Medexus Pharmaceuticals is a buy, Research Capital says

Research Capital analyst Andre Uddin maintained a “Buy” rating and C$5.55 price target on Medexus Pharmaceuticals (Medexus Pharmaceuticals Stock Quote, Chart, News, Analysts, Financials TSXV:MDP) in a June 26 note, following fourth-quarter fiscal 2025 results that showed stabilizing revenue and progress in reducing debt.

Medexus reported Q4 revenue of $24.8-million, nearly matching Uddin’s estimate of $25.5-million and consensus of $25.2-million, but down 4.6% year over year. As of March 31, the company held $24.0-million in cash and had $37.2-million in long-term debt, which it subsequently reduced to about $22.3-million through a $14.9-million prepayment in June.

“We estimate that the company’s cash balance stands at roughly $9.5M,” Uddin said. “Most importantly, MDP launched Grafapex (treosulfan) in the US on Feb 24 (LINK), generating $0.6M in product revenue within just 5 weeks of commercial availability (Feb 24 – Mar 31) & has generated $2.5M sales so far for Q2. The drug is showing solid initial uptake – monthly prescription volumes (Bloomberg) nearly doubled from 199 in March to 395 in May, representing an approximate 41% compounded monthly growth rate.”

He said four major U.S. commercial payers and 12 of 180 transplant centers have added Grafapex to their formularies. Another 15 payers have included it on prior authorization lists, and 34 transplant centers have placed at least one order.

“In our understanding, about half of those centers are placing repeat orders,” Uddin said. “To date, Grafapex has been used primarily in pediatric patients, where the medical need is greatest. Given the recent positive formulary decisions, adoption in adult patient populations is expected to follow. To our knowledge, physician-level feedback on Grafapex has been broadly positive without resistance observed regarding switching from incumbent busulfan.”

Uddin thinks that Medexus will do $12-million in Adjusted EBITDA on $108-million in revenue in fiscal 2025. He expects those numbers to improve to $26-million in Adjusted EBITDA on $100-million in revenue in fiscal 2026.

Uddin expects Grafapex to generate about $13-million in revenue in fiscal 2026, with continued momentum. The product’s gross margin is around 80%, significantly higher than Medexus’s overall margin of 52%, and should help lift total margins. He maintains Grafapex as the company’s main growth driver.

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