Good day, ladies and gentlemen, and welcome to the Medexus Pharmaceuticals first quarter 2023 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Victoria Rutherford, Investor Relations at Medexus Pharmaceuticals. Ma'am, the floor is yours. Thank you. Good morning, everyone. Welcome to the Medexus Pharmaceuticals first fiscal quarter 2023 earnings call. On the call this morning are Ken d'Entremont, Chief Executive Officer, and Marcel Konrad, Chief Financial Officer. If you have any questions after the conference call or would like further information about the company, please contact Adelaide Capital at 480-625-5772. I would like to remind everyone that this discussion will include forward-looking information as defined in securities laws. Actual results may differ materially from historical results or results anticipated by the forward-looking information. In addition, this discussion will also include non-GAAP measures such as adjusted net loss and adjusted EBITDA, which do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For more information about forward-looking information and non-GAAP measures, including a reconciliation of each of adjusted net loss and adjusted EBITDA to net loss, please refer to the company's management discussion and analysis, which, along with the financial statements, are available on the company's website at www.medexus.com and on SEDAR at www.sedar.com. I would now like to turn the call over to Ken d'Entremont. Thank you, Victoria, and thanks to everybody for joining us on the call this morning. We are proud to announce a record first quarter for Medexus. Our base business continues to perform strongly, and was complemented by recognition of a portion of revenue from Gleolan sales in the United States following our recent acquisition of Gleolan commercialization rights. During the first quarter ended June 30, 2022, we achieved revenue of $23 million compared to $ 17.3 million in the same period last year or 33% growth year-over-year. The $ 5.7 million increase is primarily attributable to an increase in the net sales of IXINITY and recognition of a portion of revenue from Gleolan sales in the United States, plus a 22% growth in Rupall year-over-year. First quarter adjusted EBITDA increased to $ 1.9 million compared to - $ 4.9 million for the same period last year. The $ 6.8 million increase was primarily attributable to an increase in sales as well as an expected reduction in research and development costs. We are pleased to achieve this adjusted EBITDA while continuing to maintain appropriate investments in our preparations for the U.S. commercial launch of treosulfan. We produced a net loss of CAD 1.4 million for Q1 compared to a net loss of CAD 6.6 million for the same period last year. Our adjusted net loss, which adjusts for unrealized losses or gains related to our convertible debentures included in net loss, was -$ 3.6 million compared to -$ 9.8 million for the same period last year. At June 30, 2022, we had $ 7.3 million in cash and cash equivalents with $ 8.7 million of total available liquidity. Turning to our specific product lines, our core business is performing well, and we are excited about new and potential additions to our product portfolio, which we believe will generate growth momentum over the coming years. We are pleased to say that we have corrected the IXINITY channel. Pharmacy and wholesale customers have now returned to normal buying patterns that are better aligned with patient unit demand. We are continuing to invest in our manufacturing improvement initiative, and we expect the resulting operational efficiencies to improve the gross margins for IXINITY over the coming quarters. The clinical phase of our phase IV pediatric study for IXINITY is now complete, and we are now preparing the analysis and clinical study report, which we expect to be completed in the first quarter of calendar 2023. A successful study could support a significant expansion of the indicated patient population for IXINITY to hemophilia B patients under 12 years of age, and we are exploring approaches to address this potential expanded market. Rupall continued to see strong unit demand growth, achieving 22% growth for the trailing twelve months ended June 30, 2022, continuing its trend as one of the fastest-growing antihistamines in the Canadian prescription market. This growth reflects a severe allergy season across Canada and successful sustained execution of our sales and marketing initiatives as physicians continue switching patients to Rupall from either generic prescription antihistamines or over-the-counter products. Turning to Rasuvo. On a unit sold basis, Rasuvo continued to maintain its strong market position and in fact increased its market share in the United States in the trailing twelve months ended June 30, 2022. However, increasing competition in the U.S. branded methotrexate market continued to negatively affect Rasuvo product level revenue. We implemented effective unit level price reductions to defend our product's strong market position. On Metoject, even with a generic entry to the Canadian methotrexate market in calendar 2020, Metoject saw unit demand increase in the trailing twelve-month period ending June 30, 2022. Again, product revenue was negatively impacted by a similarly motivated decrease in effective unit level prices. We continue to work towards conclusion of the litigation against the generic competitor, and a trial date has been set for calendar Q1 2023. We will continue to update shareholders on material developments in this matter. These existing products have primarily driven our performance to date. We also actively pursue opportunities to complement our existing product portfolio by licensing and acquiring new products. For example, in March of 2022, Medexus acquired the exclusive right to commercialize Gleolan in the United States. As I mentioned, we recognized some Gleolan revenue this past quarter, representing a portion of the product's net sales as per terms of the license agreement. We anticipate completing our agreed transition process in full within the current quarter. This will result in Medexus having full responsibility for commercialization of Gleolan in the United States, which will allow us to begin fully recognizing product revenue within the three-month period ending September thirtieth, 2022. Our U.S. relaunch of Gleolan will complement our existing commercialization rights to Gleolan in Canada, where we executed a full commercial launch of Gleolan in February 2021. As we have discussed in the past, we continue to be excited about treosulfan. We expect that it will become a leading agent for use in conditioning regimens as part of allogeneic hematopoietic stem cell transplantation protocols, or allo-HSCT, which is a therapeutic area of interest for Medexus. In June 2021, we received a notice of compliance from Health Canada to commercialize treosulfan, which we currently market in Canada under the trade name Trecondyv. We have now fully launched in the Canadian market and expect that the commercial experience we are gaining in Canada will serve us well if and when the FDA approves treosulfan in the United States. Our partners at medac recently resubmitted updates to data files and supporting information to the FDA to complete the resubmission of their new drug application for treosulfan. The review clock for the FDA's review of the NDA resubmission will then start if and when the response is considered complete by the FDA, with final FDA decision expected two to six months thereafter. An FDA approval would allow for commercial launch of treosulfan in the United States in the first half of calendar 2023. If the FDA approves treosulfan, we will then be obliged to pay a milestone payment to medac that would range anywhere between $15 million and $45 million, depending on the terms of the FDA's approval. Last week, we signed an amendment to our license agreement with medac. The amendment extended the date by which we would be obliged to pay this milestone amount to October 2023. This means that at the time of FDA approval, we would only need to pay immediately $2.5 million credit against our milestones that medac had provided us in September 2021. This will allow us to launch and begin commercialization well before these license payments must be paid. During the extended registration period, we have continued to work diligently with medac to prepare for the launch. If approved by the FDA, we expect that commercialization of treosulfan would have a material positive impact on the company's total revenue, as we estimate that the current market-leading product in the United States generated $126 million at peak annual revenue before genericization. We also continue to regularly explore additional complementary product opportunities in both current and planned therapeutic areas and in both the United States and Canada, and regularly evaluate various other transaction opportunities based on our strategic plan. A key component of this growth strategy will be to continue to leverage our infrastructure through new product acquisitions and partnerships. We will continue to look at optimizing our portfolio and leveraging our resources with the goal of executing near-term accretive transactions to achieve our sales growth targets over the coming years. In the meantime, we continue working to increase revenue, develop and leverage our commercialization infrastructure across products, and maintain strict financial discipline. I will now turn the call over to Marcel, who will discuss our financial results in more detail. Thank you, Ken. Total revenue for the first quarter ended June 30, 2022 was $23 million, which compares to revenue of $ 17.3 million for the three months ended June 30, 2021, an almost a $3 million increase versus prior quarter. The year-over-year increase of $ 5.7 million was primarily attributable to an increase in net sales of IXINITY and the addition of a portion of net sales of Gleolan sold in the U.S. Even without that additional net sales of Gleolan, the base business demonstrated a very strong performance this quarter. Gleolan sales during the ongoing transition period, including fiscal Q1 2023, have been in line with expectations, and Medexus has recognized a portion of net sales in its revenue accordingly. We expect to continue that strong performance following our U.S. launch of this product over the coming months. Gross profit was $ 12.9 million for the three-month period ended June 30, 2022, compared to gross profit of $ 6.9 million for the same period last year. The gross margin was 56.2% for the three-month period ended June 30, 2022, compared to 40.1% for the three-month period ended June 30, 2021. The 6 million increase in gross profit is attributable to the increase in net sales, as well as the impact of the failed batches of IXINITY during the three-month period ended June 30, 2021. Sales, selling and administrative expenses were $ 12.1 million for the three-month period ended June 30, 2022, compared to $ 11.7 million for the three-month period ended June 30, 2021. Research and development was $ 0.7 million for the three-month period ended June 30, 2022. This compares to $ 2.2 million for the three-month period ended June 30, 2021. The $ 1.5 million decrease was primarily attributable to a reduction in investments in the IXINITY phase IV clinical trial as it approaches its analysis and clinical study report stage. We also continue to invest a moderate amount of additional capital in the IXINITY manufacturing process improvement initiative. As a result, adjusted EBITDA for the three-month period ended June 30, 2022 was positive $ 1.9 million compared to -$ 4.9 million for the three-month period ended June 30, 2021. The net loss for the three-month period ended June 30, 2022 was $ 1.4 million compared to net loss of $ 6.6 million for the same period last year. Also included in net income or loss is a non-cash unrealized gain or loss on fair value of the embedded derivatives in our convertible debentures, which are sensitive to, amongst other things, fluctuations in our share price. We believe that adjusted net income or loss provides a better representation of performance of our operations because it excludes non-cash fair value adjustments and liabilities which may be settled for shares. Our adjusted net loss for the three-month period ended June 30, 2022 was $ 3.6 million compared to $ 9.8 million for the three-month period ended June 30, 2021. Cash and cash equivalents was $ 7.3 million at June 30, 2022, reflecting a decrease of $ 2.7 million during the first quarter of fiscal year 2023. The reduction is due to anticipated working capital fluctuations. Our available liquidity was $ 8.7 million at June 30, 2022, which consisted of $ 7.3 million in cash and cash equivalents and an undrawn credit of $ 1.4 million available under our ABL facility. We are excited about our quarterly performance and continue to explore various financing strategies to enhance our liquidity to support our business plan, which includes an eventual launch of treosulfan in the United States. We have been consistent in executing our plan quarter after quarter with sequential revenue growth and increasing profitability. We are looking forward to building that momentum towards an eventual launch of treosulfan and beyond. Operator, we will now open the call up to questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, please press star one if you have questions at this time. Please hold while we poll for questions. The first question is coming from Justin Keywood from Stifel. Justin, your line is live. Hi. Good morning. Thanks for taking my call and nice to see the profit improve in the quarter. Just on the treosulfan resubmission, if I understand correctly, the FDA will communicate if the submission is considered complete, at which point there would be a communicated timeline if I'm interpreting this correctly. I guess I have two questions around this. One, when the FDA will communicate that it considers the application complete, and what determines the review to be a two-month versus a six-month time period? Thanks. Thanks for the questions, Justin. The guideline is that they have 30 days to communicate whether or not they believe the application or the resubmission is complete. The company filed it, I think we stated, July 22. Couple more weeks to go before we would expect to hear from the agency. The timeline and what determines the two or six months, that's up to the agency. It's dependent on how much data they need to review and the timeline that they feel they need to do that. For our planning purposes, we're assuming the worst case scenario, which is up to six months. Remember, it is up to six months, so it could be shorter than six. Okay, thanks. That's clear. Just on the Gleolan sales in the U.S., there was some language in the press release that helped the growth in the quarter. Are you able just to detail what exactly those sales were within the quarter? Yeah, I'll turn it over to Marcel for the number. But yeah, obviously we're trying to communicate that, we're not yet selling product labeled with the Medexus packaging, so we're not booking full revenue. So what you're seeing so far is only a portion of that. We'll start to book full revenue, we think during this quarter, probably towards the end of this quarter, that we're working in. So it's not until really next quarter that you'll see the full impact of Gleolan, but we're pleased that, you know, it is making impact already. Marcel. Yes, sure. We've said that historically this product had generated about $3 million-$4 million per quarter. We're recognizing about half of that. As Ken mentioned, next quarter we'll be heading into a more meaningful quarter and then, you know, as of Q3 then recognize the full revenue. We'll give more details on this product. The first quarter has been really encouraging already for this. We're setting the stage for good growth going forward and we'll provide more information as we go along with this product launch. Thanks. Can you remind us what the peak sales estimates are for Gleolan in both Canada and the U.S.? I'm not sure we've really stated them. We did guide that the historical levels are $12 million-$16 million current sales. We think we could probably double that. There's a lot more potential. The penetration of this drug in other developed markets is about double what it currently is in the U.S., so we think there's a good sales lift possible. Plus there is a new indication that they're working on meningioma, which is a non-cancerous brain tumor. If successful in the clinical program, would significantly increase the potential of the drug. Thanks for taking my questions. Thank you. The next question is coming from Rahul Sarugaser from Raymond James. Rahul, your line is live. Morning, Ken and Marcel. Thanks so much for taking our questions, and congrats on the strong quarter. My first question is on Gleolan. You know, clearly its contribution helped to drive your cash burn to, you know, a much more modest number than it's been in previous quarters, so getting pretty close to being cash flow positive. I guess my question is that, you know, next quarter once we see a full contribution of Gleo, are we looking at the company getting even closer, potentially right into cash flow positive territory, and/or are there any other factors that you're looking at in order to drive towards cash flow positive? Yeah. Thanks, Rahul. Great question. I'll start and then let Marcel fill in any gaps. Clearly, you know, the strategy behind Gleolan was to help us apply the infrastructure that we already built for treosulfan plant against a, you know, currently marketable product. That, that's been successful. We think Gleolan will continue to grow, one, as we book full revenue and get the full economics of the drug, and then two, organically grow it. Plus the activity continues to grow. You know, the channel's been reset. Patient demand is growing. That will help. We do believe that, you know, we're gonna see sequential quarter-to-quarter growth as we move forward, and that's really what we've been doing for the past several quarters. Maybe just to add, you know, we talk about cash for Gleolan versus our overall cash situation and strategy. Obviously, Gleolan, as Ken mentioned. As a reminder, we had a very low upfront for this product. We expect this product to be, as we start selling it, accretive, quite soon, so gonna be a contributor very early on. Of course, you know, in the overall picture and also related to Gleolan, we're seeing purchases within inventory, for example, that now is part of the reason why our cash slightly declined. We've got some working capital fluctuations that were expected for this quarter and we've been carrying a $10 million cash balance more or less over the quarters and continue to work diligently on the next six months towards the treosulfan decision, which will be fundamentally changing the company's financials at this point. We're well mindful about that. Then we're planning the long term post treosulfan decision as well. We're looking at various financing options to bolster our cash and make sure that this period towards the launch we're heading towards is going to be affected positively for the launch, of course. That is a very important element of the next six months from a planning standpoint. Yeah. Great. That's very helpful. Thanks, Ken. Thanks, Marcel. That's a really good segue to my follow-on question, which is, as you mentioned, Ken, you've built out already a lot of the foundational structure for launching of treo, assuming it is approved. And so given that you already are absorbing these costs, that baseline cost is relatively well set. You know, once treo does start to hit the market, you know, what would be a reasonable estimate for the proportion of those sales contributing to the bottom line from Medexus? It obviously depends greatly on the launch trajectory, so the launch curve. We think that if there's been any benefit to the CRL over the past year, it's been that we've gotten far better prepared for launch. Remember the timeline when we first licensed this was extremely short. Now it's more normal. We do expect a better launch trajectory. We will add 16 people, six of which we've already added due to Gleolan. We're only adding an additional 10 at launch, so the increase in spending is not great. The margin on treo is better than our current margins, so it's got a really strong gross margin. It'll start to make the contribution pretty early on. You know, certainly in year two, it makes a contribution. Year two of launch, it makes a very strong contribution. Great. If you allow me to finish with one last quick question. You know, of course, while you and all of us are quite optimistic about a positive result from the FDA on treo, you know, in the small chance that it does not come back positive, you know, what are some of the risk mitigation things under cost mitigation, you know, things that you're putting into place, should that eventuality, you know, come to pass? That is a great question. We're not going all in on approval. We certainly believe it will be approved. There's no reason to think it won't. What if it doesn't? We do have plans that say, okay, in that scenario, you know, clearly there's lots of strategies you can put in place. You could sell some assets. We obviously will focus down on, you know, on the business that we have, which in that case will be IXINITY, Gleolan, our Canadian business. You know, we'll just get focused in on what we have. You know, you can clearly see that we are, you know, we did $23 million in revenue and didn't book for Gleolan this quarter. Clearly we're over $ 100 million in revenue now. We've got a much bigger business now than when we licensed treosulfan. That may not have been obvious to people because we, you know, went and reset the channel on IXINITY, and took a hit for three quarters while we were doing that. You know, clearly the business is far stronger now than it's ever been. We will focus on, you know, executing our plan, which is to find other drugs in orphan drug and rare disease space. Our business development work continues. If it's not treo, it'll be something else. Okay, great. Thanks, Ken. Thanks, Marcel. Congratulations again on the quarter. Thanks, Marcel. Thank you. The next question is coming from Andre Uddin from Research Capital. Andre, your line is live. Hi, Ken and Marcel. Just wondering if you can just discuss what you're doing with respect to IXINITY's manufacturing process in terms of streamlining, and also how that would impact margins, gross margins. Thanks. Thanks, Andre. Great question. I'm highly underqualified to comment on exactly what they're doing because it's complicated. It's a biologic product. There's a lot of steps in the process. We have people who are going through all those steps and making improvements to expand the yield. We have seen it working. You know, we're partway through that process, and we've seen substantial improvements in the yield. We do expect that to start to work through to our financials as we start to sell that product that benefited from the higher yields. As that continues to improve, it should just get better. You know, as you know, when we first licensed IXINITY, its gross margin was lower than the rest of our portfolio. We've been working to bring it up to that level and maybe we'll get it beyond our average gross margin. That's great. Just in terms of, if you look at new product opportunities, what does the landscape actually look like in terms of purchase prices? You know, what therapeutic areas are you seeing the opportunities primarily in? Maybe you could also just talk a little bit about the competitive landscape right now in terms of purchasing products. Are you seeing a process or can you just go a little bit into what you're seeing right now? That'd be great. Thanks. Sure. You know, clearly there are a lot of products, development products that you know, companies are struggling for cash and looking for alternatives to bring those things to market. There's lots of products available for pretty low prices that could be acquired. Now that's not our focus right now. It may be in the future if we have a successful treosulfan approval. What we're looking for is products near market that won't require a lot of our cash. I think Gleolan was an excellent example. Little upfront current sales, and we can grow it with our infrastructure. We are seeing other products kind of like that, whereby the developing company will bring its drug to approval, and then we would pick up and manage the commercialization. Even without a strong balance sheet like where we are right now, we are seeing opportunities and some things we hope to execute on. I would also say that, you know, we're pretty much laser focused on getting treosulfan approved and commercialized, and that will be a massive improvement in our organization just due to the sheer potential that the drug has. Yeah, that's great. What about if you look at medac's portfolio? I know you have that option to license different products. Is there anything else that you see that could potentially fit into your basket? Yeah, there's a few things. There's nothing as big as treo. I mean, that was the best product in the portfolio. There are a few other things that they may be working on, but you know, we're not counting on that for our licensing pipeline. Okay, that's great. Thanks. Thanks, Andre. Thank you. The next question is coming from Scott Henry from Roth Capital. Scott, your line is live. Thank you, and good morning, and congratulations on the strong results. I did have a couple questions. First on the model, gross margins were a little bit higher than they'd been trending, at least in the last quarter. Do you think this is representative of what we could see for the rest of the year, or perhaps was it just a strong quarter? Thanks, Scott. I'm gonna turn that over to Marcel to reply. Yeah, thanks, Scott, for that question. I would say a lot on the gross margin depends on the product mix. As we said, specifically one of the drivers will be as we come out of the IXINITY production improvement process. We should see an impact of that. When Gleolan comes online, we'll see probably a little bit counter to that because of the volume we'll have to book. On an individual product basis, we should see an increase quarter-over-quarter, and we'll elaborate that as we go along and explain the dynamics of the gross margin, which generally is positive on a product level, yeah. Okay, great. Similarly on SG&A, the $ 12.1 million that you did in Q1, I would imagine sequentially we would expect that to go up, certainly as Gleolan fits more into the equation. Is that a fair assumption that we should expect sequential growth in the next, I would say, three or four quarters based on that alone, and then treosulfan could add more? I would say that's a fair assumption. We will increase that mindfully, moderately, obviously, according to our cash balances, as I mentioned before, one of the sort of next few quarters planning will be the treosulfan launch. We will definitely not be thinking about impacting that. Again, we be mindfully spend on that front. The Gleolan side, yes, we'll be increasing those efforts a little bit. We had embedded a lot already in Q1. We started already obviously that spend. You should see an increase on the operating side. As well, as we mentioned on the revenue side, sequential growth expected over the next couple of quarters or so will be in line with that. Okay, great. As well, I think you talked about potentially sequential growth in Q2 versus Q1. Now, if we pull out Gleolan in the U.S., because obviously that's acquisitional growth, how is the organic business sequentially? You know, was Q1 a strong quarter or should we expect your. I mean, it was a strong quarter, but should we expect the base business to continue growing through the year. Just trying to get a sense of how to think of the quarterly progression. Yeah. The base business organic growth is, you know, primarily related to IXINITY and then Rupall also in Canada. IXINITY year-over-year is benefiting very strongly from the correction of the channel. But there is also underlying patient demand growth. I think the sales team in the U.S. and the marketing team there are doing a very good job, getting patient growth for IXINITY. We got both of those factors that work in our favor. You know, I think sequentially, we do expect organic growth in addition to the addition of Gleolan, which is obviously related to licensing. Okay, great. Final question on the balance sheet on the liability side. I know it's a little confusing with the different debt and business obligations on that liability side. Any debt due in the next, say, 12 to 18 months? Let Marcel handle that. Talking about the debt, it is a bit difficult to read the notes in the financial statements between short and long term. We have the debentures that will be next year, October, they can be settled in cash or in shares. That's the large part. The facility we have in place, the term loan, it's a $10 million term loan which we started to pay down, and then the ABL will become due in the next 12-18 months. We will definitely also anticipate that, address that. We have some time to do so, and we're fully aware of that, of these sort of 12 to 18-month timelines, of these loans becoming due then. Okay, great. Thank you for taking the questions. Thanks, Scott. Thank you. The next question is coming from Prasath Pandurangan from Bloom Burton. Prasath, your line is live. Hi, good morning. Firstly, to follow on the IXINITY manufacturing process improvements, could you talk about the timelines, as to when they're expected to complete and start impacting margins? Thanks, Prasath. Yeah, good question. We've been working on this since we acquired the drug, so they're starting to impact margins now, and will continue to do so as we go forward, and we do expect, you know, continuous improvement. It's a longer-term project. We're starting to feel the impact of the work that we've done quite a long time ago, and we will continue to see improvements as we go forward. Great. On the SG&A line item, the jump is it purely a function of new reps being hired, or is wage inflation also a factor? I'll comment and then ask Marcel to fill in the gaps. A lot of it's due to the additional three reps that we took on when we licensed Gleolan. If you remember, we took on some of their infrastructure, so that's already built into our results for the full quarter. I guess there is some price inflation in wages. Marcel, can you comment on it? Yeah, sure. Yeah, I would say this is about three to four different factors here. As Ken mentioned, the Gleolan full quarter effect both on the hiring front, but also on the variable spend, we now have as in the base. We see a bit of an inflation effect for this Q1 quarter for us, that includes some of the increases. We do have also a little bit of seasonality, I would say. Q4 is typically a little bit lower, a little bit lower quarter in terms of the variable spend. There are various factors coming together for this jump, which we don't expect to continue in Q2 then. Okay. That's useful. Thank you. Thank you. Once again, ladies and gentlemen, you can still enter the Q&A queue by pressing star one on your phone at any time. The next question is coming from Tania Armstrong-Whitworth from Canaccord Genuity. Tania, your line is live. Good morning, gentlemen. Thanks for taking my questions. Just a couple for me here. On the R&D expense line, so that's come down meaningfully, which is great to see. Just wondering, if you could provide us like a cost estimate of how much is remaining to prepare that clinical report. I'm assuming the IXINITY manufacturing process improvement costs are also baked into that line. Hi, Tania. Yes, you're correct. What's in that line now is primarily the process improvement. There's some costs associated with the clinical program, but most of it being process improvement at this stage. Marcel, you got anything you can add there? Yeah, it's the process, the process improvement, which will continue moderately as I mentioned. That's what makes the bulk of our R&D spend and also going forward then. Okay, excellent. Then on Gleolan, I think you talked about the potential to double revenue just based on increasing penetration to where we see it in international markets. I guess, what is the timeline you think you can do that in? If I might be mistaken, but I believe the orphan drug designation comes off in June 2024. We have another year and a half-ish. Is there the potential to extend your exclusivity beyond this? You're correct. That is the exclusivity period for Gleolan. We don't really expect any generic competition. It'd be a challenging area, and there is none elsewhere in the world, even without exclusivity. We don't think that's gonna happen. Obviously there is some work the licensing partner is doing in meningioma that might afford us some protection going forward. You know, back to your original question, which you know about the growth potential in it, we'll start relaunching the product, you know, in sort of September sort of timeframe, with the expanded sales force. We did announce previously that we're going from three reps to six reps in the U.S. for this drug. We think that will start to have an impact, you know, pretty quickly. I mean, the time to adoption is fairly short, you know, once we convince the hospitals to use fluorescence -guided resection. Okay. Excellent. That's very helpful. I guess to follow on that question a little bit, what I've seen in some of your peer companies, we haven't seen a full normalization of salespeople interacting with physicians face-to-face. I guess, with respect to a treosulfan launch, brand new drug, you want your salespeople out there selling it. What are you seeing in the market? Have things normalized in physician offices and hospitals? Are your salespeople able to get in there and sell face-to-face, or are they still using alternative means of selling? Yeah, it's a great question, and it's difficult to answer it 'cause it seems to be changing constantly and regionally. It's gotten way better. I mean, clearly people want to interact now, and so regardless of the status of the pandemic, seems like people want to get together. So that creates access for our salespeople. I think the IXINITY improvement is partially related to the fact that our sales force can actually get out there for the first time since we've had this product. If you remember, we licensed it in February and went into the pandemic the following month. So this is the first time that we've had our sales force really out there interacting, you know, in a more normal fashion. Hospitals continue to be an issue because obviously there's a lot of patients going and requiring ICU beds and other specialized care as a result of the pandemic. The access to those physicians is okay. It's more a question of getting patients in to see those physicians so they can get care. I will remind you that, you know, stem cell transplantation, although it sounds like a very serious procedure, and is actually administered in a chair. It doesn't take an OR. It doesn't. It's really just infusing blood cells back into the patient through an apheresis procedure. It's not like you need, you know, highly specialized care. After the transplant, obviously the patient needs to be isolated, but it doesn't require an OR space, which should help. You know, clearly we're projecting what this might look like, you know, out in the first half of 2023 when we do plan to launch. We hope that there'll be at least access like there is today, and perhaps it'll get a little bit better. That's really great color. Thank you so much, Ken. That's all for me. Thanks, Tania. Thank you. The next question is coming from Russell Pearson. Russell is a private investor. Russell, your line is live. Hi, Ken and Marcel. Congratulations on the quarter. My question is, you've got $ 15 million-$45 million in milestone payments coming up in October 2023, and you're expecting treosulfan, if approved, which I believe it will be too, the selling will start in the first half of 2023. With that large milestone payment, potentially the $45 million, let's look at it that way, plus the debentures and what other whatever other debt there is, how are you going to meet this? Like, will you sell enough of the treosulfan and the other products to meet all this debt, or what is your overall plan? Thanks, Russell. It's a great question. Clearly there's a lot of balls in the air. We think that as we move towards a treosulfan approval and the eventual decision that various forms of capital will become available to us. In the last iteration prior to the CRL there were significant debt providers that are interested in supporting the launch of a pretty significant drug. That would be one avenue we would go. Who knows what the equity markets will look like at that time? There's also always the option of selling non-core assets. There are various strategies, all of which we're considering to make sure that we meet our obligations as they come due. Okay, great. It's manageable then. It's just a matter of which direction you decide to go to make that happen. Yeah. Well, we're working on it now, so clearly the deferral of the milestone with medac was a significant step in that direction and that it takes the pressure off of us and allows us to focus on the execution of the launch rather than, you know, worrying about raising capital to pay the partner. Both ourselves and medac are very focused on achieving peak net sales, and so clearly we all want the same thing. We wanna see this drug successful in the marketplace. Deferring the milestone payments I think was a nice gesture for medac to allow us to focus on the launch, which will benefit them as well. Yeah. That is great. That is really good. Then one other smaller question, but how is Q2 looking so far? Like, it sounded like you Marcel were saying that, you know, gross margin will improve as the quarters go on here. How's the first month of Q2 looking? We're not typically giving any guidance, so one month is not significant. I think that, you know, as we go through the quarter, we'll see another strong quarter where we've been talking about this sequential improvement for a while, and we've been executing on that. We do expect that to continue as we go forward. Okay, great. Sounds really good. Thank you, Ken. Thanks, Russell. Thank you. There were no other questions in queue at this time. I would now like to hand the call back to Ken d'Entremont for closing remarks. Well, I wanna thank everybody for tuning into the call today, and thank you for all the great questions. Very happy to interact with our shareholder base. You know, our core base business has demonstrated incredible strength with IXINITY sales now normalized and the strong performance out of Rasuvo. Rupall sales are benefiting from another severe allergy season, so our core business is doing really well. We're thrilled with the fact that Gleolan is now generating revenue in the U.S., and it will continue to do that, you know, as we assume that full commercial responsibility for the product this quarter, and begin to recognize net sales in full. Our partner, medac, has submitted that additional data and supporting files to the FDA, and we look forward to an FDA decision once that submission is considered complete. We think we're gonna have a really strong fiscal 2023, and we look forward to updating shareholders as news comes in. Thanks for tuning in. Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.