TORONTO – MediPharm Labs Corp., a pharmaceutical company specialized in precision-based cannabinoids reported its financial results for the three and six months ended June 30, 2024 (“Q2 2024”).
Key Highlights
- Adjusted EBITDA: Negative $124K in Q2 2024, significantly improved from negative $949K during the three months ended March 31, 2024 (“Q1 2024”), and representing 96% growth versus Adjusted EBITDA for the same quarter in 2023 (“Q2 2023”).
- Net Revenue: $10.3M in Q2 2024, an 8% increase as compared to Q2 2023, and a 6% increase as compared to Q1 2024, representing the highest net revenue in over three years. International revenue represented 44% of total revenue in Q2 2024.
- Gross Profit: 33% in Q2 2024, significantly increased from 8.1% in Q2 2023, driven by cost reductions, production efficiencies and favourable product mix with the expansion of international medical revenue.
- Cash Balance: $16 million at the end of Q2 2024.
- Operating Expenses: Reduced by $2M as compared to Q2 2023, driven by execution of acquisition synergies and overall cost reductions.
Innovation in Pharma Quality Cannabis
European Union Dronabinol Sales Success: After a strong Q1 2024, MediPharm Labs doubled its dronabinol sales in Q2 2024, achieving total sales of $1.9M year to date. Dronabinol is a pharmaceutical monograph product produced by MediPharm Labs in a specialized all-natural process.
Licensing Agreement with Remidose Aerosols: The agreement provides exclusive rights to advanced non-combustible cannabis products. This aerosol technology, produced in both spray and inhaler formats, is expected to expand the Company’s product offerings in the adult use wellness, Canadian medical cannabis, and international medical cannabis markets.
Launch of SEDDS Capsules: In partnership with Avicanna, the company successfully manufactured self-emulsifying drug delivery systems (SEDDS) capsules. Distribution is now available for Canadian patients in two formulations.
Leadership in Australian flower alternatives: As of July 2024, MediPharm Labs holds the third largest market share for GMP vapes in Australia, both in terms of units sold and patient revenue, just nine months after launching these products.
Operational Highlights
Streamlined Medical Cannabis Operations: In Q2 2024, MediPharm Labs reduced the scale of its operations at its facility in Hope, British Columbia and relocated its direct-to-patient medical sales logistics to its facility in Barrie, Ontario. This move is anticipated to streamline operations, deliver cost savings of approximately $1M annually and deliver better service to the Company’s medical cannabis patients. The sale of the Hope Facility has the potential to generate additional cash in the near term.
EU GMP Inspections: The Landesamt für Arbeitsschutz Verbraucherschutz und Gesundheit (“LAVG”), the health authority of Brandenburg, Germany, completed inspections of both the Company’s facility in Napanee, Ontario and the Barrie Facility in April 2024. EU-GMP certification of both facilities was confirmed and renewed with certificates issued July 1, 2024, which do not expire until July 2027.
DMF Submission for CBD API: In April 2024, MediPharm Labs submitted a Drug Master File (“DMF”) for cannabidiol (“CBD”) active pharmaceutical ingredients (“API”) to Health Canada, allowing current and future pharmaceutical partners to reference MediPharm’s CBD API in new and generic drug applications. This complements the DMF filed with the United States Food and Drug Administration in 2021.
New High Potency Medical Cannabis Products in Germany: In July 2024, the Company began delivering new high potency medical cannabis flower branded under Beacon Medical GmbH to distribution partners in Germany, complementing existing sales as the market grows due to favourable regulatory changes.
Management Commentary
David Pidduck, CEO, MediPharm Labs commented, “We are very pleased with our Q2 results, showcasing substantial improvements in both revenue and profitability. The strategic initiatives implemented, including cost reductions and operational efficiencies, are yielding positive results. We are particularly encouraged by the continued growth in our international sales and the progress in innovation of non-combustible cannabis formats.”
Greg Hunter, CFO, MediPharm Labs added, “Q2 2024 was a major step in the right direction towards profitability and becoming cash flow positive. Our revenue and Adjusted EBITDA were both the highest in over three years and Q2 put MediPharm on the verge of profitability. Revenue was $10.3M or 8% higher than prior year and Adjusted EBITDA loss was $0.1M which is $3.1M better than prior year and $0.8M better than Q1 2024. Our cash burn was approximately $1M resulting in a cash balance of $16M with less than $3M of debt at the end of Q2 2024. MediPharm is in a strong financial position to capitalize on our strong suite of licences, global customer contracts and assets as we strive for profitability in the back half of 2024.”
About MediPharm Labs
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients and advanced derivative products utilizing a Good Manufacturing Practices certified facility with ISO standard-built clean rooms. MediPharm Labs has invested in an expert, research driven team, state-of-the-art technology, downstream purification methodologies and purpose built facilities with five primary extraction lines for delivery of pure, trusted and precision-dosed cannabis products for its customers. Through its wholesale and white label platforms, MediPharm Labs formulates, develops (including through sensory testing), processes, packages and distributes cannabis extracts and advanced cannabinoid-based products to domestic and international markets.
In 2021, MediPharm Labs received a Pharmaceutical Drug Establishment Licence from Health Canada, becoming the only company in North America to hold a domestic Good Manufacturing Licence for the extraction of natural cannabinoids. The Company carries out its operations in compliance with all applicable laws in the countries in which it operates.
In 2023, MediPharm acquired VIVO Cannabis Inc. which expanded MediPharm’s reach to medical patients in Canada via Canna Farms medical ecommerce platform, and in Australia and Germany through Beacon Medical PTY and Beacon Medical GMBH. This acquisition also included Harvest Medical Clinics in Canada which provides medical cannabis patients with Physician consultations for medical cannabis education and prescriptions.
