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Good morning and welcome to the Q3 fiscal 2021 financial results conference call for the HLS Therapeutics. On this morning's call, we have Gilbert Godin, Chief Executive Officer; and Tim Hendrickson, Chief Financial Officer. [Operator Instructions] Earlier this morning, HLS issued a news release announcing its financial results for the 3- and 9-month periods ended September 30, 2021. 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 slides accompanying today's call can be viewed via webcast, a link of which is available in 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 the SEDAR at www.sedar.com. During this conference call, HLS will refer to adjusted EBITDA. Adjusted EBITDA does have -- does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA is defined in the company's press release and annual filings that are available on SEDAR and on the company's website. Please note that all financial information provided in the U.S. dollars unless otherwise specified. I would now like to turn the meeting over to Mr. Godin. Please go ahead, sir.
Thank you, Kelsey, and good morning, everyone. Thank you for joining us. On our call today, I will start off with a review of operational highlights. Tim will follow with a more detailed look at our financial results, and then we will hold a Q&A session. Q3 was another quarter of growth, driven by strength and resilience with our foundational products as well as growing contribution from Vascepa. Q3 revenues was $15.1 million, up 15% versus a year ago. Adjusted EBITDA was $6.9 million, up 53% from a year ago. And cash from operations was $3.6 million, up 50% from a year ago. These are very satisfying numbers in a challenging environment and reflect our push for growth while keeping an eye on expenses. We continue to make important operational progress with Vascepa despite the impact of the COVID-19 Delta variant, which we believe has slowed the effect of the market reopening as in-person patient-physician interactions stayed well below pre-pandemic norms. Encouragingly, the percentage of patient-physician visits that are taking place in-person is growing again, and top health officials in Canada's largest provincial jurisdiction are publicly urging physicians to increase their face-to-face interactions. We believe this call to action will serve as a catalyst for Vascepa as the recent study found that physicians are 50% more comfortable initiating new therapies in a face-to-face setting versus virtual communications. I will look at the reopening along with other key catalysts for Vascepa shortly. But first, I would like to spend a few minutes on the key highlight of the quarter. Starting with Vascepa. On August 16, we announced a promotion agreement with Pfizer for Vascepa in Canada. Under the agreement, Pfizer will deploy a team of 66 sales associate across Canada to educate and efficiently expand the level of awareness of Vascepa amongst primary care physicians. Their team will complement HLS' own team of field personnel and support staff, who have been and will continue to be principally focused on the specialist physician audience. I would like to draw your attention to the slides accompanying the call today, the first of which gives you a visual representation of the sales force expansion we're speaking of. We expect the partnership will accelerate, bringing Vascepa to a broader market while preserving its financial upside. It will provide for a more than threefold increase in the number of reps detailing Vascepa and at steady state, it will increase our physician coverage by more than fourfold. This partnership also signals a validation for the product from a well-respected partner with a strong commitment to the cardiovascular space. We believe Vascepa has the potential to improve the lives of the many Canadians suffering from or at risk of cardiovascular disease, and we're excited to collaborate with Pfizer to bring this innovative therapy to those in need. Pfizer has stellar credentials in the area of cardiovascular therapies as well as a strong track record of successful partnerships, including one recently behind the success of Eliquis. A mere 4 weeks after the announcement towards the end of September, Pfizer reps began detailing Vascepa, and we expect this to be an important factor in our future growth. The next slide shows the Vascepa prescription uptake curve through the end of the third quarter. There are 2 takeaways -- 2 key takeaways from the graph on this slide. The first is that it shows the steadiness of the growth in scripts that we have generated since launch despite being very restricted in our interactions with physicians during the pandemic. The number of patients, prescribers and prescriptions related to Vascepa, all continued to increase at a solid rate sequentially. Compared to Q2, despite quieter summer months for July and August, the quarter-to-quarter weekly scripts grew 25%, the number of patients grew 23% to more than 5,000, and the number of prescribers grew 30% to approximately 1,400. Second, we believe that being included in the treatment guidelines from the Canadian Cardiovascular Society, Heart and Stroke Foundation and Thrombosis Canada is becoming foundational and will continue to gain in recognition and benefit as we broaden their dissemination with the larger sales representation in the field. We expect to see a steady trend upwards and greater impact from both factors here in Q4 and into 2022. We have spoken previously of 5 catalysts noted on the right-hand side of the slide, which we believe are essential components in reaching a steep growth curve for Vascepa. This inflection point is typically encountered in successful launches when all of the key catalysts come together. In terms of these 5 catalysts, earlier in the year, we have achieved reimbursement coverage with firms representing more than 90% of privately covered lives in Canada. And since March, Vascepa is now part of the recommended treatment guideline for 3 of Canada's most respected organization in the field of cardiovascular health. Thirdly, as just discussed, we announced a conclusion of a partnership agreement with Pfizer, resulting in a threefold sales force expansion. Although evanescent at times, the fourth catalyst hinges on COVID-19-related restrictions continuing to ease, was lower than we anticipated at the end of Q2. The trend is in the right direction. And since vaccine adoption in Canada has been strong with 73% of all Canadians now fully vaccinated, including 83% of people 12 and older, Canada sets a strong foundation for a return to a more normal social and health care environment. As mentioned earlier, in-person interactions between patients and physicians are increasing but remain relatively low. As reported by the Office of Canada's Health Minister, only 56% of all physician visits in the month of July were face-to-face. In-person meetings are an important factor as physicians are 50% more comfortable initiating new therapies via in-person consultation versus a virtual consultation. This is a contributing factor explaining why the overall Canadian prescription market went from a 4% to 6% growth rate pre-pandemic to a flat then negative rate of growth in the past 3 quarters. So while this has slowed us down, the recent trend that our lead indicators are going in the right direction. Canada has a well-vaccinated population, and health officials are taking the bold step to publicly encourage physicians to increase in-person interaction. As they do so, we believe this will provide fertile ground for the education and the adoption of Vascepa. The final catalyst on the list is public market access. And as the last catalyst, it is getting a lot of attention from our stakeholders. The questions we are asked most frequently by investors these days are: what is the status of your public market access negotiations with the pCPA? What are the potential outcomes of those negotiations? And when will it be done? Let me remind you, from the start, we have said that we must respect the process laid out by the pCPA and one of those principle is that these discussions are confidential. What I can tell you is that we are negotiating with an organization representing a large group of stakeholders, all 10 provinces. And given that Vascepa is not only a new drug but a new class of drug, we knew -- we figured all along that negotiation could be long and arduous because there are no beaten path or pre-existing business cases to follow. What I can also tell you or repeat, because we said it before, is that it is not unheard of for some products to take up to 30 months to gain public reimbursement, but we think our negotiations could likely take 18 to 24 months given Vascepa's clinical profile and the fact that it was a subject of a priority review. And that remains our aim. We are currently at 20 months and working hard at it. As to potential outcomes, foremost is concluding an agreement with the pCPA covering all 10 provinces. That is certainly the goal here for us. This said, and since we're asked about it, the pCPA process can also result in different outcomes, involving a subset of provinces or creating circumstances where provinces could engage individually in a negotiation. But I want to make it clear again that while these -- there are different paths possible, our efforts are aimed at universal access. Vascepa was subject to a priority review by Health Canada. It has strong clinical data supporting it. It is included in the treatment guidelines of Canadian and renowned international medical society, and it is backed by solid pharmacoeconomic data regarding its contribution to the health care system. Vascepa has the potential to deliver significant benefit to the many Canadians suffering from cardiovascular disease. Ultimately, we believe that Vascepa should be made available to Canadians just as other drugs for other ailments that procure a similar benefit are made available. With that, I would like to take a look now at developments with other products in our portfolio. Looking first at Clozaril. Like the mature product that it is, Clozaril continues to deliver steady financial performance. And for the full year-to-date period, the number of patients in the therapy has increased by 3%. It's important to underline that while that growth rate is modest, we have grown our market share a little bit during that time, which is reflecting the strong competitive position of the product and the CSAN support network. Here again, as pandemic restrictions continue to ease and in-person interaction increase, we expect new patient access to the treatment should improve. CSAN Pronto, our point-of-care safety blood monitoring device that addresses frequent traditional blood draws for safety monitoring, the biggest barrier to clozapine adoption is also expected to help improve patient access to Clozaril. 51 CSAN Pronto devices have now been deployed, with recent devices implemented in some of the larger institutions that were difficult to reach during the height of the pandemic. Feedback to date on the Pronto device remains positive. And our deployment strategy in the coming quarters is to continue focusing on the larger institutions. Regarding our MyCare Therapeutic Drug Monitoring, or TDM, we will be introducing the product to the market this month. MyCare TDM runs on existing lab analyzers to accurately measure the patient drug levels for 6 of the most common antipsychotics used to treat schizophrenia and bipolar disorder. Using such a test to measure the blood level for common antipsychotic drugs could provide information to help physicians better mind if a patient is taking their medication or if optimal drug concentrations are being achieved, and ultimately, whether the proper therapy is being pursued. It's complementary product within our CNS franchise. With PERSERIS, now that the patient environment is starting to stabilize, we have begun prelaunch activities and expect to introduce the product in the first quarter of 2022. PERSERIS is the first once-monthly subcutaneous risperidone, containing long-acting injectable indicated for the treatment of schizophrenia in adults. PERSERIS reflects our further commitment to the CNS therapeutic area. It allows us to directly leverage our existing commercial infrastructure, relationships and reach in the Canadian psychiatric market while delivering a new clinically meaningful therapeutic option for patients with schizophrenia. With that, I will now turn it over to Tim for a closer look on our third quarter financials. Tim?
Thank you, Gilbert, and good morning, everyone. I will start with revenues and product sales. Revenue for Q3 was $15.1 million, up 15% from Q3 last year. Revenue increased primarily due to higher sales from Vascepa, higher royalty revenue, positive developments in our Clozaril franchise and the year-over-year rebound of the Canadian dollar from its lows experienced early in the pandemic last year. On a sequential quarterly basis, it was another solid quarter of sales growth for Vascepa with sales growing 33% from Q2. In addition to the continued growth of the Vascepa franchise in terms of prescribers, patients and prescriptions, Vascepa's sequential net sales growth also benefited from continuing trending down of Vascepa assistance plan subsidies following achievement of broad private insurance coverage. There was also some additional wholesale inventory purchasing in the quarter in anticipation of expanded physician coverage for Vascepa following the announcement of the promotional agreement with Pfizer. As Gilbert mentioned, Clozaril remains a steady and reliable revenue generator for the business, and the number of Clozaril patients in Canada through Q3 increased by 3% annually, which is up from a 2% growth rate last year. Royalty revenue from the diversified portfolio of royalty interests acquired last year was $2.2 million in Q3, up from the $1.8 million of royalty revenue in Q3 last year that was based on sales of Absorica in the U.S. market. HLS terminated its ownership of the Absorica marketing rights effective December 31, 2020. So far in the 2021 year-to-date period, the portfolio of royalty interest has generated $6.9 million of revenue, comparing favorably with the $8.4 million of royalties for the 4 quarters prior to acquisition by HLS. Shifting now to expenses. Q3 operating expenses were down 5% from Q3 last year. The decrease was due to lower G&A, which was offset in part by higher cost of product sales related to the growth in sales of Vascepa and higher Vascepa selling and marketing costs. These higher Vascepa selling and marketing costs include the initial expenses as part of the Pfizer promotional agreement, but these amounts were very small in Q3 2021 given the start of activities only very late in the quarter. Adjusted EBITDA in Q3 was $6.9 million, an increase of 53% from Q3 last year and resulting in year-to-date adjusted EBITDA of $20.2 million, up 31% from a year ago. These increases were due primarily to higher sales of Vascepa and higher royalty revenues, along with the onetime retirement costs in Q3 2020, which were partially offset by this year's increase in cost of product sales related to the growth of Vascepa as well as higher Vascepa selling and marketing activities. Cash generated from operations was $3.6 million in Q3 compared to $2.4 million in Q3 a year ago. On a year-to-date basis, this year's cash generated from operations is $12.5 million compared to just $3.5 million in the same 9-month period last year. Sustained adjusted EBITDA and cash from operations have supported continuing deleveraging. Year-to-date, $7.5 million of principal has been repaid on the senior secured loan, bringing the outstanding balance to $100.1 million, which is supported by increasingly diversified operational results. Overall, we continue to have a strong financial position with $21.7 million of cash and cash equivalents, a $35 million revolving facility that remains undrawn as of today. And under the terms of our existing credit agreement, we are also able to request incremental loans up to a maximum amount of $70 million to support acquisitions and other growth opportunities. In addition, in 2020, we filed a preliminary short-form base shelf prospectus to raise up to CAD 250 million that remains available to us should the appropriate strategic opportunity emerge. We also announced with our Q3 earnings a renewal of our normal course issuer bid. From time to time, the value of our shares in the public market may provide the opportunity to acquire stock at prices that we do not believe reflect the true underlying value of the business. We've put in place the NCIB to enable us to take advantage of these opportunities. Under the terms of the NCIB, we are permitted to acquire up to 5% of our issued and outstanding common shares over the ensuing 12 period, which would equate to just over 1.6 million shares.And finally, yesterday, the Board of Directors declared that the subsequent quarterly dividend of CAD 0.05 per outstanding common share is to be paid on March 15, 2022, to shareholders of record as of January 28, 2022. With that, I'll pass it back to Gilbert for his closing comments.
Thank you, Tim. As we noted on our last call, we understand that some observers may be a bit tired to hear about the impact of COVID-19 on our rollout and performance in general. And trust me, so are we. But while rooted in the day-to-day reality, we continue to believe that the environment is improving and that important progress is being made to help grow Vascepa faster and larger. Vascepa seeks to address a large and critically unmet need in the market. It's a first-in-its-class therapy and one that has the potential to assist thousands of Canadians in their battle against cardiovascular disease, which remains the #1 -- the world's #1 killer. With 3 of the 5 growth catalysts in place, the pandemic restrictions easing progressively and the efforts being made to gain public reimbursement, we remain confident in the long-term potential of the product and in our peak year sales estimate for it. The trend forward is upward as evidenced by the sequential growth in the number of patients, prescribers and prescription. We are staying focused on the things that we can control or influence and are not getting distracted from the end goal. While the effect of the pandemic is real, significant and has slowed us down, it doesn't change the fact that the need for cardiovascular risk reduction remains immense, that Vascepa is the first and the only solution for our patients, and therefore, the Vascepa potential remains unchanged. That concludes my prepared remarks. At this point, I will ask Kelsey, the operator, to please provide instructions for asking your question. Kelsey?
[Operator Instructions] Your first question does come from Noel Atkinson from Clarus Securities.
Gilbert and Tim, well done in Q3. First off, just on the Pfizer sales force. So out of the gate here, over the last sort of 6 weeks or so, how many doctors were the sales force targeting in this sort of initial rollout phase?
We'll give you general numbers here, recognizing that those numbers grow over time, right? Well, when an audience have been called upon and at the regular rate, eventually, that target gets broadened. But notionally here, you can think in terms of -- at steady state, we will go from what would have been probably close to 3,000 doctors to now a new height of about 12,000. For the time being, it's a little lower than that because we're in the introductory phase here, and we're focusing on a slightly narrower audience on a per-territory basis. So let's say, right now, 2,500 augmented by another 7,500. But at maturity, that total will be closer, if not exceeding, 12,000 doctors.
Okay. Great. And do you have any insight -- I know we're talking in Q4, not Q3, but do you have any insight in terms of how their detailing has been going? Have they been able to start reaching doctors fairly easily?
Well, actually, here again, this is a process that follows a number of phases. There was already a significant overlap between the audience that they were already covering and the one that we will cover in the future as it relates to Vascepa. So that brings -- that brought a lot of conveniency in setting up or using pre-existing appointments.But in the first stance -- and this deployment really started at the very end of the third quarter. It was essentially going through the motions of reorienting their playing and their agenda. And I think that through Q4, there will be a ramp-up, and they will get closer to their steady state in terms of activity.
Okay. Great. I just missed the number of scripts for Vascepa in Q3. I think you said a number.
I don't know if we said the number here. The scripts that relate to the weekly reported numbers that we showed, that chart that we showed here, represent a 24.7%, I think, 25% increase quarter-over-quarter. I can circle back and give you that exact ratio between one and the other. It's a simple add-on of the data point on a weekly-to-weekly basis. So 25% might be the most reliable thing I can give you today, but we can follow up with a very number.
Okay. Great. And then just finally, again asking on Vascepa and the rollout and the Pfizer here. The sales and marketing expense growth. So your expenses were really well contained in Q3. What should we be thinking about in terms of the expense right here in Q4?
I'll just -- very quick preface and Tim can take it from there. We spend -- promotionally speaking, we spend in a responsible way, meaning that we want the spending to produce a result. And in the case of a launch, of course, there are many such spending activities that are fully warranted. There are a few others that can either be deferred or set aside and pursued shortly thereafter when the conditions are better. So that was kind of a mindset here. We haven't been pulling for any other reasons than efficiency of the resources in the context of the current restrictions. I think we've alluded to July and August being a very soft months from doctors' availability and patient visit standpoint. So it was, in certain cases, just a natural result of that on availability or inability to spend or just a decision to defer it by 1 month and to engage.So Tim, you want to say a few more things on that?
Thanks, Gilbert. You're quite right, 2 of the 3 months of the quarter and the summer, and there just isn't a lot of opportunity to spend effectively. In terms of thinking about where things would go, I think if you look back at the selling and marketing spend that we had in Q2, that represented when we were able make good use of effort behind the introduction of the guidelines. I would expect something more like that going forward. Eventually, as the sales force expansion ramps up, we'll see that add. But again, that's a reasonable increase and probably not more than a couple of million dollars a quarter in the foreseeable future.
Your next question comes from Justin Keywood from Stifel GMP.
Just on the Clozaril contribution. The sales were down 4% in the quarter, but in your opening remarks, you mentioned the patients being up 3%. So just wondering if you can provide some additional context on the ordering dynamics there.
Yes. Most certainly, because -- there could be an apparent disconnect between a growth in patient and sales that are fluctuating. I can tell you that since the pandemic began, there has been a disruption in the market. If you recall, at the outset, we saw a lot of product loading through, and actually it's at the root of that chart -- or an element of that chart that I showed. The very strong Q2 2020 and even Q3 2020 was essentially loading, even hoarding, at pharma levels. So that, of course, did apply to Clozaril as it applies to many other drugs. So the duration and the ongoing uncertainty of the pandemic has led to variability and lack of ability to fully match what's happening in the field versus what's happening at the ex-factory level or also at the retail or within the trade segment.So fundamentally, net sales will follow the trend in patients. Patients have been growing. And that is the fundamental track we believe we are on. There's always some seasonality. There's always some trade inventory adjustment from period to period, especially in the context I just described here.And this year, there's been another factor in that there's been a number of trade consolidations, resulting in some onetime changes in demand. For those who are familiar with that, there's been a merger in Quebec, Metro and Jean Coutu. And there's been also McKesson, Rexall, Shoppers Drug Mart activity here. Those consolidations are inducing additional disruption. They don't change the demand, but they do change the trade consumption pattern. And those consolidations are of a nature to sometimes create a onetime positive effect or onetime negative effect.So kind of a big soup here with the ins and outs. We focused on the lead indicator, and that's a patient count. And we know that over a reasonable period of time, all those elements get reconciled.
Understood. And are we largely through kind of this unusual ordering dynamic? Like should we have a more normalized quarter in Q4 and beyond? Or this variability still show up?
Tim, you want to comment on that?
So I think so. The one thing that we don't have visibility is the timing of trade orders, and there are some customers that order infrequently. And so there will always be some variability quarter-to-quarter. But we are seeing, as Gilbert said, the fundamentals are we follow the growth in patients. And we do, do see that over time, the product sales follow that and are in line with that. When we start reporting year-over-year, quarter-over-quarter, then there are some of these dynamics that can affect that. But the health of the business does follow the patient demand.
Okay. Understood. And then on public reimbursement for Vascepa. I realize that your comments may be limited. But I'm wondering if the negotiations -- just to confirm, is it primarily a pricing situation versus the health benefits of Vascepa? Is that the negotiation that's primarily going on right now?
Well, this is a kind of a textbook case of social economics, right? There's a new product that benefit to society, constituents in the provinces, but it's also using public money. And therefore, the negotiation will ultimately, yes, revolve around what will be the pricing or the cost of accessing or offering access to the product -- to the provinces, right? So that is ultimately the single most important element that is at the center of it. It doesn't mean that there are no discussions on product value, product benefits from a pharmacoeconomic standpoint. These are, of course, all the arguments that are discussed and debated at the table. But in the end, a listing agreement is predicated on terms that are economic in nature.
Okay. And then in the opening remarks, you mentioned that you still feel confident about the 18 to 24 months' time line, but it could potentially stretch to 30 months. I'm just wondering if there's any indication of what situation could play out if we could see something before the end of the year? Or the longer this goes on, does that suggest that this may be a more delayed process?
Yes. I just want to reiterate. Our aim is 18 to 24 months, right? I mentioned the 30 months to create a -- to draw a parallel. 30 months is not uncommon for many other products are being discussed, especially if they don't have a unique contribution. We think Vascepa has a unique contribution. It's the one and only product in its class. It's a new class of drug. And that's why we think that a shorter time frame is a reasonable assumption, and that's been our aim.As I said, 20 months have elapsed. There's still 4 months to go. We'd love to be able to say that it could be next week. It could also be in 3 months and 3 weeks. That's the -- just the responsibility that we're taking in being measured in our comments and the fact that it takes two to tango, right? We're negotiating with the PCP across the table. They represent 10 provinces. There's grid diversities. And that's why it makes it hard to land on a precise time frame.And I think I made comments to the effect that when you're essentially paving the way to a new class of drug, we're not writing pre-existing agreements that might have been done. And even though they're confidential, when you're the seventh product in a drug class, the seventh statin coming to market, well, the competitive set is pretty clear. And what provinces are willing to pay is usually brought forward in the discussion, and it kind of defines boundaries that would otherwise not exist in a case like Vascepa.So sorry for the bundles of details here. Even that is a simplification of what is being discussed. But our aim is to fit into that 18- to 24-month time frame. We said that from the first day of our launch, and we're still aiming to get that done in that time frame.
Okay. Understood. We'll look forward for those updates.
Your next question comes from Rahul Sarugaser from HLS (sic) [ Raymond James ].
This is Michael Freeman on for Rahul today. I wanted to continue along that thread of public reimbursement. You described your aim's being universal coverage as the outcome. And I'm wondering what situation would you accept the outcome of a subset of provinces covering the drug instead of universal coverage, recognizing that's suboptimal? But when -- I guess, in what context would you accept something like that?
Good. Well, there's a point where these elements may not be of our choice. When we say universal coverage, we'd love to get to a point where the agreement and the terms discussed are appealing to all the provinces so that all the provinces could offer it to their constituents. There are 10 provinces, and therefore, there are 10 vantage points. And sometimes they're close to one another, sometimes they can be distant. It's not necessarily of our doing to be able to reconcile them all, but the objective is to have a set of terms that would be agreeable to them all.Now as you know pretty well, those 10 provinces are not all equal in shape and size and also, I guess, in their ability to pay for a certain thing that they might want otherwise. So these are the variables that are being brought to the table. We have a position that is predicated on our understanding of the value of our product. And we're bringing to the table also our understanding that public money needs to be well spent by people that are custodians of 2 things: the public budget, but on the other hand, also the standard of care and access to innovation.So the net of it, Michael, is that we will not control if all 10 provinces or 8 of them or 5 of them are willing to move forward with a set of conditions or if the 10 of them will. Our aim is clearly to have as broad an agreement as possible, but nobody can force a province to do something that they don't want to do. In the end, that's their decision. Even if there's a set of agreements and they want to elect into it or for the time being out of it, that would be their decision. But most of the time, the aim is reached and the coverage is rather broad, if not universal.
All right. Yes, surely, it's a volume and pricing optimization exercise. Now on to -- thinking about -- you previously described subsidization of Vascepa in order to drive early adoption, and I wonder if these subsidies continue today at roughly the same rate that they have previously? And if so, when would you expect to taper off these subsidizations?
Good. I can tell you that about 1 in 3 scripts continues to be subsidized. It's a practice that could be long-lasting. The terms of that subsidization could change over time as reimbursement is obtained and takes effect. We're trying to think of it in terms of what the patient is confronted to. When a script is written and that script is covered by a private plan, that first script usually has to make it through a bit of an obstacle course, and it's called prior authorization. And that means that the payer will first make sure that this is in the right indication. And secondly, they'll make sure that maybe certain tests have been done showing that, yes, targets arise over a certain level and the patient is indeed on the statin. So that kind of thing.In the meanwhile, the patient that wants to start the therapy may not get coverage. So it could take a month, it could take 6 weeks, it could take 2 months. The shorter the better. But in the meanwhile, it's just good business sense to support the patient, make sure they have access to the product, right?So some of that was intense in the beginning and long. It continues to exist, but the duration of that subsidization is shorter as we get into the rhythm of those -- the processing of those claims at the various companies. So it's something that oftentimes companies continue throughout the launch and beyond the launch and see -- the continuation of it is something that continues to add on to the normal growth of things. It would make a lot of sense for us to continue, maybe curtail the program to the specifics of the time, but to continue to do that.It's -- when you think about it, it's a driving mode. It's favoring access. It's making sure that converting on a prescription isn't delayed or dropped. So it's a very useful tool for the patient and one that is kind of logical in many cases.
Okay. Great. That's really helpful. Good luck as you finish off the year.
Thank you very much, Michael.
Your next question comes from David Martin from Bloom Burton.
First question, is prescribing by primary care physicians more dependent on public reimbursement than with specialists? And if that's the case, should we temper our expectations of what the -- it's a big addition you're adding to the sales force with Pfizer. Should we temper our expectations prior to getting the public reimbursement?
David, that's a very good question, really at the heart of some of the things we're doing and modifying over time. Typically, the audience that we're calling on at any given point in time is defined along certain parameters. One of those parameters, and I think under soundly, you'll see who's prescribing statins because statin is a condition. We're an add-on to a statin. So we try to understand who's prescribing statin, and that defines, to a certain extent, the people they are treating.There are also parameters that allow us to target or favor a bit more what appears to be a publicly -- privately covered clientele versus a publicly covered clientele. So those are kind of social demographics. And it would be only logical for us to favor while we're not publicly covered to favor those privately covered patients by selecting doctors that are catering more to their needs, right?This is not a perfect science. This also means that sometimes we can say, well, at the peers that about X percent of their practice could be more private than public. And that could be an element in the way we define the audience we're calling on. And of course, as the reimbursement and formulary listing evolve, we can adjust that and enroll in additional doctors.I'll make a last comment and that is related to the indication. We're indicated in patients with established cardiovascular disease and also with patients that have diabetes. All of them should be taking a statin. All of them should have triglycerides over a certain level and/or risk factors. But I think most people will understand that the diabetes indication skews a bit younger, and the established cardiovascular disease indication skews a bit older, which is likely to be also reconciled with younger active population, privately covered and established cardiovascular disease would have proportionately a bit more of people that are somewhat older, and it could be, for more of them, publicly covered.
Have you seen a pickup in prescriptions and prescribing doctors, say, in the second half of October that you can tie back to the addition of the Pfizer sales force?
I'm going to hold on, on commenting on the October trends here or try to connect some dots. The deployment took place in the back end -- the very back end of September, and therefore, in October, many doctors were called upon for a first time. And the introduction of their role in the Vascepa detailing was essentially the subject of those first calls. So it would be a little premature.We do hope to comment and make that connection when we will comment on the fourth quarter. As you can imagine, augmenting the audience by such a number of fold and the number of calls accordingly should normally translate I think that to extrapolate. The data on October -- we're in November 3, I think. So the data on October is only essentially for the first or second week available. So it would truly be premature to try to create a cause-and-effect relationship, but we expect to see one during the fourth quarter.
Got it. Just on the pCPA negotiations. Could the outcome of that impact reimbursement levels with private insurers? Or are they completely disconnected?
They're usually completely disconnected. They're all confidential negotiations, right? So those terms are usually confidential for reasons that are different, but good for both sides. It's always competitively sensitive. And provinces want those elements to be confidential. So that's been the rule. It's not a pCPA thing only. It's been the rule for as long as I've been in this industry. Rebate agreements are typically always confidential.
And my last question is the PMPRB regulations are going to be changing. Has that slowed the negotiations in any way? Or would you -- I know it's a new drug, but would you say it's been normal course negotiation? Or has anything like PMPRB regulations impacted?
I would say 0 effect of the PMPRB regulations. We fit under a category of drugs that will not be subject to most of the changes that will take effect -- or the changes of imports that will take effect. We essentially gain our approval at the point in time, and we got our DIN at the point in time that puts us in that shielded category.Having said that, it's clear that it's more the pandemic that has been slowing things down for the pCPA in particular. And that's why a number of cases and negotiations at the pCPA are higher than they were pre-pandemic.
Your next question comes from Chelsea Stellick from IA Capital.
I just have a couple of questions. Most of them were already addressed. But I guess, would you say that you still reiterate your peak sales for Vascepa at this point? And sort of furthermore, do you think that the effects of the pandemic will never fully go away? Would this peak sales estimate remain the same?
Chelsea, thank you for your question. So clearly, yes, we haven't changed anything with respect to our peak sale potential. We don't see how the pandemic changes the need. We see the pandemic right now influencing the way people can address the need in many ways, right? Doctor visits, of course, our ability to call on doctors slows us down. And also, as we just talked, negotiations providing market access has been slowed down. But the need is the same.I think that humans adapt. We're adapting, everybody is adapting. We have anecdotal evidence of doctors saying, "Well, this is the new normal. Life has to go on." And eventually, we find a way to conduct our business. So as far as we're concerned, there's no change in our view on the peak year sales.
Good to know. I guess sort of high-level questions. I know you mentioned 56-or-so percent of physician visits were face-to-face in July. Do you have any stats on where we are now in November, late October?
I will. I mean I have to follow up with you on that after the call. We do get market research information periodically. I don't know if this would apply to November. It would certainly applied to September and maybe part of October. And what we're tracking has a number of dimensions. I think we've alluded to some of that in the script.Everything gets -- we try to measure everything versus the pre-pandemic era. And I would say that the ability to see doctors is definitely still lower, probably at least 30% lower than it used to be. The nature of those calls is different. There are definitely fewer face-to-face. Typically, 70% versus pre-pandemic in the number of calls that we can do. Typically -- it's a huge generalization, but at least the math and the averages are correct. We're targeting about 40% of those calls being face-to-face.And the other part relates to the patient-physician part of things, and that's where the number -- I think the 56% number you were alluding to comes into the picture again, right? So doctors are still struggling to see their patients at pre-pandemic rates and levels. And the other element here, again, extracted from reliable market research, doctors are not...[Technical Difficulty]
Operator, is the call still underway?
Yes, the call is still in effect right now. I'm just going to see where Mr. Godin is.I do apologize for any inconvenience. Just one moment. We're just waiting on Mr. Godin.
While we're doing that, Chelsea, did you want to proceed with your next question?
Sure. I guess -- so I guess, you said 51 CSAN Pronto devices have been now deployed. Is there a goal? Or is some sort of guidance on these devices that we can see in the next quarter or so?
Yes. Just to provide a little bit of color on that. I think when Gilbert mentioned that, he mentioned that also this was kind of a return to seeing some of those deployments at larger institutions, so mental -- larger mental health-oriented hospitals or larger centers. Those were places where -- that we were originally intending to go to first, but we essentially were unable to get in there during the early part of the pandemic, and it's great to see that we're now being able to make progress on those.And so I think that it's an important distinction that the ones that we're adding now are probably much larger in impact on the market. And so even if the number of institutions is a modest number, it's probably a more significant deployment. That said, in terms of where we're at, we're probably still early days. And so there's well more ahead of us than what we've done so far on the deployment.
I'm sorry, I'm back.
Tim did a good job of answering my question while you were away. So...
Good.
Your next question comes from Tania Gonsalves from Canaccord Genuity.
Most of my questions have been asked here. So just a couple for me. Following up kind of on Chelsea's line of thinking, on the peak sales estimate, I understand why you wouldn't change the actual peak sales guidance. But with like 1.5 years now of muted deployment potential, should we be thinking about pushing out our time lines for when we reach that peak sales? I don't think you've changed your deck yet, but wondering if 2025 is still a reasonable estimate.
Thank you, Tania. It's a good question, and it certainly has a bit of a crystal ball element to it. We're confident in peak year sales because it's predicated in what we think the standard of care will become and previous examples with statin and so on. Having said that, the timing is, of course, kind of a delicate exercise. How do we land there?We have been talking abundantly in the last quarter or 2 of that inflection curve, that inflection point, that puts the product on a different path. And we've used analogs to illustrate that. And the analog was just to show that when it takes off, it's a pretty steep climb, right? And what would otherwise seem conceivable becomes very real and demonstrated.So in our case, some of the things we discussed this morning are directly related to that inflection point. The time it will -- the time at which it will happen and the steepness of it will become apparent. So I think these are the elements that we would probably use to get in mind, is it going to happen by the end of '25 or will that slip into '26? I think we'll have to reserve our judgment.The one thing we try not to do is to be so sensitive out of extreme caution and then to change those parameters all the time. We will change them if we have a signal that is pointing to that. And if the signal says, we still think that '25 is a good time frame, we'll do that.We're not quite there yet. I apologize for kind of beating around the bush on this one, but the fact is that -- I don't think that bravado of saying, of course, we'll be there or just hedging by saying it will be delayed would be genuine. We're -- we'll wait. We have a few seminal events in the making here that will give us a shot at that.
Okay. Excellent. I will be patient and wait.
Thank you.
I think you guys have already talked to this a little bit already, but that marketing and sales line, you mentioned it should revert to more normalized levels in Q4. Will there be any outsized contribution from the Pfizer -- like as part of the Pfizer agreement, any onetime costs in that line item that we should be forecasting?
Do you want to comment, Tim?
Yes. It's a good question. I think it kind of does highlight in some respects how expanding our coverage in this way has kind of derisked that expansion for us from a financial standpoint. The short answer is, no, there isn't. And so when you think of -- if we were doing this ourselves, there'd be a lot of upfront costs related to recruiting and staffing and training and then the original deployment, whereas that's really not the case. What we'll see is we'll see a gradual ramp as the activities ramp up. And so it won't to be have that blip, if you will.
Perfect. On -- this is a little bit nonmaterial at this point, but I'm wondering if you can provide an update on Trinomia. I know there was an ongoing study we were waiting for data from before resubmitting. Do you have a time line estimate for when you might get that?
General time line, yes, we're still in the waiting phase because the -- I think the remarks we obtained from Health Canada were requiring that we use and report on an ongoing trial. It's a Spanish -- independent ongoing Spanish trial. And I think that trial is scheduled to conclude very near time. We heard and understood end of year. So hopefully, communication of those results will be available. And once we will have had a chance to complete a review of that data from the ongoing Spanish trial and that we are in a position to determine the regulatory path forward, in other words, how well this does indeed address some of the questions requested or deficiencies identified by Health Canada, it could easily be -- we're talking here if study results are available to us before the end of the year, we could be able to make that determination in the following 3 or 4 quarters and provide that answer.So I think in terms of Trinomia, to think of a resolution -- a favorable resolution in less than a year would be optimistic. I think that's pretty much the terms and the sequence of event that we're contemplating.
All right. That's very helpful. And then a last one for me. Your balance sheet continues to be in really good shape. I don't think you provided this in a while, but could you give us any color on the M&A outlook? Are you looking at things north of the border, across, south of the border right now with Vascepa with the launch delayed and not -- maybe not as busy as originally expected? Is there more potential to execute on M&A deals?
Yes. I'm not going to bring in the pandemic, but it's clear that it's a factor that's been holding certain developments that could probably have occurred otherwise. This is a preamble. I want to say that we've seen some recent activity in the spec pharma space in the last couple of months. There were 2 fairly visible material transactions. We have been on a continuous active lookout through 2021 with 2 aims. One of them is augmenting the existing, right? The CNS and the CV, cardiovascular, portfolio with products that would be commercial stage. That's easier said than done. Or option to license products that would be complement, just like we did with PERSERIS and MyCare.And secondly, we're looking for U.S. commercial platform. I think we talked about that before. That platform could be equal in size and in potential to what we have in the Canadian territory. That's because we think that scale matters in our industry. It's a way to get more visibility. It's a way to diversify the stream of revenues. It's a second axis of growth. And of course, it needs to be done in a way that is -- bearing in mind the fact that we have a very potent asset in our hands today, and that is Vascepa.So it's not just about combining for combining and gaining scale. It's about finding something that would be accretive in the broad sense and would continue to be more of the same in terms of excitement and promise of future value creation.So the deal flow continues to be abundant but requires discernment. This truly is a labor of love but also a nutrition process. That's the nature of the beast. We've earned until now the reputation of being careful stewards of shareholder capital. We would only pull the trigger if the operational and the financial criteria would make sense. We certainly wouldn't do anything to distract the team from the opportunity that Vascepa is. And we're looking -- there's at least 5 therapeutic areas that would be a good fit for us, and they're not the same in the U.S. than it would be in Canada.So that's kind of a long-convoluted answer. And when these things happen, they seem to come out of nowhere. The fact is that it's always a very intense research process of analysis and attrition. And typically, you turn 20 stones to find 1 that is worth pursuing. And once in a while, those that you pursue fully materialize.
There are no more further questions. Mr. Godin, you may proceed.
Well, thank you very much, Kelsey, and thank you all for participating on today's call. We look forward to reporting to you on our progress throughout the year. Thank you very much. Have a wonderful day. Bye-bye.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.