INVESTOR PRESENTATION Greg Gubitz | CEO Gilbert Godin | President & COO Winter 2019 TSX - HLS
Forward-looking statements Certain statements in this presentation are “forward - looking statements”. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “project”, “forecast”, “target”, “expect”, “seek”, “ endeavour ”, “anticipate”, “plan”, “estimate”, “believe”, “intend”, or stating that certain actions, events or results may, could, should, would, might or will occur or be taken, or achieved) are not statements of historical fact and may be “forward - looking statements”. Forward -looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of known and unknown risks and uncertainties which would cause actual results or events to differ materially from those presently anticipated. A number of factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this presentation. These factors should be considered carefully and prospective investors should not place undue reliance on these forward-looking statements. Although the forward-looking statements contained in this presentation are based upon what HLS currently believes to be reasonable assumptions, HLS cannot assure prospective investors that actual results, performance or achievements will be consistent with these forward-looking statements. Except as required by law, HLS does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. * * All fig igure ures in in USD un unless otherwise noted. TSX - HLS HLS THERAPEUTICS INC. 2
Specialty pharma veterans BI BIOVAIL PERFOR ORMANCE Developed and implemented new strategy $2.5B 30 months $1B 9 $1B EX EXIT IT VALUE 145% transactions deployed capital INHER ERIT ITED MARKET ET CAP RETU ETURN IN 30 30 MONTH THS Cost reductions Legal settlements Improved governance Strong record of value creation TSX - HLS HLS THERAPEUTICS INC. 3
Executing on our vision TSX - HLS HLS THERAPEUTICS INC. 4
Leading healthcare investors behind HLS ORBIMED ATHYRIUM HEALTHCOR $3.6B AUM $14B AUM $3.5B AUM HLS Therapeutics $385M debt and equity Refinanced debt in Q3: ~$10M in annual savings TSX - HLS HLS THERAPEUTICS INC. 5
HLS’s methodical strategy Staged approach KEY STR TRENGTHS Operational pharma know-how 1. FOUNDATIONAL Business development expertise cash flow Efficient corporate platform 3. LATE-STAGE CLINICAL explosive growth Strong balance sheet 2. TRANSFORMATIVE organic growth Canadian-based, North American-focused pharmaceutical company TSX - HLS HLS THERAPEUTICS INC. 6
Rapid scale since inception EBIDTA* 1 REV EVENUE* ADJUSTED EBI ($ millions) ($ millions) 4 2 75 56 54 39 20 12 TR TRANSACTIONS THERAPEUTIC ARE REAS 2015 2016 2017 2015 2016 2017 45 45 15,000 FULLY TRA RANSITIONED CLOZARIL FRO ROM NOVARTIS EMPLOYEES MENTAL HEALTH H PATIENTS SUPPORTED REDUCE-IT trial delivers blockbuster results for Vascepa 1 net loss adjusted for (i ) “stock - based compensation”, (ii) “amortization and depreciation”, (iii) “acquisition costs”, (iv) “finance and related costs”, and (v) “provision for (recovery of) income taxes” TSX - HLS * Absorica included a one-time benefit in 2017 due to competitive disruptions and manufacturer promotions HLS THERAPEUTICS INC. 7
Financial Highlights in Q3 Refinanced Debt Initiated Dividend Lowered principal to $100M Quarterly dividend of CDN$0.05 Added revolving facility of $25M Annual Return to shareholders of ~$4M Reduced interest rate by ~600 basis points Two dividends declared to-date Will save ~$10M per year Additional loan capacity of $100M available Durable cash-flows and promising outlook enable positive developments TSX - HLS HLS THERAPEUTICS INC. 8
Our portfolio FOU OUNDATIONAL PROD ODUCTS Clo Clozaril Schizophrenia U.S./Canada Acquired 2015 marketed Absorica Abs Acne U.S. Acquired 2016 marketed by third party TR TRAN ANSFORMATIVE PROD ODUCTS Vascepa Hypertriglyceridemia Canada In-licensed 2017 pre-filing Trinomia CV risk reduction Canada In-licensed 2017 pre-filing TSX - HLS HLS THERAPEUTICS INC. 9
Clozaril il: Well established antipsychotic in North America WHO essential medicine Schizophrenia Clozaril 1% of population 15,0 ,000 1/3 patie tients active patients refractory to first line treatment LIF IFE CHANGING US$29 Mil illi lion Clozaril can be life changing, revs in Canada in 2017 often the only and last recourse for refractory patients US$19 Mil illi lion 80% revs in U.S. in 2017 response rate Great foundational product with strong consistent cash flow TSX - HLS HLS THERAPEUTICS INC. 10
CSAN AN: Our patient portal and registry is an economic moat for Clozaril in Canada Created resilient demand for product 55% 55% market share Every wee eek 200 200,0 ,000 25 dedicated resources 25 Follows up on blood 1,300 patients for tests/year Sales reps non-compliance Nurses Physician consultants 50,000 50, 24,000 24, calls to 24/7 availability incoming customers/ calls/year year CSAN: Clozaril Support and Assistance Network 2010 2011 2012 2013 2014 2015 2016 2017 Sales (USD millions) Growing franchise in a genericized Canadian market TSX - HLS HLS THERAPEUTICS INC. 11
Vascepa: On path to become a first-in-class Rx cardiovascular product Vascepa is the only 96% purified Rx Icosapent Ethyl (EPA) In-licensed from Amarin Corp (NASDAQ: AMRN) VASCEPA U.S. INDICATION Versus LOVAZA Reduction of very high TRIGLYCERIDES LOVAZA is an Omega-3 mixture that Vascepa purifie ied EPA is is the (Very High) (>500 mg/dl) lowers triglycerides, but only Om Omeg ega-3 to sh show a a CV 1 ve Indication: CV 1 Protection ELEVATES LDL (bad ch cholesterol) Prospective benefit it on top of a a st statin Vascepa Lovaza (never launched in Canada) All other Om Omeg ega-3 an and fish ish-oil peak sales of US$960M trials have ve fai aile led to before LOE Other emonstrate CV 1 benefit dem its Lovaza contains 42% DHA which Elevates LDL 96% (bad cholesterol) EPA Transformational anchor to launch our second therapeutic franchise 1 CV = Cardiovascular TSX - HLS HLS THERAPEUTICS INC. 12
Vascepa: REDUCE-IT trial delivers Blo lockbuster results Tria ial des esign Tria ial res esults Primary endp dpoint Significant redu Si ductions on se secondary endpo dpoints 8,2 ,200 PATIENTS statin placebo CV CV 1 Heart Stroke + Dea eath Attack 25 25 % 20 20 % 31 31 % 28 28 % statin Vascepa + Reduction in in Major CV 1 Events Adve verse CV Amarin invested $300M over five years in REDUCE-IT trial 1 CV = Cardiovascular TSX - HLS HLS THERAPEUTICS INC. 13
Vascepa: Characteristics of a category leader 7-8M 8M #1 1 Kille ler Low Rate e Market et Canadians have ve Globall lly is s of of Adver erse el eleva vated Trig iglyceride Acc ccess CV Disea CV sease le levels Effec ects 40M 40M Rx/year written for Rx/ st statins Sign ignificant Well ll tole lerated Broad co coverag age opportunity opp expe pected Potential revenue opportunity of $150-250M per year TSX - HLS HLS THERAPEUTICS INC. 14
Vascepa – Strong differentiator and market position HLS has exclusive Canadian rights to Vascepa Vascepa (96% EPA) is the ONLY Omega-3 product to show improved cardiovascular outcomes in a large placebo controlled trial Numerous Omega-3 EPA + DHA mixture products exist, but DHA has been linked to increased LDL (bad) cholesterol 2018 Q1 Q2 Q3 Q4 2019 Q1 Q2 Q3 Q4 2020 Q1 FILE LE HC RES ESPONSE LAUNCH Poised to be HLS’s top product (based on U.S. sales data) TSX - HLS HLS THERAPEUTICS INC. 15
Trin rinomia: Expanding our cardiovascular franchise In-licensed from Ferrer Internacional, S.A. (Spain private) INDICATION DIFFERENTIATION SECONDARY TRI-COMBO CAPSULE PREVENTION OF “Polypill” COMPLIANCE/ADHE HERENCE IMPROVEMENT CARDIOVASCULAR EVENTS Patients at risk following an initial CV event are poly medicated (7-8 drugs). Aspirin (anti-coagulant) Pill burden is biggest reason for Atorvastatin (lipid lowering) non-adherence to treatment Ramipril (anti-hypertensive) Complementary therapy to cardiovascular franchise TSX - HLS HLS THERAPEUTICS INC. 16
Trin rinomia: Exclusive Canadian rights 46,000 30+ 30+ Rx/month 36 months countries approved in post launch (Spain) 2018 Q1 Q2 Q3 Q4 2019 Q1 Q2 Q3 Q4 2020 Q1 FILE LE HC RES ESPONSE LAUNCH Leverages Vascepa sales and marketing infrastructure TSX - HLS HLS THERAPEUTICS INC. 17
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