Medexus Pharmaceuticals (MDP.TO), a leading specialty pharma company, today announced that it has secured the Canadian rights to commercialize terbinafine hydrochloride nail lacquer supplied by Polichem, an Almirall group company which is focused on medical dermatological treatments for skin health.

The product has been widely used to treat fungal nail infections. Medexus will submit the product for Health Canada approval later this year, and values the Canadian fungicides market to be a total of CAD $88 million annually.

“Terbinafine hydrochloride is an excellent strategic fit with our market leading product Rupall®. We expect to soon have two strong products in our primary care sales force,” said Richard Labelle, Medexus’s General Manager—Canadian Operations. “Our sales force in Canada is already well acquainted with the dermatology field, and we see this once-a-week treatment as an important potential addition to the Canadian market. Following a Health Canada approval of terbinafine hydrochloride nail lacquer, our team will be ready and eager to put our institutional knowledge to work making an innovative new product available to healthcare professionals and patients across Canada.”

If and when the drug is approved by Health Canada, Medexus will pay Polichem a quarterly low double digit percentage royalty on net sales of the product. The long term license agreement also provides for a low upfront payment and four sales-based milestone payments, which limits Medexus’s initial outlay and aligns the parties’ interests around product performance.

“We expect that terbinafine hydrochloride will both grow our Canadian revenues and engage the commercial infrastructure we have put in place to support Rupall®, one of our current leading products,” added Ken d’Entremont, Chief Executive Officer of Medexus. “We view this deal as another example of our ability to execute accretive transactions that make efficient use of our capital and leverage our existing commercial infrastructure, with no significant effect on our near-term capital allocation strategy.”

Early last month, Medexus announced another record breaking quarter with revenue of US $28.7 million which accounted to a 35% increase over fiscal Q3 2022.

Shares of the company recently took a hit when investors became concerned that the Company would not be able to deal  with the imminent expiry of convertible debentures the company had issued early in its existence to fuel its growth.

On March 8, 2023, Medexus announced it had secured a new debt facility with BMO that would not only provide the company sufficient gas to move forward, but also deal with the soon-to-be debentures without share dilution. Chris Parry, founder of Equity Guru, explains what Medexus has done in the video above.

The stock unfortunately could not breakout above the trendline that I had drawn out, and was acting as upside resistance for the stock price. Instead of breaking out, we broke below the support the stock held for quite some time, and even regained post debenture share sell off.

$1.70 is now resistance to the upside, and bulls really need to see this zone be taken out.

Near term, we are approaching a support level which has acted as 2023 yearly lows on the debenture sell off. $1.25 is approaching, and should be a zone where potential bulls would have buy orders in. If Medexus fails to remain above this price level, a breakdown would take us back below $1.00 and retesting all time record lows at $0.88.