Sunshine Biopharma Inc. (NASDAQ:SBFM) is a pharmaceutical company that offers and researches life-saving medicines in a variety of therapeutic areas, including oncology and antivirals. The company operates two wholly owned subsidiaries: Nora Pharma Inc., a Canadian corporation with a portfolio of 63 generic prescription drugs on the market in Canada, and Sunshine Biopharma Canada Inc., a Canadian corporation that develops and sells non-prescription over-the-counter (OTC) products.
Company History
The company's history dates back to 2006 when it was incorporated in the state of Colorado as Mountain West Business Solutions, Inc. In October 2009, the company acquired Sunshine Biopharma Inc. in a transaction classified as a reverse acquisition, and the company changed its name to Sunshine Biopharma Inc. and began operating as a pharmaceutical company. In December 2015, the company acquired all issued U.S. patents for its Adva-27a anticancer compound, terminating a previous licensing agreement. In early 2020, Sunshine Biopharma initiated a new R&D project focused on the development of a treatment for COVID-19, filing a provisional patent application for small molecule inhibitors of the main coronavirus protease. The company expanded this project in 2021 to also target the coronavirus papain-like protease.
Nora Pharma Acquisition
On October 20, 2022, Sunshine Biopharma acquired Nora Pharma, a Canadian generic pharmaceuticals company based in the greater Montreal area. Nora Pharma has 46 employees and operates in a 23,500 square foot facility certified by Health Canada. Nora Pharma currently has 63 generic prescription drugs on the market in Canada and is planning to launch 32 additional generic prescription drugs in the remainder of 2024 and 2025. This acquisition significantly boosted the company's commercial operations, with Nora Pharma generating the majority of Sunshine Biopharma's revenues by 2024.
Proprietary Drug Development Program
Sunshine Biopharma's proprietary drug development program includes the following:
1. Adva-27a: A small molecule designed for the treatment of aggressive forms of cancer. The company has paused the IND-enabling studies of Adva-27a pending a review of the results and the possibility of chemical modification of the compound.
2. K1.1 mRNA: Certain mRNA molecules that have shown the ability to destroy cancer cells in vitro, including multidrug-resistant breast cancer cells, ovarian adenocarcinoma cells, and pancreatic cancer cells. The company has concluded an agreement with a specialized commercial partner for the purposes of formulating its K1.1 mRNA molecules into lipid nanoparticles (LNP) for use in conducting xenograft mice studies.
3. SBFM-PL4: A protease inhibitor for the treatment of SARS Coronavirus infections. The company has expanded its PLpro inhibitors research effort by entering into a research agreement with the University of Arizona and has recently broadened its objective to include the development of an injectable drug candidate of a first-in-class PLpro inhibitor to treat SARS-CoV2 and potentially SARS-CoV and MERS-CoV infection.
Business Segments
Sunshine Biopharma operates two main business segments:
1. Prescription Generic Pharmaceuticals Segment: Through Nora Pharma Inc., the company currently has 63 generic prescription drugs on the market in Canada. These drugs span various therapeutic areas including oncology, cardiovascular, central nervous system, anti-infective, and more. The generic drugs are sold directly to pharmacies across several Canadian provinces. During the nine months ended September 30, 2024, this segment accounted for approximately 97% of the company's total revenues. Sunshine Biopharma plans to launch an additional 32 generic prescription drugs in the remainder of 2024 and 2025, further expanding its portfolio and market presence in the Canadian generic pharmaceuticals market, which was valued at $9.7 billion annually.
A notable upcoming generic drug launch is NIOPEG, a biosimilar of NEULASTA. NIOPEG, which received Health Canada marketing approval on April 17, 2024, is a long-acting form of recombinant human granulocyte colony-stimulating factor filgrastim and is indicated to decrease the incidence of infection in patients with non-myeloid malignancies receiving anti-neoplastic therapy. NIOPEG is anticipated to be launched in the Canadian market in Q4 2024.
2. Nonprescription Over-The-Counter (OTC) Products Segment: Sunshine Biopharma Canada Inc. develops and sells nonprescription over-the-counter (OTC) products. During the nine months ended September 30, 2024, this segment accounted for approximately 3% of the company's total revenues. Sunshine Biopharma currently owns four Natural Product Numbers (NPNs) issued by Health Canada, which authorize the manufacture and sale of its in-house developed OTC products including Essential9, Essential Calcium-Vitamin D, L-Citrulline, and Taurine.
Financials
Sunshine Biopharma's financial performance has shown significant improvement in recent quarters. For the nine months ended September 30, 2024, the company reported gross revenues of $25,279,291, a 54% increase compared to $16,412,586 for the same period in 2023. The company's gross profit for the nine-month period was $7,580,345, up from $5,770,971 in the same period of 2023.
For the most recent quarter, the company reported revenue of $8,435,178, representing a 42% increase compared to the same quarter in the prior year. However, the company recorded a net loss of $1,197,803 for the quarter. Operating cash flow for the quarter was negative $1,360,956, while free cash flow was negative $1,877,960.
Despite the increased revenues, the company recorded a net loss of $2.98 million ($13.61 per share) for the nine-month period in 2024, compared to a net loss of $3.26 million ($265.71 per share) in the prior year period. The increased net loss was primarily due to higher general and administrative expenses, which grew to $11.35 million from $9.37 million.
Liquidity
The company's liquidity position remains strong, with $12.21 million in cash and cash equivalents as of September 30, 2024. The company believes this existing cash on hand will be sufficient to fund its pharmaceutical sales operations and research and development activities for the next 24 months, though additional capital may be needed in the future to support further growth.
Other key liquidity metrics as of the most recent quarter include:
- Debt/Equity Ratio: 0.022227088348114356 - Current Ratio: 5.737439540931753 - Quick Ratio: 3.568778863180712
These ratios indicate a strong short-term liquidity position and low leverage.
Risks and Challenges
In terms of risks, Sunshine Biopharma faces challenges common to the pharmaceutical industry, such as regulatory approvals, competition, and the success of its drug development programs. The company's reliance on the Canadian government's drug reimbursement programs for its generic drugs sales also exposes it to potential changes in governmental policies.
Future Prospects
Despite these challenges, Sunshine Biopharma's diversified business model, with its generic pharmaceuticals and proprietary drug development segments, and its recent acquisition of Nora Pharma, position the company for potential growth in the future. The company's focus on developing innovative therapies for oncology and antiviral indications also adds to its long-term prospects.
The planned launch of 32 additional generic prescription drugs in the remainder of 2024 and 2025, including NIOPEG in Q4 2024, is expected to further expand the company's portfolio and market presence in the Canadian generic pharmaceuticals market. This expansion, coupled with the company's ongoing research and development efforts in its proprietary drug development program, provides multiple avenues for potential growth in the coming years.