- Record revenues of $2.8 million
in Q1 2021, a 49% increase from the prior year and 13% increase
from Q4 2020
- Record gross profits (before fair market value adjustments) of
$1.1 million, a 171% improvement over
Q4 2020 and record consolidated gross margin of 38%
- Medical cannabis sales reach 20% of revenues, contributing over
45% of gross profits
- More than 7,500 prescriptions filled in Q1 2021 and over 19,000
to date
- First sales in Germany
achieved in Q1 2021, with international sales representing
approximately 10% of total Medical Cannabis Product revenues
- Khiron real-world evidence is improving physician engagement,
patient outcomes and strategic decision-making; initial results
show significant benefits to quality of life as well as significant
cost benefit to key insurance clients
- $12.5 million in cash as of
March 31, 2021 with working capital
of $22.5 million
TORONTO, May 27, 2021 /CNW/ - Khiron Life Sciences
Corp. ("Khiron" or the "Company") (TSXV: KHRN) (OTCQX:
KHRNF)(Frankfurt: A2JMZC), a
vertically integrated cannabis leader with core operations in
Latin America and Europe, announced today its financial results
for the quarter ended March 31, 2021.
These filings are available for review on the Company's SEDAR
profile at www.sedar.com. All financial information in this press
release is reported in Canadian dollars, unless otherwise
indicated.
Summary of Key Financial Results
|
3
Months
|
3
Months
|
3
Months
|
|
ended
Mar
|
ended
Mar
|
ended
Dec
|
Canadian
dollars
|
31
2021
|
31
2020
|
31
2020
|
|
$
|
$
|
$
|
Revenues
('000s)
|
2,837
|
1,901
|
2,518
|
Medical
Cannabis
|
563
|
1
|
234
|
Gross profit before
fair value adjustments ('000s)
|
1,090
|
437
|
402
|
General and
administrative costs ('000s)
|
5,592
|
5,847
|
5,157
|
Net loss
('000s)
|
(5,494)
|
(9,237)
|
(2,374)
|
Adjusted
EBITDA (1) ('000s)
|
(4,019)
|
(5,865)
|
(4,335)
|
Net loss per share
(basic and diluted)
|
(0.04)
|
(0.08)
|
(0.01)
|
Weighted average
shares outstanding ('000s)
|
150,718
|
116,607
|
130,292
|
(1)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) is a non-International Financial Reporting
Standards ("IFRS") measure calculated as net loss before tax
as reported under IFRS and adding back share-based compensation
expense, transaction fees, unrealized gain on changes in fair value
of biological assets, depreciation and non-recurring items. Refer
to the "Non-IFRS Measures" note below for further
information and the Company's MD&A for a
reconciliation.
|
Q1 2021 operating highlights and subsequent events
- Insurance coverage in Colombia
continues to be a catalyst for growth, with more than 7,500
prescriptions filled in Q1 2021 and over 19,000 prescriptions
filled to date. With continued month-over-month growth, Q2 2021
continues to build on the achievements of Q1 2021.
- Insurance coverage continues to improve patient access to
medical cannabis, with the percentage of prescriptions issued and
covered by insurance increasing from over 40% in Q4 2020 to over
60% in Q1 2021.
- Returning medical cannabis patients in Colombia reached nearly 50% in Q1 2021, as
compared to approximately 20% in Q3 2020, providing a more stable
Medical Cannabis revenue base.
- Khiron real-world evidence is improving physician engagement,
patient outcomes and strategic decision-making.
- Initial analysis of Khiron medical cannabis patient data for
various neuropathic conditions shows a significant reduction in the
intake of other medications (including opioids), improved quality
of life, and material annual savings. Khiron's patient data
continues to mount and will provide real-world evidence for
pharmacoeconomic studies intended to support the Company's goal of
reaching more patients.
- Following the initial success of its Medellin satellite clinic, the Company opened
five additional satellite clinics in Colombia in 2021, for a total of nine clinics
including the three health centres in Bogota and six satellite clinics across the
country.
- Khiron recently partnered with the Colombia Cancer League to
deliver an additional 3,000 medical cannabis patient consultations
during the month of June, in collaboration with 21 leading medical
institutions in 11 cities throughout Colombia.
- Q1 2021 medical cannabis sales in Peru increased by over 175% compared to sales
in 2020 (which began late in Q3 2020). Given the positive reception
to Khiron products in Peru, the
Company expects to open its first international Zerenia™ satellite
clinic in Peru in the coming
weeks.
- The Company plans to deploy its Zerenia™ medical cannabis
clinic and telehealth strategy in Mexico and Brazil, building on the success of its
vertical integration strategy in Colombia.
- In March 2021, the Company
successfully exported its Colombian-registered cannabis strains, in
the form of live clones, from Colombia to Europe.
- In March 2021, Khiron commenced
sales in Germany with the
successful delivery of EU-GMP medical cannabis products. Khiron
1/14 (High CBD flower) has been used to treat indications such as
anxiety, substance-use disorder and migraines.
- The Company continues to advance its operations in the UK. In
April 2021, the Company introduced
Khiron 1/14 (High CBD flower) in addition to 5-gram jars of flower
products. In addition, the Company's medical cannabis e-learning
certification, Khiron Academy, recently received accreditation for
Continuing Professional Development credits in the UK.
Discussion of Operations for the Three Months Ending
March 31, 2021
During the first quarter of 2021, the Company reported record
revenues of $2.8 million, a 49%
increase as compared to Q1 2020 due to normalized clinic operations
and the growth of medical cannabis sales. Relative to Q4 2020,
first quarter revenues increased 13% due to a 141% increase in
Medical Cannabis Product sales, which reached $563,000 in the quarter, as the Company benefited
from medical cannabis insurance coverage in its core market of
Colombia.
At $1.1 million, or 38% of
revenues, the Company achieved record gross profits due to
increasing Medical Cannabis Product sales and margin improvements
within the Health Services segment. Notably, Medical Cannabis
margins remained high at 90% of revenues, while Health Service
margins increased to 26% of revenues in Q1 2021, from 7% in Q4
2020.
In Q1 2021, the Company incurred lower general and
administrative costs as compared to Q1 2020 due cost cutting
measures implemented in the second quarter of 2020 and the
devaluation of the Colombian peso. Overall, the Company recorded a
net loss of $5.5 million in Q1 2021,
which compares to a net loss of $9.2
million in Q1 2020 and $2.4
million in Q4 2020. Adjusted EBITDA losses of
$4.0 million compared to losses of
$5.9 million in Q1 2020 due to
ongoing cost management initiatives and improved sales and
margins.
Management Commentary
"Q1 was a record quarter for
the company, in terms of both revenues and gross profits, driven by
strong results in our Medical Cannabis segment, which achieved
another quarter of more than 100% growth. Insurance coverage for
medical cannabis in Colombia
continues to have a positive impact, providing greater revenue
stability as returning patients reached 50% of medical cannabis
patient volumes in Q1. I am also happy to report that our gross
profits were well above Q4 2020, driven by strong clinic
performance and growth from our vertical integrated medical
cannabis strategy. As of April, prescriptions in Colombia were already equal to 44% of those
filled in Q1, positioning us for another record quarter in Q2,"
comments Alvaro Torres, Chief
Executive Officer and Director of the Company.
"In Europe, our world-class
team continues to execute, recently delivering first sales in
Germany and a strategic
partnership with Cellen Therapeutics, a leader in digital
healthcare in the UK and fellow founding member of Project
Twenty21. We also received UK CPD accreditation for our global
medical cannabis education platform, Khiron Academy, and imported
the first ever live cannabis clones from Colombia to Europe. Collectively, these achievements will
help us deliver on our mission of improving patients' lives by
increasing access to medical cannabis products both at home and
abroad," continued Alvaro
Torres.
Webcast Details
Khiron invites individual and
institutional investors, as well as advisors and analysts, to
attend a webcast and Q&A to discuss the Company's Q1 2021
financial statements and further activities.
DATE: May 28, 2021
TIME: 10:00am ET/7:00am PT
PRESENTERS: Alvaro Torres,
Khiron Chief Executive Officer and Director, Joel Friedman, Khiron Chief Financial Officer,
and Chris Naprawa, Chairman of
Khiron's Board of Directors
FORMAT: Live 30 minutes presentation & Q&A
session
REGISTER LINK:
https://event.on24.com/wcc/r/3196006/0652A31C731C234FE0C2F998FCEBFFEB
About Khiron Life Sciences Corp.
Khiron is a
vertically integrated medical and CPG cannabis company with core
operations in Latin America, and
operational activity in Europe and
North America. Khiron is the
leading medical cannabis provider in Colombia and the first company licensed in
Colombia for the cultivation,
production, domestic distribution and sales, and international
export of both low and high THC medical cannabis products. The
Company has filled medical cannabis prescriptions in Colombia, Peru, Germany
and the United Kingdom, and is
positioned to commence sales in Mexico and Brazil in 2021.
Leveraging wholly-owned medical clinics and proprietary
telemedicine platforms, Khiron combines a patient-oriented
approach, physician education programs, scientific expertise,
product innovation, and agricultural infrastructure to drive
prescriptions and brand loyalty. Its Wellbeing unit launched the
first branded CBD skincare brand in Colombia, with KuidaTM now marketed in
multiple jurisdictions in Latin
America, the US and United
Kingdom. The Company is led by Co-founder and Chief
Executive Officer, Alvaro Torres,
together with an experienced and diverse executive team and Board
of Directors.
Visit Khiron online at investors.khiron.ca and on Instagram
@khironlife.
Cautionary Notes
Forward-Looking Statements
This press release may
contain certain "forward-looking information" and "forward-looking
statements" within the meaning of applicable securities
legislation. All information contained herein that is not
historical in nature may constitute forward-looking information.
Khiron undertakes no obligation to comment on analyses,
expectations or statements made by third-parties in respect of
Khiron, its securities, or financial or operating results (as
applicable). Although Khiron believes that the expectations
reflected in forward-looking statements in this press release are
reasonable, such forward-looking statement has been based on
expectations, factors and assumptions concerning future events
which may prove to be inaccurate and are subject to numerous risks
and uncertainties, certain of which are beyond Khiron's control,
including the risk factors discussed in Khiron's Annual Information
Form which is available on Khiron's SEDAR profile at www.sedar.com.
The forward-looking information contained in this press release is
expressly qualified by this cautionary statement and is made as of
the date hereof. Khiron disclaims any intention and has no
obligation or responsibility, except as required by law, to update
or revise any forward-looking information, whether as a result of
new information, future events or otherwise.
Neither the TSXV nor its Regulation Services Provider (as that
term is defined in the policies of the TSXV) accepts responsibility
for the adequacy or accuracy of this press release.
Investor Contact:
Paola Ricardo
E: investors@khiron.ca
T: +1 (647) 556-5750
Media Contact:
Elsa
Navarro
Vice President, Communications
E: enavarro@khiron.ca
Khiron Europe:
Tejinder
Virk
Europe President
E: tvirk@khiron.ca
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SOURCE Khiron Life Sciences Corp.