HLS Therapeutics Targets 2027 Growth With Cardiovascular Expansion and New Deals

Key Points

• HLS is targeting renewed growth from 2027 after reducing net debt by 57%, cutting interest expense and shifting away from royalty income toward its own product portfolio.
• Cardiovascular products are the main growth driver. Vascepa continues to post mid-teens growth, while NILEMDO launched in 2026 and NEXLIZET could launch in the first half of 2027 pending Health Canada approval.
• HLS plans to reinvest in product expansion, pursue capital-efficient licensing deals in cardiovascular and neuropsychiatric markets, and return capital through share repurchases; it had bought back more than 1 million shares by Sept. 30.

HLS Therapeutics TSE: HLS outlined plans to build on its cardiovascular portfolio and pursue additional business-development opportunities as the specialty pharmaceutical company works to translate recent operational improvements into growth beginning in 2027.

Chief Executive Officer Craig Millian said the company has spent the past several years reducing debt, shifting away from passive royalty income and increasing profitability from its own product portfolio. HLS operates in neuropsychiatric disorders and cardiovascular medicine across Canada and the United States, with approximately 80% of revenue generated in Canada, he said.

The company’s 2026 guidance calls for modest revenue growth and relatively flat adjusted EBITDA as it reinvests in recently launched and upcoming products. Millian said HLS does not conduct research and development internally, instead acquiring or in-licensing clinically and regulatorily de-risked assets that are near commercialization or already marketed in other regions.

Debt Reduction and Portfolio-Led Earnings

Millian said HLS previously derived a substantial portion of revenue and about half of adjusted EBITDA from royalty interests. Those royalties either expired or were sold to help repay debt, leaving the company more dependent on product sales generated through its own commercial operations.

Excluding royalties, HLS reported product-portfolio revenue growth of roughly 6% over the past two years, while its cardiovascular portfolio grew 39%, according to Millian. Adjusted EBITDA, excluding royalty contributions, increased 73% during that period, while net debt declined 57%.

He said the company’s rolling 12-month adjusted EBITDA, adjusted to exclude royalties and interest paid, increased from approximately $2.3 million in early 2024 to about $15 million most recently. Interest expense fell from roughly $8 million annually in early 2024 to $3.2 million over the most recent 12-month period, with further reductions expected when the company reports later in the year.

“We have done a lot of the heavy lifting,” Millian said, citing improved operating margins, debt repayment and a stronger balance sheet.

Cardiovascular Products Seen as Growth Driver

Millian identified the cardiovascular franchise as HLS’s principal growth catalyst. The portfolio includes Vascepa, NILEMDO and NEXLIZET, with the latter two products intended to address LDL cholesterol lowering.

Vascepa, which launched in Canada in 2020, is in its seventh year on the market and continues to grow net sales and units in the mid-teens, Millian said. He added that the product has Canadian patent protection through the late 2030s.

According to Millian, Vascepa’s REDUCE-IT trial demonstrated a 25% reduction in composite cardiovascular risk among certain patients already taking statins, as well as a statistically significant 20% reduction in cardiovascular death as a single endpoint. He said the company has strengthened its sales and marketing team and has benefited from more frequent discussions with cardiologists as it adds products to the portfolio.

NILEMDO, or bempedoic acid, launched earlier in 2026. Millian described it as an oral non-statin treatment indicated for both LDL lowering and cardiovascular-event prevention that can be used with or without other LDL-lowering therapies. He said it may serve patients unable to tolerate statins or those who do not reach LDL targets using statins alone.

NEXLIZET combines bempedoic acid with ezetimibe in a single pill. Millian said the combination can provide approximately 38% lipid lowering, compared with about 19% for bempedoic acid alone. HLS expects a Health Canada decision on NEXLIZET by year-end, which could support a launch in the first half of 2027.

• HLS said more than 80% of privately insured Canadians have unrestricted access to NILEMDO following agreements with nearly all major private plans.
• The company expects negotiations with Canada’s pan-Canadian Pharmaceutical Alliance, or pCPA, to begin in November as it seeks public reimbursement for NILEMDO.
• HLS estimates that roughly 500,000 Canadians may be either unable to meet treatment goals while using statins and ezetimibe or unable to tolerate statins.
• The company estimates a potential peak Canadian opportunity of C$50 million to C$100 million for NILEMDO and NEXLIZET, based on its assumptions about market penetration and net pricing.

Clozaril Remains a Cash Generator

HLS’s neuropsychiatric business continues to be anchored by Clozaril, its branded clozapine product for treatment-resistant schizophrenia. Millian said the product has been available for more than 30 years and faces generic competition in both Canada and the United States, but HLS retains about 50% of the Canadian clozapine market.

Clozaril contributes about $27 million toward EBITDA, according to Millian. He said the company differentiates the brand through its CSAN patient registry and related patient, caregiver and provider support services.

Capital Allocation and Deal Strategy

With leverage reduced, Millian said HLS’s first capital-allocation priority is investing in growth, including expanding its existing products and identifying additional assets. The company’s second priority is returning capital to shareholders, followed by further debt repayment.

HLS launched a normal course issuer bid allowing it to repurchase up to 1.87 million shares. Millian said the company had repurchased more than 1 million shares through Sept. 30.

Responding to an analyst question, Millian said future business-development transactions are expected to remain capital efficient, generally using limited upfront payments and milestone structures. HLS is primarily seeking in-licensed products in cardiovascular medicine, neuropsychiatry or adjacent specialty areas that can use its Canadian commercial infrastructure, while also evaluating opportunities to broaden its presence in the U.S.

About HLS Therapeutics (TSE:HLS)

HLS Therapeutics Inc is a specialty pharmaceutical company. It is focused on the acquisition and commercialization of branded pharmaceutical products in the North American markets. The company is focused on treatment products for the central nervous system (CNS), and cardiovascular specialties. The company products include Clozaril, Absorica, Vascepa, CSAN Pronto, Trinomia and Perseris. The company earns revenue in the form of product sales and royalties, out of which product sales contribute to the majority of the revenue.

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