MediPharm Labs Provides Operational Update and Confirms Profitability Improvement Initiatives are Underway
-- Strong cash balance and continued reduction of convertible debt to less than $500K. -- Opportunities for optimization of the operating strategy between Australia and Canada as the Canadian Drug Establishment Licence (DEL) unlocks many manufacturing and supply chain pathways. These pathways will reduce infrastructure cost, improve delivery times, and increase customer satisfaction. -- Delivery to five international medical cannabis markets including first deliveries of advanced GMP CBD isolate to traditional pharmaceutical companies.
TORONTO, Dec. 21, 2021 (GLOBE NEWSWIRE) -- MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF) (FSE: MLZ) ("MediPharm Labs" or the "Company") a pharmaceutical company specialized in precision-based cannabinoids, is pleased to provide an update on the significant strategic profitability improvement initiatives underway at the Company.
"Although the cannabis industry has seen a pull back in the capital markets, I remain extremely positive in my outlook for MediPharm Labs as it is a unique and well positioned organization. With a robust sales funnel, tangible opportunities to work more efficiently and reduce costs, and already recognized progress in improving our direct margin through strategic sourcing, we are on path to improvement," said Bryan Howcroft, CEO, MediPharm Labs.
"In a very short period, the Board has seen improvements in organizational focus and decisiveness. Bryan has clearly come with positive energy, an ability to simplify strategy that enables execution, and tenacity to drive results. This leadership is exactly what we need to deliver on the improvements and growth we plan to achieve," said Chris Taves, Chairman of the Board, MediPharm Labs.
2021 was a year of transition for MediPharm Labs and paved the strategic foundation for the future. The following highlights the Company's focus areas on its path to profitability.
Strong Financial Foundation: Strong Cash Position with no Material Debt
MediPharm Labs continues to operate with a strong cash position and clean balance sheet. With the Company's only debt agreement being a 2020 convertible debenture that holds a balance of less than $500K, down from an original balance of over $40M. This position paired with a robust plan to reduce overhead, operating expenses and general and administrative expenses gives MediPharm Labs longevity to execute on its sales contracts and pipeline. This strong financial position is especially important given the current capital markets conditions in the cannabis industry.
Pharmaceutical Business Development: Uniquely Placed for a Promising Market
MediPharm Labs is not an ordinary cannabis company. Being the only purpose-built facility in North America to receive a domestic GMP licence specifically for the extraction of natural cannabinoids, MediPharm Labs continues to use its Drug Establishment Licence to build its pharmaceutical business. There are over 20 strong novel cannabinoid-based drugs currently in the late-stage research process and this business continues to develop with the approach of FDA patent challenges for generic forms of current drugs. Notwithstanding the longer pharmaceutical sales cycle of these products, MediPharm Labs has already shipped GMP CBD for development purposes to multiple established pharmaceutical companies.
The cannabis-based drug opportunity is predicted to be over $25 billion by 2025 according to Prohibition Partners. The sector has seen major progress in 2021, which started in February with the Jazz Pharmaceuticals' $7.2 billion acquisition of GW Pharma, the UK based producer of natural CBD and THC based drugs. It continued in December with Pfizer's $6.7 billion acquisition of Arena Pharmaceuticals, a drug development company with cannabis products in its pipeline.