CanniMed Therapeutics Inc. (TSX:CMED) (“CanniMed” or
the “Company”) today released its financial results for the
three and nine months ended July 31, 2017.
Highlights
- Sales of $4.8 million in the quarter
were 80 per cent higher than in the comparable period of the prior
year and were 29 per cent higher than the second quarter of 2017.
Year-to-date sales of $11.9 million were 79 per cent higher than
the first nine months of the prior year and have surpassed full
year fiscal 2016 sales.
- Concentrated cannabis oils sales
revenues were approximately 57 per cent of total revenues for the
current quarter.
- Higher sales revenues were driven by
rising demand, as dried equivalent medical cannabis sales in the
third quarter increased 82 per cent from the comparable period in
2016 to 463 kg, at an average selling price of $9.89 per gram
equivalent (sales of 1,177 kg at an average selling price of $9.68
per gram equivalent were 79 per cent higher than in the first nine
months of 2016 and 24 per cent higher than full year 2016).
- Adjusted EBITDA from continuing
operations was $(0.3) million for the quarter ($(0.1) million for
the year to date).
- Net loss of $1.4 million for the
quarter ($6.5 million net loss for the first nine months of the
year included a $2.3 million loss on derivative instruments,
relating primarily to conversion rights on debentures that were
either exercised or expired during the first quarter).
- Commenced design of a large-scale
cannabinoid oils processing facility to increase current oils
capacity. Civil works commenced in September 2017.
- Completed installation of capsule
manufacturing equipment with design capacity of up to 11,000
capsules per hour, and, after the third quarter, initiated the
Health Canada approval process.
- Continued negotiations with several
Canadian pharmacy chains, building on the previously announced
letter of intent with PharmaChoice, to collaborate on pharmacist
education and the distribution, sale and marketing of the Company’s
medical cannabis products.
- Completed the first shipments of
commercial cannabis oil to enter Australia and the Cayman Islands.
Continued negotiations for export arrangements with parties in
Europe, Africa and Australia.
- With current and planned capital
expenditures, the Company is targeting production expansion which
is estimated to reach 17,000 to 21,000 kg within the next 24
months.
- Pursuing accretive transactions
including recreational opportunities in accordance with applicable
laws and regulations.
“We continue to be pleased with CanniMed’s remarkable sales
growth as more and more patients and doctors gain confidence in our
medical cannabis oils and dried herbal products,” said Brent Zettl,
President and CEO of CanniMed. “Producing to pharmaceutical
standards in a pesticide-free environment sets a high standard and
differentiates our products from others. We are advancing several
new growth initiatives, including increasing productive capacity at
our main facility in Saskatoon, developing exports in several
countries and opening our sights on recreational market
opportunities.”
Three Months Ended
July 31
Nine Months Ended
July 31
2017 2016
2017 2016
Financial Data Revenue
$4,770 $2,650
$11,869 $6,635 Cost of sales
$2,127 $538
$5,085 $1,057 (Gain) loss on
derivative instruments
$(116 ) $4
$2,308 $(100
) Loss from continuing operations before income tax
$(1,356 ) $(446 )
$(6,635 ) $(1,344 )
Adjusted EBITDA from continuing operations(1)
$(342
) $(347 )
$(101 ) $(1,256 ) Revenue per
gram of dried marijuana equivalent
$9.89 $9.85
$9.68
$9.44
Operating Data
Total dried marijuana produced
(harvested)
(000s grams)
393 401
1,267 1,127
Total dried marijuana equivalent sold
(000s grams)
463 255
1,177 658 Total dried marijuana sold
(000s grams)
277 195
762 549 Total oils sold
(000s ml)
1,114 361
2,494 655 (1)
The Company provides selected non-IFRS
measures as supplementary information that management believes may
be useful to investors to explain the Company’s financial results.
Please see description and reconciliation of non-IFRS measures in
the “Non-IFRS Financial Measures and Reconciliations” section of
the Company’s MD&A dated September 8, 2017, available at
www.SEDAR.com.
CanniMed’s production is concentrated at its 100-acre site in
Saskatoon. The 62,000 square foot POD growth facility commenced
validation of the first of its growth chambers in the fourth
quarter of 2016, with all 18 chambers validated and in production
by August 2017. During July 2017 the BGC growth chambers,
containing an additional 12 chambers, were taken off-line for
upgrading of security and heating, ventilation and air conditioning
systems.
Financial Review
Revenue
Revenue for the three months ended July 31, 2017 increased 80
per cent to $4.8 million from the comparable period in the previous
fiscal year. This increase was attributable to a 208 kg increase in
dried marijuana equivalent sales (Q3 2017 – 277 kg of herbal sales
quantities, 186 kg equivalent of oil sales volume; Q3 2016 – 195 kg
of herbal sales volume, 60 kg equivalent of oil sales volume),
partly offset by a price cap implemented by Veterans’ Affairs
Canada.
Year-to-date, revenue increased 79 per cent to $11.9 million
from the comparable period in 2016. This increase was primarily
attributable to increased sales quantities (YTD Q3 2017 – 762 kg of
herbal sales volume, 415 kg equivalent of oils sales volume; YTD Q3
2016 – 549 kg of herbal sales volume, 109 kg of oils sales
volume).
Cost of Sales
Cost of sales is expected to vary on a quarterly basis,
depending on the number of pre-harvest plants, the strains being
grown and where the pre-harvest plants are in the growth cycle at
the end of the reporting period. Cost of sales during the three
months ended July 31, 2017 includes depreciation of $0.4 million
(YTD Q3 2017 $1.3 million) for both the POD and BGC facilities.
Growing activities in the larger POD facility were ramping up
gradually throughout the year to date. For the three and nine-month
periods ended July 31, cost of sales was composed of the
following:
Three months ended July 31,
2017 2016
Unrealized gain from changes in fair value of
biological assets
$(1,450 ) $(1,344 )
Inventory expensed to cost of sales
2,232 1,355
Production costs
1,345 527
Cost of sales, net of the unrealized gain on
changes in fair value of biological assets
$2,127 $538
Nine months ended July 31, 2017
2016
Unrealized gain from changes in fair value of biological assets
$(3,850 ) $(4,059 ) Inventory expensed to cost
of sales
5,829 3,461 Production costs
3,106
1,655 Cost of
sales, net of the unrealized gain on changes in fair value of
biological assets
$5,085 $1,057
General and Administrative Expense
For the three months ended July 31, 2017, general and
administrative expense was $1.4 million (Q3 2016 - $0.7 million);
year-to-date, this expense was $3.5 million (YTD Q3 2016 - $1.8
million). For the quarter and year to date, this increase was
primarily attributable to higher salary and benefits attributable
to more personnel and higher accounting, legal and consulting
expenses related to building capacity for rapid sales growth.
Sales and Marketing Expense
Sales and marketing expense consists of expenditures on
advertising, promotion, sales and customer service. For the three
months ended July 31, 2017, sales and marketing expense was $1.1
million (Q3 2016 - $0.8 million); year-to-date, sales and marketing
expense was $3.0 million (YTD Q3 2016 - $2.4 million). Period over
period and year-to-date, increased sales staff levels and higher
expenditures on advertising materials contributed to the increase
in this expense.
Freight and Distribution
Freight and distribution expense consists of expenditures on the
shipping of product to customers. For the three months ended July
31, 2017, freight and distribution expense was $0.5 million (Q3
2016 – $0.2 million); year-to-date, freight and distribution
expense was $1.1 million (YTD Q3 2016 - $0.6 million). Period over
period and year to date, these expenditures have increased in
conjunction with increased sales levels (Q3 2017 – 463 kg
equivalent of sales volume (Q3 2016 – 255 kg equivalent sales
volume); YTD Q3 2017 – 1,177 kg equivalent sales volume (YTD Q3
2016 – 658 kg equivalent sales volume).
Research and Development
Research and development work is directed primarily towards
plant-based materials for pharmaceutical, agricultural and
environmental applications. Research and development costs for the
three months ended July 31, 2017 were $0.2 million (Q3 2016 - $0.3
million). Year-to-date, research and development costs were $0.8
million (YTD Q3 2016 - $1.1 million).
(Gain) Loss on Derivative Instruments
For the three months ended July 31, 2017, gain on derivative
instruments of $0.1 million was comparable period over period. Year
to date, loss on derivative instruments was $2.3 million (YTD Q3
2016 – gain of $0.1 million). The year-to-date loss on derivative
instruments is attributable to the increased value attributed to
the embedded derivative liability relating to a conversion to
equity option contained within the convertible debentures,
resulting in a $2.4 million derivative loss during the first
quarter of 2017. The majority of the debentures were converted
during the first quarter of 2017 and, for the remainder of the
debentures, the option to convert into equity of CanniMed expired
at the end of the first quarter of 2017.
Loss
For the three months ended July 31, 2017, the Company recorded a
loss from continuing operations of $1.4 million, or $0.06 per
share, net of tax. This compares to a loss from continuing
operations of $0.5 million net of taxes, or $0.03 per share, for
the three months ended July 31, 2016. This increase was largely
attributable to increased general and administrative expenditures,
sales and marketing expenditures and higher freight and
distribution costs as the Company increased its capability to
support growing sales levels. Year-to-date, net loss of $6.5
million ($0.31 per share) was a $5.2 million increase over the loss
of $1.3 million for the same period in 2016. Year-to-date, the
major components of the increase were a loss on derivative
instruments of $2.3 million, and other non-cash expenditures
including foreign exchange loss of $0.4 million and share-based
compensation of $0.8 million.
About CanniMed Therapeutics Inc.
CanniMed is a Canadian-based, international plant
biopharmaceutical company and a leader in the Canadian medical
cannabis industry, with 15 years of pharmaceutical cannabis
cultivation experience, state-of-the-art, GMP-compliant production
process and world class research and development platforms with a
wide range of pharmaceutical-grade cannabis products. In addition,
the Company has an active plant biotechnology research and product
development program focused on the production of plant-based
materials for pharmaceutical, agricultural and environmental
applications.
The Company, through its subsidiaries, was the first producer to
be licensed under the Marihuana for Medical Purposes Regulations,
the predecessor to the current Access to Cannabis for Medical
Purposes Regulations. It was the sole supplier to Health Canada
under the former medical marijuana system for 13 years, and has
been producing safe and consistent medical marijuana for thousands
of Canadian patients, with no incident of product diversion or
recalls.
For more information, please visit our websites: www.cannimed.ca
(patients) and www.cannimedtherapeutics.com (investors).
Notice Regarding Forward Looking Statements
This news release contains forward-looking statements within the
meaning of applicable securities laws. All statements that are not
historical facts, including without limitation, statements
regarding future estimates, plans, programs, forecasts,
projections, objectives, assumptions, expectations or beliefs of
future performance, are “forward-looking statements”.
Forward-looking statements can be identified by the use of words
such as “plans”, “expects” or “does not expect”, “is expected”,
“estimates”, “intends”, “anticipates” or “does not anticipate”, or
“believes”, or variations of such words and phrases or state that
certain actions, events or results “may”, “could”, “would”, “might”
or “will” be taken, occur or be achieved.
Forward-looking statements are based on assumptions and involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of CanniMed
Therapeutics Inc. to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements, including the risks described in
CanniMed Therapeutics Inc.’s documents filed with applicable
Canadian securities regulatory authorities which may be viewed at
www.sedar.com. The forward-looking statements included in this news
release are made as of the date of this news release. CanniMed
Therapeutics Inc. does not undertake to publicly update such
forward-looking statements to reflect new information, subsequent
events or otherwise, unless required by applicable securities
legislation.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170911005309/en/
CanniMed Therapeutics Inc.Dara Willis,
416-836-9272media@cannimed.com
China Medical (NASDAQ:CMED)
Historical Stock Chart
From Apr 2024 to May 2024
China Medical (NASDAQ:CMED)
Historical Stock Chart
From May 2023 to May 2024