Revenues Flowing, Drug Development Pipeline Advancing
2QFY24 Review BayMedica reports another strong quarter. The commercial business operating arm of InMed reported revenue of $1.24 million for the quarter ended December 30, 2023, representing a 164% Y/Y increase and 38% Q/Q growth. Revenue for the quarter exceeded our estimate of $1.13 million. BayMedica has now recorded quarterly revenue of more than $1 million in three of the last four quarters. For the first six months of the current fiscal year ending June 30, 2024, revenue climbed 171% to $2.1 million from $0.8 million in 1HFY23. Revenue growth was driven primarily by its flagship CBC and a pleasing pickup in demand momentum for its THCV offering. Although distributor order patterns are subject to Q/Q fluctuations at this early stage of BayMedica’s commercial products life cycle, the long-term demand trajectory remains positive. On a trailing 12-month basis, BayMedica’s revenue is enjoying a strong upward trend due to increased adoption of rare cannabinoids by end-product manufacturers and consumer brands in the health & wellness sector. Improved product mix and lower COGS drive a gross margin surge. Despite an inventory write-down of $170K following a $92K write-down in the preceding quarter to reduce weighted average cost to net realizable value of certain products in its suite of offerings, BayMedica recorded a big quarterly rebound in gross margin from 2% to 26%. Excluding the write-downs, margin improved from 13% to 40%. Increased demand for BayMedica’s high-margin CBC offering and actions taken to reduce COGS related to its THCV product are the main factors behind the margin surge in the second quarter. Jerry Griffin, VP of Sales and Marketing for BayMedica, will be our guest on The Water Tower Hour podcast on February 28, 2024.
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