Raymond James upgrades Medexus Pharma

With its second quarter results in the books, Raymond James analyst Michael W. Freeman has raised its price target on Medexus Pharmaceuticals (Medexus Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSX:MDP).

On November 7, MDP reported its Q2, 2025 results. The company posted Adjusted EBITDA of $6.0-million on revenue of $26.3-million, a topline that was down 13.2%, year-over-year.

“We are pleased with our fiscal Q2 2025 results. Our core portfolio continues to provide Medexus with a solid foundation as we begin to prepare for the next phase of our growth,” CEO Ken d’Entremont said. “In particular, we are proud of the improvements we have realized in IXINITY cost of sales of products, which represent the payoff from our sustained investment in our manufacturing process improvement initiative.”

Freeman points to a potentially catalyst-rich future for MDP.

“While sales pressure across a number of MDP’s core product lines has driven a draw-down in the stock since September, we see the company’s attention on COGS and consistent adj. EBITDA outperformance as reasons to get constructive on the name. We flag that MDP has a potential FDA approval for treosulfan on its near horizon, which could nearly double revenue within 5 years (not in our estimates).”

In a research update to clients November 19, Freeman upgraded MDP from “Market Perform 3” to “Outperform 2” and raised his price target on the stock from $3.00 to $4.00.

The analyst thinks the company will post EBITDA of $20-million on revenue of $107-million in fiscal 2025. He expects EBITDA of $16-million on a topline of $88-million in fiscal 2026.

“We believe MDP’s robust slate core products addressing hematology, rheumatology, rare disease, allergy, and dermatology markets in the US and Canada is widely underappreciated by the street, particularly given MDP’s portfolio approach and efficient ops have enabled the company to drive relatively stable Rev. and EBITDA amid various sources of disruption,” he added. “Also, we’ve noticed that MDP’s COGS and SG&A margins have dropped a minimum of 200 bps each y/y, yielding some of the strongest EBITDA margins we’ve seen in this company’s history. Even with our conservative sales assumptions (see headwinds below), we see MDP driving average Rev. of ~US$94 mln and an average EBITDA margin profile of 18-19% during the next 5 years — nothing to sneeze at. (Treosulfan pre-launch/launch activity may weigh on profits during the next year or so. But, worth it.”