HLS Therapeutics (TSX:HLS) Q3 2026 Earnings Call

0:00 Good morning and welcome to the Q3 Fiscal 2026 Financial Results Conference Call for HLS Therapeutics. At this point, I would like to turn the call over to David Mason, Investor Relations, for the introductory remarks.

0:15 Good morning, everyone, and thank you for joining us today. With me on the call are Craig Millian, Chief Executive Officer, John Hanna, Chief Financial Officer, and Brian Walsh, Chief Operating Officer. Earlier this morning, we issued a news release announcing our financial results for the three and nine months ended September 30, 2026. This news release, along with our MD&A and financial statements, is available on our website and on CDAR+. Please note that slides accompanying today's call can be viewed via the webcast, a link to which is available in our earnings press release and on our website on the events page.

1:00 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 CDAR+. During the call, we will refer to adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA is defined in our press release and annual filings that are available on CDAR Plus and on our website. Please note that all financial information provided is in U.S. dollars unless otherwise specified. I would now like to turn the meeting over to Mr.

1:45 Millian. Please go ahead.

1:47 Thanks, Dave. Good morning, everyone, and thank you for joining us today. On our call today, I'll take you through our third quarter performance along with a corporate update. Brian will then follow with a closer look at each of our products. John will cover the financials in detail, and then I'll be back with a few closing thoughts before we open it up for questions. Starting with the big picture, the story this quarter is execution in driving our cardiovascular portfolio forward, forging a clear path to accelerated revenue and adjusted EBITDA growth in 2027 and beyond. Our cardiovascular portfolio delivered third quarter net sales growth of approximately 21% year over year in local currency.

2:32 The Nalendo launch is on track with its second full quarter now in the books and with sales starting to ramp. Private coverage is now fully in effect and we expect negotiations for public payer coverage to begin this quarter. Strong growth in cardiovascular sales is starting to translate into operating profit, with adjusted EBITDA up sequentially from Q2 as well as from Q3 last year. We also recently announced an agreement with Bayer that will extend our cardiovascular franchise into heart failure, with HLS leading the commercialization efforts for Vertuvo in Canada starting in the first quarter. At the same time, we remain focused on maintaining our leadership position for Closeril in Canada as it continues to generate significant cash flow in both the U.S.

3:22 and Canada. Along with a strong balance sheet, we have the flexibility to invest in new product launches, pursue business development, and return capital to shareholders. Now, let's briefly review the third quarter financial highlights. Starting with the top line, revenue in Q3 was $14.2 million, up 5% year over year. The cardiovascular portfolio led the way. Milendo, in its second full quarter on the market, generated net sales of more than $800,000 in 2018, up 91% from Q2. The SIFA third quarter net sales grew approximately 8% in local currency over prior year, with unit demand up 14%.

4:09 Year-to-date, the SEPA net sales are up approximately 12% in local currency, and we continue to expect double-digit growth for the full year. Turning to Closro, third-quarter net sales in Canada were down 2.6% in local currency, while U.S. net sales weren't in line with the prior year. Adjusted EBITDA for the quarter was $5 million, up slightly from $4.9 million in Q3 last year. This was an improvement following the year-over-year first half decline related to Nalemdo launch investment. Cardiovascular margins are expanding as Nalemdo ramps, with direct brain contribution from the portfolio of $0.7 million in the quarter. The expanding operating leverage in our cardiovascular business is now beginning to show up in our reported results.

5:03 Turning to business development. On November 3rd, we announced an agreement with Bayer, under which HLS will assume responsibility for the distribution, promotion, and medical education support of Recubo in Canada. Recubo is an established medicine, approved by Health Canada, commercially available today, with public and private reimbursement already in place. What it has lacked in Canada is promotional focus. That is the opportunity and it plays to our strengths. The deal structure is capital efficient. We book net sales and pay Bayer a royalty plus potential commercial milestone payments, while Bayer retains the market authorization and responsibility for regulatory safety and pricing matters.

5:50 Our initial OpEx investment will be modest and stage-gated and will scale as the brand gains traction. With activities set to ramp up in the new year, we expect minimal impact on revenue and adjusted EBITDA in 2027. In the near term, Vertuvo is a modest revenue contributor and its immediate value is strategic, with more substantial economic benefit coming in later years. Vertuvo extends our cardiovascular franchise into heart failure, and Bayer's choice of HLS is a further vote of confidence in our commercial capabilities. We believe HLS is increasingly seen as an attractive option for pharma companies seeking a partner with proven capabilities and expertise in Canadian specialty therapeutics.

6:37 Brian will have more to say on Recuvo shortly. As we enter our next growth phase, we've also welcomed two new independent directors to our board, Dr. Linda Maxwell and Mark DeLong, who joined on October 1st. Linda brings scientific expertise and extensive governance experience serving on public pharma company boards. And Mark brings deep business development and corporate strategy experience within specialty pharma. And that brings me to reiterate our capital allocation priorities. With the heavy lifting of de-levering behind us, we are focused first and foremost on investing in growth opportunities while continuing to return capital to shareholders through the buyback.

7:22 In September, we expanded our normal course issuer bid and remain active in the market. On the growth side, we continue to pursue business development opportunities that fit our criteria. Meanwhile, debt continues to decline through scheduled amortization, lowering our interest expense. Moving to guidance. We are refining our 2026 outlook within previously guided ranges, revenue of $56 to $60 million and adjusted EBITDA of $18.5 to $21 million. Based on our results to date, we expect revenue to be around the midpoint of the range. For adjusted EBITDA, we expect to be in the lower half of the guidance range for two reasons. First, given the strength of the Nalemdo launch, we are investing further to drive that momentum into next year.

8:14 Second, product revenue mix is shifting more rapidly towards the cardiovascular portfolio, where margins are improving but remain lower than clausural. Looking ahead, with several potential catalysts and with Nalemdo entering its first full year on the market, we expect a step up in growth in both consolidated revenue and adjusted EBITDA in 2027, and then to accelerate further in 2028. Our cardiovascular portfolio will drive that growth, with CV margins expanding as Nalemdo scales along with the potential launch of Nexlazet. Based on our progress to date, we remain confident that the Nalemdo-Nexlazet peak sales opportunity will be in the range of 50 to 100 million Canadian dollars.

9:03 In the coming months, we expect greater clarity regarding key catalysts, such as the Health Canada decision on Nexoset and the outcome of the TCPA negotiations. As such, we will provide more detailed 2027 guidance with our Q4 results. With that, let me hand things over to Brian. Thanks, Craig.

9:23 Good morning, everyone. I'll take you through the portfolio this morning, starting with our cardiovascular products, then followed by Closero. Before I do, a few words on the Canadian Cardiovascular Congress, which Craig and I attended in Ottawa last month. PCC is the largest annual gathering of cardiovascular specialists from across Canada, and HLS had a strong presence. We supported well-attended educational sessions on the CEPA's reducer trial and on non-statin prevention therapies, including Nalemdo. We also held an advisory board with leading Canadian cardiologists and lipid specialists, and launched the CBD Prevention Research Awards with the Canadian Cardiovascular Foundation to support the next generation of Canadian cardiovascular leaders.

10:12 What stood out to me was this was a level of engagement with real enthusiasm for Nalemdo and clear anticipation for Nexlozet. For a company of our size, that kind of visibility within the cardiology community matters and it reinforces our position as a leader in Canadian cardiovascular care. Now, turning to POSIPA, net sales grew approximately 8% in local currency in Q3 year-over-year, and units grew 14%. Year-to-date net sales are up approximately 12% in local currency, and units are up 16%. The underlying demand trend remains strong, with unit growth in the double digits, and we continue to expect double-digit net sales growth for the full year.

10:59 We are also seeing the synergy we expected from the LEMDO. Our teams are spending more time with the same specialists and receive the benefits from that time. Now to Nalemdo, which continues to ramp well. Net sales were up 91% over Q2, and the weekly xFactory run rate strengthened through the quarter. Nalemdo added another 1,700 new patients in Q3, up to 2,900 since launch. Nalemdo new patients continue to trend at over three times the number of patients started on Vasepa during the same period of its launch. However, we are still early in launch with market access expanding over time. At the end of Q3, approximately one in five of our targeted prescribers had initiated a patient on Nalemdo, demonstrating that we still have significant room to expand prescriber breadth.

11:53 and most prescribers have only a few patients on Nalemdo so far. So there's considerable room to drive depth as they move from trial to adoption. Our agreements with private payers now cover over 80% of privately insured Canadians and the vast majority of these patients can access Nalemdo as a full benefit without restrictions. Private coverage ramps through the quarter and as the remaining agreements with private payers took effect. As a result, we observed a significant step up in unit demand in September as patients on these newly added plans could fill prescriptions at their pharmacy. Q4 will be our first full quarter with this coverage in effect.

12:40 This week, we're also launching HLS Assist, a patient support program for our cardiovascular franchise. For eligible patients prescribed with SEPA or Nalendo, this program offers reimbursement navigation and co-pay assistance, reducing key barriers to starting and staying on therapy. This is also another example of an operational efficiency where we can scale our investment on a patient support program across multiple products in cardiovascular. On the public reimbursement side, we expect PCPA negotiations to begin this month. and we continue to expect initial provincial listings in the first half of 2027. That is the next major catalyst for Nalemdo, opening access to the two-thirds of the market covered by public drug claims.

13:30 On Nexlozet, the fixed-dose combination of benpidoic acid and azetamide, we expect a health counter decision by year end. Assuming an approval, launch would follow in the first half of 2027. Nexelzet will provide patients the convenience of two key medicines and one daily pill. But importantly, Nexelzet also strengthens our position in second-line LDL lowering, giving patients who can't tolerate statins or who need more LDL reduction than their tolerated statin dose provides an important next option. We expect modest additional investment in Q4 and through the first half of 2027 to prepare for the launch focused on market access, patient support, and targeted promotion.

14:17 Now to Vercubo, from both a clinical and a commercial perspective.

14:22 Vercubo, or Verisiguat, is indicated for patients, for adults with symptomatic chronic heart failure with reduced ejection fraction who are stabilized after a recent decompensation event requiring hospitalization or IV diuretic therapy. In plain terms, these are patients coming out of a worsening heart failure event among the highest risk patients in cardiovascular medicine. RECUVO's approval is supported by Victoria, a Phase III outcomes trial in over 5,000 patients. We see RECUVO as an underutilized asset, an oral, once daily medicine with outcomes data in an area of significant unmet need, consistent with key attributes of the other medicines in our cardiovascular portfolio.

15:09 Commercially, Vercugo builds on our cardiovascular platform and deepens our relationships with the leaders in Canadian cardiology, which we believe benefits the whole portfolio. Heart failure is a distinct specialty within cardiology, so our existing medical team will lead our initial effort, focusing on the top tier of heart failure specialists at key centers, and we'll begin product training shortly. Our current CV sales team will not initially support Vercuvo. We plan to add targeted promotional resources as we see signs of broader adoption. We will be ready to take responsibility for Vercuvo in Q1 next year. Now turning to Closro. Overall net sales declined slightly in the quarter. In Canada, patient growth is coming from the west with solid gains in BC, Alberta, and Saskatchewan.

16:00 In Quebec, our focus remains retention, and we continue to keep about 97% of patients on branded Clozarel on an annual basis. In Ontario, we are defending our leading market share despite competitive pressures we've described on previous calls. Nationally, the patient base grew sequentially each month in Q3, an encouraging leading indicator. In the US, Q3 net sales were flat year-over-year and down 6.5% year-to-date. When the REMS requirement was eliminated last year, there was some speculation that a less onerous process would expand clozapine prescribing, but we have seen little evidence of that. With fewer barriers, some patients have moved their prescriptions to retail pharmacies, where generic switching is more common. We continue to focus on our specialty pharmacy program, where patients are far more likely to stay on clozapine.

16:51 Overall, Closro will continue to be an important focus for us as we expect to remain a high-margin, cash-generating business that helps fund growth in other parts of our business. With that, I'll turn it over to John for a detailed look at our financials. John?

17:08 Thank you, Brian, and good morning, everyone. In my section, I'll review Q3 results, the balance sheet, and our capital allocation priorities. My comments are all in U.S. dollars, as per our reported numbers, unless otherwise stated. Starting with revenue, total revenue for Q3 was $14.2 million, up 5% from Q3 last year, and $41.7 million year-to-date, up 3%. The Q3 and year-to-date increases were driven by our CV portfolio. Year-to-date, the portfolio grew 19% in local currency. reflecting a 12% increase in the SEPA net sales and the addition of Noemdo.

17:54 Plausible net sales in Canada were down 2.6% in local currency versus Q3 last year. Plausible net sales in the U.S. were $2.8 million in line with Q3 last year. And finally, royalty revenue was $194,000 in Q3 compared to $179,000 in Q3 last year. Cost of sales in Q3 was up 11% compared to Q3 last year and up 12% year-to-date, driven by demand growth in the SEPA and higher Nalemdo volumes. On the expense side, Q3 operating expenses comprising sales and marketing, medical, regulatory, and patient support, as well as G&A, were 6.4 million, up 6% compared to Q3 last year, and down from $7.2 million in Q2.

18:49 Year-to-date operating expenses were up 7%, reflecting our investment in the Nalemdo launch. Q3 adjusted EBITDA was $5 million compared to $4.9 million in Q3 last year, in line with our expectations that margins would improve in the second half of 2026 as Nalemdo revenue ramps. Year to date, adjusted EBITDA was $13.1 million compared to $13.9 million last year. The direct brand contribution from the cardiovascular portfolio was $0.7 million in Q3 after breaking even in the first half of the year. This is the operating leverage in our cardiovascular business as Nalemdo scales on the commercial infrastructure already in place.

19:39 More of each incremental sales dollars flows through to adjusted EBITDA. It is also foundational to growing adjusted EBITDA in 2027, as Craig mentioned earlier. For Q3, the direct brand contribution from Closeril to adjusted EBITDA was $6.3 million and $18.7 million year-to-date. Cash from operations in Q3 was $1.8 million compared to $2.5 million in Q3 last year. While year-to-date, cash from operations was $11 million compared to $10.6 million, last year up 4%. Interest expense was $2 million year-to-date compared to $4.3 million in the same period last year, reflecting our 2025 credit agreement and a lower debt balance.

20:30 This next slide updates our capital generation view. adjusted EBITDA, less royalty revenue, less net interest paid on a trailing 12-month basis. That figure was $15.3 million at the end of Q3, up from $14.7 million at the end of Q2, and $2.3 million at the beginning of 2024. Over the same period, trailing 12-month net interest paid has fallen from as high as $8.8 million to $2.7 million. Turning to capital allocation, our priorities remain unchanged. First, investing in growth. RecuGo is a good example of what we can do. A partnership structured so that our payments track the brand's commercial success and one that extends our presence in Canadian cardiovascular medicine.

21:24 We continue to have the flexibility to act when the right opportunity presents itself. Second, returning capital to shareholders. In September, we expanded our normal course issuer bid to 1.9 million shares. Through to October 31st, we had repurchased more than 1.1 million shares, returning 4.3 million Canadian to shareholders. We continue to believe our shares represent compelling value at current prices. Third, on debt. In Q3, we made a principal repayment of 1.1 million, At September 30th, 2026, the principal balance of our term loans stood at $41.3 million, down 17% from the end of 2025. And net debt stood at $29.9 million, down 22% from the end of 2025.

22:21 Finally, looking at the balance sheet, cash was $11.4 million at quarter end, compared to $11.7 million at the end of 2025. Year to date, cash from operations of $11 million was largely offset by $7.2 million in debt repayments and $3 million in share repurchases. In summary, the business continues to generate the cash that funds both of our capital priorities, while debt continues to decline through scheduled repayments. And with our growing cardiovascular business now profitable at the brand level, we're well positioned to increase revenue and adjusted EBITDA in 2027. And with that, I'll pass it back to Craig for his closing comments.

23:04 Thanks, John. Before we open it up to Q&A, three quick thoughts on the quarter and where we're headed. First, HLS is in its strongest financial position in years. Our balance sheet is in great shape. We are generating robust cash, and we have expanded our buyback. Second, the growth engine is starting to deliver. The cardiovascular portfolio grew approximately 21% this quarter. The Nalemdo launch is going well, and the cardiovascular portfolio margins are improving. And third, the catalysts heading into 2027 are in focus. Public reimbursement for Nalemdo following PCPA negotiations, a potential Nexlozet launch in the first half of 2027 pending the Health Canada decision, and scaling up position engagement for Vertuvo starting in Q1, bringing another novel oral medicine into our cardiovascular franchise.

24:03 2027 will mark a step up in growth and we expect that growth to accelerate into 2028 as these launches ramp. Our goal is to create shareholder value by building greater scale and increasing operating leverage, both by executing with our current portfolio and through disciplined business development. That concludes my prepared remarks, and we look forward to keeping you updated on our progress. At this point, I'll ask our operator to please provide instructions for asking a question. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. Should you wish to decline from the polling process, please press star followed by the two, and if you're using a speakerphone, Please lift the handset before pressing any keys. We have our first question from Michael Freeman with Raymond James.

25:00 Hey, good morning, team. Congrats on the results. My first question is on Milendo. So I wonder if you could give us some updated prescription and patient start information through to October, if you can, and discuss how that launch is tracking versus your internal expectations.

25:19 Yeah. So I'll ask Brian maybe to comment on the progress of the launch.

25:24 Sure. Hi, Michael. Good morning. Thanks for the question. So we saw 1,700 new patients start in the quarter through end of September, and that's up to 2,900 year to date. We're seeing initial early adopters taking up the therapy with several in their practice, so the focus now remains on expanding Prescriber of Breath, and then deeper into their practice.

25:53 Yeah, maybe just comment. As we are into November now, we're not seeing any sign of that slowing down. So to keep forward, we're continuing to see that ramp, especially as private coverage in many respects just was kicking in over the summer and into September. So we're just starting to see that impact as well. and certain geographies where now things are starting to pick up. So the question around how that's tracking, it's ahead of what our initial projections were for the year. So we're very pleased with how all these launch KPIs are tracking. And as I said in my comments, we've seen nothing to suggest that at this point in the launch, we're not on track to potentially achieve that peak market opportunity that I've laid out of 50 to 100 million Canadians.

26:55 Okay, and on that peak market opportunity, what time frame are you contemplating from the time of launch to achieve sales in that range?

27:06 Yeah, so typically in Canada, peak sales are usually about six to seven years, so we'll try to accelerate that as much as possible, but it tends to be staged, obviously, with getting private coverage first, and then next year as we start to, assuming will start to get public listings. So that'll be kind of another inflection point in 2027, which will pick up further in 2028. And then if you combine that with a potential launch of Nexoset, you know, those are all potential inflection points in terms of growth. So we'll start to see, you know, really that growth trajectory accelerate, I would say, into 2027, 2028, even into 2029.

27:55 Okay, thank you, Craig. And if I could throw in one more. On the 2026 EBITDA guidance, you moved expectations down to the lower half of this guidance. And I'm curious how much of this reflects incremental discretionary Nalemdo launch spend versus the lower margin product mix shift that you mentioned in your filings.

28:22 Yeah. John, do you want to comment on that?

28:24 Yeah, I would say, Michael, it's a bit of a combination that order of magnitude, you know, half of it related to spend, half of it related to the product mix. And as we noted, you know, U.S. clause rule, a little weaker in the back half of the year than we originally expected. And that margin extremely, or that product extremely high margin. Okay. Thank you very much. I'll pass the line. We have our next question from David Martin with Bloom Burton.

29:00 Hi, good morning. I'm wondering with NextLizette, do you expect that will cannibalize Nalemdo or will it expand the market?

29:11 Yeah, I can make some comments and hand over to Brian. We actually see it as a market expansion opportunity. There will be, obviously, there'll be replacement of patients who are on both therapies, so there'll be some cannibalization, but we actually see this, David, as an opportunity to maybe move the treatment forward in terms of line of therapy. Rather than going from statin, adding azetamide, and then adding Milendo, with Nexlozet available, potentially going straight from statin to the combo product for patients who need additional LDL lowering. And we know the guidelines are all very much heading in the direction of more aggressive LDL lowering targets. And so Nexlozet really, as you can see, fits very well within that paradigm.

30:08 Yeah, I would agree with that. I think Nexlozet moves us more strongly in the second line. As Craig said, It also provides the power of combining moderate-dose statin with Nexilzet in delivering efficacy that's similar in order of magnitude of PCSK9. So, even taking patients maybe post-event, coming out of a hospital, being able to discharge on an all-oral regimen.

30:41 Okay, great. Flipping over to Clozarel. You mentioned the national patient base grew sequentially in each month of the quarter. Did sales follow the same trend? And did the patient base grow in the full quarter three versus second quarter and also year over year?

31:04 So I'll comment on the patient. So and then maybe John can put a finer point on the implications for sales. So our patient volumes have increased sequentially since Q1, which is good news. As we described on the call late last year, we had some competitive pressures specifically in Ontario, which resulted in some declining patient volume heading into 2027. So year over year, our overall patient volume is down, and I think that tracks with some decline in sales as well. but now the good news is that we do have I think eight consecutive months of sequential patient growth but still not quite back to where we were at the peak in 2025. John, anything to add to that?

31:59 No, I think that captures it. And with the patient growth this year, the sales have been increasing too in line with the patient growth?

32:14 I think largely in staff. Yeah. Okay.

32:18 Okay. And then in Q2. Sorry, David.

32:22 I just had some commentary to that. So it's not quite that simple because bear in mind, you know, the economics are a little bit different within each of the provinces. So depending on where that patient growth comes from, you know, could have implications as far as, for example, gross to net. and so while in general, obviously as patient volumes increase, that should have a positive effect on sales, it also largely depends on the mix, the geographic mix.

32:55 Okay. And then specifically in Ontario, you mentioned on the second quarter call that sales were growing sequentially in Ontario after the drop last year, you mentioned. Is that still continuing in Q3? Were sales up in Ontario over Q2?

33:14 I can speak to patients.

33:18 Patients have grown both in Ontario and nationally each month for the last eight months. We have to check on sales specifically.

33:27 It's a little lumpier because it's distributed through the hospital, so it's less of a... Less of a straight line, if you will. But the patient, the underlying indicator is patient growth. And that, as I said, has been consistently growing month over month.

33:44 But if there's disconnect between patient growth and sales growth, it's not because your pricing's coming under pressure. It's just stocking and destocking and things like that. Right.

33:56 Yeah, that would generally be true. Yes. Yeah. So as Brian said, there's not a smooth order pattern, especially in Ontario where a lot of order comes through hospitals. So just depending on how much they're stocking and what the cadence of their order patterns are. So that's why it's tough to directly correlate in short time frames to directly correlate patient growth with kind of ex-factory sales within a given geography. OK, great. True. As a reminder, if you would like to ask a question, please press star then 1.

34:44 Our next question comes from Justin Keywood with Stiefel.

34:49 Good morning. Thanks for taking my call. I was hoping to square some of the comments on having the infrastructure to support new growth, but there's also some added investments as well. And then there's the narrowing of the 2026 guidance. So my question is if there's new sales reps or if it's other types of investments to support the growth in the portfolio.

35:20 Yeah, good question, Justin. Yeah, so the spend is not related to any additional infrastructure build, so the footprint is what it is, and we're very confident that that can support the expected growth of Nalemdo and the launch of Nexilzac. Moving forward, certainly in the near to mid-term, there's no expectation to grow our footprint. I think there's certain, and I'll ask Brian to comment on some of the specifics, but I think there's Thank you for joining us today. for the sake of saving a few hundred thousand dollars, slow down that growth.

36:23 As I mentioned earlier, our goal, the typically peak sales come at six to seven years. Obviously, if there's things we can do to pull that forward, we'd like to do that. So we will, even with the additional investment, the expectation is the profitability of the cardiovascular portfolio will continue to expand each quarter and in a very significant way. And that being said, to answer the other part of the question, The growth in the cardiovascular portfolio is more than offsetting any decline in clozaril. But as John mentioned, the first half of the year, clozaril sales were down. It's a very high margin business for us. And so that shift of growth in cardiovascular at this point, dollar for dollar is not as profitable, obviously, as a decline in clozaril.

37:18 and as far as this... Yeah, sure.

37:20 Just to add some color on the spend, Justin, as Craig said, really getting Nexoset ready for launch, so doing some work around market access. I described in my remarks the patient support program, which we've redesigned to be a portfolio program on an ongoing basis. We'll see the leverage in that from a Thank you. That's helpful. And then I'm not sure if I missed this, but the Vercuvo in Canada, is there a target peak sales estimate for that product?

38:09 Yeah, so we've not provided one, but I would say, you know, our expectation is that it could do about 5 to 10 million at peak. So it's not obviously the same magnitude as the Pempadoag acid franchise, but still one that will be a nice addition. And our expectation is potentially something that will lead to maybe additional opportunities to bring in additional assets. Again, within the cardiovascular space beyond where we've traditionally been, which is in the lipid part of cardiovascular. Now we're moving into other parts of cardiovascular medicine. So I think both from modest but real potential upside in terms of peak revenue, but also, again,

39:07 Understood. Thanks for taking my questions. There are no further questions at this time. I will now turn the call over to Craig Millian for closing remarks.

39:19 Great. Thank you, Vanessa. And thank you, 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 all again soon. Thanks. Have a great day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.