LSL PHARMA GROUP REPORTS THIRD CONSECUTIVE RECORD QUARTERLY REVENUES AND Q2 2025 FINANCIAL RESULTS

Executive Summary

• LSL Pharma Group reported its Q2 2025 and Year-to-Date (YTD) 2025 financial results, marking the third consecutive quarter of record quarterly revenues.
• The company secured $17.5 million in new bank financing from Desjardins and BDC, which included a $7.5 million operating line of credit and a $10 million term loan, to refinance existing debts and fund growth.
• Corporate highlights include the expansion of the Eye-Care portfolio with agreements for up to 16 sterile eye drops in Canada, a non-binding letter of intent to acquire a Quebec-based CMO, and FDA supplemental filing for Steri-Med to manufacture ointment products.

Key Details

• Q2 2025 Financials:
  • Revenues: $7.2 million (up 72% YoY).
  • Adjusted EBITDA: $1.0 million (up 56% YoY).
  • Net Loss: $0.4 million (improved 25% YoY).
• YTD 2025 Financials:
  • Revenues: $13.8 million (up 66% YoY).
  • Adjusted EBITDA: $2.0 million (up 66% YoY).
  • Net Loss: $0.5 million (improved 32% YoY).
• Segment Performance:
  • CMO Revenues: $6.5 million in Q2 (up 165% YoY) and $12.2 million YTD (up 215% YoY), driven by acquisitions of Virage Santé and Dermolab Pharma.
  • Eye-Care Revenues: $0.8 million in Q2 (down 57% YoY) and $1.6 million YTD (down 64% YoY); the prior year benefited from non-recurrent out-of-stock sales by competitors.
• Financing Activities:
  • Secured $17.5 million total bank financing: $7.5 million operating line of credit and $10 million term loan from Desjardins and BDC.
  • Proceeds used to repay $3.3 million in publicly listed convertible debentures (LSL.DB) and other bank debts (TD, Scotia, Finacces).
  • Pro-forma cash position after debt repayment was $0.4 million; reported cash at quarter-end was $5.0 million due to timing of disbursement vs. repayment.
• Corporate Developments:
  • Eye-Care Expansion: Signed agreements to market up to 16 sterile eye drops in Canada (6 already filed with Health Canada).
  • Acquisition: Entered non-binding LOI to acquire a Quebec-based CMO; expected to add $8–10 million to CMO segment revenues.
  • Regulatory: Filed supplemental information to the FDA to qualify Steri-Med for manufacturing ointment products (initially Avaclyr); approval expected before year-end 2025.
• Balance Sheet Highlights (Q2 2025):
  • Total Assets: $61.8 million (up 15% from YE-24).
  • Total Liabilities: $37.4 million (up 31% from YE-24).
  • Shareholders' Equity: $24.4 million.
  • Working Capital: $5.1 million.
  • Net Borrowings: $18.7 million (up from $16.5 million at FY-2024).

Notable Quotes

• "We achieved record revenues in Q2 2025 for the third consecutive quarter following the successful acquisition of Dermolab late last year. The growing contribution of the CMO segment as more than offset the softer performance from the Eye-care segment..." — François Roberge, President and CEO
• "The signing of a new $7.5 million operating line of credit with Desjardins has provided in excess of $4 million of working capital flexibility to help fund our operations and growth initiatives. This financing, coupled with the new $10 million term loan from Desjardins and BDC will provide additional liquidity, help eliminate several debts and loans as well as reduce our debt servicing and cost of capital going forward" — Luc Mainville, Executive Vice-president and CFO