Thank you for joining the H.C. Wainwright 26th Annual Global Investment Conference. My name's Arabella, and I'm an analyst on the corporate access team at H.C. Wainwright. H.C. Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory, and related services to public and private companies across multiple sectors and regions. We have a total of 24 publishing senior analysts and over 636 companies covered across all sectors. Please visit hcwco.com for more information. We're so grateful you were able to join us for what is hopefully a productive day of one-on-one meetings, corporate presentations, and panels. With that being said, I'd like to introduce Craig Millian, who's the CEO of HLS Therapeutics.
Thank you, and good afternoon. I want to thank H.C. Wainwright for the invitation to speak today. My name is Craig Millian. I'm the CEO of HLS. I've been in the role for about a year and a half now, and look forward to taking the next fifteen or twenty minutes to tell you a little bit more about HLS and some of the changes we made and the journey we're on. And really excited about the potential for this business. So, if there's time at the end, we can certainly take some questions as well. Let's see if this clicker's working. Doesn't seem to be. So... There we go. So everybody's aware of the caveats associated with the forward-looking statements.
So, some background on HLS Therapeutics. We're probably a little bit different than some of the other biopharma companies that are speaking at the conference this week, which are primarily R&D stage companies. We are a commercial stage company, revenue-generating, positive adjusted EBITDA, cash flow-generating company. We are headquartered in Canada, with two offices in Montreal and Toronto, as well as an office outside Philadelphia. We sell two products in Canada, one in the US, and our focus is in two therapeutic areas, cardiovascular and psychiatric disorders. We've built what we think are really strong capabilities that differentiate us, you know, within the Canadian market, within those particular areas. We have a profitable product portfolio with growth potential.
You can see the kind of the statistics at the bottom in terms of revenues and adjusted EBITDA, as well as market cap. As I mentioned, I joined about a year and a half ago, and there's been quite a bit of changes in that time frame. We've made significant leadership changes at the end of last year, really into this year, at the board level, as well as within senior management. We've made some changes to the composition of our business. We had been a product marketing company as well as a royalty company, and we've kind of really increased our focus on the product portfolio part of that.
Also made some pretty significant changes to our operating model, to some of our go-to-market models supporting our brands. And really, you know, the focus that we've had going into 2024 is really kind of resetting our business in terms of growing our products, really taking a look at our cost structure and reducing our operating expenses. As I mentioned, a lot of you know, new leadership that we're integrating, that we're very you know, pleased about. We have divested some non-strategic assets and really rationalized our portfolio, and also strengthening our balance sheet. And we'll kind of touch upon you know, several of these concepts throughout the presentation. That's the immediate focus.
The future, you know, assuming that we check all the boxes on the left, is that we would like to leverage the capabilities that we have, certainly starting with the business units we have within Canada, to in-license assets that are complementary to our business and that allow us to really, you know, better spread out the cost of our infrastructure, both in Canada and then ultimately in the U.S. as well. So let me just, for those of you not familiar with HLS, maybe spend a couple of minutes talking about our products and our two core products, starting with Clozaril, which really was the product that launched HLS Therapeutics back in twenty fifteen. This was a product that we in-licensed or acquired, actually, from Novartis.
And it's a very important medicine for a condition called treatment-resistant schizophrenia, and this is a product that we have the rights to in both Canada and the U.S. This truly is a life-changing medicine. Schizophrenia is a devastating disease, and about a third of patients diagnosed with schizophrenia ultimately will be diagnosed with treatment-resistant schizophrenia, meaning they've cycled through multiple lines of therapy and haven't responded fully to those medicines. Clozaril is the only approved treatment for treatment-resistant schizophrenia, or I should say clozapine, the generic, is the only approved treatment. It's a highly effective treatment, 60% response rate.
And, you know, interestingly, despite the fact that this is one of the only treatments for this patient population, there's still quite a large number of treatment-resistant patients that are not on clozapine treatment. So we think even though this is a mature category, there's actually some headroom in terms of just the volume of patients that are being undertreated. What's interesting about our business with Clozaril is this is a generic market. So typically, in pharmaceuticals, you know, you think about the patent cliff, and you assume there's a tail at the end of that, where your revenues and your are going to decline rather precipitously. Clozapine has been a generic market over 10 years.
You know, when we acquired Clozaril in 2015, it was a generic market, and yet we've been able to maintain a leading market share in Canada in a generic market, and in fact, have a very stable business, both in terms of top line and brand contribution. And really, the key to our success has been what we surround that molecule with, which is a what we believe is a best-in-class patient support network and a really unique technology that complements the medicine. And I'll talk about what that is in a moment. The thing to keep in mind with clozapine, highly effective treatment, but comes with a very significant side effect, which is potentially life-threatening lowering of white blood cells.
And because of that, there's a REMS requirement or a risk management program requirement for all patients that are put on clozapine in the U.S. and Canada. So this, what we call the CSAN network, that is our patient registry, essentially, that we manage. And what is particularly cumbersome for the patient and presents really the number one barrier to getting a patient on this highly effective treatment is the need for frequent blood monitoring. Actually, weekly blood monitoring when you start this treatment. It could be over 30 blood draws in the first year alone, and that requires a patient, potentially, you know, a patient who has very significant disease with treatment-resistant schizophrenia, to go to a lab and to get a venous draw regularly.
We have licensed in this technology called CSAN Pronto, which is a capillary blood draw. It's a fingerstick, point-of-care device that can be installed right in a physician office, in a pharmacy, wherever care is being administered, and get the results, you know, quickly and get that record integrated right into the registry that is required. So, this has been a huge advantage for us, and we actually commissioned a study to see whether, you know, both our patient services and this technology, what the impact of that was. And what we were able to establish is that patients who are in the CSAN registry, our registry, the compliance rate is about 30% higher than those who are in a competitive registry.
So again, this has really helped us to maintain a very significant competitive advantage in a generic market. And again, this is these are some of the numbers that support that. In 2023, we did nearly $40 million in revenue across Canada and the US. About a third of our business is in the US, with a very attractive margin close to $30 million in direct contribution from Clozaril alone, and a product that we have successfully... And we know how many patients are on Clozaril because we have this mandatory registry. We've had 8 consecutive years of patient growth. Our goal is to certainly, first and foremost, ensure stability of Clozaril for the foreseeable future, and we don't know, you know, when that ends.
But again, we've been at it for a while. And if possible, actually, we think there's opportunities for incremental growth in certain markets within Canada, which this year we've actually had some success in terms of even growing market share and growing our business. Our second product is really our growth product, which is called Vascepa, or icosapent ethyl, which is a product that we licensed the Canadian rights from Amarin, which had the rights in the U.S. And this is really a fascinating and we believe a very important product in the treatment of cardiovascular risk.
Just starting with, you know, what the unmet need is with respect to cardiovascular disease, I think, you know, at one point, as statins became standard of care, there was almost a perception that we were done with cardiovascular disease, that it had been solved for, right? Because statins are highly effective, tons of great clinical data, and have had a profound impact in terms of reducing mortality and morbidity associated with cardiovascular disease. But that said, what we realize is LDL lowering alone is necessary, but not sufficient to really eliminate the residual risk, you know, that remains, which is quite significant. Patients are still having strokes, having heart attacks, even those who are able to get their LDL to acceptable levels. The image on the, it's my left.
I guess it's your left as well, good, is representative of the number of patients that conceivably would be candidates for Vascepa. These are patients who have established cardiovascular disease or patients with diabetes and other risk factors. Now, there are other criteria that need to be in place in order to qualify for Vascepa, but this is really the starting point of the population that we looked at, to see if patients who were already on optimal doses of statins and already had their LDL cholesterol at goal, you know, was there incremental benefit to adding a drug with an orthogonal mechanism, such as Vascepa? And the study that really demonstrated the value of Vascepa was called REDUCE-IT, which was really a significant, you know, study. It was over 8,000 patients. It was a global study.
It was a five-year trial. And what was most remarkable about the results of this study, I mean, the reduction in composite endpoint was stunning in and of itself, a 25% reduction in major CV events. But what was really staggering is that these were all patients on optimal doses of statins who had their LDLs at target levels. And so this was a population that one would think was at lo- you know, lower risk than a garden variety patient who had been in earlier studies. And so you can see the results. Of note, 25% overall risk reduction. Of particular note, if you look at the secondary endpoints, which all were significant, 20% reduction in cardiovascular death.
Other agents have shown that as part of a composite endpoint, but I'm not aware of too many medicines that have demonstrated a reduction in cardiovascular death as a single endpoint. So we showed significance in that endpoint as a secondary endpoint, not just as the composite. And there's been other support here. Of note is the EVAPORATE trial, which gave a little bit of insight in terms of maybe how Vascepa is reducing those cardiovascular events. This was an imaging study related to plaque in the coronary arteries and, you know, the reduction in various types of plaque, including low-attenuation plaque, which tends to be some of the more damaging type of plaque. So, we're excited about Vascepa.
It launched a number of years ago, had the misfortune of launching right at the start of COVID, so it got out of the gates a little sluggishly, but I think we've been making up ground. We have the exclusive rights in Canada. We believe there's upwards of about eight hundred thousand Canadians that fit the criteria for the drug. We've got very good coverage, both in private and public payers. With private and public payers, we have almost universal support from the most important medical societies in terms of recommending use. And what's really interesting about this. Unfortunately for Amarin in the United States, they lost a patent dispute, and the drug went generic a number of years ago. That's not the case in Canada or Europe, for that matter.
We actually have the basis of our patent portfolio is different, and essentially, we have patents that extend all the way out to 2039, that we think are quite, quite strong. We have a very long runway to enjoy the growth and future profitability of this product. What gives us optimism about the future of Vascepa, in part, is the fact that, you know, we're five years into launch, and we're still seeing, I would say, very considerable growth. We're seeing 50% growth in unit demand. We're seeing over 90% growth in what we call consistent prescribers. Those are essentially prescribers who are prescribing the drug with some consistency, some regularity. And we're also certainly increasing revenue as well.
Now, you'll notice the growth in revenue is not keeping up with the growth in demand, and that's understandable for the reason that when we launched, we only had coverage in private plans. In Canada, there's public reimbursement, and there's private plan reimbursement, both very important. Over the last twelve to eighteen months, we've really started to get listings in each of the key provinces in Canada, and we're starting to see growth in that book of business as well. The public book of business, as you can imagine, is not as profitable as the private book of business, and so it puts a little bit of downward pressure on the gross to net, but we think over time that will stabilize, but very important to have kind of universal coverage across both books of business, which we do.
We are doing a number of things that we feel are important to continue to grow Vascepa. I won't go into detail here just for the sake of time, but you know, just this year, we got product listings in the third and fourth largest provinces, British Columbia and Alberta. We recently decided to separate from a promotional agreement we had with Pfizer, where they were responsible for promoting Vascepa with primary care physicians, and HLS was responsible for specialty. We had ownership of the asset, book sales, and all of that, but it was essentially an agreement for them to cover primary care. We decided to bring that back in-house. It's going to result in very significant savings that will be able to you know, take Vascepa to profitability that much faster.
You can see, you know, down below the revenue target that we have for 2024. Again, very, very nice growth in year five. Few comments about the financials. I'll start with the middle chart, which shows that our growth in our marketed products, that's Vascepa and Clozaril. We grew 9% in our most recent quarter over a prior year. On the left, you see our overall revenue went down. Why is that? We had the maturation of some royalties that, after the fourth quarter of last year, went away. We also made a strategic decision to monetize another one of our royalties and sell it to DRI, a Canadian royalty company.
That allowed us to actually take those proceeds and pay off some debt on our balance sheet, which is one of our goals, so it allowed us to delever. And you know, while that was a painful adjustment for twenty twenty-four in terms of the changing composition of our business and the royalties kind of starting to go away, that really falls away as we move into twenty twenty-five, when we'll really be enjoying just the growth in our marketed product portfolio. The royalty no longer becomes an overhang on our growth. And you can see on the right really nice growth across the board with Vascepa and Clozaril in both geographies.
In parallel with the growth in our product portfolio, we've been able to actually become more efficient and really rationalize our cost structure, both in terms of overall general and administrative cost, as well as direct selling and marketing, and if you look at the bar chart all the way to the right, Adjusted EBITDA, excluding royalties, essentially what we're doing here is comparing like to like. If we didn't have royalties last year, and we didn't have royalties at all this year, and we just looked at our product sales and our expenses, what would our Adjusted EBITDA look like, and we would've almost doubled that in the second quarter of this year versus last year.
So again, this gives us confidence as we move into twenty twenty-five, that the fundamental strength of the business is there, and the growth potential is there, and the profitability is improving. Quick comment on the balance sheet. You know, we do have a fairly significant bit of debt on the balance sheet that we have been prioritizing delevering. And again, the sale of the Xenazine royalty was part of that strategy. And what you see is, at the end of last year, we had about close to $89 million of debt on the balance sheet. After we paid, we made a $14 million payment in early July.
We closed the Xenazine transaction at the end of June, and so, our term loan is down to about $70 million. So we've gone from about $90 million down to $70 million, and actually, from a net debt perspective, we're down to closer to $50 million. So we think we're making good progress in terms of strengthening our operating performance, strengthening our financials, and improving our balance sheet as well. And that, we believe, you know, really sets us up well for the future. So, just to sum up, we are generating growth from our promoted products. We're doing that while we're cutting expenses, so really strengthening our financials. We're also focused on strengthening our balance sheet so that we can really have the dry powder we need on a go-forward basis, you know, to continue to expand our business.
Again, we're a business that doesn't have organic R&D, so we depend on business development for our lifeblood. And you know, that certainly will be a key focus on a go-forward basis. So we think we're positioned well for growth, increased profitability, and portfolio expansion, and excited about the future with this company. So with that, I don't know if I have time for questions. If there are any questions or we're out of time?
We are out of time.
Okay.
Unfortunately, but everyone can feel free to reach out to Craig. Thank you so much for the presentation.
Great. Thank you.
We really appreciate the time and effort that goes into it, and we're so-