Good morning, and welcome to the Q4 and fiscal 2022 Financial Results Conference call for HLS Therapeutics. On this morning call, we have Gilbert Godin, Chief Executive Officer, and Tim Hendrickson, Chief Financial Officer. At this time, all participants are in a listen-only mode. Following management's presentation, we'll conduct a Q&A session during which analysts are invited to ask questions. To ask a question, please press star followed by one on your touch tone keypad to register. Should you require any assistance during the call, please press star followed by zero. Earlier this morning, HLS issued a news conference announcing its financial results for the three and 12-month periods ended December 31, 2022. This news release, along with the company's MD&A and financial statements, will be available on HLS's website and on SEDAR.
Please note that slides accompanying today's call can be viewed via the webcast, a link of which is available in the company's earnings press release and at its website on the events page. As certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements, actual results could vary materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form, which has been filed on SEDAR at www.sedar.com.
During this conference call, HLS will refer to Adjusted EBITDA. Adjusted EBITDA does not have any standardized meaning prescribed by IFRS. Adjusted EBITDA is defined in the company's press release and annual filings that are available on SEDAR and on the company's website. Please note that all financial information provided is in U.S. dollars unless otherwise specified. I would now like to turn the conference over to Mr. Godin. Please go ahead, sir.
Thank you, Colin. Good morning, everyone, and thank you for joining us. On our call today, we will look at highlights for the quarter and the year. Tim will follow with a more detailed look at our financial results, and then we'll hold the Q&A session. In 2022, we grew product sales in Canada by 11% in constant currency. That's 7% in reported U.S. dollars, which reflects a growing contribution from Vascepa and a steady performance from Clozaril. Total revenue was up 5% to $63 million in constant currency in 2022. Here again, 2% in reported U.S. dollars. At the same time, we are investing in the significant organic growth potential for Vascepa. We generated solid Adjusted EBITDA and cash flow of $23.8 million and $16.9 million, respectively, with cash flow increasing on the year by 3%.
Vascepa revenues in 2022 was CAD 12.3 million, up 67% over 2021. We will discuss the outlook for Vascepa in a moment. First a look at activity and achievements for the product in 2022. On the first slide, we see the prescription curve for Vascepa alongside two of the top highlights for 2022, which were to achieve public reimbursement in Ontario and Quebec. Along with several other provinces and territories, we achieved public reimbursement for more than 70% of all Canadians covered by a public plan and who meet the criteria for the therapy. On the chart, we have extended the data period beyond year-end and into February to give you a more current view of product growth.
The upward slope of the curve reflects a solid 85% growth in TRX in 2022, as well as the continued strong growth in prescribers, which was up 92%. On a sequential basis, quarterly basis, TRXs were up 22% in Q4, which highlights the growing adoption as salesforce expansion and public access make an impact. On the right-hand side, we see the impact from the public access in Quebec and Ontario, which was achieved in May and July respectively. TRXs in Quebec rose 124% in Q4, 2022, and in Ontario they rose 67% versus the same period last year. While pleased with the rate of growth in Quebec, the rate in Ontario, while solid, is lower than we would have expected after having obtained public access.
We believe this is a result of the administrative process involved in approving new patients for the medication. Ontario prescribers are having to navigate a burdensome authorization process, which in our view is impeding access to Vascepa and is counterproductive to the objective of the product listing agreement that is in place, which is to procure access to cardiovascular prevention. While we believe the authorization process will become more fluid over time, we are actively engaged with the Ontario Drug Benefit on the matter and working to improve access and to provide protection from a possibly life-saving medication to patients as intended by their doctors. We're also working with all remaining jurisdiction to obtain access or improve the onboarding of new public plan patients. The next slide illustrates how Vascepa is doing relative to other cardiovascular classes of drugs.
The chart includes data through January 2023. The data shows that Vascepa's growth continues to far exceed that of statin as it should, as well as PCSK9 for every month, quarter, and trailing 12 months period versus the same period last year. The data shows the large difference of the growth rates, especially with NRX, where the growth rates is more than seven times greater or more, depending on the time period. Our next slide shows the evolution of physician groups and their relative level of prescribing volumes for Vascepa. At a high level, this chart shows the evolution of prescriber volumes from specialists, cardiologists, and endocrinologists, and this is the blue and dark gray respectively, general practitioners, which is the green line.
GPs are now the fastest-growing prescribing group, and this is the first time in our reporting that GPs have led the growth in both TRX and NRX. A progression very similar to the statin market, where today in a mature statin market, 80% of prescriptions are written by GPs. The growth in GP engagement is consistent with the frequency of interactions that are increasing every month now. Because we started almost two years earlier with specialists, the percentage of those physicians who have prescribed Vascepa is about four times greater than it is for GPs. Over time, it is our view that we will see a similar rate of adoption for Vascepa by GPs who represent 75% of the 10,000 physicians we see today. In addition, we're also working with hospitals to have Vascepa added to selective discharge protocols of patients institutionalized because of a cardiac event.
Looking forward, we have a large public and private reimbursement in place. 70% of the public and 95% of the private plans are covered. We have 80 field personnel calling on 10,000 prescribers involved with patients at risk of cardiovascular events. We have standard of care, medical guidelines endorsement from key medical societies. We also have now additional clinical evidence supporting Vascepa in cardiovascular prevention with the completion and the publication in the fall of the Japanese RESPECT-EPA trial, which had trial results consistent with the clinical outcomes from the REDUCE-IT and the JELIS trials. The last three years have required perseverance, we believe the outlook for Vascepa has made it worth it. The need is significant, the solution is still unique, the drivers are in place.
Now, one of the big questions that our Q4 results raises is: How can we grow Vascepa TRX volume by 22% quarter-over-quarter, but net sales by less than 10%? Part of the explanation is directly related to our recent success in gaining public access in the large provinces. It's an open secret that public rebates are more generous, and for the same quantity of prescription growth, we recognize lower revenues. With the recent advent of public access, we saw a bolus, a disproportionate number of public prescriptions and claims now come into the market as those markets opened. There is a point in time when this will level off and both public and private volumes will grow in more steady proportion. That is the 50/50 ratio between public and private that we expect at steady state.
At that point, the Vascepa growth in net revenues will catch up and match the growth in prescriptions. The other element that is unpredictable but has had a negative effect in our reporting, which is in US dollar, is the weakness of the Canadian currency. The Canadian dollar lost almost 4% versus the US dollar in the Q4 alone versus the previous quarter, and 7% versus the same quarter last year. That is one of the reasons why we are reporting Vascepa sales performance in Canadian dollars or constant currency, which is also consistent with how we have presented our peak year sales estimates for the product.
On the next slides, we show our 2023 outlook for Vascepa, in which we expect Vascepa's net revenue to grow to somewhere between CAD 22 million and CAD 28 million, with the midpoint representing 2 times the 2022 net revenues in CAD, starting with a year-over-year growth of approximately 40%-50% expected in Q1 of 2023. Year-over-year growth rates for Vascepa are expected to increase through the year as a full-fledged physician detailing continues and in correlation with seasonal factors where, whereby Q4 is typically the strongest quarter of the year in a crescendo fashion. We believe that this growth rate can increase further in future periods as improvements are realized in the authorization process and as commercial outreach continues.
For now, we're pacing ourselves in our estimates until we see further evidence of those developments. Overall, we believe HLS's profile is an enviable one with steady revenues, margins, and cash flows from Clozaril, along with growth potential from Vascepa. Regarding other products in the portfolio, we have successfully maintained our leadership position for Clozaril in Canada during a three-year period when the delivery of care for mental health patients has been under pressure. During this time, Clozaril has continued to generate steady financial results. In 2022, Clozaril revenues in Canada was essentially flat year-over-year or on constant currency basis as the market leveled due to the effect of the pandemic had on access to mental health institution and hence on new treatment initiation for clozapine-refractory schizophrenic patients.
We are seeing nascent improvement in clozapine enrollment patterns and looking for them to normalize over time as the market trends back towards historic growth rate of 2%-4%. We continue with our rollout of CSAN PRONTO, a proprietary technology that addresses the number one barrier to treatment and is helping strengthen our leadership position in the Canadian clozapine market, as well as helping the market itself resume its growth. Our installed base increased 91% in 2022, and we now have 107 devices deployed compared to 56 at the end of 2021. More than 16,600 tests have been performed on more than 1,400 patients since we launched the product. We expect that the number of devices deployed will continue at a similar pace in 2023.
In the second half of 2022, we introduced MyCare, our therapeutic drug monitoring diagnostic technology or TDM, to lab specialists and clinicians and completed several client lab certifications. We now have several sites clinically enabled with access to clozapine, risperidone, and paliperidone testing and will continue to expand this footprint in 2023. While they will be modest early on, we should start reporting revenues generated by MyCare in 2023. Finally, we have met with Health Canada to discuss the favorable results of the recent trial for Trinomia, called SECURE trial, and we aim to refile the product in the second half of this year. As a reminder, Trinomia combines 3 important medications in one daily pill for patients who have experienced a cardiac event.
The SECURE trial has shown that Trinomia helped improve compliance to treatment, and that compliance produced superior cardiovascular outcomes, effectively reducing the risk of a subsequent cardiac event when compared to the three same products prescribed individually. With that, I will turn it over to Tim for a closer look at our numbers. Tim.
Thank you, Gilbert. Good morning, everyone. I will start with revenues and product sales. Led by the growth of Vascepa, our 2022 product sales in Canada increased by CAD 4.7 million or 11% in Canadian dollar terms. The 3.9% decline in the value of the Canadian dollar resulted in a growth rate of 7% for the year as reported in US dollars. Vascepa net sales were up 67% in Canadian dollar terms in 2022 and by 51% year-over-year in Q4. The difference in the rate of growth for Vascepa prescriptions compared to net sales growth reflects gross to net adjustments as the proportional number of patients on public plans increases.
As Gilbert Godin explained earlier, when the balance between public and private plan patients stabilizes, then we should see the rate of growth in net sales track the rate of growth in gross sales and prescription volumes. We expect that to occur in the second half of the year. From that point, sustained prescription growth, similar to the 22% sequential increase seen in Q4, would be expected to have a similar percentage effect on net revenues as well. Clozaril sales in Canada were relatively flat for the year and the quarter in Canadian dollars as the product continues to generate reliable results that contribute meaningfully to Adjusted EBITDA and cash flow. As Gilbert Godin mentioned, patient enrollment in clozapine therapy was muted during the pandemic and is expected to resume a modest growth trajectory in due course.
One of the ways we are doing our part to kickstart this growth is via the deployment of CSAN PRONTO, which addresses the biggest barrier for patients to initiate and remain on the therapy. In the U.S., Clozaril net sales decreased 8% in 2022, reflecting several one-time benefits in 2021, as well as modest erosion of patients offset in part by favorable trends in pricing, expired returns, and government rebates. For our royalty portfolio, there is some variability in quarter-to-quarter results, but overall revenues were $9.8 million in 2022, up 4% from last year. 2022 included the first royalties from the fourth product in the portfolio that received approvals last year first in Japan, then Europe, and then the U.S.
While still early and a modest contribution was made in 2022, we expect this product to be an important one for the portfolio in the coming years. Cost of goods increased in 2022 due largely to the year-over-year growth of Vascepa sales. Sales and marketing expenses were higher due to primarily activities related to Vascepa's growth, such as the expansion of the primary care sales force, increased marketing support following the achievement of public market access, and greater physician interaction following removal of public health restrictions in late Q1 2022. Medical, regulatory, and patient support costs were flat year-over-year, and general and administrative costs decreased modestly by 3% year-over-year. Sales and marketing expenses for Vascepa likely reached a high watermark in Q4 2022 as the number of physician interactions grew and reached steady state operating levels.
This means that selling and marketing expenses should not fluctuate much on a quarterly basis in 2023, even as script levels for Vascepa are expected to increase. This implies operating leverage in our model above the annualized Q4 sales and marketing expense level. Adjusted EBITDA was $23.8 million for the year compared to $26.3 million in 2021. The change was due primarily to the increased selling and marketing expense and increased cost of product sales related to the growth in sales of Vascepa. Even in a year like 2022, where we saw noticeably higher selling momentum for Vascepa, we continued to generate solid Adjusted EBITDA results. In 2022, we generated cash from operations of $16.9 million, up from $16.4 million the previous year.
During the year, we made dividend payments totaling $5 million, share buybacks under the NCIB of $1 million, and repaid $9.8 million on the senior secured term loan. Cash and cash equivalents were $20.7 million at December 31, 2022, compared to $21.2 million at December year-end the year earlier. On September 30, we updated our credit agreement and senior secured term loan with our existing syndicate of lenders, led by J.P. Morgan as administrative agent. The updates extended the maturity of the loan to August 2024, reduced the required amortization by an estimated $7.5 million per year, and included other changes that increased our financial flexibility.
With solid fundamentals in place, increasingly diversified revenue, sustained Adjusted EBITDA, and reliable cash from operations, we have continued to deleverage the business from a total of $185 million of debt at the company's inception, down to $97.3 million at the end of 2022, very consistent with the level at the end of 2021, effectively neutralizing the $10 million of borrowing for the approval milestone paid in July 2022 related to the royalty portfolio. HLS finished 2022 with positive cash flow from operations, more than $20 million in cash, and strong prospects for improved cash flows from Vascepa and Clozaril in Canada. There's also an undrawn revolver facility. HLS can request incremental loans up to a maximum of $70 million to support growth opportunities.
We note that one of the banks in our lending syndicate is Silicon Valley Bank. We did not have any funds on deposit at SVB, we're not seeing any immediate effects of the events over the past week. We will continue to monitor the situation very closely, we'll work with J.P. Morgan, our admin agent, as next steps become more clear for new ownership management steps in SVB. We renewed our normal course issuer bid in November 2022 and significantly increased our activity through the year, returning $1 million of capital to shareholders last year, as mentioned. Finally, yesterday, the board of directors declared that the subsequent quarterly dividend of CAD 0.05 per outstanding common share is to be paid on June 15th, 2023 to shareholders of record as of April 28th, 2023. With that, I'll pass it back to Gilbert for his closing comments.
Thank you, Tim. As we have said here on today's call, in 2022, the final pieces came into place positioning Vascepa as an integral part of cardiovascular risk reduction for Canadians who are at risk. Sales execution is a primary focus right now, increasing the frequency of interactions with key physicians and making access broader and fluid for patients covered by public plans. We look forward to reporting to you on our progress in the coming quarters. That concludes my prepared remarks. At this point, I will ask the operator to please provide instructions for asking questions. Colin?
Thank you, Gilbert. Ladies and gentlemen, we'll now conduct the question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, please press star two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Your first question comes from Noel Atkinson from Clarus Securities. Noel, please go ahead.
Hi. Good morning, Gilbert and Tim, thanks for taking our questions this morning. It's nice to see continued strong free cash flow again in Q4. We appreciate the increased visibility that you're providing now into Vascepa revenues by giving it out specifically as well as the 2023 guidance. Can you give us some sense here of you know, given the Q1 outlook for Vascepa, kind of where Q1 2022 Vascepa revenues were, are you expecting growth or is it flat, or is it modestly negative?
Hi, Noel. Thanks for the question. We are expecting growth year-over-year in the range of 40%-50%. A year ago, Vascepa net sales were just a little under CAD 2.5 million. You know, there is variability quarter-to-quarter and seasonality, and Q1 tends to be a little bit softer quarter that's reflected in that.
Okay, good. Are you folks able to provide any guidance in terms of total company revenue or Adjusted EBITDA for 2023?
We weren't going to get into specific guidance around EBITDA, although we do expect to see, you know, modest sequential improvement in Adjusted EBITDA.
Okay. The last one before we jump back in the queue here. Do you folks have any change in your peak sales outlook for Vascepa in terms of either the amount or the year in which you hope to achieve it? I think it was for CAD 250 million-CAD 300 million in 2026.
Yes. Thank you, Noel. Good morning.
Good morning.
We do not. That's the short answer. We do not. I think you realize that this quarter we made a decision and a realization that, really, you know, part of the disconnect in our discourse and some of the expectations is in part related to the focus on this long-term objective, which we still maintain. We thought that bringing the focus back to the near term would probably translate in better ways what we're trying to do, how those efforts are received, and how the progress is actually putting us on a path. It was really purposeful.
There was reflections we had internally, and realized that, you know, it's probably much more important to try to create a good idea and a good picture for the quarters and the year to come. With respect to your questions, we still believe that all the ingredients are there for this product to be reaching the peak year sales that we have alluded to in the past.
Okay, great. All right. Thanks very much, guys.
Your next question comes from David Martin from Bloom Burton. David, please go ahead.
Kind of following on Noel's question. We haven't seen a big inflection up yet in Vascepa post the public coverage. You mentioned the authorization process in Ontario is dragging things. Are there other pushbacks you're getting from physicians or payers or any other impediments? Obviously, if you, if you think your peak sales forecast is still good, you think these things are all transient, I guess.
Yes. Good morning, David. Thank you for your question. First of all, with respect to, you know, what we kinda loosely allude to as a pushback from doctors. You know, doctors are usually rigorous, critical because, you know, they deal with people's life and health. Therefore, the questions we encounter are usually, and I would say sequentially pretty much always the same, right? They learn about the product and the virtues of the product and the patient profile. Eventually, when they're ready, they still make sure that the product is gonna be accessible, that the price point is gonna be affordable to the patient as well. In that sequence, they will either encounter, you know, an open market and they will get engaged.
Sometimes they will encounter an open market, they will get engaged, and they will bump into some, what we refer to as kind of burdensome situations. The unfortunate part of that is that it may slow them down or temporarily stop them from adopting the product. We train our reps to face all those situations and assist in complementing the information. Also in cases where the access is a little cumbersome or complicated, we provide assistance. We try to make sure that, if they need to be accompanied for the first few times, that we do so with them and provide, at times, also external assistance to do so.
That's how, essentially, we try to, first of all, continue to focus on resolving the problem, but in the meanwhile, we mitigate the effect of the problem, and we alleviate the burden on the physician. That's kind of the of the mindset. We mentioned specifically Ontario for an obvious reason. Ontario is by far the largest province in Canada. We've had very good success, very good uptake, in Ontario on the private front. Therefore, the willingness to prescribe is there. The understanding of the product is there.
We did notice, however, that on a proportional basis or on a per capita basis, the uptake on the public front was slower, which got us to dig and eventually engage with the jurisdiction to try to understand what could be the issue here or the rate limiting factors. It's been an open and positive dialogue. We're hopeful that, you know, it's improvement on an every day to everyday basis until full resolution.
Are you seeing the province make changes that improve access, or are they just talking up, "Yes, we're willing," or are they not saying anything at this point?
Yes. I think it's, you know, those transient situations are more administrative in nature. There's a new product, it has criteria, it requires to be verified before it's approved. What we've attended to is that there's a bit of a learning curve. There was a short one in Quebec. It doesn't seem to be an issue anymore. Even if the approval time is longer in Quebec, it's more fluid. In Ontario, it's still from the anecdotal evidence that we gather on the field, it seems that, you know, there's a number of inconsistencies in how those scripts are being treated, the claims are being treated.
I would put that more on the on the case of more of a learning, training-related issues, you know, this being the latest product in more than 2,000 products that the office is overseeing on a day-to-day basis. There's, this is not something directed to Vascepa. It's more the fact that Victoza is new, and it has criteria that need to be understood, and before the authorization is granted.
Okay. One other question, then I'll get back in the queue. Trinomia is gonna reduce the pill burden of patients that take it. Is pill burden one of the pushbacks you're getting with Victoza, adding it to, you know, a polypharmacy, pill burden that the patients are under? If Trinomia can help Victoza, I'm wondering what kind of market share does Trinomia have in markets where it is, approved?
Yeah. I'll tell you whatever we could. I can try to obtain those market share data. I don't have them handy. I know that the product has had a nice career in the original country of Spain, but we can try to get information on that. You know, the pill burden is real. The pill burden is something that has been in existence in the field of cardiovascular in particular because, you know, you treat the original condition, but in doing so, you also want to make sure that other parameters that can be attenuated, such as the blood pressure, such as, you know, using anticoagulants facilitate the work that the heart has to do. It's always been a factor.
I would say that, you know, the physician has a key role emphasizing importance of compliance to treatment and emphasizing that it's teamwork, right? All those drugs need to work in harmony, and they're complementary to one another. That's where, in the case of Victoza, even though we are adding to the pill burden, there's no doubt about that, any new drug will add to the pill burden. The numbers are pretty compelling in that they clearly show the benefit is on top of the benefit of the statin. That's why we refer for those patients to the residual cardiovascular risk that their condition implies, even though they're treated with a statin or a blood thinner or a blood pressure medication. I would say that's part of it.
Trinomia, good example of how, you know, pill burden can be attenuated. The results are pretty stunning when you think about it, to show improvement in cardiovascular by using a poly pill instead of leaving to the patients to use three single drugs.
Okay, thanks. I'll get back in the queue.
Your next question comes from Rahul Sarugaser from Raymond James. Please go ahead.
Good morning, Gilbert Godin. Good morning, Tim Hendrickson. Thanks so much for taking our questions. Most of my questions have been answered. I just want to drill down a little bit on your slide, talking about the GPs versus specialists. We're seeing a bit of a, you know, it's early days, but we're seeing a bit of a separation in terms of the adoption with GPs versus cardiologists and endocrinologists. Is this a function of the sales team? Is it a function of the just larger group? Could you give us a sense for, you know, how we should expect those trends to continue?
Yes. Thank you. Good morning, Rahul. Thank you for your question. You know, at the root of it's, it's almost a mathematical equation. We started promoting the product to what we call, you know, subject matter expert, early adopters. These are specialists, right? Everybody follows what the cardiologist does early on or the endocrinologist. Therefore that's how most specialty products are launched. The audience we called upon, let's say notionally, give or take 2,000 physicians, limited in scope but very important for the reason that I just mentioned.
When we moved to the second phase, typically the plan was to do this as the market access opens on the public side of things, that was of course delayed because of the pandemic, we now add or layer an additional 7 to 7,500 prescribers and their general practitioners. There's an expansion in the size of the target that is threefold. That threefold expansion is, you know, expected to eventually translate into number of prescriptions. I would say that the job between the first phase and the second phase is to make sure that GPs understand that the diagnostic of the condition and the need for Victoza can be learned, understood, and performed by the GP, especially since he now has an expert that can explain.
That's what's happening when you hear about, you know, various continuous medical education forums taking place across the country. It involves a specialist that has experience with the product, that knows the data inside out, and informs and eventually trains, you know, general practitioners. There's an element of leverage there that is consistent with the fact that we're going from 2,000 to 10,000 potential prescribers and maturity.
That's the math behind it. That's why that curve is not gonna go back. That's why the GPs will continue to shoot up as more and more of them start using the product. And as we also make some inroads in the extent at which they're using it, right? To start prescribing is a good marker. To then use it every time you encounter a patient that has the right patient profile in your practice, that's the other axis of expansion, and that's why it usually produces a pretty sharp rate of growth.
Great. That's very, very helpful, Gilbert. Actually, if I, if I can actually drill down a little bit further on that latter part to your latter point. Certainly, there's a larger pool of GPs and, you know, as the Pfizer team goes and accesses that, you know, we should see that trend continuing. My question is more, I think, to do with the specialists then.
As your team accesses them and, you know, because, say, a GP will do, like maybe 1 in 10 patients they'll prescribe to, whereas a cardiologist maybe do 1 in 3 or 1 in 5. Moving them from 1 in 3 or 1 in 5 to 1 in 2, increasing the number of scripts that they're writing, per patient that they treat is a key driver there. You know, how are you looking at increasing that penetration within the cardiologists that are already prescribing?
Yes. The, we have those almost exactly internal metrics, Rahul. It's interesting to bring that up. You know, we have objectives that are to grow the number of specialists that are currently prescribing from X to Y. We also have, for those specialists, the objective of growing the number of scripts that they write every year from X to Y. Another, you know, from Z to T, let's say. That we do have growth in prescribers and then growth in volume in prescriptions, as they continue to generalize their standard of care to all of their patients. We have this equation on the specialist side. We also have this equation on the GP side.
The numbers on the GP side are larger because there are many more GPs, and it's also because our interaction with general practitioners, ours and that of our partner at Pfizer, is more recent. Right. We know, and I think we shared that the last quarter, the rate of prescription in specialists was at last quarter, four times greater than the rate of prescriptions in the GPs. That's only because we started two years earlier with the specialists. We think that, you know, that there's gonna be some catch up here, but it will apply on a much larger pool of physicians.
Great. Thank you very much for that color, Gilbert. If you'll indulge, just one quick last question. We, of course, have seen pretty terrific data on Vascepa. We're also seeing continuing data coming out of Amarin. You know, could you maybe perhaps speak to how the continuing evolving data should translate to one adoption to, you know, the total addressable market?
Yes. I think what, you know, what we've attended to, if, I don't know if that's at the heart of your question. Early on, when the trial came out, everybody was quite impressed and didn't expect the quality of the outcome. There were some doubts related to a factor. I think it was the mineral oil in particular. That came back, I would say, periodically in the ensuing couple of years. The fact is that since then, on the scientific front, there were a number of demonstrations of the reinforcing the outcome of the REDUCE-IT trial, some of them related to the demonstration of the mode of action being the reduction of atherosclerosis in those patients treated.
More recently in the fall was the result that I've alluded to in earlier in Japan, where, you know, a long open label study showed results that clearly reinforced and eliminated the concern related in the views of many anyway, eliminated the concern related to mineral oil because there was no mineral oil placebo in that study.
I think that, like many things in the medical world, over time, we say in French, "The facts are stubborn." Right? The facts here are that the results are strong and have been supported in continuous fashion by further or subsequent scientific developments. I think that, you know, that will continue to reinforce the adoptions of what is suggested in the guidelines. Hopefully, we still have more guidelines that will eventually rally the early ones, recognizing that the early ones are the most important ones.
Great. Thanks again for taking our questions. We'll get back in the queue.
Sure will.
Your next question comes from Tania Armstrong-Whitworth from Canaccord Genuity. Please go ahead.
Good morning, gentlemen. Most of our questions have been asked already, but just a couple more from me. In terms of public reimbursement, can you provide an update on what's going on with pCPA negotiations?
Yes. What, sorry. What I can tell you about the negotiations here is that they're still very active. I would say they're recently have been very active. That would probably be the proper word for it. I think that we've alluded to the nature of the issue. The issue being a consideration or requirement from those provinces that was outside of the scope or of the terms negotiated when we negotiated the letter of intent. Those considerations were uniquely voiced by Alberta and BC, and that's why we have agreements in Quebec, Ontario, and many other provinces and territories. They are important. We have explained our positions. We've been, I would say, communicating and exchanging on the way to get to a resolution.
I think that there's no doubt in my mind that all the parties involved want to find a resolution to the situation. I would say that, you know, I'm encouraged by the recent and the active discussions that we've had with both jurisdictions. I cannot predict what the outcome will be or when. We don't control all elements related to that outcome. I can only commit and reiterate that we have made ourselves available the minute that the other party was available to engage and discuss, and we will continue to do so as to resolve it in a way that's proper and satisfactory.
Just to follow, is there a situation where that outcome could be negative and both parties would walk away? If that were to happen, what would that do to your peak sales estimate?
I think that, with respect to the short term and 2023 in particular, we hope, of course, that we will have Alberta and BC coming to the market as early as possible. We don't think that it would be detrimental to what we stated earlier. On the longer term, it's different. We think that we need to have a national, you know, full market access in the country to reach peak year sales. It's not the only reason why we're doing it. We're doing it because it's important for our patients, and I guess it's the only, you know, appropriate objective that we should have, is to have universal coverage in Canada, public and private. You know, peak year sales with-without 30% of the country on the public front would, could probably require that we review those numbers if it came to that.
Okay. Thank you. Apologize if you mentioned this already, but are you able to give more color around how many patients have now been stabilized on Vascepa?
I think that. Do we have that? I thought we had that. Okay. I don't think we shared it. We provide a number of physicians, but we can certainly provide that number. I don't think. Do you have it handy?
Yeah.
13,000 is the number.
Okay. Excellent. Thank you, Gilbert. One last question for me.
By the way, Tanya, just to be clear...
Yeah.
13,000 patients are the number of unique patients that have been using Vascepa. We don't have the degree of resolution that would say, I think you used the word stabilize.
Stabilize. Yeah.
I, I-
Okay. You don't parse out.
We haven't. Correct.
Okay. Got it. Then one last one from me. I think we've probably talked about this before, but just given where public pricing came in, is there a risk that over time, commercial payers will also drop their pricing once they kinda get a sense of where public reimbursement is?
I don't know that there would be any kind of precedent for that for a simple reason. I think that, you know, everything with respect to product listing agreements in Canada, whether they're private or public, have always been historically, for as far as I know, has always been confidential information and confidential between the parties. The conditions of the reimbursements and, you know, the all the parameters and the implications of the coverage are negotiated on a case-by-case basis with the payers based on their jurisdictions, their patient bases and so on. I'm not aware of any situation where, you know, one situation will leach into the other for all of those reasons.
You know, as far as we're concerned, we have, you know, had a pretty perfect course with the PMPRB and subsequently in negotiating access with, the say the market that we have today. Usually, these elements are not subject to, renegotiations in the out years unless there was, you know, an analogous reason to do so.
Okay. Perfect. That makes sense. Thank you, Gilbert. That's all for me.
Okay. Sorry, I just gonna make correction here. I said 13,000 earlier. The right number, I'm sorry, is 11,500, and that's 90% year-over-year.
Okay, great. Thank you.
Apologize, not 13, 11,500.
Excellent. Got it. Thanks.
Your next question comes from Justin Keywood from Stifel. Justin, please go ahead.
Hi, good morning. Thanks for taking my call. Just wanna circle back on the peak sales estimate for Vascepa, just so we understand it. The target still remains intact of $250 million-$300 million in sales. I believe that the timing for that was 2025 to 2026. Is that correct?
The estimate, range that you mentioned is correct. I think we mentioned the by the end of 2026.
How do we bridge where Vascepa is expected to do $25 million at the midpoint for 2023? How do we bridge that getting up to that $275 million in essentially three years?
Yeah, I think it would be, you know, constant and rapid growth, phase of growth that is expected in the middle of the life of the product, as it usually is the case, in products that are now have gathered their full momentum. You know, I think we've alluded in the past to the way, pharmaceutical products have slow starts, periods of very high growth, and then eventually stabilize and taper down in the out years.
That's usually the time when the product will, you know, on a year-over-year basis, can double or triple, and that's because the numbers we alluded to before, those 7,500 additional physicians will now compound on the rate of growth that is augmenting, and the penetration of the practice of each of those physicians will yield a volume of prescription that will be extremely large and compounding on a growing number. We've been growing now on a small base, disseminating information to the early adopters. We're now in the first stages of that growth that involves a material number of prescribers and that brings into the realm of it because of the public reimbursement, hopefully, with B.C. in Alberta, the totality of the patients in scope in Canada.
Just to given, you know, understandably, there are some launch challenges with Vascepa just in the early days of the pandemic, do you think that has impacted the trajectory at all just, you know, given, you know, when you're launching a new drug, it's best to not have these obstacles in place? Or do you still feel that, you know, we're largely past that and there could still be substantial traction going forward?
Yes. Justin, I will say that the effect of the pandemic, and, you know, take that in context, has essentially been that we've lost a year. I think that we are today where we would have been a year earlier, right? Do I have scientific explanations and, and rigorous demonstration for that? No. I know that, you know, the impediments to our detailing, the circumstances in which the doctors were evolving, has materially slowed down and reduced the impact of the resources we've devoted to launch the product. If you picture this here, I think we'd probably have a different perceptions if we were where we are today, 2 years after the launch rather than 3, right? That's the effect of the pandemic.
Having said that, I see no reason why the pandemic would have reduced the potential of the product. It simply has slowed us down in reaching the point where we are today, which is a platform on which we plan to grow at accelerated fashion. You know, I'm trying to paint an image here, and I think we all relate to the impediments of the pandemic. I wanna remind you, even in 2022, the first five months of the year, Ontario and Quebec were in lockdowns or effects related to those. It really is only in the back end of the year that we could produce a response that is more proportional to the level of resources that we've engaged.
You know, it's, I know there's a lot of fatigue and about the topic, and I don't think we mentioned the pandemic in the script this year. That was this quarter. That was something we were trying to avoid. The reality is that, you know, if we wanna look back and analyze what has been happening, you can't ignore that this was monumental in its effect. We're gonna move on, right? We're past that point. We're making the best out of it. We've persisted through those rough times, and now there's a much clearer way forward. That really is where we're focusing.
Understood. Some obvious challenges there. Just one final question on the peak sales target. I believe there was a target EBITDA margin stated in the past. I think it was around 30%-35%. Does that still hold?
Hi, Justin. Yes, that would hold as well.
Great. Thank you for taking my questions.
Thank you, Justin.
We have a follow-up question from David Martin from Bloom Burton. David, please go ahead.
Thank you. For public coverage, it's just for secondary prevention, whereas private was primary and secondary prevention. Are you seeing GPs prescribe the drug for primary prevention for patients covered by private insurance? Are GPs generally just prescribing for secondary prevention?
They are prescribing in both cases. They are presented with the full scope of benefits of the product, which means the two patient populations. Of course, they're also informed of some of the limitations they might encounter in those jurisdictions where the patient is publicly covered. We factored the lack of coverage for primary cardiovascular prevention in the public in our estimates and our patient population estimates and our penetration rates.
Okay. One last question. How do the authorization processes differ in Ontario and Quebec? Are they pretty much the same and Ontario is just, you know, learning how to do it, or are there major differences in the two provinces?
Yes, I would say that in practice, it's almost identical. It's a form. It's a form that is either a paper fax form or an electronic form, depending on the level of automations of the physicians, and it's sent to the authorities that are overseeing the adjudication of the claim. From that standpoint, it's identical. What differs, of course, Quebec started 4 months earlier. Ontario was late July, early August. Quebec was in May, I believe. Therefore, there was a learning curve in Quebec also, no doubt about it. You know, we don't see all the intricacies of what's happening behind the scene, but early on it was obvious that what was coming out was not equal to what was going in.
That's why we think that over time and with the engagement that we've had with the Ontario Drug Benefit, there was a realization that there might be an issue here in the way they're dealing with Vascepa in particular. The product is conditional on the use of a statin and certain biomarkers. That's where we focus our dialogue in addition to focusing our dialogue on what would be the normal per capita progression in Ontario for a drug that for which we have a similar experience in other provinces.
Okay, thanks.
You're welcome.
There are no further questions at this time. I'll turn it back to Gilbert for closing remarks.
All right. Well, thank you very much, Colin. I'll be very brief. Thank you. Thank you all for participating on today's call. We look forward to speaking to you again in the near future. Thank you. Goodbye.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.