Medexus Pharmaceuticals (TSE:MDP) reported higher revenue and a return to profitability in its fiscal second quarter, as sales of GRAFAPEX helped lift results. Management reiterated its full-year sales forecast for the product, while acknowledging that achieving it would require growth to accelerate in the second half.
Revenue rose to $29.1 million from $24.7 million a year earlier, and net income was $0.8 million, compared with a net loss of $0.3 million. Adjusted EBITDA increased to $5.1 million from $4.4 million. Medexus reports its results in U.S. dollars and has a fiscal year ending March 31.
GRAFAPEX Forecast Depends on Acceleration
GRAFAPEX generated $5.7 million in product-level net revenue during the quarter. Chief Executive Officer Ken d’Entremont said the company remains confident that the product will generate between $30 million and $32 million in net revenue for fiscal 2027. Medexus also continues to expect annual product-level net revenue of approximately $100 million to $175 million within five years of commercial launch.
Alliance Global analyst Scott Henry noted that reaching the full-year forecast would require a significant increase from the first half, rather than simply a continuation of existing trends. D’Entremont said evidence generated in the U.S. market, expected to be shared beginning at ASH and later through Tandem Meetings, would help drive adoption and greater use at institutions already ordering the product.
D’Entremont said he expected the acceleration to be spread across the third and fourth fiscal quarters. “We are seeing progress now,” he said, pointing to more institutions coming on board and sharing their experience with colleagues.
Wholesaler data as of September 30, 2026, showed that 86 healthcare institutions had ordered GRAFAPEX, including 38 that had placed multiple orders during the most recent completed six-month period, d’Entremont said.
Chief Financial Officer Brendon Buschman said underlying patient demand for GRAFAPEX was $5.6 million in the second quarter, up 16% from $4.8 million in the first quarter and 156% from $2.1 million a year earlier.
Operating Cash Flow Improves
Buschman said the year-over-year revenue increase was primarily driven by higher product-level net revenue from GRAFAPEX and IXINITY, among other factors. Gross profit rose to $16.3 million from $13.8 million, while gross margin was 55.9%, compared with 55.7%. Adjusted gross margin declined to 64% from 65.2%.
Selling, general and administrative expenses increased to $13.3 million from $11.9 million. Buschman said the improvement in adjusted EBITDA was driven primarily by GRAFAPEX revenue exceeding related personnel, infrastructure and product costs. Generic competition affecting Rupall partially offset the improvement.
Cash provided by operating activities rose to $5.4 million from $3.3 million a year earlier. Buschman said working capital and payment timing contributed to the increase, although the company expects growing GRAFAPEX revenue to benefit operating cash flow over time.
Net debt was $17.9 million as of September 30, up from $15.7 million at March 31. Net debt to adjusted EBITDA was 0.97 times at quarter-end. Adjusted EBITDA, adjusted gross margin and net debt are non-GAAP measures and may not be comparable with similarly named measures used by other companies.
Canadian Path for UM171 Remains Unclear
Asked about the Canadian regulatory pathway for UM171 cell therapy, d’Entremont said the first step is to establish which options are available from Health Canada. He said Medexus would be interested in pursuing the path used by ExCellThera in Europe to make the product available to patients without a donor, but it does not yet know whether that route is available in Canada.
D’Entremont recalled that Medexus had given an estimated launch range of 2028 to 2031 when it licensed the Canadian rights. He declined to comment on potential licensing discussions involving U.S. rights.
About Medexus Pharmaceuticals (TSE:MDP)
Medexus is a leading specialty pharmaceutical company with a strong North American commercial platform and a growing portfolio of innovative and rare disease treatment solutions. Medexus’s current focus is on the therapeutic areas of hematology and hematology-oncology and rheumatology and allergy.
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