Southport Facility capabilities continue to expand
- Southport Facility capabilities continue to expand with installation of new high volume production equipment and additional licencing activities
- Significant inbound interest received for extraction and bottling of oils and secondary packaging of dried flower with purchase orders expected to soon be settled
- Tetra Health recorded its best month by patient consults in March 2021, with the second best also being in Q1 2021 (January 2021)
- Successful launch of first in-person Tetra clinic, with further launches targeted for Q2-Q3 2021 in New South Wales, Queensland, and Victoria
- Significant reduction in net cash used in operating expenses of 23% over Q4 2020
- Cash receipts from customers growth of 43% compared to Q1 2020 to $1.76 million
- Strong reportable cash position at end of quarter of $4.62 million
Epsilon Healthcare Limited (ASX:EPN) reports on its activities and provides its Appendix 4C for the quarter ended 31 March 2021.
Jarrod White, Group Chief Executive Officer of Epsilon, commented:
“I am pleased to report the success of the initiatives which were implemented throughout the last quarter of 2020 that are now scaling the offering of the Epsilon Group of Companies to be seen as a true market participant in the Global Medicinal Cannabis landscape.
“In addition to putting in place material cost reductions we have been successful in materially increasing the volume of requests for pricing and quotes for purchase orders which is aligned with our strategic vision to place the Southport facility as a true toll manufacturer and essential industry participant to the Medicinal Cannabis sector.
“Combined with Tetra’s success in increasing its own scale and distribution in that same market I am pleased to report the growth and signal the overall positive direction for Group as a whole in continuing to execute on these core areas which are essential to scale our Group’s operations into a stronger business during our new 2021 financial year.
Southport Expansion and Capabilities
Following the strategic review of the CEO and COO at the Southport Facility, the Company has completed the installation of further new equipment, including a conveyor system for the filling and torquing of cannabis oil bottles in a production line. This equipment is expected to commence operating within the next week, following Therapeutic Goods Administration inspection this week.
This equipment will significantly increase the Company’s production throughput of finished product for sale as TGA and EU GMP compliant medicine for Australia and export markets.
The Southport Facility is additionally in the final stages of validation and licencing to enable the Company to commence offering primary and secondary packaging of dried flower under its TGA GMP Manufacturing Licence, for which the Company has received significant inbound demand. Equipment to facilitate this production line, including securing an induction sealer, has been completed.
The Company expects to receive final binding purchase orders for these production lines within the next month, and will provide further updates as these are secured and production under them commences.
Vision and Mandate for the Executive Team
Now with a leaner operation, the primary task for the management team is to complete on existing discussions with partners to secure strong forward orders for the Southport Facility, develop a product pipeline for the next 12-24 months, and complete on a number of key corporate initiatives currently in negotiation. The Board of Directors are confident that this will be achieved over the coming months.
Steven Xu, Chairman of Epsilon commented:
“Since their appointment, the Board has worked very closely with the Chief Executive Officer and Chief Operating Officer as they worked to refocus the Company towards high value pharmaceutical manufacturing and healthcare, taking advantage of our world-leading production capabilities. We’re looking forward to the months to come, and seeing both the CEO and the COO deliver on the corporate initiatives in development which will see further significant transformative change in the Epsilon business”.
Tetra Health Achieves Record Month and Quarter
Over Q1 2021, the Company’s clinic business, Tetra Health, recorded two of its best ever months by number of initial patient consultations – March 2021 followed by January 2021. The Company expects this growth to continue, primarily driven by increased patient demand for dried flower products and increased patient awareness of medicinal cannabis accessibility.
Additionally, in March 2021, the Company launched its first Tetra Health in-person clinic.
As the patient is seeing a doctor in person, the patient is able to access Medicare rebates on their treatment making the out-of-pocket cost similar to current telehealth patients whilst increasing per-patient revenue for the Company.
The Company is looking to expand this model across other sites in Victoria, as well as launching in New South Wales and Queensland in the coming months.
Notwithstanding the scale back of costs the Company has also continued its strong growth in revenue, recording a 43% increase in cash receipts of customers to $1.76 million in Q1 2021 against Q1 2020.