon a bit more on the call shortly. This, coupled with our specialized sales force focused on community education and product differentiation has truly been the driving force behind this uptake. This brings me to the recent approval of our F8 Formulation of Tesamorelin. We are absolutely thrilled to be bringing this new and improved formulation to the market where it will continue to remain our engine of growth for years to come. EGRIFTA WR comes with a host of new benefits for patients. To start, this new formulation only requires a once-weekly reconstitution as opposed to daily, which is a material enhancement designed with patients in mind for a simpler and less cumbersome administration. The F8 Formulation requires a smaller volume of administration and comes with a smaller syringe and needle than the current F4 formulation. And finally, in developing this new formulation, we conducted a very thorough human factor study. This substantial investment resulted in crystal clear instruction for use for the patient. We are very confident that this new and improved formulation will lead to better patient experience, adherence and duration of treatment. As you'll recall, we resumed distribution of EGRIFTA SV in mid-February, following a temporary drug shortage that began in early January, which resulted in a sales loss of six to seven weeks. Fortunately, new and returning patients were able to fill their scripts within one or two weeks after supply was restored, and we are now fully back in business. With March patient data in, we're happy to report that our total number of unique patients is up year-over-year, indicating the base of patients is back on treatment. In addition, new enrollments were up 15% in the first quarter, compared to last year. This speaks to the dedication and performance of our field force, who were able to successfully market the benefits of EGRIFTA SV through that unfortunate period. Our teams are working hard to orchestrate a successful launch and effective transition from F4 to the F8, which will be available in pharmacies beginning in July. Importantly, this week's approval of the prior approval supplement lifts any remaining uncertainty regarding supply with ample SV on the market and additional batches in production and ready for shipment, we look forward to a seamless transition from EGRIFTA SV to EGRIFTA WR to be completed in early 2026. To further develop the strength of our HIV business, we recently presented data from the PROMISE-U.S. and VAMOS studies at CROI in March. The first poster featured data from the real-world observational registry PROMISE-U.S. demonstrating the efficacy and safety of ibalizumab in reducing HIV to undetectable levels in heavily treatment-experienced patients with multidrug resistance situation. Researchers presented an interim or match subgroup analysis comprising 112 participants. Results showed impressive reduction of viremia in patients whose regimens include ibalizumab despite having lower CD counts and higher viral loads at baseline than the non-ibalizumab control group. Ibalizumab was well tolerated with no infusion reaction and treatment-emergent adverse events. Despite the advent of new therapies, multidrug resistance has persisted. As a result, there continues to be a need to establish and maintain virologic control, especially for people who are heavily treatment experience. These latest data suggest that ibalizumab is an indispensable agent for hard-to-treat patients and will continue to be used in combination with other long-acting injectables. We look forward to continuing to enroll patients in this first of its kind registry. In the second poster, researchers from the Visceral adiposity measurement and observation study or VAMOS demonstrated that EVAF drives cardiovascular risk in patients with HIV. Investigators presented data highlighting the limitations of using BMI alone in assessing CV risk, particularly given the high CV risk observed in study participants with a normal or low BMI, but high levels of EVAF. Traditionally, clinicians have used BMI as a marker to assess the risk of cardiovascular disease and other comorbidities in this population, but have often overlooked the importance of EVAF. These findings underscore that if health care providers focus solely on BMI a sizable population of normal weight and overweight individuals with HIV, EVAF and high CV risk will be missed. We hope this study encourages the use of simple and more precise tools for assessing EVAF, such as measuring ways [Technical Difficulty] conference as a proven means to identifying people with HIV, who are at risk of cardiovascular disease. Shifting over to business development. I want to start by sharing our approach to capital allocation in light of our new business strategy. With the drug shortage now behind us, our HIV business remains strong from a demand perspective and we are now on the brink of generating meaningful cash flow, supported by our new operating structure. When thinking about long-term value creation, we made the strategic decision to commit ourselves to increasing the bottom line of this organization. This means that we will remain prudent in our spend to execute on the plan expansion of our portfolio through acquisitions and in-licensing of late-stage products. Central toward philosophy is to invest in the opportunities that offer the highest return on investment. This is why we are prioritizing products where we will have the ability to drive meaningful synergies from our current infrastructure, so that our top line will continue to outpace our expenses. In conjunction, we continue to make progress with the launches of olezarsen and donidalorsen in Canada with preparations for filing to be submitted later this year. Finally, on oncology, we continue to engage with potential partners. Oncology is all about discovering new targets, particularly in advanced cancers. Our SORT1 platform is in of itself, an innovative technology that can have applications in many cancer treatments in the future. We will update you as development takes place. Before handing over the call to Philippe to review our first quarter performance in more detail, I would like to close with a few words on tariffs. We've been closely following the situation with tariffs and have mapped out our supply chains, particularly for EGRIFTA SV, which is pretty straightforward. While we cannot avoid any impact entirely as our manufacturing process currently takes place both in the U.S. and Canada, we do not expect to be significantly impacted by tariffs should they be enforced. And with the approval of the F8 Formulation, we will soon be moving 100% of our manufacturing to a new CDMO based in the U.S. With that, I will now turn over to Philippe to review our first quarter performance.

Philippe Dubuc:
Thank you, Paul. Good morning, everyone. I am pleased to report that even though the EGRIFTA SV shortage had an impact on our financial results for the first quarter of 2025, we managed to finish the three month period with $19 million in revenues and growth of 17% and a positive adjusted EBITDA of $2.3 million versus an adjusted EBITDA loss of $247,000 last year. This brings our late -- our last 12 months adjusted EBITDA figure to $22.7 million on LTM sales of approximately $89 million or a margin of over 25%. I will caution, however, that this performance is in part due to a few large orders for EGRIFTA SV at the end of the quarter to rebuild inventories at McKesson and in our specialty pharmacy network, with some pharmacies ordering larger-than-usual quantities, which will result in a longer drawdown than usual. This should have an impact on Q2 revenues and this is why we are providing guidance this morning of $80 million to $83 million in revenues for 2025, along with an adjusted EBITDA of $10 million to $12 million. We estimate that we lost up to six or seven weeks of unit sales due to the shortage, which translates into approximately $10 million in revenue. We also believe the shortage could have a small impact on our patient base, which could have an additional $1 million to $2 million impact on sales this year. For the first quarter of fiscal 2025, net sales of EGRIFTA SV reached $13.9 million, compared to $9.6 million in Q1 of last year, which represents a 45% increase year-over-year. Recall that Q1 2024 sales of EGRIFTA SV were impacted by inventory drawdowns at the specialty pharmacy level. For Trogarzo net sales in the first quarter of fiscal 2025 amounted to $5.2 million, compared to $6.7 million for the same quarter last year, or a decrease of 22%. The decrease is mainly due to the continuing impact of new competitors in the past few years, and we do expect sales to stabilize at this level this year. In the first quarter of 2025, cost of goods sold came in at $3.5 million, down from $5.3 million in the same quarter of last year. EGRIFTA gross margins were positively affected by the reversal of a $713,000 provision, which we had built prior to the approval of our F8 formulation, and these margins came in at around 90% when excluding this reversal, which is in line with historical values and Trogarzo margins were 48%, consistent with the transfer pricing agreement with TimeEd. Again, in the first quarter of 2025, our optimized operating structure helped us achieve a positive adjusted EBITDA even with the effect of the drug shortage and the fact that we started spending on the preparation of filing of the Ionis products with Health Canada and on an eventual launch should these products be approved. R&D expenses in Q1 came in at $3 million versus $3.8 million last year or a decrease of 21%, again in the first quarter of 2025 and we were able to claim non-reimbursable federal R&D tax credits for an amount of $194,000 to reduce our income tax expense. Selling expenses came in at $6.5 million in Q1 2025, compared to $5.7 million for the same three-month period last year. Selling expenses have stabilized in 2024 and should continue at roughly the same level in the next few quarters as the focus on top and bottom line growth remains our main objective. G&A expenses in Q1 2025 amounted to $4.2 million, as compared to $3.8 million for the first quarter of 2024 or a 10% increase. The increase in G&A expenses is mostly due to higher stock-based compensation and higher professional fees. Net finance costs were again lower in the first quarter of 2025 and came in at $1.5 million. This includes interest of $1 million of long-term debt, compared to $2.3 million in 2024, mostly due to lower interest rates and the lower debt balance. Finance costs also include a non-cash loss on warrant revaluation of $450,000. As mentioned earlier, adjusted EBITDA for the first quarter was $2.3 million, up from negative $247,000 in the same period last year. February 28 2025, we had cash and cash equivalents of $4.6 million. We had an unusually high amount of accounts receivable at the end of the quarter or $22 million, due to the concentration of orders for EGRIFTA in the last two weeks of the quarter. These were all collected during the month of March. During the first quarter, we temporarily drew an additional $5 million on the TD revolving credit facility. This amount was repaid in March. As per the terms of the TD agreement, we also repaid approximately $900,000 of capital on the TD terminal. We will now open the call for your questions. Operator?

Operator:
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Andre Uddin with Research Capital. Please go ahead.

Andre Uddin:
Thank you, operator. Hi, Paul, Philippe, John, Christian and Joanne, congratulations on your FDA EGRIFTA approvals. Just in terms of business development, are you looking for new products in the same therapeutic areas? And would you also consider given where you are, would you also consider targeting a drug acquisition that is a drug that's already approved? Or would you try to in-license late-stage drug candidates? Thank you.

Paul Levesque:
Well, I think that we want to be making any of these acquisitions. Thank you for your question, Andre. But we want to make this as accretive as possible. So we never wanted to take any risk with a drug that is not approved or has a 50%-50% chance of being approved. So we want to focus on very late stage where we know that the drug has a very high chance of success for being approved. And obviously, if you want to draw more to the bottom line, you want to drive synergies with the current infrastructure we have. So the first priority is to find a product that would fit the bag that we currently have in the U.S. You would recall that half of our targets in the U.S. are community infectious disease doctors, so anything that would actually match these targets would drive synergies right away, because we have 25 people on the ground that can be active on day one. And in Canada, because we are starting to have small rare disease in rare cardio and rare immunology, having a second product in that bag for those few reps would obviously be very synergistic as well. John, do you want to add anything about what we have lining up?

John Leasure:
Hi, Andre, we have a number of nice targets that we're looking at in line with what Paul said in these areas that are synergistic. And to your other question about accretive assets that are already on the market, well we've also identified a number of opportunities there. Those are a little bit tougher to find a little more complicated, but I think it's not without possibility that we could find one there as well.

Andre Uddin:
Okay, that's great. Thank you, that's it for me.

John Leasure:
Thank you, Andre.

Operator:
The next question comes from Justin Walsh with Jones Trading. Please go ahead.

Justin Walsh:
Hi, thanks for taking the questions. Can you provide more color on how you plan to facilitate the transition from EGRIFTA WR -- rather from EGRIFTA SV to EGRIFTA WR, and I believe that you'd mentioned expecting replacement around early 2026. So how should we kind of be viewing this transition in the interim there?

Paul Levesque:
Thank you, Justin, for the question. John will answer your question in more details. But obviously, one of the limitation, as you can imagine, is payers. So if the transition is not orchestrated the best possible way, you may have people, who want to jump on the F8 right way and if for some reasons, the insurers are not going to be ready to reimburse. So that's why we're planning for a very efficient period of time of transition based on previous experience when we transition the F1 to the F4. John, do you want to provide additional details?

John Leasure:
Yes. Well, as Paul said, we do have experience in the transition from the F1 to F4, so we've modeled a similar time line. Obviously, the first step in the process is we've got to once we have -- now that we have the final label is the manufacturing and packaging of the new product. And that just takes some time. So you're looking about three months or more to get the product into the pharmacies. We can't actually start the load the new pricing and NDC numbers in the system prior to about 30-days to product availability. So that's the next stage where we then begin contacting the payers and ensure that the new pricing and NDC numbers are loaded into the system. And then it's a process of transition, which our patient support program is prepared to manage very well. And seamlessly, we have this as a transition period of, in the neighborhood of six months, because some payers are slower than others to update their systems. But obviously, our goal would be to do this as quickly as possible.

Paul Levesque:
And our sales meeting with the field force is already set. We want to obviously build a fair amount of enthusiasm related to that. But again, it takes a well-orchestrated transition and this is what we have laid out in front of us. Thanks, Justin.

Justin Walsh:
Got it. Thanks and yes, one more question. I'm just curious if you can maybe comment and remind us on your medium to long-term expectations for growth in the EGRIFTA franchise?

Paul Levesque:
Yes. Well, what I said, Justin, is that we currently have the wind blowing our way, because Excess Visceral Abdominal Fat is being recognized more than ever before. It's being linked to cardiovascular risk in HIV patients more than ever before. And in fact, I suspect that the way we're balancing back after the drug shortage is related to the demand that we have created for this product. We're pretty impressed with the way we're bouncing back, which tells me that this product is becoming more and more relevant. John, do you want to speak about the future?

John Leasure:
Well, I mean, one of our best indicators of growth is our enrollments. And year-to-date, we're at 15% growth in enrollments over last year, even with the supply disruption that we had. So I think that's a good indicator of increasing demand, and our unique patients have already bounced back above where they were the same period last year. So I think that's a good indication that the patient base is back to where it was. So we expect to see continued growth from here throughout the year.

Paul Levesque:
And Justin, let me just add the fact that you've seen the publication coming from medical. So we are active to obviously ensure that there's publications, publications that carry momentum for the MSLs on the ground for the reps. So every time that you leverage the medical activities to providing additional data to the sales force, they sell more. That's the business model that has worked for us.

Justin Walsh:
Great. Thanks for taking the questions.

Paul Levesque:
Thanks, Justin.

Operator:
And this is the operator, just checking. Do you all have any questions on the webcast?

Joanne Choi:
We do. There's a few I'll read them out. So first question is on the decline in Trogarzo sales. So we're seeing a stabilization. Why is it taking so long to stabilize? Why is there continuing negative impact?

Paul Levesque:
Yes. So we -- with the direction of therapy being about two years and the fact that we had higher enrollments previously, we're actually losing more patients than we're gaining. And that's why although the enrollment have stabilized and, in fact, actually grown this quarter. We're still losing some of the existing patient base, which we project will level out. So Trogarzo enrollments are up 16% year-to-date over last year. So that's a positive sign that we're not seeing further decline in utilization. But again, some of those existing patients from the higher previous enrollments are transitioning out.

Joanne Choi:
There's also a question on tariffs. You've talked about tariffs for EGRIFTA, but do you see any trip tariffs on Trogarzo or the Ionis products?

Paul Levesque:
Well, we don't see any issue. I mean, Philippe, you're close to this file. We don't see an issue for Trogarzo when it comes down to TimeEd, because this is a transfer price. And then what is the situation for Ionis?

John Leasure:
Ionis that the products are manufactured in Europe, and they won't pass through the U.S. border. So we don't see any risk on Ionis.

Paul Levesque:
So again, it's very difficult at this time to provide additional information, but what I wanted to make clear this morning is that we are following the situation very closely. We absolutely know the components that are passing through the border. And for now, the exposure we have is related to the SF -- the current formulation of SV formulation of EGRIFTA. And we don't foresee major implications, and we will, as we said, transition to the F8 as the best possible way.

Joanne Choi:
And last question on -- so we were waiting on the approval of the F8 for the NASH program. Can you give an update? Or are we still looking for a partner there? Or what's the status of…

Paul Levesque:
Well, in fact, this comes once in a while in the different meetings. And whenever we go to bio and whenever we see potential candidates, but there's so much action going on in the NASH space with innovative and different types of targets that it's very difficult for us to actually be having a value proposition that can translate to a real value. This being said, we will continue to be opportunistic. And if there are some compounds that are looking, and we know that there are many compounds that are in need of having a combination with a drug that can maintain lean mass, which we would do and have a double type of mode of action on fibrosis and inflammation, we could be relevant. But at this time, this is not where we're spending time and creating expectation.

Joanne Choi:
That's it for the questions, Paul.

Operator:
Thank you.

Paul Levesque:
Well, I would like to thank you for joining our earnings call this morning. I want people to understand that the drug shortage was a one-off. It is behind us. From a demand point of view, our business is very robust. And we are gearing up now to have a plan that will further improve the top line and, most importantly, the bottom line and return for investors. Thanks for joining again.

Operator:
This concludes -- the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.