Medexus Pharmaceuticals Inc. (the “Company” or “Medexus”)
(TSXV: MDP, OTCQB: PDDPF) today provided a business update
and announced its financial and operating results for the fourth
quarter and fiscal year ended March 31, 2020. All dollar
amounts contained in this press release are in Canadian dollars
unless otherwise indicated.
Fourth quarter fiscal 2020 financial
highlights**:
- Revenue increased to $25.6 million
compared to $12.7 million for Q4 2019, including organic growth of
27%
- Gross profit increased to $13.3
million compared to $7.7 million for Q4 2019
- Adjusted EBITDA* increased to $4.2
million compared to $0.1 million for Q4 2019
Fiscal year 2020 financial
highlights**:
- Revenue increased to $74.4 million
compared to $33.9 million for fiscal 2019
- Gross profit increased to $41.8
million compared to $20.2 million for fiscal 2019
- Adjusted EBITDA* was $6.0 million
compared to $2.4 million for fiscal 2019
Ken d’Entremont, Chief Executive Officer of
Medexus, commented, “I am pleased to report we generated strong
year-over-year growth in revenue and Adjusted EBITDA* for both the
fourth quarter of 2020 and full year. This improvement reflects
strong organic growth across each of our key product lines, as well
as one month of sales from our new commercial hematology asset,
IXINITY®, which we acquired at the end of February 2020.
Specifically, we achieved organic year-over-year revenue
growth of 27% and IXINITY® contributed an additional $9.5 million
for the fourth quarter of 2020. Approximately 85% of IXINITY®
revenue for the quarter accrued to Medexus in March and as such,
was highly accretive. The integration of IXINITY® is complete and
it leverages our existing US based infrastructure, as we have added
a product generating approximately $40 million of revenue on an
annual basis (based on the twelve-month period ended December 31,
2019) with roughly the same number of employees as we had before
the acquisition. We see significant potential for further growth of
IXINITY® in the US and other markets. Importantly, we financed this
transaction without any equity dilution, using a credit facility,
which, together with the solid cash flow of the combined companies,
reinforces the strength of our balance sheet and our commitment to
driving value for shareholders. Overall, we are proud of our
continued progress, continue to believe that we have built a highly
scalable business model, and will continue to actively evaluate
additional opportunities to license or acquire accretive products
that leverage our existing infrastructure in the United States and
Canada.”
Operational highlights**:
- Acquisition of
IXINITY® – On February 28, 2020, the Company acquired
IXINITY®, a recombinant factor IX therapeutic for the treatment of
hemophilia B, a rare disease affecting between 4,000 and 5,000
people in the US. Annual sales of IXINITY® were US$32 million in
2019, a 40% increase over the previous year.
- IXINITY® pediatric
study – In January 2020, the Company’s acquired business,
Aptevo BioTherapeutics LLC, commenced dosing patients in a Phase 4
clinical trial to evaluate the safety and efficacy of IXINITY® in
previously treated patients under 12 years of age with hemophilia
B. IXINITY® is currently indicated for patients 12 years of
age or older with hemophilia B, and once completed, this study may
support a significant expansion of the indicated patient population
for IXINITY®. Approximately 1 in 3 patients treated for hemophilia
B in the United States are 12 years of age or younger.
- Triamcinolone Hexacetonide
(“TH”) approval for public reimbursement in Canada – On
March 31, 2020 the Company reached an agreement with the
pan-Canadian Pharmaceutical Alliance to include TH on the federal,
provincial, and territorial formularies except for Quebec, where
the review is ongoing, and British Columbia. Inclusion of TH on
these formularies improves access to this product for a large
proportion of the population who need this drug. TH has been
included on the Alberta Drug Benefit List effective May 1, 2020 as
restricted benefits for patients up to 17 years of age inclusive
for the treatment of Juvenile Idiopathic Arthritis, and additional
formulary listings are expected this year. TH competes in an
intra-articular steroid market valued at $33 million in Canada
(source: IQVIA CDH Dec. 2019).
- Development
Project – The status of the Company’s development project,
aimed at reformulating an existing FDA-approved product for use in
the field of rheumatology, is in line with management’s
expectations. If this project is successfully developed, the
Company will have a product that addresses an unmet medical need,
within a large market it currently serves.
- Gleolan application to
Health Canada and reimbursement – On December 20, 2019,
the Company filed an application for registration of Gleolan to
Health Canada. The application is a priority review, which means
the file could be approved as soon as August
2020. On March 27, 2020, the Company was
informed that The Quality business unit at Ontario Health, based on
guidance from the Ontario Health Technology Advisory Committee had
recommended publicly funding Gleolan through the Ministry of Health
upon approval of the product by Health Canada.
- Organic Growth –
Each of the Company’s promoted products is delivering strong unit
growth year over year. Rasuvo® unit market demand in the United
States increased 11% in the year ended March 31, 2020, (Source:
Symphony Sub National 03/31/2020 Data & Chargebacks, PAP).
Metoject® realized a 96% unit demand growth in Canada in the year
ended March 31, 2020, (Source: IQVIA – TSA National units) and
Rupall™ delivered an increase of 61% in the year ended March 31,
2020, (Source: IQVIA – Drugstores and hospitals purchases).
Operating and Financial Results
Summary**
For the three months ended March 31, 2020, total
revenue was $25.6 million compared to revenue of $12.7 million for
the three months ended March 31, 2019. The increase was due to the
organic growth of the Company’s key products as well as the
additional revenue from the acquisition of IXINITY®, which
contributed approximately $9.5 million.
Gross profit for the three months ended March
31, 2020 was $13.3 million, or 51.8% of sales, compared to $7.7
million, or 60.1% of sales, for the same period last year. The
lower gross margin for the three months ended March 31, 2020, when
compared to the three months ended March 31, 2019 is due, in part,
to the IXINITY® acquisition, which currently has a lower gross
margin than the Company’s other key products.
Operating loss for the three months ended March
31, 2020 was $1.9 million compared to $1.8 million for the three
months ended March 31, 2019.
Adjusted EBITDA* for the three months ended
March 31, 2020 was $4.2 million compared to $0.1 million for the
three months ended March 31, 2019. Net loss for the three months
ended March 31, 2020 was $2.1 million compared to net loss of $0.7
million for the same period last year.
For the fiscal year ended March 31, 2020, total
revenue was $74.4 million compared to revenue of $33.9 million for
the fiscal year ended March 31, 2019. The increase was due to the
organic growth of the Company’s key products as well as the
additional revenue from the acquisition of IXINITY®.
Gross profit for the fiscal year ended March 31,
2020 was $41.8 million, or 56.2% of sales, compared to $20.2
million, or 59.7% of sales, for the same period last fiscal year.
The lower gross margin for twelve-month period ended March 31, 2020
is due, in part, to a lower gross margin related to IXINITY® in
comparison to the other major product lines. Additionally, during
the fiscal year 2020, the Company experienced an increase in
discounts given to payors and a reduction in the net selling price
of Rasuvo®.
Operating loss for the fiscal year ended March
31, 2020 was $7.7 million compared to $5.7 million for the fiscal
year ended March 31, 2019.
Adjusted EBITDA* for the year-ended March 31,
2020 was $6.0 million compared to $2.4 million for the fiscal year
ended March 31, 2019. Net loss for the fiscal year ended
March 31, 2020 was $6.2 million compared to net loss of $6.3
million for the fiscal year ended March 31, 2019.
Under the Company’s normal course issuer bid,
the Company purchased and canceled 919,000 common shares in the
market for consideration of approximately $3.7 million during the
fiscal year ended March 31, 2020.
The Company’s financial statements and
management discussion and analysis (“MD&A”) for the three and
twelve months ended March 31, 2020 are available on our corporate
website at www.medexus.com and in our corporate filings on
SEDAR at www.sedar.com.
*Refer to “Non-IFRS Financial Measures” at the
end of this press release.**Refer to “Cautionary Note Regarding
Comparative Financial Information” at the end of this press
release.
Conference Call Details
Medexus will host a conference call on Tuesday,
June 23, 2020 at 8:00 AM Eastern Time to discuss the Company’s
financial results for the fourth quarter and fiscal year-ended
March 31, 2020, as well as the Company’s corporate progress and
other developments.
The conference call will be available via
telephone by dialing toll free 844-369-8770 for Canadian and U.S.
callers or +1 862-298-0840 for international callers, or on the
Company’s Investor Events section of the website:
www.medexus.com/news-events.
A webcast replay will be available on the
Company’s Investor Events section of the website
(www.medexus.com/news-events) through September 23, 2020. A
telephone replay of the call will be available approximately one
hour following the call, through June 30, 2020, 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:
35423.
About Medexus Pharmaceuticals
Inc.Medexus is a leading specialty pharmaceutical company
with a strong North American commercial platform. The Company’s
vision is to provide the best healthcare products to healthcare
professionals and patients, through our core values of Quality,
Innovation, Customer Service and Teamwork. Medexus is focused on
the therapeutic areas of auto-immune disease, hematology and
allergy. The Company’s 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.
For more information, please
contact:
Ken d’Entremont, Chief Executive OfficerMedexus
Pharmaceuticals Inc.Tel.: 905-676-0003E-mail:
ken.dentremont@medexus.com
Roland Boivin, Chief Financial OfficerMedexus
Pharmaceuticals Inc.Tel.: 514-762-2626 ext. 202E-mail:
roland.boivin@medexus.com
Investor Relations (U.S.):
Crescendo Communications, LLCTel: +1-212-671-1020Email:
mdp@crescendo-ir.com
Investor Relations (Canada):
Frank CandidoDirect Financial Strategies and Communication
Inc.Tel: 514-969-5530E-mail: frank.candido@medexus.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Note Regarding Comparative
Financial Information
On October 16, 2018, the Company (under its
former name, Pediapharm Inc.) completed two transformative
acquisitions (the “2018 Acquisitions”) in
acquiring of all the issued and outstanding shares of Medexus Inc.
and Medexus Pharma, Inc. (under its former name, Medac Pharma,
Inc.) (“Medexus US”) and, subsequently, on
December 12, 2018, changed its name to “Medexus Pharmaceuticals
Inc.”.
On February 28, 2020, the Company announced that
Medexus US completed another major acquisition (the
“2020 Acquisition”, and together
with the 2018 Acquisitions, the “Acquisitions”) in
acquiring a Delaware limited liability company, which owns the
worldwide rights to the commercial hematology asset, IXINITY®,
for up-front cash consideration of approximately US$30
million.
Accordingly, readers are cautioned that while
certain financial information included herein for, and comparisons
to, prior periods have been presented in this press release,
changes from a pre-Acquisitions period to a post-Acquisitions
period may, in the opinion of management, be of limited value in
understanding changes to the financial condition, financial
performance, or business of the Company from period to period given
the transformative nature of the Acquisitions. Readers are advised
that the comparative information included in this press release
for: (a) the twelve-month period ended March 31, 2019, includes
certain pre-2018 Acquisitions results for Pediapharm Inc. (i.e.,
the comparative information for such period consists of results
prior to October 16, 2018 which reflect only the results for
Pediapharm Inc. pre-2018 Acquisitions and results subsequent to
October 16, 2018 which reflect the consolidated results of the
Company post-2018 Acquisitions, including the acquired entities);
and (b) the three- and twelve-months ended March 31, 2020, includes
certain pre-2020 Acquisitions results for the Company (i.e., the
comparative information for such periods consists of results prior
to February 28, 2020 which reflect only the pre-2020 Acquisition
results for the Company and results subsequent to February 28, 2020
which reflect the consolidated results of the Company post-2020
Acquisition).
Forward Looking Statements
Certain statements made in this press release
contain forward-looking information within the meaning of
applicable securities laws (“forward-looking
statements”). Such forward-looking information includes
statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions or future
events or performance (often, but not always, through the use of
words or phrases such as “anticipates”, “believes” “could”,
“expects”, “forecasts”, “intends”, “may”, “projects”, “will” and
“vision”) which are not historical facts. More specifically,
forward-information in this press release includes, but is not
limited to, information contained in statements with respect to:
the Company’s future expectations regarding growth and revenues;
expected benefits from the 2020 Acquisition; the Company’s business
strategy; the Company’s business outlook and other expectations
regarding cash flow of the combined companies and strength of
balance sheet; statements with respect to the Company’s ability to
drive value for shareholders; statements with respect to future
business operation and results, including with respect to future
earnings and the Company’s evaluation of additional opportunities
to license or acquire accretive products; the Company’s ability to
leverage its existing infrastructure in the United States and
Canada; the anticipated results of Phase 4 clinical trial for
IXINITY®; the anticipated benefits deriving from an approval for
public reimbursement of TH in certain jurisdictions in Canada; and
the anticipated results of the Gleolan application to Health
Canada. 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. The Company 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 the Company’s MD&A under
the heading “Risk Factors and Risk Management” and elsewhere in the
Company’s other disclosure documents filed with the applicable
Canadian securities regulatory authorities from time to time. Given
these risks, undue reliance should not be placed on these
forward-looking statements, which apply only as of the date hereof.
Other than as specifically required by law, the Company undertakes
no obligation to update any forward-looking statements to reflect
new information, subsequent or otherwise.
Non-IFRS Financial Measures
This press release uses the term “Adjusted
EBITDA” which is a non-IFRS financial measure, which does not have
any standardized meaning prescribed by IFRS and is therefore
unlikely to be comparable to similar measures presented by other
companies. Rather, this measure is provided as additional
information to complement those IFRS measures by providing further
understanding of the Company’s results of operations from
management’s perspective. Accordingly, they should not be
considered in isolation nor as a substitute for analysis of the
Company’s financial information reported under IFRS. In particular,
management uses Adjusted EBITDA as a measure of the Company’s
performance. The Company defines Adjusted EBITDA as earnings before
financing and special transaction costs (including, for greater
certainty, fees related to the transactions and financing announced
on October 16, 2018 and February 28, 2020, as discussed herein0),
interest expenses, income taxes, interest income, depreciation of
property and equipment, amortization of intangible assets, non-cash
share-based compensation, income from sale of asset, gain or loss
on the convertible debenture embedded derivative, foreign exchange
gains or losses, termination benefits, and impairment of intangible
assets. The Company considers Adjusted EBITDA as a key metric in
assessing business performance and considers Adjusted EBITDA to be
an important measure of operating performance and cash flow,
providing useful information to investors and analysts. This
non-IFRS measure is not intended to represent cash provided by
operating activities, net earnings or other measures of financial
performance calculated in accordance with IFRS. Additional
information relating to the use of this non-IFRS measure, including
the reconciliation of Adjusted EBITDA to Net Income (Loss), can be
found in our MD&A, which is available through the SEDAR website
(www.sedar.com).
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