STENOCARE A/S (STENOCARE or the “Company”) published on May 8th the Company’s Q1-report for 2025. The following are some key points that we have chosen to highlight in connection with the report:
- Gross sales amounted to DKK 0.8m (1.4) – affected by new revenue recognition method
- Astrum oil is now available in three countries
- The result was affected by one-off costs – cost savings improved the result
- Strengthened financial position through a rights issue
Gross Sales Affected by New Revenue Recognition Method
Gross sales amounted to DKK 0.8m (1.4) in Q1-25, corresponding to a decrease of 38 %, while net sales amounted to DKK 0.8m (1.2), representing a decrease of 32 %. Gross sales were negatively impacted by DKK 0.5m due to the new revenue recognition method adopted by STENOCARE, whereby revenue is now recognized when products are sold to the end-user. Previously, revenue was recognized when products were sold to distributors. The updated accounting method is expected to minimize the risk of reversed revenue from expired products held in distributor warehouses.
As Analyst Group has previously stated, the Company’s premium product, Astrum Oil, is viewed as a key growth driver throughout the coming years. The product differentiates STENOCARE as a first mover in the next generation of medical cannabis, providing improved, uniform, and faster uptake in the bloodstream. Astrum Oil became available to patients in three countries during Q1-25: Germany, Australia, and Norway. However, although products were delivered to distribution partners in all three markets during Q1-25, market penetration is expected to take time. Due to the new revenue recognition method, sales in Q1-25 are assumed to reflect the rest of the product portfolio, while sales from Astrum Oil are anticipated to contribute to revenue growth throughout the remainder of 2025, as the Company currently is executing go-to-market plans with local partners.
The sales performance in Q1-25 indicates a continued challenging market for the broader product portfolio, however, also affected by the aforementioned new sales recognition method. STENOCARE currently has products approved in six countries, where demand has been lower than initially anticipated. This is expected to be due to slower integration of medical cannabis into clinical practice, along with intensified competition. The development highlights the importance of successfully commercializing Astrum Oil, as the product is expected to offer key advantages that set STENOCARE apart from competitors.
Cost Base Decreased Despite One-off Effects
STENOCARE’s operating expenses amounted to DKK 2.6m (3.6) during Q1-25, a decrease of 28 %. In line with the STENOCARE 3.0 strategy, the Company exited its cultivation facility in January, reducing the cost base and expected to save DKK 5–6m in annual expenses. However, Q1-25 included non-recurring costs of DKK 0.5m related to the exit and DKK 0.3m linked to the January capital raise. Excluding these items, operating expenses amounted to DKK 1.8m, reflecting a 50 % decrease, thereby reinforcing confidence that the communicated cost savings target of DKK 5–6m in 2025 is achievable. EBITDA amounted to DKK -1.8m, but adjusted for the one-off costs, the result was DKK -1.0m.
Capital Raise to Execute on New Strategy
In January 2025, STENOCARE conducted a rights issue that generated DKK 7.9m in net proceeds. These funds are expected to support commercial activities related to the Company’s existing product portfolio, which includes 13 approved products across six countries. STENOCARE has already established core assets (regulatory, supply chain, commercial, partnerships) that will form the foundation of the new strategy.
As a result of the rights issue, the cash position was strengthened to DKK 5.9m at the end of Q1-25. This cash position remains an important area of focus for investors. It is viewed as critical for STENOCARE to scale up sales of Astrum Oil throughout 2025 as this, combined with the reduced cost base, is expected to enhance bottom-line performance and cash flow. Under such a scenario, the Company is estimated to achieve positive cash flow from early 2026, suggesting that the current cash position is sufficient. However, if the scale-up of Astrum Oil is delayed, positive cash flow would materialize at a later point, meaning the potential need for additional external capital cannot be excluded.
Medical Cannabis Made Permanent in Denmark
The Danish Parliament has passed legislation making the country’s medical cannabis program permanent, effective January 1, 2026. Since 2018, medical cannabis had been legal under a pilot program scheduled to end in December 2025. The new law ensures the continued legal availability of medical cannabis for patients and provides long-term regulatory clarity for the industry.
Analyst Group views this development as a positive for STENOCARE, as it establishes a clear framework for future operations in Denmark. Historically, Denmark has been STENOCARE’s home and most important market in terms of sales. The Company is believed to have a strong brand presence among medical professionals in the country, which supports the potential for further market growth.
In summary, STENOCARE delivered a first quarter characterized by relatively slow sales, partly due to the new sales recognition method, from the existing product portfolio, reflecting a continued competitive and challenging market environment. No measurable sales effect from the launch of Astrum Oil is expected to be visible in the Q1-report, but sales to patients are anticipated to commence in subsequent quarters and are expected to accelerate revenue growth. The cost base decreased in line with expectations, and annual savings of DKK 5–6m from discontinuing cultivation operations were substantiated by the Q1-25 report.
We will return with an updated equity research report of STENOCARE.
