MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) has sold its Australian facility and will move all manufacturing to the Canadian facility.
On Wednesday, the pharmaceutical company specialized in cannabinoids said it entered into a $6.2 million ($6.9 AUD) share purchase agreement with OneLife Botanicals PTY for the sale of its subsidiary MediPharm Labs Australia Pty Ltd. (MPLA).
The agreement is subject to conditions and will close within 90 days and includes the assets of MPLA, specialized licensing, operational knowledge, and its Australian and New Zealand customers. All international contracts outside of Australia and New Zealand will remain with MediPharm Labs and be serviced from its Barrie GMP facility.
In July last year, the company received a pharmaceutical Drug Establishment License from Health Canada, which is recognized in over 50 countries as part of the Pharmaceutical Inspection Co-operation Scheme.
The company said that after reviewing its international manufacturing platform it identified “significant potential savings” in moving all domestic and international manufacturing to the Canadian facility.
MediPharm CEO David Pidduck said the sale represents a major milestone for MediPharm Labs as it continues to focus on rightsizing the business to achieve profitability.
“As we look to maintain our strong cash balance, this transaction paired with corporate restructuring completed in June 2022 should allow us to reduce our quarterly burn rate as we improve sales,” he added.
“I want to personally thank our Australian team. This group of professionals are trailblazers in the Australian and international medical cannabis market, achieving major milestones such as multiple customer product launches and our first deliveries to Germany. OneLife Botanicals is gaining one of the most capable medical cannabis manufacturing teams in Australia.”
OneLife Botanicals CEO Andrew Grant said the purchase aligns and expedites the strategic aim of the organization to produce high-quality medicinal cannabis products by integrating manufacturing into the end-to-end supply chain.
“The integration of a fully operational facility brings forward our objectives to take our products and brand to the market.”
Grant said the company did extensive research in considering this acquisition and is highly confident about the capacity of the manufacturing facility operations and its accordance will all compliance and quality standards.
“The integration of this business with our existing cultivation facility facilitates savings in capital investment, access to operational efficiencies and establishes us as a significant supplier in the Australian medicinal cannabis industry.”