MediPharm to Cut 30% of Non-Manufacturing Staff after 3Q Losses

The restructuring plan is designed to save the company up to $2.2 million.

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) is poised to cut its non-manufacturing staff head count by 30% after another losing quarter, which saw the Ontario-based company shed another $5.9 million (C$7.9 million), according to the company’s Q3 report.

The restructuring plan, the company said, is designed to save the company up to $2.2 million moving forward, even as it expands its international footprint in Germany, Brazil, the United Kingdom, and elsewhere.

The losses for the quarter were on par with how MediPharm performed for the same three months in 2021, which saw MediPharm lose $5.5 million.

So far in 2022, MediPharm’s losses total $18.3 million, which is less than it lost for the same nine months last year – $24.8 million.

The shrinking loss margins are likely partly due to MediPharm’s revenue growth – $5.4 million for the third quarter, an increase of 66% from the second quarter and up 35% from the same period last year. International revenues performed even better for MediPharm, with the company pulling in $2.5 million for the quarter, which is a whopping 156% increase from Q2.

International sales also account for 45% of company-wide revenues for the entire calendar year so far, MediPharm reported, and for the third quarter, the company highlighted its first-ever medical marijuana export shipments to Germany, increased medical cannabis product lines in Brazil and the United Kingdom, the launch of medical marijuana sales in Brazil, and the selloff of an Australian cannabis asset.

MediPharm executives also touted the company’s lack of debt and the fact that it owns all of its assets, which they argue has it well-poised for 2023.

“The opportunity for MediPharm remains unchanged,” CEO David Pidduck said in a press release. “The international pharma-cannabinoid space is evolving rapidly … and our organization is one of only a few internationally that has the sophistication, licensing, pipeline, and experience to execute on it.”

Pidduck also said he sees “opportunities” in possible mergers and acquisition deals coming down the road as other Canadian cannabis companies struggle to turn a profit. He said the company’s leadership is “patiently but actively reviewing potential transactions both in Canada and internationally.”

John Schroyer

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