Cash-flow surge: MGC Pharma boosts outlook as revenue accelerates in the June quarter
Health & Biotech
Health & Biotech
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Special Report: A strong June quarter has seen a substantial increase in revenue for the European-based seed-to-pharmacy biotech company.
MGC Pharma (ASX:MXC) has overseen a substantial increase in sales during the quarter, rapidly advancing commercial activity through a series of distribution agreements as well as ramping up its research and development.
The company banked $763k in revenue during the quarter, with pharmaceutical product purchase orders received in the first month of operation totalling $300k, equivalent to more than 1,000 prescriptions.
It brings the total revenue for the year to just shy of $1.7 million. At the end of the March quarter, that figure for 9 months was sitting at only $882k.
The momentum has led analysts to increase their valuation of the company, with Edison Investment Research citing UK sales of its epilepsy treatment CannEpil as proof its products are in demand.
Edison now values the company at $157 million, a 16 per cent increase on prior valuations, at a target price of 13c per share.
“MGC Pharma continues to put the building blocks in place for its seed-to-pharmacy medicinal cannabis business,” Edison healthcare analyst Maxim Jacobs said.
“It has received its first formal purchase orders for CannEpil in the UK, and has already received repeat orders from new distributors in Australia. It recently appointed distributors for Brazil, Germany, Austria and Switzerland and its Phase II study of CogniCann in dementia is recruiting faster than expected.”
Company chief and founder Roby Zomer told investors they could expect strong September and December quarters, too, thanks to the impressive five distribution agreements MGC has signed.
The agreements, with five new partners, will enable patients to access MGC’s medicinal cannabis products in the United Kingdom, Germany, Austria, Switzerland, Brazil and Australia.
“This has been a fantastic quarter in which we have delivered material results from our core pharma business strategy, and increased the critical distribution channels for our portfolio of internally-developed, high quality, cost-effective phytocannabinoid medical products through five agreements opening new global markets,” explained Zomer, co-founder and MGC managing director.
The research and development division is also making significant progress, advancing programs in partnership with highly-regarded international academic institutions including Royal Melbourne Institute of Technology (RMIT) and the University of Notre Dame Australia (UNDA).
“We only see this as the beginning for the company delivering on our core business expertise, and shareholders should look forward to similarly productive September and December quarters as we continue to work to advance our company into becoming a leading international cannabinoid focused pharmaceutical business,” Zomer said.