HLS Therapeutics Q1 Earnings Call Highlights

Key Points

• HLS reported Q1 revenue of $12.9 million, up 2% year over year, and reaffirmed its 2026 guidance for revenue of $56 million to $60 million and adjusted EBITDA of $18.5 million to $21 million.
• The company said its newly launched cholesterol drug NILEMDO is showing early momentum, with nearly CAD 250,000 shipped in a little over a month, strong physician response, and expanding private payer coverage in Canada.
• Vascepa growth helped offset softness in Clozaril, while HLS continued to delever its balance sheet with net debt falling 17% from year-end 2025 and operating cash flow rising sharply year over year.

HLS Therapeutics TSE: HLS reported modest first-quarter revenue growth and reaffirmed its 2026 outlook, while management highlighted early momentum for the company’s newly launched cholesterol drug NILEMDO and continued deleveraging of its balance sheet.

On a conference call discussing results for the three months ended March 31, 2026, Chief Executive Officer Craig Millian said HLS is “in a very favorable position,” citing growth in Vascepa, resilience in Clozaril and what he described as a stronger operational and financial foundation following efficiency improvements and debt reduction.

Total revenue for the quarter was $12.9 million, up 2% from $12.6 million a year earlier, according to Chief Financial Officer John Hanna. Vascepa net sales rose 15% year over year to $4.8 million, while combined Clozaril net sales in Canada and the U.S. declined to $7.8 million from $8.2 million.

Adjusted EBITDA was CAD 3.5 million, compared with CAD 3.8 million in the prior-year quarter. Management said the decline reflected additional commercial spending tied to the NILEMDO launch, which is expected to be concentrated in the first half of the year.

NILEMDO Launch Shows Early Momentum

HLS commercially launched NILEMDO in April, and Millian said the company had shipped nearly CAD 250,000 worth of the product after just over one full month on the market. He said multiple wholesalers had placed reorders and that weekly ex-factory sales were increasing.

Chief Commercial Officer Brian Walsh said early physician response has been strong, particularly among clinicians treating statin-intolerant patients. He cited a blind awareness, trial and usage study completed in January involving 70 target cardiologists and endocrinologists, which showed more than 90% total awareness before promotion and more than 80% willingness to prescribe.

Walsh said Canada Life and Sun Life, two of Canada’s largest private payers, have listed NILEMDO as a full benefit with no prior authorization. Together, the plans represent about 40% of privately insured lives in Canada. He said HLS expects most privately insured patients to have coverage by the time it reports second-quarter results.

For public reimbursement, HLS has submitted dossiers to CADTH and INESSS, with evaluations expected this summer. Walsh said those reviews would feed into pCPA negotiations, with the company targeting initial provincial listings in the first half of 2027.

Vascepa Growth Offsets Clozaril Headwinds

Management pointed to Vascepa as a key contributor to first-quarter growth. Millian said the 15% increase in net sales represented the strongest year-over-year quarterly growth for the product since the second quarter of last year. Walsh said Vascepa unit growth was 18% versus the prior year, with improvements in new-to-brand prescriptions continuing from the fourth quarter of 2025 into the first quarter.

Walsh said prescriber breadth and depth were both improving, indicating that HLS was expanding the prescriber base while also increasing prescribing among existing physicians. He added that the payer mix continues to stabilize, which management expects to support profitability.

Clozaril results were described as in line with expectations. Millian and Walsh both noted that contracting dynamics in Ontario from 2025 are weighing on year-over-year comparisons in the first half of 2026. However, Walsh said patient volume in Ontario returned to sequential growth in March and April, and that British Columbia delivered 11% patient growth versus the first quarter of last year.

Walsh said Clozaril maintains approximately 50% market share and remains a “strong, stable cash contributor.” In the U.S., Clozaril revenue was down 2%, and HLS expects to take a modest customary price increase later this year.

Company Reaffirms 2026 Guidance

HLS reaffirmed its full-year 2026 outlook for revenue of $56 million to $60 million and adjusted EBITDA of $18.5 million to $21 million. Millian said the guidance reflects mid-single-digit revenue growth and relatively flat adjusted EBITDA as the company absorbs NILEMDO launch costs.

Management expects margins to improve in the second half of the year as launch spending normalizes and NILEMDO revenue ramps. Hanna said revenue is expected to begin ramping in the second quarter and accelerate through the second half.

Millian said the company expects double-digit growth in both Vascepa prescriptions and revenue for full-year 2026.

Balance Sheet and Capital Allocation

Hanna said cash from operations was CAD 6.4 million in the first quarter, up 80% from the year-ago period. He attributed the improvement to operational changes over the past two years and lower interest expense, which fell to $0.7 million from $1.7 million a year earlier due to a new credit agreement and a lower debt balance.

HLS made principal repayments totaling $5.1 million during the quarter. At March 31, term loan principal stood at $44.2 million, down 12% from the end of 2025, while net debt was $31.9 million, down 17% from year-end 2025 and 52% over two years. Cash at quarter-end was $12.3 million, compared with $11.7 million at the end of 2025.

Hanna said the company’s capital allocation priorities include investing in growth, continuing to reduce debt and potentially returning capital to shareholders through share buybacks. HLS does not currently have an active normal course issuer bid, but Hanna said the company will explore launching one in 2026.

NEXLETOL Expected in First Half of 2027

HLS also discussed NEXLETOL, the fixed-dose combination of bempedoic acid and ezetimibe. Millian said the company expects to respond to Health Canada’s outstanding queries this quarter, keeping it on track for a first-half 2027 launch. Later in the call, he referred to the combination pill as NEXLIZET.

Walsh said HLS views NILEMDO and NEXLETOL as “separate but connected catalysts,” with NILEMDO establishing physician familiarity before the fixed-dose combination enters the market. He said the company expects the reimbursement timelines for NILEMDO and NEXLETOL to converge, which could give HLS a structural advantage in the public listing process.

Management said the NILEMDO and NEXLETOL franchise could generate CAD 50 million to CAD 100 million in revenue at peak, based on what Millian described as conservative assumptions. He cautioned that HLS will have a more complete view of peak sales potential after public payer negotiations are finalized by early next year.

During the question-and-answer portion, Millian said early launch indicators for NILEMDO were ahead of plan, including private payer coverage and weekly shipment trends. He added that HLS had not yet received prescribing data but viewed wholesaler reorders as a sign of pharmacy-level pull-through.

Millian also said the recent acquisition of NILEMDO and NEXLIZET developer Esperion had no expected impact on HLS’s Canadian business, describing it as “business as usual” with the company’s partner.

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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