- Net working capital of $36.4
Million CAD at December 31,
2019
- On March 20, 2020 Khiron became
the first and only company in Colombia to receive full authorization to
manufacture high- and low-THC medical cannabis, and to fill
prescriptions for low-THC medical cannabis
- Khiron became the only Company authorized to export THC
products
- Filled first medical cannabis prescriptions ever using cannabis
from their fully completed state-of-the-art, 14,000 square foot GMP
and ISO 17025 compliant extraction and analysis lab in
Ibague, Colombia
- Opened European operations, and became the exclusive Latin
American provider to Project Twenty21, Europe's largest medical cannabis study with
20,000 patients
- Khiron's cultivation facilities and health centres remain
operational during COVID-19 pandemic under an exemption from the
Government of Colombia, without
any requirement for further authorization
TORONTO, May 1, 2020 /CNW/ - Khiron Life
Sciences Corp. ("Khiron" or the "Company") (TSXV: KHRN),
(OTCQX: KHRNF), (Frankfurt:
A2JMZC), a vertically integrated cannabis leader with core
operations in Latin America, is
pleased to report its financial results for the year ended
December 31, 2019. Khiron has filed
today its audited consolidated financial statements and related
management's discussion and analysis (md&a), both of which are
available on Khiron's profile at www.sedar.com. All financial
information in this press release is reported in Canadian dollars,
unless otherwise indicated.
Summary of key financial results
(Canadian
dollars)
|
Years ended December
31
|
Quarters
ended
|
2019
|
2018
|
Q4
2019
|
Q3 2019
|
Q2 2019
|
Q1 2019
|
|
$
|
$
|
|
|
$
|
$
|
Revenues
('000s)
|
9,582
|
892
|
2,510
|
2,773
|
2,208
|
2,091
|
Gross profit
('000s)
|
2,436
|
297
|
1,048
|
593
|
382
|
412
|
Net loss
('000s)
|
(36,378)
|
(19,807)
|
(7,107)
|
(10,621)
|
(10,646)
|
(8,004)
|
Adjusted EBITDA
(1) ('000s)
|
(24,504)
|
(13,969)
|
(6,342)
|
(5,438)
|
(7,056)
|
(5,668)
|
Net loss per
share (basic and
diluted)
|
(0.36)
|
(0.42)
|
(0.06)
|
(0.09)
|
(0.11)
|
(0.12)
|
Weighted average
shares outstanding ('000s)
|
101,966
|
48,519
|
115,399
|
113,997
|
95,973
|
75,895
|
1.
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) is a non-IFRS measure calculated as net loss as
reported under International Financial Reporting Standards and
adding back share-based compensation expense, transaction fees,
depreciation and non-recurring items. Refer to the Company's
md&a for a reconciliation.
|
Financial Highlights Commentary
The Company recorded a
net loss for the year ended December 31,
2019 of $36.4 million
($0.36 per share) compared to a net
loss of $19.8 million for the same
period in 2018. Adjusted EBITDA, which excludes mostly non-cash
items and some non-recurring items, was $24.5 million for the year ended December 31, 2019. The Company ended the year
with $36.9 million balance in cash
and short-term investments and minimal current debt obligations of
$1.0 million, most of which are
related to lease payments for office and medical buildings.
Adjusted EBITDA was a loss of $24.5
million for 2019 compared to $14.0
million for 2018. In March
2020 the Company received its final certification required
to manufacture medical cannabis. The year 2019 focused on moving
the Company towards this objective specifically:
- Growing and harvesting its first crop for manufacturing medical
cannabis, recording approximately $3
million in research and development expenses in 2019.
- Raised net equity financing in the amount of $53 million; as a result, the Company incurred
higher professional fees from the transactions and increased its
investor relations and marketing efforts concurrently with the
increased shareholder base, together increasing costs by
approximately $2 million.
- Prepared for global expansion and first sales of medical
cannabis by increasing capacity at its corporate offices, hiring
employees and planting a footprint in several Latin American
countries and Europe.
- Achieved revenues of $9.3 million
and gross profit of $2.2 million at
the Company's ILANS clinics, with ILANS selling the Company's first
medical cannabis product in March
2020.
The Company has a strong financial position at December 31, 2019 but must prudently manage its
cash and maintain its liquidity amidst the uncertainty of incoming
cash flows during the COVID-19 pandemic. The Company's core focus
will be on its medical businesses using a predominantly digital
strategy to grow its patient network and sell its medical cannabis
products both locally in Colombia
and globally. Maintaining high quality harvests and extracts at its
cultivation site will be critical to the Company's success. Cost
reductions in salaries, marketing and other administrative
functions have been initiated, and capital expenditure programs
have been postponed, where possible.
The Colombian government has resolved to provide health care
service companies with financial relief, which could result in the
deferral of loan repayments and lease payments by ILANS. While the
Company will avail itself of financial relief measures, management
believes that the Company should be able to maintain a positive
cash balance through 2020. Maintaining liquidity through the crisis
and continuing with its core strategy should place the Company in a
very strong competitive position once the crisis ends.
Management Commentary
"2019 was a building year for
Khiron. Now the focus of the company turns to sales execution, and
revenue generation. Khiron has achieved a significant competitive
advantage, and in March 2020 Khiron
became the first and only company authorized to sell low THC
medical cannabis in Colombia. We
have much work to do in the months ahead but are positioned to
benefit from these significant achievements," commented
Alvaro Torres, Khiron CEO and
director.
"We recognize the unprecedented global health and economic
pressures caused by the COVID-19 pandemic and have acted swiftly,
aligning our expenditures, and leveraging our digital capabilities
and staff medical teams to give patients access to telemedicine
consultations and remote product delivery," added Mr. Torres.
COVID-19
Khiron has established contingency plans in
place for all its facilities, including medical facilities which
are essential to serving the community. Those plans were put into
action and the Company's facilities and supply chain remain
operating within strict government guidelines established as a
result of the current pandemic.
Khiron's ILANS and Zerenia clinics have been deemed essential
services by the government of Colombia and continue to operate without
requirement of any further authorization. The Company's recently
announced teleconsultation services ensure patients, including
those from its ILANS and Zerenia network, have access to clinic
services and doctors trained to prescribe medical cannabis and
other treatments.
For the time being and until economies stabilize, Khiron has
shifted its strategic approach to focus on our highest margin
businesses, and revenue opportunities, alter marketing methods and
conserve cash, but has maintained its overall strategic direction
to improve the quality of life of patients and consumers. The
Company continues to prioritize the physical and mental health of
its employees, health professionals and partners during this
pandemic.
Highlights
- Expanded to Europe in
October 2019, and now has teams in
Germany and the U.K.
- Granted approval to cultivate 9.3 tons of THC cannabis,
representing 17% of the total allocated quota for Colombia in 2020, subsequent to the year
end
- Completed Company's state-of-the-art, 14,000 square foot GMP
and ISO 17025 compliant extraction and analysis lab in
Ibague, Colombia
- Received first Colombian authorization to commercialize
high-THC cannabis for domestic and export sales
- Authorized in Colombia to
manufacture high- and low-THC medical cannabis, and to fill
prescriptions for low-THC medical cannabis, effective March 20, 2020
Brazil and Peru
- Authorization from the Brazilian Health Regulatory Agency
(ANVISA) allows for Khiron medical cannabis product to be imported
for use on an individual patient basis, subsequent to the year
end
- Signed a 2-year exclusive agreement to manufacture and
distribute Khiron-branded medical cannabis products in Lima,
Peru´s largest city with 8.6 million inhabitants
Research and Development
- Participant and exclusive Latin American provider to Project
Twenty21, Europe's largest medical
cannabis study with 20,000 patients
- Initiated pre-clinical medical cannabis studies with
Universidad de la República of Uruguay and Institut
Pasteur de Montevideo in Uruguay
- Entered an agreement with prominent Colombian research
hospital, Centro Dermatológico Federico Lleras
Acosta ("CDFLLA"), establishing a clinical research
partnership focused on the effectiveness of medical cannabis for
dermatological conditions
Education and Awareness
- Embraced online education with a signed agreement with
Tecnologico de Monterrey, a leading Latin American university
(Third Ranked in Latin America) in Mexico bringing
Khiron´s online education program to reach 1,500 physicians and
healthcare practitioners
- Hosts Canadian Pavilion at Cannamexico World Summit 2019,
targeting over 2,000 global cannabusiness leaders
- Entered into an agreement with Universidad Peruana Cayetano
Heredia, a Peruvian university to sponsor workshops and remote
talks in the university's international course on Medicinal Use of
Cannabis
- Through 2019, participated in more than 30 medical events
around Latin America geared
towards educating physicians on the use and benefits of medical
cannabis
Health Services
- Launched Telemedicine, to meet essential patient needs without
the need for an in person visit
- Acquired 100% of ILANS, a neurological clinic with a network of
approximately 120,000 patients in Colombia
- Launched Zerenia Clinic, an integrative medical care service
clinic, increasing Company's patient capacity in Colombia by 75%, with medical cannabis and
other services, subsequent to the year end
- Patient network served through Khiron-owned clinics increased
to over 155,000 medical transactions
Wellbeing Products
- Expanded Kuida CBD-based cosmeceutical brand distribution to
over 300 points of sale in Colombia
- Received approval from INVIMA, Colombia's health
agency, to sell 3 additional Kuida® CBD skin care products,
expanding on the 7 products already on the market
in Colombia
- Secured initial Kuida sales in the UK and the US in Q4 2019 and
Q1 2020, respectively
- Entered into a multi-year agreement with Centro Dermatológico
Federico Lleras Acosta (CDFLLA), to
jointly conduct medical cannabis research and host educational
activities focusing on skin conditions and symptoms
Financing
- Closed $28.84 Million bought deal
financing on February 28, 2019,
including full exercise of over-allotment option
- Closed $28.75 Million bought deal
financing on May 28, 2019, including
full exercise of over-allotment option
Webcast and Q&A
Khiron invites individual and institutional investors, as well
as advisors and analysts, to attend a webcast and Q&A to
discuss the Company's 2019 year-end results and corporate
update.
DATE: May 4, 2020
TIME: 10:00am ET/7:00am PT
PRESENTERS: Alvaro Torres,
Khiron CEO and Director, and Chris
Naprawa, Khiron President
FORMAT: Live 20 minutes presentation & Q&A session
REGISTER
LINK: https://event.on24.com/wcc/r/2307088/CDF8CB87D88B5A9CC5D225E0634845EF
About Khiron Life Sciences Corp.
Khiron Life Sciences
Corp. is the dominant integrated medical cannabis company in
Latin America. Khiron has core
operations in Latin America, along
with activity in North America and
Europe, and is licensed in
Colombia for the cultivation,
production, domestic distribution, and international export of both
tetrahydrocannabinol (THC) and cannabidiol (CBD) medical cannabis.
The Company delivers best in class regulatory compliance, has the
first approved line of CBD cosmetic products on shelf
in Colombia, and is fully authorized to manufacture high- and
low-THC medical cannabis, and to fill prescriptions for low-THC
medical cannabis in the country.
With a focused regional strategy and patient oriented
approach, the Company combines global scientific expertise,
agricultural advantages, branded product market entrance
experience and education to drive prescription and brand
loyalty to address priority medical conditions such as chronic
pain, epilepsy, depression and anxiety in the Latin American
market of over 620 million people. The Company is led by Co-founder
and Chief Executive Officer, Alvaro
Torres, together with an experienced executive team,
and a knowledgeable Board of Directors that includes former
President of Mexico, Vicente Fox.
Visit Khiron online at www.khiron.ca and on Instagram
@khironlife
Cautionary Notes
Forward-Looking Statements
This press release may contain certain "forward-looking
information" and "forward-looking statements" within the meaning of
applicable securities legislation. All information contained herein
that is not historical in nature may constitute forward-looking
information. Khiron undertakes no obligation to comment analyses,
expectations or statements made by third-parties in respect of
Khiron, its securities, or financial or operating results (as
applicable). Although Khiron believes that the expectations
reflected in forward-looking statements in this press release are
reasonable, such forward-looking statement has been based on
expectations, factors and assumptions concerning future events
which may prove to be inaccurate and are subject to numerous risks
and uncertainties, certain of which are beyond Khiron's control,
including the risk factors discussed in Khiron's Annual Information
Form which is available on Khiron's SEDAR profile
at www.sedar.com. The forward-looking information contained in
this press release is expressly qualified by this cautionary
statement and are made as of the date hereof. Khiron disclaims any
intention and has no obligation or responsibility, except as
required by law, to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise.
United States Disclaimer
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities
in the United States. The securities have not been and
will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the
United States or to U.S. Persons
(as such term is defined in Regulation S under the U.S. Securities
Act) unless registered under the U.S. Securities Act and applicable
state securities laws or an exemption from such registration is
available
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
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SOURCE Khiron Life Sciences Corp.