Medexus Pharmaceuticals Inc. (the “Company” or “Medexus”)
(TSXV: MDP, OTCQB: PDDPF) today provided a business update
and announced its financial and operating results for the fourth
quarter and fiscal year ended March 31, 2019. All dollar
amounts below are in Canadian dollars.
Fourth quarter fiscal 2019 financial
highlights:
- Revenue was $12.7 million compared to $2.1 million for Q4
2018
- Gross profit was $7.5 million compared to $0.9 million for Q4
2018
- Gross margin was 58.5% compared to 40.9% for Q4 2018
- Adjusted EBITDA was $0.1 million compared to ($1.1 million) for
Q4 2018
Fiscal year 2019 financial
highlights:
- Revenue was $33.9 million compared to $10.0 million for fiscal
2018
- Gross profit was $20.0 million compared to $5.0 million for
fiscal 2018
- Gross margin was 59.1% compared to 50.4% for fiscal 2018
- Adjusted EBITDA1 was $2.4 million compared to ($2.3 million)
for fiscal 2018
- Finished the year with cash and cash equivalents of $29.2
million as of March 31, 2019 compared to $3.6 million as of March
31, 2018
- Working capital surplus as of March 31, 2019 was $32.7 million
compared to $4.8 million as of March 31, 2018
The above comparisons of the Q4 2019 and fiscal
year 2019 results are to the Company’s results for Q4 2018 and the
fiscal year 2018, respectively, which are reported periods prior to
the completion of the transformative acquisitions of Medexus Inc.
and Medac Pharma, Inc. (the “Acquisitions”).
Ken d’Entremont, Chief Executive Officer of
Medexus, commented, “We have made exceptional progress as an
organization since the completion of the Company’s transformative
transactions in the fall of 2018 when we merged the businesses of
Pediapharm Inc., Medexus Inc. and Medac Pharma, Inc. I am
pleased to report we generated strong revenue growth for the fiscal
fourth quarter, which was ahead of expectations given the typical
seasonality of our business. For the full year, sales increased
238%, reflecting both the mergers and strong organic growth across
much of the Company’s product portfolio. We also generated
positive Adjusted EBITDA of $2.4 million for the full year versus
negative $2.3 million in fiscal 2018. Overall, we have a built a
strong commercial platform and are now well positioned as a leading
North American specialty pharmaceutical company with a diversified
portfolio.”
Operational highlights:
- Launch of Metoject® - On May 1, 2019, the
Company launched a new Metoject Subcutaneous 15mg dose in Canada
for the treatment of rheumatoid arthritis, psoriasis and psoriatic
arthritis. The new 15mg dose of Metoject Subcutaneous is an
important addition to the Metoject line the Company currently has
in Canada and the Company expects this dose to be a significant
portion of our Metoject volume going forward. Metoject is now
publicly reimbursed in Canada and has experienced unit sales growth
of 319% in Q4 2019 as compared to Q4 2018, and 293% unit sales
growth in the twelve-month period ended March 31, 2019 compared to
the same period last year.2
- Rasuvo™ Growth in Unit Sales
– Sales in units of Rasuvo increased by approximately 5% in Q4 2019
as compared to Q4 2018, and by 14% in the twelve-month period ended
March 31, 2019 compared to the same period last year.3 The
Company is planning to launch additional methotrexate products for
the treatment of rheumatoid arthritis and other auto-immune
diseases built around unique delivery methods. The registration
process for one of these products is taking longer than
anticipated. In the meantime, we continue to explore other next
generation products and have initiated work on a product intended
to better address the needs of patients currently treated with
methotrexate.
- Rupall™ Growth in Units Sales
- Rupall has experienced very strong unit sales growth,
increasing by approximately 77% in Q4 2019 as compared to Q4 2018,
and by 109% in the twelve-month period ended March 31, 2019
compared to the same period last year.4
- Authorization by Health Canada to Distribute
Treosulfan - During the fiscal fourth quarter, the Company
was granted authorization by Health Canada to distribute Treosulfan
under the Special Access Program and is now shipping to hospitals
across Canada. The Company expects to expand distribution of
Treosulfan in Canada once the product has received approval as a
fully registered product and believes that this further validates
the Company’s ability to leverage the combined product portfolios
and our North American sales force.
- Exclusive Canadian Distribution Rights for
Gliolan® - On March 4, 2019, the Company obtained
exclusive rights in Canada to market and distribute Gliolan®, which
assists neurosurgeons to better visualize and more completely
remove malignant brain tumors (gliomas) by causing them to become
fluorescent and glow during surgery. We continue to receive
positive feedback from the medical community on this product and
have witnessed a strong market uptake.
Ken d’Entremont further commented that: “We are
excited about the opportunities within our portfolio of products.
We continue to experience strong year-over-year growth and we are
very optimistic in respect of the new fiscal year. We also have
$29.2 million of cash and cash equivalents and a working capital
surplus of approximately $32.7 million, which means we are well
funded to continue our organic growth, license new products, as
well as explore opportunistic acquisitions. 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.”
Operating and Financial Results
Summary
For the three months ended March 31, 2019, total
revenue reached $12,744,602 compared to revenue of $2,103,439 for
the three months ended March 31, 2018. Gross profit for the three
months ended March 31, 2019 was $7,461,237, or 58.5% of sales,
compared to $860,694, or 40.9% of sales, for the same period last
year. Operating loss for the three months ended March 31, 2019 was
($2,029,195) compared to ($1,204,949) for the three months ended
March 31, 2018.
There was an additional $282,298 of expenses
related to the Acquisitions and the related capital raise in
October 2018 (the “Offering”). Excluding
transaction-related expenses and all amortization included in cost
of goods sold, the result would have been an operating loss of
approximately $450,000.
Adjusted EBITDA5 for the three-month period
ended March 31, 2019 was $105,127 compared to ($1,119,984)
for the three-month period ended March 31, 2018.
The improvements in fourth quarter revenue,
gross profit and Adjusted EBITDA compared to the same period in the
prior year are mainly due to the Acquisitions, as well as the
increase in gross profit driven by the increase in revenue from the
products belonging to the Company pre and post-Acquisitions.
For the fiscal year ended March 31, 2019, total
revenue reached $33,864,028 compared with revenue of $10,009,167
for the full year ended March 31, 2018, representing an increase of
$23,854,861. Gross profit for the year ended March 31, 2019 was
$20,005,314, or 59.1% of sales, compared to $5,041,626 or 50.4% of
sales, for the same period last year. Operating loss for the year
ended March 31, 2019 was ($5,864,702) compared to ($2,835,105) for
the year ended March 31, 2018. There were $4.8 million of expenses
related to the Acquisitions and Offering. Excluding
transaction-related expenses and all amortization included in cost
of goods sold, the result would have been an operating income of
over $1.5 million. Adjusted EBITDA for the year-ended March 31,
2019 was $2,406,617 compared to ($2,312,498) for the year-ended
March 31, 2018.
The improvements in annual revenue, gross profit
and Adjusted EBITDA compared to the prior year are mainly due to
the income generated from the Acquisitions, as well as the increase
in gross profit driven by the increase in revenue from the
Company’s product portfolio prior to and after the Acquisitions and
Offering.
The Company’s financial statements and
management discussion and analysis (“MD&A”) for the period
ended March 31, 2019 are available on our corporate website at
www.medexus.com and in our corporate filings on SEDAR at
www.sedar.com.
Conference Call Details
Medexus will host a conference call on Monday,
July 8, 2019 at 4:30 PM Eastern Time to discuss the Company’s
financial results for the fourth quarter and fiscal year-ended
March 31, 2019, as well as the Company’s corporate progress and
other developments.
The conference call will be available via
telephone by dialing toll free 877-407-0778 for Canadian and U.S.
callers or +1 201-689-8565 for international callers, or on the
Company’s Investor Events section of the website:
https://www.medexus.com/events/.
A webcast replay will be available on the
Company’s Investor Events section of the website
(https://www.medexus.com/events/) through October 2, 2019. A
telephone replay of the call will be available approximately one
hour following the call, through July 9, 2019, and can be accessed
by dialing 877-481-4010 for Canadian and U.S. callers or +1
919-882-2331 for international callers and entering conference ID:
49555.
About Medexus Pharmaceuticals
Inc.
Medexus is a leading specialty pharmaceutical
company with a strong North American commercial platform. The
Company’s vision is to provide the best healthcare products to
healthcare professionals and patients, through our core values of
Quality, Innovation, Customer Service and Teamwork. Medexus
is focused on the therapeutic areas of auto-immune disease and
pediatrics. The leading products are Rasuvo and Metoject, a unique
formulation of methotrexate (auto-pen and pre-filled syringe)
designed to treat rheumatoid arthritis and other auto-immune
diseases; and Rupall, an innovative allergy medication with a
unique mode of action.
For more information, please
contact:
Ken d’Entremont, Chief Executive OfficerMedexus
Pharmaceuticals Inc.Tel.: 905-676-0003E-mail:
ken.dentremont@medexus.com
Roland Boivin, Chief Financial OfficerMedexus
Pharmaceuticals Inc.Tel.: 514-762-2626 ext. 202E-mail:
roland.boivin@medexus.com
Investor Relations (U.S.):Crescendo
Communications, LLCTel: +1-212-671-1020Email:
mdp@crescendo-ir.com
Investor Relations (Canada):Frank CandidoDirect
Financial Strategies and Communication Inc.Tel: 514-969-5530E-mail:
frank.candido@medexus.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Forward Looking Statements
Certain statements made in this press release
contain forward-looking information within the meaning of
applicable securities laws (“forward-looking
statements”). The words “anticipates,” “believes,”
“expects,” will,” and similar expressions are often intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
including but not limited to, statements with respect to future
business operation and results, including with respect to future
profitability and financial results. Specific forward-looking
statements contained in this news release includes, but is not
limited to, statements with respect to future business operation
and results, including with respect to future profitability and
financial results. These statements are based on factors or
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including assumptions based on historical
trends, current conditions and expected future developments. Since
forward-looking statements relate to future events and conditions,
by their very nature they require making assumptions and involve
inherent risks and uncertainties. The Company cautions that
although it is believed that the assumptions are reasonable in the
circumstances, these risks and uncertainties give rise to the
possibility that actual results may differ materially from the
expectations set out in the forward-looking statements. Material
risk factors include those set out in the Company's most recent
MD&A, future capital requirements and dilution; intellectual
property protection and infringement risks; competition (including
potential for generic competition); reliance on key management
personnel; the Company’s ability to implement its business plan;
the Company’s ability to leverage its United States and Canadian
infrastructure to promote additional growth, including with respect
to the infrastructure of Medexus Inc. and Medac Pharma, Inc. and
the potential benefits the Company expects to derive therefrom,
regulatory approval by the Canadian health authorities; product
reimbursement by third party payers; patent litigation or patent
expiry; litigation risk; stock price volatility; government
regulation; potential third party claims. Given these risks, undue
reliance should not be placed on these forward-looking statements,
which apply only as of the date hereof. Other than as specifically
required by law, the Company undertakes no obligation to update any
forward-looking statements to reflect new information, subsequent
or otherwise.
Non-IFRS Financial Measures
This press release uses the term “Adjusted
EBITDA” which is a non-IFRS financial measure, which does not have
any standardized meaning under IFRS and therefore may not be
comparable to similar measures presented by other companies.
Rather, this measure is provided as additional information to
complement IFRS measures by providing a further understanding of
operations from management’s perspective. The Company defines
Adjusted EBITDA as earnings before financing costs, interest
expenses, income taxes, interest income, depreciation of property
and equipment, amortization of intangible assets, non-cash
share-based compensation, income from sale of asset, impairment of
intangible assets as well as fees related to the Acquisitions and
Offering. The Company considers Adjusted EBITDA as a key metric in
assessing business performance and considers Adjusted EBITDA to be
an important measure of operating performance and cash flow,
providing useful information to investors and analysts. These
non-IFRS measures presented are not intended to represent cash
provided by operating activities, net earnings or other measures of
financial performance calculated in accordance with IFRS.
Additional information relating to the use of this non-IFRS
measure, including the reconciliation between Net Loss and Adjusted
EBITDA, can be found in our MD&A for the period ended March 31,
2019, which is available through the SEDAR website
(www.sedar.com).
1 Please refer to Non-IFRS Financial Measures at the end of this
document for further details.
2 Source: IQVIA – TSA National units.
3 Source: SHA PHAST.
4 Source: IQVIA – Drugstores and hospitals purchases.
5 Please refer to Non-IFRS Financial Measures at the end of this
document for further details.
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