Medexus Pharmaceuticals (MDP.V) has announced a record revenue of $113.1 million for the fiscal year 2024, along with a positive adjusted EBITDA of $19.5 million. Despite a decrease in revenue and gross profit for the fourth quarter, the company remains optimistic about the future, particularly with the potential approval of their new drug, treosulfan, by the FDA. Changes in the leadership team, including a new CFO and COO appointments, were also disclosed during the earnings call.
Key Takeaways
- Medexus Pharmaceuticals reported record annual revenue of $113.1 million and adjusted EBITDA of $19.5 million.
- The FDA has accepted the new drug application for treosulfan, with a decision expected by October 30th, 2024.
- Gross profit for the year decreased slightly compared to the previous year, with a noted decrease in patient unit demand.
- The company is undergoing leadership changes with the departure of the CFO and the appointment of new CFO and COO.
- Medexus expects treosulfan to potentially generate peak sales over $100 million.
Company Outlook
- Treosulfan could significantly impact Medexus’ total revenue if approved by the FDA.
- Despite an inventory drawdown at pharmacies and wholesalers, it is expected to end in the coming quarters without significant impact on net sales.
- Medexus plans to leverage the experience from the successful launch of treosulfan in Canada for the upcoming US launch.
Bearish Highlights
- Decrease in revenue and gross profit in the fourth quarter compared to the previous year.
- A decrease in patient unit demand by 6% year-over-year, affecting both patient level and units shipped.
- Gross margin decreased to 51.2% and 52.6% for the respective three and 12-month periods.
Bullish Highlights
- Adjusted EBITDA and net income remained positive despite a challenging quarter.
- The company is continuing to pay down its debt, with quarterly payments of approximately $3.3 million.
- No generic competition is expected in the near future for Gleolan, despite the expiration of orphan drug exclusivity.
Misses
- Net income for the fiscal year was lower than the previous year, at $0.8 million compared to $6.9 million and $1.2 million.
- Cash levels dropped in the fourth quarter due to payments made for inventory and royalties.
Q&A Highlights
- Medexus addressed the balance between patient demand and units shipped to manage inventory levels.
- The company discussed its operational expenses, which are expected to remain stable with a modest increase due to investments in IXINITY.
- Medexus emphasized the importance of clinical data and adoption by US transplanters for the success of treosulfan.
Medexus Pharmaceuticals has shown resilience in the face of decreased patient unit demand and gross profits. With a strong focus on debt reduction and the potential market entry of treosulfan in the US, the company is poised for future growth. The management team’s restructuring and the company’s prudent financial strategies have put Medexus on a solid footing as it navigates the dynamic pharmaceutical landscape.
Full transcript – Medexus Pharmaceuticals (MDP) Q4 2024:
Operator: Good morning, everyone, and welcome to the Medexus Pharmaceuticals Fourth Fiscal Quarter and 2024 Fiscal Year Conference Call. At this time, all participants are in a listen-only mode, and we will be opening for questions following the presentation. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Victoria Rutherford, Investor Relations at Medexus. Over to you.
Victoria Rutherford: Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals fourth quarter and fiscal 2024 earnings call. On the call this morning are Ken d’Entremont, Chief Executive Officer; and Marcel Konrad, Chief Financial Officer. If you have any additional questions after the conference call or would like further information about the company, please contact at 480-625-5772. I would like to remind everyone that this discussion will include forward-looking information as defined in securities laws. Actual results may differ materially from historical results or results anticipated by the forward-looking information. In addition, this discussion will also include non-GAAP measures, such as adjusted net income and loss and adjusted EBITDA, which do not have any standardized meaning under IFRS, and therefore, may not be comparable to similar measures presented by other companies. For more information about forward-looking information and non-GAAP measures, including reconciliations to net income and loss, please refer to the company’s MD&A, which, along with the financial statements, are available on the company’s website at www.medexus.com and on SEDAR+ at www.sedarplus.ca. As a reminder, Medexus reports on March 31, fiscal year basis, Medexus reports financial results in U.S. dollars. I would now like to turn the call over to Ken d’Entremont.
Kenneth d’Entremont: Thank you, Victoria, and thank you to everyone for joining the call today. We are proud of the financial results we were reporting for fiscal year 2024. We believe both — we achieved both record revenue of $113.1 million and record adjusted EBITDA of $19.5 million for fiscal year 2024, together with solid operating income of $10.8 million and a modest net loss of $0.02 million. We responded swiftly to the reverse trends affecting our business, and we are pleased with the initial progress of our ongoing expense management initiatives, which is reflected in our financial results for fiscal Q4 2024. Before I go into detail on our base business, I will provide some color on a positive development in the regulatory process for treosulfan, a key pipeline opportunity for Medexus. Earlier this month, we were informed by medac, our licensor for treosulfan that the FDA had accepted for review medac’s April 2024 resubmission of the new drug application for treosulfan. We expect that the FDA will complete its review and issue a decision by October 30th of this year. We remain optimistic about the prospect of treosulfan approval in the U.S. and about treosulfan’s potential in the U.S. market, because we continue to believe that treosulfan would prove to be the gold standard in this therapeutic space as it has in Europe and in Canada. If approved by the FDA, we expect that treosulfan would have a meaningful impact on Medexus’ total revenue. Given this positive development and the revenue opportunity for this product represents, we intend to begin making judicious investments in personnel to make sure we can hit the ground running if and when approved. That being said, we would not expect significant revenue from treosulfan until early fiscal year 2026 being the second quarter of next year at the earliest. As a reminder, under the terms of our amended U.S. license agreement for treosulfan, we are now in a negotiation period to agree with medac on any adjustments to unpaid milestones including those that would become payable following approval. These negotiations could result in adjustments to the amount and/or timing of these payments. And to be clear, we are under no obligation to make any milestone payments before the effective date of any such amendment. In the meantime, we are pleased with the performance of our base business this quarter despite some headwinds. Our fiscal Q4 2024 revenue of $26 million decreased by $2.6 million compared to Q4 2023, or a 9.1% decrease year-over-year. Adjusted EBITDA of $4.4 million for the quarter was a decrease compared to $4.8 million for the same period last year. We produced net income of $0.8 million for the quarter, a decrease compared to net income of $6.9 million for the same period last year and a positive operating income of $0.8 million, a decrease compared to $2.7 million for the same period last year. Turning to our specific products. IXINITY unit demand decreased by 6% over the trailing 12-month period ending March 31, 2024. We now believe that challenging environment, together with anticipated impact of the U.S. Inflation Reduction Act will impact product level revenue going forward. We will continue to maintain existing demand bolstered by our now approved pediatric indication as a tailwind, but we have reduced the investments in growth. On Rasuvo, we maintain a market-leading position during the quarter as unit demand remained strong. We continue to see the increased impact of product level revenue attributable to government-sponsored programs. This impacts product level revenue as these programs benefit from statutory discounts and rebates including under the U.S. Inflation Reduction Act. Rupall unit demand increased by 21% over the trailing 12-month period ended March 31, 2024. We expect that following the end of the product’s market exclusivity period in January 2025. Rupall will face generic competition in Canada. As is typical in such situations, generic competition will likely prompt us to execute — effective unit level price reductions. We continue to see tropical terbinafine which we licensed in March 2023 as a strategic fit with Rupall. Health Canada’s commitment to review our tropical terbinafine new drug submission submitted in December 2023 brings us a step closer to making the product a viable treatment option for fungal nail infections in Canada and is consistent with our plans to target commercial launch in the first half of calendar ’25. If and when approved, this product will enter a market that we estimate to be CAD88 million on an annual basis. On Gleolan, we continue seeing seeking to maximize product level revenue. Although. Gleolan performance in the U.S. has remained lower than expected, unit demand has been growing moderately over the course of fiscal ’24 as new customers adopt the product. Metoject unit demand in Canada increased by 13% in the trailing 12-month period ending March 31, 2024. Following the trial in January 2023, Canada’s Federal Court declined to uphold the Canadian patent for Metoject, which we sought to defend in response to the at-risk launch of a generic version in Metoject. While this outcome is disappointed, we previously adjusted our commercial strategy, and so we expect this outcome to have limited impact on the company and the product. In sum, we continue to focus on maintaining stability in our base business and generating cash from operations as we prepare for the revenue opportunities presented by our pipeline products. I will continue with some updates on our leadership team. With the successful completion of fiscal year ’24, Marcel Konrad, who has served as our CFO since June 2021 has chosen to depart Medexus to pursue other opportunities. Marcel’s last day will be this Friday, June 28th. For our longstanding succession plan, we have appointed Brendon Buschman, who joined Medexus in June 2019 and has worked closely with Marcel, through Marcel’s entire tenure to step into the CFO role. Among other great qualifications, Brendon has extensive experience building and leading finance and accounting teams through periods of rapid growth, which continues to be our objective for Medexus. I look forward to continuing to work with Brendon in his new capacity. I’d also like to thank him myself for his years of service on the Medexus senior management team. I wish him all the best in his future endeavors. In addition, effective Monday, June 24, we appointed Richard Labelle, as our Chief Operating Officer. Richard will now oversee all day-to-day business operations across Canada and the United States and ensure they align with our strategic goals. This expanded role builds on his demonstrated success in leading Canada’s Canadian operations, among other things. Also effective Monday, Mike Adelman, who has been an important part of the Medexus team since joining as part of our IXINITY acquisition has departed the company. My congratulations to Richard on this expanded role and I’d like to thank Mike for his extensive service to Medexus. I and the rest of the Medexus team wish him all the best. To wrap up this update, I’m confident there will be a seamless transition in the CFO role, and that this strategic reorganization will ensure our ability to embark on the next chapter of Medexus growth story. I will now turn the call over to Marcel, who one last time, who will discuss our financial results in more detail. Marcel?
Marcel Konrad: Yes. Thank you. Thank you very much, Ken. I’ve been really fortunate to be part of a great Medexus journey to become a leading North America-based specialty pharma company. And now I believe we have a solid foundation to build upon and I very much look forward to following Brendon’s and Medexus’ future successes with great interest. We’re pleased to report our eighth consecutive quarter of positive operating income and tenth consecutive quarter of positive adjusted EBITDA. Turning to the full quarterly results. Total revenue for the fiscal fourth quarter was $26 million. This quarterly revenue number represents a decrease of $2.6 million compared to $28.6 million for the three months period ended March 31, 2023. Total revenue for the full year was $113.1 million, reflecting a $5 million or 4.6% improvement compared to $108.1 million for fiscal year 2023. This decrease in fourth quarter revenue is primarily attributable to trends affecting IXINITY and Rasuvo. Specifically, IXINITY revenue in the second half of fiscal year 2024 was affected by lower-than-expected purchases by pharmacy and wholesale customers relative to a decrease in patient unit demand, which Medexus believes is a result of those customers working through inventory on hand and the accumulating effect of continued effective unit level price reductions for Rasuvo. Gross profit was $13.3 million and $59.5 million for the three and 12 months periods ended March 31, 2024, respectively, compared to gross profit of $15 million and $60 million for the same period in the previous year. The gross margin was 51.2%, and 52.6% for the three and 12 months periods ended March 31, 2024, respectively, compared to 52.5% and 55.5% for the three and 12 months period ended March 31, 2023. The $0.5 million year-over-year decrease in gross profit and 2.9 percentage point year-over-year decrease in gross margin primarily reflect changes in the relative contribution of product level net sales, including the effect of Gleolan sales in the United States before September 2022 and the accumulating effect of continued effective unit level price reductions for Rasuvo. Selling and administrative expenses were $10.3 million and $44.9 million for the three and 12 months period ended March 31, 2024, compared to $11.4 million and $48.3 million for the three and 12 months periods ended March 31, 2023. The $3.4 million year-over-year decrease in selling and administrative expense was primarily attributable to reductions in operating expenses, including as a continuing effort of cost reduction initiatives implemented in October 2022 and January 2024. In both cases, we have responded quickly to trends affecting our business. In January 2024, cost reduction initiatives involved a reduction in Medexus’ allocation of sales force resources to IXINITY and Rasuvo which the company expects will improve the contributions of those products to overall financial results. Medexus intends to seek and consider efficient approaches to allocating its remaining sales force resource to its product based on the company’s strategic plan. Research and development was $0.1 million and $1.6 million for the three and 12 months periods ended March 31, 2024. This compares to $2.7 million and $2.9 million for the three and 12 months period ended March 31, 2023. Adjusted EBITDA for the three and 12 months periods ended March 31, 2024, was positive $4.4 million and $19.5 million compared to $4.8 million and $16 million for the three and 12 months period ended March 31, 2023. The full year $3.4 million increase in adjusted EBITDA was primarily attributable to the year-over-year change in revenue, together with reductions in operating expenses over fiscal year 2024. The net income for the three and 12 month periods ended March 31, 2024, was $0.8 million, a negative $0.2 million compared to net income of $6.9 million and $1.2 million for the same period last year. Net income or loss includes a non-cash unrealized gain or loss on fair value of the embedded derivatives in our now retail convertible debentures, which were sensitive to, amongst other things, fluctuations in our share price. As such, we believe that adjusted net income or loss has historically provided a better representation of performance of our operations because it excludes these non-cash fair value adjustments on liabilities. Our adjusted net income for the three and 12 months period ended March 31, 2024 was $0.8 million and negative $0.3 million compared to an adjusted net income of $6 million and negative $1.3 million for the same period last year. Our available liquidity consisting of cash and cash equivalents stands at $5.3 million at March 31, 2024. The primary factor in the year-over-year net decrease in cash as compared to March 31, 2023, was Medexus’ use of cash to make the final maturity date payment in respect of the company’s now repaid convertible debentures in October 2023, partially offset by, amongst other things, cash provided by operating activities of $18.7 million for fiscal year 2024. The repayment of our convertible debentures fully in cash in October 2023 has simplified our balance sheet and leased our BMO credit facilities, which continue to benefit from an attractive interest rate as our only remaining debt. As of March 31, 2024, we had a combined $51.7 million outstanding on the those facilities, which will continue to pay down over the term. Together with strong cash provided by operating activities in both fiscal year 2024 and fiscal Q4 2024, we believe we are on solid footing to continue maintaining and growing our business over the coming quarters. As always, there can be variability in quarter-to-quarter results, but we look forward and are energized to continue to build the company and its portfolio in the coming quarters and beyond.
Victoria Rutherford: Operator, we will now open the call to questions.
Operator: Thank you very much. We are now opening the floor for your questions. (Operator Instructions) Your first question is coming from Andre Uddin of Research Capital. Andre, your line is live.
Andre Uddin: Thanks. Good morning, Ken and Marcel. Could you just elaborate a little bit more on — in terms of the market dynamics for IXINITY and Rasuvo in terms of pricing and competition? That would be great. Thanks.
Kenneth d’Entremont: Sure. I’ll take a crack at that. So, as we’ve said in previous quarters, we are seeing reductions in gross to net on Rasuvo, as more and more pricing controls come into play in the U.S. And so, we have seen that being decreasing over the quarter. So it’s kind of offsetting increase in unit growth that we are getting and continue to get. On IXINITY, a slightly different dynamic in that the demand has flattened and is slightly decreasing. So patients are feeling at exactly the same rate as they have historically and so that clearly has an impact. So those are the two dynamics there. Gleolan appears to be unaffected at this point.
Andre Uddin: Okay. That’s great. And just — it was also nice to see treosulfan advancing forward with the FDA. Just looking ahead also in terms of Triamcinolone, when — what do you actually need to do to get that FDA approved? And are you looking at that one?
Kenneth d’Entremont: Yes. We are looking at that one. So treosulfan is a slightly different issue in that is availability of the product that is the challenge is there are very few sources of it, yet, it’s a drug of choice for juvenile idiopathic arthritis. And so it has been a challenge to have it manufactured. Once that is resolved, then yeah, we would seek to pursue an FDA approval. We have not initiated that yet.
Andre Uddin: Okay. And just one last question. How many — about how many sales reps would you need for treosulfan in the U.S.?
Kenneth d’Entremont: We’re in the midst of reevaluating the launch plans. So I’m not going to give a specific number, but it’s relatively small. As we discussed before, the number of institutions that do stem cell transplants in the U.S. is very limited. So it’s a relatively small number, but we haven’t finalized the launch plan. We’re in the process of reevaluating that whole plan.
Andre Uddin: Great. Thanks. Thanks, Ken.
Operator: Thank you very much. Your next question is coming from Rahul Sarugaser of Raymond James. Rahul, your line is live.
Michael Freeman: Hi, Ken. Hi, Marcel. This is Mike on for Rahul today. I guess following on to Andre’s question there. I wonder if you could discuss, I guess, your initial ideas on process and timelines around a potential treosulfan launch, assuming the drug is approved, what sort of investments would you be making prior to October as you alluded to? And then how might you be investing after potential approval?
Kenneth d’Entremont: Yeah. Thanks, Mike. Great question. So as we put in this report, we are making some modest investments in treosulfan now. We are adding some people in the field, so MSLs, which will allow us to get prepared for the eventual launch, assuming a positive decision in October. Post-October, we would then execute the commercial plan. And again, it’s relatively modest spending for the significance of the opportunity that we see because it’s mostly medically-driven. Obviously, it’s a deeply scientific area, and we would invest in personnel and programs that would share that science experience that’s been developed in other markets with the American transplanters.
Michael Freeman: Very good. Thank you. And I guess my second question will be on IXINITY. How do you see the recent pediatric approval factoring into the structural issues that you’re encountering in the hemophilia B market? Is there any possibility that this could make the drug more durable in this environment or there are sort of the prevailing wins a bit too strong for that?
Kenneth d’Entremont: Yeah. It’s a great question. And we’re in the midst of evaluating that as we are gaining experience with the now approved pediatric indication, so what we have found recently that we are getting pediatric patients. It’s a familial disease. So there could be several individuals in the same family that would have the condition. So having a pediatric indication when there’s multiple children, some of which may be under 12, makes it easier for the family, the parent whoever is doing the infusion just to have one drug product in house rather than several. It also helps us in contracting. So as we work with our customers, there may be the opportunity to have various contracts and having a full indication gives us a much stronger position. So I guess, in some, we are looking at the impact of the pediatric indication. Thus far, it’s been positive. We’ll see what that does to the trajectory of the drug going forward.
Michael Freeman: All right. Thank you, guys. I’ll leave it there.
Operator: Thank you very much. Your next question is coming from David Martin of Bloom Burton. David, your line is live.
David Martin: Good morning, Ken and Marcel. Also on IXINITY, I just want to clarify, when you say unit demand decreased 6% year-over-year in the ’24 fiscal year, is that at the level of the patient or is that the level of the units that Medexus shipped?
Kenneth d’Entremont: That’s a great question, David. Both are down, and as we’ve said before, we are trying to balance patient demand with units we ship. I think the six — and correct me if I’m wrong, Marcel, but I think the six that we referenced is units we shipped.
Marcel Konrad: Yes, it’s demand, so it’s demand year-over-year, yeah, unit demand levels.
David Martin: Okay. And what was the decrease in the fourth quarter, fiscal fourth quarter?
Kenneth d’Entremont: Marcel, do you have that number?
Marcel Konrad: I’m sorry, David. What was your question?
David Martin: What was the decrease in IXINITY unit demand in fiscal fourth quarter year-over-year?
Marcel Konrad: So that essentially is on a 12 months trailing basis, yeah. So what we give now for the quarter is on a 12 months trailing basis, so not on a quarter-by-quarter, yeah, I don’t think we have given that, yeah.
David Martin: Okay. So you’ve got unit demand at the patient level going down and there’s also inventory drawdown at the pharmacies and wholesalers. When do you expect that inventory drawdown to end? And when it does, where do you think the trajectory of your net sales is going to go on the product?
Kenneth d’Entremont: I can give some general comments on that. We’re not giving guidance on product level revenue or for the company, but the drawdown on inventory in the channel we think, will be modest over the coming quarters. It hasn’t built to a level that is unsustainable. So it’s not that big an issue. But we do want patient demand, so actual consumption use in the market to be more closely related to customer demand, meaning specialty pharmacy. So when that’s balanced, we’re satisfied if the months on hand is in a regular normal range. And so we’re heading towards that. I don’t think we’re going to see any dramatic changes quarter-to-quarter. We’re slowly moving towards what we think is a proper balance.
David Martin: Okay. Your OpEx, you’ve got some reductions to the IXINITY and receivable infrastructure, but you’re also building for treosulfan. Should we look at overall OpEx being relatively stable with fiscal Q4?
Kenneth d’Entremont: Yeah, relatively stable. So the investment in IXINITY is really an investment between here and October. And then, we’ll see what the decision is at the end of October. So it’s a modest increase. We’ll fund that from — within the current budget. We can do that as we’ve got savings elsewhere. So I don’t think you’ll see a dramatic change.
David Martin: Okay. And then the last question. There was quite a drop in the cash from fiscal Q3 to fiscal Q4. You made that maturity payments in October. What was the consumption of the cash between these two in the fourth quarter?
Kenneth d’Entremont: I’ll let Marcel pick that one up.
Marcel Konrad: Yeah. Thanks for the question, David. Yeah, you’ve seen that drop from — we had, I think, over 8 million, now we’re with over $5 million. It’s — we’ve made that payment in October, you’re right. So all these sort of cash levels are planned as they shake out. We have made in Q4 specifically, as you mentioned, the drop versus Q3, there are some payments that we’ve made, for example, on the inventory side, some royalty payments in there. So I would say these are quarterly fluctuations that we are anticipating. We are also coming out from a Q3 quarter that was a little bit softer, as you remember, so we sort of recovered that in Q4. And really, so these are normal fluctuations, which we’re planning. We’re monitoring our liquidity, of course, very, very closely. So nothing else to point out there at this point.
David Martin: Okay. That’s it for me. Thanks.
Operator: Thank you very much. Your next question is coming from Christopher (indiscernible) of Cannacord Genuity. Christopher, your line is live.
Unidentified Participant: Yeah. Thanks. Good morning. I’m calling in for Tanya. I just had a quick question on the Gleolan in that the orphan drug exclusivity, I believe is firing or has expired recently this month. And I’m just wondering what’s your outlook on potential generic competition in that space?
Kenneth d’Entremont: Yeah, that’s a great question. So you are correct. It just expired or is shortly expiring. So we don’t expect to see any competition. There’s nothing on the horizon. We would be aware of it if there were something close. And so unlikely to see anything in the next 12 to 18 months, if at all. The situation in other markets is there is no generic. So exclusivity it now expired in the European markets, and there’s also no generic there. Yeah. It’s our belief that the volume is relatively small, giving the rare disease status of glioblastoma. And so any price reductions you would make a generic unviable. So it hasn’t occurred in other markets. We don’t foresee it in the near future in the U.S. either.
Unidentified Participant: Okay. That’s great. Yeah. I’ll jump back. Thanks.
Operator: Thank you very much. (Operator Instructions) Your next question is coming from Stefan Quenneville from Echelon Capital Markets. Stefan, your line is live.
Stefan Quenneville: Thanks for taking my questions, guys. Just a quick question on some of the operational changes you’ve talked about. With the Head of Canadian operations have taken over as the COO, I was just curious, if any of the learnings on treosulfan I think, successful launch in Canada. Obviously, it’s a different market than the U.S., but is there anything you can glean from that to make sure the drug launches well in the U.S. and sort of what you’ve learned from your experience in Canada?
Kenneth d’Entremont: Yeah. So Stefan, great question. That is specifically one of the reasons why we’ve made this move in that Richard and the person who leads this franchise in Canada have developed good understanding, deep understanding of what it takes to execute a successful launch on treosulfan. Obviously, the markets are different, but the clinical practices isn’t different in the two countries. So that will certainly help, and we’ll bring that experience to the U.S. launch and then clearly using all the excellent U.S. experienced people that we already have in place working with Richard, we think that the team together will be able to execute a successful launch because we’ll transplant the experience from Canada to the U.S. and have the U.S. experience in place.
Stefan Quenneville: Okay. And then, just a question on — and I think people have touched on this. I’m just going to trying to get a little more precision. So I’ll ask the question for a good third time. In terms of hiring for treo (ph) and also your kind of guidance that you’re not going to see meaningful revenue for treo until about Q2 of 2025. Is that because you’re going to wait to hear about approval in end of October before you bring on those extra salespeople? And like you said, you’re doing a little bit ahead of that, but like the bulk of those hires are going to come subsequent to the potential approval?
Kenneth d’Entremont: Correct. So we will start with the MSLs very shortly. We already have some people in place who are working in the field, but we’ll be adding some MSLs prior to the decision date, so somewhat at risk. And then, we will hire the remaining individuals upon the decision, positive decision and then execute the launch. There is a lag time between decision and having product available. So that’s part of the thinking as well that there’s no point having a whole bunch of salespeople in place without product available. So we’ll be looking to condense the product availability as much as possible and then having those people in field as soon after the launch as possible when they can start to commercialize.
Stefan Quenneville: Okay. Great. And just one last one. Just in terms of — I don’t know. if you’re going to maybe quarterly or annual target in terms of using your cash flow to pay down debt. Are you guys — can you share your thoughts on that over the say, next 12 months and what kind of cadence you’re looking to pay down debt?
Kenneth d’Entremont: Yeah. I’ll turn it over to Marcel. But as he said, we’ve been paying down the BMO debt since it was put in place, and we’ll continue to pay it down. And the schedule has been published, but I’ll turn it over to Marcel to give you the details.
Marcel Konrad: Yeah, correct. Thanks, Ken. Stefan, that’s exactly. We started out with $56.5 million of the total facility. Now we’re down to $51 million – a little over $51 million. And we have an amortization schedule that we are owing to that we’re going to stick to in terms of the payment. So that translates into a quarterly payment of about $3.3 million per quarter going forward to pay down the debt.
Stefan Quenneville: That’s great. Thanks, guys. That’s it for me.
Operator: Thank you very much. Your next question is coming from Julian Hung of Stifel. Julian, your line is live.
Julian Hung: Hi. This is Julian subbing in for Justin today. I was hoping to get a refresher on treosulfan estimates. So what do the peak sales expectations look like? How soon do you expect to reach that number and what would the ramp up look like?
Kenneth d’Entremont: Yeah. Thanks, Julian. Good question. I think what we can say about that is, obviously, we’ve got a forecast and experience with it now in Canada and what the ramp looks like from this territory. And I think the guidance that we’ve given is a factual statement, which is the historical treosulfan peak sales, which was the 1.6, which they achieved. I think it was 2016 or 2018, something like that. So there’s been some price appreciation since then. So that kind of guidance, I’ve said we see it over $100 million, but we haven’t given any specific number. The ramp to peak obviously is dependent on the clinical package data that’s available. I think in this case, it’s a bit of a unique situation and that there’s ample clinical evidence of the utility of this drug in many different indications, including the two key ones, which would be AML and MDS, the two biggest reasons for allo transplanting. And so I think the clinical experience is deep in other territories. So the task for us is to transport that experience from other markets to the U.S. market and give those U.S. transplanters some experience with the drug, which we think they will adopt relatively quickly.
Julian Hung: Thank you so much for taking my question.
Operator: Thank you very much. Well, that appears to be the end of our question-and-answer session. I will now turn the call back over to the management for any closing remarks.
Kenneth d’Entremont: Just want to thank everybody for joining us on the call today. We look forward to keeping you informed of our progress in our base business, as well as the regulatory file on treosulfan. Thanks very much.
Operator: Thank you very much. This does conclude today’s conference. You may now disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.
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