- Generated 31% sequential quarter-on-quarter growth in Q4 2020,
driven by normalized clinic operations and more than doubling of
medical cannabis sales.
- Benefited from medical cannabis insurance coverage in
Colombia effective December 2020. Insurance coverage continues to be
a catalyst for growth in Colombia,
with more than 7,500 prescriptions filled in Q1 2021 versus over
3,300 in Q4 2020.
- Maintained strong domestic pricing, with an average sales price
of $58 per unit in Colombia during the fourth quarter.
- Positioned for growth with sales execution underway in four
countries (Colombia, Peru, UK and Germany), and first sales anticipated in
Latin America's largest markets
(Brazil and Mexico) this year.
- Well-capitalized with $21.6
million in cash as of December 31,
2020.
TORONTO, April 29, 2021 /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 and Europe, announced today its financial results
for the year ended and quarter ended December 31, 2020. These filings are available
for review on the Company's SEDAR profile at www.sedar.com. All
financial information in this press release is reported in Canadian
dollars, unless otherwise indicated.
Khiron Life Sciences Reports 2020 Fiscal Year-End Results and
Provides Corporate Update
Summary of Key Financial Results
|
3
Months
|
3 Months
|
12
Months
|
12 Months
|
|
ended
Dec
|
ended Dec
|
ended
Dec
|
ended Dec
|
Canadian
dollars
|
31
2020
|
31 2019
|
31
2020
|
31 2019
|
|
$
|
$
|
$
|
$
|
Revenues
('000s)
|
2,518
|
2,510
|
8,017
|
9,582
|
Gross profit before
fair value adjustments ('000s)
|
402
|
1,048
|
1,481
|
2,436
|
General and
administrative costs ('000s)
|
5,157
|
6,260
|
20,877
|
20,525
|
Net loss
('000s)
|
(2,374)
|
(8,235)
|
(24,039)
|
(36,378)
|
Adjusted
EBITDA (1) ('000s)
|
(4,335)
|
(6,342)
|
(18,762)
|
(24,504)
|
Net loss per share
(basic and diluted)
|
(0.01)
|
(0.06)
|
(0.20)
|
(0.36)
|
Weighted average
shares outstanding ('000s)
|
130,292
|
115,399
|
120,294
|
101,966
|
(1)
|
Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization or
in this case loss) is a non-International Financial Reporting
Standards ("IFRS") measure calculated as net loss before tax
as reported under IFRS and adding back share-based compensation
expense, transaction fees, unrealized gain on changes in fair value
of biological assets, depreciation and non-recurring items. Refer
to the "Non-IFRS Measures" note below for further
information and the Company's MD&A for a
reconciliation.
|
Q4 2020 highlights
- Total revenues in Q4 2020 reached $2.5
million, reflecting sequential quarter-on-quarter growth of
31%, as patient consultations at Company-owned clinics returned to
pre COVID-19 levels and Medical Cannabis Product revenues more than
doubled over Q3 2020. Fourth quarter revenue growth was flat
year-over-year, due to lower Health Services and Wellbeing Product
revenues, offset by Medical Cannabis Product sales of $234,000.
- The Company continues to benefit from favourable market
conditions and vertically integrated operations, generating gross
margins of 92% on its Medical Cannabis Product segment in Q4
2020.
- The Company continues to prudently manage expenses, with fourth
quarter selling, general and administrative ("SG&A")
expenses declining 22% year-over-year. Following cost reductions
implemented earlier in the year, Q4 2020 SG&A expenses of
$5.9 million increased 3%
sequentially from Q3 2020.
- On November 26, 2020, the Company
completed a bought deal financing selling 32,200,000 units at a
price of $0.45 per unit for aggregate
gross proceeds of $14,490,000.
- In December 2020, the Company
announced that, following a directive by Colombia's federal government, Colombia became one of the first countries to
extend national health insurance to include medical cannabis as a
first line therapy for patients. As a result, Medical Cannabis
Product sales increased significantly starting December 2020, contributing to sequential
quarter-on-quarter revenue growth of 113% in Q4 2020.
- In December 2020, the Company
initiated its satellite clinic expansion strategy, opening its
first location in Medellin,
Colombia's 2nd largest city.
- As of December 31, 2020, the
Company had cash of $21.6 million and
working capital of $29.1
million.
2020 Annual Highlights
- During the year, the Company commenced medical cannabis sales
in Colombia, Peru, and the UK, becoming the first Company
to sell medical cannabis magistral preparations in Colombia and Peru, and medical cannabis flower in
Scotland.
- In 2020, the Company launched its Zerenia medical clinic
strategy, opening its flagship Bogota,
Colombia location in May 2020
and first satellite location in Medellin,
Colombia in December
2020.
- In September 2020, Khiron was
declared a National Strategic Project by the government of
Colombia, simplifying and
accelerating regulatory processes for the Company in the
country.
- In 2020, the Company filled approximately 5,700 prescriptions
in Latin America, generating total
Medical Cannabis Product sales of $370,000, including $234,000 in the fourth quarter.
- In total, the Company generated total revenues of $8.0 million and gross profit of $1.5 million in 2020. While COVID-19 had a
negative impact on Health Services revenues and margins,
particularly earlier in the year, the Company was able to largely
offset declines through prudent expense management.
Subsequent events and 2021 highlights
- With the start of medical cannabis insurance coverage in
Colombia in December 2020, the Company filled approximately
135% more prescriptions in Q1 2021 than in all of 2020.
Additionally, in Q1 2021, 60% of medical cannabis prescriptions
filled in Colombia were fully
covered by insurance.
- Returning medical cannabis patient volumes continue to improve,
increasing from 20-25% of total monthly patients in Q3 2020, to
nearly 50% in Q1 2021.
- Between Q2 2020 and Q1 2021, filled prescriptions per Health
Care Professional (HCP) increased from 0.9/day to 4.5/day at
Khiron's wholly-owned clinics.
- Following the initial success of the Medellin satellite clinic, the Company opened
three additional satellite clinics in Colombia in Q1 2021 with plans to open another
three locations by June 2021.
Additionally, the Company plans to deploy its Zerenia™ medical
cannabis clinic and telehealth strategy in Mexico, building on the success of its
vertical integration strategy in Colombia.
- Khiron Academy, the Company's medical cannabis e-learning
certification, has been completed by hundreds of physicians across
Latin America and Europe and was accredited for UK Continuing
Professional Development.
- In March 2021, the Company
successfully exported its Colombian-registered cannabis strains, in
the form of live clones, from Colombia to Europe. This represents the first shipment of
medical cannabis live plant material to Europe from Colombia and is expected to accelerate access
to European markets as the Company executes on its asset-light
growth strategy in the United
Kingdom and Germany.
- In March 2021, Khiron commenced
sales in Germany with the
successful delivery of EU-GMP medical cannabis products. Khiron
1/14 (High CBD flower) has been used to treat indications such as
anxiety, substance-use disorder and migraines.
- In April 2021, the Company
introduced Khiron 1/14 (High CBD flower) in the UK. Prescribing
specialists will also be able to prescribe smaller quantities of
Khiron flower products in 5-gram jars.
Management commentary
"2020 marked a turning point for
the Company as we transitioned from start-up mode to the sales
execution phase of our strategy. Despite the many challenges
brought on by the global pandemic, our team persevered and had many
significant accomplishments in 2020, including first medical
cannabis sales in Colombia,
Peru and UK, along with
Germany in March 2021, the launch of our telemedicine
platform and Zerenia clinics, and expanded patient access through
medical cannabis insurance coverage in Colombia. As we progress through 2021, I
remain very optimistic about the year ahead. We are very well
positioned to leverage the knowledge, experience and infrastructure
developed over the last year, to accelerate growth both at home and
abroad," comments Alvaro Torres,
Chief Executive Officer and Director of the Company.
Webcast details
Khiron invites individual and
institutional investors, as well as advisors and analysts, to
attend a webcast and Q&A to discuss the Company's Q4 2020
financial statements and further activities.
DATE: April 30, 2021
TIME: 10:00am ET/7:00am PT
PRESENTERS: Alvaro Torres,
Khiron Chief Executive Officer and Director, Joel Friedman, Khiron Chief Financial Officer,
and Chris Naprawa, Chairman of
Khiron's Board of Directors
FORMAT: Live 30 minutes presentation & Q&A
session
REGISTER LINK:
https://event.on24.com/wcc/r/3138835/FCAA726D3D5230BBB75B745ADE070626
About Khiron Life Sciences Corp.
Khiron is a
vertically integrated medical and CPG cannabis company with core
operations in Latin America, and
operational activity in Europe and
North America. Khiron is the
leading medical cannabis provider in Colombia and the first company licensed in
Colombia for the cultivation,
production, domestic distribution and sales, and international
export of both low and high THC medical cannabis products. The
Company has filled medical cannabis prescriptions in Colombia, Peru, Germany
and the United Kingdom, and is
positioned to commence sales in Mexico and Brazil in 2021.
Leveraging wholly-owned medical clinics and proprietary
telemedicine platforms, Khiron combines a patient-oriented
approach, physician education programs, scientific expertise,
product innovation, and agricultural infrastructure to drive
prescriptions and brand loyalty. Its Wellbeing Products unit
launched the first branded CBD skincare brand in Colombia, with Kuida™ now marketed in multiple
jurisdictions in Latin America,
the US and United Kingdom. The
Company is led by Co-founder and Chief Executive Officer,
Alvaro Torres, together with an
experienced and diverse executive team and Board of Directors.
Visit Khiron online at investors.khiron.ca and on Instagram
@khironlife.
Non-IFRS Measures
This press release may contain
references to "Adjusted EBITDA", "Gross Profit" and "Gross Margin",
which are non-IFRS financial measures. The Company defines adjusted
EBITDA as net loss before tax as reported under IFRS and adding
back share-based compensation expense, transaction fees, unrealized
gain on changes in fair value of biological assets, depreciation
and non-recurring items and is a measure of the Company's overall
financial performance and is used as an alternative to earnings or
net income in some circumstances. This performance measure is
employed by management to assess the Company's operating and
financial performance and to assist in business
decision-making. This measure does not have any standardized
meaning according to IFRS and therefore may not be comparable to
similar measures presented by other companies. Gross Margin is the
difference between revenue and cost of goods sold divided by
revenue and is expressed as a percentage. Management believes that
these measures provide useful information as they provide investors
with added insight into Khiron's financial performance. Readers are
cautioned that such non-IFRS measures may not be appropriate for
any other purpose. Non-IFRS measures should
not be considered in isolation
or as a substitute for measures of
performance prepared in accordance with IFRS.
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, including without limitation, statements relating to
the Company's anticipated sales and operations in Brazil and Mexico, the opening of additional satellite
clinics and locations in Colombia,
the effects of the Company's first shipment of medical cannabis
live plant material to Europe from
Colombia, the ability of
specialists to prescribe smaller quantities of medical cannabis
flower products, the Company's growth expectations and strategic
plans. Khiron undertakes no obligation to comment on 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 statements have been based on expectations,
factors and assumptions concerning future events which may prove to
be inaccurate, including without limitation those regarding the
continuance of favourable market conditions in the Company's
current markets and the anticipated demand for medical cannabis in
the markets in which the Company operates or is contemplating
operations.
Readers are cautioned that the above lists of forward-looking
statements and assumptions are not exhaustive. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results may differ materially from those currently
anticipated or implied by such forward-looking statements due to a
number of factors and risks. These include the risk factors
discussed in Khiron's most recently filed 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 is 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.
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.