BioHarvest Sciences Inc. (CSE:BHSC, OTC:CNVCF) announced that sales of its flagship nutraceutical VINIA product increased by triple digits year-on-year in the first quarter of 2022.
VINIA sales reached US$787,000, representing a jump of 112% versus the year-ago quarter, according to a company statement.
BioHarvest also said it had a strong quarter in research and development (R&D) execution, highlighted by a March 23 declaration of successful completion of its Cannabis R&D program with the production of cannabis biomass in large-scale industrial bioreactors -- signaling the start of commercialization of the cannabis product.
BioHarvest is in the process of transitioning the current R&D license to a production license ahead of launching a unique cannabis composition into the market in the second half of 2022.
READ: BioHarvest Sciences sets out to win over the American consumer with its first nutraceutical product VINIA
"I am very proud of our Q1 results, which demonstrate another dimension of our capabilities," said CEO Ilan Sobel. "BioHarvest continues to validate its leadership in plant-based bio-technology."
The Vancouver, British Columbia-based company noted that it managed the total VINIA sales orders in line with production constraints of its existing 2 ton/year facility and accordingly, chose to reduce marketing spend in the US to avoid out-of-stock occurrences and customer dissatisfaction.
The production capacity constraints are being alleviated by a fast transition to a new 20 ton/year facility -- a transition that started successfully in March and will positively impact the second half of 2022 scale-up of VINIA production and sales.
Looking ahead, BioHarvest reiterated its 2022 sales orders guidance of US$5 million-US$7 million -- representing a 2.5-3.5 times growth over 2021.
The company said the “careful management” of the VINIA inventory in the US resulted in 1Q sales orders in the US (where pilot sales began in May 2021) reaching US$335,000 -- representing 2% growth over 4Q 2021.
It said the Israeli market delivered US$452,000 (22% growth over 1Q 2021 and a 10% decline from 4Q 2022). Sales in Israel were heavily impacted in 1Q by an extraordinary outbreak of the COVID-19 pandemic in January and February -- but March sales in Israel have significantly recovered and April sales so far support BioHarvest's growth trajectories in line with provided guidance.
In early 3Q 2022, BioHarvest said it expects VINIA inventory to reach levels that enable significant scaling of the business. US sales metrics in 1Q 2022 continue to be very encouraging: VINIA has achieved a best-in-class verified customer rating of 4.8 out of 5, demonstrating a high level of customer satisfaction, and subscription revenue in 1Q 2022 increased 40% compared to 4Q 2021.
The company said the marketing plan for the second half of the year includes the addition of influencer endorsements, customer referral programs and affiliate programs as well as a focused approach addressing key lucrative market segments such as the Christian evangelical market.
"We were able to manage our sales growth despite inventory constraints and keep our overall customer satisfaction intact, and we enjoy fantastic growth prospects given the commencement of manufacturing at our new VINIA production facility," Sobel said. "I am equally excited by the completion of the Cannabis development program and the highly differentiated composition which we will be bringing to the market in H2 2022."
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