HLS Therapeutics: Cardiovascular Engine Accelerates as Nilemdo Launch Ahead of Plan
Specialty pharma's CV portfolio grows 25% as Vascepa sustains double-digit growth and Nilemdo gains traction; balance sheet strengthened, buyback launched.
HLS.TO · Earnings Call · 2026-08-12
Quarter in Focus: Cardiovascular Portfolio Takes the Wheel
The second quarter of 2026 marks a clear inflection point for HLS Therapeutics. Management's narrative was consistent and confident: the company is emerging from a multi-year deleveraging with a stronger balance sheet and a growth engine now firing on multiple cylinders. As CEO Craig Millian put it, “The story of this quarter is the acceleration of our cardiovascular growth engine.” — Craig Stuart Millian, Chief Executive Officer · 2026-08-12 That acceleration translated into a 25% year-over-year increase in cardiovascular portfolio net sales, with cardiovascular portfolio strength driven by double-digit Vascepa growth and a solid first full quarter from newly launched Nilemdo.
The company's shift toward growth is also visible in its capital allocation. After years of paying down debt, HLS launched a normal course issuer bid in June. "We have successfully delevered the balance sheet, reduced our interest costs, and built a business that is now consistently generating significant cash flow," Millian noted. The buyback is a direct result of that progress, reinforcing the message that capital priorities have pivoted from survival to shareholder returns and organic investment.
Nilemdo: A Launch Ahead of the Curve
The most compelling story within the cardiovascular franchise is Nilemdo. In its first full quarter on the market, it generated over $300 thousand in net sales. More importantly, “prescribers had started nearly 1.2 thousand new patients on LEMDO as measured by new to brand Rx or NBRx” — Brian T. Walsh, Chief Operating Officer · 2026-08-12 — roughly 3.5x the pace Vascepa showed at the same launch point. The momentum is particularly encouraging because much of the quarter was still ahead of full private payer coverage. Management confirmed that “private payer access is running ahead of our plan” — Brian T. Walsh, Chief Operating Officer · 2026-08-12, with the largest private payers representing about 80% of privately insured Canadians now covering Nilemdo as a full benefit without restrictions. This removes a major prescription barrier, and the company expects the ramp to continue into Q3 and beyond.
The public reimbursement path is also advancing: Canada's drug agency has issued a unanimous recommendation, setting the stage for negotiations with the Pan-Canadian Pharmaceutical Alliance. "We intend to commence these negotiations later this year," noted Brian Walsh, COO, with initial provincial listings expected in the first half of 2027. The potential for public reimbursement to further accelerate uptake is substantial, especially given the established unmet need for LDL reduction in patients who cannot reach targets with statins.
The launch is also demonstrating synergies across the cardiovascular portfolio. Walsh highlighted the overlap in prescriber base: "It is almost complete overlap with the call point, the same customer base." This is boosting Vascepa as well. In Q2, Vascepa net sales grew 18% year over year, and units grew 16%. "Prescriber breadth and depth both continue to track positively," Walsh added. The dual-product strategy is working.
Clozaril: Stabilization Becomes Reality
While the cardiovascular growth story dominates, the stability of Clozaril is equally important to the investment thesis. In Canada, the patient base has grown sequentially for five consecutive months through July. "This is a positive sign that business is stabilizing," Millian said. Net sales were down just 1% in local currency versus Q2 last year, a marked improvement from earlier comparables. The Clozaril franchise remains a strong cash contributor, holding about a 50% market share in Canada. In the U.S., the year-over-year decline is attributed to a tough comparable and the July 4 holiday timing, with management expecting roughly flat sales in the second half.
The durability of Clozaril is reinforced by the CSAN patient support program. "CSAN is an important differentiator for the Canadian business," Walsh explained, citing the Pronto device and high-touch services that keep patients loyal to the brand. These services have helped weather generic competition and temporary disruptions, and the recent sequential growth suggests the worst is behind.
Balance Sheet and Growth Optionality
The financial position is arguably the strongest in years. Cash from operations rose 14% year-to-date, and net debt stood at $28.5 million at quarter end, down 26% from the end of 2025. Interest expense has been cut dramatically, from $8.8 million in 2024 to $3.2 million on a trailing twelve-month basis, reflecting the improved credit agreement and lower debt balance. The company repurchased approximately 340 thousand shares under the NCIB through July 31, at a cost of $1.4 million Canadian.
Management is also actively evaluating business development opportunities. "We continue to screen assets very actively," said Millian, with a preference for Canadian specialty assets that can leverage existing infrastructure. The success of the Nilemdo launch and the upcoming NEXLIZET approval decision create a clear template for future acquisitions. As Millian stated, "Our goal is to build scale in the coming years, organically and through disciplined business development." The balance sheet provides the capacity to act when attractive opportunities arise.
Outlook and Catalysts
HLS reaffirmed its 2026 guidance of revenue between $56 million and $60 million and adjusted EBITDA of $18.5 million to $21 million. Management expects margin expansion in the second half, driven by the accelerating Nilemdo ramp and continued Vascepa growth, while Clozaril stabilizes further. Key catalysts include private payer coverage fully taking effect, the start of public reimbursement negotiations, and a Health Canada decision on NEXLIZET by year-end, with a potential launch in the first half of 2027.
In summary, HLS is transitioning from a turnaround story to a growth story. The Bempedoic acid franchise, anchored by Nilemdo and soon NEXLIZET, is building a new revenue pillar, while the legacy Clozaril business provides steady cash flow. With a strong balance sheet and clear strategic focus, the company appears well-positioned to deliver on its promises. The market has been relatively quiet on the stock, but if execution continues, this small-cap could become a more prominent specialty pharma player.