Good morning, ladies and gentlemen, and welcome to the Valeo Pharma Inc Second Quarter Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we'll conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, June 14th, 2024. I will now like to turn the conference over to Frederic Dumais. Please go ahead. Thank you, Operator. Good morning, everyone. Present with me today for our Second Quarter 2024 Financial Results Conference Call are Mr. Steve Saviuk, our CEO, and Mr. Pascal Tougas, our Chief Financial Officer. Before we begin our call, I would like to remind everyone that this conference call may contain certain forward-looking statements regarding the company's expectations or future events. Such expectations are based on certain assumptions that are founded on currently available information. If these assumptions prove incorrect, actual results may differ materially from those contemplated by the forward-looking statements contained in this conference call. The company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise other than as required by securities laws. I would now like to pass the call over to our CEO, Mr. Steve Saviuk. Please go ahead, Steve. Yeah, thank you, Fred. Good morning, everyone, and thank you for joining us on this Second Quarter 2024 Results Conference Call. I will review our quarterly results, provide a brief commercial and operational progress update, and then my colleague and CFO, Pascal Tougas, will provide more details on our second quarter results. Before diving into the quarter, I would like to comment on our press release issued yesterday morning. In 2021, Valeo undertook a significant launch of two new asthma therapies, Enerzair and Atectura. These are two very effective treatments for controlling the effects of asthma. Despite being launched during the height of COVID, these two drugs have overcome their slower start than anticipated and are now growing rapidly. I will comment more on this in a moment. Using our learnings we have accumulated over the years since launch, assessing market data and Xponent data as well as the competitive landscape, and facing the reality that Valeo cannot solely focus on growth without considering the bottom line, we had to make a challenging but necessary decision regarding our respiratory commercial activities. As a result, yesterday we announced the restructuring of our respiratory commercial team, which will see our workforce reduced by approximately 20% and yield over CAD 5 million in annual savings. This will help us realign our respiratory commercial focus while continuing to drive strong adoption for these two therapies in the asthma market. I would like to reiterate our strong appreciation for the effort and dedication of those Valeo employees affected by this restructuring. Now on to Q2. Q1 2024 demonstrated a resumption of our quarterly revenue growth trends. Q2 2024 results confirmed this trend with another record quarter. Revenues for the second quarter reached a record CAD 14.1 million, up 4% over Q2 2023 and Q1 2023, despite some softness in a number of our non-core brands in Q1 2024. Year-to-date 2024 revenues stand at CAD 27.7 million versus CAD 26.7 million for Q2 for the same period in 2023, also up 4%. While this revenue increase may appear to be modest on the surface, we believe it does not provide a full picture of all the progress we are currently making with respect to our core brands, and I'll deal with that in a moment. Our adjusted gross profit of CAD 3.4 million in Q2 2024, compared to CAD 4.7 million in Q2 2023, was down 27%. Our gross profit was negatively affected during the second quarter due to a reduction in Xiidra's contribution compared to the same quarter last year by over CAD 800,000. Subsequent to the end of this quarter, Q2 2024, Valeo ceased distribution of Xiidra, all in keeping with the sale of the Xiidra rights from Novartis to Bausch + Lomb that were finalized last fall. Q2 2024 produced a net loss of CAD 7.8 million versus CAD 6.5 million in Q2 2023, up 21%, and an adjusted EBITDA loss of 2.5 in Q2 2024 versus CAD 1.7 million in Q2 2023, up 48%. My colleague Pascal will have more comments on the origins and some of the details there. Although we expect restructuring charges, as per the earlier announcement regarding the restructuring of our respiratory team, these restructuring charges will impact third quarter. We believe we will see significant improvement in all the important financial metrics in Q2, starting in Q3 2024 and continuing in fuller form in Q4 2024, with our goal of achieving EBITDA positive status by year-end, still intact, and to be followed by cash flow positivity thereafter. Our respiratory unit was once again the primary contributor to revenue growth in the quarter, with Enerzair and Atectura increasing their revenues combined by a total of 52% over the same quarter last year and significantly increasing both their number of prescriptions and prescribers year-over-year. At the end of the second quarter, the number of physicians who have prescribed Enerzair and Atectura reached almost 3,900, while this increased physician adoption has driven total prescriptions for the last 12 months ended April 30th, 2024, to over 88,000 on an annual basis, an increase of 96% over the same period last year or at the same time last year. We expect to continue to see this revenue growth in these asthma therapies in the coming quarters and years. A new mix of direct physician detailing, digital interaction, and other initiatives are focused on increasing physician engagement and patient enrollment. Our ophthalmology unit was negatively impacted due to a declining margin contribution from Xiidra, totaling over CAD 800,000, as previously mentioned, versus the same quarter last year. We believe that our ophthalmology business unit can play an increasing role in the future success of Valeo and is a key therapeutic area for Valeo going forward. It is particularly well-suited to accommodate additional products. As mentioned on previous quarterly calls, our business development activities are heavily focused on expanding our ophthalmology portfolio, and we are now in advanced discussions on a number of potential products in this area. Although Redesca, the lead product in our hospital unit, and Redesca currently, in terms of biosimilar, enoxaparin biosimilar, has a number one market share in Canada of approximately 50%. Redesca experienced sales growth in the period, but it was still adversely affected by a short-term structural delay in Ontario that has pushed back full adoption of biosimilars at the hospital level. Our interaction with various levels and stakeholders in Ontario provides us with a lot of confidence that the Ontario market opportunity will start to develop quickly over the course of the summer and increasing into the fall, and that Redesca should play an important part in this market. Our quarterly results do not yet reflect the great strides that we have made since the beginning of the fiscal year. These will become more evident in the quarters to come. We expect our key brands to continue to generate consistent revenue growth and improve margins, coupling that with over CAD 7 million in cost savings that we have announced, which will lead to a stronger, more consistent, and more sustainable bottom line. I would like to wind up my portion of this call by once again paying tribute to our wonderful and dedicated employees whose continued efforts make Valeo Pharma one of the fastest-growing healthcare companies in Canada. Valeo brings innovation to Canadians, and innovation means better healthcare. And with that, I'll turn over to the financial portion of the call to Pascal Tougas, our CFO. Pascal? Thank you, Steve. Good morning, everyone. Let's quickly review our second quarter 2024 results. So starting with revenues, for the quarter, the revenues landed at CAD 14.1 million compared to CAD 13.6 million prior year quarter, comparable, representing a 4% increase. There were sales uplift generated by promotional activities in respiratory, as well as continued growth from Redesca, Simbrinza, and Allerject. On a year-to-date basis, the revenue growth is also materializing at 4% when comparing the first two quarters of 2024 versus 2023. And looking at the trailing 12-month period ended April of 2024, the revenue total is reaching CAD 54.8 million, nearly 21% growth compared to the prior 12-month period. From there, moving on to gross profit, the quarter landed at CAD 2.9 million for the quarter, down from CAD 4.1 million, comparable quarter prior year, a 29% decrease resulting from a combination of, one, the unfavorable sales mix that was generated on a year-over-year basis, and second would be the eroding contribution from Xiidra at the gross profit level, as Steve alluded to. For the quarter, no material adjustments are impacting gross profit to adjusted gross profit from that end. On a year-to-date basis, the gross profit is down CAD 2.3 million, or 31% of CAD 5.1 million, explained by quarterly impact above what was previously mentioned and Q1 variances, essentially the CAD 1.1 million of write-offs that were performed under Q1. So at that point, the adjusted gross profit returns a CAD 7.2 million output, so roughly CAD 1.3 million down from year-to-date of Q2 2023. Once you factor in, again, the elements that we just spoke to, it actually drives the elements driving the variances. Starting to take a look at operating expenses, for the quarter of Q2 2024, the OPEX materialized at CAD 6.8 million, 2% down on a year-over-year basis. The OPEX decrease remains limited on a year-over-year basis from two elements. One, the timing in sales and marketing expenses on comparable quarters, of course. And then two, the G&A appears high as it supports transformation costs of nearly CAD 500,000 within a quarter alone. Without these exceptional costs into G&A, our Q2 would have remained flat on a year-over-year basis, so roughly around CAD 1 million. On the year-to-date side, the OPEX is reaching CAD 13.9 million, yet again a 2% reduction versus year-to-date of 2023. This reduction does not include, again, two sets of costs that are partially masking the OPEX reductions that are published or reported. So one being the severances that we incurred under Q1, mostly impacting sales and marketing as well as G&A. And then two, the transformation costs that I referred to earlier on, that for the sum of Q1 and Q2 are totaling CAD 0.7 million. Finally, taking - no, sorry, not finally. Looking at net loss for the quarter was CAD 7.8 million, a CAD 1.3 million increase versus Q2 of 2023, so roughly 21%. And on the year-to-date, CAD 14.7 million, a CAD 2 million increase versus prior year, roughly 15%. Adjusting for the transformation costs and the severances would reduce the year-over-year delta by nearly CAD 1 million. At EBITDA level, so for the quarter, the loss grows by CAD 0.7 million -CAD 3.5 million, considering the exceptional costs incurred in transformation and the eroding Xiidra contribution of CAD 800,000. This would have represented an improvement of nearly CAD 0.6 million versus Q2 2023, had we adjusted for it. And then for year-to-date, the year-over-year loss remains at CAD 0.7 million, again, pretty much all tied to the quarter activity. And here again, without transformation costs and the year-over-year Xiidra contribution, this would actually put the performance into an improving status. Finally, let's take a look at the cash position and the cash burn. So for the quarter of Q2 2024, at the end of April, the cash position was CAD 6.9 million, a CAD 600,000 decrease versus year-end of 2023. The operating activities for the quarter have consumed CAD 3.3 million, a CAD 2.8 million increase versus Q2 of 2023, CAD 1.3 million from a net loss, while all non-cash elements, so both the changes in the non-cash working capital and the items not affecting cash, amount to CAD 2 million. Moving on to investing activities for the quarter, have generated CAD 1.3 million, mainly from receipts of non-core asset disposal, while the financing activities reflect cash movement associated to debt service. Just before concluding, an element of small disclosure, so I'll ask readers and/or listeners to please note that following the filing we've done yesterday after the market closed, the team picked up late yesterday on an item that was incorrectly presented on our balance sheet. It's essentially an element between the short-term and the long-term debt subsections. Accordingly, there's no P&L impact. Yet what we expect to do is for Valeo to be refiling financial statements with an amended balance sheet later on today. Again, I repeat, there is no impact to P&L. And on that note, this concludes the financial review part. Back for questions potentially later on. So for now, I'll hand it back to Steve for remarks. Thank you, and over to you, Steve. Yeah, thank you, Pascal. We are now ready to open the call up for questions. Although this portion of the call is reserved for questions from financial analysts only, we invite any of our shareholders or any other interested parties to contact us directly with any questions that they may have, and we will endeavor to get back to you as quickly as we can. Operator, you may now proceed with the questions portion of this call. Thank you, ladies and gentlemen. Should you have a question, please press the star followed by the one on your touch-tone phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please leave the headset before pressing any keys. One moment, please, for your first question. Your first question comes from Scott McAuley from Paradigm Capital. Please go ahead. Morning, guys. Thanks for taking the questions. First of all, I guess we'll start with the big news from yesterday on the restructuring. So are there any other details you can provide, like how many people are being impacted? And I think most importantly, how are you organizing it and organizing that business unit going forward so that it doesn't impact the ability for these drugs to grow and gain more market share? Okay. Well, Scott, thanks for the question. Yes, yesterday was a big day and an important day for Valeo to make these changes. So the number of people impacted, as we said, is about 20% of our workforce. To put a more stronger number, it's about 27 people. So to give a more accurate number, it's actually slightly higher than 20% of our workforce. And it's all field force we're talking about. Now, the second part of the question, how it impacts, our view is it will not impact in any material way the sales trajectory of Enerzair. And it goes back to when we started the initial licensing of Enerzair and how our targets have changed, physician targets, and how they might have changed, I would say, with information that we received on the market and a strong degree of maturity. When we initially started calling on physicians, we were calling on specialists, obviously respiratory specialists, asthma specialists, and allergy specialists. Clearly, obviously, the allergy, the asthma specialists are part of that respiratory group, which totaled about 3,000 physicians. Then we were calling on about 8,000 primary care physicians. It quickly became evident to us that that was a much too wide number of physicians. We were not able to get to what's termed as reach and frequency in the jargon in the industry. The reach was too wide, and the frequency was too low. Last year, or just slightly over a year ago, we decided to cut that back to a smaller number of physicians. We went back to maybe 2,000 specialists because realizing that many specialists maybe are not necessarily actively involved in prescribing asthma therapies. We cut also the number of GPs down to those which have a stronger or larger portion of their practice that deals with asthma. We saw some great results last year. I mean, we saw the sales starting to increase. That is because the frequency improved. What we've looked at again this year, and when we looked at it, so it all started with looking at physicians. We said, "There are a category of physicians where we're just not making a return." In the sense that the cost of calling on these physicians and the adoption by these physicians and the adoption numbers are just too low to justify continuing direct detailing activities. Other activities will continue with these physicians. We're not dismissing that. But we felt that the cost of a call, which runs close to CAD 200 every time one of our representatives walks into a doctor's office, when you add in all the costs of transport and salary and benefits and all this, it's roughly or just maybe around CAD 200 a call. We just couldn't justify it. We think there's better ways to do that. So at the end of the day, and it's maybe a bit of a long answer here, but I wanted to give as much background as possible. At the end of the day, we want to focus on approximately the top 3,000 prescribers, which represent north of or probably mid-30s in terms of overall asthma prescriptions. These will be the ones targeted with direct physician interaction with more frequency. We will be seeing some doctors 10-12 times a year. In addition to that, we are rolling out more of a digital sort of process where there'll be either phone calls, team calls, or other types of outreach to those physicians which are maybe in more geographic areas which are harder to get to or that have a smaller asthma practice. We'll continue to focus on other activities, be it symposiums, posters, which we haven't spent a lot of time on. We haven't focused on those a lot. These are the types of activities that can actually outreach to a broader number of physicians. So as a result, we think we're going to not the impact on physicians will be as effective, if not even more effective, especially on those that write a lot. So we don't see the costs, the revenues being materially impacted. And at the same time, significant savings. I have to take my hat off to our commercial team led by Kyle Steiger that really looked at these territories and where we can give for competitive reasons how many reps we still have in the field and what have you. But they did a superb job of really trying to redefine territories to maximize the sales on the current cost structure. No. Thanks. That's a lot of great detail. Maybe two quick follows on that. So with 27 people being restructured on the field force, how many people remain on the respiratory commercial sales force? And then secondly, you mentioned kind of targeting 3,000 physicians now. Is that a combination of specialists and GPs? So that's that kind of total market focus. Yeah. So first question, I'll answer by saying we're about 80 employees now at Valeo. And the specific respiratory field force is kind of a confidential thing. We'd rather that our competitors don't know, I suppose. But yeah, we're going to be at this time last year, we were 134 people. We're now 80 people, slightly less than 80. I believe it's 79. So that shows you the type of cost savings and cost reduction we've implemented at this point. Now, what was your second question? Sorry, I missed it. The three, you mentioned kind of the new target being 3,000 physicians across Canada. Is that both specialists and GPs? Yeah, that's correct. It's probably two-thirds, one-third. And there are obviously some general practitioners which have strong asthma practices, and we'll be focusing on those. That doesn't mean we're not going to be letting go of the physicians that are not going to be called on directly anymore. They will be approached in different means, whether it be through sort of telephone, through direct digital media, through other means at conferences. We had at the Canadian Respiratory Conference several months ago, we had a symposium, which was a huge success. And it was an interesting evening in that we had Dr. Ken Chapman, who is clearly one of our KOLs, and another physician debating essentially Enerzair versus biologics. We had 150 physicians in that room. And the evening was a great success. It really kind of gave a strong view of when you use a triple, when you move a patient to a biologic, why you would do it in certain ways. Those types of activities, I think, are more impactful than having sent some of our representatives out to some of these physicians, which in some cases, you may not even be able to see. So I think my comment was it's the mix that's changing. Less maybe direct interaction or less direct interaction in terms of number of physicians, more frequency, but using other techniques which are gaining popularity, especially with younger physicians that are more used to the digital approach, gaining more popularity. So we think that we continue to see Enerzair, in particular, Enerzair quarter-over-quarter is up 100% from last year. In fact, in this quarter, which is Q3, we're, I think, around 120% above Q3 2023. So there's no slowdown in these products. They're gaining, and we expect what we're doing won't have any; we'll continue that trend. Yeah. No, that's great. And then I think you had highlighted it in the comments, but just to put a point on it. So you're still expecting kind of EBITDA, breakeven, or profitability in fiscal Q4, so ending, I believe, October, and then cash flow positivity sometime thereafter. And that includes the impact of the restructuring costs and the savings from the restructuring. Yes, right. Those restructuring costs, we have a range, so we don't know the exact amount yet. I mean, this is relatively this wound is fresh, right? It happened Tuesday, Wednesday, kind of the discussions. And then we released obviously Thursday morning after all employees that had been impacted were notified. So there will be a charge in Q3. So Q3, we'll see some interesting there'll be some interesting numbers to talk about in three months' time. But the full effect is in Q4. And with these savings are not all employee savings. They're not all payroll savings. There'll be other reductions in certain non-employee spending that will impact and form part of that approximately CAD 5.2 million of savings that comes with this change that we've just made. Got it. Shifting gears a little bit to the balance sheet. So looking forward to the next few months, there's the Sagard kind of repayment at the end of August, the Novartis kind of payment back from the Xiidra sale. Do you have the cash to kind of get through that Sagard payment, first of all? And then secondly, obviously, there's the convertible debt due at the end of this year. Obviously, a lot of that's in some friendly hands. So any updates on talking to those holders, coming to a deal or coming to an agreement that works for everybody? Yeah. The first aspect is Sagard. Clearly, we're in discussions with Sagard virtually on a daily basis on a number of fronts. So we're definitely working hand in hand with them on trying to satisfy all our obligations with Sagard. So maybe that's kind of a general statement, but that's probably as clear as I could make it at this point in time. But there's a very Sagard is very understanding, friendly. We have to do some things. We'd like them to do some things. But there's an ongoing dialogue. And I think over the course of the coming weeks, we'll be hopefully in a position to clarify that even further. As far as the longer-term debt or longer-term sort of debt repayment, which comes December 31st, there has been discussions with some of these debt holders. Investissement Québec owns 40% of that debt. Then there's a number of institutions and some insiders which probably own another 40% of that debt. We have had discussions. The two in regards to Sagard and its debt and the long-term debt really, in many ways, go hand in hand. What happens with one will affect what happens with the other. I mean, what happens with the Sagard debt will affect what happens with the long-term debt. But we feel that we will come to a positive conclusion with everyone to the satisfaction of them and to the satisfaction of our shareholders. Got it. Thanks, Steve. I guess just lastly for me, and then I'll hop in the queue on the business development progress. I know you've highlighted a few times wanting to get a deal over the line on the ophthalmology business unit. You kind of mentioned in the remarks that that's continuing. Any other kind of color you can provide on that in terms of when you hope to get something done, if you expect it to be kind of immediately accretive to EBITDA or cash flow, and any other details there? Well, I would say that as an overall statement on our business development, it's active and accelerating. We feel that we will continue to add products that leverage our competencies. Clearly, the three areas that we work in, respiratory, hospital, and ophthalmology, are those areas. So yes, we're working on more deals. Yes, the types of transactions we're looking at are more of the immediately accretive type. I think Enerzair and Atectura was a big piece for us to swallow at the time that we did. Thankfully, we were able to make it through that or at least getting through it. We're not clearly out of the woods there yet in terms of making those products cash flow positive. We'll go very, very close. So new products will drive margin and bottom line immediately. So that's the overall focus. As far as the products we're working on, what I guess I could say is we're very advanced in our discussions. And again, I would say I hope we can be in a position over the coming months to basically come out with some more definitive. That's great. Thanks, Steve. I'll hop in the queue. Yeah. I appreciate it, Scott. Ladies and gentlemen, once again, if you'd like to ask a question, please press star one. Your next question comes from André Uddin from Research Capital. Please go ahead. Good morning, Steve. Just wanted to ask you a quick question. In terms of Novartis, I know you've been working towards completing that or terminating the agreement with Xiidra. Can you just discuss a little bit about what the cash inflow would be from that termination? Great. Thank you. The cash inflow, so that agreement is now terminated as we announced. It arose as a result of Novartis selling the rights to Bausch + Lomb for Xiidra. As Novartis's focus on ophthalmology starts to decline, part of that original license, because there was always a vulnerability, that product had some very unique features. It was only essentially sold in Canada and the U.S. So it made that divestiture probably a little easier. It was huge. It was big. It was close to $500 million brand. It probably fit very well with Bausch + Lomb's requirements. So as a result of that, although we were not certainly anticipating that it would be sold, we made sure that if it was sold, that we would get our down payment back. So that down payment is more than 50%. In fact, the number is in our financial statements at $ 5.8 million. So those funds are in some parts have been offset against other, whether it be inventory purchases or other amounts that we may owe to Novartis or Novartis may owe to us. And as a result of the termination of the Xiidra agreement, we're now in a period of reconciliation. And ultimately, that reconciliation will determine what the final payment is to us. But we're already in the third quarter benefiting from some of those funds. Okay. So there's a payment of $5.8 million, and then there's a potential, depending on, I guess, if certain sales milestones are hit by Bausch. Is that? No. No, this is just a write-off versus an amount. And that amount, and I don't want to mislead anyone, we're not going to get $5.8 million from Bausch + Lomb. We will get $5.8 million, but we've already received in Q1, Q2, and including now more so in Q3, we've received some of the benefits of that $5.8 million. So we're already collecting on, I would say we've collected on a large portion of that amount of money that it was owed to us. Subject now to sort of a final reconciliation based on now that the last unit has gone out of our warehouse. So now we can actually determine who owes what to whom. And that will yield a sort of a reconciliation amount owing between the parties. But it will be significantly lower than the $ 5.8 million because, as I mentioned, those amounts have already been kind of offset or received by Valeo since the time of the product's sale. Just in terms of business development, I know you were talking a little bit before that. Are you looking now more towards a co-promotional type agreement or a licensing agreement? What type of? No. Well, listen, I think our primary focus for us, what we like to see is that we invoice, we take possession of the inventory, we invoice the products, we make the margin on the products, and we leverage the capabilities of our sales team, whether they be the Ophtho team, the hospital team, and the respiratory team. Clearly, there's different opportunities for each one of those teams in terms of availability and time in terms of the actual physical sales call. So all of the BD activities are, as I mentioned earlier, focused on products that would be immediately accretive. We prefer a license. We actually prefer acquisition. So we'll see more focus on acquiring brands versus licensing brands. As you know, in Canada, given Canada's relatively small weight in the world as far as the world pharmaceutical market, it's very difficult for a multinational to justify selling a brand in Canada only. Licensing is obviously their preferred course of action. There are other mid-tier companies based in Europe or in the U.S. where there's a greater opportunity to acquire the brands for Canada. We're certainly going to look at acquisition. As being co-promote, if it made sense for us, we'd do it. Currently, we're not considering any opportunities which are co-promotes. Just looking one last question here. Just in terms of Redesca, you were talking about Ontario. What is the market size of that? Well, there's two market sizes. And every question or many questions in pharma always seem to have more complicated answers. But the reason I'm saying that is the market for enoxaparin, which is a biologic that Redesca competes directly against. The market for Redesca from enoxaparin, about CAD 65 million. Pascal, if you've got more recent numbers, chime in. But it's CAD 65 million. About 45% of that is in Ontario. So to the extent, it's just like the market just doubled for us in terms of the market opportunity. So that's the number one thing. So that's why Ontario, which until now is the only province in Canada that has not freely adopted a biosimilar policy. It's adopted a policy. It's not implemented it. And we believe that implementation is underway now. It's starting now. And that's not just for our products. It's for other biologics, whether it be a biologic for Remicade or a biologic for Lucentis or a biologic for other biological drugs. So it's a big opportunity. But the second aspect, and we always talk about this secondary market. So to the extent that enoxaparin is CAD 65 million and the overall market is CAD 170 million, well, what's in the rest of that market? Well, the rest of that market is effectively two other molecules. And one of them is a product from Pfizer called Fragmin. That's the one that we think we can also go after. So what, let's say, market share opportunities are ahead of us is number one is the direct Ontario market. So that's 45% of the CAD 60-odd million dollars of revenue. And secondly, it's this CAD 110 million, which is the other two biologics. That's across Canada where we actually have an opportunity to go out and get them. The blue sky for Redesca is very promising. The advantages that Redesca has, specifically, is number one, our supply chain is very strong. It's very robust. Our partner, Techdow, is the largest producer of crude heparin in the world. So that's the feedstock for these drugs. Secondly, we're the only biosimilar in Canada that has the vial. So there's eight stock-keeping units, the famous SKUs, seven of which are prefilled syringes, and the eighth is the vial. The vial, in dollar terms, is the second biggest selling SKU. We are the only biosimilar that has that SKU. A big advantage for us in the market when we compete against some of the other biosimilars. Yeah. That's great. Thank you, Steve. Thanks, Pascal. Thanks, Andrei. Your next question comes from Stefan Quenneville from Echelon Capital Markets. Please go ahead. Hi guys, and thanks for taking the question. I guess I have a higher-level question on the relationship with, obviously, your key partner, Novartis. I mean, maybe I'll say this. They obviously threw a monkey wrench in your operations last year with Xiidra. I'm looking at the sales force reduction in respiratory. I have to imagine that there's some sort of contractual element to the number of sales reps you have to have on those drugs as per your agreement. I'm not sure if that's the case. I'm just wondering at a high level, are they just being very, I don't know, trying to be helpful in terms of getting you guys through this period as you're trying to get the profitability, perhaps helping you on the payable side, inventory? Just maybe characterize the relationship there and anything you can share on that. Well, as you're right, Novartis is one of our very important trading partners. What I can say, and I believe we have a very—I can't speak for them, but I think from our side, we have a very good relationship with Novartis. A lot of respect for the company. I enjoy dealing with the people that we deal with in Canada. And I find them very supportive, very listenable, if that's not a word, but they listen to our points of view. And I think I wouldn't change anything in terms of how that relationship and the level it's at. Having said that, whatever we do with the products that we license from Novartis is with the alignment of Novartis. I mean, they're certainly aligned with us. And there's a lot of discussion that goes back and forth on commercializing products. But yes, we're aligned with them. So that's important that we both agree on our activities and how they should be distributed and how the medical information should be conveyed to physicians across Canada. So yeah, very much in alignment with them. Okay. And And have there been any loosening of sort of payable requirements with them just sort of over a certain period of time here, say the next couple of months, or everything, all your commercial terms have remained the same across your sort of products? Yeah. We're kind of good with our commercial terms. With every supplier, probably spoke to anyone in the world, they say, "I wish I could have another 30 days." But no, we're very pleased with it's working. Our working relationship is good. I expect because of a number of initiatives that are undergoing or that we're undergoing, I expect that working relationship to actually improve in the quarters to come. To the extent it is good now, but I think it's even going to get better. Okay. And just sort of one more detailed thing. I think we've covered most stuff already. Just, like you said, the severance costs are not certain now because obviously, it's all fresh and it's probably been a tough couple of days for you guys. Do you have a sense of the Q3 impact? Would you be, I think you may have shared a range. If you could just repeat it or share what you can on the impact that we're going to see on the next quarter. Yeah. I think I'll just, maybe Pascal will chime in, but I believe that severances versus cost savings will probably be about a wash given there's only one more month in our quarter. Our employees will continue to work for Valeo until the end of this month. So I think it's pretty well a wash. Pascal, you got anything more specific on that? No, I think that might be a bit of optimistic, Steve. I had been more like a half-and-half type of portion would have worked. But so Stefan, you could probably expect somewhere between CAD 200,000 and CAD 300,000 impact in Q3 as a wash, but it's not a full, full wash. Got it. All right. That's it for me, guys. Thanks. Great. Thanks, Stefan. There are no further questions at this time. I will turn the call back over to Steve Saviuk for closing remarks. Thank you, operator. Thank you all for attending our second quarter conference call. We appreciate your time and the opportunity to provide you with more details on our quarterly progress. We're also pleased with our growth trajectory. We focused a lot over the last number of years on top line. That focus, as I kind of started to mention, is certainly now shifting to the bottom line. We realize that that's the most important metric that we have to satisfy. We're expecting, again, continued growth from our key brands. And that's really what's important. I think the Q4, to some degree, if there's any disappointment on the downside or the revenues, we're expected to be a bit higher. Some of it has to do with products that we don't promote and are open to the, I guess, the winds of the marketplace and stocking and competitive forces. These products typically have much significantly lower margins. So to the extent Pascal was talking about product mix, what I expect is that the product mix coming from our brands, which have much stronger margins. And I would say that, let's say, on an overall average, our brands' margins are probably 4x our non-core brands' margins. So that's why you want to see our brands performing better. You're going to start seeing that. We're going to continue to start seeing it. We have work to do, though. We have work to do on our margins, on talking to our partners, on being more efficient in terms of how we service our customers, how we ship products, and how we operate even at the head office level. We will continue to try to make the appropriate changes there to ensure that we hit that sustainability level, which is cash flow positive. I think that everyone benefits there from employees to suppliers to healthcare professionals, patients, and obviously our stakeholders, our shareholders, and our debt holders. With that, again, I'd like to thank you for your continued interest and support. We look forward to keeping you up to date on any upcoming developments. We certainly expect this to be a very busy summer for us, given some of the things we've talked about on this call. And look forward to talking with you again, whether it be next quarter or in the interim. Thank you once again. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.