Another Very Strong Quarter with 37% growth Fiscal Q1 2024 revenue reflects a 37% increase over fiscal Q1 2023, demonstrating strong revenue growth and continued overall performance
Management to host conference call at 8:00 AM Eastern time on Thursday, August 10, 2023
Toronto, Ontario and Chicago, Illinois--(Newsfile Corp. - August 9, 2023) - Medexus Pharmaceuticals (TSX: MDP) (OTCQX: MEDXF) today announced its operating and financial results and provided a business update for the company's first fiscal quarter ended June 30, 2023 (the company's fiscal Q1 2024). All dollar amounts in this news release are in United States dollars unless specified otherwise.
Financial highlights
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Record total revenue of $31.6 million in fiscal Q1 2024, a year-over-year increase of 37%. This represents the strongest quarterly revenue in Medexus's history.
The substantial improvement over the same quarter in the previous year was primarily due to continuing strong sales of IXINITY, continuing strong Rupall demand growth, including in part due to timing of orders, and Rasuvo performance, and the recognition of 100% of Gleolan net sales in total revenue.
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Record Adjusted EBITDA* of 6.6 million in fiscal Q1 2024, a year-over-year increase of $4.7 million.
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This represents the strongest quarterly Adjusted EBITDA in Medexus's history. The substantial improvement over the same quarter in the previous year was primarily due to the increase in revenue mentioned above and a small reduction in operating expenses.
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Operating profit of $4.8 million in fiscal Q1 2024, compared to $0.0 million in fiscal Q1 2023.
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Net income of $0.7 million in fiscal Q1 2024, compared to $(1.4) million in fiscal Q1 2023.
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Adjusted Net Income*, which adjusts for the unrealized gains and losses included in net income (loss), of $0.6 million, compared to $(3.6) million in fiscal Q1 2023.
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Cash and cash equivalents (and total available liquidity) of $15.8 million at June 30, 2023.
* Refer to "Non-GAAP measures" at the end of this news release for information about Adjusted EBITDA and Adjusted Net Income (Loss).
Ken d'Entremont, Chief Executive Officer of Medexus, commented, "We are very pleased to report another great quarter, with continued strength and stability across the company's base business, and notably strong Rupall performance driving this latest quarter's record revenue. These results demonstrate the robustness of our product portfolio and our ability to generate revenue growth and positive operating profit, net income, and Adjusted EBITDA*."
Marcel Konrad, Chief Financial Officer of Medexus, further noted, "Our cash position has continued to improve in the first quarter of fiscal year 2024, increasing from $13.1 million at March 31, 2023 to $15.8 million at June 30, 2023.
In July, we used some of this cash to repurchase and cancel C$1.7 million principal amount of convertible debentures under our NCIB. Adjusting for that transaction, we continue to expect to have approximately $20 million of total cash at September 30 - assuming successful execution of our cash management plan, and not including any additional amounts that may become available under the $20 million uncommitted accordion facility with BMO."
Operational highlights
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IXINITY (US): Unit demand in the United States remained strong during the three-month period ended June 30, 2023, experiencing a slight decrease over the trailing 12-month period ended June 30, 2023 - reflecting the effects of lower observed average quantities of product consumed by newer patients, following the particularly strong quarter for new patient conversions in the three-month period ended March 31, 2023. (Source: customer-reported dispensing data.) Medexus's sales and marketing initiatives also benefited from resumption of in-person selling since mid-financial year 2023. Medexus has also continued to invest moderately in its IXINITY manufacturing process improvement initiative, which has had a positive impact on batch yield and manufacturing costs, expected to be offset by increases in direct costs of Medexus's third-party contract manufacturing arrangements.
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Rasuvo (US): Medexus maintained its market leading position during the three-month period ended June 30, 2023, with an estimated >80% unit share during the trailing 12-month period ended June 30, 2023, as unit demand for Rasuvo remained strong in the moderately-growing US branded methotrexate market with a highly efficient allocation of sales force resources. (Source: Symphony Sub National 06/30/2023 Data & Chargebacks, PAP). However, competition in the US branded methotrexate market continues to adversely affect Rasuvo product-level revenue. Medexus implemented effective unit-level price reductions to defend and grow its strong market position.
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Rupall (Canada): Unit demand in Canada remained strong during the three-month period ended June 30, 2023, which is reflected in the unit demand growth of 26% over the trailing 12-month period ended June 30, 2023. (Source: IQVIA CDH units - Drugstores and hospitals purchases, MAT June 2023.) This strong performance reflects successful execution of the company's sales and marketing initiatives to sustain the product's strong performance over the six years since launch, as well as the timing of certain orders during the quarter. Medexus continues to evaluate appropriate business-planning options well in advance of Rupall's Health Canada market exclusivity expiration date of January 2025. This includes securing rights to commercialize new products that would be a strategic fit with Rupall, such as terbinafine hydrochloride nail lacquer (discussed below).
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Gleolan (US): Medexus continued to execute the company's post-transition commercial plan including new sales and marketing initiatives, including application of additional existing sales force resources to expand and deepen market coverage. Medexus is also engaging in active inventory management to optimize the product's working capital position over the coming quarters. In May 2023, Medexus presented data at ISPOR 2023 demonstrating a 33% cost savings with Gleolan, compared to conventional white light surgery, in US patients with high-grade glioma. Based on the publication, which was sponsored by Medexus, although Gleolan is additive to the cost of surgery, its use results in lower cost per "imaging complete resection", and therefore is a more efficient use of resources in the surgical resection of high-grade glioma.
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Metoject (Canada): Unit demand increased by 12% in the trailing 12-month period ended June 30, 2023 in spite of direct generic competition. (Source: IQVIA - TSA database.) Product-level performance continues to experience disruption from the launch of a generic product in the Canadian methotrexate market in calendar year 2020. In the three-month period ended June 30, 2023, unit demand for Metoject benefited from unanticipated shortages of competing product inventory. Medexus continues to implement effective unit-level price reductions to defend and grow its strong market position.
Product pipeline highlights
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Treosulfan (US): medac, licensor of Medexus's commercialization rights to treosulfan and the party responsible for regulatory matters, continues to work toward resubmission of the new drug application (NDA) for treosulfan. Based on Medexus's assessment of the FDA's feedback and discussions with medac, Medexus continues to expect that it will take medac a period extending into first half calendar year 2024 to collect and submit the information requested by the FDA. In light of the ongoing delay in medac's response to the FDA's requests in respect of the treosulfan NDA, the FDA's review of the treosulfan NDA has now continued beyond the agreed outside date for FDA approval set out in the treosulfan license agreement, which provides that milestone payment amounts are subject to renegotiation and adjustment during an agreed negotiation period, which is currently underway.
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Topical Terbinafine (Canada): Medexus has made progress on preparing the new drug submission seeking Health Canada approval of terbinafine hydrochloride nail lacquer to treat fungal nail infections, and continues to expect to submit later in calendar year 2023. Management views this product as a strategic fit with Rupall and expects that it will both contribute to the company's Canadian revenues and engage the commercial infrastructure previously put in place to support Rupall, one of Medexus's current leading products.
Additional information
Medexus's financial statements and management's discussion and analysis for the fiscal quarter ended June 30, 2023 are available on Medexus's corporate website at www.medexus.com and in the company's corporate filings on SEDAR at www.sedarplus.ca (as successor to www.sedar.com).