Medexus Pharmaceuticals Inc (CVE:KMDP) (OCTMKTS:PDDPF) reported financial results for the three and nine-month periods ended on December 31, 2019 that saw revenue of C$16.2 million and C$48.7 million respectively, showing strong demand for its products.
In a statement, accompanying the latest numbers, Medexus Pharmaceuticals CEO Ken d’Entremont, noted: “We achieved revenue of $16.2 million for the three months ended December 31, 2019, compared to $14.4 million for the same period last year. This improvement reflects both the acquisitions in October 2018, as well as continued unit demand growth across our key products.”
Medexus is focused on the therapeutic areas of auto-immune disease and pediatrics. The leading products are Rasuvo and Metoject, designed to treat rheumatoid arthritis and other auto-immune diseases; and Rupall, an innovative allergy medication.
“Specifically, Metoject unit market demand increased 88%, Rupall unit market demand increased 62%, and Rasuvo unit market demand increased 8% over the same period last year,” pointed out d’Entremont.
The Medexus boss said Rasuvo received “strong payor, prescriber and patient acceptance” in the US, which has positioned the company as an “emerging leader” in the methotrexate auto-injector market.
“As reported last quarter, while gross revenue continues to grow, net revenue in the US continues to be impacted by the consolidation of the company’s payors in the US market. As a result of this consolidation, we have experienced an increase in the discounts given to payors in the form of rebates, and a corresponding reduction in the net selling price of Rasuvo,” noted d’Entremont.
“We received a substantial rebate invoice from one of our main payors in the US, which negatively impacted net revenue and gross margin for Rasuvo in the three-month period. The late receipt of the invoice in respect of these additional rebates was due to an error in the payor’s internal reporting system. We continue to investigate the cause of the late receipt of this rebate invoice … Nevertheless, we anticipate sustained growth of our key products going forward.”
New prescriptions and unit growth
The CEO said the company launched new Metoject subcutaneous doses of 10mg/0.2ml and 12.5mg/0.25ml which helps physicians to accurately prescribe an appropriate strength for their patients.
“We anticipate the majority of provinces will reimburse these new strengths in the near-term, in turn, driving new prescriptions and unit growth,” said d’Entremont.
Medexus has three pillars of growth — organic growth of existing drugs, in-licensing and acquisitions of new products and the development of a reformulated rheumatoid arthritis drug.
In March 2019, Medexus struck a licensing pact with Photonamic GmbH & Co for exclusive rights to market Gliolan in Canada, which assists neurosurgeons to better visualize and more completely remove malignant brain tumors (gliomas) by causing them to become fluorescent and glow during surgery.
Gliolan was granted priority review
“Gliolan was granted priority review by Health Canada, which should significantly accelerate our path to approval,” said d’Entremont.
“Health Quality Ontario, under guidance of the Ontario Health Technology Advisory Committee, has recommended public funding of Gliolan.”
The company believes Gliolan will gain much broader distribution in Canada once it becomes a fully registered product.
d’Entremont concluded: “Overall, we have built a highly scalable business model and we are actively evaluating additional products and potential accretive acquisitions that would enable us to leverage our North American sales force going forward. Within our existing product lines, we have experienced strong unit sales growth and expect to generate positive cash flow from operations for the remainder of the 2020 fiscal year and beyond.”
Solid balance sheet
“Meanwhile, we continue to maintain strict financial discipline and a solid balance sheet with $22.6 million of cash and cash equivalents as of December 31, 2019,” he added.
The company repurchased 779,900 shares, illustrating its confidence in the outlook for the business.
For the three months ended December 31, 2019, the company posted revenue of C$16.2 million, compared to revenue of C$14.4 million for the same period a year earlier. The increase was due to the acquisitions and the unit demand growth of the company’s key products.
Gross profit was C$9 million, or 55.4% of sales, compared to C$9 million, or 62.1% of sales, for the same period last year.
The operating loss for the three months ended December 31, 2019 was C$3.3 million compared to C$0.1 million for the same period a year earlier. Operating loss included around C$2.1 million of termination benefits and C$1.2 million of business development and regulatory affairs expense.
“The increase in business development and regulatory affairs expense was due to accelerated business development activities and an increased volume of transactions under consideration,” noted the company.
For the nine months ended December 31, 2019, the company posted total revenue of $48.7 million, compared to revenue of $21.1 million for the nine months ended December 31, 2018. Gross profit was $28.5 million, or 58.4% of sales, compared to $12.5 million, or 59.4% of sales, for the same period last year.
Contact the author Uttara Choudhury at [email protected]
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