Theratechnologies Inc. (NASDAQ:THTX) experienced a decrease in net sales during the first quarter of 2024, primarily due to inventory adjustments and larger rebates and returns. Despite this, the company saw a consistent increase in enrollments and unique patients, particularly for their leading product, EGRIFTA SV.
The company has reaffirmed its revenue guidance for the full year and expects stronger performance in the upcoming quarters. Theratechnologies is actively pursuing business development opportunities and is engaged in FDA discussions for its drug applications while progressing in its oncology trial.
Key Takeaways
- Theratechnologies reported a decline in net sales for Q1 2024, with EGRIFTA SV sales at $9.6 million, down from $12.7 million the previous year.
- The company recorded a negative adjusted EBITDA of $247,000 for the quarter, an improvement from the previous year.
- Full-year revenue guidance remains between $87 million and $90 million, with adjusted EBITDA projected at $13 million to $15 million.
- Theratechnologies is awaiting FDA decisions on drug submissions and is advancing its oncology program with partner engagement.
- The company ended the quarter with substantial cash reserves and is considering options for prepaying its Marathon loan facility.
Company Outlook
- Theratechnologies expects a stronger second quarter and improved performance in the second half of the year.
- The company is actively seeking business development opportunities in HIV and small metabolic/liver disease sectors.
- There are ongoing discussions with potential partners for the NASH program and optimism for future partnerships in oncology.
Bearish Highlights
- Net sales have declined due to realignment of inventory levels and increased rebates and returns.
- Trogarzo net sales decreased by 7.4% year-over-year due to lower unit sales.
- Both EGRIFTA SV and Trogarzo experienced increased cost of sales.
Bullish Highlights
- Enrollment and unique patient numbers for EGRIFTA SV continue to grow.
- The company has recorded its third consecutive quarter of near flat to positive adjusted EBITDA.
- Interest in injectable drugs like EGRIFTA SV is on the rise, potentially creating market tailwinds.
Misses
- Q1 net sales fell short of the previous year's figures for both EGRIFTA SV and Trogarzo.
- The company reported a negative adjusted EBITDA, despite it being an improvement from the prior year.
Q&A Highlights
- Theratechnologies addressed FDA questions successfully and expects to submit a new drug application within the year.
- The company has enough capital to cover the Marathon loan facility repayments and is exploring prepayment options.
- Optimism was expressed about the company's value proposition in oncology and the market performance of EGRIFTA.
Theratechnologies remains confident in its strategic direction and its ability to navigate current challenges. The company's leadership thanked participants for their involvement and expressed optimism for the future. The focus on commercial business development and potential product acquisitions is expected to drive growth, along with the anticipated FDA decisions and progress in the oncology program.
InvestingPro Insights
As Theratechnologies Inc. (THER) navigates through a challenging quarter with decreased net sales, InvestingPro data and insights provide a deeper understanding of the company's financial health and stock performance.
With a market capitalization of $68.97 million, the company's size remains modest in the biopharmaceutical space. The stock's volatility is reflected in its price movements, with a significant 18.85% return over the last month, despite a year-to-date price total return of -10.49%.
InvestingPro Tips indicate that analysts are cautious about the company's profitability, having revised their earnings downwards for the upcoming period and not anticipating profitability this year. This aligns with the company's reported negative adjusted EBITDA for Q1 2024. Moreover, the company has not been profitable over the last twelve months, which is consistent with the reported P/E Ratio (Adjusted) of -3.58, signaling that investors are paying more for each dollar of loss.
Investors looking for income through dividends will not find it here, as Theratechnologies does not pay a dividend to shareholders. However, the company's gross profit margin remains robust at 75.99%, indicating strong underlying efficiency in its operations despite the current headwinds.
For those interested in further insights and additional InvestingPro Tips, more are available at https://www.investing.com/pro/THTX. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 5 more InvestingPro Tips listed in InvestingPro that can help investors make more informed decisions regarding Theratechnologies Inc.
Full transcript - Theratechnologies Inc (THTX) Q1 2024:
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Theratechnologies First Quarter 2024 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 10, 2024 at 8:30 A.M. Eastern Time. I will now turn the call over to Julie Schneiderman, Senior Director, Communications, and Corporate Affairs at Theratechnologies. Julie, please go ahead.
Julie Schneiderman: Thank you, operator, and good morning, everyone. On the call today will be Theratechnologies’ President and Chief Executive Officer, Mr. Paul Levesque; and Senior Vice President and Chief Financial Officer, Mr. Philippe Dubuc. During the Q&A session, we will be joined by Dr. Christian Marsolais, Senior Vice President and Chief Medical Officer; and Mr. John Leasure, the company's Global Commercial Officer. Before we begin, I'd like to remind everyone that remarks today contain forward-looking statements regarding the company's current and future plans, expectations and intentions with respect to future events. Forward-looking statements are based on assumptions, and there are risks that -- there are risks that results obtained by Theratechnologies may differ materially from those statements. As such, the company cannot guarantee that any forward-looking statement will materialize and you are cautioned not to place undue reliance on them. The company refers current and potential investors to the forward-looking information section of Theratechnologies management's discussion and analysis issued this morning and available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Forward-looking statements represent Theratechnologies' expectations as of this morning, April 10, 2024. Additionally, today, the company is using the term adjusted EBITDA, which is not a financial measure under International Financial Reporting Standards, IFRS or U.S. generally accepted accounting principles, U.S. GAAP. Adjusted EBITDA excludes the effects of items that primarily reflect 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 and available on SEDAR+ and on EDGAR at the web addresses mentioned earlier. Investors can also follow the company on LinkedIn and X, formerly Twitter and sign up for alerts on Theratechnologies' investor website at theratech.com. With that, I would now like to turn the conference over to our President and CEO, Paul Levesque.
Paul Levesque: Thank you, Julie. Hello, everyone, and good morning. I am pleased to be reporting on Theratechnologies financial results for the first quarter ended February 29, 2024. Today, I will be brief as we were together not that long ago for our fourth quarter and full year 2023 call. You may recall that we ended 2023 with a very strong second half. This rounded out a six month positive trajectory with EGRIFTA SV as our engine of growth and a robust adjusted EBITDA number to set us on a path to profitability in 2024. I also alluded to the fact that we should expect some variability in revenue growth reporting in 2024, especially in the first half of the year based on the buildup and subsequent drawdown of inventory. For Q1, to a little surprised, this has been the case. Our first quarter 2024 sales results are a stark contrast to those reported in the first quarter of last year, which I will elaborate on shortly. Looking forward, our reverse trend is unfolding. In fact, we expect a stronger second quarter for 2024 versus the unusually weak second quarter reported in 2023. We also expect second half reporting to better reflect our overall performance. While sales reporting has been erratic, enrollments and unique patients show consistent growth particularly when it comes to our priority brand EGRIFTA SV. First quarter momentum in new prescription growth continued with new enrollments up 21% and the number of unique patients up 14% compared to the first quarter of 2023. Interestingly, the number of unique prescribers is also steadily increasing up 13% this past February alone as compared to the same month in 2023. We've also continued to demonstrate strength on the bottom line, making this our third consecutive quarter of near flat to positive adjusted EBITDA. Our new cost structure, together with our strategic focus on commercial capabilities, puts Theratechnologies under brink of producing stronger cash flow and value for shareholders. As such, I'm pleased to reaffirm our guidance for full year 2024 of revenues between $87 million and $90 million and an adjusted EBITDA in the range of $13 million to $15 million. Let's take a moment now to circle back on the inventory challenges we have faced so that I can provide clarity on the disconnect we are seeing between our key performance indicators and top line results. To illustrate the situation, I want to highlight how sales of EGRIFTA SV to a few specialty pharmacies has been out of sync with demand resulting in a historically low number of days on hand. When we take a closer look at the slide, you can see that inventory on hand at the end of first Q '23 was approximately 55 days. In contrast, the inventory on hand at the end of first quarter '24 was only about 27 days. The difference in days on hand has impacted our first quarter revenues and growth. We are actively monitoring our distribution network with the goal of maintaining 30 to 35 days on hand at the pharmacy level. At the same time, I want to reiterate that patient demand remains strong, with total patient numbers up significantly from the same quarter last year. Together, these factors should lead to more stable revenue growth. Now before we move on to oncology, allow me to provide an update concerning recent FDA submissions and how we are moving forward with the life cycle management of our products, with the F8 formulation of tesamorelin. During our last earnings call, I shared no review of the complete response letter we received from the FDA in January and our plan of action for a Type B meeting with the FDA. The meeting took place several weeks ago and we received important feedback on our file. We are now awaiting the FDA's minutes of the meeting and remain on track with our resubmission and to receive an FDA decision before the end of 2024. Finally, I want to touch on the Intramuscular Administration of the Trogarzo maintenance dose. The refusal to file letter received from the FDA in February indicates that it would require the conduct of a new study to pursue the registration of the IM method administration. Given the cost of the study and the evolving competitive landscape, we have decided to deprioritize this project for the foreseeable future. It is important to note that the IV Push method of administration for Trogarzo is already simplified or simplifying the treatment burden for patients and their health care providers as a quicker and more convenient option. Trogarzo remains a vital therapy for a small subset of people with HIV, who have very limited treatment options at their disposal to address multi-drug resistance. Equally, it is an important companion to EGRIFTA SV. Now on to oncology and the acceleration of our Phase I clinical trial of sudocetaxel zendusortide. The recent announcement that the enrollment of the new cohort of patients at the increased dose level is underway, is an important milestone. The first patient has already been treated with the 2.5 milligram per kilogram dose, the equivalent of 1.5 times the dose of docetaxel when used alone, sets us well on our way to further characterizing sudocetaxel zendusortide as a potentially viable therapy for individuals with advanced ovarian cancer. Earlier this week, our team presented two preclinical posters at ACR in San Diego. I want to highlight the results of our new camptothecin-peptide conjugates, in the treatment of SORT1+ colorectal cancer, and in particular, the PDC with an exatecan payload. We have also completed the preliminary characterization of several additional novel PDCs. In addition to the human data we have on sudocetaxel zendusortide, these latest preclinical data highlight the promising tolerability and anti-tumor effects of our new PDCs, further demonstrating the versatility, flexibility and effectiveness of our SORT1+ technology platform. Now that we have significantly advanced our oncology program with important evidence on multiple PDCs with different payloads, coupled with the more than 40 patients already treated with sudocetaxel zendusortide, we believe we are in a position of strength to continue engaging with a partner for additional developmental steps. We are now accelerating these activities. Turning to commercial business development. As we move further along our journey as a bottom line focused by a pharma company, I know there is a great deal of anticipation for further details around product acquisitions and future growth. I want to reiterate that our growth trajectory for both the top and bottom line has put us in a position of strength. This should facilitate the acquisition of new assets, which could be instruments of value creation for shareholders. With M&A more important than ever for Theratechnologies, the timing is ideal to welcome two new Board members, Jordan Zwick and Elina Tea, both with an abundance of expertise and experience in this area. With this, I'd like to turn the call over to Philippe, who will go over the periods financials and details. Philippe?
Philippe Dubuc: Thank you, Paul. Good morning, everyone. Consolidated revenue for the three month period ended February 29, 2024 was below our expectations, reasons I will be getting into, but I wanted to stress that further to the readjustment of our cost base over the past nine months we have recorded our third straight quarter of near flat to positive adjusted EBITDA, an improvement of $3.6 million over the first quarter of last year, even though we recorded a drop in revenues. The right-sizing of the organization bodes well for the future and is the basis for our confirming the adjusted EBITDA guidance of $13 million to $15 million for 2024. For the first quarter of fiscal '24, net sales of EGRIFTA SV reached $9.6 million compared to $12.7 million in Q1 of last year. As Paul explained a few moments ago, net sales of EGRIFTA SV were affected by the significant realignment of inventory levels at our pharmacy partners and do not reflect the growing demand that we are seeing based on level of dispense to patients, the ultimate factor reflecting demand for the product. As mentioned, we are working closely with pharmacies to ensure stable inventory levels going forward. EGRIFTA SV sales were also impacted by larger government rebates and returns in the first quarter of fiscal 2024. Trogarzo net sales in the first quarter of fiscal '24 amounted to $6.7 million compared to $7.2 million for the same quarter last year, representing a decrease of 7.4% year-over-year. The decrease was mainly due to lower unit sales in the quarter as compared to last year. Lower unit sales in the first quarter were also a result of inventory buildup in late 2022 and early 2023, a situation which has resolved throughout the rest of the fiscal 2023 year. This being said, we are expecting a stronger performance in 2024 from EGRIFTA SV rather than Trogarzo. In the first quarter of '24, cost of sales were affected by an $837 provision related to the production of the F8 formulation since the product is not yet approved. As such, cost of sales came in at $5.3 million, up from $4.7 million in the same quarter in fiscal 2023. While Trogarzo margins were stable during the quarter, EGRIFTA SV cost of goods was also affected by slightly higher production related costs. We are expecting stable margins for EGRIFTA going forward. I'm happy to report that again in the first quarter through rigorous management of spending R&D, selling and G&A expenses were all lower this year when compared to the first quarter of '23, helping us achieve our third straight quarter of near flat to positive adjusted EBITDA as established as an objective early in the 2023 fiscal year. R&D expenses decreased substantially in the first quarter of 2024 compared to the same period last year mostly due to lower spending on our oncology program as well as lower expenses following the near completion of our life cycle management projects for EGRIFTA SV and for Trogarzo. R&D expenses came in at $3.8 million versus $9.4 million last year or a 60% decrease. Selling expenses came in at $5.7 million for Q1 2023 compared to $6.8 million for the same three month period last year. Selling expenses should stabilize in the future, as our focus on top and bottom line growth remains our main objective, and hence, we will not be compromising on customer facing activities. G&A expenses in Q1 of 2024 amounted to $3.8 million as compared to $4.5 million last year or a 15% decrease. The decrease in G&A expenses is largely due to our decision to focus on our U.S. commercial operations and our focus on controlling expenses. Again, these expenses are expected to stabilize going forward. As you can see from our reduction of expenses in R&D, selling and G&A in both Q3 and Q4 of 2023, and again, in Q1 of '24, we now have rightsized the organization to ensure that we are well on our way in our journey towards showing strong growth in adjusted EBITDA. As a result of this, we are pleased to report adjusted EBITDA for the first quarter of 2024 of negative $247,000 versus negative $3.9 million in the same period last year, a significant improvement considering that revenues in Q1 were lower than in Q1 of last year. Net finance costs in the first quarter of 2024 amounted to $2.1 million and included interest of $2.3 million on the Marathon loan facility. As Paul briefly alluded to in his remarks, we are confirming our guidance this morning for revenues of $87 million to $90 million for fiscal 2024 and adjusted EBITDA of $13 million to $15 million, which includes the spending on our oncology program this year, pointing to the strong performance of our commercial operations for the remainder of the year. As previously mentioned, any additional spending on oncology after the completion of the Phase I trial will be carried out through partnerships, so this program will no longer affect our adjusted EBITDA in 2025 and beyond. We ended the first quarter on solid financial footing with cash, bonds and money market funds at the quarter end amounting to $38.5 million. While we ended the quarter with $60.6 million drawn on the Marathon facility. As a reminder, the repayment of the Marathon facility will begin in August of this year over 36 monthly installments. Restricted prepayment penalties will also start easing in July of this year. With that, Paul will be back for final comments. But first, we'll open the line for questions. Operator?
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Louise Chen with Cantor. Please go ahead.
Carvey Leung: Hi. Good morning, everyone. This is Carvey on for Louise Chen from Cantor. Thank you for taking our questions. First question is on TH1902. How many patients are you going to enroll at a higher dose level? When will we see data from the Phase I? Second question is on NASH, with the recently approved NASH treatment, how are your discussions with potential partners change for tesamorelin? Thank you so much.
Paul Levesque: Thank you for the question. So first, I will turn to Christian to ensure the TH1902 questions. So Christian, how many questions are we going to have in the higher dosage cohort?
Christian Marsolais: Well, the -- maybe to start the -- as we announced, we already completed the first cohort, which was 1.75 milligram per kilogram, which was the equivalent for the one we're following before of the 200 milligram per meter square. In the second cohort, now we're going for a total of six patients, of which two patients so far have been treated or been enrolled. The dose is 2.5 milligram per kilogram, which is the equivalent of 300 milligram per meter square, 50% dosing grows from the first cohort. And after those six patients, there should be an additional four patients to complete the safety requirement as requested by the FDA.
Paul Levesque: When it comes to your NASH question, and thank you for the question. We see more inbound interest now that there's a product that has been approved. As you know, we have advanced a protocol ready to go for a Phase IIb/III trial. The last couple of years have been quiet, not because there was no activity, but a lot of parties were basically in the wait and see mode to see if one drug would get approved. And with the approval of Madrigal (ph) and the new interest in the NASH space, a lot of people are reaching out to us. And as you know, we will stick to our strategic direction of doubling down on the commercial line of business. And therefore, we need a partner to advance that program. We haven’t given up, and we’re still certainly interested in finding a partner because we do have evidence that the fundamentals of NASH can be tackled by the mechanism of action of tesamorelin both on the NAS score and fibrosis. So thanks for your question.
Carvey Leung: Thank you.
Operator: The next question comes from Bill Maughan with Canaccord Genuity. Please go ahead.
William Maughan: Good morning. I have a couple. So, you've previously talked about and alluded to today, bringing in another potential asset to add to the commercial effort. Just wondering what the status of those efforts is, and what the biggest, I guess, hurdle or I guess, what you need to see before you can bring in another asset? My next question is on, you've had a consistent focus on adjusted EBITDA for the last year or so, at least and obviously, have gotten to a level where you're about flat to up. As you approach other metrics, for example, net income or cash flow positivity, do you expect the focus to change towards those metrics going forward? And then, finally, on the meeting with the FDA following your CRL. What were the main either misunderstandings or just differences of opinion that were hatched out and that you got on the same page with the FDA on to clear the way to a resubmission? Thank you.
Paul Levesque: Thank you for your question. So let me tackle the first one on the business development. And Philippe, you can take the adjusted EBITDA question, and Christian, the meeting with the FDA and the questions that were discussed as part of the Type A meeting. So on your first question, and I think we have said that before, but let me restate our interest for business development. So obviously, we have capabilities in HIV. HIV [Technical Difficulty] tesamorelin is more HIV adjacent, but also in small metabolic small liver disease, we have hired a lot of people on the ground in sales and in medical that have expertise in small metabolic and small liver disease providing that we do not have to create a huge new sales force and rather stick to covering the centers of excellence, we believe we could actually undertake such efforts and be successful. This is advancing very nicely. We have opportunities that are moving forward, and I would be more than happy to reveal those once they are finalized, which is not the case yet. But I can tell you, this is key to our activities at the moment, and I'm very optimistic about the outcome being positive within a decent period of time. Next question, Philippe, on the adjusted EBITDA, when are we going to be net income positive?
Philippe Dubuc: Well, I'm not going to comment on when we're going to be, but just on the reporting, you're right, Bill. We are transitioning from being EBITDA negative to EBITDA positive. And if you look at our guidance, you'll see that it will be improving over the year. So at some point, we'll be talking more about cash flow, about free cash flow, and also about the bottom line. We're really turning the corner and these metrics will become more and more important in the next quarter or two.
Paul Levesque: Christian, we had a very important meeting with the agency that we call the Type A meeting. We just wanted to have clarity on some of the questions. So what have we learned and what is the step forward now?
Christian Marsolais: Yeah. With the FDA when we request a Type B meeting, we proposed to the FDA, the plan of action for all of the questions, and there are only two questions that will remain to be clarified. The first one was regarding the anti-microbial testing. And since we started discussion with the FDA during the review process, we initiated another study with the final component, the component that will be commercially available mainly the bacteriostatic water for injection from Pfizer (NYSE:PFE) and the drug product, which is now produced by PCI, and we have good results. We shared those results with the FDA, but they couldn't comment during the meeting because our new data presented to the FDA, they will include their comments in the minutes that should be coming any days probably by the end of this week. The other one that was very important for us to clarify about their understanding was regarding the immunogenicity risk assessment. We wanted to ensure where the FDA was standing. The question was more related to the degradants. As you know, now in our formulation, it is a live-life’s (ph) drug product that needs to be reconstituted and stay reconstituted for a period of seven days. And we have tightened our spec to meet the same values, if you want us for the F4, then we think that those two questions were well addressed, and we're ready to complete the work and submit to the FDA for a decision this year.
Paul Levesque: Thank you. So we are awaiting minutes from the Type A meeting. We are working on the resubmission, and we expect the decision by -- before the end of the year. Thank you. Thanks for your question.
Operator: This concludes our audio question-and-answer session. I would like to turn the conference back over to Paul Levesque and management, if there are any webcast platform questions and for any closing remarks.
Paul Levesque: Okay. Thank you, operator. So there are a few questions. And the first one is you mentioned that there has been an acceleration in the oncology trial. Can you expand on this? So Christian, we actually released the fact that we had one patient, so what's the update?
Christian Marsolais: Well, the update is that now the -- all of the sites are active up and running and looking for patients, then we had a second patient that was treated yesterday, which is very good. We also – like, the sites are active and now trying to recruit the six patients as fast as possible. We have another patient which is in screening at the moment, and we're in regular contact with all of our sites to ensure that those six patients will be recruited, don't have the date in mind. It's always a bit difficult to give a date, but hopefully, in the coming weeks or months.
Paul Levesque: Thank you, Christian. And can you expand on the partnering strategy for oncology? No. We're still extremely active. What I said is very important because this is something that we have not maybe clearly explained that before. But there are two things now that are coming together very nicely. We have TH1902, in the clinic in Part 3 with a new protocol that is being dosed and we're doing now the last cohort at a higher dose of 1.5 time the dose of docetaxel when used alone. That is more than 40 patients human that have been dosed with TH1902 and some of them with the new protocol. That's one thing. But we also wanted to advance other PDCs with different payloads. Some of them are more potent than docetaxel. We've done that. And in fact, over the weekend, you presented pretty stunning data with those PDCs sometimes in combination, sometimes alone, but it's pretty stunning information again. So we think that now with docetaxel and our peptide drug conjugate advancing and showing signs of efficacy because we have seen signs of efficacy, and we may see even more with the new protocol now with the last cohort that we're dosing at the moment, that combined with the new PDCs that we have advanced, we think that we are in the sweet spot for attracting interest, we're getting interest from oncology companies. And you know what those companies are, they are the companies that are very active in oncology, and we are putting our value proposition together with a very clear next step on what we should advance further, and I remain extremely optimistic that we'll find some interest and get some activity going, and we will be reporting into time. Okay. And there's a question on the impact of GLP-1. So can you expand a little bit on any insights that you're seeing in the market on the impact? So thank you for the question. So John, we've said that EGRIFTA now is recording many quarters of pretty, pretty good performance. So how is that panning out with the GLP-1s pressure and news that, that category of medicine is making on a daily basis.
John Leasure: Yeah. Thanks, Paul. We continue to see interest in injectable drugs to decrease that. And where nobody was talking about this a couple of years ago, now everybody is talking about it. So we think that is creating some tailwinds for us. And the patient type for EGRIFTA is much different than the patient type for GLP-1, where that's mainly a high BMI patient and the GLP-1 where the EGRIFTA patient frequently has an increased hip to waist ratio. Another major difference is that EGRIFTA increases lean mass and where the GLP-1s have been associated with significant decrease in lean mass and this is a big problem, especially in the HIV population. So, there are different pension types, but there's increased interest, and we're continuing to see strong new enrollment growth and total patient growth. And so I think that's what it speaks for itself.
Paul Levesque: Thank you, John. Last question is a little bit more information around the plan with Marathon. So I think Paul (ph) address that [indiscernible].
Unidentified Company Representative: So the facility is $60 million or $60.6 million and its reimbursable over 36 equal monthly payments, which works out to $5 million a quarter. So with the cash that we have on hand and the cash that we'll be generating from operations, we believe that we have enough to reimburse the facility in its entirety. This being said, there are some restrictive prepayment penalties, such as make-whole payments on the facility two years after drawdown. So the first of these restrictive penalties goes away on the first $40 million tranche in July of this year and the second restricted penalties on the $20 million go away in a year and a few months in June of 2025. We don't have specific plans right now to prepay, but we are looking at all options available, and when we are ready to proceed with something we will keep the market abreast, but that is definitely something that we are considering right now. So Paul, I'll turn it over to you, there are no more questions.
Paul Levesque: Thank you, everyone, for attending the call today and for your questions. The second quarter is shaping up nicely, setting the stage for 2024 annual revenues between $87 million and $90 million and an adjusted EBITDA in the range of $13 million to $15 million. We remain confident in our strategy of doubling down on our commercial capabilities completing Part 3 of our Phase I oncology clinical trial and acquiring assets to create value for our shareholders in 2024. Thank you again for continuing to be part of our journey. See you soon on the second quarter call. Have a great day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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