Zelira Therapeutics closes out FY21 with record cash receipts ahead of product launches

Zelira Therapeutics Ltd (ASX:ZLD, OTCQB:ZLDAF) has capped off the 2021 financial year with record cash receipts as it looks ahead to product launches later this year. The cannabinoid medicines developer finished the June quarter with A$311,000 in cash receipts — up 38% on the March quarter’s A$225,000 result. In today’s quarterly report, Zelira chalked up the record receipts to sales growth across its SprinjeneCBD toothpaste line, clinical trial management and product licensing fees from partner Levin Health Limited. Zelira ended the June quarter with A$4.97 million in the bank to support its operations heading into the new financial year. Building on momentum Zelira Therapeutics managing director Dr Oludare Odumosu said: “Our company continues to grow revenues with its strongest quarterly cash receipts from customers reported since its inception and 38% growth on the previous quarter. “This growth demonstrates our ability to ramp up commercialisation with a focus on generating revenue from both over-the-counter (OTC) products, as well as our prescription licensing and clinical trial programs. “Zelira is well-positioned to build on the momentum of the past six months and further accelerate our progress in 2021 as we launch new products and expand into new geographies.” The SprinjeneCBD toothpaste. Future activities Following a record-breaking June quarter, Zelira is progressing additional licensing discussions for its HOPE™ and Zenivol™ lines in the US. The ASX-lister is also looking to conclude ongoing negotiations and expand the distribution of these products into other global markets, including Germany and the United Kingdom. Zelira’s commercialisation program is expected to prime the company to launch a suite of new cannabinoid-based products next quarter, with these expected to drive additional revenue growth as the company’s product portfolio continues to expand. Overall, Zelira continues to focus on its clinical activities in a bid to develop and evaluate the efficacy, safety and tolerability of its proprietary formulations and products. Financial performance Coming off what was previously a record March quarter, Zelira beat its cash receipts result yet again, with more than A$300,000 brought in from customers over the period. Moreover, the combined cash receipt tally for the second half of FY21, coming in at A$536,000, is five times greater than the total cash receipts recorded in the financial year’s first half. Looking ahead, with a suite of new products planned for launch next quarter, believes it is poised to generate further revenue growth via its diversified prescription and OTC income streams across multiple territories. Zelira expensed A$215,000 on research and development (R&D) over the June quarter, bringing its total R&D spend for the financial year to A$1.92 million. Net cashflow for the last three months of FY21 totalled A$1.5 million. Commercialisation accelerates One of the June quarter’s key commercialisation opportunities involved Zelira’s HOPE™ range of autism spectrum disorder products, which are now available for sale to approved dispensaries in Washington, D.C. — a state that has reciprocity with 32 others in the US. Since May 2021, Alternative Solutions LLC, a licensed grower, manufacturer, and distributor of medical cannabis products, has distributed Zelira’s HOPE™ range of products in the US state. Zelira’s HOPE range will be made available in all Washington, D.C. dispensaries by the end of 2021. Outside of the US, the cannabinoid medicines developer is preparing to launch its CBD toothpaste in the UK via an exclusive distribution agreement with Health House International Limited. In June 2021, Zelira signed a five-year exclusive distribution agreement with its fellow ASX-lister in a move that expanded its SprinjeneCBD toothpaste brand beyond the United States. Health House will purchase and exclusively distribute a minimum US$250,000 of Zelira’s CBD toothpaste over the first six months of the agreement, and a further US$250,000 over the second six month period. In terms of clinical work, Zelira has also engaged in a licensing and managing agreement with Levin Health to conduct a chronic pain treatment trial on retired athletes. The licensing and project management agreements utilise Zelira’s leading intellectual property portfolio and medicinal cannabis trial expertise alongside Levin’s advisory team and network of retired professional athletes. Research underway In addition to its commercialisation work, Zelira is also conducting research on a number of fronts. Last month, in collaboration with Curtin University, the ASX-lister developed a new technology that improves the delivery of cannabidiol-based drugs into the brains of mice by up to 40 times. The technology has the potential for cannabinoid-based therapies to treat neurological disorders such as Alzheimer’s disease, multiple sclerosis, and traumatic brain injury Also in June, trial results from a study on Zelira’s Zenivol® in chronic insomnia patients were published in peer-reviewed journal SLEEP®, the benchmark international journal for all sleep-related conditions. Earlier this month, the cannabinoid medicines developer secured Institutional Review Board (IRB) approval for a pain observational trial to take place in the US. As a result, Zelira announced it would test its patent-protected product against a big pharmaceutical company’s multi-billion-dollar revenue drug. Ultimately, it’s hoped the trial will measure how effectively Zelira’s offering can treat neuropathic pain compared to a major, established pharmaceutical drug.