The ASX-listed bio-pharma company, MGC Pharmaceuticals Ltd (ASX: MXC), has published its latest quarterly report, showing impressive operational highlights for the three months ending 30 June, 2019.
This period saw a significant increase in revenue, as the company continued to advance its core "Seed to Pharmacy" commercialisation strategy, with operations now fully focused on the EU pharma divisions of Research and Development, Manufacturing and Distribution.
The additional revenue was the result of increasing commercial activity during the quarter, which saw the company raking in a substantial $763,000 in total. More than $300,000 of this was generated during April by pharmaceutical purchase orders alone, which translate to over 1,000 prescriptions.
MGC also secured several significant licenses during this time—such as a United Kingdom Controlled Drug Import Licence for the importation of CannEpil™ into the UK—which will allow for the further advancement of its expansion plans. While no cash receipts for sales were reported for Q1 2019, the company has already received its first formal purchase orders for the Australian and the UK markets, totalling over A$300,000.
MGC also received preliminary approval for its GMP-certified medicinal cannabis
production and cultivation facility in Malta. Given the proposed facility is significantly larger
than originally envisaged, the company predicts that construction costs will reach $15 million.
However, the good news doesn't stop there, with the co-founder and Managing Director of MGC Pharmaceuticals, Roby Zomer, noting that "in addition to this, our non-pharma business units resulted in a substantial increase in revenue".
"MGC Pharma is also continuing with significant advancements within our Research and Development division as we continued to work closely with leading academic institutions internationally to firmly position the Company at the forefront of future medical developments in this sector," he said.
The company generated a total of $469,000 in revenue from CannaGlobal as part of a five-year supply agreement to provide CBD based raw cosmetic material, while a following $182,000 was also received from Mabsut Life following the successful delivery of product orders.
The company's Research and Development division has also been making considerable strides, having significantly advanced programs in partnership with multiple academic institutions, including the Royal Melbourne Institute of Technology (RMIT) and the University of Notre Dame Australia (UNDA).
"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."
– Co-Founder and Managing Director of MGC Pharmaceuticals, Roby Zomer
The company has recorded positive initial findings from its study into the treatment of high-grade brain tumours, which suggest that cannabinoids can reduce the viability of glioblastoma cells. MGC's upcoming Phase 2 clinical trial of its CogniCann drug is also proceeding ahead of schedule, after it was met with overwhelmingly high interest from potential candidates looking to participate in the study.
The company also secured distribution agreements with five new partners this quarter, which has provided the company with access to major new global patient markets, such as Austria, Brazil, Germany, Switzerland, the United Kingdom, and Australia.
The most significant of these agreements were with Cannavalate and Health House International—two of Australia's leading medicinal cannabis distribution and logistics experts—both of which saw an increase of 50% on initial order.
Partnerships with Grow Biotech PLC and IPS Specials will also provide MGC with direct access to the UK medical cannabis market, while a deal with ONIX Empreendimentos e Participações will allow the company to enter the Brazil by shipping products directly to patients using the CANTERA digital platform. The quarter also saw MGC's products penetrate the German, Austrian and Swiss markets thanks to a deal with Mexacare GmbH.
"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," managing director Roby Zomer said.
"With the focus of the industry globally now on pharmaceutical grade cannabinoid products, and European markets, MGC Pharma occupies a highly strategic position with control across the product chain – from Seed to Pharmacy – and providing the only EU GMP certified compounded material available in Australia and the UK.
"This is further to having a materially advanced clinical program including human trials and pre-clinical research ranging from skin treatments to brain cancer."
Aside from its pharmaceutical agreements, the company was also able to lock down a marketing and distribution deal with the Chinese digital commerce platform YuShop Global that will see MGC Pharmaceutical's CBD and hemp-enhanced nutraceuticals product range sold in China.
Based on the strength of these results—and the expected increase in post-approval price for Epidiolex—the company has increased its valuation to $157 million, or 0.13 per share.
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