What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-10 compared with 2023-05-10 · 154 added, 168 removed, 178 unchanged (64% of the section changed)

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Sunshine Biopharma

Sunshine Biopharma Inc.

is a pharmaceutical company

offering and researching life-saving medicines in a wide variety of therapeutic areas, including oncology and antivirals.

to our own drug development operations, we operate three wholly owned subsidiaries, including (i) Nora Pharma Inc.

(“Nora Pharma”),

a Canadian corporation with a portfolio consisting of 50 prescription drugs on the market in Canada and 28 additional drugs scheduled

to be launched in 2023 and 2024, (ii) Sunshine Biopharma Canada Inc.

(“Sunshine Canada”), a Canadian corporation which develops

and sells OTC supplements, and (iii) NOX Pharmaceuticals, Inc., a Colorado corporation which is inactive and is scheduled to be dissolved

later this year.

are a pharmaceutical company offering and researching life-saving medicines in a wide variety of therapeutic areas, including

oncology and antivirals.

In addition to conducting our own drug development operations, we operate two wholly owned subsidiaries:

(i) Nora Pharma Inc.

(“Nora Pharma”), a Canadian corporation with a portfolio consisting of 50 generic prescription

drugs on the market in Canada and 27 additional drugs scheduled to be launched during the next 18 months, and (ii) Sunshine

Biopharma Canada Inc.

(“Sunshine Canada”), a Canadian corporation which develops and sells nonprescription

over-the-counter (“OTC”) products.

were incorporated in the State of Colorado on August 31, 2006 and on October 15, 2009 we acquired Sunshine Biopharma, Inc.

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classified as a reverse acquisition.

Sunshine Biopharma, Inc.

was holding an exclusive license to a new anticancer drug bearing the laboratory

name, Adva-27a (the “License Agreement”).

Upon completion of the reverse acquisition transaction, we changed our name to

Sunshine Biopharma, Inc.

and began operating as a pharmaceutical company focusing on the development of the licensed Adva-27a anticancer

In December 2015, we acquired all worldwide issued (US Patent Number 8,236,935, and 10,272,065) and pending patents under PCT/FR2007/000697

Biopharma, Inc.

held an exclusive license to a new anticancer drug bearing the laboratory name, Adva-27a (the “License Agreement”).

Upon completion of the reverse acquisition transaction, we changed our name to Sunshine Biopharma, Inc.

and began operating as a pharmaceutical

December 2015, we acquired all worldwide issued (US Patent Number 8,236,935, and 10,272,065) and pending patents under PCT/FR2007/000697

and PCT/CA2014/000029 for the Adva-27a anticancer compound and terminated the License Agreement.

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The data obtained for mRNA molecules bearing the laboratory name K1.1 became the subject of a new patent application filed in

October 20, 2022, we acquired Nora Pharma Inc.

(“Nora Pharma”), a Canadian generic pharmaceuticals company based in the greater

Montreal area.

Nora Pharma has 37 employees and operates in a 15,000 square foot facility certified by Health Canada.

Nora Pharma currently

offers 50 generic prescription drugs and 11 nonprescription OTC products.

Nora Pharma sales were $10.7 million USD during its fiscal

year ended June 30, 2022.

The consolidated financial statements contained in this report include the results of operations of Nora Pharma

from October 20, 2022 through December 31, 2022.

on the Market

October 2022, we acquired Nora Pharma, a Canadian generic pharmaceuticals

company based in the greater Montreal area.

Nora Pharma has 41 employees and operates in a 15,000 square foot facility certified by Health

Nora Pharma currently sells 50 generic prescription drugs in Canada.

The consolidated financial statements contained in this report

include the results of operations of Nora Pharma and Sunshine Canada.

Prescription Drugs on the Market

a result of the acquisition of Nora Pharma we now have the following generic prescription drugs on the market in Canada:

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Central nervous system

addition, we have the following nonprescription OTC products on the market in Canada and partially in the U.S.:

Essential 9 ™

Essential Amino Acids capsules (761 mg)

L-Arginine capsules (500

L-Carnitine capsules (667

Extreme-Mass ™

Weight Gain powder

Whey Protein powder

Branched-Chain Amino Acids

capsules (600 mg)

L-Creatine Monohydrate powder

Nora B12-1000

Vitamin B-12 tablets (Cyanocobalamine,

Calcium Carbonate tablets

Nora Cal-D 400

Calcium Carbonate (500 mg)

+ Vitamin D (400 IU) tablets

Nora Cal-D 1000

Calcium Carbonate (500 mg)

+ Vitamin D (1,000 IU) tablets

Vitamin D tablets (Calciferol

Senna Alexandrina tablets

Nora Sennosides

Senna Alexandrina tablets

Acetylsalicylic Acid tablets

NRA-Docusate Sodium

Docusate Sodium capsules

Potassium Chloride tablets

in Development

following table summarizes our generic and proprietary drugs in development:

Prescription Drugs Pipeline

addition to the 50 drugs on the market, we currently have the following roster of generic prescription drugs scheduled to be

launched later this year and in 2024:

Group A (7 Products)

Central Nervous System, Urology,

Cardiovascular

Nervous System, Gastrointestinal, Urology

Under Regulatory Review

Group B (3 Products)

Central Nervous System, Gastrointestinal

Group B (1 Product)

Under Regulatory Review

Group C (1 Product)

Group C (8 Products)

Nervous System, Cardiovascular, Metabolism

Under Regulatory Review

Group D (5 Products)

Central Nervous System, Cardiovascular,

Under Regulatory Review

Group E (5 Products)

Cardiovascular, Urology,

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Under Regulatory Review

Group F (6 Products)

Urology, Cardiovascular,

Oncology, Anti-infectives

Group E (6 Products)

Cardiovascular, Oncology, Anti-infectives

Under Regulatory Review

believe the addition of these products to our existing portfolio will strengthen our presence in the Canadian generic drugs marketplace

and provide us with greater access to pharmacies as we become more of a go-to supplier for every-day and specialty medicines.

Drugs in Development

are currently developing the following drug candidates:

Adva-27a (Small Molecule)

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Animal Testing

Drugs in Development

Anticancer Drug

the area of oncology, our proprietary drug development activities have been focused on the development of a small molecule called Adva-27a

for the treatment of aggressive forms of cancer.

A Topoisomerase II inhibitor, Adva-27a has been shown to be effective at destroying

Multidrug Resistant Cancer cells including Pancreatic Cancer cells, Breast Cancer cells, Small-Cell Lung Cancer cells and Uterine Sarcoma

cells (Published in ANTICANCER RESEARCH, Volume 32, Pages 4423-4432, October 2012).

We are the direct owner of all patents pertaining

to Adva-27a including U.S.

is a small molecule designed for the treatment of aggressive forms of cancer.

A Topoisomerase II inhibitor, Adva-27a has been shown to

be effective at destroying Multidrug Resistant Cancer cells including Pancreatic Cancer cells, Breast Cancer cells, Small-Cell Lung Cancer

cells and Uterine Sarcoma cells (Published in ANTICANCER RESEARCH, Volume 32, Pages 4423-4432, October 2012).

We are the direct owner

of all patents pertaining to Adva-27a including U.S.

Patents Number 8,236,935 and 10,272,065.

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the DNA unwinding enzyme, Topoisomerase II.

Unlike Etoposide however, Adva-27a is able to penetrate and destroy Multidrug Resistant Cancer

In addition, Adva-27a has been shown to have distinct and more desirable biological and pharmacological properties compared to

In side-by-side studies using Multidrug Resistant Breast Cancer cells and Etoposide as a reference, Adva-27a showed markedly

greater cell killing activity (see Figure 1).

Unlike Etoposide however, Adva-27a has the advantage of being able to penetrate and destroy

Multidrug Resistant Cancer cells.

In addition, Adva-27a has been shown to have distinct and more desirable biological and pharmacological

properties compared to Etoposide.

In side-by-side studies using Multidrug Resistant Breast Cancer cells and Etoposide as a reference,

Adva-27a showed markedly greater cell killing activity (see Figure 1).

February 2023, we signed a research agreement with the Jewish General Hospital (“JGH”), to complete the IND-enabling studies.

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In April 2022, we filed a provisional patent application in the United States covering the subject mRNA molecules.

We recently concluded

an agreement with a specialized partner for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles, ready for use

to conduct studies in xenograft mice.

recently concluded an agreement with a specialized partner for the purposes of formulating our K1.1 mRNA molecules into lipid nanoparticles,

ready for use to conduct studies in xenograft mice.

We anticipate commencing such studies later this year.

COVID-19 Treatment

initial genome expression products of Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2), the causative agent of COVID-19,

are two large polyproteins, referred to as pp1a and pp1ab.

These two polyproteins are cleaved at 15 specific sites by two virus encoded

proteases (Mpro and PLpro) to generate 16 different non-structural proteins essential for viral replication.

Mpro and PLpro represent

attractive anti-viral drug development targets as they play a central role in the early stages of viral replication.

PLpro is of particular

interest as a therapeutic target in that, in addition to processing viral proteins, it is also responsible for suppression of the human

immune system making the virus more life-threatening.

COVID-19 research effort has been focused on developing an inhibitor of PLpro, the viral enzyme that mediates suppression of the human

immune system.

On May 22, 2020, we filed a patent application in the United States for a new treatment for Coronavirus infections.

patent application covers composition subject matter pertaining to small molecules for inhibition of the Coronavirus main protease (Mpro)

and papain-like protease (PLpro).

Coronavirus Treatment

initial genome expression products following infection by Betacoronavirus,

the causative agent of COVID-19, are two large polyproteins, referred to as pp1a and pp1ab.

These two polyproteins are cleaved at 15 specific

sites by two virus encoded proteases, called Mpro and PLpro, to generate 16 different non-structural proteins essential for viral replication.

Mpro and PLpro represent attractive anti-viral drug development targets as they play a central role in the early stages of viral replication.

PLpro is of particular interest as a therapeutic target in that, in addition to processing essential viral proteins, it is also responsible

for suppression of the human immune system making the virus more life-threatening.

PLpro is present only in Betacoronaviruses, the subgroup

of Coronaviruses represented by the highly pathogenic SARS-CoV, MERS-CoV, and SARS-CoV-2.

Anti-Coronavirus research effort has been focused on developing an inhibitor of PLpro and, on May 22, 2020, we filed a patent application

in the United States covering composition subject matter pertaining to small molecules for inhibition of the Coronavirus PLpro as well

February 2022, we expanded our PLpro inhibitors research effort by entering into a research agreement with the University of Arizona

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Under the agreement, the University of Arizona granted the Company a first option to negotiate a commercial, royalty-bearing

license for all intellectual property developed by University of Arizona personnel under the Research Project.

In addition, the Company

and the University of Arizona entered into an option agreement (the “Option Agreement”) whereby the Company was granted a

first option to negotiate a royalty-bearing commercial license for the underlying technology of the Research Project.

On September 13,

2022, we exercised our option under the Option Agreement and on February 24, 2023, we entered into an exclusive worldwide license agreement

with the University of Arizona for all of the technology related to the Research Project.

license for all intellectual property developed by University of Arizona under the Research Project.

In addition, the Company and the

University of Arizona entered into an option agreement (the “Option Agreement”) whereby the Company was granted a first option

to negotiate a royalty-bearing commercial license for the underlying technology of the Research Project.

On September 13, 2022, we exercised

our options, and on February 24, 2023, we entered into an exclusive worldwide license agreement with the University of Arizona for all

of the technology related to the Research Project.

the evolution of the COVID-19 pandemic to its current state, we have expanded our objective to develop a late-preclinical injectable

candidate of first-in-class PLpro inhibitor to treat SARS-CoV2 (and potentially SARS-CoV and MERS-CoV) infection in patients who could

not use Paxlovid, Molnupiravir, or Remdesivir, due to concerns about drug interaction and possible ‘rebound’ infections and

other side effects.

are the sole owner of all worldwide rights pertaining to Adva-27a.

These patent rights are covered by PCT/FR2007/000697 and PCT/CA2014/000029.

patent applications filed under these two PCT's have been issued in the United States (US Patent Number 8,236,935 and 10,272,065), Europe,

These patent rights are covered by PCT/FR2007/000697 and

PCT/CA2014/000029.

The patent applications filed under these two PCT's have been issued in the United States (US Patent Number

8,236,935 and 10,272,065), Europe, and Canada.

May 22, 2020, we filed a provisional patent application in the United States for a new treatment for Coronavirus infections.

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mRNA molecules.

recently acquired wholly owned subsidiary, Nora Pharma, owns 152 DIN’s issued by Health Canada for prescription drugs currently

on the market in Canada.

These DIN’s were secured through in-licenses or cross-licenses from international manufacturers of generic

pharmaceutical products.

addition, we are the owner of two NPN’s issued by Health Canada:

NPN 80089663 authorizes us to manufacture and sell our in-house

developed OTC product, Essential 9™, and NPN 80093432 authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D

under the brand name Essential Calcium-Vitamin D ™ .

recently acquired wholly owned subsidiary, Nora Pharma, owns 179 Drug Identification Numbers (“DIN’s”) issued by Health

Canada for prescription drugs currently on the market in Canada.

These DIN’s were secured through in-licenses or cross-licenses

from international manufacturers of generic pharmaceutical products.

addition, we are the owner of two Natural Product Numbers (“NPN’s”) issued by Health Canada:

NPN 80089663 authorizes

us to manufacture and sell our in-house developed OTC product, Essential 9™, and NPN 80093432 authorizes us to manufacture and

sell the OTC product, Calcium-Vitamin D under the brand name Essential Calcium-Vitamin D ™ .

of Operations

of results of operations for the three months ended March 31, 2023 and 2022

the three months ended March 31, 2023, we generated $4,894,053 in sales, compared to $122,645 for the three months

ended March 31, 2022, an increase of $4,771,408.

The increase is attributable to sales generated by our recently acquired wholly owned

subsidiary, Nora Pharma.

The direct cost for generating these sales was $3,065,931 (62.6%) for the three months ended March 31, 2023,

compared to $59,845 for the three months ended March 31, 2022 (48.8%).

The increase in the cost of goods sold in 2023 is due to the cost

of manufacturing of the generic prescription drugs sold by Nora Pharma.

Our gross profit grew to $1,828,122 for the three months ended

March 31, 2023, compared to $62,800 for the three months ended March 31, 2022.

General and administrative expenses during the three month period ended March

31, 2023 were $3,657,103, compared to $1,286,164 during the three month period ended March 31, 2022, an increase of $2,370,939.

This increase

was the result of increased overhead associated with being a Nasdaq listed company and expenses related to Nora Pharma operations.

Specifically,

we incurred increased costs in accounting ($95,951), consulting ($126,117), office costs ($199,953), research and development ($71,273),

salaries ($1,739,257) and taxes ($63,718).

Overall, we incurred a loss of $1,828,981 from our operations for the three months ended March

31, 2023, compared to a loss of $1,223,364 from our operations in the three month period ended March 31, 2022.

addition, we had net interest income of approximately $172,821 during the three months ended March 31, 2023, compared to a net interest

expense of approximately $12,870 during the three months ended March 31, 2022, as a result of interest earned on the cash on hand.

a result, we incurred a net loss of $1,702,430 for the three months ended March 31, 2023, compared to a net loss of $1,236,234 for the

three month period ended March 31, 2022.

of results of operations for the three months ended June 30, 2023 and 2022

the three months ended June 30, 2023, we generated $5,560,865 in sales, compared to $150,307 for the three months ended June 30, 2022,

an increase of $5,410,558.

The increase is attributable to sales generated by our recently acquired wholly owned subsidiary, Nora Pharma.

The direct cost for generating these sales was $3,608,118 (64.9%) for the three months ended June 30, 2023, compared to $74,683 (49.7%)

for the three months ended June 30, 2022.

The increase in the cost of goods sold in 2023 is due to the cost of manufacturing the generic

prescription drugs sold by Nora Pharma.

Our gross profit grew to $1,952,747 for the three months ended June 30, 2023, compared to $75,624

for the three months ended June 30, 2022.

and administrative expenses during the three-month period ended June 30, 2023 were $2,942,370, compared to $771,420 during the three-month

period ended June 30, 2022, an increase of $2,170,950.

This increase was the result of increased overhead associated with being a Nasdaq

listed company and expenses related to Nora Pharma operations.

Specifically, we incurred increased costs in accounting ($34,221), consulting

($290,771), office ($304,978), research and development ($322,622), salaries ($960,167) and taxes ($96,649).

Overall, we incurred a loss

of $989,623 from our operations for the three months ended June 30, 2023, compared to a loss of $695,796 from our operations in the three-month

period ended June 30, 2022.

addition, we had net interest income of approximately $175,453 during the three months ended June 30, 2023, compared to a net interest

income of approximately $146,043 during the three months ended June 30, 2022, as a result of interest earned on cash on hand.

a result, we incurred a net loss of $902,108 ($0.02 per share) for the three months ended June 30, 2023, compared to a net loss of $538,872

($0.03 per share) for the three-month period ended June 30, 2022.

of results of operations for the six months ended June 30, 2023 and 2022

the six months ended June 30 2023, we generated revenues of $10,454,918,

compared to revenue of $272,952 for the six months ended June 30, 2022, an increase of $10,181,966.

The increase is attributable to sales

generated by our recently acquired wholly owned subsidiary, Nora Pharma.

The direct cost for generating these revenues was $6,674,049

for the six months ended June 30, 2023 (63.8%), compared to $134,528 (49.3%) for the six months ended June 30, 2022.

The increase in the

cost of goods sold in 2023 is due to the cost of manufacturing the generic prescription drugs sold by Nora Pharma.

Our gross profit increased

to $3,780,869 for the six months ended June 30, 2023, compared to a gross profit of $138,424 for the same period in 2022.

and administrative expenses during the six-month period ended June 30, 2023 were $6,599,473 compared to $2,057,584 during the six-month

period ended June 30, 2022, an increase of $4,541,889.

This increase was the result of increased overhead associated with being a Nasdaq

listed company and expenses related to Nora Pharma operations.

Specifically, we incurred increased costs in accounting ($130,171), consulting

($416,888), office costs ($504,931), research and development ($393,895), salaries ($2,640,424) and taxes ($160,367).

Overall, we incurred

a loss of $2,818,604 from our operations in the six-month period ended June 30, 2023, compared to a loss from operations of $1,919,160

in the similar period of 2022.

addition, we had net interest income of approximately $348,259 during the six months ended June 30, 2023, compared to a net interest

income of approximately $133,182 during the six months ended June 30, 2022, as a result of interest earned on cash on hand.

a result, we incurred a net loss of $2,604,538 ($0.09 per share) for the six-month period ended June 30, 2023, compared to a net loss

of $1,775,106 ($0.18 per share) for the six-month period ended June 30, 2022.

and Capital Resources

As of June 30,

2023, we had cash or cash equivalents of $19,729,491.

Net cash used in operating activities was $1,850,106

during the three months ended March 31, 2023, compared to $1,304,208 during the three month period ended March 31, 2022.

was a result of the addition of Nora Pharma’s operations.

Cash flows used in investing activities were $146,303

for the three months ended March 31, 2023, compared to $0 for the three months ended March 31, 2022.

The increase was the result of cash

invested in Nora Pharma.

Cash flows used in financing activities were $(538,299)

for the three months ended March 31, 2023, compared to $12,437,673 provided by financing activities for the three months ended March 31,

The decrease was primarily as a result of no offerings made during the three months ended March 31, 2023 compared to two offerings

completed in February and March 2022, and due to our purchase of $506,822 in common stock under Rule 10B-14 in the first quarter of 2023

period compared to $0 during the same period in 2022.

cash used in operating activities was $5,628,146 during the six months ended June 30, 2023, compared to $1,878,010 during the six-month

period ended June 30, 2022.

The increase was a result of the addition of Nora Pharma’s operations.

flows used in investing activities were $405,779 for the six months ended June 30, 2023, compared to $0 for the six months ended June

The increase was the result of cash invested in Nora Pharma.

flows provided by financing activities were $3,519,672 during the six

months ended June 30, 2023, compared to $41,561,363 during the six months ended June 30, 2022.

The decrease was primarily as a result

of one offering made during the six months ended June 30, 2023, compared to three offerings completed in February, March, and April 2022,

and due to our purchase of $506,822 in common stock in the first quarter of 2023.

are not generating adequate revenues from our operations to fully implement our business plan as set forth herein.

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On April 28, 2022, we received net proceeds of approximately $16.8 million from the sale of common stock and warrants in a private placement.

We believe our existing cash will be sufficient to fund our operations, including general and administrative expenses, expanded research

and development activities, and OTC supplements business, for the next 24 months.

There is no assurance our estimates will be accurate.

Management estimates that we will need additional capital in the amount of approximately

$30 million to fully implement our business plan, including funding for further research and development activities and possibly clinical

trials, as well as expansion of our generic pharmaceuticals operations arising from the Nora Pharma acquisition.

Additional capital may

not be available on terms acceptable to us, or at all.

Currently, we do not have any firm committed arrangements for financing and

can provide no assurance that we will be able to obtain financing when required.

No assurance can be given that we will obtain access

to capital markets in the future or that financing, adequate to satisfy the cash requirements of implementing our business will be available

on acceptable terms.

Our inability to obtain acceptable financing could have an adverse effect upon the results of our operations and

financial condition.

On May 16, 2023, we received net proceeds of approximately $4.1 million from the sale of common stock and warrants in a private placement.

We believe our existing cash will be sufficient to fund our operations, including general and administrative expenses, research and development

activities, and the generic pharmaceuticals sales business, for the next 18 to 24 months.

There is no assurance our estimates will be

estimates that we will need additional capital in the amount of approximately $30 million for expansion of our drug development activities

and generic pharmaceuticals operations, including possibly a Phase I clinical trial.

Additional capital may not be available on terms

acceptable to us, or at all.

Currently, we do not have any firm committed arrangements for financing and can provide no assurance that

we will be able to obtain financing when required.

No assurance can be given that we will obtain access to capital markets in the future

or that financing, adequate to satisfy the cash requirements of implementing our business will be available on acceptable terms.

inability to obtain acceptable financing could have an adverse effect upon the results of our operations and financial condition.

Accounting Estimates

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis