MediPharm Labs Reports Strong Financial Results and Progress Towards Profitability

LOS ANGELES– MediPharm Labs Corp., a pharmaceutical company specializing in precision-based cannabinoids, has announced its financial results for the first quarter ended March 31, 2023. The company’s performance reflects progress towards profitability and significant milestones achieved during the period.

During the first quarter of 2023, MediPharm Labs recorded its strongest EBITDA in two years, with losses reduced to ($2.1 million). This positive trend was attributed to the company’s focus on growing gross margin positive revenue segments, streamlining operations, and reducing operating expenses. With the inclusion of a one-time reversal of bad debt collected, the adjusted EBITDA stood at ($3.1 million).

Following the completion of the acquisition of VIVO Cannabis Inc. on April 1, 2023, MediPharm Labs initiated plans to reduce the combined non-direct labor workforce of MediPharm and VIVO by approximately 30%. This reduction, along with previous restructuring efforts by both companies in 2022, is expected to result in annual savings of over $4 million. These measures are part of the company’s strategy to achieve positive EBITDA synergies between $7 million and $9 million on an annualized basis.

Despite the seasonality of the Canadian adult-use market, MediPharm Labs experienced a 20% growth in revenue on a year-over-year basis in the first quarter of 2023. Operating expenses were reduced by 47% compared to the same period in 2022. Notably, the company achieved positive gross profit for the second consecutive quarter.

MediPharm Labs also solidified its leadership in the cannabis-based pharmaceutical industry by initiating correspondence with the United States Food and Drug Administration (FDA). The company’s in-depth Active Pharmaceutical Ingredient (API) filing review with the FDA for a natural cannabinoid molecule marks a significant milestone. Furthermore, one of MediPharm’s US-based academic research partners received FDA approval for an Investigational New Drug (IND) in March 2023, allowing participant dosing to commence in the coming months.

The transformative merger and acquisition with VIVO Cannabis in April 2023 enabled MediPharm Labs to expand its market coverage and consolidate its position in Canada’s cannabis industry. The combined entity now possesses cultivation and manufacturing expertise, a wide range of dried flower and derivative products, and established distribution channels for both medical and adult-use wellness markets.

MediPharm Labs ended the first quarter of 2023 with $20.2 million in cash and a strong balance sheet, being debt-free and holding outright ownership of its assets. The acquisition of VIVO resulted in additional manufacturing facilities, clinics, land parcels, and $2.5 million in debt, set to mature in 2024.

David Pidduck, CEO of MediPharm Labs, expressed satisfaction with the company’s financial and non-financial progress, stating that all key metrics are moving in the right direction. Greg Hunter, CFO of MediPharm Labs, emphasized the positive improvements in revenue, gross margin, expenses, and cash burn. He highlighted the implementation of a post-acquisition restructuring plan and the company’s commitment to achieving positive EBITDA and cash flow.