0001683168-26-002644
SEC filingSunshine Biopharma's revenue grew 4.1% to $36.3M driven by Nora Pharma expansion, but net loss widened to $6.0M due to a $1.7M intangible asset impairment.
Sunshine Biopharma, Inc. is a pharmaceutical company focused on offering and researching life-saving medicines across therapeutic areas including oncology and antivirals. The company operates through two wholly owned Canadian subsidiaries: Nora Pharma Inc., which markets 71 generic prescription drugs in Canada, and Sunshine Biopharma Canada Inc., which develops and sells over-the-counter (OTC) supplements. In addition to its commercial operations, the company is conducting a proprietary drug development program consisting of two candidates: K1.1 mRNA, a lipid nanoparticle encapsulated mRNA targeted for liver cancer, and SBFM-PL4, a protease inhibitor for treatment of SARS Coronavirus infections.
The company's business is organized around three distinct activities. The commercial operations segment, conducted through Nora Pharma, focuses on procuring rights to generic pharmaceutical products for sale in Canada through in-licensing and supply agreements, cross-licensing arrangements, and distribution agreements. The OTC supplements segment, operated by Sunshine Canada, develops and sells products exclusively through the Amazon marketplace in Canada, having discontinued U.S. Amazon sales operations in the third quarter of 2025. The proprietary drug development segment advances two research-stage candidates, both currently in animal testing. No revenue share percentages are disclosed for these segments.
The company currently markets 71 generic prescription drugs in Canada spanning therapeutic areas including oncology, cardiovascular, central nervous system, diabetes, urology, anti-infective, and anti-inflammatory. Notable products include Abiraterone, Apixaban, Dasatinib, Everolimus, Pegfilgrastim, Rivaroxaban, and Dapagliflozin. Ten of these drugs are sold through distribution agreements where Nora Pharma acts as distributor. The company has 22 additional drugs in its pipeline, with 12 anticipated for launch during the remainder of 2026. In proprietary development, K1.1 mRNA has shown the ability to destroy cancer cells in vitro and demonstrated effectiveness at reducing liver cancer tumor size in xenograft mice. SBFM-PL4 has exhibited activity at sub-micromolar concentrations against PLpro and demonstrated antiviral activity in SARS-CoV-2 infected cells. The OTC portfolio includes Essential•9, an essential amino acid supplement in capsule form.
Generic drug sales are conducted by Nora Pharma's in-house sales representatives, primarily in the province of Quebec, with lesser presence in Ontario, Alberta, and British Columbia. The company provides pharmacy support activities including human resources, commercial and technical assistance, and training to pharmacy owners, mostly free of charge, to enhance marketplace visibility. OTC products are sold exclusively through the Amazon marketplace in Canada, relying on Amazon's infrastructure for order processing, fulfillment, and customer service. Prior to the discontinuation of U.S. operations, OTC revenue was derived approximately 90% from Canada and 10% from the United States. No specific customer concentration is disclosed.
The Canadian generic pharmaceuticals market was valued at approximately $10.4 billion USD in 2024, with more than 35 active generic players. The top three competitors hold approximately 50% share of the total market. Nora Pharma is described as relatively new but demonstrating one of the fastest year-over-year sales growth rates among peers. In antiviral drug development, the company competes with Pfizer, Merck, Gilead, Eli Lilly, and Regeneron, each of which has developed effective vaccines or treatments for COVID-19. In oncology, competitors include Merck, Amgen, Roche, Pfizer, Bristol-Myers Squibb, and Novartis, along with numerous smaller companies. The OTC supplements business operates in a very crowded and highly competitive product sector, though the company believes Essential•9 is the only essential amino acid supplement comprising all nine essential amino acids in capsule form.
The company's strategic priorities center on expanding its generic drug portfolio through securing additional product rights via in-licensing, cross-licensing, and distribution agreements. With 22 pipeline drugs and 12 expected launches in 2026, the company aims to strengthen its presence in the Canadian generic drugs market and become a go-to supplier for both every-day and specialty medicines. The proprietary drug development program continues to advance K1.1 mRNA and SBFM-PL4 through preclinical testing, with the company having secured patent protection and exclusive worldwide licensing rights from the University of Arizona for PLpro inhibitor technology. The company also leverages pharmacy support activities as a competitive differentiator to bolster sales efforts and marketplace visibility.
As of the date of the report, Sunshine Biopharma has a total of 50 full-time employees. Proprietary drug development activities are subcontracted to specialized service providers in the United States, Canada, and overseas, with research quantities of drug candidates manufactured at the University of Arizona and WuXi App Tech in Hong Kong. The company also engages consultants and outside professionals for marketing, accounting, and IT functions. Operations in the Province of Quebec are subject to labor laws providing guaranteed minimum entitlements including minimum wages, maternity leave, medical leave, and employee termination conditions, as well as language laws requiring corporate operations to be conducted largely in French. The company states it is fully compliant with these requirements.
For the fiscal year ended December 31, 2025, Sunshine Biopharma generated total revenues of $36,305,891, a 4.1% increase compared to $34,874,283 in 2024. This $1.4 million increase was attributed to the expansion of Nora Pharma's sales efforts across the Canadian provinces of Quebec, Ontario, Alberta, and British Columbia. The cost of sales decreased both in absolute terms and as a percentage of revenue, falling to $24,050,214 (66.2% of revenue) from $24,204,489 (69.4% of revenue) in the prior year. This 320 basis point gross margin improvement was largely driven by lower professional allowances incurred on product sales outside the Province of Quebec, where such allowances are government-regulated, as well as reduced wholesalers' fees and discounts.
General and administrative (G&A) expenses increased by $2,000,791 to $18,482,706, up from $16,481,915 in 2024. This increase is primarily attributable to a non-cash charge of $1,748,247 related to the impairment of intangible assets. Excluding this impairment, G&A expenses would have shown a more modest increase. Interest income declined to $280,901 from $496,003 in 2024, due to reduced interest rates and lower cash balances. Consequently, the company reported a net loss of $5,975,352 for 2025, compared to a net loss of $5,134,116 in 2024. The widening loss was driven by the impairment charge, partially offset by improved gross profit.
The company's operations are centered around its wholly-owned subsidiary, Nora Pharma, a generic pharmaceutical operation in Canada. The MD&A does not break out other distinct operating segments. Nora Pharma's revenue growth reflects successful geographic expansion within Canada. The segment's profitability dynamics improved significantly at the gross margin level, with the cost of sales ratio declining by 320 basis points. This improvement is linked to a favorable sales mix shift toward provinces outside Quebec, where professional allowances and wholesaler fees are lower. The operating expense structure, however, was impacted by the non-recurring intangible asset impairment, masking the underlying operational leverage.
Management has taken steps to improve future profitability. In January 2026, the company implemented initiatives to reduce general and administrative expenses and better align its cost structure with the objective of achieving near-term profitability. Based on current plans, management expects these initiatives to reduce expenses by approximately $2 million to $3 million in 2026, though there is no assurance these reductions will be realized. Regarding liquidity, the company believes its existing cash of $9,123,308 as of December 31, 2025, will be sufficient to fund operations for the next 18 months. However, management anticipates needing to raise additional capital in the future to expand its generic pharmaceutical operations and notes that such capital may not be available on acceptable terms, or at all. The company has no committed sources of capital.
As of December 31, 2025, Sunshine Biopharma reported cash and cash equivalents of $9,123,308, a decrease from $9,686,529 at the prior year-end. The Company notes that cash balances may exceed FDIC insurance limits of $250,000 in the U.S. and $100,000 CAD in Canada, with approximately $7 million deposited in the U.S. and $2 million in Canada. The Company carries no notes payable or long-term debt. Total shareholders' equity stands at $23,038,460, down slightly from $23,500,754, driven by a net loss of $5,975,352, partially offset by warrant exercises and a registered direct offering. Inventory increased to $13,472,025 from $11,278,105, and a new allowance for obsolete inventory of $475,153 was recorded, indicating potential issues with sell-through or product shelf-life. Intangible assets, net, decreased significantly from $3,019,717 to $1,889,370, primarily due to a $1,748,247 impairment charge for product licenses that could not be commercialized.
The Company has a non-cancellable operating lease for office space with a remaining term of 4 years. Total future lease payments amount to $812,402, with $215,637 due within one year, $398,222 due between one and three years, and $198,563 due thereafter. A disputed earnout payable of $295,797 remains on the balance sheet related to the acquisition of Nora Pharma Inc. The earnout is currently in dispute following the dismissal of the subsidiary's president on April 14, 2025. The former president's legal counsel has demanded approximately $5,300,000 USD, which the Company considers unfounded. No provision for this claim has been made in the financial statements.
The Company did not repurchase any shares or pay any dividends during the year. Financing activities provided $4,748,408, primarily from $2,919,812 in warrant exercises and $1,828,596 in net proceeds from a registered direct offering. Investing activities used $836,306, consisting of $661,815 for the purchase of intangible assets (license fees) and $174,491 for equipment purchases. The Company has no outstanding debt.
The Company operates as a single reportable segment focused on the research, development, and commercialization of prescription drugs and supplements. All operations are managed on a consolidated, enterprise-wide basis. Revenues are generated entirely from customers in Canada, and substantially all long-lived assets are located in Canada. Over 97% of revenues are derived from the sale of generic prescription drugs, with OTC supplements contributing less than 3% of total annual sales.
Sunshine Biopharma remains in a precarious financial position, reporting an accumulated deficit of $75.0 million and a net loss of $6.0 million for fiscal 2025. The company explicitly states it may never achieve profitability. This is compounded by a critical need for additional funding to satisfy future capital needs, including preclinical and clinical testing. The risk of dilution is concrete, with 15.2 million Series B Warrants outstanding at an exercise price of $2.07, and the authorization of 30 million shares of blank-check preferred stock, which could be used to create senior securities.
The company's generic pharmaceutical business, acquired via Nora Pharma, faces severe supply chain concentration risk. Approximately 75% of the drug portfolio is manufactured by just three overseas suppliers. This creates a material vulnerability to GMP non-compliance, regulatory inspection failures (FDA Form 483, warning letters), contamination events, and geopolitical disruptions. The filing specifically cites the wars in Ukraine and the Middle East, tariff escalations, and threats of conflict in South America, Greenland, and the Far East as direct threats to supply continuity. Rising raw material, labor, and transportation costs are expected to continue pressuring margins through fiscal 2026.
Nora Pharma's revenue is almost entirely dependent on the Canadian generic drug market, which is described as intensely competitive and subject to continuous price erosion. The highest risk identified is the ongoing and unresolved negotiations between the pharmaceutical industry and the Canadian federal government regarding pricing and reimbursement frameworks. Any adverse changes to provincial formularies or reference pricing could directly reduce revenues. Additionally, the company's proprietary drug pipeline (K1.1 mRNA) has not been filed with any regulatory body, and no revenue is expected from it in the foreseeable future.
The company faces an imminent threat of Nasdaq delisting, with its common stock trading near the $1.00 minimum bid price requirement. A delisting would severely impair liquidity, limit access to public capital markets, and negatively impact the company's ability to use equity incentives. The filing also highlights extreme key-person risk, noting that the loss of CEO Dr. Steve N. Slilaty would significantly delay or prevent the achievement of business objectives.
Sunshine Biopharma's cash flow statement for the year ended December 31, 2025, reveals a company in transition, with a significantly reduced cash burn compared to the prior year. Net cash used in operating activities was $5.3 million, a 57% improvement from the $12.5 million used in 2024. This positive trend was primarily driven by a substantial reduction in working capital investment. In 2024, the company built up inventory by $6.0 million and accounts receivable by $2.3 million, whereas in 2025, inventory investment was a more modest $1.6 million and receivables grew by only $0.1 million. The operating cash flow loss of $5.3 million compares to a net loss of $6.0 million, with the difference largely explained by a $1.7 million non-cash intangible asset impairment charge and $0.3 million in depreciation and amortization.
Investing activities consumed $0.8 million in cash, a sharp decline from $2.0 million in the prior year. The 2025 figure includes $0.7 million for the purchase of intangible assets and $0.2 million for equipment. The company did not report any free cash flow, but combining operating and investing cash flows results in a total cash outflow of $6.2 million before financing activities.
To fund these operational and investment shortfalls, the company relied heavily on financing activities, which provided $4.7 million in cash. This was sourced from the exercise of warrants ($2.9 million) and a public offering of common stock ($1.8 million). Notably, there were no share repurchases in 2025, compared to $3.1 million in 2024, and no dividends were paid. The company ended the year with $9.1 million in cash, down from $9.7 million at the beginning of the period, after accounting for a positive foreign currency translation adjustment of $0.9 million. The absence of cash paid for interest and income taxes in 2025 is a notable anomaly compared to the prior year.