Celadon Pharmaceuticals (CEL) H1 2022 earnings summary

Executive summary

• Achieved AIM readmission via reverse takeover of Vertigrow Technology Ltd, raising £8.5m in equity capital to support growth plans.

• Operates a 100,000 sq ft GMP-aligned facility, one of the first licensed by the Home Office to grow high-THC medicinal cannabis; Phase 1 grow facility completed seven harvests with pharmaceutical-grade cannabis confirmed by third-party testing.

• Owns a majority stake in LVL Health, running the only MHRA conditionally approved chronic pain trial using cannabis-based medicines; LVL clinic launched with high patient interest and positive initial feedback.

• Phase 2 grow facility build on track for Q1 2023 operational start, targeting annual grow capacity of three tonnes.

• Signed R&D collaboration with Phytome Life Sciences to develop novel cannabis-based medicines.

Financial highlights

• Revenue for the six months ended 30 June 2022 was £11,258, compared to nil in the same period last year, generated through the LVL private pain clinic.

• Operating loss of £1.98m (Jun-21: £1.03m), before one-off, non-recurring, and non-cash items related to the RTO; loss before tax of £13.5m (Jun-21: £1.9m), including £11.5m of non-cash and one-off items such as £6.4m share-based payment and £1.5m adviser costs.

• Cash balance at 30 June 2022 was £9.1m (Jun-21: £2.8m), reflecting RTO placing proceeds and cash from Summerway Capital Plc and Vertigrow Technology Ltd; £7.3m as of 26 September 2022.

• Operating cash outflow of £3.0m in the period, including £1.5m of transaction costs for the RTO.

• Gross loss of £12,409 due to mix of paying and non-paying patients at the LVL clinic.

Outlook and guidance

• Near-term focus on achieving MHRA registration and commencing the chronic pain trial, while pursuing early revenue opportunities; revenue generation expected in 2023 as Phase 2 facility becomes operational and regulatory milestones are achieved.

• Positioned to capture a share of the global medical cannabis market, forecast to grow at ~27% CAGR to US$53bn by 2027.

• Strategy centers on patient-first approach, integrated supply chain, and breakthrough R&D for advanced prescription medicines.