Medexus Pharmaceuticals loses $2.7M (U.S.) in fiscal Q2

2022-11-08 18:35 ET – News Release


Medexus Pharmaceuticals Inc. has released its operating and financial results and has provided a business update for the company’s second fiscal quarter ended Sept. 30, 2022. All dollar amounts in this press release are in United States dollars unless specified otherwise.

Financial highlights for fiscal Q2 2023:

  • Record total revenue of $27.7-million, a year-over-year increase of 55 per cent, and a quarter-over-quarter increase of 20 per cent. This represents the strongest fiscal quarter in Medexus’s history. Increased net sales of Ixinity and Rupall and recognition of 100 per cent of revenue from Gleolan sales in the United States starting September, 2022, were strong contributors to this substantial year-over-year improvement.
  • Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $4.2-million, a year-over-year improvement of $6.3-million and a quarter-over-quarter increase of $2.3-million. The primary drivers for this substantial year-over-year improvement were increases in revenues, a reduction in research and development costs, and an increase in gross margin.
  • Operating profit of $1.9-million, a year-over-year improvement of $6.9-million.
  • Net loss of $(2.7-million), a year-over-year change of $(12.8-million), primarily due to unrealized gains on the change in fair value of the embedded derivatives in Medexus’s convertible debentures in the prior year’s net profit.
  • Adjusted net loss, which adjusts for the unrealized gains and losses included in net profit (loss), of $2.8-million, a year-over-year improvement of $3.3-million.
  • Cash and cash equivalents of $9.6-million (with $10.1-million of total available liquidity) at end of fiscal Q2 2023.

Ken d’Entremont, chief executive officer of Medexus, commented: « This was an excellent quarter for Medexus, demonstrating both the robustness of our product portfolio and our initiatives to improve margins and drive sales. Preliminary results of our Ixinity manufacturing initiative have started to produce improved yields, which contributed to this quarter’s improvements in our gross margins. During the quarter, we delivered organic growth across all our leading prescription products, and completed the transition to full commercial responsibility for Gleolan in the U.S. We are excited to see Gleolan’s contribution over the coming quarters as we execute on our commercial plan, which includes improved sales and marketing initiatives. »

Marcel Konrad, chief financial officer of Medexus, further noted: « During the second quarter we delivered an increase in our cash position versus previous quarter and generated positive operating cash flow this quarter. We also invested in our net working capital, including inventory and accounts receivable, as we prepare for continued growth and new business, especially as it relates to Gleolan. We anticipate seeing the benefit of these investments in our cash flow in the coming quarters. We are also actively evaluating strategies to optimize our balance sheet and capital structure to support this growth and have engaged third party advisers to help us in this initiative. »

Operational highlights

Operational highlights for the three-month period ended Sept. 30, 2022, and subsequent period include:

Leading products

  • Ixinity: Unit demand in the United States remained strong during the quarter and increased year over year, growth that was also reflected in the 12 months ended Sept. 30, 2022 — reflecting an acceleration of patient conversions on top of a stable, existing base of patients, following resumption of in-person selling earlier in the year. Medexus also continues to invest in a continuing initiative to improve the Ixinity manufacturing process. Preliminary results have indicated meaningfully improved yields and Medexus has started to see moderate improvements in gross margins for the product.
  • Rasuvo: The company maintained its market leading position during the quarter, with an estimated 80-per-cent unit share during the 12 months ended Sept. 30, 2022, and achieved a near-record sales month in August, as unit demand for Rasuvo remained strong in the moderately growing United States-branded methotrexate market with a limited sales force allocation. However, increasing competition in the U.S.-branded methotrexate market continue to negatively affect Rasuvo product-level revenue.
  • Rupall: Unit demand for the quarter increased year over year given peak allergy season across Canada during the quarter and successful sustained execution of sales and marketing initiatives, which was reflected in the unit demand growth of 25 per cent for the 12 months ended Sept. 30, 2022. This performance continues to position Rupall as one of the fastest-growing antihistamines in the Canadian prescription market.
  • Gleolan: Medexus acquired the exclusive right to commercialize Gleolan in the United States in March, 2022. During the quarter Medexus successfully completed the full transition of U.S. commercial responsibility to Medexus, which puts the company in position to successfully execute its commercial plan, including improved sales and marketing initiatives. The company began shipping Medexus-labeled product as of August, meaning that September was the first full month, and that the three-month period ended Dec. 31, 2022, will be the first full fiscal quarter, in which Medexus recognizes 100 per cent of Gleolan net sales.
  • Metoject: Unit demand in Canada for the quarter increased year over year, growth that was also reflected in the 12 months ended Sept. 30, 2022. Product-level performance continues to experience disruption from the launch of a generic product in the Canadian methotrexate market in calendar year 2020. Medexus and medac, licensor of Medexus’s commercialization rights to market and sell Metoject in Canada, continue their joint preparations for trial in the related patent litigation, a date for which has been set for early calendar year 2023.

Product pipeline highlights

  • Treosulfan (United States): In September, 2022, Medexus was informed by medac, licensor of Medexus’s commercialization rights to treosulfan, that the Food and Drug Administration had delivered to medac a second notice of incomplete response regarding medac’s July, 2022, new drug application resubmission for treosulfan (NDA). This notice requested further supporting information from medac to complete medac’s NDA resubmission but did not require submission of new clinical data. Medexus will provide an update to its shareholders and other stakeholders once management knows whether the resubmission has been accepted and is better able to assess the impact of this delay. The company has applied much of the infrastructure added in anticipation of a treosulfan launch to support Gleolan, gaining experience in many of the same institutions that are expected to use treosulfan if and when it is approved. Medexus also implemented a restructuring plan in October, 2022, to focus resources on existing products.
  • Ixinity (pediatric study): Medexus continues to explore opportunities to expand the patient population eligible to use Ixinity. In the first half of calendar year 2023, Medexus expects to submit to the FDA the results of Medexus’s phase 4 clinical trial evaluating the safety and efficacy of Ixinity in previously treated patients under 12 years of age with hemophilia B.
  • Gleolan (meningioma indication): The licensor of Medexus’s commercialization rights to Gleolan continues to pursue research and development activities regarding a meningioma indication for Gleolan (aminolevulinic acid hydrochloride or ALA HCl). Medexus’s exclusive commercialization rights include this additional meningioma indication.

Additional information

Medexus’s financial statements and management’s discussion and analysis for the fiscal quarter ended Sept. 30, 2022, are available on Medexus’s corporate website and in the company’s corporate filings on SEDAR.

Conference call details

Medexus will host a conference call at 8 a.m. Eastern Time on Wednesday, Nov. 9, 2022, to discuss the company’s operating and financial results and corporate updates for fiscal Q2 2023.

To participate in the call, please dial the following numbers:

  • 888-506-0062 (toll-free) for Canadian and U.S. callers;
  • 1-973-528-0011 for international callers;
  • Access code: 424091.

A live webcast of the call will be available on Medexus’s corporate website.

A replay of the call will be available approximately one hour following the end of the call through Wednesday, Nov. 16, 2022. To access the replay, please dial the following numbers:

  • 877-481-4010 for Canadian and U.S. callers;
  • 1-919-882-2331 for international callers;
  • Conference ID: 47041.

A replay of the webcast will be available on Medexus’s corporate website until Thursday, Nov. 9, 2023.

About Medexus Pharmaceuticals Inc.

Medexus is a leader in innovative rare disease treatment solutions with a strong North American commercial platform and a portfolio of proven best-in-class products. Its current focus is on the therapeutic areas of hematology, auto-immune diseases and allergy. Medexus continues to build a highly differentiated company with a growing portfolio of innovative and high-value orphan and rare disease products that will underpin the company’s growth for the next decade.

The company’s current leading products are: Rasuvo and Metoject, a unique formulation of methotrexate (auto-pen and prefilled syringe) designed to treat rheumatoid arthritis and other auto-immune diseases; Ixinity, an intravenous recombinant factor IX therapeutic for use in patients 12 years of age or older with hemophilia B (a hereditary bleeding disorder characterized by a deficiency of clotting factor IX in the blood, which is necessary to control bleeding); and Rupall, an innovative prescription allergy medication with a unique mode of action. Medexus also holds exclusive U.S. and Canadian rights to commercialize Gleolan (aminolevulinic acid hydrochloride or ALA HCl), a Food and Drug Administration-approved, orphan drug-designated optical imaging agent currently indicated in patients with glioma (suspected World Health Organization grades III or IV on preoperative imaging) as an adjunct for the visualization of malignant tissue during surgery.

The company has also licensed treosulfan, part of a preparative regimen for allogeneic hematopoietic stem cell transplantation to be used in combination with fludarabine, for commercialization in the United States and Canada. Treosulfan was approved by Health Canada in June, 2021, and is marketed in Canada as Trecondyv. Treosulfan is currently the subject of a regulatory review process with the U.S. Food and Drug Administration.

Medexus’s mission is to provide the best health care products to health care professionals and patients. It strives to deliver on this mission by acting on its core values: quality, innovation, customer service and collaboration.