$6 million injection for Wellnex Life in medicinal cannabis race

The ASX has recognised FY22 as a record year for capital raises – with $159.4 billion invested overall – and some Aussie businesses still appear to be riding the wave of positive investor sentiment.

The ASX has recognised FY22 as a record year for capital raises – with $159.4 billion invested overall – and some Aussie businesses still appear to be riding the wave of positive investor sentiment.

Among them is health and wellness company Wellnex Life (ASX: WNX), which emerged from its recent capital raise with $2.815 million from shareholders and an additional $3.15 million from a private placement – an achievement the company believes will improve its chances of leading Australia’s medicinal cannabis race.

“We are overjoyed to have seen such strong support from shareholders, particularly amidst challenging market conditions,” Wellnex CEO George Karafotias said.

Award-winning Homart Pharmaceuticals became a cornerstone investor with a $3 million placement, Mr Karafotias added – a strategic investment the CEO said would strengthen Wellnex’s manufacturing and product expertise and expand its export network and contacts.

“The total $5.965 million in funds raised will enable us to progress on our goal to be one of the first companies to offer an over-the-counter medicinal cannabis product in the Australian market.”

Prescriptions for medicinal cannabis more than doubled year-on-year between 2019 and 2021, and the soon-to-emerge market for over-the-counter medicinal cannabis is forecast to be worth ~$3 billion by 2024.

Beginnings, pipelines and future plans

Listing on the ASX in July 2021, Wellnex started as a brand innovator and distributor targeting the then $10.7 billion Australian health and wellness market, partnering with the likes of Chemist Warehouse and GlaxoSmithKline, launching and licensing a range of in-house and external brands and achieving a revenue of $18.61 million in FY22.

The recent capital raise is expected to progress Wellnex’s joint venture with medicinal cannabis manufacturer OneLife Botanicals, as well as finance the inventory required for launching new brands and products.

As at 20th October, the company’s pipeline for the rest of the financial year includes launches of Wellnex’s new e-commerce platform; medicinal cannabis products; and the company’s wholly owned Pharmacy Own brand and recently acquired teeth whitening brand Mr. Bright.

“We are keenly focused on continuing to generate value for shareholders, with a strong pipeline of brand and product launches in the remainder of FY23 that will further accelerate revenue and margins,” Mr Karafotias said.

The company is targeting revenue of $29 million in FY23, with Q1 revenue of $6.88 million delivered (up 81% versus Q1 FY22). In June, Wellnex stated that they are on a “trajectory to profitability”.

Reach Markets was the lead manager of the capital raise.

To stay up to date with news and announcements from Wellnex Life, register your details on the company’s investor portal.

Reach Corporate provides Corporate Advisory Services to WNX and have been engaged by them to manage their investor communications.

Past performance is not a reliable indicator of future performance.

Sources:

 

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