VALEO PHARMA REPORTS THIRD QUARTER 2024 REVENUES

• Q3-24 revenues of $12.6 million, down 11% from Q3-23, excluding XIIDRA, growth trend from continued business remains healthy at +9%, Q3-24 vs Q3-23

• Q3-24 adjusted EBITDA loss of $1.5 million compared to $2.5 million for Q3-23, down 40%

MONTREAL, Sept. 12, 2024 /CNW/ - Valeo Pharma Inc. (TSX: VPH) (FSE: VP2) (“Valeo” or the “Company”), a Canadian pharmaceutical company, today reported its financial results for the third quarter ended July 31, 2024.

Third quarter 2024 Results & Highlights:

• Revenues of $12.6 million in Q3-24 vs $14.1 million in Q3-23, down 11%
• Excluding XIIDRA activity, revenue trend showing +$1 million or 9% growth in Q3-24 vs Q3-23
• YTD-24 revenues of $40.3 million vs. $40.8 for 2023, down 1%
• Adjusted gross profit of $3.9 million in Q3-24 vs $4.4 million in Q3-23, down 12%
• Q3-24 net loss of $8.2 million vs $5.8 million in Q3-23, up 40%
• Adjusted EBITDA loss of $1.5 million for Q3-24 vs $2.5 million loss in Q3-23, down 40%
• Enerzair and Atectura prescribing physicians reached 4285 at the end of Q3-24, a 71% increase year-over-year.
• Total Enerzair and Atectura prescriptions for the 12 months ending July 31, 2024, exceeded 97,000, up 74% over the 12 months ending July 31, 2023

“As demonstrated by the June 2024 restructuring of our respiratory business unit, we regularly review performance, structure and business processes to optimize results. We are dedicated to delivering operational efficiencies while striving for profitable growth”, said Al Moghaddam, CEO. “We are encouraged by the continued growth of our respiratory unit and return to growth for our specialty products despite a $2.5 million negative impact in revenue during our third quarter of 2024 when compared to our third quarter of 2023 resulting from the termination of the XIIDRA commercialization”.

Commenting on the third quarter 2024 results, Pascal Tougas, Valeo’s Chief Financial Officer, said, “Factoring out the transfer of XIIDRA, the revenue growth trend from continued business remains strong. Given the recent performance of our core brands, revenue growth is expected to continue going forward. Once the non-recuring restructuring and transformation costs are fully behind us, this should result in expanding gross profits and a faster path towards profitable growth over the coming quarters.’'

Third Quarter 2024 Financial Results

• Revenues were $12.6 million for the third quarter ended July 31, 2024, compared to $14.1 million for the third quarter ended July 31, 2023, representing an 11% decrease. Valeo’s revenues are trending down in Q3-24 as result of the offset between -$2.5 million from Xiidra asset transfer (no longer selling) and, +$1.0 million growth from retained / comparable portfolio, essentially tied to Core brands. The Q3-24 revenue performance on comparable portfolio represents a continuing upward trend with $11.8 million compared to $10.8 million in Q3-23, a 9% increase and a 12% increase versus Q2-24;
• Adjusted gross profit was $3.9 million for the third quarter ended July 31, 2024, compared to $4.4 million for the third quarter ended July 31, 2023, representing a 12% decrease. The $0.5 million decrease over the previous comparable period is tied to the transfer of Xiidra only contribution for portion of Q3-24, resulting in a $1.3 million decrease versus same quarter year over year;
• Net loss was $8.2 million for the third quarter ended July 31, 2024, compared to $5.8 million for the third quarter ended July 31, 2023. The 40% increase in net loss in Q3-24 mainly results from a combination of i) Gross profit diluted by $1.3 million tied to Xiidra only being active for a portion of Q3-24 and ii) transformation and restructuring costs (supported under G&A) in Q3-24 in the amount of $1.6 million;
• Adjusted EBITDA loss was $1.5 million for the third quarter ended July 31, 2024, compared to $2.5 million for the third quarter ended July 31, 2023, a 40% improvement.

Year to Date 2024 Financial Results

• YTD Revenues of $40.3 million for the nine months ended July 31, 2024 compared to $40.8 million for the nine months ended July 31, 2023 representing a 1% decrease;
• Adjusted gross profit was $11.2 million for the nine months ended July 31, 2024 down 14% compared to $13.0 million for the nine months ended July 31, 2023;
• Net loss of $22.9 million for the nine months ended July 31, 2024 compared to $18.6 million for the nine months ended July 31, 2023; and
• Adjusted EBITDA loss of $6.1 million for the nine months ended July 31, 2024 compared to an adjusted EBITDA loss of $6.4 million for the nine months ended July 31, 2023, a 5% improvement.

Third Quarter 2024 Highlights

• In May 2024, the Company confirmed that the effective date of termination regarding the XIIDRA partial termination agreement previously entered into was set at May 30, 2024, rather than the date of the marketing authorization transfer;
• In June 2024, the Company announced the restructuring of its respiratory commercial field operations aimed at reducing its operating expenses, aligning its commercial infrastructure with current market dynamic and accelerating its path to profitability with cost reduction measures, affecting approximately 20% of its workforce, to decrease its operating expenses by more than $5 million on an annualized basis; and
• In June 2024, the Company announced the appointment of Mr. Al Moghaddam to the newly created role of Chief Development Officer and his departure from the Company’s Board of Directors.

Third Quarter 2024 Subsequent Events

In August 2024, the Company announced the appointment of its Chief Development Officer, Mr. Al Moghaddam, to succeed its retiring CEO, Steve Saviuk. Mr. Saviuk has remained on Valeo’s Board of Directors and assumed the role of Chairman. Mr. Richard J. MacKay has stepped down from his role of Chairman of the Board and remained a Board member;

• In August 2024, the Company announced its voluntary delisting of its Class A shares from trading on the OTCQB Venture Market due to low trading volume, the associated administrative requirements and costs and other corporate and commercial priorities. The Company’s last day of trading on the OTCQB Venture Market was August 30, 2024;
• In September 2024, the Company entered into an agreement with Sagard Healthcare Royalty Partners, LP (“Sagard”) amending the Secured Term Loan entered into between Valeo and Sagard in July 2022. The Facility was amended to provide, among other things, an extension until September 6, 2024, which date can be extended thereafter for successive one-week periods, at Sagard’s sole discretion, for the first $10 million repayment by Valeo, originally scheduled for August 31, 2024. Pursuant to the Amendment, and regardless of the extension of the First Repayment, Valeo made an immediate repayment of US$4,800,000 (approx. C$6,500,000) reducing the principal amount owed by Valeo on the Facility. Other obligations to meet certain minimum liquidity requirements have also been extended to September 30, 2024; and
• On September 6, 2024, Sagard provided an additional extension period.

Third Quarter 2024 Webcast and Conference Call

Valeo will host a conference call to discuss its third quarter 2024 results and highlights on Friday September 13, 2024, at 8.30 am (ET). The telephone numbers to access the conference call are 1-437-900-0527 and 1-888-510-2154. An audio replay of the call will be available. The numbers to access the audio replay are 1-289-819-1450 and 1-888-660-6345-0541 using the following access code (68810 #).

A live audio webcast of the conference call will be available via:

https://app.webinar.net/yVn5GpN1pM9

Financial Statements and MD&A

Valeo Pharma’s financial statements and Management’s Discussion and Analysis for the three-month and nine-month periods ended July 31, 2024, are available on SEDAR at www.sedar.com.

About Valeo Pharma

Valeo Pharma is a Canadian pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on Respiratory, Ophthalmology and Hospital Specialty Products. Headquartered in Kirkland, Quebec Valeo Pharma has all the required capabilities and the full infrastructure to register and properly manage its growing product portfolio through all stages of commercialization. For more information, please visit www.valeopharma.com and follow us on LinkedIn.

Forward Looking Statements

Forward-looking statements are statements and information regarding possible events, conditions or results of operations that are based upon assumptions about future economic conditions and courses of action. All statements and information other than statements of historical fact may be forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as “seek”, “expect”, “anticipate”, “budget”, “plan”, “estimate”, “continue”, “forecast”, “intend”, “believe”, “predict”, “potential”, “target”, “may”, “could”, “would”, “might”, “will” and similar words or phrases (including negative variations) suggesting future outcomes or statements regarding an outlook.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: reliance on third-party suppliers and manufacturers, the availability of additional funding, common risks for pharmaceutical products, including product liability claims, insurance and recalls, registration risks in certain jurisdictions, the inability to implement Valeo’s strategy to grow the business, dependence on key management personnel and executives, competition, currency fluctuations and the risks, uncertainties and other factors contained in the section entitled “Risk Factors” in Valeo’s annual information form dated January 29, 2024, a copy of which is available on Valeo’s Sedar+ profile at www.sedarplus.ca.

Actual events or results may differ materially from those anticipated in these forward-looking statements if known or unknown risks affect Valeo’s business, or if Valeo’s estimates or assumptions turn out to be inaccurate. Valeo undertakes no obligation to update publicly, or otherwise revise, any forward-looking statements, whether as a result of new information or future events or otherwise, except as may be required by law. If Valeo does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements, unless required by law.

SOURCE Valeo Pharma inc.