Medicure Inc.

Thank you, Holly, and good morning to all on the call. We appreciate your interest and participation in today’s call.

Joining me today in the 2024 financial statements is Dr. Neil Owens, President and Chief Operating Officer; and Haaris Uddin, Medicure’s Chief Financial Officer.

The net revenue for 2024 was $21.9 million, a slight increase from the previous year, which was $21.7 million. The company recorded a net loss for 2024 of approximately $1 million or $0.10 per share compared to a net loss of $922,000 or $0.09 per share last year.

The net loss is due in large part due to non-cash expenses, including $2.3 million of amortization of the company’s assets and $196,000 of share-based compensation expense on stock options granted to employees and directors during the prior year. There was a bit of a decrease in the AGGRASTAT revenue and increase in professional fees as well.

There was higher revenue from sales of ZYPITAMAG through Marley Drug and including current year’s expenses was R&D of $3.1 million largely for the MC-1 PNPO clinical trial. We have added a fifth focus the past year, that being the development of a novel drug related to MC-1 with significant market potential.

So a reminder that the 5 business focuses for Medicure are holding sales and profits from AGGRASTAT, growing ZYPITAMAG revenue and profit, growing the Marley Drug online pharmacy business, the development of MC-1 for PNPO deficiency and the new chemical entity related to Medicure’s historic drug development with very large market potential. I’d now like to turn the call over to our CFO, Haaris Uddin, to review and provide some color on the 2024 financial statements.

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 can obtain a copy of our complete set of our financial statements for the year ended December 31, 2024, on the Investors page of our website. Alternatively, a copy of all financial statements and management discussion and analysis can be obtained from sedarplus.ba.

I will now provide some key highlights of our financial performance for the year ended December 31, 2024. Total revenue for the year ended December 31, 2024, was $21.9 million compared to $21.7 million for the year ended December 31, 2023.

Net revenues earned from AGGRASTAT during the current year totaled $8.1 million, a decrease from the prior year, where net revenue from AGGRASTAT was $9.7 million. The decrease in AGGRASTAT revenue during the current year is a result of pricing pressures from increased competition stemming from the launch of generics, tirofiban hydrochloride.

Net revenues earned from ZYPITAMAG through the traditional insurance channel during the current year totaled $3 million, which is an increase from the $2.4 million of net revenue earned during the prior year. The increase in ZYPITAMAG sales through the traditional insurance channel can be attributed to greater utilization of the products through insurance formularies, specifically Medicare Part D.

This increase is offset by increased wholesaler fees in addition to higher coverage gap payments to pharmacy benefit managers. For Marley Drug, net revenue during the current year totaled $10.8 million, an increase from the prior year, where net revenue totaled $9.6 million.

The pharmacy business has undergone a change in its product mix since the prior year, resulting in the increase in revenue during the current year, and the pharmacy continues to focus on fulfillment partnerships, its e-commerce platform and increased sales of ZYPITAMAG. Offsetting the increase in revenue is a decline in reimbursements from pharmacy benefit managers, which only impact insured prescription revenue.

AGGRASTAT cost of goods sold for the year ended December 31, 2024, totaled $2.5 million, a decrease from the prior year, where cost of goods sold totaled $3 million. The decrease in cost of goods sold is the result of a decrease in volume of AGGRASTAT sold, which is consistent with the lower revenue recorded in the current year.

ZYPITAMAG cost of goods sold for the current year totaled $1.4 million, an increase from the prior year, where cost of goods sold for ZYPITAMAG totaled $974,000. Included within the cost of goods sold for ZYPITAMAG in the current year is $759,000 relating to products sold to customers and $620,000 from amortization of the ZYPITAMAG intangible assets.

The increase in cost of goods sold noted during the current year is due to a higher volume of products sold during 2024 in addition to a recovery, which was recorded in the prior year of $281,000 relating to ZYPITAMAG royalties. Marley Drug cost of goods sold totaled $4.9 million during the year ended December 31, 2024, an increase from the prior year where cost of goods sold totaled $3.7 million.

The increase in cost of goods sold is a result of a higher volume and the nature of products sold through both the mail order and e-commerce platform during the current year. Selling expenses totaled $8 million for the year ended December 31, 2024, a decrease from the prior year, where selling expenses were $8.3 million.

The decrease in selling expenses during the current year is a result of management’s efforts in optimizing its sales and marketing expenses. This included a reorganization of the company’s sales team in addition to focusing our marketing channels, which provided the greatest return on investment.

General and administrative expenses totaled $4.8 million for the current year, in comparison to $4.1 million during the prior year. The increase in general and administrative expenses in the current year is a result of higher professional fees, primarily related to legal fees, offset by lower share-based compensation expense on previously granted stock options to key employees and directors of the company.

Research and development expenses for the current year totaled $3.1 million compared to $2.4 million during the prior year. The increase during the current year is primarily due to the timing of research and development expenditures relating to each development project the company is currently undertaking, which in the current year primarily related to the development of MC-1.

Other income during the current year totaled $1.9 million. The other income recorded during the current year was a result of a legal settlement between the company and its contract development and manufacturing organization.

The company received a settlement payout in the fourth quarter of 2024. During the prior year ended December 31, 2023, the company did not record any other income.

The company reported finance income of $165,000 during the current year in comparison to finance income of $65,000 during the prior year ended December 31, 2023. The finance income recorded during the current year consisted primarily of interest income earned on the cash held by the company, offset by bank charges and finance expenses on the company’s lease obligations.

The company recorded a foreign exchange loss of $71,000 during the current year in comparison to a foreign exchange loss of $108,000 during the prior year. The change in foreign exchange relates to changes in the U.S.

dollar exchange rates during the respective years, which led to an unfavorable foreign exchange loss during both the current and prior years. Adjusted EBITDA for the current year was negative $437,000 compared to an adjusted EBITDA of $1.9 million during the year ended December 31, 2023.

The decrease in adjusted EBITDA during the current year is primarily due to higher Marley Drug cost of goods, lower AGGRASTAT revenue as well as higher research and development expenses. And this amount – these amounts are offset by a decrease in selling expenses, higher ZYPITAMAG sales through both the Marley Drug Pharmacy and traditional insurer channel.

Subsequent to year-end, the company acquired 100% of the outstanding shares of Gateway Medical, an independent pharmacy located in Portland, Oregon in exchange for total consideration of $580,000. In addition, the company also signed an agreement with the intention of acquiring 100% membership interest of West Olympia Pharmacy, an independent pharmacy located in West Olympia, Washington for total consideration of $975,000.

The transaction of West Olympia is subject to the licenses of the pharmacy transferring from the seller to the buyer prior to the transaction closing. The transaction is expected to close in the second quarter of 2025, and both pharmacies were intended to be acquired with the intention of expanding the company’s Retail Pharmacy operating segment and creating synergies with Marley Drug.

As at December 31, 2024, the company had cash totaling approximately $7.2 million, an increase from the $6.4 million of cash held as of December 31, 2023. The company does not have any debt on its books.

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 over to our President and Chief Operating Officer, Dr.

Neil Owens, for some additional commentary regarding our operations.

Thank you, Haaris, and good morning, everyone. I’d like to start with some updates on our ZYPITAMAG business.

Sales of ZYPITAMAG sold through Marley Drug grew by 23% from $2.6 million in 2023 to $3.2 million in 2024. We continue to use a field-based sales team as well as prescriber and consumer marketing and have refined our marketing messaging to what we have found resonates best for both.

Patients still have challenges in accessing ZYPITAMAG through their insurance coverage, which is the reason why selling ZYPITAMAG through Marley Drug is such an effective approach. Similarly, due to wholesaler and coverage gap fees, low PBM reimbursements and product returns selling through Marley Drug provides a much higher gross margin.

We’ve also found that adherence rates for patients taking ZYPITAMAG is more than 40% higher through Marley Drug compared to other retail pharmacies because of our customer service and engagement strategies, this helps for reducing our attrition rate and increasing revenue. Net revenue through insured channels and the standard retail pharmacy model grew by 25% from $2.4 million in 2023 to $3 million in 2024 due to an increase in purchasing from wholesalers and changes in our mix of insured customers.

Overall, ZYPITAMAG represents a priority for growth through efforts of our sales and marketing team. Further on our Marley Drug business, net revenue grew by 12.5% from $9.6 million in 2023 to $10.8 million in 2024.

This is due to an increase in ZYPITAMAG sold through the pharmacy business as well as generic medication sales due to multiple marketing strategies used in 2024. Notably, the sale of Brenzavvy tablets through Marley Drug, which is an accessible alternative SGLT2 inhibitor to JARDIANCE and FARXIGA, contributed revenue of $807,000 in 2024.

Another recent example is the exclusive sale of sitagliptin, which is a first generic entry for another popular diabetes medication. Medicure is working on leveraging Marley Drug’s reputation for customer service, unique branded medication solutions and national distribution to continue to drive growth.

Challenges we have faced include competition and fluctuation in cost of goods, which impact our margins as well as lowering our customer acquisition costs as much as possible. We also plan to invest further in our e-commerce website to make it a best-in-class experience for customers.

Recently, Medicure announced the acquisition of Gateway Medical Pharmacy and signing of a definitive agreement with West Olympia Pharmacy. These additional pharmacy subsidiaries immediately grow our customer and prescriber base for both ZYPITAMAG and other branded products and will be adopted under the Marley Drug brand.

Additional benefits of these acquisitions include faster shipping times and redundancy, growing our brand nationally, increasing our revenue and are cash flow positive. In terms of our AGGRASTAT business, net revenue fell from $9.7 million in 2023 to $8.1 million in 2024 due to generic Tirofiban competition.

Medicure remains the only manufacturer of the 3.75 milligram bolus format, which is typically administered before the infusion unit. We continue to provide support to our U.S.

hospital accounts and plan to remain price competitive in targeted ways. Medicure’s R&D focus is primarily on its Phase 3 study to seek approval of MC-1 as the first FDA-approved therapy for patients with PNPO deficiency, which is a rare pediatric disease leading to seizures and is ultimately fatal if untreated.

If successful, use of Medicure’s legacy product MC-1 could lead to a priority review voucher, which can be redeemed or sold and provides significant value. The FDA granted approval to start enrollment, and so enrollment is ongoing with patients receiving treatment with MC-1.

Medicure also recently received Fast Track designation for MC-1 for its intended indication, which will facilitate the review of Medicure’s FDA new drug application. Medicure did decide to remove the entire coding of the MC-1 tablets to speed up absorption based on the feedback from clinicians, and therefore, that batch was produced and is now being sent to the clinical sites for use.

Recently, the Phase 3 study’s first patient has completed the study enrollment period and has now moved into a continuation phase post enrollment. Medicure recently announced that it has signed an asset purchase agreement for the acquisition of the patent and intellectual property related to the discovery of new chemical entities that can be developed for therapeutic use.

We believe that the new chemical entities will promise to provide improvements over existing lead compounds in alignment with treatment of diseases being targeted by Medicure and could provide significant long-term value upon completion of all required preclinical and clinical studies and regulatory approval. Medicure has yet to announce the clinical therapeutic targets, however, has started preclinical testing and API development of the lead compound.

Overall revenue in 2024 of $21.9 million was only slightly higher than 2023 of $21.7 million despite increases in ZYPITAMAG and Marley Drug revenue due to lower AGGRASTAT revenue, higher Marley Drug cost of goods, as well as higher general and administrative expenses from higher than expected legal expenses and higher research and development expenses, which were $3.1 million in 2024. We are therefore reporting a negative EBITDA of $437,000 and a net loss of $1 million for the year.

Medicure remains debt-free. And to reiterate, the company’s short-term goals are focused on growing ZYPITAMAG, growing Marley Drug and our pharmacy business, maintaining AGGRASTAT sales and the development of new products, short-term seeking the approval of MC-1 to receive a priority review voucher and long-term, the development of our new chemical entities and intellectual property for diseases with large market potential.

With that, I would like to turn the call back to Dr. Friesen for final comments.

Thank you, Neil. Though overall revenue was consistent with last year, there were significant developments through the acquisition of Marley, which we think strongly complements Medicure’s business, including sales and marketing of ZYPITAMAG.

The acquisition of the two pharmacies recently supports our focus on growing the business and diversifying our revenue and asset base near-term through acquisitions and long-term through R&D, carefully investing to grow our future profitability. My goal and that of our Board, management and staff is to continue to build this business with a stable long-term outlook to generate value for our shareholders.

And as always, I want to express my sincere appreciation to the outstanding team of employees we have been blessed with. Thank you, our shareholders, for your continued support and interest.

Now, Holly, I will turn it back to you to lead us through the Q&A.

Yes. My name is Zach.

Thank you guys for the hard work you guys are doing. I just have a few brief questions.

My first question is in regard to the general and administrative expenses. I saw that legal fees were the primary cause of the increase last year.

Do you guys see this coming back down in 2025?

I don’t know, Neil, did you want to – or Haaris?

Yes. What I can say is I would expect there are still few significant legal fees in 2025.

We can comment further on that, but I don’t see that actually coming down too much further, unfortunately.

Okay. If I may have just two other quick questions, in regard to R&D, it seems that the primary expense right now is for the MC-1 development.

Do you expect those expenses to continue at a similar level in 2025?

Yes. Go ahead.

Yes, it’s a good question. I think that they should come down versus 2024.

However, we have started investing in the new intellectual property. So, overall, our R&D expenses will probably be similar, its right around $3 million.

I think that we are forecasting. So, it should be consistent with 2024 as well.

Okay. Thank you.

I appreciate that. Just last question – yes, last two questions here.

For the Phase 2 trials for MC-1, do you guys have any update on the timeline for that?

Yes. So, I can answer that one as well.

It is a 12-month study. And so we are expecting to enroll all patients this year.

It’s a very small study. It’s only – we are only targeting to enroll 10 patients, but it’s an extremely rare disease.

So, it takes some effort to find all of those patients. But we should expect to enroll all patients this year, and then they will be enrolled for 12 months.

We have seen it – as I mentioned, we have had one patient complete in 12 months, but it’s going to be staggered as patients enroll. But then we do have a shorter review period once we have completed the study because it’s an orphan disease.

So, it’s basically an accelerated review period.

Okay. Thank you.

I really appreciate that. And then the last question is regarding your latest acquisitions, which is exciting.

I was just wondering if you guys could provide any color on the synergies that you are expecting.

Yes, I can jump in on that one as well. There are many.

As mentioned, gaining national brand exposure for ZYPITAMAG and the drug is challenging. And what this does is it gives us an immediate exposure to, I would say, tens of thousands of patients through both pharmacies, not only the patients, but the providers that we can market ZYPITAMAG and our other branded products to.

So, basically, we can integrate them quite effectively and not only that, but we are going to see some cost savings on our cost of goods just through increased purchasing power as we add the pharmacies. But it also provides redundancy just for shipping so that because we fill all 50 states, we send medications to all the 50 states, these other pharmacies can provide faster shipping times to the West Coast, only because we are trying to be competitive with other pharmacies that offer home delivery.

So, we want to be best-in-class in that sense, and this redundancy overall in terms of fulfillment.

Okay. Thank you.

And thank you, Zach, for the questions.

Yes. Thanks as well.

Again, thank you for those on the call. We appreciate it, and we look forward to further updates for the next quarter.

Again, thank you. Have a great day.