LOD, Israel — Panaxia Labs Israel Ltd., (TASE: PNAX), a pharma company that develops, manufactures and markets progressive medical cannabis products in pharmaceutical quality, published its financial reports for the second quarter and first half of 2021.
As part of their strategy to exit low-profit activities in Israel and focus on manufacturing and exporting premium products to Europe, Panaxia sold its distribution and logistics operations in Israel and recorded a capital gain of 14.8 million and an operational profit of 3.7 million.
Dr. Dadi Segal, CEO of Panaxia Israel: “We have concluded the second quarter and the first half of the year with an impressive revenue growth compares to last year. It includes sales of the company’s products in Germany and Cyprus. It is a transition period, the last line of a long-term strategic process for the expansion of European markets and the exit from secondary activities in Israel, which are not at the core of the company’s business. This process is expected to materialize significantly in the upcoming quarters. As part of the process, we have decided to exit activities in Israel, that are characterized by high competition and low profitability, and during that time, we have sold the distribution and logistics activities.
“The extensive resources we have invested in recent years have begun to bear fruits. We are expecting to start exporting medical cannabis extracts for inhalation, the only kind approved for marketing in Germany and throughout Europe. This is good tidings for patients, who avoid smoking medical cannabis for various reasons. It is also a powerful growth and profitability engine, with a potential to reach a significant market share In Europe, similar to mature markets in North America. Meanwhile, we continue regulatory registration of our products in Greece, Denmark and Poland, and look forward to beginning sales of products designed for the Oncology field in partnership with the German pharma company, Axio-Novo, this year. We intend to enter any market that has a medical cannabis regulation in Europe, based on our relative advantages”.
The company’s revenues in the 2nd quarter of 2021 amounted to 17.6 million, an increase of 19.2% compared to revenues of 14.8 million in the parallel quarter last year. Panaxia’s revenues in the first half of 2021 amounted to 37.3 million, an increase of 38.4% compares to revenues of 26.9 million in the same period last year. The increase in revenues is due to both an increase in sales of finished products to patients and pharmacies and an increase in revenues from manufacturing services. In addition, during the first half of 2021, the company made sales to Germany and Cyprus.
Operating profit in the 2nd quarter of 2021 amounted to 3.7 million, in comparison with an operating loss of 8.6 million in the corresponding quarter last year, and an operating loss of 8 million in the previous quarter. The operating loss in the first half of 2021 reached 4.3 million, compared with an operating loss of 17.9 million in the corresponding period last year.
Based on self-manufacture and export, as well as selling the company’s distribution and logistics activities in Israel, it is expected to contribute to improvement in Panaxia’s operating profitability and expenditures structure, along with expected growth and improvement in profitability in the next quarters, as a result of the company’s core activities.
The net profit in the 2nd quarter of 2021 reached 3.6 million, compares with a net loss of 8.7 million in the corresponding quarter last year, and 8.3 million in the previous quarter.
(This information is primarily sourced from Panaxia Labs Israel Ltd. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).