Medexus Pharmaceuticals Inc. (the “Company” or “Medexus”)
(TSXV: MDP, OTCQX: PDDPF) today provided a business update
and announced its financial and operating results for the
three-month period ended June 30, 2020. All dollar amounts
below are in Canadian dollars unless specified otherwise.
First quarter fiscal 2021 financial
highlights:
- Revenue increased to $27.5 million compared to $16.1 million
for Q1 of fiscal 2020, driven by growth in IXINITY®, Rasuvo®,
Metoject® and Rupall™
- Adjusted EBITDA* increased to $5.0 million compared to $0.5
million for the same period last year; see “Reconciliation of
Adjusted EBITDA to Net Income (Loss)”. This is also an increase
over the $4.2 million in Adjusted EBITDA* achieved in the prior
quarter, the three-month period ended March 31, 2020.
- Cash provided by operating activities was of $4.1 million,
compared to cash used by operating activities of $0.3 million for
the same period last year.
- Selling and administrative expenses as a percentage of revenue
has decreased to 41.4%, from 65.1% for the same period last year,
as the Company continues to leverage its platform and significantly
increase its revenue with only modest increases to operating
expenses.
- Achieved operating income of $1.6 million, compared to an
operating loss of $1.1 million for the same period last year.
- Available liquidity of $14.5 million at June 30, 2020, compared
to $7.4 million at March 31, 2020.
Ken d’Entremont, Chief Executive Officer of
Medexus, commented, “We achieved record revenue and adjusted
EBITDA* of $27.5 million and $5.0 million, respectively, for the
three months ended June 30, 2020, compared to $16.1 million and
$0.5 million, respectively, for the same period last year. In
addition to our year-over-year growth, both revenue and adjusted
EBITDA* increased sequentially versus the three months ended March
31, 2020, which also included revenue from IXINITY®. This
year-over-year and sequential improvement was driven by the strong
performance of our core products, IXINITY®, Rasuvo®, Metoject® and
Rupall™, each of which continues to achieve strong organic growth
despite the ongoing COVID-19 pandemic. Additionally, with the
acquisition of IXINITY in the USA, we are further leveraging our
existing commercial infrastructure and our SG&A has
meaningfully declined as a percentage of revenues to just 41% this
quarter, versus 65% for the same period last year. As a
result, we generated $4.1 million of cash flow from operations
during the quarter. At the same time, we continue to
strengthen our balance sheet with available liquidity of $14.5
million at June 30, 2020, compared to $7.4 million at March 31,
2020.”
“We continue to take steps to ensure the safety
of our personnel, while at the same time, our sales teams have
remained productive by finding new ways to connect with clinicians
and patients during the ongoing COVID-19 pandemic. Overall, we have
built a highly scalable business model and continue to actively
evaluate additional products and potential accretive acquisitions
that would enable us to further leverage our North American
commercial infrastructure.”
Operational highlights**:
- Triamcinolone Hexacetonide (“TH”): On April 8,
2020, the Company announced that the pan-Canadian Pharmaceutical
Alliance (pCPA) price negotiations for Triamcinolone Hexacetonide
Injectable Suspension 20mg/mL (TH) in Canada have been completed
with expected public reimbursement to roll out in the respective
provinces over the coming months.
- US$20 Million Asset-Based Credit Facility: On
May 7, the Company announced that it entered into a definitive
credit agreement with a syndicate of lenders agented by MidCap
Financial Trust (“MidCap Financial”) in respect to a secured
asset-based revolving credit facility with a term of 38 months (the
“ABL Facility”) featuring a US$20 million revolving commitment
(subject to the borrowing base) and an uncommitted US$10 million
accordion. Borrowings under the ABL Facility bear interest at a
rate of one-month LIBOR plus 3.95%, subject to a LIBOR floor of
1.50%. Interest is payable monthly in arrears on the first business
day of each month. The initial advance under the ABL Facility was
used by the Company to repay US$10 million of the principal amount
outstanding under the US$20 million secured term loan entered into
by the Borrowers on February 28, 2020 (the “Term Loan”). The
interest rate on amounts outstanding under the ABL Facility is 255
basis points lower than that of the Term Loan. After such
repayment, approximately US$10 million principal amount remains
outstanding under the Term Loan.
- OTCQX: On August 4, 2020, the Company
qualified to trade on the OTCQX® Best Market and was upgraded to
the OTCQX from the OTCQB® Venture Market and continues to trade on
the TSX Venture Exchange.
Operating and Financial Results
Summary
Total revenue reached $27.5 million for the
three-month period ended June 30, 2020, compared to revenue of
$16.1 million for the three-month period ended June 30, 2019. The
increase was mainly due to the acquisition of IXINITY® as well as
organic growth of the Company’s key products.
Gross profit reached $15.0 million for the
three-month period ended June 30, 2020, compared to gross profit of
$9.9 million for the three-month period ended June 30, 2019. The
gross margin was 54.4% for the three-month period ended June 30,
2020, compared to 61.4% for the three-month period ended June 30,
2019. The lower gross margin for the current period is due, in
part, to the 2020 Acquisition of IXINITY, which has a lower gross
margin than the Company’s other key products.
Operating income for the three-month period
ended June 30, 2020, was $1.6 million, compared to an operating
loss of $1.1 million for the three-month period ended June 30,
2019.
Adjusted EBITDA* for the three-month period
ended June 30, 2020 was $5.0 million compared to $0.5 million for
the three-month period ended June 30, 2019.
Net Loss for the three-month period ended June
30, 2020 was $4.8 million, compared to $2.2 million for the
three-month period ended June 30, 2019.
The Company’s financial statements and
management discussion and analysis (“MD&A”) for the period
ended June 30, 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 at 8:00 AM
Eastern Time on Wednesday, August 12, 2020 to discuss the Company’s
financial results for the fiscal 2021 first quarter ended June 30,
2020, as well as the Company’s corporate progress and other
developments.
The conference call will be available via
telephone by dialing toll free 844-602-0380 for Canadian and U.S.
callers or +1 862-298-0970 for international callers, or on the
Company’s Investor Events section of the website:
https://www.medexus.com/en_US/investors/news-events.
A webcast replay will be available on the
Company’s Investor Events section of the website
(https://www.medexus.com/en_US/investors/news-events) through
November 12, 2020. A telephone replay of the call will be available
approximately one hour following the call, through August 19, 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: 36502.
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
Pharmaceuticals 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 February 28, 2020, the Company announced that
Medexus Pharma, Inc. (“Medexus US”) completed another major
acquisition (the “IXINITY® Acquisition”) 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-IXINITY® Acquisition period to a
post-IXINITY® Acquisition 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 IXINITY®
Acquisition. Readers are advised that the comparative information
included in this press release for the three-month period ended
June 30, 2019, includes certain pre-IXINITY® Acquisition
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-IXINITY® Acquisition results for the
Company and results subsequent to February 28, 2020 which reflect
the consolidated results of the Company post-IXINITY®
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 referred to 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 herein),
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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