Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF) announced today its financial results for the quarter ended March 31, 2022, with revenues increasing 65% to $4.6 million and a 28% sequential increase from the fourth quarter. The company’s net loss was essentially flat at $4.5 million.
Khiron reported revenue in medical cannabis of over $2.6 million in the quarter, a 470% increase from the prior year and a 32% increase from the fourth quarter. Europe (the UK and Germany) represented 53% of all medical cannabis revenue, compared to 10% in Q1 2021. The net change in cash and cash equivalents of –$3.3 million, compared to –$8.6 million in Q1 2022, ending the first quarter with $5.1 million in cash. Khiron attributed its balance sheet improvement to actively managing the working capital cycle, improving collection times for its accounts receivable, and extending payment terms on its accounts payables while reducing overall general and administrative costs and increasing its high gross margin medical cannabis business.
“Khiron is the top-selling medical cannabis brand in Latin America and one of the top-selling brands in the United Kingdom,” said CEO Alvaro Torres. “Our unique approach will continue to generate double-digit revenue and gross profits quarter over quarter in markets poised to become significant in the coming years. Our focus is to leverage the infrastructure we have built to continue driving sales in our target markets while maintaining discipline in our expenses so we can achieve profitability in the near future, and then continue to look for more growth opportunities in Latin America and Europe.”
Khiron’s European expansion and continued growth in Colombia, are driving its medical cannabis segment growth. In the first quarter, Khiron surpassed $1 million in medical cannabis revenues in the United Kingdom. In Colombia, Khiron continues to be a market leader in medical cannabis with its vertically integrated approach and leverage of insurance coverage in its clinics. Over 82% of sales were sold through insurance coverage, and over 84% of the sales were sold to returning patients, who are now purchasing up to 1.8 bottles per month.
Khiron Buys German PharmaDrug
PharmaDrug Inc. (CSE: PHRX) (OTCQB: LMLLF) reported that it has entered into an agreement with Khiron Life Sciences to sell all of the outstanding securities of Pharmadrug Production GmbH, the company’s wholly-owned German subsidiary, a medical cannabis distributor, with a Schedule I European Union narcotics license and German EuGMP certification allowing for the importation and distribution of medical cannabis to pharmacies in Germany and throughout the European Union. Under the terms of the share purchase agreement, the company has agreed to sell 100% of the securities of Pharmadrug GMBH for consideration consisting of 5,500,000 common shares in the capital of Khiron and a non-interest bearing promissory note in the principal amount of $1,100,000 which note will be payable one year from the date of issue.
Daniel Cohen, the Company’s Chairman and Chief Executive Officer commented, “We are excited to be entering into this transaction with Khiron as it is a major step towards the company’s shift into a pure-play biotech strategy. We believe Khiron is perfectly positioned to take full advantage of the asset and believe PharmaDrug should ultimately yield the most value for Pharmadrug Production through and equity ownership in Khiron.”
Mr. Torres added, “The results of Q1 2022 continue to showcase the success of Khiron’s global expansion and the corporation’s unique “patient-first” strategy.