Zelira Therapeutics Ltd (ASX:ZLD, OTCQB:ZLDAF) is well placed to generate further growth in cash flow and revenue via its diversified income streams, with a suite of new products launched in H1 FY2022.
The company generated quarterly cash receipts of $0.341 million in Q2 FY2022 underpinned by sales of SprinjeneCBD and consulting payments, relatively stable to Q1 FY2022’s $0.362 million.
$0.342 million has already been received in the first two weeks of Q3 FY2022, being the partial receipt of the US$1 million EDCDM (enhanced distillate capture and dissolution matrix) technology licensing fee.
The US$750,000 balance of the EDCDM license fee will be paid in the current quarter, generating another circa A$1.0 million in cash receipts (depending on exchange rates at the time) in Q3.
Expansion into New Zealand
Zelira has expanded into New Zealand via a 5-year exclusive distribution agreement with NUBU Pharmaceuticals, New Zealand’s largest medicinal cannabis distribution company.
This distribution agreement expands the availability of Zenivol®, Zelira’s clinically validated cannabinoid-based insomnia medication, beyond Australia and Germany, and HOPE™ beyond Australia and the United States, into the highly regulated and tightly held New Zealand market, further expanding Zelira’s global footprint for its Rx (pharmaceutical) business.
NUBU will be filing for formal New Zealand government registration with the Ministry of Health NZ for both Zenivol ® and HOPE™.
“Well placed to continue our growth trajectory”
Commenting on the operational progress in Q2 FY2022, Zelira’s Global Managing Director & CEO, Dr Oludare Odumosu said: “With commercialisation continuing to ramp up, Zelira delivered a solid second quarter operationally.
“Cash receipts were stable, with substantial growth in cash receipts to occur in the current third quarter given the operational initiatives successfully executed over the first half of FY2022.
“Our strategy of having multiple shots at goal is delivering, with sales momentum gaining for current products in market, and new products being clinically tested and launched.
“With access to Germany and New Zealand via additional distribution agreements with the largest medicinal cannabinoid distributors in each market, we are well placed to continue our growth trajectory through FY2022.
“Zelira is known as a leader in cannabinoid research and development for the medicinal cannabis market, and this was further strengthened over Q2.
“We successfully supported Levin Health’s receipt of ethics approval for Phase 2A clinical trial for chronic pain and had the clinical trial results of Zelira’s Phase 1 published in the peer-reviewed journal ‘Pain and Therapy’.”
Entry into a highly regulated market
“Zelira’s entry into the highly-regulated New Zealand medicinal cannabis market is further testament of Zelira’s capabilities as a world class pharmaceutical developer and formulator and commitment to producing the highest quality, evidence-based cannabinoid medicines.
“Our partnership agreement with NUBU aligns to Zelira’s global expansion strategy across our Rx [Pharmaceutical] portfolio, with NUBU, New Zealand’s largest medicinal cannabis distribution company, having existing strategic partnerships in place with many of New Zealand’s largest pharmacy groups.
“We strongly believe that the cannabinoid-based medicine market will scale up significantly when the ability to consistently formulate, validate and commercialise dosage forms that closely resemble current pharmaceutical drugs and in formats such as capsules and tablets, becomes available.”
EDCDM technology
“We solved the two key issues holding this back via Zelira’s proprietary Enhanced Distillate Capture and Dissolution Matrix (EDCDM) technology.
“This is a very exciting development as it opens multiple product development and commercialisation paths for medicinal cannabinoids.
“The licensing arrangement with DRCN Holdings reflects the substantial and immediate value of Zelira’s technology given the multiple products that can now be commercialised.”
“Strong signal of fundamental value”
“We were delighted to welcome US-based fund, Quincy Street, onto the register at an exciting time for Zelira.
“The capital raised, undertaken at a substantial premium to the stock’s trading price, was a strong signal of the fundamental value a sophisticated and experienced investor saw in our scientifically based cannabinoid products that were already in market and coming to market, as well as our growing biopharmaceutical portfolio.
“We have an ambitious product development and sales growth strategy that we are executing on.
“The funds raised have not only introduced a new US-based fund onto our register, but more importantly, provided us with the capital to more aggressively roll out our growth strategy with a target of reaching financial breakeven.”