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Good morning and welcome to the Q1 2023 financial results conference call for HLS Therapeutics. On this morning's call, we have Craig Millian, Chief Executive Officer; Tim Hendrickson, Chief Financial Officer.[Operator Instructions] Earlier this morning, HLS issued a news release announcing its financial results for the 3-month period ended March 31, 2023. This news release along with the company's MD&A and financial statements will be available on HLS's website and on SEDAR. Please note that the slides accompanying today's call will be viewed via the webcast, a link of which is available on the company's earnings press release and on its website on the Events page.Certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form, which has been filed on SEDAR at www.sedar.com.During this conference call, HLS will refer to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed as by IFRS. Adjusted EBITDA is defined in the company's press release and annual filings and are available on SEDAR and on the company's website. Please note all financial information provided is in U.S. dollars, unless otherwise specified.I would now like to turn the meeting over to Mr. Millian. Please go ahead, sir.
Thank you, Michelle. Good morning, everyone, and thank you for joining us. It's a pleasure for me to be here today on my first earnings call as CEO of the company. On our call today, I'll review highlights for the quarter and then Tim will follow-up with a more detailed look at our financial results. And then we'll hold a Q&A session.Before we get into our results, I'd like to briefly introduce myself and my background and share with you some of the reasons why I'm excited to join HLS, and also what my near term priorities are.I've been in the pharmaceutical and biotech industry for the past 30 years, and I tend to think of my career so far in 2 distinct phases. The first half was spent at 2 large global pharmaceutical companies, Sanofi and Pfizer, where I held marketing leadership roles on several blockbuster brands, including some of the cardiovascular space such as Lipitor. The second phase started with a move from New York to the Boston region, where I took on senior commercial leadership and executive roles at emerging biotech and specialty pharma companies, and where I continued to lead commercialization efforts across a range of new and existing therapies. For example, I helped build capabilities and infrastructure as the commercial lead at Vertex Pharmaceuticals in advance of their first ever commercial launches. And at EMD Serono, I led multiple and highly profitable U.S. business units, including neurology and immunology, a business with about 200 headquarters and field-based professionals and over $1 billion in sales.When I received the call to interview for the CEO role at HLS, needless to say, I was extremely pleased and I saw this as a logical next step in my career. As I learned more about the HLS story, I was intrigued by its history as a young and entrepreneurial company. Of course, I performed my diligence on the excellent medicines within the product portfolio, and the strategic balance that exists between the reliable cash flows from the CNS business which complement the organic growth potential of Vascepa. I'm quite familiar with both the cardiovascular and neuroscience spaces, having worked in both therapeutic areas, and I was eager to get back to running a business at a company with multiple products in the market and where I could put my leadership experience and commercial expertise to work.Finally, as someone who has spent a lifetime in pharma, I'm driven by the desire to work on products that can make a life-changing difference to patients. And this is certainly the case with the portfolio at HLS. Last week, which was my first week on the job, I spent some time in our Montreal and Toronto offices. And while my time in the chair has been brief, I've been impressed by those whom I've met so far. They are strongly committed to our mission of ensuring these much-needed medicines are available to patients who will benefit from them. And I look forward to working closely with this team to achieve our objectives.I'll take a few minutes now to talk about my top priorities. To start with, in the near term, I don't anticipate a major shift in strategy, but of course, this could certainly evolve over time. Our immediate focus is to, first, drive growth of Vascepa; second, maintain the Clozaril business, seeking modest growth in Canada to balance some anticipated attrition in the U.S. And number three, ensure we're optimizing our spend and that we're investing in resources and activities that have maximum business impact. We'll continue to be opportunistic as it relates to business development opportunities, but this is not an immediate area of focus. In the longer term, as we're successful in achieving our 3 key objectives, we'll strengthen our financials and then be in a better position to expand our product portfolio and/or the footprint of the business.With respect to Vascepa, it's important to appreciate that we're not just competing for market share in an established category. In a real sense, we're defining a new treatment paradigm, positioning a novel class of drugs within a very crowded cardiovascular market. As such, sales growth has not occurred as rapidly as initially projected. But we strongly believe HLS will ultimately benefit from building this category, particularly considering the potential length of our patent runway.We do have a number of tailwinds discussed in previous earnings calls that are now in place to help us build on our momentum. In the near term, our most important focus will be on execution in the field. Between HLS and Pfizer, the Vascepa sales force is by far our largest investment, and we need to ensure we're getting maximum leverage from this very valuable resource.I'm encouraged by the progress we're making in ensuring strong alignment at the field level between the 2 sales teams as it relates to targeting, key performance indicators and incentives among other things. We're making progress in building breadth and depth of our prescribing base. But given the strength of the Vascepa product profile and the improving access landscape, we have an opportunity to go further. What's encouraging is that our earlier market research suggests that Vascepa is quite promotionally responsive and physicians who have been detailed tend to have a positive perception, strong message recall and an increased intent to treat. The team and I will be analyzing performance from multiple angles, looking at the promotional responsiveness at a prescriber level as well as performance differences by geography, physician segment and indication and we will leverage learnings in real time to adapt our plans as needed.I want to highlight just one example of the traction we're starting to see in some of our largest geographies. Our sales professional in the Toronto South territory is demonstrating the highest growth in all of Ontario so far this year. This territory includes most of the teaching hospitals in Ontario, a region that was hard hit by COVID such that access and willingness to initiate new therapies was low. The return to normalcy, combined with public plan reimbursement is providing a great opportunity for growth in this territory. This is one of many success stories we're hearing from the field. Overall, we're getting access to physicians and the frequency of interaction is increasing. Results are improving, but I think that all of us, HLS staff, our partners, investors and others believe that we should be further along at this stage. And our goal is to ensure that we identify and address any barriers that are preventing Vascepa from reaching its full potential.With that, let's take a look at Q1 performance. I'll start with the numbers at a high level. Total Q1 reported revenue was up 1% to $14.8 million. That would have been $15.3 million and plus 5% in constant currency. We generated solid adjusted EBITDA and cash from operations of $5.1 million and $4 million, respectively, which reflects the earnings power of Clozaril and the royalty portfolio at a time when we're investing in the growth of Vascepa. Along those lines, Vascepa revenue in Q1 was CAD 3.5 million, up 43% over Q1 of last year. The first slide is an updated look at the total prescription chart for Vascepa showing growth since launch. As mentioned, we're making progress here, growing prescriptions at a good clip. The slope reflects 94% growth in total prescriptions over Q1 of last year. The total number of physicians who have prescribed Vascepa is up to 3,700, an increase of 85% over this time a year ago. The growing base of experience with the product presents an opportunity for us to also increase the depth of prescribing activity.Our next slide shows the evolution of physician specialties and their relative level of prescribing volumes for Vascepa. On the left-hand side, we see that general practitioners or GPs are the largest prescribing segment and growing at a strong rate. While cardiologists, who were the largest segment early on, now trail GPs, but still remain a significant influential and growing prescriber group. On the right-hand side, you can see the increasing impact of the sales force expansion with our partner, Pfizer, leading the charge with GPs. Scripts written by GPs increased 114% year-over-year. About half of all new prescriptions now come from the GP audience and the trend in the chart would suggest that the gap between GPs and the other prescriber groups will continue to widen. This is important as approximately 80% of our target prescriber audience is in the primary care setting. So we have the potential to continue to drive considerable growth within this segment.Building on the 43% growth rate in Q1, we expect revenue growth for Vascepa to increase over the course of the year. That said, the positive impact from strong prescription growth in Q1 2023 was partly offset by payer mix being more weighted to public plans than was expected. As a result of this pricing effect and based on where we ended Q1, we are now guiding to the low end of our CAD 22 million to CAD 28 million revenue range for Vascepa in 2023.I recognize there's been much interest in our projection of peak year sales for Vascepa as well as timing to peak. Previously, we stated that Vascepa could achieve peak year sales of CAD 250 million to CAD 300 million by the end of 2026. The market size, share and pricing assumptions underlying the peak estimate still seem reasonable. That said, based on where we stand today and even with an accelerating growth trajectory, it is not likely this number will be achieved in a 3-year time horizon. Therefore, we are no longer guiding towards this number for 2026.We'll continue to provide annual guidance for Vascepa product sales, and we'll look to introduce and share additional performance metrics in the future that we will be tracking closely to better assess the near and long-term potential for Vascepa. I want to be clear that I and the whole team at HLS believe that Vascepa has significant growth ahead of it. Vascepa has an excellent benefit risk profile with compelling clinical data. As many as 2 million Canadians are in label and stand to benefit from the drug. Medical societies in Canada and around the world have added Vascepa to their guidelines. Feedback from physicians is positive. Reimbursement is now in place for the vast majority of patients. And there is a very long runway as there is a portfolio of 25 patents, 16 of which have been issued and 12 of which are listed on the Canadian patent registry with expiration dates as late as 2039. So everything is in place for this brand to become a major success.With that, I'll pivot here to take a quick look at Clozaril. I've touched on Clozaril's importance in generating cash to support investment in other parts of our business, such as Vascepa. Beyond its profitability, Clozaril is an essential medicine that can literally mean the difference between life or death for at-risk patients. Myself and everyone at HLS who support both the product and the patient community are proud to be associated with this important therapy. Clozaril revenue in Canada grew in Q1 in constant currency. And importantly, the patient count grew modestly as well. We continue with our rollout of CSAN Pronto, a proprietary technology that addresses the #1 barrier to treatment in the Canadian Clozapine market. We added new deployments in Q1, and the number of installed devices is up 90% from Q1 last year. We expect that the number of devices deployed will continue in 2023 as we focus on larger institutional settings.Finally, in our earnings release today, we announced that the Board has canceled the company's dividend policy. HLS is a growth-oriented company, and this decision was made in the context of our capital allocation strategy and the desire to increase the return of capital to shareholders via stock buybacks. We believe our shares are undervalued and that allocating more funds to the buyback is a more effective return of capital to shareholders at this time.With that, I'll turn it over to Tim for a closer look at our numbers. Tim?
Thank you, Craig, and good morning, everyone. I'll start with revenues and product sales. As Craig touched on, the decline of the Canadian dollar relative to the U.S. dollar had an impact on our reported results in U.S. dollars in the quarter. For example, Clozaril net sales in Canada grew by 3% in Canadian dollars, a very solid result reflecting continued patient growth. But when translated to U.S. dollars for reporting purposes, reported net sales in U.S. dollars are down 4%, which doesn't speak as clearly to the solid results and underlying fundamentals.Overall, Canadian product sales, which includes Vascepa, increased 12% in Q1 in constant currency, but this growth is only up 5% when translated and reported in U.S. dollars. Vascepa Q1 net sales were up 43% in Canadian dollar terms, while total prescriptions for Vascepa were up 94% in the same period. As the business adjusts to the growing number of publicly insured patients, there will be this difference in the rates of growth accordingly. When the balance between public and private plan patients stabilizes, which we expect later this year, then we should see the rate of growth in net sales track the rate of growth in gross sales and prescription volumes.In the U.S., Clozaril net sales decreased by $200,000 in Q1, an increase in units sold and the impact of a price increase implemented midyear last year, resulted in higher gross revenues for Clozaril in the U.S. in Q1. However, this was more than offset by larger one-time benefits realized in Q1 of last year that were related to expired product returns. However, starting this year with a positive development on U.S. Clozaril gross revenues is certainly encouraging. Royalty revenues were $2.7 million in Q1, which was a 1% increase over the same period last year, reflecting a steady contribution to adjusted EBITDA and cash flows. The diversified royalty portfolio now has contributions from 4 products with the fourth product having received approvals in 2022. We expect that product to be an important contributor to the portfolio as its commercialization efforts expand and continue.Operating expenses increased 17% in Q1, which was driven by an increase in the cost of sales due to the growth in shipments and sales of Vascepa as well as an increase in selling and marketing costs for Vascepa. Of note, Clozaril gross margin and operating expenses across both Canada and U.S. markets were very stable, and we continue to find efficiencies as we expand our support offering that maintains and grows these important franchises.Looking at the level of operating costs, it is important to remember that typically, the largest commercial cost for a supported product like Vascepa is for the sales force and associated costs. There is a good deal of operating leverage in the current model with that sales force cost already embedded in our results. As such, incremental gross profit from Vascepa in 2023 will accrue toward adjusted EBITDA as we go forward. Typically, for trade-related reasons, not underlying patient fundamentals, we have stronger revenues in Q4 as trade stocking builds ahead of the holidays and then a corresponding weaker quarter in Q1 as those excess inventories are depleted in the ordinary course. As our operating expenses though are relatively constant through the year, this does put pressure on our Q1 operating results.Adjusted EBITDA in Q1 was $5.1 million compared to $6.3 million in Q1 last year. The decrease is due primarily to the increase in operating expenses for Vascepa. As we continue to invest in the launch and growth of Vascepa due to the steady profitability with Clozaril and the royalty portfolio, HLS continues to generate strong adjusted EBITDA and cash flow from operations.In the Q1 financials, you will note that we have made a change in our assumption for the useful life of the Vascepa to intangible assets. As Craig mentioned earlier, there is an extensive portfolio of patents. The latest of these to expire, that is issued and listed on the patent registry, does not expire until 2039. So we have extended our assumption for the useful life accordingly. This doesn't have a material impact near term on amortization or net income, but is more reflective of the long period ahead that we have for the commercialization of Vascepa in Canada.In Q1, we generated cash from operations of $4 million compared to $5.8 million last year. Cash and cash equivalents were $21.2 million at March 31, up from $20.7 million at year-end. With solid fundamentals in place, increasingly diversified revenue, sustained adjusted EBITDA and reliable cash from operations, we have continued to deleverage the business from a total of $185 million of debt at the company's inception down to $95.2 million at the end of Q1. In addition to the positive cash flow from operations in the quarter, more than $20 million in cash and strong prospects for improved cash flows from Vascepa and Clozaril, there is also an undrawn revolver facility of $26.5 million and HLS can request incremental loans up to a maximum of $70 million to support growth opportunities.As Craig mentioned, after careful deliberation, the Board has canceled our dividend policy as we believe that allocating more funds to the NCIB, which particularly when our stock is trading at these levels, is a more effective way to return capital to shareholders. As you may recall, our normal course issuer bid was renewed for another year back in November 2022 and remains available to us as we look to increase our buyback activity throughout the year.With that, I'll pass it back to Craig for his closing comments.
Thanks, Tim. In closing, I'm thrilled to be here today as CEO of the company and to be in a position to build on the strong foundation that's in place. Accelerating Vascepa's growth while maintaining or incrementally growing our profitable CNS business in Canada are the top priorities right now. We plan to spend efficiently, making sure we're investing in the highest impact activities. Finally, we're reallocating capital from the dividend to the share buyback as we believe our current stock price is undervalued, does not reflect the promising potential for the business.That concludes my prepared remarks. At this point, I'll ask the operator to please provide instructions for asking a question.
[Operator Instructions] The first question comes from Rahul Sarugaser of Raymond James.
Welcome, Craig. So my first question is relatively high level one. Craig, now that you've taken the seat as CEO. So one thing that has befuddled the market and us is that Vascepa, at least on paper, seems to have all the hallmarks of a potentially successful drugs in the guidelines, the data is excellent, et cetera, et cetera, you have strong sales forces behind it. And so you talked a little bit about the limited trajectory so far. Recognizing that you have all these really strong pieces in place, in your diligence, where are the 1 or 2 places that you think you'll be able to most effectively affect that inflection on revenue?
Yes. Rahul, thanks for the question and the warm welcome. Yes, I think there's a number of reasons why the trajectory is probably not where we would have expected it to be today, and I think those have been elucidated in prior calls. I mean, certainly launching during COVID was challenging in that we were unable to really have face-to-face interactions with physicians for quite some time. And similarly, when Pfizer came on board, it was a fairly slow ramp. In addition, obviously, it took time to get access and reimbursement in the public plans. Those things are all in place now. So those are all really positive tailwinds.I think what I'm really excited about and focused on because I think it's an immediate opportunity, as I mentioned in my remarks, is to leverage the sales force that we have in place. On the HLS side, it's a very seasoned specialty sales team now that's been together for quite some time and has great access and engagement with the specialists, the cardiologists and endocrinologists. And now with Pfizer, I think, really starting to hit their stride, which is a much larger sales team calling on primary care, and equally importantly, I think going into this year, creating even stronger alignment between the 2 sales forces in terms of really coordinating both strategically and tactically across a number of parameters, I expect we're going to see a much greater impact of that sales team. So I'd say in the immediate term, I think that's going to be a key driver. Of course, having the access in place, we're just starting to see, I think, the benefits of that. We're seeing very nice growth in Ontario in the first part of this year, the majority of which is in the public side. So there's certainly been some pent-up demand there. And of course, we are seeing really quite remarkable demand growth overall in terms of prescriptions. So I think we are seeing that impact. We have to continue to see it accelerate, obviously, and again, take advantage of what we have in place.The last thing I'll say is I do believe that we are trying and I said this in my remarks as well, we are really trying to change a treatment paradigm. We are going up against a number of different categories that are well-supported and have strong data in their own right. And so the changed behaviors takes time. Everything is there in terms of the data, the guidelines, the access, but again, we're trying to create a brand-new category as it relates to IPE, and we're trying to position it to change behaviors in a really profound way. So I think the first step in terms of getting the message out there, physicians starting to write the drug, I think those are all pointing in the right direction. The next phase, which I think will really accelerate the growth trajectory is when the behaviors really change and this becomes embedded in regular prescribing patterns for physicians. And I expect that will happen sooner rather than later.
Terrific. Thanks for that color. That certainly helps us. And then just my follow-up question is, I guess, we're heartened to see the cancellation of the dividend piping of the cash towards the share buyback. I guess the third leg of the stool, of course, is potentially leveraging that cash and your broader liquidity into growing top line by acquisition. And particularly given your focus on parking those sales teams and able to get them to be productive and potentially providing additional product in their bag. So how should we be thinking about your acquisition strategy going forward in terms of driving that top line by our acquisition.
Yes. I think for right now, my focus is, first and foremost, on the products we have. I think it's important for us to optimize what we have in the bag today. I think both Vascepa and Clozaril have terrific, terrific potential. Obviously, Clozaril more so in a sustained mode with opportunities, I think, to grow incrementally in Canada, and then Vascepa is certainly with an opportunity to grow much more profoundly. So I think right now, the focus of the management team is on working with the resources we have, which are considerable. I think our sales force, if you look at the size of our sales force and our share of voice, it's competitive with anybody else out there. And certainly, we invest in other areas as well. So I think what we'd like to see is the growth in Vascepa and really leverage the improved operating results to plow back into the business. And then ultimately, longer term, I think our expectation is that we will grow the portfolio and grow our footprint on both sides of the border over the long-term, but I think in the near term, it's all about our operating results with the current portfolio.
Great. And wishing you the best of luck in the new seat, Craig.
Great. Thanks, Rahul.
The next question comes from David Martin of Bloom Burton.
First one is, are you seeing any changes with respect to the prior authorization situation in Ontario, changes in processing time, acceptance rate and changes in doctors' acceptance of the process?
Yes. Thanks, David, for the question. So I think this does even harken back to the question that Rahul had, which was around what are the type of things that are going to help us. That gives me great hope that we're on the cusp of performance picking up. I think one of them is around public access. It is still relatively early days. And without question, there's some complexity in terms of the tier of access that we have. But it's not unusual for new products to be placed on that tier. The forms are not overly cumbersome, but there is a learning curve. And so this is certainly an organizational focus to mitigate this as a barrier to prescribing. And so we've worked both at a field level to work closely with the offices to help them get up their learning curve in terms of completing the paperwork, which again, is really not overly cumbersome and it's not unique to Vascepa.And in parallel, we've had discussions with the public plans to make sure that they're doing their part and they're not creating unnecessary burden on the part of the physician offices because we did see a little bit of that early on. So I think working both those angles, we're seeing good progress. We've also put a specific program in place. The pilot program in Ontario, where we're providing some nursing support to help again with the process, and we've got, I think, something on the order of 25 physician offices enrolled in that program, and we expect to see positive results out of that. I think the proof is in the pudding, so to speak, and that we are seeing good lift in Ontario. And I would say the majority of new patients that are being prescribed Vascepa are public patients. So I don't have hard metrics on this at this point, David. But what I could say is anecdotally, we're doing everything we can, and we're seeing progress. It's important to get on the other side of this because admittedly the quicker we're on the other side of this, the quicker we can pivot back to doing what we need to be doing, which is obviously selling Vascepa and pulling through the product based on the benefits of the drug and less on the administrative parts of it. So I don't want to downplay the relevance. But what I would say is it's not unexpected. It's not unusual. It's a learning curve, and we're making slow and steady progress. I don't see this long-term as a major issue.
Great. Just one other related question to that. To minimize the impact of that prior authorization requirements, would you think about or are you subsidizing the first prescription for public recovered patients? And has that had an impact on the average revenue per script?
No. The answer to the question is no. We haven't done that. It's not something that we're contemplating.
David, if I could just add to that. You may recall from past discussions about this, that the response time in Ontario is actually really pretty quick. So there have been some of these learning curve issues and some frustrations and anecdotal data points. And we're very encouraged with the response by the product and the ongoing dialogue. But their response time is pretty quick. And importantly, I think results speak louder. And certainly, in the most recent data point, we've had a very nice increase in the number of claims coming through. And so I think that is something that's probably quickly becoming more behind us. And so there doesn't seem to be a need for something like that.
Okay. Great. Last question is you gave the split of primary care to specialists. What is the split right now, percent, public versus private? And you said in the past, do you think that will get to 50-50 once things settle out? Are you still thinking it will be 50-50?
Yes. So we're not going to disclose the split just because we want to make sure we keep confidential kind of the nature of the agreements we have in place with both public and private plans. What I'll say is the following, yes, we still expect a 50-50 split when things normalize based on the underlying demographics that makes sense and the near-term trend, there's nothing in the near-term trend that would suggest otherwise. What I will say is that in the near term, and one of the reasons why, despite having very strong demand growth, your net sales lags is the majority of new patient volume is our patients who are on public plans. And so that's good news because that was intentional. I mean, we signed the contracts with an intent to provide broad coverage to patients regardless of private or public. So that's good. But in the near term, obviously there is some pent-up demand. And so until we have an opportunity for those patients to get on drug and then get back to more of a normalization, a lot of the new volume is certainly weighted towards public plans. But if you average out the new volume with the existing patient base over time, again we expect that will settle at 50-50.
So we're not at 50-50 yet, obviously.
That's correct, David.
The next question comes from Justin Keywood of Stifel.
Craig, I realize it's pretty early at the helm. But is M&A a focus for you? Or does it continue to be Vascepa and Clozaril?
Yes. Thanks for the question, Justin. Yes, as I mentioned earlier in my comments, in the near term it's really about optimizing the performance of the current products. We think we have a lot of runway with our current portfolio. We want to see those results, and we want those to translate into even stronger financials. And then certainly, as we move towards the mid-to-long-term business development activities, are certainly going to play a larger part. But long term, our expectation, we consider ourselves a growth company, and our long-term ambition is to grow our business, again, both in Canada and eventually the U.S. as well. But in the near term, my focus is very much on the current product portfolio.
Understood. And not sure if I missed it. Has there been an update on the public access in Alberta or BC?
Yes, you haven't missed that, Justin because there's nothing new to report. The discussions are ongoing, the file is active, admittedly slow going, but we're still doing everything we can to secure that access. But there's no new developments at this point. And obviously, as soon as there's something to report, we'll share that.
Okay. And then maybe a question for Tim. Within the press release, you mentioned the strong Vascepa prescription growth at triple digits and then the net revenue lagging that prescription growth. I'm wondering what that time difference is between the prescription growth before we see it in HLS' financials, if it's 1 quarter or 2 quarter or if you have any parameters around that?
Thanks, Justin. There's a number of things that are going into that. Some of that is the dynamic around this being the first quarter of the year, and we do have some trade inventory dynamics. And so that will be a part of that. We also kind of shared that we have the situation where the mix is adjusting. So the balance between public and private scripts is sort of adjusting to now having access in the public market. We do think that that probably should normalize and stabilize later this year. So that's a matter of a couple of quarters before that should stabilize. And once we get to that point, we should be seeing in terms of percentage change, we should be seeing the top and the net sales line moving much more closely together.
The next question comes from George Ulybyshev of Clarus Securities.
This is George dialing in on behalf of Noel. Most of our questions have been addressed. So just a quick one here. What's the effective average price per month for Vascepa that you guys are recognizing for 2023 if you're now at the lower end of Vascepa revenue outlook?
Thanks, George. That's one of those things where, again, given the sensitivity and our obligation to maintain our average net selling price with our various public agreements confidential, we haven't disclosed that. But where we're seeing it is very much in line with what we'd expected, given the fact though that we are seeing a little bit faster pickup in the public versus the private in the quarter. But it's all consistent with what we'd expected for the various different segments.
[Operator Instructions] The next question comes from Tania Armstrong-Whitworth of Canaccord Genuity.
Just a couple more from me. Firstly, you mentioned the Alberta and BC negotiations are ongoing. I'm wondering if you can provide a little color to quantify how big those 2 markets are in the event we do not get a contract in place?
Thanks, Tania, for the question. I believe it's about 30%, give or take, of the population is centered in Alberta and BC, is that -- am I correct?
I'll jump in. We shouldn't put the new guy in a spot like that. In terms of share of the market, it's probably a little smaller than that, more like 20% to 25%. But it's also important to remember that there is a very healthy private market in both of those provinces, and we do have businesses there, and those businesses are growing right now even without the benefit of having public reimbursement. And so it's not the full population weight of those provinces. It's really whatever the public would add in that. And so we are very encouraged with the success that we're seeing in those provinces even without public reimbursement. It would be nice if we could get it over the line with those agreements. But again, as we've stated in the past, we're not going to accept something that is a retrade from what was part of the original terms with the pCPA, and at least that's our view of it. And so we are working those discussions, but we'll update you when there's something to report.
Yes. I think it's important to reinforce that we are still having quite strong performance there. We are pulling through patients. And obviously, they're all private patients. And so the margins are different than in other parts of the country. So that certainly helps offset a little bit of the lack of access. Preferably, we'd love to have access across the board, but it's still quite encouraging in terms of the performance we're seeing out that west.
Okay. Excellent. And a year before you guys got public coverage, a lot of your commentary was about how private coverage couldn't reach its full potential either because doctors were kind of waiting until every patient was reimbursable. How much of that 50% of the market that is private, could you get if you did not have public reimbursement in Alberta and BC? Would it be 80% of that, 50% or lower than this?
That's a tough question, Tania. I think it's a very good question, obviously, one that we're digging into as a contingency. I don't have any answer for you at this point. But what I would say is my expectation is that we go after the business that we can get. And so again, ideally, and certainly, in this market, there's very much a premium placed on having access in both public and private. But certainly, within the primary prevention indication, which is not currently covered on the public side, we have a great opportunity to pull through business across the board. And as it relates to Alberta and BC, as I said, we have continued to see growth. So I think it's just a matter of structuring the engagement with the physician or the prescriber in a way to identify the patients that have coverage and will benefit from the drug. It doesn't make any sense to deprive all patients of a potential life-saving medicine just because some patients don't have access to it. So I think we have to kind of change that mindset. Again, we're going to do everything we can to get close to 100% access across the board. But if it doesn't make sense to sign those agreements, then we will go after that private business, and we'll get as much of it as we possibly can. We're certainly not going to give up on it. So I don't have a number for you, but I'm bullish that we can certainly still compete for that.
Okay. Excellent. That's good color. And then just lastly on the returning capital to shareholders. Is that cancellation of the dividend policy and focus on buybacks. I don't know if you can provide timing of a potential NCIB that you put in place. But given where the stock is trading, I'm wondering how you want to balance capital allocated towards the NCIB versus towards investing in Vascepa over the near term?
Thanks, Tania. So a couple of different things there. I'll handle them in sequence. So we do have an NCIB in place. It is already active, and so we can start to act on that pretty quickly. For context, if I kind of look at what our total return of capital to shareholders looked last year. Last year it was about $5 million on return via the dividend and about $1 million on share buybacks through the NCIB. So that's probably the envelope, if you want to think about it at the current state of the business. But I think going forward, we have one more dividend in June. But I would think if you look at the balance of the year, that's probably the envelope. And I think the NCIB provides a much more effective way for us to be returning that capital to shareholders right now, certainly at the current share prices.And then separately, I think that's really kind of a different thing altogether from the investment choices on Vascepa. I think there we need to look at what's needed to ensure that we're on the right growth trajectory, that we're optimizing the spend, I think Craig made a number of comments about that earlier. And I think that's really how we're going to view that and make sure that, that's done. But this is a business that is in a very enviable position with a very strong cash from operation position. And so this is something where we expect to be doing both.
Okay. Excellent. So if share prices, I guess, remain where they are, there is potential to see an increase to that $6 million envelope this year?
Walking a fine line in terms of what we can say around what we will do specifically on the buyback. But yes, we would clearly expect to see more activity on the buyback than last year.
There are no further questions at this time. I will now turn the call back to Mr. Millian for his closing remarks.
Thanks, Michelle, and thanks, everyone, for participating on today's call. We look forward to reporting to you on our progress in the coming quarters and speaking with you again in the near future. Goodbye, and have a great day.
Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.