HLS Therapeutics (HLS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $14.5 million, with adjusted EBITDA of $4.3 million and cash from operations of $2.5 million, reflecting a decline from Q2 2023 due to lower royalty revenue, but core product sales grew 9% year-over-year excluding royalties.

• Operating expenses were reduced by 13% year-over-year, supporting improved profitability despite lower total revenue.

• Promoted products Clozaril and Vascepa saw double-digit sales growth in Canada, with Clozaril up 5% and Vascepa up 21% year-over-year in local currency.

• The Xenpozyme royalty interest was sold for up to $45.75 million, strengthening the balance sheet and enabling $14 million in debt repayment.

• Net loss for Q2 2024 improved to ($5.7 million) from ($9.4 million) in Q2 2023, mainly due to lower expenses and other income.

Financial highlights

• Q2 total revenue was $14.5 million, down from $16.4 million in Q2 2023, mainly due to lower royalty revenue.

• Excluding royalties, marketed product revenue grew 9% year-over-year to $14.1 million.

• Q2 adjusted EBITDA was $4.3 million, or $3.8 million excluding royalties, up 86% year-over-year.

• Cash and cash equivalents at quarter end were $32.5 million, up from $22 million at year-end 2023, including $13.25 million from the royalty sale.

• Net loss per share Q2 2024: ($0.18) vs. ($0.29) in Q2 2023.

Outlook and guidance

• 2024 consolidated revenue guidance is $58.5–$59.7 million; Vascepa revenue expected at $17–$18 million, Clozaril at ~$40 million, and royalty revenue at $1.5–$1.7 million.

• 2024 adjusted EBITDA guidance is $15.5–$16.7 million; Vascepa is expected to achieve brand profitability in Q4 2024.

• Company expects further cost savings from transitioning Vascepa primary care sales in-house by end of August.