Medexus Pharmaceuticals Inc. (“Medexus” or the “Company”) (TSX:
MDP) (OTCQX: MEDXF) today announced its financial results and
provided a business update for the three-month period ended
December 31, 2021. All dollar amounts below are in United
States dollars unless specified otherwise.
Third Quarter Fiscal 2022 Financial
Highlights:
- Revenue of $21.3
million, an increase of 19% compared to $17.9 million in Q2 of
fiscal 2022 and a 12% decrease compared to $24.3 million in Q3 of
fiscal 2021. Sequential quarterly revenue growth was primarily
attributable to an increase in IXINITY sales in Q3.
- Adjusted EBITDA* of
$1.9 million, an increase from ($2.0) million in Q2 of fiscal 2022
and a decrease from $3.9 million in Q3 of fiscal 2021. Sequential
quarterly improvement was primarily attributable to improved
IXINITY net sales in Q3 and the reduction of expenses. The
Company’s recent inventory management and manufacturing process
modernization initiatives have also started to produce positive
results.
- Net loss of $1.2
million, compared to $12.8 million in Q3 of fiscal 2021.
- Adjusted net loss*,
which adjusts for unrealized losses (or gains) on the fair value of
derivatives, of $3.4 million, compared to $0.4 million in Q3 of
fiscal 2021.
- Net cash flow of
$1.4 million, compared to $2.8 million in Q3 of fiscal 2021.
- Cash and cash
equivalents of $9.6 million (with $10.1 million of total available
liquidity) at end of Q3 of fiscal 2022.
Ken d’Entremont, Chief Executive Officer of
Medexus, commented, “We are encouraged to see sequential
quarter-over-quarter growth in revenue and adjusted EBITDA this
past quarter. In particular, IXINITY saw improved sales in Q3
versus Q2 of fiscal 2022 aided by supply chain improvements. We
plan to build on this momentum by continuing to pursue
opportunities to complement our existing product portfolio, while
also preparing for the commercial launch of Treosulfan in the
United States later this year, assuming approval by the FDA.”
Third Quarter Fiscal 2022 Operational
Highlights:
-
IXINITY: The Company continued to see positive
trends with respect to IXINITY sales, with unit market demand in
the United States experiencing continuous growth in the trailing 12
twelve-months ended December 31, 2021 (Source: customer reported
dispensing data), which the Company views as indicating a moderate
level of patient conversions on top of a stable, existing base of
patients. IXINITY net sales and gross margins in the period were
both affected by the Company's recent initiatives to reset the
supply chain and selling process and preliminary results of the
Company's ongoing manufacturing process modernization initiative.
The Company expects gross margins for the product will ultimately
improve further as a result of these operational efficiencies.
-
Rupall: The product continued to generate strong
unit demand growth of 30% for the trailing twelve-months ended
December 31, 2021. This positions Rupall as one of the fastest
growing anti-histamines in the Canadian prescription market
(Source: IQVIA CDH units – Drugstores and hospitals purchases, MAT
December 2021). This strong growth reflects a severe allergy season
across Canada and physicians increasingly switching patients to
Rupall from either the generic prescription anti-histamines or
over-the-counter products.
-
Treosulfan: On November 23, 2021, the Company
participated in medac’s Type A meeting with the FDA to review
medac’s resubmission plan for its new drug application (“NDA”) for
Treosulfan. Following that meeting, and based on further
discussions with medac, the Company’s conclusion is that there is a
path towards approval that does not involve completing an
additional phase 3 study, provided medac delivers to the FDA
materials that address the FDA’s outstanding issues. The NDA
resubmission is currently expected to occur in the second calendar
quarter of 2022, with a final FDA decision expected 2 to 6 months
thereafter.
Operating and Financial Results Summary
for the Three Months Ended December 31, 2021:
Total revenue reached $21.3 million for the
three-month period ended December 31, 2021, compared to revenue of
$24.3 million for the three-month period ended December 31, 2020.
Revenue for the quarter benefited from a large late-December order
totaling approximately $2.0 million, which was originally
anticipated to be received in Q4 of fiscal 2022. In addition, as
previously disclosed, revenue for the comparison period includes
over $2.5 million in revenue from IXINITY sales, which was
originally expected to be realized in September 2020, but was
instead realized in early October 2020 due a delay in receipt of
finished product from the Company’s contract manufacturing partner.
The Company expects that timing of such large orders will continue
to affect quarter-to-quarter comparisons of the Company’s
revenues.
Gross profit reached $11.5 million for the
three-month period ended December 31, 2021, compared to gross
profit of $12.7 million for the three-month period ended December
31, 2020.
Gross margin was 54.1% for the three-month
period ended December 31, 2021, compared to 52.2% for the
three-month period ended December 31, 2020. This higher gross
margin is due to an increase in sales of higher margin products in
Canada, as well as improvements made to the IXINITY manufacturing
process, which has begun to generate improved yields, reducing the
Company’s cost per unit of IXINITY.
Operating loss was $0.3 million for the
three-month period ended December 31, 2021, compared to operating
income of $1.5 million for the three-month period ended December
31, 2020.
Adjusted EBTIDA* was $1.9 million for the
three-month period ended December 31, 2021, compared to $3.9
million for the three-month period ended December 31, 2020. This
lower adjusted EBITDA is due to the impact of the significant
investments the Company made to improve its capacity for future
business development and prepare for the anticipated
commercialization of Treosulfan in the United States.
Net loss was $1.2 million for the three-month
period ended December 31, 2021, compared to $12.8 million for
the three-month period ended December 31, 2020. Net loss for
the quarter included a $2.2 million non-cash unrealized gain on the
fair value of the embedded derivatives in the Company’s convertible
debentures, which was driven by a change in the Company’s share
price at the end of the relevant periods.
Operating and Financial Results Summary
for the Nine Months Ended December 31, 2021:
Total revenue reached $56.4 million for the
nine-month period ended December 31, 2021, compared to revenue of
$62.0 million for the nine-month period ended December 31, 2020.
Revenue for the period was lower than the comparison period due to
comparatively weaker IXINITY sales, particularly earlier in the
period. Rupall sales also contributed significantly to revenue for
the period, notwithstanding typical seasonality that resulted in
more moderate sales later in the period. Despite being on the
market for more than four years, Rupall saw unit demand growth of
30% over the trailing twelve-months ended December 31, 2021
(Source: IQVIA CDH units – Drugstores and hospitals purchases).
This is due to a severe allergy season across Canada, and further
market share gained by the brand.
Gross profit reached $27.8 million for the
nine-month period ended December 31, 2021, compared to gross profit
of $33.2 million for the nine-month period ended December 31, 2020.
The decline for the nine-month period ended December 31, 2021 was
due, in part, to an increase in cost of goods sold, caused by
additional expenses related to failures during the IXINITY
manufacturing process in the quarter ended June 30, 2021, as
previously disclosed. The Company is currently focusing on
modernizing the manufacturing process to mitigate the risk of
future manufacturing failures and to improve yields. Preliminary
results of this initiative positively affected IXINITY performance
later in the period.
Gross margin was 49.3% for the nine-month period
ended December 31, 2021, compared to 53.5% for the nine-month
period ended December 31, 2020. This lower gross margin is due to
the additional expenses related to failures during the IXINITY
manufacturing process earlier in the period, discussed above.
Operating loss for the nine-month period ended
December 31, 2021 was $12.5 million, compared to operating income
of $3.2 million for the nine-month period ended December 31,
2020.
Adjusted EBTIDA* was $(5.0) million for the
nine-month period ended December 31, 2021, compared to $9.8 million
for the nine-month period ended December 31, 2020. This lower
adjusted EBITDA is due to the impact of the IXINITY manufacturing
failures during the three-months ended June 30, 2021, the large
increase in research & development costs over the comparative
period, and the significant investments the Company made to improve
its capacity for future business development and prepare for the
anticipated commercialization of Treosulfan in the United
States.
Net income was $2.4 million for the nine-month
period ended December 31, 2021, compared to net loss of $17.8
million for the nine-month period ended December 31, 2020. Net
loss for this period included a $21.8 million non-cash unrealized
gain on the fair value of the embedded derivatives in the Company’s
convertible debentures, which was driven by changes to the
Company’s share price at the end of the relevant periods.
The Company’s financial statements and
management discussion and analysis, or MD&A, for the period
ended December 31, 2021 are available on the Company’s corporate
website at www.medexus.com and in the Company’s corporate filings
on SEDAR at www.sedar.com.
* Refer to
“Non-IFRS Financial Measures” at the end of this press release.
Conference Call Details
Medexus will host a conference call at 8:00 AM
Eastern Time on Thursday, February 10, 2022, to discuss the
Company’s financial results for the fiscal 2022 third quarter ended
December 31, 2021, as well as the Company’s corporate progress and
other developments.
The conference call will be available via
telephone by dialing toll free 888-506-0062 for Canadian and U.S.
callers or +1 973-528-0011 for international callers and by
entering access code: 826598. A webcast of the call may be accessed
at https://www.webcaster4.com/Webcast/Page/2010/44502 or on the
Investors—News and Events section of the Company’s corporate
website at https://www.medexus.com/en_US/investors/news-events.
A webcast replay will be available on the
Investors—News and Events section of the Company’s corporate
website at https://www.medexus.com/en_US/investors/news-events
through Friday, February 10, 2023. A telephone replay of the call
will be available approximately one hour following the call through
Thursday, February 17, 2022 and can be accessed by dialing
877-481-4010 for Canadian and U.S. callers or +1 919-882-2331
for international callers and entering conference ID: 44502.
About Medexus
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. Our
current focus is on the therapeutic areas of rheumatology,
transplant, auto-immune disease, hematology, and allergy. We
continue to build a highly differentiated company with a growing
portfolio of innovative and high-value orphan and rare disease
products that will underpin our growth for the next decade.
Our current leading products are Rasuvo™ and
Metoject®, a unique formulation of methotrexate (auto-pen and
pre-filled 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.
We have also licensed Treosulfan, 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 under review by the U.S. Food and Drug
Administration.
Our mission is to provide the best healthcare
products to healthcare professionals and patients. We strive to
deliver on this mission by acting on our core values: Quality,
Innovation, Customer Service, and Collaboration.
Contacts
For more information, please contact any of the following:
MedexusKen d’Entremont, Chief Executive
OfficerMedexus Pharmaceuticals Inc.Tel: 905-676-0003Email:
ken.dentremont@medexus.com
Marcel Konrad, Chief Financial OfficerMedexus
Pharmaceuticals Inc.Tel: 312-548-3139Email:
marcel.konrad@medexus.com
Investor RelationsVictoria RutherfordAdelaide
CapitalTel: 1-480-625-5772Email: victoria@adcap.ca
Forward-Looking Statements
Certain statements made in this press release
contain forward-looking information within the meaning of
applicable securities laws (forward-looking statements). The words
“anticipates”, “believes”, “expects”, “will”, “plans”, “potential”,
and similar words or expressions are often intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. More specifically,
forward-looking information in this press release may include, but
is not limited to, information contained in statements with respect
to: business strategy or outlook and future growth plans;
expectations regarding future financial or operating performance;
ability to obtain FDA and other regulatory approvals when required;
and competitive position and anticipated trends and challenges in
Medexus’s business and the markets in which it operates; among
others. These statements are based on factors or assumptions that
were applied in drawing a conclusion or making a forecast or
projection, including assumptions based on historical trends,
current conditions and expected future developments. Since
forward-looking statements relate to future events and conditions,
by their very nature they require making assumptions and involve
inherent risks and uncertainties. Medexus cautions that although it
is believed that the assumptions are reasonable in the
circumstances, these risks and uncertainties give rise to the
possibility that actual results may differ materially from the
expectations set out in the forward-looking statements. Material
risk factors include those set out in Medexus’s materials filed
with the Canadian securities regulatory authorities from time to
time, including Medexus’s most recent annual information form and
management’s discussion and analysis; future capital requirements
and dilution; intellectual property protection and infringement
risks; competition (including potential for generic competition);
reliance on key management personnel; Medexus’s ability to
implement its business plan; Medexus’s ability to leverage its U.S.
and Canadian infrastructure to promote additional growth;
regulatory approval by relevant health authorities, including the
FDA; product reimbursement by third party payers; litigation or
expiry with respect to patents or other intellectual property
rights; litigation risk; stock price volatility; government
regulation; and potential third party claims. Given these risks,
undue reliance should not be placed on these forward-looking
statements, which are made only as of the date hereof. Other than
as specifically required by law, Medexus undertakes no obligation
to update any forward-looking statements to reflect new
information, subsequent or otherwise.
Other notes
This press release may contain references to
trademarks and service marks. Solely for convenience, trademarks
and trade names referred to in this press release may appear
without the ® or ™ symbols, but such references are not intended to
indicate, in any way, that the holder or holders of the relevant
intellectual property rights will not assert, to the fullest extent
under applicable law, their rights to these trademarks and trade
names.
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