Following Monday’s closing bell, Canadian specialty pharma company Medexus Pharmaceuticals (TSX-V:MDP)(OTCQB:PDDPF) released its results from operations for the quarter and fiscal year ended March 31, 2019 showing a dramatic improvement in the top and bottom lines compared to a year earlier. The books were catalyzed by the company formerly known as Pediapharm completing mergers with Medexus Inc. and Medac Pharma.
In October, Pediapharm finished the acquisition of Medexus, a company focused on rheumatology, women’s health and dermatology, for $23 million in stock and Medac, the U.S. business of Germany’s medac GmbH and seller of the rheumatoid arthritis drug Rasuvo, for $13.1 million in cash, $1.9 million in stock and up to $35 million more in other considerations over five years.
In December, the combinations resulted in the name change to Medexus Pharmaceuticals.
During the first full quarter under the new moniker and business model (and last quarter of fiscal 2019), Medexus generated C$12.7 million in revenue, up from C$2.1 million in Q4 fiscal 2018. For the fiscal year, revenue was C$33.9 million, up 239% from C$10.0 million in the prior year.
Sales of Rasuvo increased 14% year-over-year on a unit basis. Unit sales of allergy medication Rupall increased 109% compared to the previous 12-month period. Unit sales of Metoject, an injectable for rheumatoid arthritis, psoriasis and psoriatic arthritis, rocketed 293% year-over-year.
The company in May launched a new 15-milligram dose of Metoject, which has reimbursement approval in Canada and is expected to be a key driver to the franchise going forward.
Elsewhere in Canada during the quarter, Medexus received Health Canada authorization to distribute Treosulfan, a conditioning agent used ahead of stem cell transplantation, under the agency’s Special Access Program, which allows healthcare practitioners access to non-marketed drugs in dire situations. The company also expanded its licensing agreement with photonamic GmbH & Co. for exclusive Canadian rights to market and distribute Gliolan, a product that assists neurosurgeons in removing brain tumors by making them glow.
Gross profit for the quarter climbed to C$7.5 million from about C$900,000 a year earlier. On an annual basis, gross profit swelled to C$20.0 versus C$5.0 million in fiscal 2018.
The higher profits were aided by solid increases in gross margin, which rose to 59.1% in the latest year compared to 50.4% in 2018.
Adjusted earnings before interest, taxes, depreciation and amortization swung to C$2.4 million from negative EBITDA of C$2.3 million last year.
On the back of a capital raise to complete the acquisitions, Medexus ended March with C$29.2 million in cash and cash equivalents and a working capital surplus of C$32.7 million.
“[W]e are well funded to continue our organic growth, license new products, as well as explore opportunistic acquisitions,” commented Medexus CEO Ken d’Entremont in a statement this evening. “We also recently announced a normal course issuer bid, which we expect will reduce the number of shares outstanding and increase the earnings per share, which we believe will help further drive shareholder value,” he concluded.
Shares of TSX-Venture listed MDP closed the day down a penny at $4.48 ahead of the news release. US-listed shares, which are ultra-thinly traded, were flat at $3.56.