Medicure Inc.

Welcome to Medicare's Earnings Conference Call for the quarter and year ended December 31st, 2024. 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 April 29th, 2025. 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 all on the call. We appreciate your interest and participation in today's call. Joining me today in the 2024 financial statements is Dr. Neil Owens, President and Chief Operating Officer, and Har Sudden, Medicare's Chief Financial Officer. The net revenue for 2024 was $21.9 million, slight increase from the previous year, which was $21.7 million. The company recorded a net loss for 2024 of approximately $1 million or $0.10 per share compared to a net loss of $922,000 or $0.09 per share last year. The net loss is due in large part to non-cash expenses including $2.3 million of amortization of the company's assets and $196,000 of share-based compensation expense on stock options granted to employees and directors during the prior year. There was a bit of a decrease in the Agristat revenue and increase in professional fees as well. There was higher revenue from sales of Zipidimed through Marley Drug and including current year's expenses was R&D of 3.1 million largely for the MC1 PNPO clinical trial. We've added a fifth focus the past year, that being the development of a novel drug related to MC1 with significant market potential. So, a reminder that the five business focuses for Medicare are holding sales and profits from Agristat, growing Zypidemag revenue and profit, growing the Marley Drug online pharmacy business, the development of MC1 for PNPO deficiency, and the new chemical entity related to Medicare's historic drug development with very large market potential. I'd now like to turn the call over to our CFO, Haris Hooden, to review and provide some color on the 2024 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 can obtain a copy of our complete set of our financial statements for the year ended December 31st, 2024 on the investors page of our website. Alternatively, a copy of all financial statements and management discussion and analysis can be obtained from cdarplus.ca. I will now provide some key highlights of our financial performance for the year ended December 31st, 2024. Total revenue for the year ended December 31, 2024 was $21.9 million compared to $21.7 million for the year ended December 31, 2023. Net revenues earned from Agristat during the current year totaled $8.1 million, a decrease from the prior year where net revenue from Agristat was $9.7 million. The decrease in agri-site revenue during the current year is a result of pricing pressures from increased competition stemming from the launch of generic Tyro-5 and hydrochloride. Net revenues earned from Cepidemec through the traditional insurance channel during the current year total $3 million, which is an increase from the $2.4 million of net revenue earned during the prior year. The increase in epidemic sales through the traditional insurance channel can be attributed to greater utilization of the product through insurance formularies, specifically Medicare Part D. This increase is offset by increased wholesaler fees in addition to higher coverage gap payments to pharmacy benefit managers. For Marley drug, net revenue during the current year totaled $10.8 million, an increase from the prior year where net revenue totaled $9.6 million. The pharmacy business has undergone a change in its product mix since the prior year, resulting in the increase in revenue during the current year, and the pharmacy continues to focus on fulfillment partnerships, its e-commerce platform, and increased sales of Zupinibank. Offsetting the increase in revenue is a decline in reimbursements from pharmacy benefit managers, which only impact insured prescription revenue. Agristat cost of goods sold for the year ended December 31, 2024, totaled $2.5 million, a decrease from the prior year, where cost of goods sold totaled $3 million. The decrease in cost of goods sold is the result of a decrease in volume of Agristat sold, which is consistent with the lower revenue recorded in the current year. Zepidimac cost of goods sold for the current year totaled $1.4 million, an increase from the prior year, where cost of goods sold for Zepidimac totaled $974,000. Included within the cost of goods sold for Zipidimeg in the current year is $759,000 relating to products sold to customers and $620,000 from amortization of the Zipidimeg intangible asset. The increase in cost of goods sold noted during the current year is due to a higher volume of products sold during 2024, in addition to a recovery, which was recorded in the prior year, of $281,000 relating to Zipidimeg royalties. Marley drug cost of goods sold totaled $4.9 million during the year ended December 31, 2024, an increase from the prior year where cost of goods sold totaled $3.7 million. The increase in cost of goods sold is the result of a higher volume and the nature of products sold through both the mail order and e-commerce platform during the current year. Selling expenses totaled $8 million for the year ended December 31, 2024, a decrease from the prior year where selling expenses were $8.3 million. The decrease in selling expenses during the current year is the result of management's efforts in optimizing its sales and marketing expenses. This included a reorganization of the company's sales team in addition to focusing on marketing channels, which provided the greatest return on investment. General and administrative expenses totaled $4.8 million for the current year in comparison to $4.1 million during the prior year. The increase in general and administrative expenses in the current year is the result of higher professional fees, primarily related to legal fees, offset by lower share-based compensation expense on previously granted stock options to key employees and directors of the company. Research and development expenses for the current year total $3.1 million compared to $2.4 million 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, which in the current year primarily related to the development of MC1. Other income during the current year totaled $1.9 million. The other income recorded during the current year was the result of a legal settlement between the company and its contract development and manufacturing organization. The company received the settlement payout in the fourth quarter of 2024. During the prior year ended December 31st, 2023, the company did not record any other income. The company recorded finance income of $165,000 during the current year in comparison to finance income of $65,000 during the prior year ended December 31st, 2023. The finance income recorded during the current year consisted primarily of interest income earned on the 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 $71,000 during the current year in comparison to a foreign exchange loss of $108,000 during the prior year. The change in foreign exchange relates to changes in the U.S. dollar exchange rate during the respective years, which led to an unfavorable foreign exchange loss during both the current and prior years. Adjusted EBITDA for the current year was negative $437,000 compared to an adjusted EBITDA of $1.9 million during the year ended December 31, 2023. The decrease in adjusted EBITDA during the current year is primarily due to higher mortgage drug costs or goods. lower agri-start revenue, as well as higher research and development expenses. And these amounts are offset by a decrease in selling expenses, higher epidemic sales through both the Marley Drug Pharmacy and traditional insured channel. Subsequent year end, the company acquired 100% of the outstanding shares of Gateway Medical, an independent pharmacy located in Portland, Oregon, in exchange for total consideration of $580,000 USD. In addition, the company also signed an agreement with the intention of acquiring 100% membership interest of West Olympia Pharmacy, an independent pharmacy located in West Olympia, Washington, for total consideration of $975,000 USD. The transaction of West Olympia is subject to the licenses of the pharmacy transferring from the seller to the buyer prior to the transaction closing. The transaction is expected to close in the second quarter of 2025 and both pharmacies were intended to be acquired with the intention of expanding the company's retail pharmacy operating segment and creating synergies with Marley Drug. As at December 31, 2024, the company had cash totaling approximately $7.2 million an increase from the $6.4 million of cash held as of December 31, 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.