Strong Revenue Growth
- Quarterly net revenue of
$7.3M , an increase of 66% on a sequential basis from$4.4 million in Q2 and a 35% increase compared to Q3 2021. - Canadian provincial sales of
$3.5M representing a growth of 28% on a sequential quarterly basis and 81% on a year-to-date comparison to the same period in 2021. Driven by leadership in the cannabis oil category and ongoing product innovation. - International revenues for Q3 were
$3.4 million which increased 156% from$1.3 million in Q2. International revenues represented over 45% of total revenues in Q3 and 40% on a year-to-date basis. We expect that this segment will continue to grow as we achieve gains in existing markets, and with our expansion into new markets such asBrazil and theUnited Kingdom .
Streamlining and Focusing Operations to Achieve Cost Savings
- Subsequent to the quarter, the Company completed the previously announced sale of
MediPharm Labs Australia Pty Ltd for AUD$7.25M. The sale strengthens our balance sheet, should reduce cash burn, and enhances capacity utilization at the Company's Canadian GMP facility. - Implemented a restructuring plan that we expect will reduce Canadian non-manufacturing headcount by approximately 30%, potentially reducing annualized expenses by approximately
$3M . Some savings were realized during Q3, with full annualized savings expected to begin in Q4 2022.
Innovation and New Product Launches Drive Revenue Growth
- As the Company continues to expand its portfolio to grow future sales the
MediPharm wellness cannabis oil remains a core product line. In Q3 2022MediPharm held number 2 share nationally in this subcategory, according to Hyfire point of sale data. - Launched 14 new unique SKUs since Q2, including 4 new international GMP SKUs for the
UK and Brazilian markets. This represents a 75% increase in launches compared to Q2 and a 250% increase over Q3 of last year. So far in 2022 we have launched 25 new SKUs.
Continued Progress Towards Leadership in the Emerging Cannabis-Based Drug Opportunity
- In partnership with a large global pharmaceutical company, in Q3
MediPharm contributed API to an Abbreviated New Drug Application filed with theUS Food and Drug Administration (FDA). - Made first three deliveries of
MediPharm products to clinicians' academic clinical trials, one in phase 1 and 2 in phase two. This includes one trial that is exploring the opioid sparing potential for cannabinoids in existing opioid users. - Completed R&D and commercialization work on pharmaceutical grade THC isolate. First sales of this product will be associated with a German contract for the pharmaceutical drug Dronabinol.
- On
August 9 th, entered into a research support agreement with theKeck School of Medicine of University ofSouthern California to conduct a Phase 2 trial on the efficacy of THC and CBD to treat hospice-eligible patients diagnosed with dementia and experiencing agitation. The lead investigators have been awarded a total ofUS$16M in the form of grants from theUS National Institute of Health and theNational Institute on Aging .
Further Expansion of International Medical Business
- Made initial shipments to German market from Canadian facility during the quarter. This allows further production of international medical cannabis oil from
Canada , streamlining operations and leveraging automation infrastructure. - The Company's German partners, such as
STADA , continued to generate sequential growth in patient sales during Q2. - Launched four new international GMP SKUs, in the
UK andBrazil . - Made first commercial sale to
Brazil during Q3 following the Q2 receipt of commercial volume import permits from theBrazilian Health Regulatory Agency (Anvisa).Brazil is a large potential market with rigorous regulatory oversight.MediPharm is one of only 4 GMP manufacturers internationally with approved products for sale under the country's medical access program and has the only authorization for a product produced inCanada .
Solid balance sheet, materially debt free, outright ownership of key assets
- Ended the quarter with
$19.5M of cash which does not include$6.4M for the sale of the Australian facility. - The Company remains materially debt free and has outright ownership of its assets, including its GMP facility in
Ontario . - In July, the company was awarded a favourable summary of judgement in the
Ontario Court of Justice in connection with a supply agreement dispute in the amount of$9.8M .
Q3 2022 – Financial Summary
September |
| |||
$'000s | $'000s | $'000s | ||
Revenue | 7,262 | 5,401 | 4,362 | |
Gross profit | (1,190) | (1,860) | (532) | |
Adjusted Gross Profit1 | (762) | (1,354) | (47) | |
Net loss | (7,930) | (7,356) | (8,987) | |
Adjusted EBITDA1 | (4,974) | (6,518) | (6,345) | |
Date: November 14, 2022 | Time: 8:30 a.m. ET
Conference ID: 4921762
(Participants are asked to dial in approximately 15 minutes before the start of the call)
An audio webcast will be available in the Events section of the
For those who are unable to participate on the live conference call or webcast, a replay will be available approximately one hour after completion of the call.
Adjusted EBITDA and adjusted Gross Profit are not recognized performance measures under IFRS, do not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers. Adjusted EBITDA and adjusted Gross Profit are included as a supplemental disclosure because Management believes that such measurement provides a better assessment of the Company's operations on a continuing basis by eliminating certain non-cash charges and charges or gains that are non-recurring. Adjusted EBITDA is defined as net loss excluding interest, taxes, depreciation and amortization expense, interest income and expense, finance fees, gain in revaluation of derivative liabilities, taxes, impairment losses on inventory, write down of deposits and share-based compensation. Adjusted EBITDA has limitations as an analytical tool as it does not include depreciation and amortization expense, interest income and expense, taxes, share-based compensation, and transaction fees. Because of these limitations, Adjusted EBITDA should not be considered as the sole measure of the Company's performance and should not be considered in isolation from, or as a substitute for, analysis of the Company's results as reported under IFRS. The most directly comparable measure to Adjusted EBITDA calculated in accordance with IFRS is operating income (loss). The above is a reconciliation of the Company's operating loss to Adjusted EBITDA. See "Reconciliation of non-IFRS measures" in the Company's Management's Discussion and Analysis for the period ended
Founded in 2015,
In 2021,
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate to, among other things, statements regarding: the Company establishing itself as an international pharmaceutical company; a leading position in the projected multibillion-dollar global cannabis pharmaceutical market; becoming the go-to partner for pharmaceutical companies around the globe; potential for material revenue growth for years to come; and the Company's transition towards pharmaceutical and medical markets reaching new heights. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the ability of
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1 Adjusted Gross Profit and Adjusted EBITDA are non-IFRS measures. See the Non-IFRS Measures section of this news release. |
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