Medicure Inc.

Welcome to Medicare's Earnings Conference Call for the quarter ended March 31st, 2026. 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 25, 2026. I would now like to turn the conference call over to Dr. Albert Friesen, Chief Executive Officer of MediCure, 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 on the Q1 2026 conference call is Haris Uddin, Medicare's Chief Financial Officer. Net revenue for the quarter was $7.9 million compared to $5.5 million for the quarter ending March 31st, 2025. The company recorded a net loss for the quarter of $406,000 or $0.04 per share compared to a net loss of $694,000, or $0.07 a share, on the March 31, 2025 quarter. The net loss is due to non-cash expenses, including $644,000 of amortization on the assets related to the purchase of Zyphidimed and the pharmacy business, and $855,000 invested in the R&D, primarily the MC1 for the treatment of PNPO deficiency. Medicare's continued investment in our research and development during the current year underscores our commitment to advancing innovative therapies such as the PACE-3 trial, Medicare's investment in investigational drug MC1 for the treatment of PNPO deficiency, and delivering long-term value to patients and shareholders. The five focuses of business are stabilizing sales and profits of Agristat, growing Zydeco Bank revenue and profit, growing the Marley Drug online pharmacy business, and developing the MC1 for PMPO deficiency. Also advancing a new chemical entity related to MediCure's legacy product with a large market potential. I'll now turn it over to our CFO, our student, for the review and some color on the Q1 2026 statements.

Thank you, Dr. Fraser. 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'll be able to obtain a complete copy of our financial statements for the quarter ended March 31st, 2026. along with previous versions of our financial statements on the investors' page of our website. And issuing 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 of our financial performance for the quarter ended March 31, 2026. Total revenue for the quarter ended was $7.9 million compared to $5.5 million for the quarter ended March 31, 2025. Net revenues earned from Agristat during the current period totaled $979,000. A decrease from the period ended March 31, 2025, where net revenue from Agristat was $1.7 million. The decrease in agrostat revenue during the current period is a result of a lower volume of units sold as a result of increased competition from generic Pyro-5 and hydrochloride. Medicare remains the only manufacturer of the 3.75 milligram bullet-style format, which is typically administered before the infusion unit. We continue to provide support to our U.S. hospital accounts and plan to remain price competitive in targeted ways. Net revenue earned from Zepeda Bank through the traditional insured channel during the period ended March 31st, 2026, totaled 1.3 million, which is an increase from the 519,000 of net revenue earned during the period ended March 31st, 2025. The increase in net revenue noted during the current period is attributable to higher utilization of the product through insurance formularies, The primary focus of the company continues to be growing Zepidemag revenue through the insurer channel and through Marley Drug throughout 2026. It is important to note that the sales of Zepidemag through Marley Drug are excluded from December. With regards to Marley Drug and that revenue during the current period total 3.2 million, an increase from the 3.1 million earned from Marley Drug during the period ended March 31st, 2025. Net revenue attributable to Zipidimac through Marley Drug was $745,000 during the current period. An increase from the period ended March 31, 2025, whereas Zipidimac sales were $640,000 through Marley Drug. The increase in revenue through Marley Drug is attributable to increases in sales of Zipidimac in addition to an increase in Brinzobni sales along with other exclusive products that are offered through Marley Drug. We continue to see access challenges to patients seeking Zepidimeg through traditional insured channels, which has reinforced the effectiveness of our direct distribution strategy through Marley Drug. This approach allows us to mitigate pressures associated with wholesaler fees, coverage gap costs, and lower PBM reimbursement rates, in addition to product returns. As a result, Marley Drug provides a more efficient and controlled channel to deliver Zepidimeg to patients. Additionally, this platform enables us to expand access to other products such as Renzavi, further strengthening our competitive positioning within the retail and mail-order pharmacy landscape. During the prior year, the company made two acquisitions. On March 11, 2025, the company acquired Gateway Medical Pharmacy, an independent pharmacy located in Portland, Oregon, which also has the ability to complete non-serial compounding. Revenue for Gateway Medical Pharmacy during the current period totaled $753,000 in comparison to $175,000 during the period ended March 31st, 2025. It is important to note that the revenue earned from Gateway Medical Pharmacy during the prior period was only from March 11th, which is its acquisition date, until March 31st, 2025. On June 16, 2025, the company acquired West Olympia Pharmacy, an independent pharmacy located in Olympia, Washington. Revenue earned from West Olympia Pharmacy during the current period was $1.7 million. Given West Olympia Pharmacy was acquired on June 16, 2025, the company did not earn any revenue through West Olympia Pharmacy during the three-month period ended March 31, 2025. The company now offers impediments for both pharmacies, and the company intends on introducing additional product offerings at both Gateway Medical Pharmacy and at West Olympia Pharmacy, which have increased revenue at Marley Drugs. Total cost of goods sold for the period ended March 31st, 2026 was 4.4 million, an increase from the period ended March 31st, 2025, where cost of goods sold was 2.6 million. Agristat cost of goods sold for the quarter ended March 31, 2026, totaled $524,000. A decrease from the period ended March 31, 2025, where cost of goods sold totaled $699,000. The decrease in cost of goods sold is directly attributable to the decrease in revenue from Agristat during the current quarter. Zipidimac cost of goods sold for the current quarter totaled $300,000. An increase from the three-month period ended March 31, 2025, where cost of goods sold totaled $244,000. Included within the cost of goods sold for Zipidimac in the current quarter is $145,000 related to products sold to customers and $155,000 from amortization of the Zipidimac intangible assets. The increase in cost of goods sold towards the PDMAG during the current quarter is directly correlated with the increase in revenue through the insurer channel. Marley drug cost of goods sold totaled $1.6 million during the period ended March 31st, 2026, consistent with the period ended March 31st, 2025, where cost of goods sold also totaled approximately $1.6 million. Although revenue from Marley Drug has slightly increased during the current quarter, cost of goods sold remained consistent due to better purchasing contracts through the pharmacy as a result of the acquisitions of Gateway Medical Pharmacy and West Olympia Pharmacy during the prior year. Gateway Medical Pharmacy's cost of goods sold during the current quarter was $517,000 in comparison to $110,000 during the quarter ended March 31st, 2025. Given Gateway Medical Pharmacy was acquired on March 11, 2025, the cost of goods sold recorded during the prior period was from March 11, 2025 to March 31, 2025. West Olympia's cost of goods sold during the current period was $1.5 million, and given West Olympia Pharmacy was acquired on June 16, 2025, there is no cost of goods sold attributable to West Olympia Pharmacy during the period ended March 31, 2025. Our three pharmacies, Marley Drug, Gateway Medical Pharmacy, and West Olympia Pharmacy, make up the company's pharmacy business segment. The company has seen improvements on its inventory purchasing as a result of these acquisitions, and is looking at further ways to capitalize on the synergies created as a result of these acquisitions to improve the company's financial performance overall. Selling expenses totaled $2 million for the period ended March 31, 2026, an increase from the period ended March 31, 2025, where selling expenses totaled $1.8 million. The increase in selling expenses during the current period in comparison to the prior period is the result of the company's acquisitions of Gateway Medical Pharmacy and West Olympia Pharmacy during the prior year. Offsetting the increase from these acquisitions are decreases in consulting and marketing expenses, as the company is focused on allocating its resources to initiatives which provide the greatest return on investment. General and administrative expenses totaled 1.1 million for the period ended March 31st, 2026, consistent with the quarter ended March 31st, 2025, where general and administrative expenses were also approximately 1.1 million. Despite the additions of Gateway Medical Pharmacy and West Olympia Pharmacy during the prior year, general administrative expenses decreased during the current period. And this can be attributed to a decrease in professional fees incurred, in addition to a decrease in share-based compensation expense on previously granted stock options. Research and development expenses for the quarter ended March 31st, 2026, totaled $855,000 compared to $570,000 during the period ended March 31st, 2025. The increase in research and development expenses during the current period is primarily due to the timing of expenditures. The primary development project for the company continues to be MC1 for P&PO deficiency. The company recorded a finance expense net of $16,000 during the current period in comparison to finance income net of $34,000 during the period ended March 31st, 2025. The finance expense reported during the current period primarily relates to interest on the company's lease obligations and holdback payable and non-cash accretion expense on the company's acquisition payable liability, which was paid during the current period. Offsetting these expenses is interest income earned during the current period. The company recorded a foreign exchange loss net of $14,000 during the current period in comparison to a foreign exchange loss of $35,000 during the period ended March 31, 2025. The change in foreign exchange loss relates to changes in the U.S. dollar exchange rate during the respective years. Adjusted EBITDA for the period ended March 31st, 2026 was $280,000 compared to an adjusted EBITDA of $28,000 during the period ended March 31st, 2025. The increase in adjusted EBITDA during the current period is due to a decrease in operating loss, which primarily relates to an increase in net revenue of Zipidemag for both the Insure Channel and Grimaldi drugs, increased revenue from the company's pharmacy business segment, offset by a decrease in net revenue from AgriSat, an increase in cost of goods sold, primarily due to the pharmacy business segment, and an increase in research and development expenses. As of March 31, 2026, the company had cash totaling approximately $1.5 million, a decrease from December 31, 2025, where the company had $3.8 million of cash held. The decrease in cash balance for the company is primarily attributable to working capital adjustments relating to the company paying down its liabilities, in addition to accounts receivable which had not been collected prior to the end of the quarter, but had been subsequent to the quarter end. 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 back over to our CEO, Dr. Albert, for some additional comments and closing remarks.

Thank you, Horace. Overall, the company's revenue increased. The acquisition of Gateway Medical Pharmacy and West Olympia Pharmacy created additional synergies for the company and also provided additional channels for the company to market and sell zypitamine. Medicare's R&D focus is primarily on its phase 3 study to get approvals for MC1 as the first FDA-approved therapy for patients with P and PO deficiencies. This is a rare pediatric disease leading to seizures and ultimately fatal if untreated. On success, use of Medicare's legacy product for MC1 could lead to a priority review voucher, which can be redeemed or sold and provide significant value. Recent sales of these vouchers have been in excess of $100 million. Enrollment is currently ongoing with patients receiving treatment with MC1. Medicare has received fast track designation for MC1 for its intended indication. The phase three study is on, as said, is ongoing with enrollment. Two patients have already completed 12 months, and our target is to complete enrollment of all patients by the end of June this year, 2026. which is approximately 10 patients. We are still focused on growing the business and diversifying our revenue and asset base, near-term through acquisition and long-term through R&D, carefully investing to grow future profitability. My goal and that of our board, management, and staff is to continue to build this business with a strong, stable, long-term outlook to generate value for shareholders. And as always, I want to express my sincere appreciation for the outstanding team of employees we've been blessed with. Thank you, our shareholders, for your continued support and interest. And now we'll turn it over to the moderator for our Q&A.

Thank you. We will now begin the question and answer session. If you have 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. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star 1 to ask a question. One moment please while we poll for questions. As a reminder, if you would like to ask a question, please press star 1. We have reached the end of the question and answer session, and I will now turn the call over to Dr. Albert Friesen for closing remarks.

Thank you. Thank you for all of you that are on the call. Appreciate your interest, and we welcome you to continue to follow, and if you have any questions, contact us directly, and look forward to the Q2 call. Thanks again.

Thank you. This concludes today's conference. Thank you for participating. You may now disconnect.