Khiron Life Sciences has reported Q2 2021 medical cannabis revenues of (CAD) $2.8m driven by the markets in Germany and Colombia.
Vertically integrated cannabis company Khiron Life Sciences, with core operations in Latin America and Europe, has announced its financial results for Q2 2021 with sales in the UK and Germany having increased significantly, up 475% and 265%, respectively, from the prior quarter.
The company saw medical cannabis revenues increase 47% from the prior quarter, reaching over $825,000. Medical cannabis products contributed 29% of total revenues and 70% of gross profits, and achieved a gross profit margin of 37% ($1.0m), reflecting a 228% improvement over the prior year.
Sales growth in Europe
Khiron says growth has largely been driven by sales in Germany, with sales in the country and in the UK having increased significantly, up 475% and 265% respectively from the prior quarter, driven by expanded medical cannabis products lines and increased product availability. As a result, Europe accounted for over 25% of Q2 medical cannabis sales.
For the quarter, Khiron recorded gross profits for European medical cannabis of $214,573, representing a gross margin of 100%.
Khiron director and CEO, Alvaro Torres, said: “In Q2, we continued to achieve strong results within our Medical Cannabis segment, reporting 47% sequential growth and margins of over 85% for the fourth consecutive quarter. With revenues increasing across all markets, our medical cannabis segment contributed 29% of revenues and 70% of gross profits, showcasing how our medical cannabis business can fundamentally shift margin profiles as revenues increase.
“…in Europe we expanded our product offerings in both the UK and Germany, and delivered our largest shipment to date, resulting in a significant revenue contribution from Europe during the second quarter.”
Khiron has had further success in the UK, with its medical cannabis e-learning certification, Khiron Academy, receiving accreditation for Continuing Professional Development credits in the UK.
Latin America
In June 2021, Khiron was awarded high-THC medical cannabis quotas for exports to Mexico from Colombia, and medical cannabis patients in Colombia reached nearly 50% in Q2 2021.
Khiron says that with more than 24,000 prescriptions filled year-to-date in Latin America and continued month-over-month growth, Q3 2021 continues to build on Q2 2021 levels.
Commenting on Latin America and Colombia, Torres said: “In Q2 and subsequently, we achieved a number of very significant milestones. With the start of sales in Brazil in July, our sales presence has expanded to five of our six target markets. In addition, we are making strides toward launching our Zerenia™ clinics in Mexico this year, and recently expedited our entry into Mexico by several months with the receipt of a high-THC extract export quota from Colombia.
“We continue to expand patient access within our core markets, partnering with the Colombia Cancer League and 21 leading medical institutions to deliver 3,000 medical cannabis consultations at no cost to patients. In June, we also opened our first clinic outside of Colombia in Lima, Peru, which is expected to have a positive impact on prescription volumes going forward.
“With these milestones behind us, we expect to increase sales of medical cannabis products across all markets over the coming 12 months. As we continue to expand our clinic and patient networks, partnerships with insurance providers, and distribution channels, we anticipate that global medical cannabis revenues will reach $1 million per month by Q1 2022. In addition, we anticipate that revenues from Health Services will stabilise at $1m per month, consistent with levels achieved in March 2021.”
Insurance coverage in Colombia continues to be a catalyst for growth, with more than 10,600 prescriptions filled in Q2 2021, a 40% increase from Q1 2021.
Overall, Khiron recorded a net loss of $4.8m in the second quarter, which compares to a net loss of $5.7m in the prior year and $5.5m in the prior quarter. Adjusted EBITDA losses for Q2 2021 were $3.9m, compared to the prior quarter loss of $4.0m and prior-year loss of $3.9m.
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