MediPharm Labs Corp. has entered into an agreement for the purchase and sale of its facility in Napanee, Ontario, through a disposition of all of the company’s indirect equity interests in its wholly-owned subsidiary ABcann Medicinals Inc. to Kensana Health for $5.5 million in cash. 

Pursuant to the purchase agreement, Kensana Health has agreed to acquire all of the issued and outstanding shares in the capital of ABcann from the company’s operating subsidiary MediPharm Labs Inc. 

If the acquisition of ABcann goes through, Kensana Health will acquire the license in respect of the Napanee Facility as well as the building, land, and equipment. Current commercial agreements and activities of the company will stay with MediPharm Labs.

The deal is expected to close by January 1, 2025, subject to customary closing conditions and receipt of all necessary approvals, as applicable.

As part of the transactions contemplated by the purchase agreement, MediPharm Labs and Kensana Health will form a strategic partnership, through the execution of a comprehensive supply and services agreement, leveraging MediPharm’s advanced GMP manufacturing capabilities. Under this partnership, Kensana Health has agreed to supply select products and services to augment MediPharm’s international brands and to support the company’s growing international customer base.

This strategic transaction, says MediPharm in a press release, aligns with the company’s focus on streamlining its operations and maximizing value for stakeholders. This transaction is also expected to further complement MediPharm’s cash position and allow it to invest in future growth opportunities.

“This Transaction reflects our commitment to enhancing operational efficiency while fostering strong partnerships that expand our global reach,” said David Pidduck, CEO of MediPharm Labs. “By monetizing non-core assets and securing a strategic supply and services agreement, we are looking to ensure that MediPharm is well-positioned to continue delivering high-quality, GMP-certified cannabinoid solutions to our valued partners and customers worldwide.”

For Kensana Health, the deal is expected to support its ongoing United States Food and Drug Administration (FDA) registration process for its novel topical chronic wound treatment, with plans for subsequent approvals in Europe, U.K., Canada, the Middle East, Pacific Rim and Australia. 

Ken Clement, CEO and Founder of Kensana Health, commented, “As the original founder of ABcann in 2012, I am very grateful to the MediPharm team for facilitating the opportunity for Kensana Health to complete this acquisition.”

Clement goes on to say, “This acquisition represents our commitment to advancing phytopharmaceutical development, specifically targeting severe medical conditions with significant unmet needs. This is a strategic move to expand our pharmaceutical manufacturing capabilities for multiple plants, and not just phytocannabinoids.”

Medipharm Labs brought in $9.8 million in net revenue in its most recent quarterly report for the three months ended September 30, 2024 (Q3 2024), with $3.1 million in gross profit, but a net loss of $2.8 million.

Net revenue was up 15% from $8.5 million in the same quarter the previous year, while net loss declined from $4.3 million. Gross profit increased year-over-year from $2.4 million and $3.4 million in the previous quarter (Q2 2024).

The bulk of the company’s net revenue came from sales into the Canadian market ($6.2 million), increased from $5.9 million in the same quarter in 2023. Another $2.5 million in sales were in Australia, up year-over-year from $2.2 million, $1 million in Germany (up from $319,000 in Q3 2023), and $62,000 in other international sales (up from $5,000).

MediPharm Labs was founded in 2015. The Barrie, Ontario facility holds GMP certifications from Health Canada, the Australian Therapeutic Goods Association, and ANVISA (Brazil). The Barrie Facility obtained EU-GMP certification from the LAVG in July 2024. These GMP certifications have been accepted in other international markets, such as Brazil and the European Union.

MediPharm owns two wholly-owned subsidiaries, Canna Farms and ABcann. ABcann’s operations focus on European Union Good Manufacturing Practices related to cultivation and packaging for international markets.

MediPharm announced its plans to close its BC-based Canna Farms facility and move its medical sales to Ontario in July.

ABcann announced a name change to Vivo in 2018. MediPharms announced the completion of its acquisition of Vivo in 2023.

Related Articles

MediPharm Labs reports continued growth in Canadian, international markets

May 16, 2024

MediPharm to close Canna Farms facility, move medical sales to Ontario

July 2, 2024

Medipharm Labs reports increased revenue, decreased losses in Q3 2024

November 14, 2024