What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-15 · 152 added, 112 removed, 198 unchanged (57% of the section changed)

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About Sunshine Biopharma

are a pharmaceutical company offering and researching life-saving medicines in a wide variety

of therapeutic areas, including oncology and antivirals.

We have two wholly owned subsidiaries:

We are a pharmaceutical company offering and

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

We have two wholly

owned subsidiaries:

(i) Nora Pharma Inc.

(“Nora Pharma”), a Canadian corporation, through which we

currently have 70 generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma

(“Sunshine Canada”), a Canadian corporation through which we develop

and sell OTC supplements.

In addition, we are conducting a proprietary drug development

program which is comprised of (i) K1.1 mRNA, an LNP encapsulated mRNA targeted for liver cancer, and (ii) SBFM-PL4, a protease inhibitor

for treatment of SARS Coronavirus infections.

(“Nora Pharma”), a Canadian corporation, through which we currently have 74

generic prescription drugs on the market in Canada, and (ii) Sunshine Biopharma Canada Inc.

(“Sunshine Canada”), a

Canadian corporation through which we develop and sell OTC supplements.

In addition, we are conducting a proprietary drug

development program which is comprised of (i) K1.1 mRNA, an LNP encapsulated mRNA targeted for liver cancer, and (ii) SBFM-PL4, a protease

inhibitor for treatment of SARS Coronavirus infections.

Commercial Operations

Our commercial operations are focused on the

procurement of rights to generic pharmaceutical products for sale, currently in Canada and ultimately around the world.

secure such rights through various types of strategic arrangements, including:

Our commercial operations are focused on the procurement

of rights to generic pharmaceutical products for sale, currently in Canada and ultimately around the world.

We seek to secure such rights

through various types of strategic arrangements, including:

In-licensing and Supply Agreements:

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The products are sold under the partners’ label.

Generic drugs are pharmaceutically equivalent to the

brand name drugs.

Generic drugs are pharmaceutically equivalent

to the brand name drugs.

They contain identical medicinal ingredients in the same amounts as the brands.

Generic medications, however, may have

Generic medications may have

different non-medicinal ingredients than the brand name drugs, but the generic developer must show that these do not affect the safety,

efficacy, or quality of the drug compared to the brand.

When a generic drugs company wants to sell a generic drug in Canada, it must file

When a generic drug company wants to sell a generic drug in Canada, it must file

a generic drug submission with Health Canada.

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drugs on the market in Canada:

Action/Indication/Therapeutic

Reference/Brand

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Antibacterial

Gynecologic pathology

Central nervous system

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Cardiovascular

Action/Indication/Therapeutic Area

Reference/Brand

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Central nervous system

Hydroxychloroquine

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Central nervous system

Pegfilgrastim (Niopeg)

Cardiovascular

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Central nervous system

Sitagliptin-Metformin*

Cardiovascular

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Central nervous

* Sold through distribution agreements in

which we act as distributor.

* Sold through distribution agreements in which we act as distributor.

In addition to the 74 drugs currently on the market,

we have 64 additional drugs in our pipeline including 13 we anticipate launching during the remainder of 2025.

These additional drugs

will address various human health areas including cardiovascular, oncology, gastroenterology, central nervous system, diabetes, urology,

endocrinology, anti-infective, and anti-inflammatory.

We believe the addition of these products to our existing

portfolio will strengthen our presence in the Canadian $9.7 billion a year generic drugs market ( Research and Markets ) and provide

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

we have 17 additional drugs in our pipeline anticipated to be launched in 2026.

These additional drugs will address various human health

areas including cardiovascular, oncology, gastroenterology, central nervous system, diabetes, urology, endocrinology, anti-infective,

and anti-inflammatory.

We believe the addition of these products to our

existing portfolio will strengthen our presence in the Canadian $9.7 billion a year generic drug market ( Research and Markets )

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

Research and Development

The following table summarizes our proprietary drugs

in development:

The following table summarizes our proprietary

drugs in development:

Area/Indication

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(Small Molecule)

(SARS Coronavirus)

(SARS Coronavirus Infection)

K1.1 Anticancer mRNA

In June 2021, we initiated a new research project in

which we set out to determine if certain mRNA molecules can be used as anti-cancer agents.

In June 2021, we initiated a new research project

in which we set out to determine if certain mRNA molecules can be used as anti-cancer agents.

The data collected to date have shown that

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On April 20, 2022, we filed a provisional patent application in the United States covering our K1.1 mRNA molecules.

In November 2022, we concluded an agreement with a

specialized commercial partner for the purposes of formulating our K1.1 mRNA molecules into specific lipid nanoparticles for use in test

animals including xenograft mice.

In November 2022, we concluded an agreement with

a specialized commercial partner for the purposes of formulating our K1.1 mRNA molecules into specific lipid nanoparticles for use in

test animals including xenograft mice.

The initial results of our animal testing indicated that our K1.1 mRNA-LNP constructs were effective

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SBFM-PL4 SARS Coronavirus Treatment

The initial genome expression products following infection

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

The 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

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

We have since broadened our objective to include the

development of a 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 interactions and possible rebound infections and other side

Our current lead compound was recently found to be

active at sub micromolar concentrations against PLpro and exhibited antiviral activity in SRAS-CoV-2 infected cells as well as in cells

We have since broadened our objective to include

the development of a 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 interactions and possible rebound infections and other

side effects.

Our current lead compound was recently found to

be active at sub micromolar concentrations against PLpro and exhibited antiviral activity in SRAS-CoV-2 infected cells as well as in cells

infected with several different variants of concern.

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Intellectual Property

On May 22, 2020, we filed a provisional patent application

in the United States for a new treatment for Coronavirus infections.

Our patent application covers composition subject matter pertaining

to small molecules for inhibition of the main Coronavirus protease, Mpro, an enzyme that is essential for viral replication.

application has a priority date of May 22, 2020.

On April 30, 2021, we filed a PCT application containing new research results and extending

coverage to include the Coronavirus Papain-Like protease, PLpro.

The priority date of May 22, 2020 has been maintained in the newly filed

PCT application.

On April 20, 2022, we filed a provisional patent application

in the United States covering mRNA molecules capable of destroying cancer cells in vitro.

The patent application contains composition

and utility subject matter pertaining to the structure and sequence of the relevant mRNA molecules.

On May 22, 2020, we filed a provisional patent

application in the United States for a new treatment for Coronavirus infections.

Our patent application covers composition subject matter

pertaining to small molecules for inhibition of the main Coronavirus protease, Mpro, an enzyme that is essential for viral replication.

The patent application has a priority date of May 22, 2020.

On April 30, 2021, we filed a PCT application containing new research results

and extending coverage to include the Coronavirus Papain-Like protease, PLpro.

The priority date of May 22, 2020 has been maintained in

the newly filed PCT application.

On April 20, 2022, we filed a provisional patent

application in the United States covering mRNA molecules capable of destroying cancer cells in vitro.

The patent application contains

composition and utility subject matter pertaining to the structure and sequence of the relevant mRNA molecules.

Effective February 24, 2023, we became the exclusive,

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200 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.

Nora Pharma also owns the rights to sell 10 generic

prescription drugs in Canada through distribution agreements with various international partners under which Nora Pharma acts as distributor

and receives a percentage of sales.

In addition, we own four (4) NPN’s issued by

Health Canada including (i) NPN 80089663 which authorizes us to manufacture and sell our in-house developed OTC product, Essential•9™,

These DIN’s were secured through

in-licenses or cross-licenses from international manufacturers of generic pharmaceutical products.

Nora Pharma also owns the rights to

sell 10 generic prescription drugs in Canada through distribution agreements with various international partners under which Nora Pharma

acts as distributor and receives a percentage of sales.

In addition, we own four (4) NPN’s issued

by Health Canada including (i) NPN 80089663 which authorizes us to manufacture and sell our in-house developed OTC product, Essential•9™,

(ii) NPN 80093432 which authorizes us to manufacture and sell the OTC product, Calcium-Vitamin D, (iii) NPN 80125047 which authorizes

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Results of Operations

Comparison of results of operations

for the three months ended March 31, 2025 and 2024

the three months ended March 31, 2025, we generated $8,901,341 in sales, compared to $7,541,046 for the three months ended March 31,

2024, an increase of $1,360,295, or 18.0%.

The increase is attributable to new product launches and expanded marketing and sales efforts.

The direct cost for generating these sales was $6,170,915 (69.3%) for the three months ended March 31, 2025, compared to $5,186,709 (68.8%)

for the three months ended March 31, 2024, largely unchanged.

Our gross profit for the three months ended March 31, 2025 was $2,730,426,

compared to $2,354,337 for the three months ended March 31, 2024, an increase of $376,089.

and administrative expenses during the three-month period ended March 31, 2025, were $4,026,176, compared to $3,704,926 during the three-month

period ended March 31, 2024, an increase of $321,250.

This relatively small increase was the net result of increases and decreases in

specific expense categories.

For example, while consulting fees increased by $317,886 and marketing expenses increased by $200,315, there

was a decrease in accounting fees of $58,247 and legal fees of $194,799.

Overall, we incurred a loss of $1,295,750 from our operations

for the three months ended March 31, 2025, compared to a loss of $1,350,589 from our operations in the three-month period ended March

In addition, we had interest income of $75,367 during the three

months ended March 31, 2025, compared to interest income of $144,089 during the three months ended March 31, 2024, as a result of having

less cash on hand.

As a result, we incurred a net loss of $1,179,771

($0.44 per share) for the three months ended March 31, 2025, compared to a net loss of $1,283,801 ($2.00 per share) for the three-month

period ended March 31, 2024.

Comparison of results of

operations for the three months ended June 30, 2025 and 2024

During the three months ended June 30, 2025, we

generated $9,410,230 in sales, compared to $9,303,067 for the three months ended June 30, 2024, largely unchanged.

The direct cost for

generating these sales was $5,987,364 (63.6%) for the three months ended June 30, 2025, compared to $6,946,810 (74.7%) for the three months

ended June 30, 2024, a decrease of approximately 11% largely due to procurement of better cost of finished products.

Our gross profit

for the three months ended June 30, 2025 was $3,422,866, compared to $2,356,257 for the three months ended June 30, 2024, an increase

of $1,066,609.

and administrative expenses during the three-month period ended June 30, 2025, were $5,477,521, compared to $3,624,533 during the three-month

period ended June 30, 2024, an increase of $1,852,988.

The significant increase was primarily attributable to a $1,061,809 impairment

of intangible assets resulting from the determination that certain product licenses could not be commercialized.

The other expense categories

which contributed to this increase were consulting fees which increased by $682,679 due to fees paid in connection with warrant exercises

and salaries, which increased by $492,500 due to new hiring.

Overall, we incurred a loss of $2,054,655 from our operations for the three

months ended June 30, 2025, compared to a loss of $1,268,276 from our operations in the three-month period ended June 30, 2024.

had interest income of $72,715 during the three months ended June 30, 2025, compared to interest income of $143,995 during the three

months ended June 30, 2024, as a result of having less cash on hand.

As a result of the foregoing, we incurred a net

loss of $1,770,834 ($0.39 per share) for the three months ended June 30, 2025, compared to a net loss of $494,300 ($9.94 per share) for

the three-month period ended June 30, 2024.

Comparison of results of

operations for the six months ended June 30, 2025 and 2024

the six months ended June 30 2025, we generated revenues of $18,311,571, compared to revenue of $16,844,113 for the six months ended

June 30, 2024, an increase of $1,467,458, or 8.7%.

The increase is attributable to enhanced marketing efforts in 2025.

The direct cost

for generating these revenues was $12,158,279 for the six months ended June 30, 2025 (66.4%), compared to $12,133,519 (72.0%) for the

six months ended June 30, 2024.

The decrease in the cost of goods sold in 2025 was due to the procurement of better cost of finished

Our gross profit increased by $1,442,698 from $4,710,594 for the six months ended June 30, 2024, to $6,153,292 for the same

period in 2025.

and administrative expenses during the six-month period ended June 30, 2025, were $9,503,697, compared to $7,378,640 during the six-month

period ended June 30, 2024, an increase of $2,125,057.

The significant increase was primarily attributable to a $1,061,809 impairment

of intangible assets resulting from the determination that certain product licenses could not be commercialized.

The other expense categories

which contributed to this increase were consulting fees which increased by $1,000,565 due to fees paid in connection with warrant exercises

and salaries which increased by $484,234 due to new hiring.

These increases were offset to some extent by a decrease in legal fees by

$353,240 and R&D by $246,759.

Overall, we incurred a loss of $3,350,405 from our operations in the six-month period ended June 30,

2025, compared to a loss from operations of $2,668,046 in the similar period of 2024.

had interest income of $148,082 during the six months ended June 30, 2025, compared to interest income of $288,084 during the six months

ended June 30, 2024.

The decrease was a result of having less cash on hand.

a result of the foregoing we incurred a net loss of $2,950,605 ($0.82 per share) for the six-month period ended June 30, 2025, compared

to a net loss of $1,778,101 ($43.48 per share) for the six-month period ended June 30, 2024.

Liquidity and Capital Resources

As of March 31, 2025, we had cash and cash equivalents of $8,124,610.

cash used in operating activities was $1,713,835 during the three months ended March 31,

2025, compared to $3,185,158 during the three-month period ended March 31, 2024.

was a result of reduced cash required for the operations of Nora Pharma.

flows used in investing activities were $176,024 for the three months ended March 31, 2025, compared to $668,736 for the three months

ended March 31, 2024.

The decrease was the result of less cash invested in Nora Pharma.

flows provided by financing activities were $338,137 during the three months ended March 31, 2025, compared to $5,398,149 during the

three months ended March 31, 2024.

The decrease was primarily as a result of no financing events completed during the three months ended

March 31, 2025, compared to an offering yielding net proceeds of $8,522,411 completed during the three months ended March 31, 2024.

are currently generating revenue of approximately $8.9 million per quarter and incurring a quarterly deficit of approximately $1.2 million.

In addition to increasing sales and streamlining operations to reduce expenses, we are currently focusing our attention on lowering our

cost of goods sold from our current level of approximately 70% to possibly 60%.

We believe these measures could bring us to breakeven

and make us less dependent on the capital markets for financing.

We believe our existing cash on hand together with cash we generate

from sales will be sufficient to fund our operations for the next 24 months.

There is no assurance our estimates will be accurate.

have no committed sources of capital and we anticipate that we will need to raise additional capital in the future, including for further

research and development activities and possibly clinical trials, as well as expansion of our generic pharmaceuticals operations.

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

As of June 30, 2025, we had cash and cash equivalents of $10,305,320.

Net cash used in operating activities was $2,987,267

during the six months ended June 30, 2025, compared to $7,762,942 during the six-month period ended June 30, 2024.

The decrease was a

result of reduced cash required for the operations of Nora Pharma.

Cash flows used in investing activities were $667,802

for the six months ended June 30, 2025, compared to $1,210,944 for the six months ended June 30, 2024.

The decrease was the result of

less cash invested in Nora Pharma.

Cash flows provided by financing activities were

$3,948,372 during the six months ended June 30, 2025, compared to $5,369,566 during the six months ended June 30, 2024.

The decrease was

primarily as a result of a smaller financing event completed during the six months ended June 30, 2025, compared to an offering yielding

net proceeds of $8,522,411 completed during the six months ended June 30, 2024.

We are currently generating revenue of approximately

$9.4 million per quarter and incurring a quarterly deficit of approximately $1.0 million (not including the one-time intangible assets

impairment of $1,061,809 during the three months ended June 30, 2025).

In addition to increasing sales and streamlining operations to

reduce expenses, we are currently focusing our attention on lowering our cost of goods sold from our current level of approximately 65%

to approximately 60%.

We believe these measures could bring us to breakeven and make us less dependent on the capital markets for financing,

although there can be no assurances that we will be successful in achieving these reductions.

We believe our existing cash on hand together

with cash we generate from sales will be sufficient to fund our operations for the next 24 months.

There is no assurance our estimates

will be accurate.

We have no committed sources of capital and we anticipate that we will need to raise additional capital in the future,

including for further research and development activities and possibly clinical trials, as well as expansion of our generic pharmaceuticals

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

Critical Accounting Estimates

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included therein as filed with the SEC on April 1, 2025.

Recently Adopted Accounting Standards

Recently Adopted Accounting

We have adopted all new accounting standards impacting

Off Balance-Sheet Arrangements

We have not entered into any off-balance sheet arrangements.

We have not entered into any off-balance sheet

arrangements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

We are a smaller reporting company and are not required

to provide the information under this item.

We are a smaller reporting company and are not

required to provide the information under this item.

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