Operator
Welcome to Medicare's Earnings Conference Call for the quarter ended March 31, 2026. My name is Holly, and I will be your operator for today's call. At this time, all participants are in listen-only mode. Before we proceed, I would like to remind everyone that this presentation contains forward-looking statements relating to future results, events, and expectations, which are made pursuant to the safe harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the company's actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, those described in the company's most recent annual information form and Form 20-F. Later, we will conduct a question and answer session. Please note that this conference call is being recorded and today's date is May 25, 2026. I would now like to turn the conference call over to Dr. Albert Friesen, Chief Executive Officer of Medicare, Inc. Please go ahead, Dr. Friesen.
Good morning to all. I appreciate your interest and participation in today's call. to $5.5 million for the quarter ending March 31st, 2025. The company recorded a net loss for the quarter to a net loss of $694,000 on the March 31st, 2025 quarter. The net loss is due to non-cash expenses, including $644,000 of amortization on the assets related to the purchase of Zipitimag and the pharmacy business, and $855,000 invested in the R&D, primarily the MC1, for the treatment of PNPO deficiency. Medicare's continued investment in our research and development during the current year underscores our commitment to advancing innovative therapies, such as the Phase III trial, Medicare's investment and investigational drug MC1 for the treatment of PNPO deficiency and delivering long-term value to patients and shareholders. The five focuses of the business are stabilizing sales and profits of Agristat, growing Zipitamag revenue and profit, growing the Marley drug online pharmacy business, and developing the MC-1 for PMPO deficiency, also advancing a new chemical entity related to Medicare's legacy product potential. I'll now turn it over to our CFO, Horace Uden, for the review.
Speaker 4
Thank you, Dr. Friesen. A couple of quick items to note before I start. All dollar figures are in Canadian dollars unless otherwise noted by each presenter. And as a reminder, you will complete a copy of our financial statements for the Q26, along with previous versions of our financial statements on the Investors page of our website. A copy of all financial statements and management's discussion and analysis can be obtained from CDARplus.ca. Some key highlights of our financial performance for the quarter ended March 31st, 2020. Quarter ended was $7.9 million compared to $5.5 million for the quarter ended March 31st, 2025. Net revenues earned from Agristat during the $79,000. A decrease from the period ended March 31st, 2025 where net revenue from Agristat was 1.6. The decrease in Agristat revenue during the current period is a result of a lower volume of units sold as a result of increased competition from generic Tyro-5 and hydrochloride. Medicare remains the only manufacturer of the 3.75 milligram bolus file format, which is typically administered before we continue to provide support to our U.S. hospital accounts and plan to remain price competitive in targeted ways. Net revenue earned from Zepidimac through the traditional insured channel during the period ended March 31st, $23 million, which is an increase from the $519,000 increase in net revenue noted during the current period is attributable to higher utilization of the product through insurance formularies. The primary focus of the company continues to be growing the PIT-A-Meg revenue through the insurer channel and through Marley Drug. Throughout 20, PIT-A-Meg through Marley Drug are excluded from this number. With regards to Marley Drug, the net revenue during the current period total is $3.2 million, an increase from the $3.1 million earned from Marley Drug during the period ended March 31, 2025. Net revenue attributable to Zepidemag through Marley Drug was $745,000 during the current period, an increase from the period ended March 31, 2025, whereas Zepidemag sales were $640,000 through Marley Drug. The increase in revenue through Marley Drug is attributable to increases in sales in Zepidemag, in addition to an increase in Brinzavi sales along with other through Marley drug. Access challenges for patients seeking Zepidemag through traditional insured channels, which has reinforced the effectiveness of our direct distribution strategy through Marley drug to mitigate pressures associated with lower PBM reimbursement rates. Marley drug provides a more efficient and controlled channel to deliver Zepidemag to Additionally, this platform enables us to expand access to the Brinzavi, further strengthening our competitive positioning within the retail and mail order. Prior year, the company made two acquisitions. On March 11, 2025, the company acquired Gateway Medical Pharmacy in Oregon, which also has the ability to complete non-steroidal compounding. Revenue for Gateway Medical Pharmacy during the current period totals $753,000 in comparison to $175,000 during the period ended March 31st, 2025. It is important to note that the revenue earned from Gateway Medical Pharmacy during the prior period was only from March 11th, which is its acquisition date, until March 31st, 2016, 2025. The company acquired West Olympia Pharmacy, an independent pharmacy located in Olympia, Washington. Revenue earned from West Olympia Pharmacy during the current period was 1.7 million. Given West Olympia Pharmacy was acquired on June 16, 2025, the company did not earn any revenue through West Olympia Pharmacy during the three-month period ended March 31st through both pharmacies and the company intends on introducing additional product offerings at both Gateway Medical Pharmacy and at West Olympia Pharmacy which have increased revenue at Marley Drunk. It was 4.4 million, an increase from the period ended March 31st, 2025, where cost of goods sold was 2.6. Agristat cost of goods sold for the quarter ended March 31st, 2026, totaled $524,000. A decrease from the period ended March 31st, 2025, where cost of goods sold totaled $699,000. Decreasing cost of goods sold is directly attributable to the decrease in revenue from Agristat during an increase from the three-month period ended March 31st, which is within the cost of goods sold for Zepidemeg in the current quarter is $145,000 relating to products sold to customers and $155,000 from amortization of the Zepidemeg intangible assets. The increase in cost of goods sold for Zepidemeg during the current quarter is directly correlated with the increase in revenue through the insurer channel. Early drug cost of goods sold total 1.6 million during the period ended March 31st 2026 consistent with the period ended March 31st 2025 where cost of goods sold also totaled approximately 1.6 million although revenue for Marley drug has slightly increased during the current quarter cost consistent due to better purchasing contracts through the pharmacy as a result of the acquisitions of gateway medical pharmacy in West Olympia pharmacy during the prior Gateway Medical Pharmacy's cost of goods sold during the current quarter was $517,000 in comparison to $110,000 during the quarter ended March 31st, 2025. Given Gateway Medical Pharmacy was acquired on March 11th, 2025, the cost of goods sold recorded during the prior period was from March 11th, 2025 to March 31st, 2020. West Olympia's cost of goods sold during the current period was $1.5 million, and given West Olympia Pharmacy was acquired on June 16, 2025, there was no cost of the period ended March 31st. Three pharmacies, Marley Drug, Gateway Medical Pharmacy, and West Olympia Pharmacy make up the company's pharmacy business segment. The company has seen improvements on its inventory purchasing as a result of these acquisitions and is looking at further ways to capitalize on the synergies created as a result of these acquisitions to improve the company's financial performance overall. Selling expenses totaled $2 million for the period ended March 31, 2026, an increase from the period ended March 31, 2025, where selling expenses totaled $1.8 million. Increase in selling expenses during the current period in comparison to the prior period is a result of the company's acquisitions of Gateway Medical Pharmacy and West Olympia Pharmacy during the prior year. Offsetting the increase from these acquisitions are decreases in consulting and marketing expenses, as the company is focused on allocating its resources to initiatives which provide the greatest return on general and administrative expenses totaled $1.1 million for the period ended March 31, 2026, consistent with the quarter ended March 31, 2025, where general and administrative expenses $1.1 million. Despite the additions of Gateway Medical Pharmacy and West Olympia Pharmacy during the prior year, general and administrative expenses decreased during the current period. And this can be attributed to a decrease in professional fees incurred in addition to a decrease in share-based compensation expense on previously granted stock options. Research and development expenses for the quarter ended March 31st, $25,000 compared to $570,000 during the period ended March 31st, 2025. Research and development expenses during the current period is primarily due to the timing of expenditures. The primary development project for the company continues to be MC1 for PNPO-deficient expense net of $16,000 during the current period in comparison to finance income net of $34,000 during the period ended March 31, 2020. Finance expense recorded during the current period primarily relates to interest on the company's lease obligations and holdback payable and non-cash accretion expense on the company's acquisition payable liability, which was paid during the current period. Offsetting these expenses is interest income earned during the current exchange loss net of $14,000 during the current period in comparison to a foreign exchange loss of $35,000 during the period ended March 30. The change in foreign exchange loss relates to changes in the U.S. dollar exchange rate during the respective adjusted EBITDA for the period ended March 31, 1st, 2026 was $280,000 compared to an adjusted EBITDA of $28,000 during the period ended March 31st, 2020. The increase in adjusted EBITDA during the current period is due to a decrease in operating loss, an increase in net revenue of Zipitimeg through both the Insure Channel and Grimarly Drug, increased revenue from the company's pharmacy business segment, offset by a decrease in net revenue increase in cost of goods sold pharmacy business segment and an increase in research and development expenses. 26 the company had cash totaling approximately 1.5 million a decrease from December 31st 2025 where the company had 3.8 million of cash. The decrease in cash balance for the company is primarily attributable to working capital adjustments relating to the company paying down its liabilities in addition to accounts receivable which had not been collected prior to the end of the quarter. The company does not have any debt on it. I want to remind you that there will be an opportunity at the end of today's call for you to ask questions regarding the financial results of the company as a whole. And with that, I would like to turn the call back over to our CEO, Dr. Albert Friesen.
Thank you, Horace. Overall, the company's revenue increased. The acquisition of Gateway Medical Pharmacy and West Olympia Pharmacy created additional synergies for the company and also provided additional channels for the company to market and sell Zypidemad. Medicare's R&D focus is primarily on its Phase III study to get approvals for MC1 as the first FDA-approved therapy for patients with PNPO deficiency. This is a rare pediatric disease leading to seizures and ultimately fatal. The excess use of Medicare's legacy product for MC1 could lead to a priority review voucher, which can be redeemed or sold and provides significant value. Recent sales of these vouchers have been in excess of $100 million. It is currently ongoing with patients receiving treatment with MC1. Medicare has received fast-track designation for MC1 for its intended indication. The Phase III study, as I said, is ongoing. With enrollment, two patients have already completed 12 months, and our target is to complete enrollment of all patients by the end of June this year, 2026, which is approximately 10 patients. We focused on growing the business and diversifying our revenue and asset base, near-term through acquisition, and long-term through R&D, carefully investing to grow future profitability. Management and staff is to continue to build this business with a strong, stable, long-term outlook to generate value for shareholders. And as always, I want to express my sincere appreciation for the outstanding team of employees we've been blessed with. Thank you, our shareholders, for your continued support and interest. and now we'll turn it over to the moderator for our Q&A.
