Medicure Inc.

Greetings and welcome to Medicare's earnings conference call for the quarter ended September 30th, 2025. My name is Ali 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 Harbors Provision 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 call is being recorded and today's date is November 20, 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, Ali, and good morning to all on the call. We appreciate your interest and participation in today's call. Joining me today on the Q3 2025 financial statements call is Dr. Neil Owens, President and Chief Operating Officer, and Haris Uttan, Medicare's Chief Financial Officer. The net revenue for Q3 2025 was 8.2 million, an increase from the previous year, where our net revenue is 5.2, largely due to the addition of two pharmacies. The company recorded a net loss of 1.4 million, or 13 cents per share, compared to a net income of 680,000, or 7 cents per share, for the quarter ending September 30th, 2024. And that loss is about the same as the non-cash items including amortization plus the research investment. Medicare's investment of $717,000 in research and development during the quarter and underscore our commitment to advancing innovative therapies such as the Phase III trial of Medicare's investigational drug MC1 for the treatment of DMPO deficiency and delivering long-term value to patients and shareholders. Just to remind shareholders, the five focuses of our business are holding sales and profits of Agristat, growing Zypidemag, revenue and profit, growing the Marley Drug and online pharmacy business, development of MC1 for the PNPO deficiency, and a new chemical entity related to Medicare's historic drug development with a large market potential. Now I'd like to turn the call over to CFO, Horace Ouden, to review and provide some colour on the Q3 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 a complete copy of our financial statements for the quarter ended September 30th, 2025, along with previous versions of our financial statements on the investor's page of our website. In addition, a copy of all financial statements and management discussion and analysis can also be obtained from CDARplus.ca. I will now provide some key highlights of our financial performance for the three-month period ended September 30th, 2025. Total net revenue for the quarter ended September 30, 2025 was $8.2 million compared to $5.2 million for the quarter ended September 30, 2024. Net revenues earned from Agristat during this period totaled $1 million, a decrease from the prior year where the net revenue from Agristat was $1.9 million. The decrease in agri-start revenue during the current period is a result of a lower volume of units sold as a result of increased competition from generic TARA5 and hydrochloride. Net revenue earned from CEPIDEMEG through the traditional insured channel during the three-month period ended September 30, 2025, totaled $769,000, which is an increase from the $553,000 of net revenue earned during the period ended September 30, 2024. The increase in net revenue during the current period is related to a decrease in the number of returns during the current period in addition to consistent utilization of the product through insurance formularies. It is important to note that sepidemic sales through Marley Drug are excluded from this For Marley Drug, net revenue during the current quarter totaled $3.3 million, an increase from the $2.7 million earned from Marley Drug during the three-month period ended September 30, 2024. The increase in Marley Drug sales during the current period is due to an increased volume of products sold. Net revenue attributable to Zepidemeg through Marley Drug was $917,000 during the current period. An increase from the three-month period ended September 30th, 2024, whereas Epidemex sales through Marui Drug were $815,000. On March 11th, 2025, the company acquired Gateway Pharmacy. Revenue for Gateway Pharmacy for the quarter ended September 30th, 2025 was $890,000. In addition, on June 16th, 2025, the company acquired West Olympia Pharmacy. Revenue earned from West Olympia Pharmacy during the current quarter was $2.2 million. The company intends on offering Zitomag through both pharmacies in subsequent quarters in addition to other product offerings which have increased revenue at Marley Drug. Switching over to cost of goods sold, Agristat cost of goods sold for the quarter ended September 30, 2025, totaled $667,000. A decrease from the prior year where cost of goods sold during the same period totaled $719,000. The decrease in cost of goods sold is directly correlated with the lower volume of products sold during the current period. Zipidimeg cost of goods sold for the current quarter totaled $232,000, an increase from the period ended September 30, 2024, where cost of goods sold for Zipidimeg totaled $177,000. Included within cost of goods sold for Zipidimeg in the current period is $77,000 related to products sold to customers. and $156,000 from amortization of the Zipidemag intangible asset. Mortgage drug cost of goods sold totaled $1.9 million during the period end of September 30th, 2025, an increase from the period end of September 30th, 2024 where cost of goods sold totaled $1.5 million. The increase in cost of goods sold during the current period is the result of a higher volume and the nature of products sold both through the mail order and e-commerce platforms at the pharmacy. Gateway Pharmacy's cost of goods sold during the three-month period ended September 30, 2025 was $608,000. And West Olympia's cost of goods sold during the three-month period ended September 30, 2025 was $1.9 million. As both pharmacies were acquired during the current year, there was no cost of goods sold recorded for either Gateway Pharmacy or West Olympia Pharmacy during the three-month period ended September 30, 2024. Selling expenses totaled $2.2 million for the quarter ended September 30, 2025. An increase in three-month period ended September 30, 2024 where selling expenses were $2 million. Selling expenses increased in the current period as a result of the acquisitions of Gateway Pharmacy and West Olympia Pharmacy during the current year. General and administrative expenses totaled $1.2 million for the quarter ended September 30, 2025. consistent with the prior year, where general and administrative expenses were also approximately $1.2 million. The slight decrease in general and administrative expenses in the current period is a result of lower professional fees in the current period, in addition to lower share-based compensation expense, which is based on the vesting schedule of previously granted stock auctions to key employees and directors of the company. Research and development expenses for the quarter ended September 30, 2025 totaled $717,000 compared to $795,000 during the same quarter in the prior year. The decrease in research and development expenses during the current period is primarily due to the timing of expenditures. The company recorded a finance expense net of $2,000 during the current period in comparison to a finance income net of $18,000 during the three-month period ended September 30, 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 holdback payable and a non-cash accretion expense on the company's acquisition payable liability. The company recorded a foreign exchange loss of $21,000 during the quarter ended September 30th, 2025 in comparison to a foreign exchange loss of $46,000 during the quarter ended September 30th, 2024. The change in foreign exchange loss relates to change in the U.S. dollar exchange rate during the respective years. Adjusted EBITDA for the quarter ended September 30, 2025 was negative $597,000 compared to an adjusted EBITDA of negative $467,000 during the quarter ended September 30, 2024. The decrease in adjusted EBITDA during the current period is due to an increase in operating loss which primarily related to lower net revenue of Egrostat, higher cost of goods sold through the company's retail pharmacy operating segment which now includes Marley Drugs, Gateway Pharmacy and West Olympia Pharmacy, offset by higher epidemic revenue through both the insured channel and through Marley Drugs and lastly higher revenue through the company's retail pharmacy operating segment. As at September 30, 2025, the company had cash totaling approximately $4.1 million, a decrease from December 31, 2024, where the company had $7.2 million of cash held. The decrease in cash balance of the company is primarily attributable to the acquisitions of both Gateway Pharmacy and West Olympia Pharmacy during the current year. 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.

Thank you Horace and good morning to everyone. I'd like to start with some updates on our Zipidemag business. Total sales of Zipidemag in Q3 2025 were 1.7 million. which was a 21% increase from 1.4 million in Q3 2024. Sales of Zipidemag sold through Marley Drug grew by 12.5% from 815,000 in Q3 2024 to 917,000 in Q3 2025. However, awareness of Zipidemag still remains low and the opportunity remains very large. So, in order to grow sales further, we have refocused our field-based sales team and adjusted our prescriber and consumer marketing approach to try and grow further and faster. Selling Zephyrmatic germally drug has proven to be an effective approach due to the pharmacy's customer service, the absence of the typical hurdles put in place by insurance companies, and transparency in pricing. In addition, due to removing wholesaler and coverage gap fees, low PBM reimbursement, and product returns, selling through Marley Drug provides a much higher gross margin. We've also found that adherence rates for patients taking Zip-N-Mag is more than 40% higher through Marley Drug compared to other retail pharmacies because of our service and engagement strategies. This helps for reducing our attrition rate and increasing revenue. Net revenue through insured channels and the standard retail pharmacy model increased from $553,000 in Q3 2024 to $770,000 in Q3 2025 due to an increase in purchasing from wholesalers and changes in the mix of our insured customers. Overall, Zipinamag represents a priority for growth through efforts of our sales and marketing team. Further on our Marley drug business, net revenue grew by 22% from 2.7 million in Q3 2024 to 3.3 million in Q3 2025. This is due to an increase in sepidemic sold through the pharmacy business as well as generic medication sales and notably the sale of Brinzavi tablets, which is an accessible alternative SGLT2 inhibitor to Jardiance and Farcega. Medicare is working on leveraging Marley Drug's reputation for customer service, unique branded solutions, and national distribution to continue to drive growth. Challenges we've faced include competition and an increase in cost of goods, which impacts our margins. We plan to seek additional partnerships and branded products to offer through our e-commerce website. Recently, Medicare announced the acquisition of Gateway Medical Pharmacy and West Olympia Pharmacy, These additional pharmacy subsidiaries immediately grow our customer and prescriber base for both Zupetamag and other branded products. Combined, they contributed $3.1 million in revenue in Q3. In terms of our Agristat business, net revenue fell from $1.9 million in Q3 2024 to $1 million in Q3 2025 due to generic tire fadband competition, lower demand, and product returns. Volume of product units sold in Q3 2025 was 6% lower than in Q2 2025. Medicare remains the only manufacturer of the 3.75 milligram bullets file format, which is typically administered before the infusion unit. We continue to provide support to our US hospital accounts and nurture brand loyalty. Medicare's R&D focus is primarily on its phase three study to seek approval of MC1, as the first FDA-approved therapy for patients with PNPO deficiency, which is a rare pediatric disease leading to seizures and is ultimately fatal if untreated. A successful use of Medicare's legacy product MC-1 could lead to a priority review voucher, which can be redeemed or sold, and provides significant value. Enrollment is currently ongoing with patients receiving treatment with MC-1. and Medicare has received fast-track designation for MC1 for its intended indication, which will facilitate the review of Medicare's FDA new drug application. The Phase 3 study has had two patients complete the 12-month study, and we are targeting the end of 2025 to have all patients start enrollment, which will be approximately 10 to 15 patients in total. Medicare recently presented the study design and baseline steady-state pyridoxal 5-phosphate levels for enrolled patients at the 54th Child Neurology Society Conference, led by principal investigator Dr. Philip Pearl, who is the director of epilepsy and clinical neurophysiology at Boston Children's Hospital. Medicare recently announced as well that it has signed an asset purchase agreement for the acquisition of the patent and intellectual property related to the discovery of new chemical entities that can be developed for therapeutic use. We believe that these new chemical entities will promise to provide improvements over existing lead compounds in alignment with the treatment of diseases being targeted by Medicare and could provide significant long-term value upon completion of all required preclinical and clinical studies and regulatory approval. Medicare has yet to announce the clinical therapeutic target, however, has started preclinical testing and API development of the lead compound. Overall net revenue in Q3 2025 was $8.2 million compared to $5.2 million in Q3 2024 due to an increase in Zepidemag and Marley drug revenue and the acquisitions of Gateway Medical and West Olympia Pharmacies. Because of lower agri-stat revenue and higher Marley Drug cost of goods, as well as R&D expenses of $717,000 in Q3 2025, we are reporting an adjusted EBITDA of negative $597,000 and a debt loss of $1.4 million. Medicare remains debt-free and to reiterate, the company's short-term goals are focused on growing Zip-it-a-Mag, growing Marley Drug and our pharmacy business, maintaining agri-stat sales, and development of new products. short term seeking the approval of MC1 to receive a priority review voucher and long term the development of our new intellectual property for diseases with large market potential. With that I'd like to turn the call back to Dr. Friesen for final comments.

Thank you Dr. Owens and thank you Horace. My goal and that of our board management and staff is to continue to build this business with a stable long-term outlook to generate value of our shareholders. I want to express my sincere appreciation to the outstanding team of employees we've been blessed with. Thank you, our shareholders, for your continuous support and interest. So moderator, I'll turn back to you to lead us to the Q&A portion.

Thank you sir. Ladies and gentlemen, at this time we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star 1 if you have any questions or comments. One moment please while we poll for questions. Okay. As we have currently no questions on the lines at this time, I would like to turn it back over to Dr. Friesen for any closing remarks he may have.

Again, thank you to all on the call, to our shareholders, and wishing you a great day.

Thank you. Ladies and gentlemen, this concludes today's call. You may disconnect your lines at this time, and we thank you for your participation.