Hello, and welcome to the Life Sciences Virtual Investor Forum. On behalf of OTC Markets and our co-host, Zacks Small Cap Research, we are very pleased you have joined us. The first presentation of the day is from Avicanna. Please note you may submit questions for the presenter at any time. You can also view a company's availability for a one-on-one meeting by clicking Book a Meeting. At this point, I am very pleased to welcome Aras Azadian, Chief Executive Officer of Avicanna, which trades on the OTCQX Best Market under the symbol AVCNF, and on the TSX Big Board under the symbol AVCN. Welcome back, Aras.
Thanks for having me. It is a pleasure to be here, and thank you for the audience for listening in. My name is Aras Azadian, CEO founder of Avicanna. I have been in this role for 10 years now. Here to tell you the story of Avicanna. We are a company that is focused on science, focused on evidence, and really the therapeutic benefits of cannabinoids, from a strictly medical and pharmaceutical application. At a very high level, Avicanna today is a commercial stage medical company generating prescription medicine in terms of medical cannabis products, predominantly in Canada, expanding internationally. We are also focusing on the clinical development and pharmaceutical pipeline of tomorrow. We do have an extensive pharmaceutical pipeline that is going through various studies that I will expand on as well. We operate really in four commercial units or four commercial pillars.
Main one is RHO Phyto, which is our medical portfolio or medical formulary. These are all non-inhaled, advanced, and science-based formulations that are utilizing cannabinoids with advanced drug delivery systems. This includes about 60 SKUs in the Canadian market alone, and again, internationalizing. This is dispensed through various international channels in Canada, but including mymedi.ca, which is our online medical cannabis care platform. It is essentially an online pharmacy, patient support, and medical affairs platform that revolves around insurance adjudication and clinical support for patients. We have our pharmaceutical pipeline, which I will allude to, and these are various drugs in different stages of clinical development, one of which is in phase II. We have our raw material or ingredient division that is focused on supplying and supporting Avicanna's medical and pharmaceutical pipeline globally.
The company today is, as I mentioned, in commercial stage across these four pillars, over 60 SKUs now in the Canadian market and international. We have internationally have had transactions in over 20 markets where we only operate with where it is federally legal. This is why we are currently inactive in the U.S. as we await for U.S. rescheduling to take place. Our claim to fame really is our scientific platform. We own all the intellectual property in terms of drug development, portfolio formulations, finished products, drug candidates. We conduct the clinical trials through the leading academic and clinical institutions in Canada. We have had the opportunity and the pleasure to take advantage of the regulatory framework in Canada to work with key opinion leaders, the major players.
Originally, we were part of a Johnson & Johnson incubator, so we've had mentorship from senior J&J executives, which is where the scientific platform was originally accepted. But then through the academic and clinical partnerships in Canada, we've been able to advance that substantially higher. I'll quickly go through the business pillars. RHO Phyto, as I mentioned, is our medical cannabis portfolio. This is really a formulary. This is really a toolkit for physicians to then decide which products and what cannabinoid ratios of CBD, THC, CBN, or CBG are most appropriate in what delivery form for what patient. I'll give you some examples. For a patient that is suffering from neuropathic pain or acute pain, likely a fast onset or a quick-acting THC product is going to provide immediate relief.
For a different patient that wants to stay asleep, a CBN and THC formulation that's sustained release might be better for sleep. You might have a patient that's suffering from osteoarthritic pain. A transdermal gel that delivers the cannabinoids deep into the joints and muscles might be the right one. The point of RHO Phyto is that this proprietary portfolio of products that's been designed, developed, commercialized, optimized through 10 years of experience in Canada, is now the most comprehensive portfolio for medical cannabis care. It's designed to allow patients across the planet to benefit from cannabinoid-based medicine for a range of clinical indications.
These products, as I mentioned, are offered through prescription in Canada or through medical authorization in Canada, and it's part of our early-stage commercialization that has resulted not only in significant revenue, it's allowed the company to achieve break-even status while we fund our own pharmaceutical development of tomorrow. This has also allowed us to learn a lot about what products, what formulations are working for what clinical indication. A few weeks ago, we launched a sub-brand of RHO Phyto under the QUIX nanotechnology. QUIX is a proprietary nanotechnology that we've developed that has now been patented, is going through patent, the further patent development that allows us to create little nanoemulsions or nanoparticles of cannabinoid-based formulations that allows them to be faster in terms of onset, enhance bioavailability, enhance stability, but more importantly, provide patients for a substitute or an alternative for inhalation products.
We believe in harm reduction. We believe in providing patients with accurately dosed fast onset formulations and products, which you can see in the form of QUIX, that allows them to reduce or eliminate combustible or inhaled products where they need fast onset. Quite excited about this portfolio. In Canada, it's already commercial on the MyMedi platform and launching within the next few weeks across other medical platforms as well. We believe this portfolio is in line with the evolution of cannabinoid-based medicine and the need for standardized advanced formulations, again, to reduce or eliminate combustible products. This is part of our pipeline developments. Over the next 3 to 4 quarters, we will continue to provide and commercialize more advanced formulations. The way we conduct our development is R&D is in-house.
We conduct preclinical work, and then once the products are ready for commercialization, we test them in the Canadian market, where we test them across various medical channels, including our own. Some of those products then translate and transition into pharmaceutical pipeline. Some of those products are then eliminated. Some of those products are then enhanced in terms of marketing and commercial efforts across other platforms and ultimately internationally. For us, really, Canada is a sandbox in which we've developed, again, what I believe is the most complete medical cannabis care platform. In Canada, we have now over 170 commercial listings with nearly 60 SKUs across eight different medical platforms, and we do so with 10 manufacturing partners. Avicanna is not a licensed producer. We're technically not a cannabis company, but we are a biopharmaceutical company, and we operate in a very asset-light model.
In addition to RHO Phyto, we built what is mymedi.ca. MyMedi was built on the acquisition of Medical Cannabis by Shoppers Drug Mart. For the Canadian folks, they would know who Shoppers Drug Mart is. For the U.S. folks, this is the CVS or Walgreens of Canada. They had a medical cannabis division that we acquired. Through this acquisition, we basically obtained the large patient population, the patient support programs, the insurance and clients, which includes private and public payers. From there, we added the Avicanna medical affairs, a more scientific background, and have now turned MyMedi into what I believe is the most complete medical cannabis care platform. In simple essence, MyMedi is an e-commerce pharmacy and patient support program.
We have pharmacists on the phone that are providing basically patient support, dosing, titration, treatment planning, and those same pharmacists are then helping those patients with their overall care. MyMedi operating as a pharmacy also provides a range of products and portfolio. The major six pillars of the operations of MyMedi includes the portfolio, which we've optimized throughout the years. The digital pharmacy and e-commerce, which I just covered. Patient support. Again, this ranges from treatment planning, follow-ups, integration with the healthcare institutions, and care. Medical affairs. This is education and training of the medical community, real-world evidence, clinical studies. Integrated care partnerships, something we announced in the last few weeks. This is us embedding MyMedi into the current standard of care. As an example, only about 1% of the Canadian population today is benefiting from medical cannabis through HCP involvement. We've seen the data.
Having a healthcare provider involved in the patient journey when it comes to cannabinoid-based medicine is absolutely important. We're seeing better results. We believe that our pharmacists and the healthcare providers in Canada being part of that journey is going to be critical to expand this patient population, but also to improve patient care. For that, we are now integrated into existing institutions, whether that's hospitals, pain clinics, or other institutions that are providing other types of care. MyMedi and what we're providing with Avicanna is going to be the extension of that care. It is a nationwide program. Again, from a strategic perspective, it's direct engagement with the medical community. We've established the credibility that we have in Canada. We believe a lot of that is very easily translatable to the United States.
We hope that rescheduling does take place and a federal legislation is enacted that allows us to really take the learnings that we had from RHO Phyto, MyMedi, our level of care, which again, I believe is globally leading, to the United States, where we have a substantially larger market, especially when you think about veterans, pain patients, sleep, major indications and comorbidities and symptoms that we believe cannabinoid-based medicine has a profound role in. We provide a lot of education training. I mentioned that Avicenna Academy is an academy we established. It's essentially a digital platform for training, courses, modules on various indications, various treatment styles, and this is also now being further incorporated to protocols. We're providing physicians and patients with not only care protocols, but indication-specific protocols on how to prescribe. How does this translate into pharmaceutical?
Taking our learnings from our medical proprietary medical portfolio and combining that with the medical care platform that we've established with MyMedi has given us real-world evidence and understanding of which products, which formulations, doses, and ratios are working for what type of patient cohorts. This has led into substantial clinical observational real-world evidence data, some of which has already been published, for example, in the Canadian Journal of Pain recently. It is helping us to optimize and enhance our pharmaceutical pipeline, which I will now allude to. In terms of our pharmaceutical pipeline, we have six major candidates that we are progressing quite rapidly within the Canadian infrastructure, and we're doing this with essentially a bootstrapped budget. Just from the revenues that we're generating from medical cannabis, we are again near breakeven in the first half of the year.
We expect to be at a positive in the second half of the year, and we are doing that while we're funding clinical development. One of the major reasons why we're able to accomplish that is the credibility and the support that we have from the Canadian academic and clinical community that has supported the development of these trials through grants, through Canadian government grants. As such, my most exciting project that I'm the most excited about is our current phase II trial that is being conducted with Toronto General Hospital and UHN. This is a randomized controlled trial on osteoarthritic pain, where we are doing a crossover study with two cannabinoid-based formulations, one CBD and one THC. The THC version of that capsule is also in a phase I study with the University of Calgary for PTSD. Some of our other drug candidates are targeting dermatology indications.
Some are targeting chronic pain. We have one that has already been approved, called Trunerox, for epilepsy in Colombia, specifically, where we expect to expand that into other South American markets as well. What you see here is a quite advanced pharmaceutical pipeline that is really built on the company's intellectual property, on the company's clinical development infrastructure, but also on the practical learnings we've had on the medical cannabis side in which we are seeing, again, what is really working. As we advance these trials, we're going in with a higher level of confidence that they're going to be successful, and we are in a position that we expect to be able to conduct these studies with more pharmaceutical partners, particularly after the U.S. rescheduling of cannabinoid-based medicine.
If that does take place, we expect mid to large pharmaceutical companies to be able to actually proceed into the development of pharmaceuticals, and we have saved them 10 years with this portfolio, in my opinion. I talked about this study. Quite excited about the phase II clinical study. This is led by the former president of Canadian Pain Society and the head of UHN, the most important medical institution here in Canada, Department of Pain, Dr. Hance Clarke. This study started early this year. We expect to have early readouts as early as early next year. This is progressing well. The phase II study is conducted with a positive signal. We expect to then proceed it to a phase III. This is quite advanced in terms of drug, and it is done within Health Canada randomized controlled trial standards.
This is a Health Canada-approved study, which is in line with future FDA IND-level studies that we look to conduct. A quick look at our raw material division. We actually don't cultivate in Canada. We are not a licensed producer today in Canada. We actually source our raw materials in terms of the cannabinoid that goes into our medical and pharmaceutical products around the world, with the exception of Canada, out of our operations in Colombia. We have a joint venture with one of the world's largest organic agriculture companies in Colombia, in which we are producing CBD, CBG, and THC biomass that we are extracting into active pharmaceutical ingredients. We have the capacity to supply ourselves, and we are also supplying other pharmaceutical companies around the world. Today, there are four drugs, four pharmaceutical forms of cannabinoids that have been approved using our raw materials.
We believe this combination of cannabinoid-based drugs, formulations, intellectual property, plus a low-cost organic supply of the natural botanical active ingredients, is ultimately going to provide Avicanna with not only entry barriers, but massive competitive advantages when it comes to pricing. This is going to be part of a long-term strategy. We have been active in Colombia for eight years now. To date, we have exported these raw materials into 22 countries. Pretty excited about the potential as this further materializes, and this raw material division is now turning into its own profit center by supplying other companies as well. This is just a small roadmap of the countries we so far have had commercial activity. This includes all of the continents in the world, 24 international markets.
As more and more markets liberalize around the world and allow cannabinoid-based medicine or pharmaceuticals, Avicanna is in the forefront of that to deliver, again, our proprietary products. We think this is quite exciting because the evolution of cannabinoid-based medicine, and from a regulatory perspective, the evolution around countries is towards the medicine. We are very well positioned to be able to tackle a substantially larger market. I always say I don't look at cannabinoid-based medicine as a segment or a category. I look at the market opportunity as pain, sleep, anxiety, neurological disorders, and various clinical indications or symptoms that we are able to support with our products. A lot of that, again, validated, but more so developed and optimized in Canada. In terms of our scientific platform, I will go quickly here. We own all the intellectual property.
For almost 11 years now, we've been developing patents, formulations, preclinical methodologies, analytical, bioanalytical methodologies to develop what I believe is the most scientifically advanced platform in the cannabinoid industry. This is done in-house with our own clinicians and researchers and scientists and formulation scientists, but also with the most important academic and clinical institutions in Canada. For some of the Canadian folks, University of Toronto, Leslie Dan Faculty of Pharmacy, UHN, The Hospital for Sick Children, these are the top institutions. For the American folks or international folks, just important to understand, Canada is the first G7 country to legalize cannabis and allow this level of research. We've had pioneers in the form of scientists and clinicians that have wanted to collaborate and operate with Avicanna to develop the intellectual property, to generate the evidence, especially to address unmet medical needs.
We're very proud, very happy with what we've accomplished with the Canadian medical community, and we look forward to expanding those relationships into the U.S. In terms of financials, we're just showing 2025 here. The revenue for 2025 was about CAD 25 million. We're seeing consistent improvements in our gross profits, and this is really through improvements of operations, but it's also through improvements in terms of the portfolio. We are selling more of our own products across various channels, including mymedi.ca. As we see more and more of our products and portfolio, particularly the QUIX portfolio launch in Canada, as we see internationalization of our medical products, we expect these revenues are going to take Avicanna into cash flow positive stage, not just EBITDA positive, and we are doing so while we're trading at all-time lows.
In terms of the stock, it's worth mentioning, and this is public information, the company's trading at all-time lows. We had our largest shareholder last year do a complete exit within the marketplace, and that has depressed the stock completely to the stage where it's trading today. We believe it's an incredible opportunity given the major catalysts that's there. There's a breakdown of our revenue. As you can see, majority of the revenue is coming out of Canada. MyMedi, as an online pharmacy medical platform in which we are selling a lot of our own products, those numbers are both growing, more so specifically on the Avicanna proportion of sales. Other Canadian sales are looking better. International is very early stage, but as you can see, but imagine the potential of RHO Phyto in the international markets, which we're quite excited about.
In terms of pharmaceutical pipeline, this is essentially pre-revenue. Trunerox has had a soft launch for about two months in Colombia as our first epilepsy drug. But again, we expect those to expand. More importantly, we believe in the near term, pharmaceutical revenues are going to be something that we're going to monetize on in terms of licensing fees, co-developments, et cetera, particularly, again, as U.S. rescheduling or if U.S. rescheduling does come into place. I'll wrap up with just the board and management. A very tightly held company in terms of cap tables, but also very tight management and board. Very happy with the group we have today. A lot of the management team have been with us for a minimum of five to six years.
We are, in many ways, pioneers by taking this dual approach of medical to pharma, while avoiding the recreational sort of combustible side of the industry. I do argue that we are industry leaders. I do believe that we are in many ways misunderstood, as we are put into a cannabis bucket rather than a biopharmaceutical company. There are very few biopharmaceutical companies with our market cap that has the type of revenue and upside potential that we have. This is why, as of this week, we are starting to present and get out in the audience. So, appreciate the OTC team for inviting us to also speak. I see a number of questions here, so I will use the rest of the time to answer the questions. If there are any other questions, feel free to put them in there.
So first question is, what is the sequential growth of proprietary product sales that we have had? I guess that is a Q2 figure. So that is really us advancing and growing our fundamental business, and our fundamental business is our own Canadian medical products. What we are seeing is when we acquired Medical Cannabis by Shoppers Drug Mart, the online platform, Avicanna represented about 7% of the sales. By the end of Q2 this year, we were at about 27% or 28%. So this is a trend that is continuing to grow. What is driving that trend is the medical affairs, the clinical protocols, the treatment planning, all of the work that we are doing in terms of hand-holding both the patients and the medical community to drive them towards what are the best products for them. In many cases, those products happen to be Avicanna's.
As we launch more and more advanced products, like QUIX a few weeks ago, we are providing patients, and again, the medical community, with better tools and better options for cannabinoid-based treatment rather than combustible and inhalable products. A trend I want to allude to, which I think is quite important, is when we took over Medical Cannabis by Shoppers, flower represented about 60%-70% of the sales. Today, that is less than 30%. So we are seeing a different patient population. We are seeing different patient population that are actually using standardized cannabinoid-based products rather than, again, combustible or inhaled products. Good question. how are you thinking about monetizing the clinical data real world evidence opportunity emerging from the MyMedi ecosystem? Love this question. Look, there is a significant amount of intellectual property that is there. For Avicanna internally, that data is being used every day.
We are using that in portfolio design. We are using that in sort of deciding what products we can put into the market for what clinical indication, again, cohort or symptom. Then we are then combining that into our medical affairs and patient support assets. We are using that for clinical development of our pharmaceutical pipeline. So we work with very tight budgets, so if we are allocating resources into what we believe is a priority, we are doing that with this insight and data. I believe with the United States opening up and more and more liberalization around the world and more and more focus on cannabinoid-based medicine opens, MyMedi on its own can be monetized to provide insights and data to pharmaceutical companies that want to target a specific indication. I think it is going to help us to generate licensing revenue in that form.
I also think MyMedi as a whole can be monetized by expanding into other international markets. I argue that medical cannabis is not a product. Medical cannabis is a service. Recreational cannabis is a product. So what does that mean? I believe medical cannabis needs to be provided with patient support, with medical affairs, with an online platform such as MyMedi, and we believe the platform as a whole can be also monetized and expanded internationally, particularly, again, in a market like the U.S. which customer segment is showing the earliest traction for programs, hospitals, clinics, insurance, multidisciplinary care networks? Another very good question. We have been in the hospital system for many years. Specifically the Sunnybrook Cancer Centre, which is one of the most important cancer centers in North America, where we are actually dispensing within the hospital pharmacy.
An oncology patient picks up their chemotherapy medications, are also picking up cannabinoid-based capsules or topicals. The point of that was to avoid them to walk into a dispensary. So we have learned a lot from that. But those are not high revenue or high velocity channels. What is higher velocity and higher revenue channels for us is the integration and incorporation into more of the multidisciplinary care clinics, specifically with aims such as pain. By the time a patient basically is at a pain clinic, that is probably the third or fourth line treatment. That means their general practitioner or the family physician was not able to help them. In those instances, there is a high likelihood that cannabinoid-based medicine can be helpful. So the same way a pain clinic can provide several services, physiotherapy, different drugs, and different medications, they can now offer, through MyMedi, cannabinoid-based medicine.
This is something that we are integrating. We are doing the administrative work. We are helping them with not just education and training, but we are actually doing the treatment planning for their patients. This is something that I truly believe will grow the size of the pie. It is an integration that I believe we are the only ones that are qualified to conduct here in Canada, and then hopefully replicate into other markets. I am trying to read another question. Oh, there is a lot. How does QUIX compare to existing fast emulsion beverages/edibles in Canada and the U.S.? Please discuss that opportunity for QUIX." Good point. So QUIX is a nanotechnology, again, designed for a fast onset.
If anyone here has had any type of edible or any type of consumed ingestible cannabinoid experience would know that cannabinoids are hydrophobic, they are slow, it is inconsistent, and it is very difficult both for the feeling or the effect to be reproducible. QUIX essentially addresses all of those gaps. So it is a fast-acting technology that originally was a liquid form that we have now translated and advanced into capsules, gummies, and drops, and beverages. What is different between QUIX and the other formulations that are in the U.S. specifically is that not only is it proprietary, patented, but we have the science and evidence to back up the claims that we are making.
What we say is a nanoemulsion, the pharmacokinetic profile, the data that we have to substantiate that, the stability that we have that demonstrates even in beverages how it is quite stable is what is different from QUIX and other formulations. Now that data is being further expanded. We are conducting further studies to demonstrate that data within the final forms that are now in the Canadian market as well. In terms of QUIX, yes, it is going to be, in my opinion, as a portfolio, quite successful. We have seen incredible signs already in the Canadian market. But we believe the technology itself can be then implemented into a much larger market opportunity in more of a licensing model in what I like to call the Intel Inside model.
For that, we are actually in discussions with several companies in different parts of the world as well because, again, the learnings that everyone has had and the experience we have had with, obviously, the technology is very, very positive, and we believe the market is much larger for Avicanna to try to address alone. What are you hearing from healthcare professionals about the unmet need for rapid-onset, well-characterized base medicine? I mean, that is a consistent gap within the market, and that is specifically what we are addressing with our portfolio for many years now. Again, we are learning through MyMedi.ca, where are the gaps? What is working? This is where the rapid-onset technology, QUIX. We also have a powder version called PwdRx that is tunable. Not only is it fast, we also have a very slow sustained release version. That is what physicians want to see.
Physicians want to see standardized medicine that is dosed, that allows them to tell a patient, Mrs. Johnson, start with 2 mg, go to 5 mg. They want to do that. Physicians do not want to prescribe small joint versus big joint. We know that. What we are doing really here is we are legitimizing cannabinoid-based medicine into the standard of care by providing physicians with what they know. The second stage of what we are providing with our formulations is evidence. By demonstrating stability, pharmacokinetics, bioavailability, we are demonstrating a level of credibility that really has not been presented by the cannabinoid-based industry thus far. A lot of that is due to regulatory limitations, for example, the United States, but that is what has given Avicanna the edge, right?
We are ahead in that, and I think that is helping Avicanna to regain confidence with the medical community, for cannabinoid-based medicine as a whole, and I believe is why we are seeing our proportion of sales increase. I believe once we can unlock international markets, again, particularly in the United States, it is quite exciting. How close are you to announcing first hospital specialty clinic or healthcare network implementation under the new integrated healthcare program? We are already in two of the main, I would say, actually two of the largest hospitals in Canada in terms of Sunnybrook Health Sciences Centre, University Health Network, Toronto General Hospital. This is already integrated. This is where we have learned from. We started sort of at the top with the most prestigious institutions possible, and we are now in the position where we are expanding that into clinics.
We're currently into three pilots with three different companies that have a specialized care platform. Some of these are not material transactions that are not going to be press released. Some of them might be. As they advance, we will be putting the information out. Today, we are active. This integrated healthcare model is working. We are optimizing it. We are trying to enhance the protocolization of the process in which we don't have to train, for example, in one institution, 70 physicians. We can give them the right protocols and process so that our team is really carrying that burden. Again, I'm very excited about the opportunity of growing the size of the pie here. What is the most important clinical regulatory catalyst investors should anticipate over the next 12 months? U.S. reschedule.
I mean, look, I know there's a lot of friction between the Canadians and Americans these days, but at the end of the day, we're neighbors. Patient populations are quite similar. The healthcare system is quite similar. What we've generated here, the proof of concept we've developed for Avicanna is easily replicable in the United States, and we look forward to doing that. The one thing that I do respect about the medical community is that they respect evidence. So us generating evidence and going to the United States with USPTO patents and evidence is going to allow us to open the door and actually grow that market as well and provide the credibility that the market requires. I think we're out of time. I know there's a lot more questions. I apologize for that, but I want to just thank everyone for the time.
If anybody wants to reach out to me at aras.azadian@avicanna.com. I look forward to continuing the conversation.