LSL PHARMA GROUP REPORTS FOURTH CONSECUTIVE RECORD QUARTERLY REVENUES AND Q3 2025 FINANCIAL RESULTS

Executive Summary

• LSL Pharma Group reported its fourth consecutive quarter of record revenues for Q3 2025, with total revenues reaching $7.6 million (up 89% year-over-year) and Year-to-Date (YTD) revenues of $21.4 million (up 73% year-over-year).
• The company secured Health Canada approval for six sterile ophthalmic solutions (eye-drops) for glaucoma and allergies, with commercial launches expected in Q2 2026.
• LSL Pharma expanded its Contract Manufacturing Organization (CMO) segment through the acquisition of Du-Var Laboratory Inc. for $2.9 million in financial debt, adding 30,000 sq. ft. of manufacturing capacity.
• The company completed a $2.3 million non-brokered private placement and redeemed $3.3 million in publicly listed convertible debentures, while securing remaining portions of secured loans from BDC and Desjardins.

Key Details

• Q3 2025 Financials:
  • Revenues: $7.6 million (vs. $4.0 million in Q3 2024; +89%).
  • YTD Revenues: $21.4 million (vs. $12.4 million in YTD 2024; +73%).
  • Adjusted EBITDA: $1.2 million for Q3 (vs. $0.5 million; +153%) and $3.1 million for YTD (vs. $1.6 million; +90%).
  • Net Loss: $1.8 million for Q3 (vs. $0.4 million) and $1.7 million for YTD (vs. $1.2 million).
  • Operating Profit: $0.5 million for Q3 (vs. $0.1 million) and $1.3 million for YTD (vs. $0.5 million).
• Segment Performance:
  • CMO Revenues: $6.6 million in Q3 (+179% YoY) and $18.8 million YTD (+201% YoY). Organic CMO growth (excluding acquisitions) was 70% QoQ and 42% YTD.
  • Eye-Care Revenues: $1.0 million in Q3 (-40% YoY, down from competitor out-of-stock events in prior year) and $2.6 million YTD (-57% YoY).
• Corporate Actions & Financing:
  • Private Placement: Closed a non-brokered private placement for gross proceeds of $2.3 million.
  • Debt Redemption: Redeemed $3.3 million in publicly listed convertible debentures, resulting in a $0.8 million loss on debt settlement.
  • Loan Securing: Secured the remaining $1.6 million portion of the Secured BDC loan and Secured Desjardins loan.
  • Leverage Ratio: Total net borrowings to net tangible assets ratio was 0.47:1 at end of Q3 2025 (vs. 0.41:1 at YE 2024).
• M&A (Du-Var Laboratory Inc.):
  • Acquisition Consideration: $2.9 million (representing Du-Var's financial debt).
  • Capacity Added: 30,000 sq. ft. of manufacturing space.
  • Expected Impact: Increase CMO revenues by more than 25%.
  • Du-Var Financials (12 months ended Aug 31, 2025): Revenues of $4.4 million, Net Loss of $2.1 million, Adjusted EBITDA of $0.5 million. Total Assets: $6.9 million; Liabilities: $5.1 million.
• Balance Sheet Highlights (as of Sept 30, 2025):
  • Total Assets: $60.2 million (+12% vs. YE 2024).
  • Total Current Assets: $20.7 million (+33% vs. YE 2024), driven by a $4.2 million increase in inventory.
  • Shareholders' Equity: $25.4 million (+$0.5 million vs. YE 2024).
  • Working Capital: $7.2 million.
  • Operating Loans (less Cash): $6.3 million (vs. $2.3 million at YE 2024).

Notable Quotes

• "We achieved record revenues in Q3-25 for the fourth consecutive quarter reflecting the contribution of Dermolab acquired late last year. By acquiring Du-Var Laboratory, we can already project good growth of our CMO segment for the next year," said François Roberge, President and CEO.
• "With the first 6 eye-drops now approved by health Canada we are well positioned to execute our strategic plan for 2026, as we approach the FDA decision regarding the certification of our Steri-Med site to manufacture Avaclyr and other products for the US market," added Mr. Roberge.
• "Once again we have been able to acquire another CMO asset while committing nominal cash resources. The integration of Du-Var Laboratory has begun and we look forward to leveraging Du-Var's capabilities, and generate synergies to contribute to the profitability of LSL Pharma," said Luc Mainville, Executive Vice-president and CFO.