Theratechnologies Inc (THTX) 2011 Q2 法說會逐字稿

Good morning ladies and gentlemen, and thank you for standing by. Welcome to the Theratechnologies Second Quarter Results 2011 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. (Operator Instructions).

I would like to remind everyone that this conference call is being recorded today, July 7 at 830 AM Eastern Time. And I would like to turn the conference over to Denis Boucher, National Public Relations.

Thank you and welcome. Speakers on today's call include Mr. John Huss, President and Chief Executive Officer, and Mr. Luc Tanguay, Senior Executive Vice President and Chief Financial Officer of Theratechnologies. Their presentations will be followed by a Q&A period which will be open exclusively to financial analysts.

Before we start, I have been asked by Theratechnologies to read the following message regarding forward-looking statements. I would like to remind everyone that Theratechnologies' remarks today may contain forward-looking statements about its current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other forward future events or developments. Several assumptions were made by Theratechnologies in preparing these forward-looking statements, and there are risks that actual results will differ materially from those contemplated by the forward-looking statements.

As a result, the Company cannot guarantee that any forward-looking statement will materialize. And you are cautioned not to replace undue reliance on these forward-looking statements. Theratechnologies refers current and potential investors to the Risk and Uncertainties section of its Annual Information Form dated February 22, 2011. The AIF is available at www.Sedar.com and at www.SEC.gov under Theratechnologies' public filings.

The reader is cautioned to consider these and other risk and uncertainties carefully and not to put undue reliance on forward-looking statements. Forward-looking statements represent Theratechnologies' expectations as of July 7, 2011. Except as may be required by Canadian securities laws, Theratechnologies does not undertake any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

I would now like to turn the conference over to Mr. Huss.

Thank you Denis. Good morning everyone. Welcome to all and thank you for joining us today to discuss the second quarter of 2011. I will provide you with a brief business overview of our activities over the last two quarters before turning the call over to Luc, who will present our second quarter financial results.

The last quarter proved to be a very busy one for us. And as we continued to execute on our four-pronged strategy which is, one, to maximize global commercial opportunities for our lead product EGRIFTA. Two, to develop tesamorelin to treat muscle wasting in patients with COPD. Three, to solidify Theratechnologies' position as a leader in the field of novel GRF products, and four, to pursue [excellent] growth opportunities.

In terms of commercialization of EGRIFTA, we're progressing well. Consolidated revenues now include those generated from two quarters of product sales, and for the first time, this quarter includes three months of royalty payments for EGRIFTA from our commercial partner in the US, EMD Serono.

Based on IMS data we estimate that the number of patients taking EGRIFTA grew to about 380 at the end of March. Based on the same source, we estimate that the number of patients continued to grow to about 1300 by the end of June, an increase of 240%. So while the first payment of royalties will be modest, our prescription base is growing and we expect royalties to increase accordingly in the future.

To summarize the US commercial uptake of EGRIFTA, let me state the following.

First, coverage remains excellent with over 80% of patients currently being reimbursed. Secondly, we continue to gain new patients on a continuous basis. Thirdly, existing patients are renewing their prescriptions, which demonstrates that the drug works, that patients are satisfied and compliance is good.

By the end of June, a total of 2601 prescriptions had been filled. This includes new and repeat prescriptions and we're very pleased with these results.

Now while commercial activities for EGRIFTA are ramping up in the US, we have also worked and moved forward with several regulatory filings in additional markets. In June we filed an application for EGRIFTA with (inaudible) Canada. Also, our partner Ferrer submitted tesamorelin in Europe and the file has been accepted for review. If approved, the marketing authorization will be valid in 30 European countries including all EU members. Finally, in the Middle East our partner Sanofi has recently filed an application in Israel.

Now, you remember when I joined the Company we made several commitments and I'm pleased to report that we have already met many of our objectives. We wanted to find the right commercial partners for Europe and Latin America and we accomplished this in the first quarter of 2011. We also plan to file in Europe through our partner, which was accomplished in early June.

We said we would move forward with a new clinical program, and we announced a new program for muscle wasting in patients with COPD in February. I'm happy to confirm that we are as set to begin the Phase 2 clinical trial in September as previously announced.

We had previously indicated that we are working on a new formulation for tesamorelin. This more concentrated formulation, 2 mg of active substance in 0.5 mm of solution to be used in the COPD clinical trial, has been finalized and submitted with EMEA in Europe and with the FDA in the United States.

We have also made a conscious effort to improve our communications with the market and this will remain a priority going forward. So, as you can see, we have delivered on our commitments and we will continue to do so.

In addition, Theratechnologies has recently made two important announcements. The first is that we have revisited our (inaudible) business model to increase our flexibility and rely more on external partners to bring our R&D projects forward. We are confident that this new business model will better support our strategy and our evolution into a revenue-generating Company.

This change resulted in a 25% workforce reduction. Now these are difficult decisions to make, but we felt it was a necessary step to take in order to strengthen the Company over the long-term.

Finally, Theratechnologies also announced its listing on the NASDAQ global market stock exchange. So, as you can see, 2011 has been extremely busy and we have made significant progress on all of our key projects.

With that, I would like to turn over the call to Luc to present our financial results.

Thank you John. As already mentioned, we report today our second quarter 2011 financial results. And we have now generated revenues from sale of EGRIFTA for a second quarter in a row since commercial activity commenced at the beginning of this year.

Consolidated revenues for the second quarter amount to almost CAD3.5 million compared to CAD1.7 million for the same period in 2010. Under the term of our agreement, we supply EGRIFTA to EMD Serono. The revenues generated directly from these sales amount to about CAD2 million in the second quarter and about CAD3.8 million for the first semester of the year. This reflects Serono's requirements to meet current demand as well as some additional stock to build inventory for the summer period.

The royalty payment we reported today represents sales recorded in the period from January to the end of March. Royalty for that period amounted to CAD194,000 and represent an estimated prescription base of 383 patients at the end of March. By the end of June we know that the number of patients reach over 1300.

Royalty for the month of April, May and June will only be reported in the next quarter, so we are on track to reach about 4000 patients by the end of 2011. And this data is consistent with what we announced at our annual meeting earlier this year. These numbers, though, should not be annualized and these -- as these patients will not have received the full and complete year of treatment by the end of the year. These figures translate into approximately [$25 to $35] in sales of EGRIFTA in the US for 2011.

Turning now to the cost of sales of EGRIFTA, these total CAD2.6 million for the second quarter. Cost of sales exceeds sales revenue due to an accounting requirement that we expense some historical inventory costs, and also because of customer current costs related to validating backup suppliers for raw material [on finished] goods.

I would like to point out that this is a temporary situation. Product sales are expected to become profitable when our old inventory is depleted, which is expected in 2012, and when the costs associated with validating backup suppliers are behind us.

Looking at our R&D expense net of tax credit, they total about CAD3.1 million for the second quarter, which represent a decrease of 26.5%. Our R&D expense this year are related to the preparation for the Phase 2 COPD clinical program to the work of a new formulation and a new presentation for EGRIFTA, and to the development of novel growth hormone releasing factor peptides. R&D expenses also include [all] inventory, manufacturing and clinical activities to support our three commercial partners as well as follow-up on the post-approval commitment.

These figures do not include the impact of our new R&D model which will result in a net reduction in payroll expenses of approximately CAD300,000 for the remainder of fiscal 2011 and a reduction of approximately CAD2.5 million for next year.

I would like to now bring your attention, our general and administrative expenses which amount to about CAD3.7 million for the quarter compared to almost CAD2 million for the same period in 2010. This increase is strictly due to a one-time cost of CAD1.9 million associated with the planned public offering of share that was withdrawn.

Taking into account the revenue and expenses as described above, we recorded a second-quarter net loss of CAD5.9 million or CAD0.10 per share, compared to a net loss of about CAD4.8 million or CAD0.08 per share for the same period in 2010. Finally, in the second quarter we continued to build inventory.

At May 31, liquidities which include cash and bonds amount to about CAD49 million. So, as we go forward, we continue to remain in a very strong cash position. I will now turn the call back over to John for closing remarks.

Thank you Luc. So in closing let me reiterate a few points. First, sales and reimbursement and the US are on track. And as Luc mentioned, we should reach between [CAD25 million and CAD35] million of sales this year.

So, to put it briefly we're satisfied with the work done by our partner EMD Serono and hope they will continue pushing the drug.

Two, we've started booking royalty payments and expect them to continue increasing nicely in the future. Three, our balance sheet remains strong and we have CAD49 million left in cash. Four, all of our key projects are on track and we have continued delivering on our promises.

Five, we have quite significantly increased our communication efforts in the past quarter and will continue to be very active on that front.

Now, what should we expect for the remainder of the year? First and foremost, we expect sales and coverage for EGRIFTA in the US to continue to develop nicely as already seen. We would also proceed with further regulatory filings for our commercial partners in various regions. Most importantly, expect regulatory filings to start in Latin America this summer.

We will continue to prepare for our COPD clinical program in order to start the Phase 2 trial in September. As previously mentioned our R&D activities discover and develop second-generation and novel GRFs are all on track and will continue. And last but not least, we will spend quite some time on the road to talk about the good things we're doing.

So with that, I would like to thank you for joining the call today and we will now take questions from financial analysts.

(Operator Instructions) Pooya Hemami, Desjardins Securities.

Can you give us some -- any statistics on the renewal rates of patients taking the drugs in terms of are there any patients who are given an initial drug dose and who don't get renewal prescriptions?

I will ask John Huss to answer this question.

So you've seen we have -- at the end of June we have about [1300 new threads] and about 2500, 2600 total threads. On average patients have been taking about two scripts in the first five months of therapy, which proves that the compliance must be pretty high now. Since our partner EMD Serono is responsible for the commercialization in the US and they have direct access to the access program, I don't have details other than the IMS data I can share with you on compliance.

But if you look at the increase in repeat scripts in the past few weeks and months, in the last two months, and compare that with the initial new prescriptions done in the first few months of the drug being launched, you will see that compliance is up there. So without having a definite figure, I would expect from the data I am seeing or would expect compliance to be around 80% to 90% in the US at this point.

Okay, thank you. And just a question, in your guidance of 4000 patients taking the drug by year-end, and CAD25 million to CAD35 million in sales for EGRIFTA in the United States. If we assume the starting point of zero and a linear progression, that comes to me at an average of CAD15,000 per patient. Is that a sales rate per patient that we should model, CAD15,000 per patient?

I think what I've been talking about since the beginning of the year, we need to be careful when we model. And we need to be careful that we don't annualize patients as they come in. Now obviously will be gaining more patients as reimbursement continues ramping and as more physicians join the boat and prescribe the product.

So we've got about 1300 patients in the first half of the year. So we expect about double that to come in between now and the end of the year which is -- which would be a good launch year and a regular launch year.

Obviously what we're doing is two things. First of all you need to apply a discount to this figure. Obviously EMD Serono, with the payers, are providing a discount. And we plug in 10% as an average discount because that is what we think -- what we are seeing today and what we think continues being in line for the future.

The bracket between CAD25 million and CAD35 million is a difference between 60% and 70% compliant. So you need to put in some kind of compliance rate. I think what you need to do is, as you model the patient uptake make sure that you put the right number of months on drug this year, apply some kind of discount factor and apply some kind of compliance rate for the entire year.

I think compliance will be somewhere between 60% to 80%. I think today compliance is very high. Patients have recently jumped on the drug. It is the right season to do that. If you are going to lose weight circumference, you want to be for the summer to look in shape during the summer. I don't expect compliance to be as high at the end of the year as it is today.

So I think for any chronic treatment, if you plug in between 60% and 70% you are on the safe side. Now that same number will give us a basis. These 4000 patients will give us a basis of CAD60 million to CAD70 million at the end of the year to enter 2012. And that will be the basis on which we can grow and on which we expect EMD Serono to increase sales.

So it's not completely ridiculous to think that we may achieve in excess of CAD100 million next year, which obviously will change the picture in terms of potential milestones to come in and royalty payments.

Okay. So if I understand correctly, you're expecting by the end of the year for the run rate, the sales run rate, to be CAD60 million to CAD70 million per year? Or I imagine about CAD5000 to CAD6000 per month -- does that sound reasonable? (multiple speakers)

Per month, correct.

Okay and just one last question before I go back into the queue. There was a five- to six-week lag between when the patient goes to the access center and when he receives this drug. Has there been any work to shorten that lag time?

Yes. So EMD Serono has confirmed that they will increase resources in their access programs. And just as a reminder, access is the center platform -- the core center that EMD Serono uses to get the scripts from the physician right to the secure pharmacy network, who will then send the drug to the patient. So they're going to increase the resources in the access program to be able to shorten the time.

I still think it is a bit long. I think being at six, seven weeks -- if we could shorten that I think we will see an even more rapid uptake of new patients. So, again, I'm very satisfied with what EMD Serono is doing.

They really understand this business. They understand the growth hormone (inaudible). They understand the HIV population, the physician population. They know how to get these drugs reimbursed and we are seeing it. But I do expect them to up the antes a bit on the access program to shorten that time to three to four weeks.

Okay, thank you very much.

(Operator Instructions) Philippa Flint, Bloom Burton & Co.

Thank you and good morning. Can you comment? You had previously said that you had spoken with the EMA on your COPD trial for Phase 2. Can you comment on FDA, if you received feedback and if it is in line, consistent with what the EMA had said in terms of moving ahead with your current design?

I will ask John Huss to answer this question.

So the feedback from EMEA was positive. They have backed the program, both the design of the Phase 2 program we are suggesting and what we intend to do with the results, if they're positive, going to Phase 3 program.

The US has been a bit more critical but still open, so they have accepted our Phase 2 program and we will go ahead as we have suggested. They -- obviously everybody is expecting to see the results before they decide what to do moving forward. But they will definitely expect to see endpoints moving into the Phase 3 program which will show some kind of clinical significance to the results.

Today we're looking at a six-minute walking test and other functional parameters, as such endpoints will have to be included as primary endpoints into the Phase 3 program. So I think until we have the results of Phase 2, it is too early to anticipate and to start forecasting what's going to happen with the result. But if -- We have built into our program as secondary endpoints everything that EMA and FDA will want to see as endpoints in the Phase 3 program and Phase 3 trials moving forward.

So, what we will do is, as soon as we have the results we will have an end of Phase 2 meeting, both with EMA and with the FDA. Make sure that they are very comfortable with our Phase 3 trial moving forward and take it from there.

And do you think the FDA will want something specific to the lung or do you think, consistent more with the EMA, it will be more exercise-related like the six minute walking test?

It's tough to say, because actually when we received the results of the feedback from the FDA, the following week they approved a drug for muscle wasting in cancer patients. And the only endpoints they asked for was a constant endpoint of increase in body mass and stair climbing. And they stated they would approve the drug if the trial is positive.

So I think today, I think muscle wasting is a pretty new field. And with any new field there is nothing approved for this indication. You need to come up with clinical data. You need to make a point and then discuss with the FDA and with the EEA what they will want to see in the Phase 3 trials to be able to get into the market.

I'm confident today that we will be able to reach that based on the data that we have included in our Phase 2 program. Don't forget, we have included 200 patients in three arms. So we have doubled the sample size that we had in our previous Phase 2 trial. We have doubled the length of therapy, so we're going from three months to six months and we've increased the dosage.

We're doing everything here to be able to show more than just an increase in lean body mass because I've no doubt today that we will be able to show that. My hope is that we have some good results and good trends on six-minute walks, on other functional parameters and quality of life which will help us convince the FDA that this is indeed an important indication that you need to treat.

And there is nothing out there today to treat those patients, so there is clearly a medical need. We clearly have scientific support behind us. We just need to do this trial, get the evidence, go back to the FDA and discuss with them what they want us to put into the Phase 3 program.

Okay, great. Thank you. A couple of quick questions for Luc. The selling costs, do you expect those to decrease now that Serono has basically taken over the marketing? Or will they stay at similar levels because of your other partners?

[To the point the] selling costs will be lower when we will have used our old inventory, which could happen at the beginning of next year. It's just for accounting reasons we are doing that. So we're using material we were buying when we were conducting research, so the price was quite different than the commercial price we have today.

But that's the only reason. So it will get lower, much lower when we will get the new batches, if you will. And also when we will have the new presentation, then we'll get much lower in terms of selling costs.

Sorry, I was talking about the other line; not cost of sales, but actual selling -- your line item selling and market development.

Sorry? Is that a [non-fixed] you're talking about?

The line item on your income statement, selling and marketing development expenses (multiple speakers)

I know what you mean. Those are related to business development and we have teams doing work with our commercial partners, so it won't get much lower than it is now. I think you should use what you have today.

So we need to continue working with our partners and also we have business development to do. So I don't expect that to be at much lower than that.

Thank you very much.

Sorry.

(Operator Instructions) Rusty Leonard, Stewardship Partners.

Hi, John and Luc. Great results; I like seeing that big gain in sales and appreciate all the hard work that you're doing out there to keep the Company moving forward. It's showing up and I'm very grateful for that as one of your larger shareholders.

Question for you on the CMS approval for reimbursement, what's the -- it is kind of overdue at this stage in the game, is it not? Or is that on target?

I will ask John Huss to answer this question.

Good morning Rusty. Thanks for your kind words. Yes, we will continue pushing.

CMS, actually I think there's been a bit of confusion, and probably due to some of the comments we've made in the past. Medicare, since this is a pharmacy benefit drug and it is a Part D, actually there will not be a central CMS announcement as we thought there may be. So the information we received was only partly true.

Now I'm not excluding; they may be. But what is happening is actually the -- there will be stand-alone prescription drug plans signed by individual contractors with Medicare. And these will be announced on an individual basis, and there are about 1500 drug plans out there who work with Medicare to work on these prescription drug plans.

So we don't expect, actually, CMS to be publishing anything. And it will be -- we will find out as individual plans start listing the drug based on the Part D prescription drug benefit.

Is that a hindrance because -- is it easier to get the private plans to join up if there is a central announcement? Or does that slow the process down or is it really not (multiple speakers)

No, not at all actually. What it does is it accelerates because we actually have patients on Medicare Part D today based on these drug plans that started covering it. And we have had Medicare coverage since -- for the past three or four months already. (multiple speakers)

What it does, though, each plan has to go and negotiate with Medicare and then make a choice for their individual plan.

Okay. The sales numbers are just great, but I think you have covered all of that already. I look forward to seeing how that progresses and it looks like it is progressing very, very well.

On the COPD trials, the cost of the trials, you have a variety of options. I'm wondering if you could help steer me through understanding how this could work. You have Serono potentially putting up money, I guess half of the cost for the trials, and then Ferrer also has an option, correct?

Correct.

Correct.

So, what are the different possibilities? And what do you think will actually happen there, or is it just too early to say? But even if you can't say which way it's going to go there, in terms of whether Ferrer will retain all of the rights and the others will walk way from that option, what would be the impact?

Or what would you like to see happen I guess would be part of my question; what would be the ideal situation for Theratechnologies and its shareholders? And then (multiple speakers) what do you think about the different things that could go on there?

Let me tell you what we have on paper. And then what I like and not like is fairly irrelevant because at the end of the day we have contracts.

So, two things; first of all, the Phase 2 program. The total Phase 2 program is going to cost about CAD7 million, right? CAD2 million this year, CAD5 million next year.

And if the EMD Serono opts in at the end of the Phase 2 program with the result of the Phase 2 to commercialize EGRIFTA in this indication, then they will reimburse us half of what we spend on the Phase 2 program. And they will carry forward 50% of the cost of the Phase 3 program moving forward. So that is for EMD Serono.

And I cannot anticipate today whether they will go for it or not. There's no reason why they shouldn't. They're in the US. The sales are progressing well.

They have 40 [reps], and with 40 reps by the way, they can probably do both indications. I think they probably put a lot of effort on the first indication, which is good news. That means they have everything in line to launch this new indication when it comes.

Obviously when you start developing relationships with a new partner, the most difficult part of the relationship is the beginning. So with the time we're investing to get to know them better, they're investing time to get to know us better, we're working well together. Obviously I would like this relationship to last.

I think it would make a lot of sense for them to continue promoting our drug in all indications in the future. And potentially even when we come up with follow-up compounds I hope they would be interested in looking at them at least, because I think anything they have invested in terms of human resources and financial resources would be beneficial to them and to us in the future.

So, would I like them to continue? Certainly. And again if they do, they will reimburse us 50% of the Phase 2 costs and they'll carry half of the cost going forward.

In Europe Ferrer has the opt in for -- the option to commercialize the new indication and they have huge interest. They have three drugs in Europe already today in COPD. They know the targets very well. They know the indications. They know the physician and patient population very well and they are highly interested.

So I expect them to help us financially carry the cost of the clinical program in Europe moving forward. I think at the end of the day what we'll have to pick up here is fairly limited.

And if you add up the two Phase 3 trials we have in mind, it's going to be about CAD30 million per trial. So we're talking about a total of CAD60 million which we start spending in 2013, but the bulk of the expenses will be in 2014 and 2016. And by that time we will have generated, if sales continue as they're going in the US and this is a predictor of what could happen in Latin America and Europe, where the financials for us obviously are much more interesting, then I'm not sure it even becomes a huge issue anymore and a huge question anymore.

So our options are, if everything goes well, we can do everything alone. If everything goes well, we could go with partners. And I won't say if nothing goes well because I'm not expecting that to happen. So that is not a scenario I am working on right now.

So these are the solutions, and if EMD Serono at the end of Phase 2 were to tell us they're not interested -- for many reasons. They are an affiliate of a European group and the group back in Europe could say listen, guys. We strategically don't want to go into COPD and we will not let an affiliate [the size of the US] go into that indication alone. Then we will find new partners.

I'm not worried today with the results of the Phase 2 and the way we have designed the Phase 2 trials, including all of the endpoints we have included. I have absolutely no doubt in mind today that we will not be able to find a partner with positive results.

Now, obviously the results will have to be positive. But if we predict ourselves a year, 1.5 years from now with positive results of the Phase 2 program I'm not too worried that we will be able to find a partner. So choice number one for me definitely keep the current partners.

We're investing in this relationship. I believe in it. It's is showing to be beneficial for everybody.

Choice number two, if EMD Serono were to opt out, find a new partner. Option number three, if everything goes well and the finances look great, you know, maybe think about doing ourselves.

Right. So from a shareholder perspective I understood that correctly; we could actually get COPD indication for almost free. We won't have to pay for it because your partners will have paid for all of the research essentially?

It won't be free. But we will not pay a lot of money, absolutely.

That's pretty impressive. All right and a question real quick (multiple speakers)

Our goal is to limit our contribution here to the minimum. Right now we're in cash receiving mode and not cash spending mode too much. Let's continue building on that.

You've got my approval of that.

I though I would.

One quick question on the board, you have the option to add two Board seats after the vote. And I'm wondering if you made any progress on identifying new Board members.

Yes, we have. So we're looking at a few right now. We have started interfering with a few and the goal obviously is to find and announce someone in the US first. So our utmost priority right now is to get somebody in the US who understands the business and who understands the US market and who lives in the US. So that is priority number one.

We have identified some good candidates. We have started interviewing good candidates. And I'm very confident we'll be able to announce somebody in the second half of the year.

Doug Loe, Versant Partners.

Thank you very much and good morning gentlemen. Just one housekeeping question just to get it out of the way really quickly. What proportion of your cash burn was working capital deficit in the quarter?

And then my second question was -- I know it's a little bit early in your US launch, but you have several hundred patients who have been on drug to this point and thus might have some insights into overall HIV liquid dystrophy market size in the US that perhaps you have been able to refine. I'm just wondering what proportion of the overall HIV/AIDS population that is being consulted by referring physicians here is actually manifesting HIV liquid dystrophy symptoms. And thus just wondering if you have an update here just to sort of provide an update on what you think the overall market size and opportunity is there. That's it for me, thanks.

Thank you. I will ask Luc to answer the first question and then John will answer the second one. Thanks.

Hi Doug. We used for -- in the last quarter we used almost CAD2.3 million in the -- we invest CAD2.3 million in the working capital. In total since the beginning of the year it is CAD5.5 million.

Perfect. Thanks.

I'll pick up the second part of the question. I feel I'm pretty happy to be able to confirm the numbers we have been putting forward are starting to be confirmed by physicians and by what we're seeing in the market place. So we continue to hear that about 30% of the patients with HIV on treatment present with lipodystrophy.

So we are still sticking to the 30%. [Don Berger] recently had a pretty good teleconference where he confirmed that number, and talking to some of the physicians in the US that is what we're hearing also. So we're sticking to the numbers.

So the 240,000 patients we talked about in our original plans are probably, give or take a few thousand, the right number we're looking at. So let's see how many of these will actually be reimbursed.

But I expect the final patients, eligible and reimbursable patient approval to be in around 200,000 which obviously confirms the potential of this drug. So every 10,000 patients we get, which would be a 5% penetration of this 200,000 patient pool, would be CAD250 million worth of sales. And I'm still comfortable we can get up to 10% or more over the next year.

So I am sticking to the numbers we have been talking about since the beginning of the year. We think they are north of 200,000 patients today. But by the time reimbursement is done, I expect the final approval to be 200,000. And that confirms about 30% of the HIV population today treated for HIV with antiretroviral treatments have lipodystrophy.

Thanks a lot for the update.

And Mr. Boucher there are no further questions at this time. You may resume with your presentation or closing remarks.

Wonderful. Well, this concludes our conference call on second quarter financial results. We thank you for your interest in Theratechnologies and for joining in this morning. We wish you a very good day. Thank you so much.

Thanks, goodbye.

Goodbye.

Ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation and ask that you please disconnect your lines. Have a good day everyone.