Canadian pharmaceutical company Valeo Pharma Inc. (TSX:VPH, OTCQB:VPHIF) reported a 3% increase in first quarter revenue compared to the same period in the previous year driven by strong sales from its respiratory business unit.
For the first quarter ending January 31, 2024, Valeo saw revenue of $13.5 million as prescriptions of its Total Enerzair and Atectura products surged 130% compared to the previous 12-month period to reach 78,000.
Commenting on the results, Steve Saviuk, CEO of Valeo Pharma, emphasized the company's return to revenue growth momentum in Q1 2024. He attributed this growth to the strong performance of the respiratory business unit, with asthma product revenues soaring by 58% compared to the previous quarter.
"Valeo has embarked on a number of initiatives as it drives towards positive cashflow with our previously announced operational cost savings having greater impact from Q2 2024 onwards,” Saviuk said in a statement.
The CEO told investors that Valeo expects its major brands, Enerzair, Simbrinza and Redesca will provide an increasing share of revenue growth in the coming quarters, as well as greater margin contribution.
Elsewhere on the balance sheet, Valeo also reported an adjusted EBITDA loss of $2.1 million for Q1, showing a 6% improvement over Q1 2023's loss of $2.2 million.
The company's net loss for the quarter stood at $6.9 million, marking a 10% increase from the previous year, partially due to lower ophthalmology revenues associated with the wind-down of promotional activities for Xiidra.
Pascal Tougas, Valeo's Chief Financial Officer, acknowledged the challenges faced in Q1, including inventory write-offs impacting financial performance, but remained optimistic about the company's cost reduction and organizational realignment measures, which he said are beginning to show benefits.
“Our operating margins and adjusted EBITDA loss have started improving with the bulk of the operating expenses reduction measures benefits expected to materialize starting in the second quarter and ramping up sequentially throughout the remainder of 2024,” the CFO said.
Subsequent to the end of the quarter, Valeo announced amendments to its commercialization and supply agreements, indicating a shift in focus towards accelerating debt repayment and optimizing resources. The company entered into agreements with Sagard Healthcare Royalty Partners, LP, for accelerated debt repayment, aiming to repay $10 million by August 31, 2024.
More recently, Valeo signed an agreement to assign the rights to a non-core asset, expecting gross proceeds consideration of $1.5 million in Q2.
In a related development, Valeo announced changes to its board of directors, with the appointment of Robert Raich and Charles Bisaillon and the resignation of several members, including Michel Trudeau, Stuart Fowler, Didier Leconte, and Tamara Close.