Medicure Inc.

Good morning, ladies and gentlemen, and welcome to Medicare's earnings conference call for the quarter ended September 30th, 2022. My name is Michelle and I will be your operator for today's call. At this time, all participants are in listen-only mode. Before we proceed, I would like to remind everyone that this presentation contains forward-looking statements relating to future results, events, and expectations, which are made pursuant to the safe harbor provisions of the US Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the company's actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, those described in the company's most recent Annual Information Form and Form 20-F. Later, we will conduct a question and answer session. Please note that this conference call is being recorded and today's date is November the 25th, 2022. I would now like to turn the conference call over to Dr. Albert Friesen, Chief Executive Officer of Medicare, Inc. Please go ahead, Dr. Friesen.

Thank you, Michelle, and good morning to all on the call. We appreciate your interest and participation in today's call. Joining me today on this Q3 2022 financial statements call is Dr. Neil Owens, President and Chief Operating Officer, and Haris Hooden, Medicare's Chief Financial Officer. We're pleased to report that net income for the quarter increased significantly from the previous quarter, with net revenue remaining steady. Net income for the quarter ended September 30, 2022, was $1.1 million, or $0.11 per share, and EBITDA was $1.4 million. Agristat sales remained steady. Zipidimax sales increased steadily, and the Marley Drug business provides a diversified revenue and helps grow our Zipidimax sales and profit. With the acquisition of Marley Drug and the online pharmacy and the online pharmacy continues to provide steady growth. Medicare's business focus is on the following growth and development initiatives. One, continued sales and profits from Agristat. Two, growing Zypidemag revenue and profit. Three, developing Marley Drug online presence. And four, the MC1 development for PNPO deficiencies. One of the reasons we acquired Marla Drug, a pharmacy uniquely positioned to dispense medications to all Americans in all 50 states and territories through mail, was to expand our sales reach for Zypinime. We believe the best way to do this is through a direct-to-consumer approach via an e-commerce platform coupled with our existing infrastructure. The goal of the platform is to bypass the traditional framework run by health insurers and pharmacy benefit managers that has made access to affordable medications too expensive for many Americans, including both generic and branded products such as Zypidemate. This past few months, Medicare celebrated its 25th anniversary. For 25 years, our mission has been to serve patients by delivering safe and efficacious life-changing medicines at affordable prices, capitalizing our strengths in cardiovascular therapy and knowledge of the ever-changing U.S. market. We're excited to continue working our mission over the next 25 years and more. We believe investments and experience over the past 25 years positions Medicare on a steady path to continued success. It takes time and persistence, and we've demonstrated that. Now I'd like to turn the call over to our CFO, Horace Ouden, to review and provide some color on our financial results for Q3.

Thank you, Dr. Friesen. A couple of quick items to note before I start. All dollar figures are in Canadian dollars unless otherwise noted by each presenter. And as a reminder, you will be able to obtain a complete copy of our financial statements for the quarter ended September 30th, 2022 at the end of the day today, along with previous financial statements on the investor's page of our website. Alternatively, a copy of all financial statements and management discussion and analysis can be obtained immediately from CDAR.com. I will now provide some key highlights of our financial performance for the quarter ended September 30th, 2022. Total revenues for the three-month period ended September 30, 2022 were $5.3 million compared to $4.9 million for the quarter ended September 30, 2021. Net revenues from Agristat for the period ended September 30, 2022 totaled $3.1 million, an increase from the prior year where net revenue from Agristat was $2.9 million. The increase in Agristat revenue during the current year is a result of a higher volume of units sold. The company earned net revenues from Zipidimeg in Q3 of 2022 of $434,000, which is an increase in the net revenues earned during the same period in the prior year of $388,000. The company continues to focus on Zipidimeg and expects revenues to continue to grow throughout the remainder of 2022 and beyond. The company earned net revenues from Marley Drug in Q3 of 2022 of $1.8 million, which is an increase from the net revenues earned from Marley Drug during Q3 of 2021 of $1.6 million. The increase in net revenue earned through Marley Drug is a result of an increased volume of sales, including sales through the Marley Drug e-commerce platform, which launched during the current year. Turning to cost of goods sold. Agristat cost of goods sold for a three-month period ended September 30, 2022, totaled $477,000. Cost of goods sold for Agrisat consisted of finished products sold that was delivered to customers. Zepidimeg cost of goods sold for a three-month period ended September 30th, 2022, totaled $363,000 and includes $153,000 relating to products sold to customers, $148,000 from amortization of the Zepidimeg intangible assets. and $62,000 relating to royalties on the sales of Petameg resulting from the acquisition of the product in September of 2019. Marley Drug had cost of goods sold of $551,000 during the three-month period ended September 30th, 2022, and this pertained to the cost of products sold by Marley Drug's in-store and mail-order pharmaceutical business, which also included sales through the Marley Drug e-commerce platform. Selling expenses totaled $1.7 million for the three-month period ended September 30, 2022, in comparison to $2.6 million for the three-month period ended September 30, 2021. Selling expenses decreased in the current period as a result of the company implementing cost-saving measures on multi-drug, in addition to the company reclassifying certain expenses as general and administrative expenses based on their nature. General and administrative expenses totaled $1 million for the quarter ended September 30, 2022, in comparison to $538,000 during the period ended September 30, 2021. The increase in general administrative expenses primarily related to professional fees incurred during the current period as the company continues to improve its e-commerce platform, partially offset by lower legal costs and a reclassification of certain expenses from selling to general and administrative based on their nature. Research and development expenses for the three-month period ended September 30, 2022 totaled $314,000 compared to $468,000 during the three-month period ended September 30, 2021. This decrease during the current period is primarily due to the timing of research and development expenditures relating to each development project and a declining research and development budget. The company recorded finance expense of $33,000 during the three-month period ended September 30, 2022. The finance expense recorded during the period consisted primarily of accretion on the SEPIDEMEC acquisition table, bank charges incurred, and finance expense on the company's lease obligations, partially offset by interest income earned during the current period. The company recorded a foreign exchange gain during the three-month period ended September 30, 2022 of $10,000 compared to a foreign exchange loss of $226,000 during the three-month period ended September 30, 2021. The change relates to changes in the U.S. dollar exchange rate during their respective periods which led to a favorable foreign exchange gain during the current period. Adjusted EBITDA for the three-month period ended September 30, 2022 was $1.4 million compared to an adjusted EBITDA of $282,000 during the three-month period ended September 30, 2021. The increase in adjusted EBITDA for the three-month period ended September 30, 2022 is a result of a lower research and development cost lower general administrative costs relating to improvements on the Marley Drug e-commerce platform, in addition to higher revenues in the current period when compared to the same period in the last year. As at September 30, 2022, the company had cash totaling approximately $4.5 million, an increase from the $3.7 million of cash held at December 31, 2021. The company does not have any debt on its books. I want to remind you all there will be an opportunity at the end of today's call for you to ask questions regarding the financial results of the company as a whole. And with that, I would like to turn the call over to our President and Chief Operating Officer, Dr. Neil Owens, for some additional commentary regarding our operation.