TORONTO – MediPharm Labs Corp., a pharmaceutical company specialized in precision-based cannabinoids announced its financial results for the three and nine months ended September 30, 2024.
Key Highlights
- Adjusted EBITDA: Negative $743K in the three months ended September 30, 2024 (“Q3 2024”), significantly improved from negative $2.4M during the same period in 2023 (“Q3 2023”).
- Net Revenue: $9.8M in Q3 2024, a 15% increase as compared to Q3 2023. International medical cannabis revenue grew 37% versus Q3 2023 and represented 36% of revenues in the quarter. Canadian medical and business to business sales represented 46% of total revenue in Q3 2024.
- Gross Profit: 32% in Q3 2024, a 29% improvement from Q3 2023, driven by cost reductions, production efficiencies and favourable product mix.
- Final Convertible Debt Payment: $2.2M debt payment in Q3 2024. This fully pays off all of the Company’s convertible debt. The Company is now free of any material debt with full mortgage free ownership of its three production facilities.
- Cash Balance: $13 million at the end of Q3 2024.
Growth in International GMP Sales
Refresh of Beacon Branded Flower in Germany: Beacon branded medical sales of $400K in Q3 2024 vs $135k in all of 2023. MediPharm is using its experience in Germany and Beacon branded assets from Australia to further build brand equity and exert better control of growth opportunities
Continued Success in Australia: $2.5M in wholesale sales in Australia in Q3 2024 was the best quarter sales since acquiring Beacon Medical Australia PTY Ltd. in the second quarter of 2023. The growth was driven by the addition of new high potency flower stock keeping units (“SKUs”) and the recent new launches of Good Manufacturing Practices (“GMP”) oils, vapes and live resin vape cartridges.
Future International Growth Opportunities: MediPharm has additional commitments for sales into new international markets and is currently completing certain international regulatory registrations. Late-stage regulatory registrations include UK, Brazil and New Zealand. Early to mid-stage regulatory registrations include France, Spain, Poland and Switzerland. These markets vary in size, however MediPharm is well positioned with plans to sell higher value GMP products, like cannabis oil and dronabinol, given its history and expertise in supplying GMP compliant products.
Commercial Highlights
Product Launches: MediPharm continued to build on its product innovations in Q3 2024, commercializing 11 unique SKUs, four of which were live resin GMP vapes for the Australian medical market. Overcoming the many challenges, whether regulatory, validation or stability associated with a new international GMP SKU like live resin allows for a competitive moat in this emerging global concentrate category.
Domestic Medical: Completing the relocation of medical sales and distribution from Hope, BC to Barrie, ON has resulted in cost savings and better service for our patients. This also allows for the future sale of the facility in Hope, BC (the “Hope Facility”). Product mix on this ecommerce platform continues to grow with 24 new SKUs onboarded in Q3 2024.(2)
Harvest Medicine Cannabis Clinics: Harvest Medicine Inc. (“Harvest Medicine”) cannabis clinic sales remain consistent even as the number of new medical cannabis patients in Canada declines. This shows that Harvest Medicine is successful with patient retention including with the important Veteran patients, even as other companies exit the clinic business. After achieving further efficiencies in clinic operations this stand-alone business unit now enjoys net positive cash flow from operations.
Management Commentary
David Pidduck, CEO, MediPharm Labs commented, “MediPharm accomplished several important milestones in Q3 that will position us well for profitability in 2025. MediPharm has successfully diversified its business. As a global GMP player, our international sales grew 37% vs. Q3 2023, resulting in over 35% of revenue coming from outside Canada.
We have a strong presence in the Canadian medical channel, and growing B2B sales. Additionally, MediPharm continues to launch new products and build on our very broad product line in the Canadian adult use and wellness channel. This diversity has contributed to our balance sheet strength and our ability to capitalize on future growth opportunities in various countries, product categories, and channels.”
Greg Hunter, CFO, MediPharm Labs added, “Q3 2024 was a major step in the right direction towards profitability. Paying off our debt and rationalizing facilities, pursuing cost efficiencies while growing our higher margin international revenues are all critical elements to position us for long term sustainable growth.
Our strong balance sheet makes us an ideal partner for corporate development opportunities as we continue to see consolidation in the industry globally.”
About MediPharm Labs
Founded in 2015, MediPharm Labs specializes in the development and manufacture of purified, pharmaceutical-quality cannabis concentrates, active pharmaceutical ingredients (API) and advanced derivative products utilizing a GMP 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 Australia and Beacon Medical Germany GmbH. This acquisition also included Harvest Medical Clinics in Canada which provides medical cannabis patients with Physician consultations for medical cannabis education and prescriptions.
