Medexus Pharmaceuticals (MDP.T) today announced its financial results and provided a business update for the three-month period ended June 30, 2021.
“We continued to see pressure on IXINITY® ex-factory sales this past quarter, due to the high level of product in the distribution channel. We believe that we are making progress in normalizing the distribution channel and are highly encouraged by growing demand,” commented Ken d’Entremont, Chief Executive Officer of Medexus.
In other words, IXINITY® sales were reduced due to inventory issues, which ultimately disrupted the Company’s distribution channel. As a result, Medexus’ revenue was decreased to USD$17.3 million compared to USD$20 million for Q1 of fiscal 2021. Although Medexus’ sales took a hit, patient unit demand for IXINITY® increased 25.3% compared to the corresponding period in the prior year, to 7.6 million IUs, reflecting the Company’s successful commercial efforts. Once inventory issues have been resolved and supply chain improvements have been implemented, Medexus expects strong IXINITY® ex-factory sales and improved gross margins in the coming quarters.
However, Medexus reported a net loss of USD$6.6 million compared to USD$3.4 million year-over-year. Furthermore, Medexus’ operating loss for the three-month period ended June 30, 2021, was USD$7.2 million compared to an operating income of USD$1.2 million in the same period last year. In total, the Company’s gross profit declined to USD$6.9 million for the three-month period ended June 30, 2021, compared to a gross profit of USD$10.9 million in the previous year.
On the bright side, on June 28, 2021, Medexus received a Notice of Compliance from Health Canada to commercialize treosulfan, a drug developed by medac, in Canada under the tradename Trecondyv®. Shortly after, on July 12, 2021, Medexus entered into an exclusive licensing agreement with medac for the commercialization of treosulfan in Canada, representing the third license Medexus has signed with medac. Keep in mind, Medexus acquired the rights to treosulfan through the acquisition of Medac Pharma in the fall of 2018. However, Medexus’ attempt to commercialize treosulfan in the United States did not go as swimmingly. Despite having Orphan Drug designation, Medexus received a Complete Response Letter (CRL) from the FDA with respect to the Company’s New Drug Application (NDA) for the use of treosulfan in the US. As cited in the CRL, the FDA determined that it could not approve the NDA in its present form. More details can be found here.
“Looking towards the balance of the year, the US approval for treosulfan will remain a major priority. The recent Complete Response Letter was not expected, however, we remain confident in the data that supports the use in patients with Acute Myeloid Leukemia and Myelodysplastic Syndrome,” continued Ken d’Entremont.
Although Medexus’ financial results don’t paint the prettiest picture, the Company did achieve growth in other areas. For example, Medexus’ Rupall™ anti-histamine medication saw unit demand growth of 44% for the 12 months ended June 30, 2021. Additionally, Medexus recently completed enrollment for IXINITY® Phase 4 clinical pediatric trials with the hopes of achieving label expansion for IXINITY®. Looking forward, if Medexus can secure NDA approval from the FDA for treosulfan in the US, the Company could see huge returns. Why? Because North America currently dominates the acute myeloid leukemia market, which was valued at USD$1.46 billion in 2019 and is expected to expand at a CAGR of 14%.
Medexus’ share price opened at $3.19, down from a previous close of $3.85. The Company’s shares are down -24.42% and are currently trading at $2.91 as of 2:30PM ET. This indicates that there has been significant change following the news.
