Medicure Inc.

Welcome to Medicare's earnings conference call for the quarter ended March 31, 2025. 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 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 20F. Later, we will conduct a question and answer session. Please note this conference is being recorded and today's date is May 22, 2025. I would now like to turn the conference over to Dr. Albert Friesen, Chief Executive Officer of Medicure Incorporated. 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, excuse me, Joining me today on the Q1 2025 financial statements call is Dr. Neil Owens, President and Chief Operating Officer, and Horace Uden, Medicare's Chief Financial Officer. The net revenue for Q1 2025 was 5.5 million, a slight decrease from the previous year's net revenue, which was 5.7. The company recorded a net loss for Q1 of approximately $694,000 or $0.07 per share compared to a net income of $51,000 the first quarter of 2024. The net loss in the current period was due in large part due to significant R&D expenses of $570,000 mainly for the MC1 PNPO clinical trial. and a bit of a decrease in agri-staff revenue, a decrease in zypinimic revenue from the insured channel, amortization of the company's intangible assets. Offsetting this was decreases in selling and general and administrative costs. In addition, higher revenue through Marley Drug, including higher sales of zypinimic through Marley Drug. The company has five focuses. Agristat sales and profits holding them, growing Zypidemag revenue and profit, growing the Marley Drug online pharmacy, including new pharmacies we've recently added, the development of MC1 for PNPO deficiency, and a new chemical entity related to Medicare's historic drug development with a very large market potential. I'd now like to turn the call over to our Chief Financial Officer, Harasudan, to review and provide on the Q1 2025 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 complete copy of our financial statements for the quarter ended March 31st, 2025, along with previous financial statements on the investors page of our website. In addition, a copy of all financial statements and management's discussion and analysis can be obtained from CDARplus.ca. I will now provide some key highlights on our performance for the three-month period ended March 31, 2025. Total revenues for the quarter ended March 31, 2025 were $5.5 million compared to $5.7 million for the quarter ended March 31, 2024. Net revenues earned from Agristat during the current period totaled $1.7 million, a decrease from the prior year, where net revenue from Agristat was $2.3 million. The decrease in Agristat revenue during the current period is the result of a lower volume of units sold as a result of increased competition from generic Taro 5 and hydrochloride. Net revenues earned from Cepidemeg through the traditional insured channel during the current period totaled $519,000. which is a decrease from the $777,000 of net revenue earned during the same period in the prior year. The decrease in Zipidimic revenue during the three-month period ended March 31, 2025 can be attributed to a decrease in utilization of the product through insurance formularies, specifically Medicare Part D. It is important to note that Zipidimic sales through Marley Drug are excluded from this number. For Marley Drug, net revenue during the current quarter totaled $3.1 million. An increase from the $2.7 million earned from Marley Drug during the three-month period ended March 31, 2024. The increase in Marley Drug sales during the current period is due to an increased volume of products sold, including Zepidemeg. Net revenue attributable to Zepidimic through Marley Drug was $918,000 during the current period. An increase in the three-month period ended March 31, 2024 whereas Zepidimic sales were $567,000 through Marley Drug. On March 11, 2025 the company acquired Gateway Pharmacy. Revenue for Gateway Pharmacy between the period of March 11, 2025 to March 31, 2025 was $175,000 The company intends on offering Zepidimac to the pharmacy in subsequent quarters in addition to other product offerings which have increased revenue at Marley Drug. Moving to cost of goods sold, Agristat cost of goods sold for the quarter ended March 31st, 2025 totaled $699,000, an increase from Q1 2024 where cost of goods sold totaled $403,000. The increase in cost of goods sold is attributable to insurance proceeds received by the company during the three-month period ended March 31, 2024, of $281,000 for inventory which had been previously expensed during 2023. Normalizing for this, in addition to foreign exchange rate differences between the two periods, cost of goods sold for Agristat did decrease, which is consistent with the lower revenue for Agristat recorded during the current period. Zepidemec cost of goods sold for the current quarter totaled $244,000, a decrease from Q1 2024, where cost of goods sold for Zepidemec through the insured channel for the quarter ended, totaled $315,000. For the current period, included within cost of goods sold for Zepidemec is $82,000 relating to products sold to customers and $162,000 of amortization of the Zepidemec intangible assets. The decrease in cost of goods sold noted during the current quarter is consistent with a decrease in revenue noted during the current period. Margarity drug cost of goods sold totaled $1.6 million during the period ended March 31, 2025. An increase from the period ended March 31, 2024, where cost of goods sold totaled $1.1 million. The increase in cost of goods sold during the current period is a result of a higher volume and the nature of products sold through both the mail order and e-commerce platform. Gateway Pharmacy's cost of goods sold during the three-month period ended March 31, 2025 was $110,000. The cost of goods sold reported for Gateway Pharmacy is only from its acquisition date of March 11, 2025 to March 31, 2025. Selling expenses totaled $1.8 million for the quarter ended March 31, 2025, a decrease from Q1, 2024, where selling expenses were $2 million. Selling expenses decreased in the current period as a result of lower consulting and marketing expenses incurred by the company. General and administrative expenses totaled $1.1 million for the quarter ended March 31, 2025, in comparison to $1.2 million during Q1, 2024. The decrease in general and administrative expenses in the current period is a result of lower legal fees in the current period in addition to lower 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 31, 2025 totaled $570,000 compared to $680,000 during the same quarter in the prior year. The decrease in the current period 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 period was primarily the development of MC1. The company recorded finance income net of $34,000 during the current period ended of $34,000 in comparison to finance income net of $51,000 during the three-month period ended March 31, 2024. The finance income recorded during the current period primarily related to interest income earned, offset by bank charges, interest on the company's lease obligations, and non-cash accretion expense on the company's acquisition payable liability, which is in connection with the acquisition of Gateway Pharmacy. The company recorded a foreign exchange loss of $35,000 during the quarter ended March 31, 2025, in comparison to a foreign exchange loss of $7,000 during the quarter ended March 31, 2024. The change in foreign exchange loss relates to changes in the U.S. dollar exchange rate during the respective years. Adjusted EBITDA for the quarter ended March 31, 2025 was $28,000 compared to an adjusted EBITDA of $359,000 during the quarter ended March 31, 2024. The decrease in adjusted EBITDA during the current period is due to a decrease in operating income, which primarily relates to decreased revenues from the sale of Agristat and Zepidimeg through the insurer channel, offset by higher revenue through Marley Drug, including higher revenue of Zepidimeg through Marley Drug. In addition, the company also had lower selling expenses and general administrative and research and development expenses. As of March 31st, 2025, the company had cash totaling approximately $7.2 million, consistent with the $7.2 million of cash held as of December 31st, 2024. 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.