MediPharm Labs Corp. (OTCQX: MEDIF) announced its financial results for the three and twelve months ending December 31, 2020. Revenue increased 22% sequentially in the fourth quarter to $6.1 million versus $4.9 million but was substantially lower than 2019’s fourth-quarter revenue of $32 million.

The net loss before tax in the quarter was $30.9 million and was largely attributed to a $10.7 million write-down of inventory to its net realizable value, $1.6 million write-down of non-current deposits, $5.9 million incremental depreciation expense of fixed assets, a $2 million impairment on fixed assets and a $1.4 million restructuring expense.

“We are executing on our strategy to become a high-value, GMP-certified, global cannabis API provider to medical and wellness markets,” said Keith Strachan, President and Interim CEO, MediPharm Labs. “We have successfully signed new international contracts, expanded our pharmaceutical licenses, and reduced costs as we are focused on returning to profitability and ensuring the long-term success of the business.” The company’s Board of Directors has appointed a special committee to lead the search for a permanent Chief Executive Officer.

The revenue for full-year 2020 was $36 million versus total revenue in 2019 of $129 million.

Greg Hunter, Chief Financial Officer, MediPharm Labs, commented, “We are encouraged by the sequential increase in fourth-quarter revenue reflecting the growth of our manufacturing and white label business. In addition to the completion of cost reduction initiatives in the quarter, we are confident that our sales, product innovations and fiscal management will return us to profitability.”

In November the company warned of the revenue losses as its CEO departed the company. MediPharm said that the decline in revenue was due to lower bulk extract volumes and average selling prices, which were partially offset by growth in formulated finished goods sales, up 30% to provincial distributors throughout Canada, and sales from MediPharm Labs Australia. The company told investors in a statement that based on agreed customer production schedules, it expects revenue from its portfolio of domestic and international sales agreements to grow beginning early in 2021 and will be complemented by new sales of LABS Cannabis products.