BioSyent Inc.

Rene Goehrum - President & CEO

Hello, and welcome to the Q1 2018 Results Presentation. My name is Rene Goehrum and I’m the President and CEO of BioSyent Inc.

I want to draw your attention to our forward-looking statements disclaimer and I’ll start the presentation with a look at our quarterly sales EBITDA and net income after tax results. So the first quarter of 2018 represented our 31st consecutive profitable quarter.

Sales were just under 4.5 million which represented a 16% increase versus a year ago period. Our EBITDA was up 24% and our net income after tax up 27% just over $1.1 million.

So you can see the business we accelerated in the first quarter on a year ago and previous year comparison basis. In the year ago period, we did have some trade inventories that we are working through as well.

So just looking at the pharma business on its own, you can see that our Canadian pharma sales were up 12% for the quarter. Our international pharma sales up 90%, represented on this graph, the blue tips are our international pharma.

We’ve now shift FeraMAX various SKUs to international customers in 13 consecutive quarters. And just wanted to caution looking at the international results at plus 90% and making an assumption of what that would look like through the course of the year.

We certainly have got plenty of experience now over the last three or four years. That there is some volatility in the orders that we received from customers, demand is good in the markets where the products are being promoted, but we do note that the size of our customer orders transit time and what not does have an impact on the business and we wouldn’t read too much into having a plus 90% quarter and assuming that would occur for the balance of the year.

I think that would, safe to say that would exceed what our expectation is for the business this year. Drilling down a little bit on the quarter results in the pharmaceutical business, pharma sales were $4.3 million in the quarter that was up 19% versus last year.

The Canadian portion of that at 3.8 million was up 12% as I mentioned earlier. Drilling down further you can see that FeraMAX 150 units were up 12%, FeraMAX powder units up five and then we had some strong growth with RepaGyn and Cathejell up 21 and 22%.

So those four products were the main drivers of the top line growth performance in the Canadian Pharmaceutical business. As mentioned before, I gave you some comments about the international business.

Sales were 566,000 in the quarter and we’ve certainly seen growing demand in these markets, but the variability in sale that we’ve seen quarter-to-quarter would be my cautionary note on that. So, I want to update you on a couple of our launch products.

You’ve heard we’re now talking for quite some period of time with the challenges that we’ve been having with the commercialization of Cysview. I’d saw reflected in the first quarter results is not much on the top line from Cysview, but we have had what I would consider to be a breakthrough in the implementation side that we think we’re filtered through our results as we go into Q2 and especially Q3 and Q4 this year.

So I’ve spoken in the past about the long selling cycle for this product, but we’ve now seeing more hospitals that are adopting Cysview. So we’ve had two hospitals that have been using it in the surgical procedures and in the management of non-muscle invasive bladder cancer.

That increased by four hospitals to a total of six. Now as of May, so that is after the quarter-end obviously We’ve got four additional hospitals that have made the move to implement Cysview and use it in their management of non-muscle invasive bladder cancer and this happened in the course of April and May, all of those four sites have ordered and I believe one or two of them have already reordered.

So that’s being used in procedures and we think that will filter through in terms of consumption obviously filter through in our revenue results as the year progresses. In addition to those six that are now live with Cysview, we’ve got seven additional hospitals that have either completed successful evaluations or are intending to implement Cysview without going through in evaluation.

All of those seven sites are now working through a process to go live and use Cysview with their patient population. In addition to that, we’ve got two additional hospital sites where the evaluation is underway or planned.

On the assumption that we get all of those 15 sites up and running that would give us a revenue runway that would put us on path to what our expectations were, not dating probably about the year or so, but it's certainly what we expected the kind of reception that we would have expected from customers, it's just probably worth the one year lag for what we thought we would do with this product. What’s interesting here is that the first quarter reflects none of the results from our revenue perspective, but certainly we’ve been promoting and working through the implementation on these new sites.

We are now generating revenue from these additional hospital sites that have adopted that will start seeing the gross margin benefits of that filter including the P&L. It certainly will have an effect as we go forward and that’s an effect in a positive way.

So I just wanted to update you on the Aguettant System. As you know, we’ve re-launched the atropine sulfate product about two years ago.

So we’re now kind of coming to the end of what we would consider the launch period for our product like this. Now units in the first quarter for atropine were down 12% Q1 ’18 versus Q1 ’17, but that isn’t really alarming.

We had significant pipelining through the adoption of province wide customers and hospitals last year in the first quarter and so to be down just 12% in units were quite pleased with. We’ve also seen fairly strong uptick in the second quarter so April May of this year partially driven by our customer stock out situation for competing product.

As a result of that, we’ve had a number of hospitals that have been in a process of making a positive decision for Aguettant atropine that I’ve just accelerated that decision making process. So coming into the end of the quarter, we expect the units to be up significantly from the year ago.

Phenylephrine hydrochloride was launched at the end of ’16 for that product in the first quarter units were up 17% versus year ago. Overall, between those two molecules we’ve not got 136 hospitals that have made repeat purchases of the Aguettant System through April 30th of this year.

Certainly, that is tracking to our expectations. During the first quarter and subsequent just a couple of things I wanted to comment on.

As you know, at the beginning of the year, we announced that Larry Andrews and Sara Alfred had joined our Board of Directors. They replaced two gentlemen that long serving directors that retired at the beginning of January, and also just yesterday, Mr.

Joseph Arcuri was elected to our Board of Directors at our Annual General Meeting and he replaces one further retirement of the Director Mr. Paul Montador.

So, that was kind of planned and in fact all three of those moves have been planned for some period of time. Now, we’ve kind of implemented the new group that we’re moving forward with from a governance perspective.

So it's also exciting in May that FeraMAX was named the number one recommended iron supplement brand in Canada for the third consecutive year. This is an independent survey done of healthcare practitioners in Canada.

So both doctors and pharmacists, they’re asked what they’re number one recommendation is from an iron supplement. It's well over 3,000 healthcare practitioners that are in their survey.

So not only are we now three years in a row, but each year the number of doctors or the percentage and the percentage of pharmacists that are recommending FeraMAX as their primary choice has increased. So 17 over 16 and 18 over 17 have increased and I think we’re seeing this in a continued strength in this business in Canada both in unit growth and in dollar growth.

So as we look at the completion of the second quarter and out through the balance of the year and quite frankly beyond 2018 with a view of what we expect to be the growth drivers of our business, so we see additional growth coming from FeraMAX. I’ve spoken at some length in this presentation about what’s happening with Cysview.

Cathejell continues to show unit and dollar growth in the business, RepaGyn and Aguettant System as well. So, we see all of those contributing these are kind of in Canada and outside of Canada, we’ve got some new markets for FeraMAX internationally that we’re working through regulatory process as we’ve disclosed before and in our D&A and other communication.

We’ve got two cardiovascular prescription products that are going through a Health Canada approval to one women’s health prescription product. Upon successful approval by Health Canada, those products will be introduced to the marketplace as well.

We have a very active deal funnel, we don’t do these things on a linear basis, so I think we’ve got six or seven and live projects on the go right now that we expect to have some success with one or more of these negotiations and diligence on new opportunities as we complete those we will be letting you know what’s going on with new drug and licensing. So a quick look at our balance sheet, not a lot of change from December 31st.

Our working capital is up 6% to 21.3 million. Our cash in short term investments went up by about 300,000 to 19.6 million.

We're essentially building a balance sheet for deployment and we continue to work on those opportunities to deploy capital to diversify our portfolio and grow our business over the long-term. If we focus that specifically around cash generation, I would say that Q1 is historically our lowest quarter for cash generation, that’s typically a result of the fact that we do our final tax catch up payments in the first quarter.

We also paid bonus in the first quarter of the year for the fiscal year previous. So historically the first quarter is the lowest in terms of cash generation, which you can see here that our cash position on March 31st has grown strongly from 9.3 million in 2016 to 19.6 million in the March 31st standard here in 2018.

Our return on equity as we continue to report for the 12 months ending March 31st was 26% obviously that’s coming down kind of marginally over the last couple of years form very high peaks five or six years ago, really this is a function of our growth rate and our cash position on the balance sheet. So we as I mentioned before we’re working hard on deployment opportunities and when the time is right till the opportunities are right we’ll be there to deploy the capital that we have at our disposal.

Looking on a trailing 12 month basis, our earnings per share, our EPS reached $0.38 to March 31st TTM that compares favorably to $0.29 I should say for the previous 12 months period. So I just wanted to finish the presentation by thanking you for your continued interest in BioSyent and if you wanted more information about our products you have plant sites you can see on the screen here if you need any more information on our corporate website as well.

And we look forward to reporting on our continued growth in the business. We’ve had a pretty strong start to the second quarter with a number of brands, hitting all time records and it’s unusual for us to have that in April and May typically we see that in October and November.

So that seems to indicate while that we’ve got good momentum as we go towards the balance of this year. Thank you.