Botanix Pharmaceuticals Limited ($BOT)

Good evening, everyone, joining us from North America, and a pleasant good morning to everyone joining from Australia. I'm Vince Ippolito, Executive Chairman of the Board of Botanix Pharmaceuticals Limited, and we're pleased to present the Botanix quarterly activity report and 4C quarterly cash flow report for the period ending 31 March 2026. And the company has come a long way since our highly successful commercial launch of Sofdra, and we're pleased with the progress that we've made and believe that we're well positioned for future growth, as you're going to see from today's presentation. And at the end of the presentation, we'll have time for a few questions from the audience. So please type them into the Q&A section of the webinar here. Now we have close to 300 people that have preregistered and joined us here for today. So we're going to most likely be consolidating like questions when we ask them. And so hopefully, we'll be able to hit your questions and the broad-based ones that you have from today's presentation. On the screen, I'm joined by our Chief Executive Officer, Dr. Howie McKibbon; and our U.S. Chief Financial Officer, Chris Lesovitz, who will take you through today's presentation. And with that, I'm going to turn the presentation over to Howie.

Yes. Thank you, Vince, and thank you all for joining today. So for the many new investors that we have on the call, we'll give a brief corporate overview, and then we'll get right into results and outline our growth plans for the future. So for those that are new to us, Botanix is a growing dermatology company that recently launched Sofdra. It's the first and only new chemical entity approved for primary axillary hyperhidrosis or excessive underarm sweat. It's a condition that affects more than 10 million people in the United States alone. So for context, there are only 2 new chemical entities in dermatology approved by the FDA in 2025 out of the only 44 drugs there. So it's a valuable asset to us as a new chemical entity. Our Botanix Fulfillment Platform has effectively increased patient compliance. It continues to outperform the industry benchmark for prescription fills, achieving 2.5 more fills than the industry standard. We'll discuss later on why that's a really important strategic asset for our company. Our pro forma cash position at the end of Q3 was $50.8 million. And as many of you know, we completed our sales force expansion to 50 sales specialists at the end of October of 2025. The team is highly productive and performing as expected so far. Total prescriptions shipped continue to grow despite the short-term winter slowdown in the United States hyperhidrosis market. We're pleased that March set an all-time high for Sofdra with 10,653 prescription shipments as we head into the summer season with a very nice exit month. We expect our sales force to increase momentum this quarter. While hyperhidrosis is a year-round condition, summer months often prompt more patients to seek treatment because they're less likely to conceal symptoms with dark clothing or additional layers. Next slide, please. So Botanix is led by a pretty experienced board and management team with a proven track record of identifying, acquiring and launching dermatology drugs that ultimately become market leaders. Many of the team members have previously collaborated at successful dermatology companies and with over 30 dermatology launches under the belt, the team has an unmatched record in commercializing products and achieving exits to larger partners. Next slide, please. So before we get to the quarter results, I want to step back and summarize what we've achieved over the past 12 months as this company has transformed from a development stage company to one generating almost $120 million in gross revenue on a trailing 12-month basis. Cumulative net revenue rose from a nominal amount to almost $28 million. Cumulative prescription shipped increased to 86,000. And these milestones are notable given that Sofdra launch was 14 months ago. Strong physician uptake and positive patient experience prompted us to expand the sales force to 50 specialists in October, as I said earlier. And that was to support the continued Sofdra demand and provide capacity for additional products in the future that our platform is ready for. The original sales reps outperformed three recent dermatology launches in the comparable first quarter period. So we're happy with their results and excited to see the new sales representatives follow along the same lines. And finally, Sofdra benefits from a strong patent protection extended to 2040. So it's given the company roughly 15 years of runway to commercialize the product. And while we also continue to pursue opportunities to strengthen or extend that patent protection, we'll be focused on growing Sofdra in the near term. Next slide, please. So a lot has happened in recent months. I'd like to highlight a few key developments along the way. So TRx has hit a record of 10,653 units shipped in March, as I said earlier, as the hyperhidrosis market began recovering from the winter slowdown in the United States. Botanix completed a $45 million capital raise in March and April. Our pro forma cash net of fees was $50.8 million, positioning us well for the next phase of commercial execution. We also renegotiated 2 payments for Sofpironium Bromide, and that's the Sofdra active pharmaceutical ingredient, deferring roughly USD 15 million of API purchases to future years and eliminating any expected purchases until December of 2027, which had an immediate positive impact on cash flow. On April 16, we agreed to terms with Piramal for a proposed manufacturing and supply arrangement. Piramal will begin development services and serve as an additional -- I'm sorry, as an alternate commercial API supplier. This additional source of API is expected to lower our cost of goods sold by 25% to 40% with those benefits being realized progressively beginning in 2028. Together, the capital raise, the deferred API payments and alternate API supply strengthened our ability to execute the growth plan, both for Sofdra and for the Botanix Fulfillment Platform. After the March record prescriptions, we're confident in our continued sales momentum as we enter the final quarter of the year. Next slide. So we'll dive into results here. As we said earlier, Sofdra reached 26,684 prescriptions in Q3, demonstrating continued growth despite the [ learner ] slowdown. Momentum is accelerating. March was the best month, not just for the quarter, but for Botanix. And as we exited that 10,653 prescriptions, we look forward to that continued growth. Next slide. All right. Now though our gross to net was temporarily impacted as expected. I first talked about this back in July, I think, in our investor presentation that U.S. health care insurance deductibles reset at the beginning of each calendar year. And that impacts about 50% of all privately insured Americans under 65. The reimbursement rates normalize after patients meet the deductibles, and that occurs typically by the end of April. So we're happy to see our gross to net, our net sales growing. We anticipated what was going to happen in Q3, though prescriptions are up, revenues down a little bit. But again, that happens to every company in the United States as deductibles reset. We're now coming out of that period. So with that, I'll turn it over to Chris Lesovitz, our U.S. Chief Financial Officer.

Thank you, Howie. Although average gross to net yield for the quarter was 18%, gross to net showed improvement throughout the quarter, growing from 16% to 19%. Exiting the deductible reset period drives higher gross to net yield for Sofdra as high-deductible plan units typically transition into fully reimbursed units from May onward. As you can see in the graph, the orange arrow shows the growth in gross to net in the prior 12-month period. We can expect gross to net to resume a similar upward trajectory in Q4 and onwards. Next slide, David. Turning to our financial position at the end of Q3. We continue to maintain a strong, well-controlled balance sheet as we scale the business. From a liquidity standpoint, we finished the quarter with $50.8 million in pro forma cash, which included $22.1 million in cash at quarter end and an additional $28.7 million net of costs from the capital raising settled post quarter. As a reminder, quarter end cash balance included the $9.7 million API purchase. Following the completed raise, the funds provide us with substantial flexibility and runway to execute against our commercial and operational objectives. As a result of the API investment, we ended the quarter with an inventory balance of approximately $34.5 million. Importantly, this represents an adequate supply of API, positioning us to support continued manufacturing ramp-up as Sofdra demand grows without supply disruption or near-term working capital risk. Our operating cash outflow for the quarter would have been $13.6 million, excluding the $9.7 million API purchase, which is a decrease compared to $17.2 million from Q2. When the API purchase is included, operating cash outflows increased by $6.1 million from Q2 to $23.3 million in Q3. Jump to the next slide. Moving to our cost structure. The net cash outflow would have decreased 21% absent the $9.7 million API purchase, as I previously mentioned. On the revenue line, receipts from product sales decreased 5.4% quarter-over-quarter, which was driven primarily by the U.S. health care insurance deductible reset, impacting Sofdra insurance reimbursements in January and February. Importantly, this is a timing effect rather than the demand issue, which we begin to see normalizing exiting the quarter. On the cost side, product manufacturing costs increased 308% quarter-over-quarter. This increase was expected and directly reflects the $9.7 million API purchase referenced earlier. Offsetting that, the organization demonstrated meaningful cost discipline. Operating costs declined 13%, driven by an overall reduction in operating expenses as well as the absence of one-time regulatory items incurred in prior period. Similarly, staff costs decreased 43% quarter-over-quarter due to nonrecurring payments made in Q2. Our general and administrative costs increased nominally by about $200,000 or 17%, which was in line with expectations. Again, net cash outflows increased 35% quarter-over-quarter. But it is important to reemphasize that excluding the API purchase, net cash outflow would have decreased approximately 21% to $13.6 million. This highlights the underlying operating leverage in the business and reinforces that the quarter's cash dynamics were primarily driven by the inventory timing rather than decline in operating performance. In summary, we exited Q3 with strong liquidity, solid inventory positioning and continued discipline in cost management, which collectively position us well for the next phase of commercial execution. Next slide, David. Now discuss the potential impact of U.S. pharmaceutical tariffs. Botanix is exploring options to reduce or delay the effect of the United States pharmaceutical tariffs announced April 2, 2026. The United States considers Sofdra to be a product of Japan based on its API manufacturing site, which would be subject to a 15% tariff of approximately USD 10 per bottle upon importing into the United States from its finished good manufacturing site in Canada. Reduced tariffs may be available for the companies entering onshoring agreements. The newly selected alternate API supplier, Piramal, will manufacture at a U.S. site, potentially offsetting tariff impacts following their onboarding. Tariffs are to take effect September 29, 2026, and we will provide future updates as they become readily available. Our renegotiated API supply agreement. As mentioned, we had 2 API purchasing totaled USD 15 million. These were previously scheduled for delivery in April 2026 and January 2027. These were rescheduled with no API purchases anticipated before December 2027. This was a result of a successful renegotiation of the existing API supply agreement with our current API supplier and value partner, Kaken Pharmaceutical Company. Under the supply agreement, Botanix has commitments to purchase API by December 2027, December 2028 and 3 remaining API purchases over 2029 and 2030. Each will cost approximately USD 7.5 million and depending on the exchange rate at the time of purchase. A reminder, Botanix satisfied our $9.7 million API purchase obligation in March as this was reflected in our company's current cash position. With us, I'll return this back to Howie.

Yes. Thanks, Chris. So just to summarize there, those API payments were moved. They're moved to where the next one doesn't have to occur until the end of 2027. Cost should remain fairly flat from $13 million to $15 million a quarter post. So it puts us in a very predictable cash outflow situation moving forward. So we're happy to see that occur. The next step of this, and we previously discussed it, it's the importance of establishing an alternate API supplier for Sofdra. It does a couple of things. You got to derisk the supply chain. It's not optimal to just have one. Certainly, at launch, we would like -- would have liked to have this. We acquired the product late stage, and those relationships are already in place. Rather than delay the launch, we move forward. But we are very focused on having this alternate supplier up and running so we can realize the potential cost savings of 25% to 40% and the reduction of COGS and the related increase in gross profit. So we've agreed to terms with Piramal, very large supplier for proposed manufacturing and supply arrangement under which Piramal is going to get started now with development services and start to serve as an alternate API supplier for Sofdra. So under this term sheet, the tech transfer will begin immediately. And during that time period, the parties are going to negotiate us in Piramal, negotiate a definitive commercial API supply agreement. And the API is anticipated to be available from Piramal in 2028 with those benefits being realized progressively during the transition to that supply. And we'll provide updates on future calls as those activities progress. Next slide, David. Just going to reiterate a couple of things here and then transition to the future. So as you know, we secured capital raise commitments of approximately $45 million to fund the API purchase to support the growth, and that consisted of a $40 million two-tranche placement underwritten SPP of $5 million. So as of March 31, cash on hand was $22.1 million. That included the $14.1 million from the first tranche of the placement. We paid out the $9.7 million in API, and then we received the second tranche at $23.8 million, along with the $4.9 million SPP. So we ended up with a pro forma Q3 cash balance of $50.8 million, and that well positions us to take advantage of our growth opportunities in the future. Next slide, David. All right. So let's talk about those catalysts here. This is our focus, deliver continued growth on Sofdra. And that's important, and that's our first, our flagship product, but there are other opportunities out there as well. So the platform that we have is working very well and it's scalable. And for little -- minimal investment, minimal cost, you can put other products on that platform that we might in-license and they would immediately have additional fills by comparison to what they're already getting. We're going to continue to implement our API supplier plan. By having the term sheet ready, we've made a significant step toward decreasing those COGS, and we'll continue on with those activities. We have the opportunity to expand Sofdra licensing to additional regions for increased revenue. And the value proposition for mergers and acquisitions is elevated by Sofdra's long IP runway to 2040 and frankly, by having the secondary supplier as well and the more optimal cost of goods. Next slide, David. So on that first [indiscernible] is Sofdra, and it's an outstanding example of the dermatology solution for patients in a large underserved market, and it's had an unmet need. It's progressing along nicely, and we're focused on the future growth of this product. The performance proves the strength of the organization, the value of the Fulfillment Platform we've developed. Just for those who are new, in May of 2022, Botanix acquired worldwide rights -- exclusive rights to sofpironium with patent protection through 2040. Sofdra was approved back in 2024 as the first new chemical entity for hyperhidrosis. In Q3 of last year, Botanix successfully launched Sofdra for primary axillary hyperhidrosis or excessive underarm sweating. So it presents a novel, safe and effective solution for patients who have lacked treatment options in a socially and mentally challenging medical condition. And it's the third largest medical condition in dermatology affecting over 10 million patients in the U.S. alone. Next slide. So quickly on how it works and what hyperhidrosis is. People are sweating -- people that have this condition are sweating when they're not supposed to be sweating. It's characterized by the success of sweating beyond what is needed to maintain normal body temperature. Now we believe the novel MOA or mechanism of action, the Sofdra allows it to reduce sweat at its source because it selectively binds to the muscarinic 3 receptor in sweat gland that's primarily involved in sweat signaling. It's rapidly metabolized once it hits the bloodstream, which we believe minimizes the side effects and gives us a very clean side effect profile. Physicians have told us that the proprietary metered dose pump, which limits unwanted contact to the hands is one of the key reasons they prescribe the product. Next slide, please. All right. So let's talk about other opportunities and the platform itself. Now although hyperhidrosis ranks as the third largest derm condition, the overall derm market presents substantial opportunity. It's about a 10% CAGR with the U.S. market forecast to grow from USD 8 billion in '24 to roughly USD 14.5 billion by 2030. So more than 130 million Americans are affected by skin conditions. It's a figure that continues to climb as social media drives awareness and diagnosis. We have a seasoned board and management team have demonstrated history of acquiring, launching and scaling derm products and ultimately bringing them to market-leading positions. And our platform here is a strategic asset. We can maximize the volume of products in these large therapeutic areas of dermatology, ultimately improving the gross to net and the service that physicians and patients get and ultimately, the refills that those patients receive. So very excited about the opportunities in the future, not just for Sofdra, but for the entire dermatology market and what the platform can do. So let's transition to that platform on the next slide. So our primary asset now at Botanix. The platform is an innovative margin-enhancing solution that scales to support additional products with minimal investment. What we mean by that is to put something else in our sales force bag to put something else on the platform has very little incremental cost because those fixed costs are already there. Now we have the opportunity to scale with it. The platform delivers high prior authorization approval rates, so you get more reimbursed prescriptions over time, improves gross to net margins and by using a single pharmacy network to serve both derm practices and patients, really simplifies the prescribing and product access. So said another way, when they write it, they're confident that the patient is going to get it and the patient will stay on the product. There's built-in personal and AI-driven follow-up that improves patient compliance and drive the fill rate to approximately 2.5x the industry standard. And finally, direct consignment to pharmacies removes the wholesaler. We've spoken about this before, which provides immediately -- I'm sorry, immediate supply chain cost savings. Next slide. All right. So we're pleased with the March quarter results. Both the performance of our sales reps and the operation of the platform have been very strong. As we said earlier, Sofdra presents a strong growth opportunity. It's meeting or exceeding our expectations as we've exited our highest month ever and move into the summer months. Not only that, physicians are giving us continuous feedback that they're pleased with the clinical performance and very happy with the safety profile. These dermatologists are highly promotionally sensitive to this product. So since expanding to 50 sales professionals, prescription volumes have continued to grow. We remain confident in Sofdra's future. The platform is already delivering value for patients, physicians, refill rates. Most importantly, it can scale to support additional products while maintaining that high level of performance and substantially increasing throughput. These factors provide a solid foundation for growth. We're going to remain focused on execution and look forward to speaking to you again soon. That said, this concludes our presentation. We'll take as many questions as time allows, and I'll send it back over to you, Vince, for Q&A.

Great. Thank you very much, Howie and Chris, for the presentation. We did get a lot of questions here. So I'm going to try and move through them here as quickly as possible. Chris, there was a number of questions about the pro forma cash of $50.8 million. I'm going to have you answer the first part of the question here, and that is -- it was asked in many, many different ways, but is that enough money here for us? And then Howie, there was just a question about that cash and how you think about it for future M&A versus driving Sofdra and kind of what would that M&A kind of look like with this kind of cash on hand. But first, Chris, why don't you answer the first part of that of is that going to be enough?

Yes, sure thing, Vince. Yes. Based on our current plan, the $50.8 million of pro forma cash is sufficient. As we -- as you know, we raised the $45 million of the funding to execute against our operating plan. That amount was successfully raised and approved by the investors. And those proceeds are still and remain consistent with what we outlined at that time. And also most importantly, within the $50.8 million balance, this includes the March API payment. That obligation is behind us now. So I mean with that said, yes, very comfortable with our current liquidity position.

All right. Let's look at the follow-up, and I think that one was about -- what the current cash is being used for or going to be used for, how does it relate to M&A?

Yes.

And what does that structure look like? So the cash we have on hand is for execution for the company's operations right now, okay? Any M&A that would occur, we're looking for and actively engaged in discussions for assets where we can license them for little or no upfront dollars with a shared royalty. So in this situation, it's not something that we're planning or would think of using our current cash for and acquiring a product. So once you have that product in. Well, other than some small amount of additional marketing materials for the sales force to use to sell those products, not a lot of incremental costs. They're going to see the same physicians. We said this earlier. If you Google derms, how many dermatologists in the United States, you probably come up with about 14,000. If you got down to those who have an active NPI who are treating patients, writing prescriptions, et cetera, there's probably 10,000. About half of those are focused on aesthetics or cosmetics primarily. And the other half are medical dermatology. And those same 5,000 write the majority of medical dermatology products that we spoke about earlier in the therapeutic areas that we outlined in that slide. So there's opportunity out there to have these types of in-license deals to then put them in our sales force bag and allow this platform that we've created to optimize the gross to net, to increase the amount of fills those patients get and then to actually organically grow that product because of the talent of our sales force.

Thank you, Howie. I'm going to give this next one to you as well here. There were a couple of questions about our record growth in March, the level of prescriptions that we had in that current month. So as you look at March, what were the key reasons for the growth as you see it in March?

Yes. Good question, Vince. A couple of things there with regard to the all-time high 10,600 prescriptions. Sales force is fully trained and hitting their stride now. We actually had them out of the field for a week in January, where we brought them all together to provide their new updated marketing campaign, the marketing materials and have them practice with each other to share key learnings. That advanced training certainly sharpened the messaging during that time period. Our message is resonating strongly with our prescribers when you're in the launch. So a couple of things have to happen. You'll go out initially and they'll try the product. In order to get them to keep writing, they have to hear the message and they have to have experience with the product and the platform itself. So the message is there. We're seeing a certain amount of prescriptions actively look -- I'm sorry, a certain amount of physicians actively seek out patients as they're coming into their office. So a good product, good safety, good efficacy, good access and the message being delivered on a regular basis from the sales representatives. And ultimately, in the market research we conducted last year, this shouldn't be a surprise, but until it happens, we can't rely on it. 90% of the physicians said they were going to write more in the next 6 months. And that's actually panned out in reality. So we're happy to see that. Our goal now as we head into these summer months is to capitalize on the market size and the fact that both physicians and patients are satisfied with the product and what we can do.

Okay. Thank you. There's a two-part question here. Howie, this came up last time at the last webinar, there were questions about the alternate supplier and why does it take so long to do this? So first part of this question is for you. Why does it take years to set up Piramal for additional API supplier? And then, Chris, the follow-on question to that is, what's really driving that 25% to 40% savings that we're going to have by going to the additional supplier as you look into the out years? But let's start with Howie about why does it take so long?

Yes, why does it take years? It actually doesn't take years to set it up. It takes years to get the whole thing approved. So let me go over the events that will occur. So over the next, we'll call it, 9 to 12 months, Piramal will be developing the process, making engineering development batches and expand into commercial batches, all right? We'll need 6 months' stability data in Sofdra bottles, and that's required before submission of the supplemental new drug application or the sNDA. Another 6 months is required for the FDA to review that application. And post that, you're able to manufacture and utilize the product from that plant. It's not something that's out of the ordinary. This is actually a fairly quick time line because we've been speaking with Piramal, and we have a very seasoned manufacturing team here now in place. But ultimately, they're focused on making sure everything we can do will be on time because we want to get to that 25% to 40% savings on the cost of goods sold, ultimately increase our gross profit, derisk the supply chain by creating that redundancy. And then also, there's a potential mitigation of the evolving U.S. tariff landscape because we're going to be making that API in U.S. soil. I want to transition over to that second part, Chris, which I think was what are the components of that savings?

Yes. How do we realize 25% to 40%? What is that primarily being driven from?

It's primarily going to be driven from the actual cost of the API. We're getting it at a reduced price with our new partner, Piramal. So that's the main driver of the decrease 25% to 40% cost.

Yes, they're also doing -- look, there's I think a couple of things too. Piramal, they're a good partner, right? They want -- as is Kaken, right? We have good partners here. But ultimately, they are excited to get into this space. It's a company we've worked with in the past. And seemingly, there's savings on the API. There's other savings ultimately that our manufacturing team looks at as well [indiscernible]. How can each of the components be saved or how can we save dollars on each of the components over time? How much is the bottle filled, the excipients, what are the cost of those excipients? But to Chris' point, the vast majority of the cost of the bottle Sofdra is in the API. And when you decrease that API cost, you're decreasing cost of goods sold, which is why we're very confident in the range that we provided.

Thank you. Howie, I'm going to give this one to you. This question was asked several different ways about the stock price. But I'm just going to pair it the most direct question that we had here is why is the stock so low?

Yes. Not happy about the actual price right now either. And I understand the question. The current price reflects, in my opinion, short-term factors rather than the underlying fundamentals for Botanix. So we just hit our all-time high in March, 10,653 prescriptions. We're well through working through the deductible reset period. The platform itself, which we take for granted now, it's validated, continues to produce strong results, continues to provide elevated levels of service to the patients and the physicians, and it's delivering refill rates that are much higher than what we're typically used to. And as a result, we're ready to able to add additional products to it and immediately see the benefits from those products as well. So it's certainly something we're very cognizant of, something that we watch as you do. But we believe that the short-term factors over time will fall away and the underlying fundamentals of the company will be rewarded. And our focus is to add to shareholder value every day we come in.

Thank you. Chris, I'm going to let you talk about this next one since you spoke about tariffs, obviously, in the media quite a bit, the onshoring agreements, tariffs. This question was how can onshoring agreements reduce tariffs?

Okay. It's a good question. So as you know, Sofdra is currently considered a product of Japan. This is due to the API manufacturing site location. With that said, the estimated tariff amount is not expected to exceed that USD 10 per bottle. So an onshoring agreement is an option that we are exploring due to the establishment of our alternate API vendor, Piramal. They will manufacture Sofdra API in the United States.

We don't know exactly nor do most. I don't think this is hammered out yet completely as to what onshoring means, right? But onshoring API certainly puts us in the best position to be able to move forward because it is the vast majority of the cost of Sofdra, number one. Number two, Piramal also has the ability to put the API together with the excipients and create Sofdra itself. I think this optionality is most important now because there aren't going to be any companies I'm aware of who will be in a position to do this by September. So if you're on the way to do this or have the ability to onshore your production, you're in the best position, we believe, to be able to take advantage of those types of options.

Great. We have time just for a couple more questions here. Howie, this is a two-part question going to be for you. It was a clarifying question about the high-deductible co-pay season. Like what happens in the U.S., the health care system here? Do patients sometimes defer that out-of-pocket to later in the year? Or is most of the time those high-deductible co-pays occur in the early part of the year? So we'll go with that one first, and then I'll ask the second part of it, [ Doug ].

Yes. So the deductible is like a GAAP insurance, right? So in this instance, they might have to pay the first USD 1,000 or USD 2,000 of all of their health care in order for the insurance to kick in, right? So this resets for the vast majority of insurers in January. What typically happens over that first quarter is they start to consume health care. They go to their physical, they have other reasons to go to physicians and they meet that deductible, right? During that time period, we're making sure that they do have access to Sofdra at the promise that we've given them in the past. And by the time March comes around, certainly by the end of April, the vast majority of all of those patients have met their deductible. So what happens is they consume health care or they go to the doctor. And as a result, those dollar amounts are hit, the insurance kicks in. And it's historically been very predictable for us, not just for pharmaceuticals, but other health care services as well. So it's not a Botanix-specific issue or even a pharmaceutical company-specific issue. It's a U.S. health care issue and one that we're well used to dealing with.

The second part of that, Howie, is a question of the understanding of how the health care system drives the gross to nets early in the year where they become depressed. But this question was about our platform and how does the Botanix Fulfillment Platform help improve gross to nets.

Yes. Any product out there that goes through a wholesaler is going to be immediately improved by using this -- our Fulfillment Platform because we skip the wholesaler, number one. So there's no distribution service agreement fees that go to a wholesaler. In the United States, the vast majority of pharmaceutical companies sell to a wholesaler at a discount so that, that wholesaler can ship it to various pharmacies in the United States. So we have a direct shipment to our pharmacies, and we're able to skip those fees. The other part here has to do with prior authorizations. Whenever the drug is prescribed in the United States, vast majority of products have what's called a prior authorization. That means the patient or physician has to do something, provide information to the insurance company to get the drug approved. Many times, that causes either a gap in the drug getting there or something that's missed that has to go back to the insurance company or a patient or a physician that just gets fed up and walks away, frustrated and walks away. So what the platform does is it shepherd them through the prior authorization process and basically does it for them for all the things that the insurance company allows them to do and provide the physician with the paperwork electronically where they just have to hit a submit button in most cases. So the whole idea is a concierge service that gets prior auths approved. So skipping the wholesaler more prior auths are submitted, more prior auths are approved, ultimately leading to more reimbursed prescriptions.

Great. Thank you. And I think the last question, Chris, I'm going to let you go ahead and answer this. It was around the slide you showed with the three API purchases, the two that were due in '29 and '30. Can you clarify when those purchases are due in those years?

Yes. So with a renegotiated contract, we have to make a minimum of purchase as late as December 2029 and December 2030. So in addition to that, in 1 of those 2 years, we have to make additional purchase of our choosing, which will be based on Sofdra demand. And then as a reminder, these are approximately USD 7.5 million, depending on the exchange rate at the time. But again, we're happy with the renegotiation, and this provides us a lot of flexibility with our future API purchases.

I'd add it doesn't preclude us from purchasing anything from Piramal in '28. Said another way, those are just the minimum purchases that must come from Kaken. Piramal up and running in 2028 will have the ability to provide us the supplemental API that's needed to create the bottles to meet our demand.

Very good. Thank you very much, Howie and Chris and everyone that's joined us here on this Botanix webinar. We appreciate your support of the company and joining us here today. And with that, I'm going to close off today's webinar, and thank you once again, and have a pleasant day.