HLS Therapeutics Inc

TSX:HLS

Earnings Call Transcript 2023-Q2

[Operator]

Good morning and 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. [Operator Instructions] Earlier this morning HLS issued a news release announcing its financial results for the 3 and 6 months ended June 30th, 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 accompanying 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.

[Craig Millian, executive]

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 3 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 and in June we hired Brian Walsh as Senior Vice President in Head Commercial. Brian replaced our former Chief Commercial Officer, Sanjiv Sharma, who retired in July. I've worked with Brian previously and I'm excited about the leadership capabilities he brings to HLS. He's led commercial teams across sales, marketing and business development and 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 and we welcomed two new board members, John Hanna and Christian Roy. At the same time, we reduced the number of directors from 10 to 8, which lowers expense and is the 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 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 quarter 2, 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 deep 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 time frame 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 4 of the prior 5 weeks. We have started to see some stabilization around payer mix, but uptake in public plans still outpaces private plan growth. This is driving a negative impact on growth 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 9 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 we'll 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. And of course, this is more profitable growth, with a favorable impact on overall growth to net. As a reminder, on a 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 3 months as CEO, I believe it is clear the need to reset the outlook for the product, as well as adapt a strategy to capitalize on its significant potential. This has led us to adjust our 2023 guidance for Vascepa. Based on payer mix dynamics, ongoing reimbursement challenges and slower than expected penetration into primary care, we are lowering our full-year guidance to CAD 18 million to CAD 20 million Canadian dollars.In the coming weeks, we are prioritizing the following 3 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 cost 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 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 multichannel 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 to 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 to CAD 150 million annual sales opportunity if we were to capture just 10% to 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. So, 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?

[Tim Hendrickson, executive]

Thank you, Craig and 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 partners, 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 and would have been $16.9 million on a constant currency basis. Canadian product sales, which includes Vascepa increased to 8% in Q2 in constant currency, but this growth was only up 3% when translated and reported in US currency. Vascepa revenue in Q2 was CAD 4.5 million, up 49% over Q2 last year and 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 plus 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 patient stabilizes, which we expect in the coming quarters, then 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 U.S., 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 copay 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 4 products in the portfolio. Approximately $0.5 million of the year-over-year increase is the 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 '23 and then to decrease in '24 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. And 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 6 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 then 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 at 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 deleveraged 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.

[Craig Millian, executive]

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 new treatment paradigm, positioning a novel class of drugs within a crowded CD 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.

[Operator]

Thank you. [Operator Instructions] The first question comes from Justin Keywood of Stifel.

[Justin Keywood, analyst]

On Vascepa, I'm just wondering if there's 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 wondering what gives you the confidence that this drug could be successful in Canada?

[Craig Millian, executive]

I think -- so it's a good question, I know I'm probably not the best person to give an assessment of the performance in other markets that would probably be best, good question for Amarin and I know they're investing in many of those markets. But I would point to the U.S., I think certainly, ahead of the unfortunate patent situation that led to generic availability, the uptake was quite considerable. And I think if you look at it on a proportional basis, even in a generic market, this would still translate into $1 billion-plus branded market in the U.S. and if you applied branded pricing.So I think looking at it proportionately and looking at the level of investment in promotion and kind of the positive drivers that we have in Canada, including availability on guidelines the strong clinical data, the relatively strong reimbursement that we have, we think that it does position us ultimately to grow Vascepa albeit perhaps not quite to the levels that were initially projected, but still we think it will be a considerable product, we think ultimately in excess of CAD 100 million. It will take a little bit longer perhaps than initially expected and again, I think if 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 the share of voice and share of mind within the kind of cardiovascular risk [indiscernible].So we think our data and our product profile and our benefit risk profile compare very favorably to any other treatment option, but it will take time and investment for us to get traction. And I'll just make one more point. I think a lot of -- I think a lot of brands would be very happy to see 91% year-over-year prescription growth. So in some respects, we're a victim of setting high expectations, but objectively, the brand is growing, it is gaining traction. We are bringing on new prescribers. We are seeing an increase in terms of depth of prescribing. But again, admittedly, it will take a little bit longer.

[Justin Keywood, analyst]

And then just on that target for Vascepa to exceed CAD 100 million in sales that could obviously be quite impactful to HLS that would imply almost or a doubling of the overall business. Is there a time line to achieve that?

[Craig Millian, executive]

Yes, I would say what we're -- our target would be in a 4 to 5 year time horizon, we think that, that's achievable. And 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 modified the size of that universe based on updated epi-data, but we still think overtime that, that level of penetration is reasonable, but it will require very strong execution over the next few years to get there.

[Justin Keywood, analyst]

And just one more question, not sure if I missed it. Any update on the reimbursement status of Vascepa in Alberta or BC?

[Craig Millian, executive]

Yes, Justin, I did provide an update on that. Unfortunately, we are adding impasse in our negotiation with BC, so they've closed the file for now. They were unwilling to demonstrate any flexibility on certain provisions that provided or would have presented an unacceptable economic risk to HLS. And frankly, we're not anything that we're part of the negotiation with the larger provinces. And 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 situation there in terms of requesting certain provisions that we deem unacceptable, but we are at least old having dialogue.

[Justin Keywood, analyst]

Is there any recourse given that there's third parties 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 BC or Alberta?

[Craig Millian, executive]

Yes, it's a good point. We are looking at other maybe unconventional approaches that we might take to ensure that there is at least an appropriate assessment made here. So we don't have anything tangible right now other than to say we are looking at a number of different possibilities to continue the dialogue with those provinces because we do think that what's being requested is unreasonable in many respects. And being a Canadian-based company in a company that obviously has a limited number of products within our portfolio, we can't accept conditions that would put our ability to be profitable at risk.So these are conversations that are worthy of continuing and we're investigating how we might do that because we -- most importantly, we think Vascepa should be something that's available to the citizens of Canada. 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.

[Tim Hendrickson, executive]

Just to add one thing to that, Justin and I fully echo that, that it is something that its entire to it, this is a product that should be available for all patients in need. While we explore those other avenues, it's important to remember that Vascepa is reimbursed almost universally on private plans. And so those patients who do have private coverage in those provinces, we are not going to overlook them. We will continue to pursue that avenue and we are seeing growth in prescribing in those provinces. And then I think we reported though we're -- prescribing was up 69% in Alberta and BC despite the lack of public reimbursement. And obviously, in the private payer segment, that's also a more profitable avenue of growth. So we'll continue to pursue that, while also exploring a way to get this product available to all Canadians.

[Operator]

The next question comes from Dave Martin, Bloom Burton.

[David Martin, analyst]

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?

[Craig Millian, executive]

Yes, I wish I had a -- thanks for the question, David. I wish I had a better answer for you. We are actively reaching out. We've had to be honest, limited success in terms of getting hold of folks there. So I suspect, again, this is speculation that there are some staffing issues and perhaps related to summer vacations because as I mentioned, they seem to begin at the start of June and it was a fairly dramatic change. This was not a minimal kind of increase in delay times. And again, I suspect that other products are being impacted by this based on what they have on their website. But I have not received kind of a formal explanation as to the why, so it's pure speculation.And what we're doing is reaching out on a regular basis to the authorities there. We also believe that this provides even more rationale for us as we take the more strategic action of trying to get the limited use code for Vascepa, which we believe would be a potential game changer 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 other products within cardiovasculars are available with an LU code.So this certainly I think gives us some compelling rationale based on the fact that patients are -- are ultimately not getting a potentially life-saving therapy. And we've also been in conversations with several of our key opinion leaders who are -- feel strongly about this and they want to know how they can help. And as I mentioned in my prepared comments, we continue to invest in educating and working at the grassroots level with prescribing physicians and offices to help them navigate this.But our expectation is, it will improve, but again I don't have anything empirical here to point to other than it started at the onset of summer, but we'll keep at it.

[David Martin, analyst]

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 smoothing the process for the patients?

[Craig Millian, executive]

Yes, it's an interesting thought, it's not something that we're currently entertaining out. Tim, like you wanted to comment?

[Tim Hendrickson, executive]

Yes, thanks, David. That's certainly something where we are providing a service like that where it comes to privately covered patients who require prior authorization and there is sort of an established period of time of a few weeks for that to take place. It's something that we'll probably rise by this sudden much lengthier delay, again processing times had been in the matter of days and now have really kind of gone to a much longer period. If this is going to continue, we'll have to explore other options, clearly. But I think the first priority is to get an explanation and see that, that gets returned to a more reasonable amount of time in the short order.

[David Martin, analyst]

But I may have missed it, did you say that the approval rate is high, even though it's taking long time?

[Craig Millian, executive]

Yes, the approval rate, we don't have -- they haven't shared exact figures with us, but we believe it's well north of 80%, probably more towards 90% at this point, which we believe is an important benchmark and also will support our case for the limited use code. And it's encouraging that whereas this was an obstacle a few months ago and we were seeing much higher rejection rates. It seems to have -- that concern seems to have been adequately addressed and continues to move in the right direction. We're not hearing about kind of the outright rejections and it seems like the physicians now have been educated in terms of ensuring that they're completing the forms correctly in putting the right patients on treatment that the criteria, yes.

[David Martin, analyst]

Okay, great.

[Craig Millian, executive]

This does appear to be a new and different challenge and again, according to the government's own website, it's a delay that's affecting all adjudications of chronic medicines.

[David Martin, analyst]

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? If you can comment on that?

[Craig Millian, executive]

Yes, I would say to this point, although we've had good update with Pronto. I think where it's probably had its greatest impact has been as a defensive 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 have seen dramatic increases in growth in those institutions where we've installed Pronto. So I think that certainly is an opportunity and that was part of the rationale. So that's something that we're interrogating to better understand.

[Operator]

The next question comes from Rahul Sarugaser of Raymond James.

[Rahul Sarugaser, analyst]

And just want to start by saying that really appreciate the transparency that you've been bringing to these calls. So I just want to first dig into the balance between special sales and GPs. Of course, the specialists that we've talked too as well as the ones that are prescribing [Technical Difficulty] to be kind of holding up sales. You talked about relatively poor uptake among some GPs or more maybe a majority of GPs. Can you give us a little bit more color as to why the reticence in that GP group is it because they maybe aren't treating these types of patients that have plus 1 or how or an second event. Could you just give us more color as to why and how you might be able to actually turn that group given the strong guidelines?

[Craig Millian, executive]

Yes, sure. I think part of it is time. We expect that a general practitioner group would be slower adopters in general than specialists. And obviously, things like complexity around reimbursement being on a exceptional access tier is something that GPs are even less familiar with in terms of prescribing than even specialists. So while I don't want to pin everything on reimbursement, I do think that our ability to improve the reimbursement [ milu ] is going to have a dramatic impact on prescribing.I think the other piece of that is simply -- you're competing for share of mind with general practitioners with not just other cardiovascular products which are manifold, but for a lot of other conditions. And so despite the fact that we're calling on a large number of GPs and we may be seeing them every 4 to 6 weeks. There's a little bit of serendipity involved in terms of whether they happen to see a patient around the time frame when the presentation from a sales rep is fresh in their mind.And so that's why it's so important for us to really be strategic in terms of who we're targeting, really focusing on those general practitioners that are more early adopters and that are more receptive to the messaging and perhaps have more of those patients in their practice. And then that we also invest some resources 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.And so even with a very well-resourced sales team, it's just one dimension. And I think right now, our go-to-market model is a little bit too heavily focused on just having the sales force carry the load. So I do think the opportunity to better target concentrate our resources on those physicians that are both high potential and most likely to prescribe and we can use different behavioral and attitudinal data and use analytics to help us better identify those folks and then augment that with other types of tactics that, to this point, we haven't really employed. We think we'll drive more efficiency and more effectiveness. So we don't think those things are mutually exclusive.But I do want to also just close by saying this is a -- despite the terrific data and the guidelines, even in the case of statins, primary care physicians that overnight did not become the predominant prescriber class 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 them there. And so we also have to manage expectations and know that this will take time and we need to continue to grow. By the way, we need to continue to grow in specialty as well, our work is not done there. We need to improve our -- the timeliness and the simplicity of the reimbursement process. And then I think a more balanced approach to going after the kind of the best targets within primary care. I think all those things are going to yield a better outcome. But there's nothing -- there's nothing fundamental about the messaging or the data or anything like that, that's -- that we're hearing that is problematic at this point.

[Rahul Sarugaser, analyst]

And so now focusing on perhaps the part that it seems to be working and you said that the specialists are prescribing and there's an opportunity there to really amplify what is working. So besides the lowering barriers to the paperwork, et cetera, how is your team very specifically looking to really capitalize on that vertical that is working?

[Craig Millian, executive]

Yes, I think, again, I think it's just a balanced investment as well. I think things like making sure we have a really strong presence, scientific conferences and continue to invest in things like medical education, appropriate scientific communications. We can't just assume that because the data were published and the data are terrific and we have put on guidelines that we can kind of rest on our laurel.So 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 have a one-dimensional approach to specialty either. We need to continue to invest probably in different ways than we would within primary care. Obviously, we're not going to fund a large outcome study, that's the unfortunate part of Amarin losing patent exclusivity in the U.S. that doing other large kind of landmark trials are probably not in the near term, but there are other ways that we can continue to educate and invest in scientific exchange and I think that's really well appreciated.I've had a number of conversations with some of the top key opinion leaders and I think you heard Rahul yourself from Dr. Verma, I think in general, they're excited about it, but we need to continue to keep the noise level high.

[Rahul Sarugaser, analyst]

And if you [indiscernible] last question. You referenced Amarin now as well as earlier and given the IP cliff that they faced, I believe that HLS is more optimistic about IP protection post the Health Canada exclusivity ending end of 2027. So could you perhaps give us give a bit more color in terms of how you expect to provide barriers to entry and continue to conicity beyond '27?

[Craig Millian, executive]

Tim, you want to take that one?

[Tim Hendrickson, executive]

Certainly. So it is a very different situation than what unfortunately transpired in the U.S. It's important to remember that 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 listed on the Health Canada patent registry. And the last expiration date of that last listed patent is going to 2039. And so it's quite a significant patent estate. Importantly, that's all IP protection that is related to the significant outcome from the REDUCE-IT trial and the cardiovascular risk reduction indication. And so that is quite entirely different from what was the subject of the litigation in the U.S. market. And that really speaks to why we think it's a very different situation than in the U.S.

[Operator]

The next question comes from George Ulybyshev of Clarus Securities.

[George Ulybyshev, analyst]

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 in prescriptions growth has been tracking in those provinces in Q2 and going into the third quarter relative to other provinces, mainly Quebec and Ontario?

[Craig Millian, executive]

Yes, so we gave you the numbers in terms of the, I think it was 69% year-over-year and it was...

[Tim Hendrickson, executive]

In BC and Alberta.

[Craig Millian, executive]

In Alberta combined, it was either -- was it 6% or [ 18% ] sequentially.

[Tim Hendrickson, executive]

Sequentially, yes.

[Craig Millian, executive]

I would say it's -- Quebec is our fastest growing province. Quebec is really kind of figured it out in terms of not encountering the same sort of reimbursement challenges that Ontario was, even though it's a similar tier of access, Ontario, Quebec seems to be able to manage it, I think their physicians are just more comfortable with that process. And so we're seeing the most growth in Quebec.And then I would say Ontario and BC, Alberta are probably somewhat -- somewhat comparable, Ontario is still growing a little bit faster. But I think importantly, because of the split in the Western provinces and I won't get into the details, but this is highly profitable business for us because it's -- it has a very positive impact on gross to net. So as much as we're disappointed not to get public access in BC and importantly, because we believe patients should have access to this medicine. As far as our performance relative to net sales, we're quite pleased with the progress that we're seeing in BC and Alberta specifically. And so the key there is to continue to drive that business even in the absence of a public payer.

[Tim Hendrickson, executive]

Yes, I mean just to kind of put some context on, if our national growth rate in prescriptions was at the 91% year-over-year, Ontario and Quebec as larger population centers are naturally going to drive more of that. And since we also have public reimbursement in those provinces and so we're in both the public and the private segment there, that gives even greater weighting to Ontario and Quebec in that number. But that's sort of your national number, Alberta and BC at 69% growth is not really lagging that far behind when you consider that, that has the additional challenge of being only in the private payer segment. And so whatever additional challenges are in finding those patients and whatnot, we're still seeing a pretty significant growth in those markets despite that challenge.

[George Ulybyshev, analyst]

And maybe just one more on Vascepa. Out of roughly 10,000 physicians that you guys are targeting, what percentage 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?

[Craig Millian, executive]

The vast majority.

[George Ulybyshev, analyst]

Okay.

[Craig Millian, executive]

Yes, well, I would say 80%.

[Tim Hendrickson, executive]

I think well north of that now.

[Craig Millian, executive]

Yes.

[Tim Hendrickson, executive]

Some time ago when things were very different in the pandemic environment, getting access to physicians was very much a challenge and it was harder getting up to see that. We're not seeing that now. And so our ability to see the doctors on that list is...

[Craig Millian, executive]

Oh, yes, but...

[Tim Hendrickson, executive]

We're getting in there, the vast majority of those will have been seen...

[Craig Millian, executive]

End time.

[Tim Hendrickson, executive]

And seen multiple times, exactly.

[George Ulybyshev, analyst]

And those are in-person visits or phone calls, primarily?

[Craig Millian, executive]

Typically in person.

[George Ulybyshev, analyst]

And I think you mentioned the frequency of these visits is 4 to 6 weeks, is that right?

[Craig Millian, executive]

It varies, George. So it's a tiered approach, so depending on the debt -- looking at things like deciling and other criteria, we prioritize. And so if it's A target, they would be seen more frequently and I don't have the precise figures. But certainly, the more high priority targets are being seen, I believe, at least every 4 weeks or so -- on the primary care side.

[Operator]

Thank you. There are no further questions. I will turn the call back to Craig Millian for closing remarks.

[Craig Millian, executive]

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 speaking with you again in the near future and have a good day.

[Operator]

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.