Specialty pharma company Medexus Pharmaceuticals (MDP.TO) provided an update on the Treosulfan NDA resubmission and provided a business update.
On September 16th 2022, Medexus was informed by Medac, licensor of Medexus’s commercialization rights to Treosulfan, that the US Food and Drug Administration (FDA) has delivered to Medac a second notice of incomplete response regarding Medac’s application resubmission for Treosulfan.
The FDA requests further supporting information to complete Medac’s resubmission but does not require submission of new clinical data.
Medexus will update shareholders and the market on a timeline on September 21st 2022.
“While we recognize that the FDA’s response timeline has proven longer than anticipated, we are encouraged to see that the Agency remains engaged with medac to find a path towards resubmission,” commented Ken d’Entremont, Chief Executive Officer of Medexus. “We continue to seek opportunities to collaborate with medac to the extent permitted by our license agreement in order to support medac in satisfying the FDA’s requests and in upholding their responsibility for treosulfan regulatory matters. We are evaluating the potential impact of this delay, including on the timing of a commercial launch in the United States, and we are working with our regulatory and legal advisors to plan accordingly. We firmly believe that treosulfan would make a substantial difference for U.S. patients, as it has in Europe and Canada, and we remain optimistic about the prospect of a treosulfan approval in the United States.”
Mr d’Entremont continued: “We remain focused on delivering strong revenue growth and improved overall performance in our current portfolio of products in both the United States and Canada. We were pleased to announce the strongest fiscal Q1 in our company’s history by delivering a record US$23.0 million of revenue and improved operating performance. Overall, our monthly results so far suggest that we are heading towards another strong quarter.”
Investors should keep in mind that Medexus’ current portfolio is bringing in record earnings, and sales of Gleolan could be the catalyst for another strong quarter. Medexus previously estimated that Gleolan had generated US$3 million to US$4 million in revenue in the last full quarter before Medexus acquired the exclusive right to commercialize Gleolan in the United States. September 2022 will be the first full month in which Medexus recognizes 100% of Gleolan net sales.
Analysts such as Stifel GMP issued an intraday buy price for the stock at $1.34, notifying investors that Medexus is reliant on its partner Medac for the FDA submission process and there continues to be requests related to the data provided. Stifel also stated that this development is a major setback but potential FDA approval of Treosulfan, upon a resubmission application could still materially change Medexus’ business by more than doubling overall sales. The full report can be read here.
Research Capital Corporation also issued a report titled “The FDA Being the FDA“. The firm is maintaining a SPECULATIVE BUY rating for the stock. Research Capital states the most important thing about today’s news is the fact that no additional new clinical data is required. Hence, they expect Medac to submit the additional data and the FDA to review it. Research Capital has a price target for the stock of CAD $5.50.
Medexus stock is currently down -37% for the day. The market does not like the news of Treosulfan delay.
On the technicals, the stock has hit new all time record lows. Previous record lows were $1.42 formed back on March 23rd 2020. Today’s sell off saw the stock hit lows of $1.09.
A daily close below $1.60 would see us close below recent support. This would mean more lows, and likely, more new all time record lows. If the stock can maintain a close above $1.60, then a bounce from support would be in the cards. Today’s daily candle close will be very important in determining whether buyers step in and buy the dip at this support, or if the bearish sell off will continue to gain steam.
