Raymond James analyst Rahul Sarugaser reiterated an “Outperform” rating on Québec-based specialty pharma company Medexus Pharmaceuticals (Medexus Pharmaceuticals Stock Quote, Charts, News, Analysts, Financials TSX:MDP) in an update to clients on Thursday, saying refocusing investor attention on the company’s current revenue trajectory makes for “a compelling investment thesis” on Medexus. Medexus, which focuses on rare disease, near-market and on-market pharmaceuticals, got some disappointing news last September related to the attempted commercial launch of treosulfan in connection with Medac GmbH, when the latter was issued a second notice of incomplete response from the US FDA on a New Drug Application. The news dropped the stock, which has since recovered that ground, although MDP is still at multi-year lows. Sarugaser’s new report comes after Medexus released preliminary third quarter fiscal 2023 revenue of between $28.5 and $29.0 million, which would represent a year-over-year increase of at least 34 per cent and a sequential uptick of three per cent. Medexus said the improved revenue performance came from increases in sales across its portfolio. Medexus also provided an update on treosulfan, saying it expects Medac to take “up to a year or more” to collect and submit the information requested by the FDA for its NDA. Sarugaser said the timeline would put the earliest possible approval of treosulfan at 18 to 24 months from now. Sarugaser said in the past the investment story on MDP had been all about treosulfan but that since the second incomplete letter that story has been unclear. Now, the analyst thinks the new quarterly results put a new spin on the company and stock, where the projected Q3 2023 revenue would represent a beat of the consensus forecast. “We focus investors’ attention on MDP’s ex-treo revenue trajectory, which—with today’s pre-announced revenue — in-line with Raymond James’ estimate and handily higher than consensus, we see consolidation of MDP’s ex-treo revenue story. To this end, we estimate MDP producing $108 million for 2023, growing to $116 million in 2024, yielding $14 million and $17 million in EBITDA, respectively,” Sarugaser wrote. Sarugaser said with treosulfan now a good two years away, Medexus will want to right-size its cost structure, something for which he will be watching closely in the upcoming full Q3 report. With his “Outperform” rating, Sarugaser also maintained a target price of C$2.00 per share, which at press time represented a projected one-year return of 90.5 per cent. On the financial end, Sarugaser is forecasting MDP to deliver full fiscal 2023 (year end March) revenue of $108 million and EBITDA of $14 million.