Canadian producer of wellness products, Neptune Wellness Solutions (NASDAQ: NEPT), said its revenues fell 16% in the first quarter to $5.7 million, in spite of it being the maiden quarter with cannabis revenues. The top line was, meanwhile, better than analysts’ expectation of $4.82 million.
Hurt by litigation provisions of $7.9 million, net loss widened to $12.4 million in Q4 from $4.8 million a year ago.
The stock fell 7.7% during after-market trading on Wednesday. NEPT shares have almost doubled in the trailing two weeks, while in the year-to-date period, it has increased 74%.
Earlier today, shares of the wellness company gained over 3% after it announced a three-year cannabis extraction agreement with Green Organic Dutchman Holdings Ltd, the second such deal. Under the agreement, Neptune will be licensed to extract cannabinoids, which will be used for the production of consumer wellness products.
The Quebec-based company also has a multi-year agreement in place with Tilray (NASDAQ: TLRY) for cannabinoid extraction and purification.
Neptune Wellness said it expects cannabis extraction revenues from Q1 2020 to be lower than $1 million as operations have been affected by constrained extraction capacity and limited biomass inventory.
The company expects revenues growth from cannabis extraction and packing to accelerate from the second quarter of this fiscal year.
CEO Jim Hamilton said, “We are on track to achieve positive EBITDA this year, and on the threshold of creating a profitable, cash-generating business model.”