Good morning, ladies and gentlemen, and welcome to the Valeo Pharma Inc Third Quarter 2021 Results Conference Call. I would now like to turn the conference over to Mr. Frederic Dumais. Please go ahead.
Thank you, operator. Good morning, everyone. Present with me today on the call are Mr. Steve Saviuk, our CEO, Mr. Frederic Fasano, our President and Chief Operating Officer, and Mr. Luc Mainville, our Senior VP and Chief Financial Officer. Before we begin our third quarter 2021 results and highlights conference call, I would like to remind everyone that this conference call may contain certain forward-looking statements regarding the company's expectations or future events. Such expectations are based on certain assumptions that are founded on currently available information. If these assumptions prove incorrect, actual results may differ materially from those contemplated by the forward-looking statements contained in this conference call. The company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required by security laws.
I would now like to pass the call over to our CEO, Mr. Steve Saviuk. Please go ahead, Steve.
Thank you, Fred. Good morning, all, and thank you for joining us for the third quarter 2021 results and highlights conference call. I will start by quickly reviewing our third quarter highlights and recent milestones, then I'll pass the microphone over to Mr. Fred Fasano, our President and COO, who will provide more details on our commercial efforts, completion of the implementation of our new corporate structure. Following which, Senior VP and CFO Luc Mainville will provide a short overview of the quarterly results before we open up the call for questions from analysts. Third quarter 2021 was clearly a pivotal quarter for Valeo Pharma. We recorded record quarterly revenues and gross margin, and again, record year-to-date revenues. All of this stems from, or in large part, the launch of three very important products for us.
Redesca for the treatment of anticoagulant blood disorders, and ENERZAIR and ATECTURA for the treatment of asthma. We are in the early stages of our sales growth for these products, which we expect will exceed CAD 125 million in peak sales. Significant growth starting in Q3. We've also implemented a new corporate structure. If we look back to six months ago or six to eight months ago, we had a total headcount of approximately 35 people. We are now 100+. A structure that clearly positions us as a mid-tier pharma company in Canada. One of the important aspects of any drug in Canada is the public-private reimbursement, who pays for the drugs. For our three key drugs, Redesca, ENERZAIR, and ATECTURA, we have extensive private coverage in the 75%-80% range. We expect that to go closer to 100% by the end of this year.
Redesca has extensive public coverage, with only Quebec and British Columbia currently not reimbursing the drug at the retail level. We expect that by the end of October to be rectified and that all provinces will be covering the drug. We are well advanced in our discussions to have our two asthma therapies, ENERZAIR and ATECTURA, reimbursed at the provincial level. Redesca is currently our top-selling product. We launched it in end of April, really, but May was the big month for Redesca. We expect peak sales for Redesca to exceed CAD 30 million. CAD 30 million of that CAD 125 million will come from Redesca. Typically, the uptake and the sales growth will be earlier in the launch curve of products. What we would expect is that for the next three or four quarters, that Redesca will be the workhorse in terms of driving our top-line sales.
Quickly followed up by the asthma therapies that have now been launched by our sales team. We have a national sales force of 65 managers and regional sales managers, which puts us on a par with even big pharma. We have a very extensive and complete commercial team. Our asthma drugs, as I mentioned, have been launched. They were launched in June. The commercial team has been at full strength and in the field as of August. We are sampling the product extensively, and the early indications from healthcare providers is very strong, which would portend to the sampling and just general comments about new therapies and the benefits from our clinical data. We think we clearly are at an inflection point now.
We're moving from that small pharma company that we were a year, a year and a half ago, to really into the mid-tier, with significant revenue targets going forward. We have a structure that is leverageable for additional products, which we expect to be able to launch in the coming years. I think we're at a very attractive point in our commercial history. With that, I'll pass the mic over to Fred to give you a bit more detail and color on the implementation of this corporate structure, a bit more on these three transformative products that I mentioned earlier, and other of our latest accomplishments. Over to you, Fred.
Hey, Steve. Thank you. Thank you so much, and thank you, the audience, also to be on the call this morning. It's my pleasure today to report on the latest business updates regarding our Q3 results and to share with you also our excitement to see things moving in the right direction at Valeo. We are posting good Q3 results, and our focus is more than ever on first accelerating top-line revenue growth and shortening our time to break even. The first point I want to report on this morning is where do we stand in terms of our new corporate structure. Steve has already given some part of it, but it is now fully completed and operational. The point underlying this new design of corporate structure is important.
It's a strategic transformation of Valeo, of our organization, which has led us to design two different business units led now by industry veterans and staffed with industry skilled and experienced people. Both business units are now fully operating in support of our branded products. Two products are part of the respiratory business unit, and six are part of the specialty product business unit. Our third arm, I would say, the hospital generic division, includes now generic products, mainly sold through hospital tenders without any promotional support. One important consideration at the time we started with this aggressive hiring plan was really our ability to attract talent. I'm also happy this morning to report that we have been able to hire great professionals, attract great professionals to Valeo, even though we hear everywhere about the talent shortage, especially in the high-tech field.
The idea to build an anchor Canadian pharma company has created a very attractive and exciting story for veterans of the pharma industry to join us. Interestingly enough, our number 100 employee will be our vice president, human resources and talent management, who will join our organization as of the 1st of October, who will be made public at this time. It has been quite an achievement to have managed this process from end to end in such a short period of time. As a result now, our field force is supported by a strong and experienced head office staff comprised of marketing, medical affairs, regulatory, quality assurance, business development, and other functions like finance, HR, and supply, to ensure commercial efforts on the field are supported and revenue maximized. You may have seen that yesterday as well.
We have launched a new corporate visual identity with a new logo and website to improve and enrich the communication platform to investors, of course, but also to healthcare providers and patients. The second chapter, the second bucket of my report this morning is on our commercial launches, of course, including Redesca, our low molecular weight heparin biosimilar, and ENERZAIR and ATECTURA, our two asthma products. Nationwide, our sales force is fully operational in both business units and is hitting the ground every day now with healthcare providers, either remotely or in person, depending upon the local COVID-19 recommendation.
To that extent, a digital platform has been launched with the latest technology included. This platform is allowing our team now, our account team, to call on more than 200 hospitals to get Redesca listed on hospital formularies and our spec and GP respiratory team to call on more than 10,000 key asthma prescribers, among which pulmonologists, allergists, pediatricians, and primary care physicians. From a product standpoint, Steve alluded to that Redesca is rapidly becoming our best-selling product. We are working now to secure more orders coming from hospitals, as many tenders will kick in as of the 1st of October. The product is now well-covered by both public and private payers across the country, so the next key step to build momentum is gaining on hospital listing.
That's clearly the focus of our key account manager team, who is talking every day to GPOs, Group Purchasing Organizations, hospital committees, and hospital pharmacies to list Redesca. The launch of ENERZAIR Breezhaler and ATECTURA Breezhaler is also well on track, with a series of medical and marketing activities having taken place. You may recall that both products were made available in the distribution channel last June, and they are ready to be delivered to patients in retail pharmacies. Medical activities have started with a series of ad boards conducted with top key opinion leaders to share and discuss the large clinical data set available on this product. So far, strong feedback has been received, and high level of interest has been seen, and more specifically on how to prescribe this product and in which patient profile. Commercial activities like product detailing, lunch and learn, digital marketing have also started.
From the sales perspective, the early sign of product adoption has been observed. In parallel to those activities, the patient support program is now up and running, and it includes an early sampling service to healthcare providers. Interestingly enough, this activity is ramping up very quickly, and we are shipping more than 50 samples a day of both ATECTURA and ENERZAIR every day from our warehouse to healthcare providers. Lastly, we reported previously that private coverage of both products is above 85%, and as Steve mentioned, we are now working hard and seeking public coverage for both products. The third point I wanted to bring to your attention this morning is around our business development activities. Our BD team is hard at work to source continuously new opportunities and bring complementary products to Valeo.
Certainly, one priority for our BD team is bringing innovative products which can be rapidly accretive on the revenues front. The recent deals we have been able to close have obviously provided credibility, visibility to Valeo as one of the go-to Canadian pharma companies. In conclusion, Valeo is very well positioned to continue growing and posting further achievements as we are going forward. This will come as a result of leveraging our newly created medical and commercial platform. It will be less about upscaling and building infrastructure, but instead leveraging our current capabilities to deliver on expectations. We are confident that 2021-2022, as a tipping point for our company, will confirm the strengths of our business model as we continue to experience rapid growth. Furthermore, this will allow us, first of all, to be the leading Canadian pharma company. This is our mission statement.
It will also allow us to provide new therapeutic options to patients in need and also to return value to our investors who believe in our story. This concludes the product review section of our call, and I will now pass it over to Luc for a brief review of our quarterly financial results. Thank you.
Thank you, Fred. During the last quarter, the corporation generated record quarterly revenues of CAD 5.7 million, up 280% compared to CAD 1.5 million in Q3 2020, and up 114% over the prior second quarter 2021. Net revenues for year-to-date 2021 were up 94% compared to year-to-date 2020 at CAD 10.2 million compared to CAD 5.2 million. The increases in net revenues for both the quarter and the year-to-date periods were due to the strong contribution of new products launched over the past 12 months, including revenues from Redesca, launched in April 2021, ENERZAIR and ATECTURA launched in June 2021, but also Ametop launched in Q3 2020, and finally, YONDELIS for sarcoma and sodium ethacrynate launched in the U.S. All these products, the later products were launched in the last quarter of 2020.
Our product mix has also improved significantly compared to prior periods, with higher margin products contributing a greater percentage of our total revenues. Due to revenues from recently launched higher margin products such as Redesca, ATECTURA, ENERZAIR, YONDELIS, Ametop, as well as the quarter-over-quarter growth of Onstryv, our gross margin ratio for the third quarter has improved more than fourfold at 38% of revenues as compared to 9% in the third quarter of fiscal year 2020. A 30% increase in gross margin ratio, combined with a 280% increase in net revenues, contributed to increase our growth margins by more than 16 times between the third quarter 2020 and the third quarter fiscal year 2021, at CAD 2.2 million compared to CAD 0.1 million.
For the nine months year-to-date 2021 period, the significant increase in revenues from higher margin products led to a greater mix of revenues for the period, contributing to increase our gross margin ratio from 18% to 32% of net revenues, representing a 14% increase. The combined impact of the improved revenue mix as well as the growth in revenue led to a 245% increase in gross margin contribution for the year-to-date period 2021 as compared to last year, at CAD 3.3 million compared to CAD 0.9 million. I'll now cover operating expenses. Starting with the third quarter 2021, we're now presenting medical affairs and regulatory expenses as a separate line on our profit and loss statement.
We believe that due to the increased spending related to medical affairs, QA, QC activities, pharmacovigilance, and regulatory work, which are all required to support our growing branded commercial portfolio, it will be important for the reader to better appreciate the level of G&A, sales and marketing, and med affairs spending going forward, and also better appreciate our efforts to leverage these three cost centers. Now, sales and marketing. For sales and marketing expenses for the third quarter were CAD 2.4 million or 42% of revenue as compared to CAD 0.5 million or 34% of revenue for the third quarter 2020. Sales and marketing expenses for the year-to-date were CAD 4 million or 39% of revenue as compared to CAD 1.6 million or 31% of revenue for the year-to-date period 2020.
Earlier in fiscal year 2021, Valeo implemented a nationwide sales force of key account managers in anticipation of the launch of Redesca in April 2021. For the first time, expenses related to the Redesca sales force were included in our sales and marketing expenses for the full quarter in the third quarter, as opposed to only a portion of the quarter in the second quarter. In the third quarter, following the licensing of ENERZAIR and ATECTURA from Novartis, the corporation started hiring a dedicated sales force of 65 experienced professionals. Most of the hiring related to the respiratory sales team has been completed prior to the end of the quarter. These factors contributed to increase our sales and marketing expenses, while revenue from the transformational products have not yet reached their full potential.
During the quarter, the corporation incurred a series of non-recurring expenses that are typical of expanding sales force and new product launches, such as a CAD 0.6 million hiring fee compared to zero last year, and CAD 0.2 million for market data and branding. Some of these non-recurrent expenses have been deducted from our adjusted EBITDA calculation. Over time, we expect sales and marketing to be more representative of recurrent spending and should trend downwards as a percentage of revenue. G&A expenses for the third quarter 2021 were CAD 1.7 million as compared to CAD 0.8 million for the third quarter 2020, representing a 125% increase. G&A expenses for the year-to-date 2021 were CAD 3.5 million as compared to CAD 2 million for year-to-date 2020, representing a 74% increase.
The increase in G&A expenses for each of the third quarter and year-to-date period resulted from incremental investor relations expenses as well as the addition of head office personnel, such as a new president and new staff required to support the strong growth anticipated in fiscal year 2021 and beyond. Following the creation of a new corporate structure, we've created a few additional head office positions. The new structure should be completed prior to year-end 2021, and will provide significant leverage thereafter. Consequently, G&A expenses as a percentage of net revenue should trend downwards starting fiscal year 2022. As mentioned earlier, starting in the third quarter 2021, we're no longer presenting med affairs within G&A. We feel these expenses deserve dedicated narratives, and presenting them separately will add value to investors when reading our financial statements.
Note that the third quarter 2021 and year-to-date 2021 were impacted by a material CAD 0.5 million non-recurrent special provision. The non-recurrent special provision has been eliminated from our adjusted EBITDA calculation. The said provision represents a preliminary charge specific to a loss incurred due to a bank fraud involving Valeo and one of its major suppliers. Ultimate responsibility for the loss has not yet been fully determined, and we anticipate that the net loss to be incurred as a result of this event to be nominal after recovery from the various insurance companies involved, as well as from other initiatives.
At this time, and until full responsibility and recovery is determined, and due to accounting rules, we must fully account for the maximum CAD 0.5 million impact of this event in our third quarter financial statements, and will account for additional impact of CAD 0.4 million in the last quarter, less any recovery secured on the Q3 and Q4 provisions by the time we report on our year-end results. We believe that the net impact to Valeo for each of the third quarter and fourth quarter period will be assessed prior to reporting our year-end results. As a result of this event, the corporation's management and board of directors have acted swiftly to reduce and recover the loss associated to this event, implementing new systems and procedures to protect the corporation going forward, and we've made changes to personnel procedures to address the needs of the organization.
The potential loss to be suffered by Valeo as a result of this fraud will not affect the ongoing operation and activities of the corporation. I'll now discuss medical affairs and regulatory expenses. These expenses include costs related to staff and activities such as medical liaison, sales liaison staff, costs to organize regional and national advisory boards, build and maintain our KOL, key opinion leader networks, pharmacovigilance, quality assurance and quality control and regulatory activity needed to support our new and existing products. These expenses also cover costs for supporting patient support programs, as well as compassionate use programs more specific to oncology projects. In order to support our fast-growing branded product, we have expanded our med affairs and reg team and activities during the quarters. Med affairs and reg expenses have increased from CAD 0.2 million to CAD 0.4 million between Q3 2020 and Q3 2021.
Same expenses have increased from CAD 0.5 million to CAD 1 million between year-to-date 2020 and year-to-date 2021. Over time, we expect these expenses to trend downwards as a percentage of revenue as we take full advantage of the market opportunities for our products. Our financial expenses have increased by 51% and 77% respectively for the quarter and year-to-date periods in fiscal year 2021 as compared to last year. These increases were due to a series of debenture financing closed over the past year. Valeo secured debenture financings of CAD 2.2 million in Q2 2020 and CAD 1.7 million in the third quarter 2020, as well as CAD 6.6 million non-convertible debenture financing in April 2021, which were partly repaid after the end of the recent quarter.
These financing contributed to increase our financing costs from CAD 0.2 million in Q3 2020 to CAD 0.4 million in Q3 2021, and from CAD 0.4 million to CAD 0.8 million between year-to-date 2020 and year-to-date 2021 periods. Our net loss for the third quarter stood at CAD 3 million as compared to CAD 1.6 million in the third quarter 2020. Our net loss for the year-to-date stands at CAD 6.6 million compared to CAD 3.6 million for the year-to-date 2020 period. During the last quarter and year-to-date period, the favorable impact of our record revenue and the significant increase in gross margins have contributed to reduce the impact of adding staff and expenses to position Valeo for a solid revenue growth for the fiscal year 2021 and beyond.
The creation of two business unit as well as expansion of Valeo's commercial medical and support staff is required to capitalize on the significant market opportunities for Redesca and ENERZAIR and ATECTURA, as well as to accelerate the growth of other existing products such as Onstryv and YONDELIS. Our net loss has been impacted by material non-recurrent expenses such as hiring fees totaling CAD 0.6 million and CAD 0.8 million for the quarter and year-to-date period in fiscal year 2021, compared to nil last year, as well as CAD 0.5 million special provision described earlier. We have completed most of the additions to our sales medical and head office staff during the third quarter, and we anticipate that the strong sequential quarterly growth of our net revenues and margins will contribute to lead Valeo towards profitability during the course of fiscal year 2022. Now for our EBITDA loss.
Our EBITDA loss increased from CAD 1.3 million in Q3 2020 to CAD 2.3 million in Q3 2021. EBITDA loss for the year-to-date period increased from CAD 2.9 million in year-to-date 2020 to CAD 5.3 million in 2021. Same as for our operating loss, the third quarter 2021 and year-to-date 2021 EBITDA results were impacted by several non-recurrent material costs, and the significant increase in our gross margin contribution did not fully cover our operating expenses, which now reflect the full impact of our new organization. However, we believe that adjusted EBITDA is a better indicator of our financial performance. Our adjusted EBITDA loss increased by CAD 0.1 million between Q3 2020 and Q3 2021, at CAD 0.8 million compared to CAD 0.7 million. Adjusted EBITDA loss for year-to-date 2021 was CAD 3.1 million as compared to CAD 2.2 million for year-to-date 2020 period.
Our adjusted EBITDA loss was down 25% in the third quarter 2021 as compared to the prior second quarter of 2021. I'll now comment on cash flow and financial resources. Cash used in operations was CAD 9.8 million in year-to-date period compared to CAD 3.4 million in year-to-date 2020. The CAD 6.4 million increase came from a CAD 3 million increase in net loss, more importantly, a CAD 4.4 million increase in non-cash working capital. This was only partially covered, offset by increase in items not affecting cash of CAD 1 million. During the year-to-date 2021 period, we've invested CAD 5.2 million for inventory and to support the increase in our trade and other receivable. This investment was required to support our strong growth, we do not anticipate a significant investment in working capital assets over the coming quarters.
Items not affecting cash increased with the increase in depreciation and amortization of intangible assets such as the new license with Novartis, as well as the share-based compensation and non-cash impact of interest expense on the debentures. Cash used by investing activities to acquire intangible assets during the period was CAD 2.3 million in year-to-date 2021 as compared to CAD 1 million for year-to-date 2020. The CAD 1.3 million variance was mainly due to the CAD 1.8 million license fee paid to Novartis on signing of the ENERZAIR and ATECTURA license, as well as CAD 0.3 million investment to expand our warehouse and head office to support our growth. During year-to-date 2021, financing activities provided cash of CAD 18.3 million compared to CAD 4.1 million last year.
During the year-to-date 2021 period, Valeo secured CAD 10.3 million net proceeds from the issuance of units, CAD 6.6 million from the issuance of non-convertible debentures, plus CAD 2 million from the exercise of warrants, options, and compensation warrants. During the corresponding year-to-date 2020 period, Valeo secured CAD 1.7 million from the issuance of non-convertible debenture, CAD 1.1 million net cash from advances into the convertible debenture financing, as well as CAD 1 million from an increase in its operating loan. At the end of the last quarter, our cash position stood at CAD 9 million. Following the end of the third quarter, the corporation repaid CAD 3.3 million from the CAD 6.6 million bridge financing secured in April. The balance of this bridge will be repaid in January 2022.
Following a series of successful financing in fiscal year 2020 and year-to-date 2021, including the recent CAD 11.5 million bought deal transaction in June 2021, we've secured significant capital to strengthen our balance sheet and our cash position and provide liquidities to support the implementation of our new corporate and sales structure and fund activities and initiatives that are aimed at capturing the significant market opportunity, especially for Redesca, ENERZAIR, and ATECTURA. As evidenced by our record quarter in Q3 2021, the contribution of these transformational products is expected to materially impact both the corporation's revenues and gross margins going forward. Consequently, Valeo is still determined on reaching profitability by the end of fiscal year 2022. This concludes the financial review part of our call. I will now turn back the call to Steve.
Well, thank you, Fred and Luc. We are now ready to open the call for questions. Although this portion of the call is reserved for questions from financial analysts, we invite all our shareholders or any other interested parties to contact us directly with any questions that they may have, and we will try to get back to you as quickly as we can. Operator, you may now proceed with the questions part of this call.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have any questions, please press star followed by one on your touchtone phone. You will hear a three-tone prompt acknowledging the request, and your question will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift your handset before pressing any keys. One moment for your first question. Your first question comes from Scott McAuley with Paradigm Capital. Please go ahead.
Hello, gentlemen. Steve, Fred, and Luc. Congrats on the record quarter. Really great results. You had highlighted that Redesca was the largest revenue driver this quarter. I was just wondering if you can provide any additional color possible on that revenue breakdown, either on a product basis or between the different business units. I know it's something you don't include in the financials, but any additional color would be great. Whether or not in the future you plan to break that down in the statements.
Luc, I think that you should answer that.
Yeah. Thank you. Well, Scott, thanks for being on the call, and that's a great question. Well, obviously, we've just created the two business units, and we're just starting to see the commercial penetration for the recently launched products. I think it's a bit early for us to start providing a breakdown of revenue. We do anticipate in the near future, when we start seeing recurrent product revenue from each of these drivers to be consistent and growing nicely, we'll be providing a little bit of a breakdown, and that will provide the reader a better appreciation of our sales and marketing efforts for the various business units. At this time, I think it's more prudent that we just keep it the way it is.
Yep. No, totally fair. Yeah. Certainly look forward to those additional details. Just another one. Steve, I just wanted to quickly follow up on a comment you made earlier in the prepared remarks. Just to clarify, you had mentioned peak sales of CAD 125 million.
Yeah.
The new deck still refers to CAD 160 million sales by 2025. Just want to make sure that everyone's on the same page on those numbers there.
Yeah. Well, the deck that you have that refers to CAD 160 million is for all our products. When I said in excess of CAD 125 million, that was strictly for those three products, Redesca, ENERZAIR, and ATECTURA. Clearly, we're expecting even greater revenues than. When I say CAD 125+ million , I'm really putting the emphasis on the plus in bold letters. I think that's when you look at the rough breakdown in that CAD 160 million, you'll see that I think ENERZAIR and ATECTURA and Redesca were about CAD 125 million, CAD 130 million of that CAD 160 million.
Okay. Perfect. Just quickly on this bank fraud issue, again, you highlighted it in reports and talked about today. Just in terms of any visibility on recovery of that cash, potential impact on your balance sheet, any other color you could provide on that impact on you guys?
Luc?
Yeah. Well, again, I think we've said what we had. I think we provided a little bit of color as to the event, what happened. I think the challenge we have is that from an accounting point of view, you've got to book the maximum exposure at the time it happens. Because the event happened late prior to presenting our numbers, we didn't have time to fully execute on our recovery initiatives, include as the secure insurance coverage reimbursement. We do expect that those initiatives will be fruitful in the next coming months. What's going to happen is that by the time we report our year-end results, actually our year-end is October, and we have four months to produce our statement.
By January, February, we'll be in a much better shape, and by that time, we'll have fully recovered the proceed from the insurance and other recovery initiatives. The impact will be fixed at that time. In terms of additional impact on our numbers, I've quantified the loss in Q3 and the maximum potential loss in Q4. That maximum potential loss in Q4 will deduct any recovery from the whole initiative at that time. We might actually have a reversal of the Q3 provision at that time. It's too early to tell. That's for the P&L impact. As far as the cash situation, we have made arrangements for this event to not impact our cash flow until the initiatives pan out. We expect those initiatives, as I said, to come to a resolution over the course, I would say, of November, December.
Yep. Thank you for that. It's just lastly from me, and I'll hop back in the queue. Does these strong results impact your expectations for the rest of the year in terms of the revenue ramp? Just wanted to get a sense on the next few months, if possible.
Fred?
Yes. Scott, the point here is we are waiting for an important event taking place in October that will support the Q4 results. The trend on both sides, I would say the trend that we have seen on the weekly sales tracking dashboard that we have in place now is that it is growing on a week-over-week basis on the Redesca side and, of course, on the ENERZAIR and ATECTURA side. We still have some difficulty to see clearly where we're going to land at the end of fiscal. Certainly, if you take two quarter kind of a lens on our results. It's clearly directed towards growing and providing value. Again, we've decided that Redesca will be certainly moving forward in a quicker way, as we are expecting hospital listings and GPOs listing to come into effect, to be effective. I would certainly look at particularly the performance of Redesca in the upcoming months.
That's great. Thank you, gentlemen. Again, I'll jump back in the queue.
Thanks.
Thank you. Your next question comes from Paul Stewardson with iA Capital. Please go ahead.
Good morning, guys, and congratulations on the quarter. Just calling in on Chelsea's line. Just wondering if you could give us some color on the Onstryv sales. You mentioned it was a good quarter. Was that idiosyncratic? Is that a new run rate? Sort of how's the growth looking on Onstryv?
Maybe Luc, you can provide color on that.
Yeah. Well, I guess, Paul, the Onstryv is clearly not at the same level as Redesca. As a contributor to the overall products, it's a contributor, but not the main contributor. We're happy to see that Onstryv is contributing more not only to top line, but also our margins and bottom line. That's the reason why I made the comment, because we do need the contribution of all products to make a bigger impact on our gross margins. Onstryv, at this point in time, is still suffering from lack of public reimbursement that we're working on. Until that happens, it's going to be, not a marginal product, but a smaller product in our portfolio.
Okay. Just in terms of the growth that you did see in it, do you expect to keep seeing more of that?
Maybe I can jump in, Steve, if you allow me, just to add one point. I think it's a good point, actually. It comes as a result of really a growing interest that we have seen among neurologists in Canada. You know that the product was supported by a patient support program. We will continue. We have changed, actually, the condition of this patient support program, but it will continue to be supported by Valeo. Great interest. We are receiving letters from neurologists around the importance of getting this product covered. As Luc mentioned before, then Paul, the point here is really working out on trying to make this product covered as all of the competitors actually are covered, and this with a special focus in Quebec.
That could be certainly a turning point for this product, even though we consider this product to be maybe a CAD 1 million-CAD 3 million product and not a CAD 30 million product like Redesca. We see some growth and definitely a great interest from the neurologists.
Okay. Thanks, guys. Again, just on another of the sort of smaller products, but still important. In terms of the Montreal Heart Institute trial results are probably coming, I imagine, quite soon. Have Hesperco sales been increasing throughout the last several months since launch? Or is it really just holding off until those results come out and then you can sort of map out the marketing plan?
Fred, I'll answer this or deal with it, and you can maybe chime in with some of the We're still waiting for the final report on the Montreal Heart Institute. There have been drafts going back and forth. We're waiting to see whether they'll how they'll publish and in which context and which timing. I would say sales have been relatively flat and partially due to our focus on, obviously, our other products, partially because of the kind of the waiting around for the results to come from the Montreal Heart Institute, but also because of the listing of the products within the various retail banners. I think we'll start to see something happening there. We're feeling that we should be able to have some information on mass listing in some of the bigger chains in the coming weeks.
Okay. In terms of the U.S. launch, is there a date on that, or what's the status?
The U.S. launch, we're still discussing with several U.S. parties. I would expect the launch like late fall, November timeframe, early December. Again, the key really for the success of this product, as you've seen recently, COVID-19 is continuing to be in the headlines. It's continuing to affect a lot of people around the world. We certainly would like to get this and intend to get the product. We still have support behind the product. We still intend to get the product out there. One of the key marketing drivers for it will be the results that we get from Montreal Heart Institute.
Of course. That's helpful. Just in terms of ENERZAIR and ATECTURA, can we look for any sort of prescriber data to come as these ramp, or can we get any color on the number of prescribers?
Fred?
Yeah. Thank you, Steve, and thank you, Paul, for the question. I think we have now kind of all the dashboard necessary to start to report on product adoption. Far it's still very low numbers, but certainly we are looking to have the necessary data set. Look carefully at how many prescribers are taking on the product, are prescribing the product. The short answer is, we're going to start to report on this adoption curve probably in the months to come, and we have now the data set that we're buying to provide more color and information about that. To give you an idea, what we're tracking here is sales data on a weekly basis and on a monthly basis. We are starting things moving on. The current trend on sales is around 100+ product.
Interestingly enough, those products are starting to be used in approximately the same proportion. We see things moving, very early days of course, but we see things moving on the sales data side.
Yeah. That makes sense. Last one from me, maybe for Luc. Just, can you touch on inventory in terms of, as you guys keep heading towards bigger and bigger revenue numbers, how much more inventory are you going to be needing in the next couple of quarters?
Well, good question. I think I mentioned that of course, we had to make a major commitment, especially for Redesca, and minimum batch size being what it is, we needed to invest significantly. Right now we're eating up that inventory and we'll be restocking over on a quarterly, semi-annual basis. Of course, the level of inventory for that product will try to be just in time as much as possible, but because of shipping challenges and difficulties in supply, we don't want to take any chances. We may foresee a little bit of an increase, not a major increase, as I mentioned. We went from nothing to a significant stocking of Redesca. As far as the other products, the other products will pick up slowly clearly we'll adapt. We benefit on the Novartis supply agreement.
We benefit from almost a just-in-time arrangement. We have a little bit more flexibility on that one not to stock a year's worth of product. All in all, nominal increase compared to last quarter, but that should be celebrated, as you know, Paul. If we invest more it's because we need more to support the top line. We'll see how things pan out.
Yeah, absolutely. Okay. Thanks for taking my questions, guys. Really, again, congratulations on the growth.
Thank you very much, Paul.
Thank you.
Thank you. Ladies and gentlemen, as a reminder, should you have any question, please press star one. Your next question comes from Andre Uddin with Research Capital. Please go ahead.
Oh, hi Luc.
Morning, Andre.
Hi, Andre.
This already. Had a nice quarter, definitely. Just looking at the bank fraud, can you just discuss maybe what some of the systems you've put in place to prevent this from happening again?
Well, in terms of the systems, these events, of course, as much as you feel you were caught in an unfortunate situation, it forces the company to look at everything. We've looked at everything from IT systems to internal procedures, et cetera. Without going too much into details of the event, because as I said, we still have not yet assessed if the full responsibility is on Valeo or else. We've got to be careful with our comments, and we have hired specialists to help us in that regard during the proper cyber checks and forensic work to help us. At the end of these investigations and analysis, there will be reports to management and the board, and everything that needs to be done will be done.
At this point in time, we believe the event is specific to only one supplier and one relationship. Nothing else will be. We don't have to worry about any other events happening elsewhere in the organization. Again, going back at what we're doing, Andre, got to be careful not to share too much, but trust us that we've done everything we had to do to protect from these kind of events going forward.
Okay, very good. Just looking at, out of the 65 sales reps that you have, how many are right now promoting ENERZAIR and ATECTURA?
Fred?
Exactly, Andre. Good morning. The number in support of our respiratory portfolio is exactly 47.
Okay.
If you have management line, it's 54, and then you have other positions dedicated to this via the headquarters. That's where we come from when we are saying we are now able to cover more than 10,000 prescribers, including specialists and primary care physicians. This is coming as a target list derives from those territories designed all across Canada.
That's great. Fred, you were talking a little bit about this before, but given your larger sales force on the business development front. Are you seeing companies actually approach Valeo now that you have this larger sales force? What type of products are you focusing in on? Are there any specific other disease indications that you're looking at? Thanks.
Thanks, Andre. It's exactly what we are going to frame in our strategic thinking process and plan. I would say, we have been dreaming for some months now where we are now, meaning indeed heavily investing in respiratory. We are definitely in this therapeutic area to stay, and other one like neurology or oncology, which represents opportunities for us eventually to bring more product. To answer your question, definitely we are well established now in the BD network, so we see opportunities around us. As I said, we have visibility, and we have credibility. We see definitely interesting product. Companies, international companies are seeking to partner with Canadian companies. We have this visibility.
Now, the one point I want to make clear is that anything that we are looking at today, it has to answer to one prerequisite, which is helping us to accelerate the top-line revenues and subsequently, of course, the bottom line. Not seeking for product with two, three years' time to be launched and effectively covered and all processes put in place. We are really running after short growth drivers. That's one point. For the other question, as which therapeutic area are we looking for? I think we are still in an opportunistic way, looking at the one we have currently announced, but potentially other one as well.
That's great. Okay, thanks. Thanks a lot, guys.
Thank you.
Thank you, Andre.
Thank you, Andre.
Thank you. We have a following question from Scott McAuley with Paradigm Capital. Scott, your line is now open.
Thank you, guys. Just 1 quick follow-up from me. I know you've talked in the past about the uplisting kind of to the TSX. I was just wondering if you could provide any additional color on kind of timing or how that process is going.
Yeah. We've been working on that, and we expect to be able to have more news before the end of the year. Clearly our timeframe is still the six to nine-month period to get listed. Meaning, I think we meet many of their listing requirements. The ones that are more subjective we're dealing with and hopefully can provide more information to the market. Clearly that's based on talking to our shareholders or potential future shareholders, and looking at our peers that are on the TSX and who we really feel are now our peers. That TSX listing is very important to us.
That's great. Thank you, guys.
Thank you. There are no further questions at this time. You may proceed.
Thank you, operator. Well, just in finalizing, on behalf of Fred and Luc, myself, we are all very pleased with the accomplishments that have happened over the last few months. This is a company that has certainly been transitioning on a quarter-over-quarter basis at a remarkable pace. We have innovative products, we have motivated people, and a complete structure to deliver on our ambitious objectives. We've positioned Valeo to become a leading Canadian pharmaceutical company in its target therapeutic areas. We are in the very early stages of our revenue growth, with a multiyear runway ahead. We maintain our earlier guidance of a doubling of revenues from 2020 to 2021, and we expect at least the same for 2022.
We're totally committed, and I think that's come through the comments that both Fred and Luc have made, as well as myself, in achieving positive cash flow in the second half of 2022. It's one of our key objectives. Again, all Valeo management board employees are significant shareholders in the company. We remain very much aligned towards value creation for all shareholders. Again, thank you for your continued interest and support as we look forward to keeping you up to date with the various exciting changes I'm sure that we'll have in the next quarter, and look forward to speaking with you soon. Thank you for attending.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.