Medicure Inc.

Welcome to Medicare's earnings conference call for the quarter ended March 31st, 2023. My name is Holly, 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 U.S. 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 May 29th, 2023. 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, Holly, and good morning to everyone on the call. We appreciate your interest and participation in today's call. Joining me today on this Q1 2023 financial statement call is Dr. Neil Owens, President and Chief Operating Officer, and Horace Ouden, Medicare's Chief Financial Officer. We're pleased to report that the revenue of $5.6 million for Q1 2023 remains steady from the previous quarters with net income of $290,000. of $867,000 and $0.03 per share of earnings, all showing consistent good financial returns. Agriset sales and Zypitimax sales and Marley Drug Income all provide net earnings and net earnings are on top of their R&D investment of $526,000 this past quarter. The four focuses of business, just reminding you, are the sales and profits from Agristat, growing Zypidemag revenue and profit, growing the Marley Drug online pharmacy business, and the development of MC1 for the PNPO deficiency application. The acquisition of Marley, the online pharmacy delivering to homes in all 50 states and other territories through mail, was to expand our sales reach for Zypidemag and is growing a contributor to Medicare's business. We believe the investments and the experience of the past 25 years positions Medicare on a steady path of continued success. I'd now like to turn the call over to our Chief Financial Officer, Haras Uddin, to review and provide some color on the financial results.

Thank you, Dr. Breeson. 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 March 31, 2023, by the end of day today, along with previous financial statements on the Investors page of our website. Alternatively, a copy of all financial statements and management discussion analysis can be obtained immediately from CDAR.com. I will now provide some key highlights of our financial performance for the quarter ended March 31, 2023. Total revenues for the period ended March 31, 2023 were $5.6 million compared to $5.7 million for the period ended March 31, 2022. Net revenues earned from Agristat during the current quarter totaled $2.7 million, a slight decrease from the prior year where net revenue from Agristat was $2.8 million. The decrease in agri-start revenue during the current quarter is the result of fluctuating foreign exchange rates and higher wholesaler fees on units of products sold. Net revenues earned from Zipidimac during the current quarter totaled $640,000, which is a decrease from the $1 million of net revenue earned during the prior year. The decrease can be attributed to coverage gap rebates paid during the current period, in addition to higher wholesaler fees. The company continues to focus on Zipidimeg and hopes to see a growth in sales of Zipidimeg throughout 2023 and beyond. Moving on to Marley Drug. Net revenues from Marley Drug during the current quarter totaled $2.3 million. This is an increase from the $1.9 million earned from Marley Drug during the same period in the prior year. The increase in Marley drug sales during the current year is due to an increased volume of sales, which is partially attributable to the launch of the Marley drug e-commerce platform, which was launched during the beginning of 2022. Moving on to cost of goods sold, Agristack cost of goods sold for the quarter ended March 31st, 2023, totaled $770,000, a decrease from the prior year where cost of goods sold totaled $911,000. The decrease in cost of goods sold for Agristat is the result of better inventory management during the current year, in addition to a lower volume of Agristat sold. Sipitimac cost of goods sold for the quarter ended March 31, 2023, totaled $317,000, an increase from the prior year, where cost of goods sold for Sipitimac was $224,000. Included within cost of goods sold for Zepidemeg is $117,000 relating to products sold to customers, $153,000 of amortization of the Zepidemeg intangible asset, and $47,000 relating to royalties on the sale of Zepidemeg, resulting from the acquisition of the product in September of 2019. The increase in cost of goods sold noted during the current year is due to a higher volume of Zepidemeg sold during the current quarter, ended March 31, 2023. Marui drugs cost of goods sold totaled $745,000 during the quarter ended March 31st, 2023. This is an increase from the prior year where cost of goods sold totaled $556,000. The increase in cost of goods sold during the current year is the result of a higher volume of products sold through Marui drugs during the current period. Selling expenses totaled $2 million for the quarter ended March 31st, 2023 in comparison to $1.7 million during the prior year. Selling expenses increased in the current year due to the company recording a higher volume of product sold during the current period, in addition to inflationary increases the company has been subject to during the current year. General and administrative expenses totaled $906,000 during the current period, in comparison to $1.3 million during the same period in the prior year. The decrease in general and administrative expenses is primarily related to the decrease in professional fees paid by the company during the current period, The company incurred additional professional fees in the prior year as a result of the launch of the e-commerce platform during Q1 of 2022. Research and development expenses for the current period totaled $526,000 compared to $345,000 during the prior year. The increase during the current year is primarily due to the timing of research and development expenditures relating to each development project the company is currently undertaking. The company recorded $5,000 during the current period ended March 31st, 2023 of finance expense. The finance expense recorded during the current period consisted primarily of bank charges, finance expense on the company's lease obligations, and these were both offset by interest income earned during the current period. The company recorded a forward exchange loss during the period ended March 31, 2023 of $24,000 compared to a foreign exchange loss of $133,000 during the prior year. The change relates to the change in the U.S. dollar exchange rate during the respective years, which led to a favorable foreign exchange, or sorry, pardon me, an unfavorable foreign exchange loss during the current period. Adjusted EBITDA for the period ended March 31st, 2023 was $916,000 compared to an adjusted EBITDA of $1.2 million during the period ended March 31st, 2022. The decrease in adjusted EBITDA during the current year is due to a decrease in operating income, which primarily stemmed from a decreased net revenue from the sale of Agriscience Epidemag, an increase in R&D expenses offset by an increase in net revenue through marketing drugs. As at March 31, 2023, the company had cash totaling approximately $4.92 million, a slight increase from the $4.86 million held at December 31, 2022. The company does not have any debt on its books. I want to remind you that 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.