Good morning, ladies and gentlemen, and welcome to Valeo Pharma Inc.'s second quarter results conference call. At this time, all participant lines are in a listen-only mode, but following the presentation, we will conduct a question-and-answer session. If at any time during the call you require immediate assistance, please press star zero for an operator. Also, note that the call is being recorded on Wednesday, June 14, 2023. Now I would like to turn the conference over to Frederic Dumais. Please go ahead.
Thank you, operator. Good morning, everyone. Present with me today for our second quarter 2023 financial results conference call are Mr. Steve Saviuk, our CEO, and Mr. Luc Mainville, our Senior VP and Chief Financial Officer. Before we begin our call, I'd 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 Steve. Please go ahead.
Thank you, Fred. Good morning, all, and thank you for joining us for our second quarter 2023 results conference call. I will start by quickly reviewing our latest quarterly results and will provide a brief commercial and operational update and then pass it over to our Senior VP and CFO, Luc Mainville, who will provide more details on our record second quarter results. Over the course of the last several quarterly analyst conference calls, I have spoken of the way that Valeo Pharma has been transformed through the in-license and commercialization, in particular, of 6 innovative drugs, and how we have structured our commercial activities into 3 therapeutically focused business units: respiratory, ophthalmology, and our hospital specialty group.
During the quarter, we have strengthened our commercial team and have tuned our strategies to position us to deliver strong organic growth across all of our business units for quarters to come. We are extremely pleased with our second quarter results, both financial and qualitative. We, as a company, will not waver in our mission to deliver the full potential of our products for the benefit of patients across Canada. By improving patient outcomes, we have positioned Valeo as one of the leading publicly traded, domestically owned pharmaceutical companies in Canada. I'd like to take the time now to touch on some of our financial highlights, which our CFO, Luc Mainville, will expand upon later in the call. In our second quarter, Valeo generated record revenues of CAD 13.6 million, an increase of 184% over Q1 2022, and the sixth consecutive quarter of revenue growth.
Our adjusted gross profit reached CAD 5 million, up 181% over the same period last year, and a CAD 800,000 increase over the previous quarter. Adjusted EBITDA loss decreased to CAD 1.7 million, a 53% reduction from 2022 and a CAD 500K improvement over Q1. Both of these showed improvements for the sixth straight quarter. This favorable trend is expected to continue in the quarters to come as we continue to our progress towards profitability. Our continued revenue growth and improving overall financial performance is a result of a dynamic and dedicated commercial team. Our 87-person field force is segmented within our three therapeutic business units, with our largest presence concentrated in our respiratory business unit.
I would now like to provide an overview of the quarterly performance of our three business units, touching on key takeaways from the quarter and outlook. Our respiratory business unit consists of three products: Enerzair Breezhaler, Atectura Breezhaler, two advanced asthma therapies, as well as ALLERJECT, an epinephrine auto-injector used to treat severe allergic reactions. Enerzair and Atectura continue to demonstrate significant month-over-month prescriber and prescription growth. At the end of the second quarter, prescribing physicians reached 2,036, a 29% growth from the prior quarter and a 355% increase over the prior year. Q2 Enerzair/Atectura prescriptions reached 14,765 in the quarter, a 291% increase over the same period last year. Total prescriptions for the last 12 months were up 654% year-over-year.
As I mentioned in last quarter's call, changing established physician prescribing practices requires both reach and frequency by our field team. We believe that our asthma therapies offer compelling therapeutic benefits for patients, and we continue to pursue physician interaction, educational programs, and extensive sampling to help product adoption. We are very encouraged by our physician and prescription data growth, especially in the strong increase in the number of primary care physicians, who generate the bulk of asthma prescriptions in Canada that have started to prescribe our asthma therapies. The Canadian asthma market is now valued at over CAD 800 million annually. We are challenging the established asthma brands and gaining increased physician adoption through our dedicated 60-person commercial field team, expected to engage in over 45,000 physician interactions this year.
Despite the advances in electronic technology, in-person interactions continue to be the most favored and effective means of demonstrating product benefits. Our field representatives' call efficiency, that is, the number of physician interactions on a daily basis, has improved dramatically over the course of the last quarters, and as of the end of Q2, has essentially returned to pre-COVID levels. We continue to forecast our two asthma therapies to have peak sales potential to reach in excess of CAD 100 million. Our epinephrine auto-injector, ALLERJECT, for the treatment of severe allergic reactions, has many feature benefits, which we believe will cause it to challenge EpiPen for leadership in the CAD 80 million severe allergy market. Although acquired last August, our commercial activities supporting awareness and adoption of the product commenced in mid-April of this year.
mid last 2 weeks of the second quarter, just ahead of the seasonally strong sales period of summer and early fall months. We have developed innovative commercial campaigns aimed at both physicians and consumers, highlighting features such as voice activation, industry-leading reliability, and compact size, which bring innovation and benefits to this market segment. We will also benefit in the coming quarters from the recent recall and market absence of another competitor. Our Ophthalmology Business Unit was in full operational mode during the second quarter. This 20-person dedicated team was assembled over the closing months of 2022 and is now engaged in the promotion of our 2 ophthalmic therapies, XIIDRA for dry eye and Simbrinza for glaucoma. With existing revenues of approximately $23 million, these 2 patented drugs have strong, established therapeutic benefits and are the backbone of our Ophthalmology Business Unit.
The resumption by Valeo of promotional activities for these two therapies, using conventional as well as innovative outreach strategies, is expected to yield continued product revenue growth in the quarters to come. We have targeted and expect to in-license acquire additional ophthalmic therapies, thus leveraging our commercial capabilities and build the broader product portfolio that benefits our target physician audience. As it relates to our specialty business unit, this business unit centers around Redesca, a hospital-based anticoagulant, which is the number one biosimilar anticoagulant in Canada. That growth is expected to continue as Ontario adopts a policy favoring biosimilars, which came into effect April first. Ontario represents 45% of the Canadian enoxaparin market. While we expect the biosimilar conversion to take place over a number of months, Redesca is well positioned to capture its fair share of this provincial market.
In addition, our medical team has been engaged with hospitals across the country to educate these centers on the benefits of adopting Redesca over other anticoagulant biologics, specifically dalteparin and tinzaparin, which would more than double the Redesca addressable market. We have recently made gains in these efforts, as several hospitals are in the process of converting to Redesca. Valeo Pharma has a diverse and innovative drug portfolio, strong commercial capabilities, and experienced management team. The organic revenue growth and improved financial performance is expected to continue for quarters to come, as our core product portfolio has significant revenue growth potential. Let's look to the future. As I touched upon briefly before, given our in-licensing acquisition of products business model, our business development activities are the cornerstone of future product introductions.
In the short term, we are focused on products which can have an immediate revenue impact, and we are currently in discussions regarding a number of opportunities which can leverage our existing capabilities, particularly in the hospital specialty and Ophthalmology Business Units. With the current annualized run rate in excess of CAD 55 million, we continue to expect that revenues for fiscal 23 will reach CAD 60+ million, an increase of well over 100% from 2022. I would like to wind up my portion of this call by paying tribute to the over 125 entrepreneurial women and men whose daily efforts continue to make Valeo Pharma one of the fastest-growing healthcare companies in Canada. Valeo brings innovation to Canadians. Innovation means better healthcare.
With that, I'd like to turn the call over to Luc Mainville, our SVP CFO, to provide more in-depth financial data on our last quarter.
Thank you, Steve. I will start my review with some general comments. As mentioned by Steve, the addition of XIIDRA, Simbrinza, and ALLERJECT last year have boosted the peak sales potential of our existing product portfolio in excess of CAD 225 million, 4x our current run rate of CAD 55 million, which is more than 100% above our fiscal year 2022 revenue. All of this with a relatively low impact on our OpEx. This is a true validation of our business model, which now offers significant operating leverage that we intend to capture going forward. Due to the continued growth of Redesca and Enerzair and Atectura, coupled with the addition of XIIDRA, Simbrinza, and ALLERJECT in the last quarter of fiscal year 2022, Valeo achieved record revenues and record adjusted gross margin in Q2 2023 for the fourth and sixth consecutive quarter, respectively.
A combination of growing revenue and product margin with strict control over OpEx, has contributed to reducing our quarterly adjusted EBITDA loss for the sixth consecutive quarter since Valeo implemented its new corporate and commercial infrastructure in the second half of fiscal year 2021. Financial results for Q2 2023 also showed the full impact of two financing transactions completed last year. Valeo completed a $25 million convertible financing, convertible debt financing in December 2021, as well as a $30 million U.S. secured term loan from Sagard Healthcare Partners in July 2022. Both transactions have provided Valeo with the capital required for acquiring commercial rights to XIIDRA, Simbrinza, and ALLERJECT, as well as to fund our operations and working capital requirements associated with these new products. Now, some detailed comments on our results.
The corporation achieved record revenue for the 4th consecutive quarter in Q2 2023 at CAD 13.6 million, compared to CAD 4.8 million in Q2 2022. A 184% increase and a 2% increase over Q1 2023. Revenues in year-to-date 2023 increased 197% over year-to-date 2022. The quarter-over-quarter increase resulted mainly from the addition of new products, as well as a 39% organic growth from products included, including Redesca and Enerzair, Atectura. Our asthma products continue to experience significant market share gains as they enter the 2nd year commercialization, post securing broad public and provincial reimbursement. Enerzair continues to lead the fast-growing triple active therapy asthma market, while Atectura continues to benefit from market share gains within the double active therapy asthma market.
Q-o-Q growth of our asthma products was 271% in Q2 2023 versus Q2 2022. Our gross profit contribution in Q2 2023 was up 168% over Q2 2022, at CAD 4.4 million. Gross profit for the year-to-date 2023 period was CAD 8.2 million, up 166% over year-to-date 2022. Our gross profit percentage in Q2 2023 and year-to-date 2023 has been slightly impacted by the increase in amortization of product rights from the Novartis and Kaleo product license secured in Q2 2022. After eliminating the amortization charges related to these new licenses, our adjusted gross profit in Q2 2023 increased significantly over Q2 2022, at CAD 5 million, compared to CAD 1.8 million, representing a 181% increase.
Adjusted gross profit for year-to-date 2023 was up 180% over year-to-date 2022, at CAD 9.3 million compared to CAD 3.3 million. Adjusted gross profit margin has decreased slightly between Q2 2023 and year-to-date 2023, compared to our prior year period, as a result of the change in product mix, with XIIDRA, Simbrinza, and ALLERJECT contributing to a significant portion of our year-to-date 2023 revenues. XIIDRA, Simbrinza, and ALLERJECT transaction have been structured predominantly based on varying transfer prices. Transfer price under the Novartis license will decrease over time to compensate for a relatively low upfront license fee paid on signing compared to industry standards. Transfer price will reduce annually over the term of the agreement. It will further decrease as sales increase.
The transfer price for the Kaleo agreement will be reduced over time as Valeo hits commercial milestones. Going forward, we expect our adjusted growth profit margin to expand sequentially as revenues from more lucrative products, such as Enerzair, Atectura, and Redesca, grow and capture an increasing share of our revenues, and that XIIDRA, Simbrinza, and ALLERJECT margins expand due to the structure of their respective licensing agreements. Total OpEx in Q2 2023 stood at CAD 7.2 million, up 30% compared to CAD 5.6 million in Q2 2022, down 5% compared to the prior Q1 2023 quarter. Total OpEx for the year-to-date 2023 period increased 24% over year-to-date 2022. Our total OpEx increased in the later part of fiscal year 2022 to reflect the addition of the Ophthalmology Business Unit.
Despite the expansion of our commercial team to support the new Ophthalmology Business Unit and a CAD 0.4 million non-recurrent severance paid in Q1 2023, our ratio of total OpEx to revenue has declined significantly from in year-to-date 2023 at 56%, compared to 133% in year-to-date 2022. Note that our OpEx in Q2 2022 and year-to-date 2022, included a non-recurrent, favorable CAD 0.4 million fraud recovery. We expect the ratio of total OpEx to revenue to continue declining sequentially over the coming quarters as we continue to leverage our commercial and corporate infrastructure and take full advantage of the market opportunity for our lead products. Our financial expenses in Q2 2023 were CAD 3.9 million, compared to CAD 1.2 million in Q2 2022.
Financial expenses for year-to-date 2023 were $6.4 million, compared to $2.2 million in year-to-date 2022. Financial expenses in year-to-date 2023 included the full impact of the convertible debenture financing, as well as the Sagard financing completed last year. The increase between the reported periods also included the effective interest cost on the long-term debt captured, which captures the cost of relative to the issuance of warrants as a mean of reducing the actual interest rate on these instruments. Financial expenses in Q2 2023 also included a $0.6 million unrealized net FX foreign exchange loss, resulting from the conversion at the end of Q2 2023 of the U.S. dollar-denominated Sagard loan compared to the prior quarter. Less FX gains on cash. The net FX impact for the year-to-date period was a $0.1 million gain.
We're tracking foreign exchange rates and believe our current exposure is acceptable. We intend to be more proactive in managing our FX exposure as we approach repayment of capital on the Sagard loan, which will start in the last quarter of fiscal year 2024. In Q2 2023, despite strong commercial gains and leveraging our commercial and corporate infrastructure, our net loss was CAD 6.5 million, compared to CAD 5.1 million in Q2 2022, representing a 27% increase. Net operating loss for year-to-date 2023 was CAD 12.7 million, compared to CAD 11.1 million last year. The increase in net loss in Q2 2023 and year-to-date 2023 was mainly due to the increase in financial expenses, amortization charges, and the increase in sales and marketing expenses to support our new business unit.
Those were offset by significant expansion of our gross profit. EBITDA loss in Q2 2023 was CAD 2.7 million, compared to CAD 3.6 million in Q2 2022, a 25% decrease. EBITDA loss for the year-to-date 2023 period was CAD 5.2 million, compared to CAD 8.4 million last year, a 38% decrease. After adjusting for share-based compensation, foreign exchange, as well as other non-recurrent adjustments, our adjusted EBITDA loss in Q2 2023 was declined for the sixth consecutive quarter to CAD 1.7 million, compared to CAD 3.6 million in Q2 2022, representing a 53% improvement. For the year-to-date period, our adjusted EBITDA loss decreased from CAD 8.1 million in year-to-date 2022 to CAD 3.9 million in year-to-date 2023, a 52% improvement.
Cash at the end of Q2 2023 stood at CAD 10.1 million, as compared to CAD 22.5 million at the start of the year, representing a CAD 12.4 million decrease, a CAD 0.8 million nominal decrease compared to the end of the first quarter of 2023. Our working capital continues to be very strong, with a surplus of CAD 16.7 million at the end of Q2 2023. In addition to our cash resources, Valeo is permitted under the Sagard secured loan agreement to implement an operating line of credit to leverage its growing high-quality short-term assets, which now total in excess of CAD 20 million at the end of the quarter. Discussions are currently taking place with several institutions in that regard. The growing operating profit, tight control over OpEx, translating into fast declining EBITDA loss.
Our operating requirements are also declining rapidly, as evidenced by the nominal CAD 0.8 million cash used during the last quarter. Over the last two fiscal years, we've secured capital to fund the in-licensing additional growing assets, as well as to fund the growth of our respiratory, allergy, and Ophthalmology Business Unit. Going forward, we intend to use our cash reserves and prioritize access to non-dilutive capital to support our operations as we strive to capture the significant market opportunities of our commercial portfolio. This concludes the financial part of our call. I will now turn the call back to Steve.
Thank you, Luc. We are now ready to open the call up for questions. This portion of the call is reserved for questions from financial analysts, we invite any of our shareholders or any other interested parties to contact us directly with any questions they may have, and we will 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, if you would like to ask a question, please press star followed by 1 on your touchtone phone. You will then hear a 3-tone prompt acknowledging your request. If you would like to withdraw from the question queue, please press star followed by 2. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star 1 now if you have any questions. Your first question will be from Stefan Quenneville at Echelon Capital Markets. Please go ahead.
Hi, guys. Thanks for taking the question, congrats on the quarter. I just wanted to ask to get a bit more detail on the ALLERJECT competitive situation. Obviously, with a competitor off the market in the short term, during the sort of key summer and hopefully for you guys, fall quarter. I was just curious, what proportion of sales for the product, you know, more or less, occur in the summer and fall quarter?
Yeah, Stefan, thanks for the question. Probably my just the good sort of roundtable guess is about 60% of the revenues come in that May to late September timeframe. They're basically segregated into the May, June, or sort of late May or to early July, and then the September to October, back to school. It's not so much because of the fact that there's the allergy season may accelerate during the summer, but you're outside and, you know, bee stings, things of that nature. A lot of it has to do with kids going to camp, people going away on holidays, people going back to, or going back to school. It seems like there's like a natural seasonality has developed.
As you know, these products typically have a 12-month shelf life, once you get into buying it in a September, you kind of continue it. What we expect is that ALLERJECT, which has not had really a significant impact on our revenues in Q1, Q2, will have a much more significant impact in Q3 and Q4.
... Okay. Finally, are you getting any competitive intelligence on when the competing products might get back on the market? Obviously, it's still off the market as we speak.
Yeah, it looks like it's gonna, from what we're told, again, it's, it looks like more of a longer term, absence.
Okay, great. That's all for me. Thanks, guys.
Thanks, Stefan.
Thank you, Stefan.
Again, as a reminder, if you do have any questions at this time, please press star followed by one on your touchtone phone. Your next question will be from Andre Uddin at Research Capital. Please go ahead.
Oh, hi, Steve and Luc. Just, besides looking at Redesca, are there any key positive drug reimbursement changes that you think would result in some changes to your current sales outlook?
I don't see. I think, you know, all of our top products are pretty well fully reimbursed, both privately and publicly across Canada. We don't see anything from the, from that side. What we do see is two things, I guess, specific to Redesca. Number one, Ontario opened up as of April first. It's a slower opening than a lot of the other provinces did in terms of some of their policies they have adopted. I can tell you that we're engaged with numerous hospitals in Ontario, in discussions, sampling the product, and I think we've actually acquired a few of the smaller hospitals, so I think that's, that bodes well.
The other clip, the other side of the coin to that one is, as you know, for a long time, we've talked about enoxaparin, which is about a CAD 65 million market in Canada, but dalteparin is actually about a CAD 85 million market in Canada, so bigger biologic. We recently converted a couple of hospitals away from dalteparin to enoxaparin. The two products are very similar therapeutically. They have a strong overlay, one over the other. We find that very encouraging that we're starting to see hospitals wanting to take advantage of the price benefits that come with enoxaparin. You know, as I mentioned in my portion of the call, it essentially more than doubles the available market to us. It's a good trend to start seeing happening.
I can say, without identifying the hospitals, one of them is really sort of a, let's say, an example, like a thought leader. We would expect that with the adoption of that hospital, other hospitals in the area would follow suit, or other hospitals across Canada would follow suit.
Yeah, that's great. Thanks, Steve. Then just in terms of sampling of your, you know, some of your key products, can you just elaborate a little bit more in terms of how that's impacting your business now? What are your plans there? Are you gonna continue to do a lot of sampling, or can you just talk a little bit more about that? That'd be great.
The sampling is not across all products. The main products that we sample right now are ENERZAIR, ATECTURA, and of course, XIIDRA, which is very promotionally sensitive. We would expect that the sampling, if we take them one by one, for the next couple of years, XIIDRA, sorry, ENERZAIR and ATECTURA, we will continue to sample. It's really important that, you know, it's a chronic illness that you get patients on. You feel very, you know, relatively quickly, the benefits of ENERZAIR when you start taking it. Having a 10 unit sample pack, which is 10 days supply, really is helpful in getting patients to on the adoption cycle. We think it's a key thing, is it.
Many drug companies, as you know, continue to sample, you know, many years after launch. XIIDRA is one also, which has, there's a strong turnover of patients for dry eye. Again, sampling is a key cornerstone for our in our policies. What I would say about that is, one of the benefits of XIIDRA is that the onset of relief from dry eye syndrome happens quicker on XIIDRA than on our competitors. Typically, within the sample period, you start feeling that relief, where I think with our competitors, you're looking at several months before you start seeing relief. That's good because patients will, when they see relief, are obviously more engaged in continuing their prescriptions.
The other thing I would say, which is maybe more for Luc to comment on, is the sampling anomaly in terms of the accounting treatment. When you samples in Canada, for accounting purposes, they are not expensed as you dispense them, they're expensed as you acquire them. And that can cause some lumpiness in terms of. In other words, if we were to buy, let's say, CAD 1 million of samples in August, well, that's CAD 1 million of expense in August.
We do forecast that, and we do budget for that, but those will be things we will bring up in our quarterly calls to say, because those samples we might use over a period of 1 year or 9 months, but the fact is that they get, you take the hit all in 1 month. Luc, I don't know if you want to add anything to that.
Well, it's a good point, and we've been doing good, I would say, management of the supply of samples to alleviate that situation. Over last year, I would say that we are buying samples on a quarterly basis. The CAD dollar amount has been, I guess, you know, going up and down, but it has not had such an impact that our numbers have been out of whack because of samples. We expect to try to, you know, distribute, I would say, and plan the purchase of sample in a way that's gonna be manageable.
As said by Steve, if ever there's a, let's say, combining samples from multiple products at the same time, the same quarter, has a significant impact, we'll highlight that because it's gonna have a positive impact in the following months. We track that, and we try to have, you know, nominal impact on our numbers. I'd like maybe, Steve, to go back on the first question by Andre regarding reimbursement. There is a situation with Enerzair in Quebec, where the product is still within, you know, the first year post reimbursement, public reimbursement, and it's still subject to formulary filing by the doctors prescribing the product. That has a limiting factor on the ability by doctors to freely script the product.
We expect that formulary paperwork, I would say, overhang to be resolved within the next couple of quarters, and that will, of course, have a big impact, we feel, on the Quebec prescriptions for Enerzair, which is still the second province for that product.
Okay.
Yeah, it's, quite well made, Luc.
Okay, that's useful. Just in terms of, I know if you look, you know, each quarter you're moving closer to being EBITDA positive, can you comment on when you think you could be cash flow positive as well?
Luc, maybe you can take that.
Yeah. Well, Q3 is gonna be a very interesting quarter. You know, right now we're trending significantly. We're halfway into the quarter, and we compare that to Q2. You know, we're, you know, well above this point last quarter, so that boils well for how Q3 is gonna look like in Q4. The plan, and we've been, you know, guiding the market on this, is that we would be exiting EBITDA positive by the end of this year, and we would be cash flow positive by the end of next year. Any business development transaction we do, will accelerate that because of the leverage we currently have in our infrastructure.
Assuming no business development addition, which is probably unlikely because we're in advanced discussion for many additions, you know, it would be late 2024, but we're working on making that happen sooner.
Okay. That's great. Thanks, Luc and Steve. Yeah.
Thanks. Thank Andre, for your question.
Next question will be from Scott McAuley at Paradigm Capital. Please go ahead.
Morning, gentlemen. I guess kind of following up on that last question, you know, it's great to see the cash burn come down and those kind of expenses, maintained. I guess, can you speak to kind of the next few quarters, you know, that 0.8 cash burn, is that kind of the new floor, or, you know, as working capital needs over the next few quarters, you know, talk about kind of that variability, kinda quarter to quarter, as you work towards that cash flow positive milestone?
Well, Luc.
Okay. Yeah. I mean, every quarter you have events that will impact your cash burn, some that are within your control, some that are not. You know, there's a couple of things there. I would say supply of product is probably the item that has the biggest impact on our working cap, and we've been fortunate to have the timing of the supplies that have been favorable to us in Q2. But we got some late shipments in Q2 that needs to be settled in Q3, and now with the minimum order quantity that we've got on our products, you know, we're managing for this to have, you know, a manageable impact on our cash flow.
I'm sure you saw from our financial statements, the commitments we have for the next quarters, and we have to settle that. I would say that the current trend is above the 0.8, but it's going down rapidly because of the multiple, the multitude of factors. Well, first we're fixed OpEx, so we're not adding to the burn in terms of new expenses. We're actually doing things to control, if not decrease the burn. Some of the expenses that have gone through our books over the last year and a half regarding launch of products, to give you an example, you know, we did adjust for the launch of Enerzair that took place in Q2. That's an expense that's not gonna be repeated going forward.
It had to be expense, 'cause that was needed to support the product. Those launch expenses are no longer happening unless you add new products. Launch expenses being removed, control over OpEx, streamlining the operations, and expanding margins is having a big impact on our cash flow. With regards to supply, we're working with our suppliers to manage the timing and the MOQ to try to not grow our inventory level, which we believe is at a high level. However, we are wanna be opportunistic to capture market opportunities, such as for Redesca.
When you know that ODB is changing its policy, you wanna make sure that you've got the supply to meet the demand from the market, and especially in the heparin market, where, you know, Lovenox has had a series of out-of-stock situations. We pride ourselves from having probably the best supply chain within the heparin market, and that's something that we've gotta protect. We're managing all those variables, Scott, but the cash on hand available line of credit and decreasing burn, you know, we believe we're in good shape right now.
No, thanks for that, Luc, and, yeah, appreciate it. Fred, threading a needle with all those, all those variables there.
Yeah.
Actually, speaking on that line of credit, I know you had mentioned in your prepared comments you're kind of working with a number of potential institutions. I don't know if you can say anything in terms of kind of when you hope to get something kind of formalized and what, you know, you have a high amount of assets and working capital to leverage for it, but kind of what dollar value you're looking for, if that's something you can talk to?
We can say that we're permitted to put in place a roughly a CAD 5 million line of credit using our receivable inventory, current margins to support that or, you know, multiple times above the line of credit that we're seeking. We're in discussions with many players. I can't comment as to when this could or will happen. I can only tell you that we're talking to numerous institutions at this point in time, but no, you know, no guidance on if and when it's gonna happen.
Fair enough. For the asthma portfolio, obviously positive to see that the total number of prescriptions and the number of prescribers, you know, continue the upward trend. I guess in there, within the individual docs, like, are you seeing, you know, there's a lot of them still kind of testing it out, like prescribing to only a few patients and waiting to see how they kind of perform? Or are you starting to see maybe even some of those earlier adopters starting to move to prescribe across their kind of patient portfolio, either the Enerzair or the Atectura?
Yeah, you would, it's, I guess, a combination of both. You know, we added about, roughly 500 doctors in the last quarter, so you would expect that some of those are starting to test out. We know that some of the ones from the past are starting to write more, and that's really part of our outreach strategy, is to try to get physicians, the ones that have adopted, to identify. It's really key for them to identify and challenge their patients in terms of how they're doing with asthma. It's a bit of both, but what I can say is that we're getting more and more influential physicians who are coming over to the Enerzair side, and the Enerzair is clearly the number one product to promote. It's the most advanced.
It's that fixed triple, where the number one, either by far over Trelegy in that fixed triple. We expect to see and continuing to see the that sort of a bit more of an exponential curve. As you know, that it's not one for one kind of thing, where we add a doctor and we actually add two prescriptions, three prescriptions. We're working a lot and doing various things, not just learning activities, but something called spirometry, where we actually provide clinics with a device, or they go to a clinic has a device, where they're actually able to measure lung capacity and challenge their patients to say, you know, "How are you doing?
You're not up to the standard you should be at or to the for your age or for your for your group of patients. I think what we really, I mean, just to give you an example, ex factory, we don't talk a lot about ex factory. Ex factory in the month of May was 18% higher than the month of April. That's, I mean, that's a significant jump in terms of units we shipped out. Again, that's going out to wholesalers. We're very, we're keen on that. The other thing I would caution about the prescription data, too, is it can be a bit misleading.
Number one, the sampling criteria is such that those numbers, there's a lot of readjustment of those numbers afterwards. That's why some, you see it kind of. When you look at that graph, it's not as smooth as probably it actually is. The second thing is there's a disparity. A prescription in Ontario is typically for 3 months. A prescription in Quebec is typically for 1 month. A prescription does not necessarily equate unit to unit. Just to take that into consideration, it's great to see prescriptions growing, but actually units are growing faster than prescriptions.
Oh, appreciate that color. I guess lastly for me, you mentioned, you know, current run rate of, you know, CAD 55 million+ and, you know, expecting 2023 revenue of, you know, CAD 60 million+. Not a big gap to fill there. You know, across the Redesca, the asthma, the ophthalmology, like, where do you see or where do you think of those business units having kind of that biggest impact of crossing that gap in the, you know, next two quarters from kind of the current run rate to that kind of goal of CAD 60+ million for the year?
Yeah, I think that really it's, you know, we're expecting to see a strong respiratory summer, especially from ALLERJECT. That's one of the drugs we think will perform very well this summer. Redesca is a wild, is a bit, you know, because of the nature of this, the way we're penetrating markets, it's not only winning hospitals, but when will they start using the product, even if they've agreed to switch over to you? That makes it harder to forecast, but we think Redesca will, and certainly ophthalmic will be a steady rise. You know, these are established products. They're not gonna jump, you know, 30% in one month or in one quarter.
What you're gonna see is a consistent, several, you know, 3%-4% increase month-over-month in terms of their numbers. It's all three business units. We'd. If I had to say in dollar terms, I'd probably look more at respiratory and the specialty as being the ones that'll provide that bigger dollar jump in the coming quarters. Luc, I don't know if you want to add something to that one?
Well, I think we're fortunate to have six assets that are all growing, and I would say that especially Q3, with the seasonality of ALLERJECT, yes, ALLERJECT is gonna be very strong in Q3, Q4 compared to the prior quarter. Maybe additional info on XIIDRA, Simbrinza. You know, we've really relaunched these products and, you know, about three months ago, but the sampling on XIIDRA has accelerated over the last couple of months, so we expect a big push on XIIDRA over the next couple of months. We're already seeing it. Enerzair, Atectura, they just grow month-over-month, you know, give you, again, a growth figure number. Enerzair, Atectura are currently trending in excess of 50% above midpoint, Q2. You're in those if you're not talking double digits, you're talking significant growth.
Yes, Redesca is entering, you know, very interesting periods because of the secondary market conversion and also the Ontario now open to, you know, to switch. I just went through all the products, but M-Eslon was another product that was not very strong in the first half of the year due to different reasons, but M-Eslon annually grows a couple of %. We expect a strong recovery of M-Eslon in the second half. Put all of that together, plus some very positive news on smaller products like, you know, that we never talk about, that are currently above last year.
you know, Q3 is lining up to be, I mean, record for us is gonna be something to get used to, but I think Q3 and Q4 are gonna be, you know, I don't wanna use the term spectacular, but I think the rise is gonna be extremely strong.
Fantastic. Thanks, guys.
Well, thank you.
At this time, Steve Saviuk, we have no further questions, sir. Please proceed.
Great. Well, thank you, operator. Again, thank you all for attending our quarterly results conference call. We really appreciate your time and the opportunity to provide you with more details and color on our progress as we continue building Valeo into a leading Canadian pharma company. Just to touch on and summarize on a few points, as we just talked about, we expect growth on our three business units. We're, you know, now we're talking organic growth, so we're not talking acquisition growth. Any acquisition growth would be in addition to whatever we've said today. Enerzair, we're seeing strong adoption, uptrend. You know, it is a very established market that we're going into with drugs that have been around for a long time.
The future benefits of Enerzair are so significant that we're getting that turnover, that crossover to physicians. We expect that to accelerate. ALLERJECT, we're heading into the peak season. We think we have a great product, so do many physicians, many allergists, and increasingly a number of patients. We see seasonal impact of ALLERJECT in Q3, Q4. Ophtha field force, really, the second quarter was the first quarter that you could say we had a full quarter of field force, but then again, sampling only started towards the end of it, so we expect that to continue. Redesca, the big, you know, the two things there are Ontario and getting some of those hospitals on board.
I would say every hospital in Ontario is evaluating Redesca right now, or all the significant hospitals in any case, and several smaller ones have already agreed to convert. The dalteparin, tinzaparin conversions are happening. We're very excited. We probably can't speak about all the opportunities there that we're engaged in, but there are some that are, that really, truly give us a lot of belief that this is not just a theory that there will be conversion, but that this is actually gonna be happening in Canada. As Luc mentioned, double-digit income growth, at least this far. We don't want to give guidance yet for Q3, but we're certainly seeing a very strong start to Q3. Last but not least, the BD side of the business, very, very active.
You know, as our business units have grown and we've demonstrated depth and commercial capabilities, that is attracting other companies to us that prior to might not have reached out to Valeo. Again, it's Simponi units, and as I mentioned in my portion of the call, really the area we wanna focus on is specialty and hospital. I think the rest of the group has got a lot on their plate with Enerzair and Atectura, certainly that's their focus. You know, we're certainly pushing to get additional product which would drive revenue into the current fiscal year. With that, again, thanks to everyone. Thanks for your questions, for your support. We look forward to keeping you up to date on upcoming events and developments.
We'll be certainly in touch with you know, before the next quarter call as we as we come across and we develop our business. Feel free to reach out to us at any time. Thanks again.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your line.