Medicure Inc.

Welcome to Medicare's earnings conference call for the quarter ended March 31st 2024. My name is Jenny and I will be your operator for today's call. At this time all participants are in a listen only mode. Before we proceed I would like to remind everyone that this presentation contains forward-looking statements relating to future events, results 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 20F. Later, we will conduct a question and answer session. Please note that this conference is being recorded and today's date is May 29, 2024. I would now like to turn the conference over to Dr. Albert Friesen, Chief Executive Officer of Medicare Inc. Please go ahead, Dr. Friesen.

Thank you, Jenny, and good morning to all on the call. We appreciate your interest and participation in today's call. Joining me today for the Q1 2024 financial statements call is Dr. Neil Owens, President and Chief Operating Officer, and Haris Uddin, Medicare's Chief Financial Officer. The net revenue for Q1 2024 was $5.7 million, which is similar to the previous year's Q1 net revenue of $5.6. and a bit of an increase from the previous quarter, that being Q4 23, which was 5.1. The net income for their quarter was $51,000, which is a bit lower than the previous year's Q1, which was $290,000, but significantly better than the previous quarter, that being Q4 2023, which was a loss. Adjusting earnings before interest, taxes, depreciation, and amortization for the quarter was a positive $359,000. In summary, the revenue from Agristat was down slightly, but revenue from both Marley Drug and Zypidemag were up. So just a reminder that the four focuses of a Medicare business are holding and the sales and profits of Agristat, growing Zypidemag revenue and profit, growing the Marley Drug online pharmacy business and investing research and development in the MC1 for the PNPO deficiency. The online pharmacy continues to help grow Zypinamag and is growing and are growing contributor to Medicare's business. We continue to explore acquisitions of additional pharmacies with a promising outlook for the while still focusing on the R&D for long-term growth. We believe the investments and experience over the 27 years positions Medicare on a steady path for continued success. So, now I'll turn over the call to our Chief Financial Officer, Harthudin, to review and provide some of the colour on the financial statements.

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 March 31st, 2024 by the end of day-to-day along with previous financial statements on the investor's page of our website. Alternatively, a copy of all financial statements and management's discussion and analysis can be obtained immediately from CDAR.com. I will now provide some key highlights of our financial performance for the three-month period ended March 31st, 2024. Total revenues for the quarter ended March 31st, 2024 were $5.7 million compared to $5.6 million for the quarter ended March 31st, 2023. Net revenues earned from Agristat during the current period totaled $2.3 million, a decrease from the prior year where net revenue from Agristat was $2.7 million. The decrease in Agristat revenue during the current year is the result of a lower volume of units sold as a result of increased competition from generic, tyroside and hydrochloride. Net revenues earned from Zipidimeg through the traditional insurance channel during the current year totaled $777,000, which is an increase from the $640,000 of net revenue earned during the same period in the prior year. The increase in Zipidimeg sales through the traditional insurance channel can be attributed to a higher volume of product sold. For Marley Drug, net revenue during the current quarter totaled $2.7 million, an increase from the $2.3 million earned from Marley Drug during the three-month period ended March 31st, 2023. The increase in Marley Drug sales during the current period is due to an increased volume of sales, including an increased volume of Zepetimac sales through Marley Drug, which is also included within this figure. The company continues to focus on growing Marley Drug and growing the sales of Zepetimac through Marley Drug into 2024 and beyond. Moving on to cost of goods sold, Agrisat cost of goods sold for the quarter ended March 31st, 2024 totaled $403,000, a decrease from the prior year where cost of goods sold totaled $770,000. The decrease in cost of goods sold is a result of a lower volume of Agrisat sold in addition to insurance proceeds received by the company during the current quarter which related to inventory which was damaged and transport in a previous period. Zipidimeg cost of goods sold for the current quarter totaled $315,000, which was consistent with the prior year, where cost of goods sold for Zipidimeg for the quarter ended totaled $317,000. Included within cost of goods sold for Zipidimeg in the current year is $162,000 relating to products sold to customers and $153,000 of amortization of the Zipidimeg intangible assets. The slight decrease in cost of goods sold noted during the current quarter is due to the conclusion of the company's royalty obligation on the sale of Sipinamex, offset by a higher volume of Sipinamex sold through the insured channel in the current period. Marley Drug cost of goods sold totaled $1.1 million during the period ended March 31, 2024, an increase from the period ended March 31, 2023, where cost of goods sold totaled $750,000. The increase in cost of goods sold during the current year is a result of a higher volume and the nature of product sold through both the mail order and e-commerce platform during the current year. Selling expenses totaled $2 million for the quarter ended March 31st, 2024, consistent with the same period in the prior year, where selling expenses were also $2 million. Selling expenses slightly decreased in the current period as a result of less consulting expenses incurred by the company with regards to regulatory reporting on its government contracts, offset by a higher revenue amount earned through Marley Drug in the current quarter. General and administrative expenses totaled $1.2 million for the quarter ended March 31, 2024 in comparison to $905,000 during the same quarter in the prior year. The increase in general and administrative expenses in the current period is the result of higher legal fees in the current period, in addition to higher share-based compensation expense, which is based on the vesting schedule of previously granted stock options to key employees and directors of the company. Research and development expenses for the quarter ended March 31st, 2024 totaled $680,000 compared to $526,000 during the same quarter in the prior year. The increase during the current period is primarily due to the timing of research and development expenditures relating to each development project the company is currently undertaking. The company recorded finance income of $51,000 during the period ended March 31st, 2024. The finance income recorded during the current period consisted primarily of interest income earned on cash held by the company offset by bank charges and finance expenses. on the company's lease obligations. The company recorded a foreign exchange loss of $7,000 during the quarter ended March 31, 2024 in comparison to a foreign exchange loss of $24,000 during the quarter ended March 31, 2023. The change in foreign exchange loss relates to changes in the US dollar exchange rate during the respective years, which led to an unfavorable foreign exchange loss during the current period. Adjusted EBITDA for the quarter ended March 31st, 2024 was $359,000 compared to an adjusted EBITDA of $916,000 during the quarter ended March 31st, 2023. The decrease in adjusted EBITDA during the current period is due to a decrease in operating income which primarily stemmed from decreased revenues from the sale of Agristat offset by higher revenue through Marley Drug and from Cepidemag. In addition, there were also higher higher selling general administrative expenses and higher research and development expenses. As of March 31st, 2024, the company had cash totaling approximately $6.1 million, a slight decrease from the $6.4 million of cash held as of December 31st, 2023. 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 operations.