Welcome to Medicare Inc.'s Earnings Conference Call for the quarter ended December 30, 2025. My name is Holly, and I will be your operator for today's call. At this time, all participants are in listen-only mode. Before we proceed, I would like to remind everyone that this presentation contains forward-looking statements relating to future results, events, and expectations which are made pursuant to the Safe Harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which could cause the company's actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, among others, those described in the company's most recent annual information form and Form 20-F. Later, we will conduct a question-and-answer session. Please note that this conference call is being recorded, and today's date is August 21, 2025.
I would like to turn the conference call over to Dr. Albert Friesen, Chief Executive Officer of Medicare Inc. Please go ahead, Dr. Friesen.
Thank you, Holly, and good morning to all on the call. We appreciate your interest and participation in today's call. Joining me today on the Q2 2025 call are Dr. Neil Owens, President and Chief Operating Officer, and Haaris Uddin, Medicare's Chief Financial Officer. The net revenue for Q2 2025 was $6.7 million, an increase from the previous year where the net revenue was $5.2 million. The company recorded a net loss of approximately $786,000 or $0.08 per share, compared to a net loss in the previous year of $1.1 million and $0.12 per share. The non-cash items contributing to the loss include amortization, stock options, etc., about the same as the net loss.
In addition, Medicare also invested $641,000 in research and development during the quarter, underscoring our commitment to advancing innovative therapies such as the Phase III trial for Medicare's drug MC1 for the treatment of PNPO deficiency and delivering long-term value to patients and shareholders. We recently added a fifth focus, that being the development of a novel drug related to MC1 with significant market potential to further build long-term value for shareholders. Just to remind us, the five focuses are holding sales and profits of AGGRASTAT, growing ZYPITAMAG revenue and profits, growing MARVEY Drug, the pharmacy business and the online pharmacy, the development of MC1 for PNPO deficiency, and the new chemical entity related to Medicare's historic drug development with large market potential. Now I'd like to turn the call over to our CFO, Haaris , to review and provide some color on the Q2 financials.
Thank you, Dr. Friesen. A couple of quick items to note before I start. All dollar figures are in Canadian dollars unless otherwise noted by each presenter. As a reminder, you can obtain a complete copy of our financial statements for the quarter ended June 30, 2025, along with previous financial statements on the Investors' page of our website. In addition, a copy of all financial statements and management's discussion and analysis can also be obtained from cdrclub.ca. I will now provide some key highlights of our financial performance for the three-month period ended June 30, 2025. Total revenue for the quarter was $6.7 million compared to $5.2 million for the quarter ended June 30, 2024. Net revenue earned from AGGRASTAT during the current period totaled $1.7 million, a slight decrease from the prior year where net revenue from AGGRASTAT was $1.8 million.
The decrease in AGGRASTAT revenue during the current period is a result of a lower volume of units sold as a result of increased competition from generic TYR5 and hydrochloride. Net revenue earned from ZYPITAMAG to the traditional insured channel during the three-month period ended June 30, 2025, totaled $751,000, which is a slight increase from the $654,000 net revenue earned during the same period in the prior year. The increase in ZYPITAMAG revenue during the three-month period ended June 30, 2025, can be attributed to an increased utilization of the product through insurance formularies during the current quarter. It is important to note that ZYPITAMAG sales through MARVEY Drug are excluded from this number. For MARVEY Drug, net revenue during the current quarter totaled $3.1 million, an increase from the $2.7 million earned from MARVEY Drug during the three-month period ended June 30, 2024.
The increase in MARVEY Drug sales during the current period is due to an increased volume of products sold. Net revenue attributable to ZYPITAMAG through MARVEY Drug was $908,000 during the current period, an increase from the three-month period ended June 30, 2024, where ZYPITAMAG sales through MARVEY Drug were $791,000. On March 11, 2025, the company acquired Gateway Medical Pharmacy. Revenue for Gateway Medical Pharmacy for the quarter ended June 30, 2025, was $764,000. In addition, on June 16, 2025, the company acquired West Olympia Pharmacy. Revenue earned from West Olympia Pharmacy during the current quarter was $328,000. It is important to note that the revenue earned through West Olympia Pharmacy during the current period was from its acquisition date of June 16, 2025- June 30, 2025.
The company intends on offering ZYPITAMAG through both pharmacies in subsequent quarters, in addition to other product offerings which have increased revenue at MARVEY Drug. With regards to cost of goods sold, AGGRASTAT cost of goods sold for the quarter ended June 30, 2025, totaled $693,000, an increase from the prior year where cost of goods sold totaled $604,000. The increase in cost of goods sold is attributable to a slightly higher manufacturing cost, a less favorable FX rate, offset by a lower volume of products sold during the current period. ZYPITAMAG cost of goods sold for the current quarter totaled $233,000, a decrease from the same period in the prior year where cost of goods sold for ZYPITAMAG for the quarter ended totaled $353,000.
Included within cost of goods sold for ZYPITAMAG in the current period is $76,000 relating to products sold to customers and $157,000 of amortization of the ZYPITAMAG intangible asset. MARVEY Drug cost of goods sold totaled $1.5 million during the period ended June 30, 2025, an increase from the period ended June 30, 2024, where cost of goods sold totaled $1.3 million. The increase in cost of goods sold at MARVEY Drug during the current period is a result of a higher volume and nature of products sold through both the mail order and e-commerce platform. Gateway Medical Pharmacy's cost of goods sold during the three-month period ended June 30, 2025, was $531,000, and West Olympia Pharmacy's cost of goods sold during the three-month period ended June 30, 2025, was $241,000.
As both pharmacies were acquired during the current year, there was no cost of goods sold recorded for either Gateway Medical Pharmacy or West Olympia Pharmacy during the three-month period ended June 30, 2024. Selling expenses totaled $2.1 million for the quarter ended June 30, 2025, an increase from the three-month period ended June 30, 2024, where selling expenses were $1.8 million. Selling expenses increased in the current period as a result of the acquisitions of Gateway Medical Pharmacy and West Olympia Pharmacy, in addition to higher selling expenses through MARVEY Drug, which is also consistent with the higher revenue recorded through MARVEY Drug in the current period. General and administrative expenses totaled $1.3 million for the quarter ended June 30, 2025, in comparison to $1.4 million during the quarter ended June 30, 2024.
The decrease in general and administrative expenses in the current period is a result of lower professional fees in the current period, in addition to lower share-based compensation expense, which is based on the vesting schedule of previously granted stock options to key employees and directors of the company. Research and development expenses for the quarter ended June 30, 2025, totaled $741,000 compared to $868,000 during the same quarter in the prior year. The decrease during the current period is primarily due to the timing of research and development expenditures relating to each development project the company has currently undertaken, which in the current period was primarily the development of MC1. The company recorded finance income net of $20,000 during the period ended June 30, 2025, in comparison to finance income net of $36,000 during the three-month period ended June 30, 2024.
The finance income recorded during the current period primarily relates to interest income earned, offset by bank charges, interest on the company's lease obligations and holdback payable, and non-cash accretion expense on the company's acquisition payable liability. The company recorded a foreign exchange loss of $49,000 during the quarter ended June 30, 2025, in comparison to a foreign exchange loss of $25,000 during the quarter ended June 30, 2024. The change in foreign exchange loss relates to changes in the U.S. dollar exchange rate during the respective years. Adjusted EBITDA for the quarter ended June 30, 2025, was - $28,000 compared to an adjusted EBITDA of - $514,000 during the quarter ended June 30, 2024.
The increase in adjusted EBITDA during the current period is due to a decrease in operating loss, which primarily related to higher revenue of ZYPITAMAG through MARVEY Drug, in addition to overall higher revenue at MARVEY Drug, in addition to lower general and administrative expenses, in addition to lower research and development expenses offset by a lower revenue of AGGRASTAT and higher cost of goods sold during the current period. As of June 30, 2025, the company had cash totaling approximately $4.8 million, a decrease from December 31, 2024, where the company had $7.2 million of cash held. The decrease in cash balance, the decrease of cash balance of the company is primarily attributable to the acquisitions of both Gateway Pharmacy and West Olympia Pharmacy during the current year. The company does not have any debt on its books.
I want to remind you that there will be an opportunity at the end of today's call for you to ask questions regarding the financial results of the company as a whole. With that, I would like to turn the call over to our President and Chief Operating Officer, Dr. Neil Owens, for some additional commentary regarding our operations.
Thank you, Haaris, and good morning, everyone. I'd like to start with some updates on our ZYPITAMAG business. Total sales of ZYPITAMAG in Q2 2025 were $1.7 million, which was a 21% increase from $1.4 million in Q2 2024. Sales of ZYPITAMAG sold through MARVEY Drug grew by 15% from $790,000 in Q2 2024 to $908,000 in Q2 2025. To grow sales further, we plan to continue to use a field-based sales team as well as prescriber and consumer marketing.
Selling ZYPITAMAG through MARVEY Drug has proven to be an effective approach due to the pharmacy's customer service, the absence of the typical hurdles put in place by insurance companies, and transparency in pricing. In addition, due to removing wholesaler and coverage gap fees, low PBM reimbursement, and product returns, selling through MARVEY Drug provides a much higher gross margin. We've also found that adherence rate for patients taking ZYPITAMAG is more than 40% higher through MARVEY Drug compared to other retail pharmacies. That's because of our service and engagement strategies, and this helps for reducing our attrition rate and increasing revenue. Net revenue through insured channels and the standard retail pharmacy model increased from $654,000 in Q2 2024 to $751,000 in Q2 2025 due to an increase in purchasing from wholesalers and changes in the mix of our insured customers.
Overall, ZYPITAMAG represents a priority for growth through efforts of our sales and marketing team. Further on our MARVEY Drug business, net revenue grew by 15% from $2.7 million in Q2 2024 to $3.1 million in Q2 2025. This is due to an increase in ZYPITAMAG sold through the pharmacy business, as well as generic medication sales, and notably the sales of BRENZAVVY tablets, which is an accessible alternative SGLT2 inhibitor to JARDIANCE and FARXIGA. Medicare is working on leveraging MARVEY Drug's reputation for customer service, unique branded solutions, and national distribution to continue to drive growth. Challenges we've faced include competition and an increase in cost of goods, which impacts our margins. We plan to seek additional partnerships and branded products to offer through our e-commerce website. Recently, Medicare announced the acquisition of Gateway Medical Pharmacy and West Olympia Pharmacy.
These additional pharmacy subsidiaries immediately grow our customer and prescriber base for both ZYPITAMAG and other branded products. Combined, they contributed $1.1 million in revenue in Q2. Additional benefits of these acquisitions include faster shipping times and growing our brand nationally. In terms of our AGGRASTAT business, net revenue fell from $1.8 million in Q2 2024 to $1.7 million in Q2 2025 due to generic TYR5 and competition. Volume of product units sold and revenue in Q2 was consistent with Q1 2025. Medicare remains the only manufacturer of the 3.75 mg format, which is typically administered before the infusion unit. We continue to provide support to our U.S., hospital accounts and plan to remain price competitive in targeted ways.
Medicare's R&D focus is primarily on its Phase III study to seek approval of MC1 as the first FDA-approved therapy for patients with PNPO deficiency, which is a rare pediatric disease leading to seizures and is ultimately fatal if untreated. If successful, use of Medicare's legacy product MC1 could lead to a priority review voucher, which can be redeemed or sold and provide significant value. The FDA granted approval to start enrollment, and so enrollment is ongoing with patients receiving treatment with MC1. Medicare also recently received FDA fast track designation for MC1 for its intended indication, which will facilitate the review of Medicare's FDA new drug application. The Phase III study had its first patient complete the study enrollment period, and we are targeting the end of 2025 to complete enrollment.
Medicare recently announced that it had signed an asset purchase agreement for the acquisition of the patent and intellectual property related to the discovery of new chemical entities that can be developed for therapeutic use. We believe that these new chemical entities hold promise to provide improvements over existing lead compounds in alignment with the treatments of diseases being targeted by Medicare and could provide significant long-term value upon completion of all required preclinical and clinical studies and regulatory approval. Medicare has yet to announce the clinical therapeutic target; however, it has started preclinical testing and API development of the lead compound. Overall net revenue in Q2 2025 was $6.7 million compared to $5.2 million in Q2 2024 due to an increase in ZYPITAMAG and MARVEY Drug revenue and the acquisitions of Gateway Medical and West Olympia Pharmacy.
In part because of higher MARVEY Drug cost of goods and selling expenses, as well as R&D expenses of $741,000 in Q2 2025, we are reporting an adjusted EBITDA of - $28,000 and a net loss of $786,000. Medicare remains debt-free, and to reiterate, the company's short-term goals are focused on growing ZYPITAMAG, growing MARVEY Drug and our pharmacy business, maintaining AGGRASTAT sales, and developing new products. Short-term, seeking the approval of MC1 to receive a priority review voucher, and long-term, the development of new intellectual property for diseases with large market potential. With that, I'd like to turn the call back to Dr. Friesen for final comments.
Thank you, Neil. Medicare's overall revenue continues to increase. This is in part, through a large part, through the acquisition of MARVEY Drug and the pharmacies we just have announced the acquisition of in the last two months. We're still focused on further growing the business and diversifying our revenue and asset base, near-term through acquisition and long-term through R&D, carefully investing to grow our future profitability. My goal and that of our board, management, staff is to continue to build this business with a stable long-term outlook to generate value for our shareholders. I want to express my sincere appreciation to the outstanding team of employees we've been blessed with. Thank you, our shareholders, for continued support and your interest. Holly, I'll turn it back to you for the Q&A.
Thank you. We will now begin the question-and-answer session. If you have a question, please press Star, one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. As a reminder, if you would like to ask a question, please press Star, one. We have reached the end of the question-and-answer session, and I will now turn the call over to Dr. Albert Friesen for closing remarks.
Thank you, Holly, and thank you for all that are on the call. We thank you for the support and interest, and wish you a great day.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.