Medexus (MDP.TO) announces record quarter revenue of US$28.7 million

Specialty pharma company, Medexus Pharmaceuticals (MDP.TO) released fiscal Q3 2023 (quarter ended December 31st 2022) operating and financial results. The company has announced another record quarter with revenue of US$28.7 million which accounts to a 35% increase over fiscal Q3 2022.

Financial statements and management’s discussion and analysis can be found here.

Here are the financial highlights:

Record total revenue of $28.7 million, a year-over-year increase of 35%, and a quarter-over-quarter increase of 4%. This again represents the strongest fiscal quarter in Medexus’s history. Increases in net sales across Medexus’s portfolio, including recognition of 100% of revenue from Gleolan sales in the United States starting September 2022, were the primary contributors to this substantial year-over-year improvement.
Record Adjusted EBITDA* of $5.2 million, a year-over-year improvement of $3.3 million and a quarter-over-quarter increase of $1.0 million. The primary drivers for this substantial year-over-year improvement were the increases in revenues and a reduction in research & development costs.
Operating profit of $2.9 million, a year-over-year improvement of $3.2 million.
Net loss of $(1.5) million, a year-over-year change of $(0.4) million.
Adjusted Net Loss*, which adjusts for the unrealized gains and losses included in net profit (loss), of $0.9 million, a year-over-year improvement of $2.5 million.
Cash and cash equivalents of $9.3 million (with $10.1 million of total available liquidity) at end of fiscal Q3 2023.

Ken d’Entremont, Chief Executive Officer of Medexus, commented, “We are very pleased to report another record quarter, again demonstrating the robustness of our product portfolio and our ability to generate consistent revenue growth and positive Adjusted EBITDA*. During the quarter, we delivered revenue growth across our prescription product portfolio in both the United States and Canada, and saw continued strength and stability in the company’s base business.”

When it comes to operational highlights, here are how things broke down for Medexus’ leading products:

IXINITY: Unit demand remained strong, and Medexus had continued to improve the IXINITY manufacturing process which has had a positive impact on manufacturing costs.

RASUVO: Medexus maintained its market leading position with an estimated 80% unit share. Demand remains strong for the moderately-growing U.S. branded methotrexate market with a limited sales force allocation. However, increasing competition in the U.S. branded methotrexate market continues to adversely affect Rasuvo product-level revenue.

RUPALL: Unit demand in Canada remained strong and was reflected by unit demand growth of 25%. This strong performance reflects successful execution of the company’s sales and marketing initiatives over the five years since launch.

GLEOLAN: Unit demand continues to be in line with expectations, positioning Medexus to successfully execute its post-transition commercial plan including new sales and marketing initiatives. Medexus began shipping Medexus-labeled products to customers across the United States in August, meaning that September 2022 was the first full month, and the three-month period ended December 31, 2022 was the first full fiscal quarter, in which Medexus recognized 100% of Gleolan net sales.

Metoject: Unit demand in Canada increased however product-level performance continues to experience disruption from the launch of a generic product in the Canadian methotrexate market in calendar year 2020. Medexus anticipates that the Federal Court of Canada will issue its decision on the patent litigation relating to these generic products, initiated in August 2020 and completed in January 2023, later in calendar year 2023.

The stock has not ripped as it did on last quarter’s earnings. However, the stock remains above a major support zone where a battle between the bulls and the bears is taking place. Note how the $1.80 zone remained as strong support. There was a breakdown in September 2022 which saw the stock print all time record lows, but was quickly bought up.

I want to highlight to readers and investors that the Company’s market cap is $36.20 million. And that is in Canadian dollars. If you convert the US$28.7 million in earnings to CAD you get about $38.5 million. Higher than the market cap in CAD terms, and it gets even more exciting when you stretch out quarterly earnings for the year.

Granted that investors will be looking at that EBITDA number and management has made it a priority.

On the technicals, support is holding and the breakout of a triangle/wedge pattern remains in play. If we can bounce from support and close above this trendline, then the next zone of action would be the $2.50 zone.