STENOCARE A/S (STENOCARE or the “Company”) published on February 27th the Company’s Q4-report for 2024. The following are some key points that we have chosen to highlight in connection with the report:
- Sales above guidance and our estimates
- Astrum oil is now available in three countries
- The result was affected by a special item – operational EBITDA better than our estimates
- Strengthened financial position through a rights issue after the end of Q4-24
Sales Above Our Estimates and Astrum Oil Available in Three Countries
The gross sales amounted to DKK 1.5m (1.7) in Q4-24, corresponding to a decrease of 17 % but 17% above guidance of DKK 1.2m. Net sales, including product returns, amounted to DKK 1.3m (1.3), which was 21% above Analyst Groups estimate of DKK 1.0m.
As Analyst Group has previously stated, we see the company’s premium product Astrum oil as an important growth driver in the coming year, as it distinguishes STENOCARE from competitors as a first mover in the next generation of medical cannabis, providing improved, uniform and faster uptake in the blood. The product became available to patients in three countries during 2025, Germany, Australia, and Norway, which is why sales in Q4-24 only reflect STENOCARE’s other product range.
The Result was Affected by a one-off Special Item
The EBITDA result amounted to DKK -15.1m and was affected by a special item amounting to DKK 13.1m attributable to the exit of the Company’s cultivation facility. In November, STENOCARE announced the STENOCARE 3.0 Strategy, which states that the Company will focus on trading prescription-based medical cannabis sourced from suppliers and exit the production activities at STENOCARE’s own indoor cultivation facility. While STENOCARE will not receive any payment for transferring the production facility, the Company will be relieved of all related costs, including the significant long-term lease and equipment lease. This represents a financial obligation of approximately DKK 14m over the next six years registered in the balance sheet and additional DKK 5m in annual operational costs, which will no longer weigh on the Company. To summarize, there are no cash proceeds from the exit but DKK 13.1m of long-term lease commitment related to exit of the cultivation facility are included as costs in special items during Q4-24.
Adjusted for the special item, the EBITDA result amounted to DKK -2.0m (-3.0), which was better than Analyst Group’s estimate of DKK -2.5m. The cost base continues to decrease as STENOCARE are operating with a lean organization, personnel expenses amounted to DKK 1.1m (1.8), corresponding to a decrease of 41%. With the exit from the cultivation, expected annual operational costs savings of DKK 5m will be made, why we estimate a continued decreased cost base in 2025 compared to 2024. Below is a summary of our estimates vs the outcome excluding the special item amounting to DKK 13.1.
German Cannabis Import Surged in Q4, but Political Pressure Builds on Flourishing Medical Market
Germany imported a record amount of cannabis during Q4 and for the full year 2024 medical cannabis import more than doubled to 70 tonnes, up from 32 tonnes in 2023. The growth comes from the implementation of the Cannabis Act (CanG) on April 1st, 2024, which legalized cannabis for adult use, where cannabis also was removed from the list of narcotics, something that is expected to have simplified the process for more doctors to prescribe medical cannabis and ease the way for patients to obtain a prescription. STENOCARE has had a product approved in Germany since Q4-23, but given the Company’s sales in 2024, STENOCARE’s growth in the country is assumed to have been absent.
A large portion of the market growth has been driven by the rapid expansion of telemedicine clinics, which has raised concerns that the ease of access to medical cannabis has allowed individuals who do not actually require medication to gain access to medical cannabis. In the German election on February 23rd, Christian Democratic Union (CDU), received the most seats in Germany’s federal election, a party that has previously pledged to abolish the previous government’s cannabis law. However, it remains unclear whether this would mean rolling back the changes to medical cannabis, namely removing it from the list of narcotics, which has driven the recent boom in the market, as well as whether CDU will have a majority to go ahead with its intention.
Nevertheless, STENOCARE focuses on prescription based medical cannabis and has long focused on educating doctors on potential applications. Since January 2025, Astrum Oil has been available to German patients, and we expect the product’s benefits to drive sales to patients in need of medical cannabis treatment, regardless of political initiatives that may hinder overall market growth.
The Financial Position Strengthened
The cash balance amounted to DKK 1.4m at the end of Q4-24, however after the end of Q4-24 STENOCARE announced the outcome of the conditional rights issue which was conducted in January 2025. The rights issue will provide STENOCARE with estimated net proceeds amounting to DKK 7.9m. The proceeds are expected to be used for commercial activities linked to the company’s existing product portfolio, as well as servicing the convertible loan of DKK 2.8m with interests and instalments.
We expect STENOCARE’s burn rate to decrease going forward because of the exit from cultivation activities as well as increased sales of the Astrum Oil, which is seen as an important growth driver, given that it distinguishes STENOCARE from competitors as a first mover in the next generation of medical cannabis. Based on this, we estimate that STENOCARE are financed for the remainder of 2025.
To summarize, STENOCARE delivered a report where sales were above guidance and our estimate, as well as an operational EBITDA result, excluding special items, that was above our expectations. The medical cannabis market has proven challenging to penetrate, partly due to high competition and partly due to widespread skepticism toward cannabis among prescribing doctors. STENOCARE is therefore expected to place greater focus on educating doctors about the benefits of medical cannabis treatment, thereby driving growth, where we see the Astrum Oil as an important growth driver as it distinguishes STENOCARE from competitors as a first mover in the next generation of medical cannabis.
We will return with an updated equity research report of STENOCARE.
