Mr. Steve Saviuk reports

VALEO PHARMA REPORTS RECORD THIRD QUARTER 2023 REVENUES

Valeo Pharma Inc. has released its financial results for the third quarter ended July 31, 2023.

Third quarter 2023 results and highlights:

• Record quarterly revenues of $14.1-million in Q3 2023, compared with $6.1-million in Q3 2022, up 132 per cent, with Enerzair and Atecura up 234 per cent;
• Record adjusted gross profit of $5.1-million in Q3 2023 compared with $2.4-million in Q3 2022, up 106 per cent;
• Q3 2023 net loss of $5.8-million compared with $5.4-million in Q3 2022;
• Q3 2023 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $2.5-million compared with a $3.5-million loss in Q3 2022, a 28-per-cent reduction;
• Enerzair- and Atectura-prescribing physicians reached 2,503 at the end of Q3 2023, a 23-per-cent growth for the quarter and 221-per-cent increase year over year;
• Total of 18,384 Enerzair and Atectura prescriptions during Q3 2023, up 163 per cent over Q3 2022;
• Total of 56,021 Enerzair and Atectura prescriptions over the last 12 months, up 310 per cent year over year.

"Our record third quarter revenue and year-to-date results demonstrate our ability to generate sequential quarterly growth. Our key innovative products are well positioned in their respective market segments, and we expect their organic growth trend to continue for many quarters to come," said Steve Saviuk, chief executive officer. "Enerzair and Atectura are leading the way for us confirming their strong position as important therapies in the large Canadian asthma market. Growth in the number of prescribing physicians and total prescriptions has been increasing quarter over quarter at an accelerating pace, and we believe they are only in the beginning stages of demonstrating their true market potential."

Commenting on the record third quarter 2023 results, Luc Mainville, senior vice-president and chief financial officer, said: "Our quarterly and year-to-date results when compared with previous-year periods show that we are on the right track. Our revenues, margins and EBITDA results for Q3 2023 have been impacted by an increase in revenue provisions related to group purchasing organization and product listing agreement coverage on our basket of products while our operating expense included high level of sample costs compared with prior quarters. With projected revenues and margins growth, and continued strict control over [operating expenses], we remain focus on achieving EBITDA profitability, and are taking commercial and operational initiatives to achieve this objective. Subsequent to the quarter, we have also strengthened our working capital by completing a $4.5-million private placement and debt financing, and are now better positioned to pursue our ambitious growth objectives."

Third quarter 2023 financial results:

• Record revenues were $14.1-million for the quarter ended July 31, 2023, compared with $6.1-million for the quarter ended July 31, 2022, representing a 132-per-cent increase. The increase over the previous comparable period is mainly due to the addition of Xiidra, Simbrinza and Allerject, as well as continued growth and market share gains of the company's other core products, Redesca, Enerzair and Atectura;
• 20-per-cent organic revenue growth in Q3 2023 compared with Q3 2022, including 234-per-cent combined revenue growth from Enerzair and Atectura;
• Adjusted gross profit was $5.1-million for the quarter ended July 31, 2023, compared with $2.4-million for the quarter ended July 31, 2022, representing a 106-per-cent increase. The increase over the previous comparable period is mainly due to the significant increase in the company's revenues;
• Net loss was $5.8-million for the quarter ended July 31, 2023, compared with $5.4-million for the quarter ended July 31, 2022. The 8-per-cent increase in net loss in Q3 2023 was due to the increase in financial and sales and marketing expenses, which was partly offset by the significant increase of gross profit;
• Adjusted EBITDA loss was $2.5-million for the quarter ended July 31, 2023, compared with $3.5-million for the quarter ended July 31, 2022, a 28-per-cent improvement.

Year-to-date 2023 financial results:

• Record YTD revenues of $40.8-million for the nine months ended July 31, 2023, compared with $15.1-million for the nine months ended July 31, 2022, representing a 171-per-cent increase;
• Adjusted gross profit was $14.3-million for the nine months ended July 31, 2023, up 148 per cent compared with $5.8-million for the nine months ended July 31, 2022;
• Net loss of $18.6-million for the nine months ended July 31, 2023, compared with $16.4-million for the nine months ended July 31, 2022. The increase in net loss is mainly due to the increase in financial and sales and marketing expenses, which was partly offset by the significant increase of gross profit;
• Adjusted EBITDA loss of $6.4-million for the nine months ended July 31, 2023, compared with an adjusted EBITDA loss of $11.6-million for the nine months ended July 31, 2022, a 45-per-cent improvement.

Third quarter 2023 highlights:

• In July, 2023, the company noted from a news release issued by Novartis on June 30, 2023, that Novartis agreed to sell Xiidra, a prescription eye drop solution indicated for the treatment of the signs and symptoms of dry eye disease, as well as several other ophthalmology products to Bausch + Lomb Corp. Simbrinza is not part of the products that are being divested by Novartis. The sale is expected to close before the end of the year;
• In June, 2023, Tamara Close and Didier Leconte have joined the company's board of directors. Following the appointment of Ms. Close and Mr. Leconte, Valeo's board of directors comprises eight directors, five of whom are independent;
• In May, 2023, following the U.S. Food and Drug Administration (FDA) decision to decline Veru Inc.'s request for emergency use authorization (EUA) for sabizabulin, the company and Veru mutually agreed to terminate their commercial services agreement for sabizabulin for COVID-19 in Canada originally entered into on Sept. 14, 2022.

Third quarter 2023 subsequent events

In August, 2023, the company closed a $4.5-million financing comprising a non-brokered private placement offering of 13,999,997 units of the company at a price of 28 cents per unit for gross proceeds of $3.92-million, including the participation of Investissement Quebec for $2.0-million and $1,421,000 from insiders. In addition, the company secured a loan agreement with a related party for a principal amount of $580,000 bearing annual interest at a rate of 12 per cent.

Third quarter 2023 webcast and conference call

Valeo will host a conference call to discuss its third quarter 2023 results and highlights on Thursday, Sept. 14, 2023, at 8:30 a.m. ET. The telephone numbers to access the conference call are 416-764-8659 and 1-888-664-6392. An audio replay of the call will be available. The numbers to access the audio replay are 416-764-8677 and 1-888-390-0541 using the following access code (187641 followed by the pound key).

A live audio webcast of the conference call will be available on-line.

Financial statements, and management's discussion and analysis

Valeo Pharma's financial statements and MD&A for the three-month and nine-month periods ended July 31, 2023, are available on SEDAR.

About Valeo Pharma Inc.

Valeo Pharma is a fast-growing Canadian pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on respiratory/allergy, ophthalmology and hospital specialty products. Headquartered in Kirkland, Que., Valeo Pharma has all the required capabilities and the full infrastructure to register and properly manage its growing product portfolio through all stages of commercialization.

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