Good morning, welcome to the Q2 2023 Financial Results conference call for HLS Therapeutics. On this morning's call, we have Craig Millian, 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 will conduct a question and answer session, during which analysts are invited to ask questions. To ask a question, please press star one on your touchtone phone to register. Should you require any assistance during the call, please press star zero. Earlier this morning, HLS issued a news release announcing its financial results for the three and six months ended June 30 2023. This news release, along with the company's MD&A and financial statements, are available on HLS's website and on SEDAR.
Please note that the slides that accompany today's call can be viewed via the webcast, a link of which is available on the company's earnings press release and on its website on the Events page. Certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form, which have been filed on SEDAR at www.sedar.com. During the 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 meeting over to Mr. Millian. Please go ahead, sir.
Thank you, Michelle. Good morning, everyone, and thank you for joining us. On our call today, I'll review highlights for the quarter, and then Tim will follow with a more detailed look at our financial results, and then we'll leave time for a Q&A session. Q2 was a quarter of significant transition as well as a reset for HLS as we made important structural and leadership changes and started making necessary adjustments to our operating model to build a solid foundation for sustainable and profitable growth moving forward. In my section today, I'll focus on three key areas: structural and leadership changes, Q2 operational results, and Vascepa developments and outlook. In Q2, we made organizational changes to provide new perspectives and a fresh look at our business moving forward, as well as to ensure strong alignment with shareholders.
This involved new leadership at both the management and board level. As you know, I joined on May 1st. In June, we hired Brian Walsh as Senior Vice President and Head of Commercial. Brian replaced our former Chief Commercial Officer, Sanjiv Sharma, who retired in July. I've worked with Brian previously. I'm excited about the leadership capabilities he brings to HLS. He's led commercial teams across sales, marketing, and business development. He has a strong track record of driving results. He and I will be working closely together to optimize the effectiveness of our sales efforts, marketing investment, and commercial partnerships. At the board level, John Welborn, a director since 2020, was named Chair. We welcomed two new board members, John Hanna and Christian Roy.
At the same time, we reduced the number of directors from 10 to eight, which lowers expense and is right-sized to support the company at this stage. As mentioned on our last call, we eliminated the dividend with the last payment made on June 15th. Our intention is to reallocate capital previously earmarked for dividends to share buybacks. With the shares trading at current levels, we believe that allocating funds to the buyback is currently a more effective approach to return capital to shareholders. We've also initiated a deep dive across our portfolio with the intent of focusing our investment on assets in which we are confident we can drive positive economics over a reasonable time horizon. As such, we've concluded there is no feasible path forward in Canada for PERSERIS.
As you'll recall, our negotiations with the PCPA did not yield an agreement for public reimbursement of PERSERIS, at which point we explored direct negotiation with individual provinces. Unfortunately, our discussions with those provinces did not lead to an economically viable path forward, and as a result, we've chosen to discontinue all activities related to the product. In the coming weeks, we'll review other parts of our portfolio and make changes as needed to ensure we optimize our business moving forward. My second area of focus today is on financial and operational results for the quarter. Our Q2 revenue and adjusted EBITDA results were largely in line with expectations, with modest top-line growth driven by the increase in Canadian product revenue and strong royalty revenue.
Overall, our revenues of $16.4 million grew 6% year-over-year, and our promoted product sales in Canada grew 8% in local currency. Vascepa generated 49% year-over-year net sales growth in Q2, with 91% prescription growth driven by increases in new prescribers, new patients, and more prescribing by current writers. That said, the trajectory of prescribing growth is not as steep as originally projected, and we believe uptake should be faster based on the current level of investment. I will discuss this in detail momentarily. Continuing with our look at the quarter, CLOZARIL fundamentals in Canada remain solid. The number of patients using CSAN Pronto in Q2 grew by more than 70% year-over-year.
While we saw a 5% year-over-year decrease in Q2 CLOZARIL net sales, this was in part due to wholesaler order timing issues, with some typical month-end orders placed in early July rather than June. CLOZARIL sales in Canadian dollars for the first half of the year were down just slightly at 1.5%, while patient numbers actually grew 1% in the same year-to-date period. We expect CLOZARIL sales in Canada for the second half of the year to be flat to slightly positive over prior year in constant currency. My third area of focus this morning is the Vascepa outlook. We remain excited about the Vascepa opportunity. Our objective moving forward is to identify and invest in opportunities for continued growth, along with an accelerated timeframe to brand profitability.
In Q2, we saw continued growth driven by an increase in new prescribers as well as more consistent prescribing. In addition to the 96% increase in total prescribers year-over-year, we saw a 139% increase in the average number of consistent prescribers. This is a new metric we started tracking, and we define it as prescribers who have written a Vascepa script in at least four of the prior five weeks. We have started to see some stabilization around payer mix. Uptake in public plans still outpaces private plan growth. This is driving a negative impact on gross to net relative to the prior year, hence the delta between prescription growth versus net sales growth.
As we have mentioned on prior calls, we expect the payer mix dynamics to further stabilize in the coming quarters and settle at a roughly 50/50 public-private split. Despite continued prescription growth, we are encountering ongoing reimbursement challenges and slower than expected uptake in primary care, factors that are having an impact on our growth trajectory and outlook. In Ontario, there are ongoing challenges in getting timely reimbursement authorization for eligible patients, and this has slowed adoption. We've spoken previously of an earlier issue with large numbers of patients being rejected for coverage. On a positive note, there has been significant progress in addressing that issue, with rejection rates coming down. Unfortunately, starting in June, we have become aware of a new issue, with patients experiencing long processing delays of many weeks or even months, when previously, authorizations were often approved in a matter of days.
The issue seems to have arisen with the onset of the summer months and is likely impacting authorization times for other chronic medicines as well. In fact, on the official Provincial Exceptional Access Program website, they acknowledge current processing times of 44 business days for chronic drug treatments. That's almost nine weeks. We've reached out to the provincial authorities to better understand the situation and importantly, request that appropriate action be taken to reduce delays. At the same time, we continue to support physician practices with appropriate resources to help with the administrative burden of getting eligible patients onto Vascepa. Regarding reimbursement in the western provinces, we remain in discussion with Alberta to secure public plan reimbursement. However, it is unclear whether we will reach a mutually agreeable outcome.
At the same time, we have reached an impasse in our negotiations with British Columbia, where there is currently no path forward for public plan reimbursement, and they have closed the file for now. We will continue to work towards getting Vascepa reimbursed for all eligible patients in need of this important therapy. Unfortunately, BC and Alberta continue to demand concessions that were not required by the other larger provinces and that would represent an unacceptable economic risk to HLS. Of course, we are willing to reopen dialogue with BC whenever they are prepared to be flexible in negotiations, and we still hope that we can reach an agreement with Alberta. For purposes of our guidance, we are no longer assuming public reimbursement in either BC or Alberta as part of our base case moving forward.
We will continue to focus on private plan patients in BC and Alberta and will structure our engagement with prescribers accordingly. On a positive note, we have seen continued growth in the western provinces despite a lack of public reimbursement, with 69% year-over-year TRX quarterly growth in Alberta and BC, and 6% TRX growth in Q2 over Q1. Of course, this is more profitable growth with a favorable impact on overall gross to net. As a reminder, on the national level, Vascepa has coverage for more than 90% of eligible patients in private plans and more than 70% of eligible patients in public plans. Now I'd like to discuss another lever critical to Vascepa growth: sales force planning and execution. Between HLS and Pfizer, the Vascepa sales force is by far our largest investment, and we need maximum leverage from this valuable resource.
Despite significant investment in promoting to the general practitioner segment, uptake is not happening as rapidly as projected, with only a small percentage of called-upon GPs currently prescribing Vascepa. We are working closely with Pfizer to identify opportunities to increase the impact of selling efforts in primary care. Although Vascepa is growing, after three months as CEO, I believe it is clear the need to reset the outlook for the product, as well as adapt the strategy to capitalize on its significant potential. This has led us to adjust our 2023 guidance for Vascepa. Based on paramix dynamics, ongoing reimbursement challenges, and slower than expected penetration into primary care, we are lowering our full year guidance to CAD 18 million- CAD 20 million.
In the coming weeks, we are prioritizing the following three areas to both drive sustained growth and to reach brand profitability in the second half of 2024. First, we have initiated discussions with Pfizer to adjust the go-to-market model for 2024, with the intent of reducing overall costs to HLS without sacrificing the opportunity to grow Vascepa. We will do this by both decreasing total call capacity with GPs, while increasing the sales force focus on those high potential physicians with the highest likelihood to prescribe. Currently, most sales calls are being made on GPs who have yet to write a Vascepa prescription, despite repeated interactions with the sales rep. There are many reasons why this may be the case, including reimbursement issues. That said, we believe there are more cost-effective tactics to promote Vascepa to slower adopting physicians, for example, through digital or other multi-channel platforms.
Although we have limited flexibility to make major adjustments to realize savings in 2023, our expectation is significant OpEx savings starting in Q1 2024, based on the results of our discussions with Pfizer. Second, we will focus on improving reimbursement dynamics in Ontario. In the near term, within the constraints of the Exceptional Access Program tier, Vascepa currently is in. In parallel, we will focus considerable resources on securing a more appropriate level of access by pursuing a limited use code as soon as possible. To be clear, authorities are under no obligation to provide this level of access, but we believe Vascepa most appropriately belongs there and will certainly make the strongest case possible. Third, we will work to generate a balanced payer mix with our fair share of patients within both public and private plans, to enable Vascepa to have a stable gross to net moving forward.
Our ability to grow business in the Western provinces, despite a lack of public access, is one means of achieving this goal. Increasing Vascepa usage within the diabetic primary prevention patient segment is another. I want to be clear that I and the whole team at HLS believe that Vascepa has significant growth ahead of it. It has an excellent benefit risk profile with compelling clinical data and strong professional guideline support. Reimbursement is in place for most patients, and we expect the ease and timeliness of public payer reimbursement to improve over time. We remain confident that there is a large addressable market for Vascepa.
Based on an updated look at recent patient epidemiology studies and data sets, combined with the current reimbursement landscape, we now estimate a total market size of roughly 750,000-800,000 patients who potentially meet both the prescribing and reimbursement criteria for Vascepa. With updated assumptions around patient adherence and payer mix, we believe this translates into a roughly CAD 100 million-CAD 150 million annual sales opportunity if we were to capture just 10%-15% of this market. There remains much work to be done to capitalize on this opportunity, as Vascepa represents a new treatment paradigm for cardiovascular risk reduction, and this requires time and investment. We think now is the time to balance growth with profitability and employ a responsible investment plan focused on levers with the greatest ROI. To sum up, we remain confident in Vascepa's long-term potential, and with the right adjustments, it is well-positioned to continue to both grow and achieve profitability in the second half of 2024. With that, I'll turn it over to Tim for a look at the numbers. Tim?
Thank you, Craig. Good morning, everyone. I will start with revenues and product sales. Starting this quarter in our MD&A, we've also separately broken out the revenue performance of our Canadian products, Vascepa and CLOZARIL, in Canadian dollars to give better clarity on the constant currency performance of these products, as well as to provide insight into the relative contribution of the products. Total revenue for Q2 was $16.4 million, up 6% over Q2 last year, would have been $16.9 million on a constant currency basis. Canadian product sales, which includes Vascepa, increased 8% in Q2 in constant currency, this growth was only up 3% when translated and reported in U.S. currency. Vascepa revenue in Q2 was CAD 4.5 million, up 49% over Q2 last year, up 28% sequentially from Q1.
This CAD 1 million sequential increase is the largest quarter-over-quarter dollar increase in Vascepa net sales since launch. The gap between prescription growth at +91% and Vascepa net sales growth at 49% narrowed in Q2 compared to Q1 of this year, and is trending in the expected direction as the recent growth impacts both the average prescription size as well as the balance between public and private plan patients. When the mix of patients stabilizes, which we expect in the coming quarters, we should see the rate of growth in net sales track the rate of growth in gross sales and prescription volumes. CLOZARIL Q2 net sales in Canada decreased 5% year-over-year in Canadian dollars, but were up 3% sequentially from Q1.
The net 1.5% decrease on the year so far reflects some variability due to trade order patterns and does not reflect underlying patient demand. The number of patients is up 1% year-to-date compared to the same period last year. In the US, CLOZARIL net sales decreased by $0.5 million in Q2, but were flat sequentially to Q1 of this year. The year-over-year decrease is primarily due to a $0.5 million benefit in Q2 last year related to the provision for expired product returns, while public rebates and co-pay assistance programs have increased moderately in the current year. Encouragingly, for the year-to-date period, CLOZARIL U.S. gross sales are flat to up slightly.
Royalty revenues were $3.4 million in Q2, up $1.2 million, or 51% from Q2 last year, reflecting contribution from all four products in the portfolio. Approximately $0.5 million of the year-over-year increase is a result of a one-time milestone receipt related to the approval of XENPOZYME. Operating expenses increased 16% in Q2, which was driven by an increase in cost of sales due to the growth in shipments and sales of Vascepa, and an increase in selling and marketing costs for Vascepa. Selling and marketing costs for Vascepa are expected to remain stable for the remainder of 2023 and then to decrease in 2024 as we implement the new go-to-market plan that Craig described earlier, that will drive accelerated growth on Vascepa on its way to positive contribution to adjusted EBITDA in the second half of 2024.
In Q2, we had other charges of $3.9 million. As Craig described earlier, we have discontinued commercialization efforts for PERSERIS after unsuccessful efforts to secure public reimbursement, resulting in other charges of $2.4 million, most of which was impairment of the intangible asset. There were $1.5 million of reorganization costs related to the leadership changes that Craig also described earlier. adjusted EBITDA in Q2 was $5.5 million, compared to $6.2 million in Q2 last year. The decrease is primarily as a result of higher selling and marketing expenses for Vascepa. For the six-month period ended June 30, 2023, the direct contribution to adjusted EBITDA from the CLOZARIL franchise was $14.4 million. This illustrates the continued strong operating performance of CLOZARIL in both Canada and the U.S.
For the same year-to-date period, the negative direct contribution to adjusted EBITDA from Vascepa was $4.7 million, indicating the significance of reaching positive contribution to adjusted EBITDA for Vascepa in the second half of 2024. Of note, while brand level results are impacted by currency, the company overall currently benefits from a natural currency hedge between the positive contribution from Canadian CLOZARIL and negative contribution from Vascepa, and the company's Canadian dollar-denominated general and administrative costs. We expect relatively flat adjusted EBITDA in the second half of the year and early 2024, as compared to the first half of 2023, as investment levels in Vascepa continue more or less at year-to-date levels through 2023, and as the royalty portfolio results first normalize after Q2, and then one of the existing products completes its term later this year.
We would expect adjusted EBITDA to start to improve as we drive towards positive Vascepa direct contribution to adjusted EBITDA in the second half of next year. In Q2, we generated cash from operations of $2.7 million, compared to $3.5 million in Q2 last year. Cash was $20.9 million on June 30th, up from $20.7 million at December 31, 2022. With solid fundamentals in place, increasingly diversified revenue, sustained adjusted EBITDA, and reliable cash from operations, we've steadily de-leveraged the business from a total of $185 million of debt at the company's inception, down to $93.8 million at the end of Q2.
As you may recall, our normal course issuer bid was renewed last November and remains available to us, as the NCIB is now our primary vehicle for returning capital to shareholders, and we look to increase our buyback activity following the mid-June payment of our last declared quarterly dividend. With that, I'll pass it back to Craig for his closing comments.
Thanks, Tim. To sum up, we believe that with the leadership changes made in Q2, we have the right team in place to move HLS into the future and to drive increased shareholder value. Our near-term priorities remain to grow Vascepa with an increased focus on getting to brand profitability in the second half of 2024, and to maintain or incrementally grow our profitable neuroscience business. With respect to Vascepa, we're not just competing for market share in an established category. In a real sense, we're defining a new treatment paradigm, positioning a novel class of drugs within a crowded CV market. We strongly believe HLS will ultimately benefit from building this category, particularly considering the unmet medical need, the strength of the Vascepa data, the large market size, and the potential length of our patent runway. That concludes my prepared remarks. At this point, I'll ask the operator to please provide instructions for asking a question.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star, followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to remove yourself from the queue, please press star two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. The first question comes from Justin Keywood of Stifel. Please go ahead.
Good morning. Thanks for taking my call. On Vascepa, I'm just wondering if there is a particular country or geography that you can point to where the drug has been relatively successful? Because there appears to be challenges in multiple different regions, and I'm, I'm wondering, what gives you the confidence that this drug could be successful in Canada?
Yeah, thanks, Justin. You know, I think the... it's a good question, and I know, you know, I, I'm probably not the, the best, you know, person to, you know, to give it, to give an assessment of, of, you know, performance, in, in other markets. That would probably be best a good question for, for Amarin. I know they're, you know, they're, they're investing in, in, in many of those markets. I would point to the U.S. I think, you know, certainly, you know, ahead of the unfortunate patent, situation that led to, generic availability, the uptake was, was quite considerable. I think if, if you look at it on a proportional basis, even in a generic market, you know, this, this would still, you know, translate into a billion-dollar plus, you know, branded, branded market in the U.S. and, you know, if, if you applied branded pricing.
I think, you know, looking at it proportionally, and looking at the level of investment in, in promotion and kind of the, the positive drivers that we have in Canada, including availability on, on guidelines, the strong clinical data, the, the, you know, relatively strong reimbursement that we have, you know, we think that it does, it does position us ultimately to grow Vascepa, albeit, you know, perhaps not quite to the levels that were initially projected, but still, we think it'll be a considerable, considerable product. We think, you know, ultimately in excess of CAD 100 million. It will take a little bit longer perhaps than initially expected.
Again, I think if you, you put it in the context of a competitive market without direct competitors, but obviously other well-funded companies with other products that are competing for, for the share of, you know, share of voice and share of mind within the kind of the cardiovascular risk milieu. We think our, you know, our data and, and the, our product profile and our benefit risk profile compare very favorably to any other treatment option, but it'll, it'll take time and investment for us to, to get traction. I'll just make one more point. I think, you know, a lot of, I think a lot of brands would be very happy to see 91% year-over-year prescription growth. In, in some respects, we're a victim of, of setting, you know, setting high expectations. You know, objectively, the brand is, is growing, it is gaining traction. We are bringing on new prescribers. We are seeing an increase in terms of depth of prescribing. Again, admittedly, it, it'll take a little bit longer.
Understood. That's helpful perspective. Then just on that target for Vascepa to exceed $100 million in sales, that could obviously be quite impactful to HLS. That would imply, you know, almost a, or a doubling of the, of the overall business. Is, is there a timeline to achieve that?
Yeah, I, I would, I would say what we're, what we're, our target would be in a four to five year time horizon. We think that that's achievable. Again, it's in terms of the penetration rates that are required, they're pretty much in line with what we've always aspired to do, to get into kind of the teens as far as penetration of the universe of eligible patients. We've, we've modified the size of that, that universe based on updated epidemiological data. We still think over time that that level of penetration is reasonable, but it will require, you know, very strong execution over the next over the next few years to get there.
Understood. Just one more question. Not sure if I missed it. Any update on the reimbursement status of Vascepa in Alberta or BC?
Yeah, Justin, I did provide an update on that. Unfortunately, we are at an impasse in our negotiation with BC, so they've closed the file for now. They were unwilling to demonstrate any flexibility on, you know, certain provisions that provided or would have presented an unacceptable economic risk to HLS, and frankly, were not anything that we're part of the negotiation with the larger provinces. So for now, we have taken the assumption around public plan reimbursement in BC out of our projection. We've also conservatively taken Alberta out of our projection. We are still in active discussions with Alberta. Again, similar, similar, situation there in terms of requesting certain provisions that, that we deem unacceptable, but, but we are at least still having dialogue.
Is there any, recourse, you know, given that there's, you know, third parties for, for Canada that oversees the new drugs, and there's been positive opinions, for Vascepa, including CADTH, just, in regards to launching new drugs in, in BC or Alberta?
Yeah, we're, it's a good, it's a good point. We are looking at other maybe, you know, unconventional approaches that we might take to, you know, to ensure that there is at least an appropriate assessment made here. We don't have anything, you know, tangible right now, other than to say we are looking at a number of different possibilities, you know, to continue the dialogue with those provinces. We do think that what's being requested is unreasonable in many respects.
You know, being a Canadian-based company, and a company that, obviously has a limited number of, you know, products within our portfolio, you know, we, we can't, accept conditions that would, you know, put, put our ability to be profitable at risk. You know, so these, these are conversations that, are worthy of, of continuing. We're, we're investigating, you know, how, how we might do that because we... most importantly, we think Vascepa should be something that's available to the citizens of, of, of Canada. It's an important, it's an important therapy, and it's unfortunate that, the citizens of those provinces will, who are on public plans will not have access to it.
Just, just to add one thing to that, Justin, and I, and I fully echo that, that it is something that is entirely would, this is a product that should be available for, for all patients in need. While, while we, you know, explore those other avenues, it's important to remember that Vascepa is reimbursed almost universally on private plans. Those, those patients who do have private coverage in, in those provinces, we are not going to overlook them. We will continue to pursue that avenue. We are seeing growth in prescribing in those provinces. I think we reported that we are prescribing was up 69% in Alberta and BC, despite the lack of public reimbursement. You know, obviously in the, in the private payer segment, though, that's also a, a more profitable avenue of growth. We'll, we'll continue to pursue that, while also exploring a way to get, this product available to all Canadians.
Understood. Thank you for taking my questions.
Thank you. The next question comes from Dave Martin, Bloomberg. Please go ahead.
Yes, good morning. First question regarding the average 44 day delay in Ontario. You said, I think the government gave some reasons as to why this is happening, but have they committed to improving on that? Should we just expect to see it improve when the vacation season ends?
Yeah, I wish I had a. Thanks for the question, Dave. I wish I had a better answer for you. We're, you know, we are actively reaching out. We've had, to be honest, you know, limited success in terms of getting hold of folks there. I suspect, again, this is speculation, that there are some staffing issues and, and perhaps related to summer vacations, 'cause as I mentioned, this seemed to begin at the start of June, and it was a fairly, you know, dramatic change. This was not a minimal, you know, kind of increase in delay times. Again, I suspect that other products are being impacted by this, you know, based on what they have on their, on their website.
I have not received, kind of a formal explanation as to the why, so it's pure speculation. You know, you know, what we're doing is reaching out on a, on a regular basis, you know, to the, to the authorities there. We also believe that this provides even more, you know, rationale for us as we take the more strategic action of trying to get the limited use code for Vascepa, which we believe, you know, would be a potential game changer, you know, in terms of making the product available again, to eligible and appropriate patients, but without all of these bureaucratic delays, unnecessary delays, especially considering most of the, the other products within cardiovascular are available with an LU code.
This certainly, I think, gives us, you know, some, some compelling rationale based on the fact that patients are, you know, are, are, are ultimately not getting a potentially life, you know, life-saving therapy. We've also been in conversations with, with several of our, our key opinion leaders who are, you know, feel strongly about this, and they want to know how they can help. As I mentioned in my prepared comments, we continue to invest in educating and, and working, you know, at the, at the grassroots level with, prescribing, you know, physicians and offices to, to help them navigate this. Our expectation is, it, it will improve. Again, I don't have anything empirical to, to, you know, to point to other than it started at the onset of, of summer. We'll keep at it.
I think you said, correct me if I'm wrong, but the success rate, like it's taking a while, but the approval rate is very high. Have you thought about possibly, like, providing providing the first month, not free, but subject to the approval of the reimbursement and just, you know, smoothing the process for the patients?
Yeah, it's a, it's an interesting thought. It's not something that we're currently entertaining. Tim, you look like you wanted to comment.
Yeah, it, thank- thanks, David. That's, that's certainly something we're, we're, we are providing a service like that, where it comes to, you know, privately covered patients who require prior authorization, and there is, you know, sort of an established period of time of a few weeks for that to take place. It's something that, that, we'll probably explore further. Again, we were somewhat surprised by this, this sudden, much lengthier delay. Again, processing times had been in the, in the matter of days and, and now have, have, have really, kind of gone to a much longer period. If this is going to continue, we'll have to explore other, other options, clearly. I think the first priority is to get an explanation and see that that gets returned to a more, reasonable amount of time in, in the short order.
I may have missed it. Did you say that the approval rate is high, even though it's taking a long time?
Yeah. Yeah, the approval rate, we don't have ex- they haven't shared exact figures with us, but we, we, we believe it's well north of 80%, probably more towards 90% at this point, which, which we believe is an important benchmark and also will support our case for the limited use code. It's encouraging that, you know, whereas this was, was an obstacle a few months ago, and we were seeing much higher rejection rates, it, it seems to have, you know, that, that concern seems to have been adequately addressed and, and continues to move in, in the right direction. We're not hearing about, you know, kind of the outright rejections. It seems like the physicians now have been educated in terms of, you know, ensuring that they're completing the forms, you know, correctly and putting the right patients on treatment that fit the criteria.
Yeah.
Okay, great [crosstalk].
This does appear to be a, a new and, and different challenge. According to the government's own, own website, it's, it's a delay that's affecting all, all adjudications of chronic medicines.
Okay, great. I do have another question about CLOZARIL. You're really growing the use of Pronto, but we haven't seen a material inflection up in the number of patients treated. Has there been something that's been holding that back? Do you expect a material inflection up in the future? You know, if you can comment on that.
Yeah, I would say, you know, to this point, although we've had good, good update with Pronto, I think where it's probably had its greatest impact has been, you know, as a defensive, you know, strategy to protect business where there's been generic threats, and then in some cases, the opportunity to actually convert competitive business. Again, small sample size at this point, so I think it's not conclusive. I wouldn't say we've seen dramatic increases in growth in those, you know, institutions where we've installed Pronto. I think that certainly is an opportunity, and that was part of the rationale. That's something that we're, you know, we're interrogating to better understand.
Okay, thanks. That's it for me.
Thank you. The next question comes from Rahul Sarugaser of Raymond James. Please go ahead.
Good morning, Craig, Tim, thanks so much for taking our questions. Just want to start by saying that really appreciate the transparency that you've been bringing to these calls. I just want to first dig into, you know, the balance between specialist sales and GPs. Of course, the specialists that we've talked to is, as well as, you know, the ones that are prescribing Vascepa seem to be, you know, kind of holding up sales. You talked about relatively poor uptake among some GPs or maybe a majority of GPs. Could you give us a little bit more color as to, you know, why the reticence in, in that GP group? Is it because they maybe aren't treating these types of patients that have, you know, disease plus, plus one or, or, or, you know, are on a second event? Could you give, give us more color as to, as to why and, and how you might be able to actually turn that group, given, given the strong guidelines?
Yeah, sure. I think, you know, I think part of it is, you know, is, is time. You know, we, we expect that a general practitioner group would be slower adopters in general than specialists. Obviously, things like complexity around reimbursement, being on an Exceptional Access tier is something that GPs are even less familiar with in terms of prescribing than, than even specialists. While I don't want to pin everything on reimbursement. I do think I do think that the, our ability to improve the reimbursement milieu is going to have a dramatic impact on, on prescribing.
I think the other, the other piece of that is simply, you know, you're competing for share of mind, in, with, with general practitioners, with not just, you know, other, other cardiovascular products, which are, which are manifold, but for a lot of other conditions. So despite the fact that, we're calling on a, a large number of GPs and, and, you know, we, we may be seeing them every, you know, four to six weeks, you know, there's a little bit of serendipity involved in terms of whether they happen to see a patient around the timeframe when, you know, the, the, the presentation from a sales rep is fresh in their mind.
That's why it's, it's so important for us to really be strategic in terms of who we're targeting, you know, really focusing on those general practitioners that are more early adopters and that are more receptive, you know, to, to the messaging and, and perhaps have more of those patients in their practice. That we also invest some resources, you know, to, to things like multi-channel marketing, where we can create a little bit more surround sound to the physician. Because if all they're hearing about Vascepa is from the rep call, again, the rep can't call on those physicians every day. Even with, you know, very, you know, well, well-resourced, you know, sales team, it's just one dimension.
I think right now, our, our go-to-market model is, is a little bit, is a little bit too, too heavily focused on just, you know, having the sales force, you know, carry the load. I do think the opportunity to better target, you know, concentrate our resources on those physicians that are both high potential and most likely to prescribe, and we can use, you know, different, you know, behavioral and attitudinal, you know, data and, and use analytics to help us, you know, better identify those folks, and then augment that with other types of tactics that to this point, we haven't really employed, we think will, will drive more efficiency and, and more effectiveness. We don't think those things are, are mutually exclusive.
You know, I do wanna also just close by saying, you know, this is despite the terrific data and the guidelines, you know, even in the case of statins, primary care physicians overnight did not become, you know, the, the predominant prescriber class, you know, for statins. It was after many years, tens of thousands of patients worth of data, literally billions of dollars worth of investment, that ultimately got, you know, got them there. We also have to manage expectations and, and know that, you know, this, this will, you know, will take time, and we need to continue to grow. By the way, we need to continue to grow in, in specialty as well. Our work's not done there. We need to improve our, the timeliness and, and the simplicity of the reimbursement process.
Then I think a more balanced approach to going after the, you know, kind of the best targets within primary care. I think all those things are gonna yield a, a better outcome. There's nothing, you know, well, there's nothing fundamental about the messaging or, or the data or anything like that, that's, that we're hearing that is problematic at this point.
Right. Right. Thank you. That's, that's very helpful. So now focusing on perhaps the part that is seems to be working, and you said that the, the, you know, the, the specialists are prescribing, and there's an opportunity there to really amplify, you know, what is working. You know, besides the lowering barriers to, you know, the paperwork, et cetera, you know, how, how is your team very specifically looking to really capitalize on that vertical that is working?
Yeah, I think, you know, again, I think it's, it's just a, a, a balanced investment as well. I think things like, you know, making sure we have a really strong presence at scientific, you know, conferences and continue to invest in things like medical education and appropriate scientific communications. You know, we can't just assume that because, you know, the data were published and the data are terrific, and we got put on guidelines that we can kind of rest on our laurels. You know, I, I think in the case of specialists, I don't think we can take them for granted. Just as I said with primary care, we can't have a one-dimensional approach. We also can't have a one-dimensional approach to specialty either.
We need to continue to invest, in probably in different ways than we would within primary care. You know, obviously, we're not going to fund, you know, a, a large outcome study. You know, that's the, the unfortunate part of, Amarin losing patent exclusivity in the U.S., you know, that, that, you know, doing other large kind of, you know, landmark trials are probably not in the near term, but there are other ways that we can continue to educate and invest in, in scientific exchange, and I think that's really well appreciated. I've had a number of conversations with, with some of the top key opinion leaders, and, and I think, you know, you heard, Rahul yourself from, you know, from Dr. Verma. I think in general, you know, they're excited about it, but we need to, you know, continue to keep the noise level high.
Great. Thanks. If you indulge one last question. You, you referenced Amarin, now as well as earlier. Given the IP cliff that they faced, I believe that HLS is more optimistic about IP protection post the Health Canada exclusivity ending in end of 2027. Could you perhaps give us, give a bit more color in terms of how you expect to provide various entry and then, and continue the exclusivity beyond 2027?
Tim, you want to take that one?
Certainly. You know, it, it is, it is a very different situation than, than, than what unfortunately transpired in the U.S. It's, it's important to remember that, you know, there, there is a significant and robust IP portfolio beyond the data protection period. We have access to, I believe it's 25 patents, 16 of which have already been issued. Most of those are, are listed on the Health Canada patent registry. The last, you know, expiration date of that, that last listed patent is, is going to 2039, and so it's quite a significant patent estate. Importantly, that's all IP protection that is related to the, you know, significant outcome from the REDUCE-IT trial and the cardiovascular risk reduction indication. That is quite entirely different from what was the subject of the, of the litigation in the U.S. market. That really speaks to why we, we think it's a very different situation than in the U.S.
Great. Thanks very much for taking our, our questions. We'll get back in the queue.
Thank you. The next question comes from George Ulybyshev of Clarus Securities. Please go ahead.
Morning, guys. Thanks for taking our questions. Just a few here. On Vascepa, you mentioned there being strong performance in Alberta and BC when it comes to private access patients. Could you give us a sense of how the demand and prescriptions growth has been tracking in those provinces in Q2 and going into the third quarter, relative to other provinces, mainly, Quebec and Ontario?
Yeah. yeah, so we gave you the numbers in terms of the... I think it was 69% year-over-year, and it was- In BC and Alberta c ombined. Yeah, it was either, was it 6% or 8%, sequentially?
Sequentially, yeah.
I would say it's, Quebec is our, is our fastest growing province. Quebec is really, kind of figured it out in terms of, not, you know, not encountering the same sort of, reimbursement challenges that Ontario is, even though it's a similar tier of access, Ontario, Quebec seems to be, be able to manage it. I think their physicians are just, you know, more comfortable with that process, so we're seeing the most growth in Quebec. I would say, you know, Ontario and, BC, Alberta are, are probably somewhat, somewhat comparable. Ontario is still growing a little, little bit faster.
I think importantly, you know, because of the split in the western provinces, and I won't get into the details, but, you know, this is highly, you know, profitable business for us because it's, you know, it has a very positive impact on gross to net. As much as we're disappointed, you know, not to get public access in BC, and, and importantly, because we believe, you know, patients should have access to this medicine. You know, as far as our performance relative to net sales, you know, we're, you know, we're quite pleased with the progress that we're seeing in BC and Alberta specifically. You know, the key there is to continue to drive that business, you know, even in the absence of a public, a public payer.
Yeah. I mean, just to kind of put, put some context on that, you know, if our national growth rate in, in, in prescriptions was, you know, at the 91% year-over-year, Ontario and Quebec, as larger population centers, are, are naturally gonna drive more of that. Since we also have public reimbursement in those provinces, and so we're in both the public and the private segment there, that, that gives even greater weighting to Ontario and Quebec in that, in that number. You know, that's sort of your national number. Alberta and BC at 69% growth is, is not really lagging that far behind when you consider that that has the, the additional challenge of, of being only in the private payer segment. You know, whatever additional challenges are in finding those patients and whatnot, we're, we're still seeing a pretty significant growth in those markets despite that challenge.
Got it. Got it. Thanks for that color, guys. Maybe just one more on Vascepa. Out of roughly 10,000 physicians that you guys are targeting, what % would you say have been already contacted by the sales force at least a couple of times? If you could provide the estimates for both specialists and primary care physicians, that would be helpful.
Oh, the, the vast majority.
Vast, okay.
yeah. Well, well, you know, I would say 80%.
I think either well north of that now.
Yeah.
You know, some time ago, when, you know, things were very different in the pandemic environment, getting access to physicians was very much a challenge, and it was harder getting them to see that. We're not seeing that now, and so our ability to see the doctors on that list is.
Oh, yes.
We're getting in there. The vast majority of those will have been seen and s een multiple times. Exactly.
Got it. Those are in-person visits or phone calls, primarily?
Typically in person.
Okay. Okay. I think you mentioned the, the frequency of these visits is four to six weeks. Is that right?
You know, it varies, George. It's, you know, it's a tiered approach. You know, depending on the, you know, looking at things like deciling and, and other, other criteria, we prioritize. So, you know, if it's a, you know, target, you know, they would be seen more, more frequently. I don't have the precise, the precise figures, but, you know, certainly the more, high priority targets are being seen, I, I believe, at least every, you know, four weeks or so.
Yeah.
On the, on the primary care side.
Got it. Got it. Okay, that, that's it for us. Thank you, guys.
Yeah.
Thank you. There are no further questions. I will turn the call back to Craig Millian for closing remarks.
Great. Thanks, thanks, Michelle, and thank you to all the analysts for participating on today's call and for your questions. We look forward to reporting to you on our progress in coming quarters and to speaking with you again in the near future. Have a good day.
Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.