MGC Pharmaceuticals has announced the appointment of a new CFO in the latest of a flurry of updates from the company, which says it is on the precipice of breaking into the world of ‘true pharma’.
Following the departure of Daniel Kendall earlier this month, which saw the company’s share price drop by around 10%, Angela-Marie Graham will now take the financial reins of the company from London.
Ms Graham will have her work cut out at MGC, which saw net losses jump 30% in the six months to December 2021, despite reporting record revenues in the same period.
MGC’s VP Business Development & International Relations Ron Lipsky told BusinessCann that these rising costs were the price of ‘making the leap’ into the multi-billion-pound pharmaceutical industry.
“I would define this as MGC’s leap into the world of true pharma. We’ve constantly been moving forward towards this biopharma vision, and being able to facilitate it in the right way. And I think that we’re finally at a point where we really do have a secure pipeline and understanding of what needs to be achieved in order to bring those products to market.”
On April 12 2022 MGC informed investors that Mr Kendall ‘had ceased in his role as CFO’ after around a year, and that its Managing Director and CEO Roby Zomer would take on his responsibilities on an interim basis until a new CFO is appointed.
According to the Australian company, after becoming the first cannabis company to list on the London Stock Exchange (LSE) in early 2021, it has seen a number of major corporate functions transferred to London, and therefore believed it was best suited with a UK-based financial director.
The move forms part of MGC’s wider strategy to establish a corporate base in London, which has also seen the appointment of a new London-based group financial controller, and will also reportedly see Mr Zomer relocate to the city imminently.
Ms Graham joins from consultancy firm Client CFO and has held a number of prominent finance director roles at growth companies from an array of sectors, though this will be her first foray into the cannabis space.
She joins as MGC reports reaching a number of ‘key milestones’ towards its long term plans in Europe, including the granting of a European patent for its flagship CimetrA product.
An MGC spokesperson told BusinessCann this patent, granted by the Slovenian Intellectual Property Office (SIPO), will last for 20 years and see its IP protected across the EU, while providing a foundation from which to apply in the US and further afield.
Sciensus Rare Partnership
Furthermore, weeks earlier, MGC signed a major distribution deal with Sciencus Rare, a deal Mr Lipsky believes could transform the company’s future and provide it with a ‘foothold’ in the illustrious pharmaceutical industry.
Sciensus Rare, a dedicated rare disease subsidiary of Sciensus, formerly known as Healthcare at Home, signed a partnership deal which will make it the exclusive distributor of MGC’s CannEpil and CogniCann products in the UK, Denmark, France, Italy, Spain and Luxembourg.
The tie-up, which is understood to have been in the works for around a year, will provide a number of practical benefits for MGC, including opening the door to its established supply chains across Europe while seeing it take responsibility for applying to Early Access Programmes and Named Patient Programmes also.
“The fact of the matter is we can’t do those six countries without them right now. I have to sign these partnerships in order to enter these markets. The appropriate way to enter the pharma market is boots on the ground and pre-existing relationships, I can’t build those overnight in a new territory.”
However, Mr Lipsky says the key benefit of this deal lies in the legitimacy its 30-year pharmaceutical history brings to the cannabis company.
“Still, in our world, it’s not easy to get these vital medicines and cannabis based medical products to patients. You need someone who knows how to slog through the paperwork and do the pharma dance, and these are the partners that we’ve chosen for that very reason.
“Much of the cannabis world is trying to cling to pharma, is trying to edge into pharma, but there’s a very select group that can actually represent themselves well enough in order to make the leap. We’re very much being legitimised by our distribution partner in this case.”
Big Pharma, Big Costs
Though Sciensus can open the doors to pharma for MGC, walking through them will require significant capital.
In the six months to December 31 2021 MGC reported revenues of $2.6m, up 243% from the $741,911 it made in the same period a year earlier, with gross profits also up 150%.
These gains were more than offset by its operating expenses, seeing losses rise 30% to $7.5m in the same period.
According to Mr Lipsky, these skyrocketing expenses were a result of the ‘man and expert’ hours needed to heighten the volume of these pharma activities, including clinical trials.
“Because Pharma has created the parameters, it’s really, really expensive. So there are things that just cost money because they’re in a paradigm world of pharma. But it’s also because we’re increasing our activity.”
He explained that if MGC tried to cut corners and save money at this vital stage, ‘we lose later’, adding that ‘we’re making sure that we can comply with these pipelines forever, so the beginning is definitely expensive.’