Celadon Pharmaceuticals (CEL) H1 2024 earnings summary

Executive summary

• Entered strategic collaboration with Valeos Pharma A/S to license IP and genetics, accelerating EU supply and enabling earlier product delivery to European customers; Valeos to begin cultivation for Celadon’s customer in Q1 2025.

• Completed 12 harvests from Phase 1 grow facility, with 16 harvests expected in 2024; Phase 2 construction and HVAC design finalized, though fit-out delayed due to funding issues.

• Signed major sales contracts, including a 3-year deal worth up to £8.7m annually and a 5-year contract worth approximately £40.7m; UK contracts with potential annual revenue of £1.5m.

• Supplied first product to US customer and continued UK sales, marking entry into the US market.

• Raised £2.65m gross from equity raises during and after the period; £0.4m remains due from committed subscription; ongoing discussions for further debt facilities.

Financial highlights

• Revenue for the six months ended 30 June 2024 was £63k, up from £8k in the prior year period.

• Operating loss reduced to £2.3m (2023: £3.2m); loss before tax narrowed to £2.4m (2023: £4.4m), reflecting lower transaction costs and improved cultivation.

• Gross profit of £350k (2023: £26k loss), reflecting improved cultivation and fair value adjustments; fair value of biological assets at 30 June 2024 was £129k to £338k.

• Cash balance at 30 June 2024 was £16k, with £0.5m at 27 September 2024 after equity raises; inventory increased to £319k (2023: £24k).

• Net assets at 30 June 2024 were £2.5m, down from £3.0m at 30 June 2023.

Outlook and guidance

• Strategic partnership with Valeos expected to commence cultivation in Q1 2025, increasing annual capacity to ~4.5 tonnes and accelerating European supply.

• Phase 2 facility to focus on UK and international markets as EU supply is accelerated via Valeos; completion delayed due to funding.

• Available cash expected to finance working capital through December 2024; ongoing discussions for further debt facilities and equity raises.

• Optimistic about medium- to long-term sector growth, especially as UK CBMP market develops.