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Medipharm Labs Q1 Earnings Showed Execution Across The Board

May 19, 2021 • 7:42 AM EDT
3 MIN READ  •  By Michael Berger
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Earlier this week, MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) released first quarter financial results that highlights how the business is working to establish itself as an international pharmaceutical company that specializes in cannabis.

During the last quarter, the global cannabis extraction leader has been under considerable pressure and this is a trend that has surprised us. So far this year, MediPharm has reported a series of positive developments and we are favorable on the direction the management team is bringing the business.

We believe that MediPharm has been executing on a targeted growth strategy that is focused on establishing its presence as a pharmaceutical company while ramping up international sales. We are bullish on these verticals and believe the market is discounting the potential growth that is associated with them. 

Reported a Series of Major Milestones in the First Quarter

One of the major milestones that was reported in the first quarter was the commencement of sales of GMP-certified medical cannabis products in Germany under its long-term partnership agreement with STADA Arzneimittel AG. During the quarter, MediPharm also completed its first medical cannabis exports to Peru and we will monitor how this aspect of the story advances in future quarters.

Another important development that was reported in the first quarter, is related to how the management team has executed on a cost cutting strategy which led to a 30% decrease in expenses. By focusing on cutting costs and ramping up the international and pharmaceutical side of the business, the management team is highly focused on making the business profitable again and we are favorable on this.

We believe that MediPharm’s international and domestic sales agreements are creating tangible momentum for future quarters and are bullish on the long-term outlook of the business. In the current quarter, we expect the company to launch additional medical cannabis products and are favorable on the potential revenue that could be generated through it.

A Global Execution Story to be Aware of 

So far this year, MediPharm has expanded its licenses, global regulatory authorizations, and product fillings with health authorities and we expect this focus to pave the way for growth on the international side of the industry.

One of the trends we expect MediPharm to benefit from is related to the increased demand for medical cannabis at the patient level. By forming strategic relationships with big pharmaceutical companies, the company can capitalize on the increasing demand and will monitor how this aspect of the story advances in future quarters.

Through a strategic agreement with Malta-based Pharma MT, MediPharm will supply premium, GMP certified, finished dose cannabis oil for patients. This development expanded the company’s global customer base for turn-key manufacturing and distribution services to nine countries with exports expected to ramp up throughout the year.

Positioned to Execute on a Multi-Faceted Growth Strategy 

As of March 31st, MediPharm reported to have more than $42 million of cash and cash equivalents. These resources leave the company with a strong balance sheet and the funds that are needed to support the long-term growth strategy. By focusing on cutting costs and ramping revenues, MediPharm is focused on creating value for shareholders and we are favorable on this. 

At current levels, we believe the leading global cannabis extraction company is trading at a discount to its peers and has a compelling valuation. We believe the risk-reward profile is favorable on current levels and consider MediPharm to be a business with significant potential growth catalysts. 

MediPharm will continue to work to become a dominant player in the emerging global pharmaceutical, medical and wellness cannabis market. So far this year, the company has made significant headway on its key priorities and is well positioned to establish itself as a leading global pharmaceutical company that specializes in cannabis.

If you are interested in learning more about MediPharm’s multi-national growth strategy, please send an email to support@technical420.com with the subject “MediPharm Labs” to be added to our distribution list. 

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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