Pharmaceutical company Althea Group (ASX: AGH) has published an interim update regarding its active businesses in Australia, Canada and the UK, declaring that February bettered January as the company’s second-best month on record.
The company expects to record the highest revenue month in its history this month as demand for medicinal cannabis continues to grow in all territories where it is being prescribed and sold to patients.
Moreover, Althea declared it currently has zero debt, around $1.8 million in inventory and more than $15 million in cash to support its growing sales trajectory and prevent the current COVID-19 pandemic from stifling its operations.
Althea said it added 617 new patients in Australia with the total now surpassing 5,000 nationwide.
At the end of February, Althea had 5,207 patients who were prescribed a range of medicinal cannabis products by 440 healthcare professionals – figures that are expected to continue growing as patients report positive results from being treated with medicinal cannabis.
Additionally, the rate of patient growth has been consistently increasing, rising from less than 100 in May 2018 to as high as 5,500 in January this year. The average number of patients per day has also grown from around 10 in April of last year to 30 today.
In terms of revenues, Althea said its growing list of patients is generating an increasing amount of recurring revenue as a result of repeat patients continuing to purchase Althea medication after an initial treatment period of approximately one to three months.
Combined with strong uptake from new patients, March is on track to deliver “the most sales in a single month”, the company said.
One key insight mentioned in Althea’s market update was a distinct correlation between how closely doctors observed their patients during initial treatment and how likely they are to repeat the prescription and advise the same treatment to others.
Althea said its specialised concierge service provides a “gold standard” of clinical support for healthcare professionals and actively works to support doctors with optimal prescribing protocols, which facilitates better patient analysis.
A key aspect of the company’s revenue stream is exports, with shipments to the UK now reaching a record high.
Earlier this month, the UK Home Office said import restrictions have eased to ensure prescriptions for cannabis-based products will continue as normal and will not be adversely affected by the ongoing COVID-19 pandemic that has stalled global trade.
Althea said it recently shipped hundreds of units from Australia to the UK and has import licences already submitted in order to dispatch hundreds more.
“These are certainly challenging times and the company understands we have a great responsibility not just to patients, but also to our shareholders,” Althea chief executive officer Joshua Fegan said.
Mr Fegan added that Althea’s entire management team is monitoring the COVID-19 crisis very closely and aims to deliver on the company’s objectives regardless of rapidly changing market conditions, while ensuring its balance sheet is properly safeguarded.
Peaking in Canada
With operations in Australia and the UK making commercial progress, Althea said its Canadian business has just completed its Peak Processing Solutions facility in Ontario, “on budget and with only a slight delay to the intended timeline”.
With the facility now completed, the company plans to submit the remaining documentation to Health Canada with a view of receiving a Health Canada licence later this year.
If or when a licence is obtained, Althea is set to operate one of the first licenced cannabis processing facilities in Canada capable of contract manufacturing cannabis-infused products for consumer-packaged goods companies, thereby “closing a huge gap in the Canadian recreational cannabis market,” the company said.