Mr. Ken d'Entremont reports

MEDEXUS GENERATES RECORD REVENUE OF US$108.1 MILLION IN FISCAL YEAR 2023

Medexus Pharmaceuticals Inc. today released its operating and financial results and provided a business update for the company's fourth fiscal quarter and fiscal year ended March 31, 2023 (the company's fiscal Q4 2023 and fiscal year 2023). All dollar amounts in this press release are in United States dollars unless specified otherwise.

Financial highlights

Record total revenue of $108.1-million in fiscal year 2023, a year-over-year increase of 41 per cent. This represents the strongest annual revenue in Medexus's history. A continuing positive trend in sales of IXINITY, continuing strong Rupall demand growth and Rasuvo performance, and the inclusion of Gleolan net sales in total revenue were the primary contributors to this substantial year-over-year improvement.

• Total revenue of $28.6-million in fiscal Q4 2023, a year-over-year increase of 41 per cent. The substantial improvement over the same quarter in the previous year was primarily attributable to an increase in net sales of IXINITY during the quarter as pharmacy and wholesale customers return to buying patterns better aligned with patient unit demand.
• Record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $16.1-million in fiscal year 2023, a year-over-year increase of $20.0-million. This represents the strongest annual adjusted EBITDA in Medexus's history. The increases in net sales mentioned above, a reduction in research and development costs, and an increase in gross margin were the primary contributors to this substantial year-over-year improvement.
• Adjusted EBITDA of $4.8-million in fiscal Q4 2023, a year-over-year increase of $3.7-million. The substantial improvement over the same quarter in the previous year was primarily attributable to increases in net sales of IXINITY and Rasuvo, and a decrease in research and development costs, partially offset by an increase in selling and administrative expense.
• Operating profit of $7.6-million in fiscal year 2023 and $2.7-million in fiscal Q4 2023, compared with $(15.0)-million in fiscal year 2022 and $(2.5)-million in fiscal Q4 2022.
• Net income of $1.2-million in fiscal year 2023 and $6.9-million in fiscal Q4 2023, compared with $(2.9)-million in fiscal year 2022 and $(5.3)-million in fiscal Q4 2022.
• Adjusted net income of $(1.3)-million in fiscal year 2023 and $6.0-million in fiscal Q4 2023, compared with $(24.0)-million in fiscal year 2022 and $(4.6)-million in fiscal Q4 2022.
• Cash and cash equivalents (and total available liquidity) of $13.1-million at March 31, 2023.

Ken d'Entremont, chief executive officer of Medexus, commented: "We are very pleased with the performance we have seen in our base business, which has demonstrated continued growth. We have continued to see strong sales for IXINITY, Rupall and Rasuvo. Revenues have been further propelled this fiscal year by the addition of Gleolan sales in the United States. We are proud to note that this has translated into positive net income, an increase in cash and record positive adjusted EBITDA for fiscal year 2023."

Marcel Konrad, chief financial officer of Medexus, further noted: "Our cash position has improved this quarter, increasing from $9.3-million at Dec. 31, 2022, to $13.1-million at March 31, 2023. We see our cash balance continuing to increase and expect to have approximately $20-million of total cash at Sept. 30, not including any additional amounts that may become available under the $20-million uncommitted accordion facility that was put in place at the time of the non-dilutive debt financing we completed with BMO in March. We are pleased that diligent pursuit of our business objectives together with careful monitoring of our capital structure has put the company in a strong year-end position, with four consecutive quarters of positive operating income and six consecutive quarters of positive adjusted EBITDA."

Mr d'Entremont concluded: "We are excited about several products in our pipeline that we continue to advance. We recently secured the Canadian rights for terbinafine hydrochloride, a dermatology product, which is an excellent strategic fit with our market leading product Rupall. We remain optimistic about treosulfan's prospects in the United States as our licensing partner works toward a resubmission to the U.S. Food and Drug Administration. Princess Margaret Hospital's retrospective analysis found a 30-per-cent improvement (83.2 per cent versus 53.2 per cent) in one-year overall survival for patients treated with treosulfan, which we find extremely encouraging and relevant to the U.S. population as well."

Operational highlights

• IXINITY (U.S.): Unit demand in the United States remained strong during the 12-month period ended March 31, 2023, with the fourth financial quarter 2023 reflecting the best quarter of financial year 2023 for new patient conversions, on top of a stable, existing base of patients (source: customer-reported dispensing data). Medexus's sales and marketing initiatives also benefited from resumption of in-person selling earlier in financial year 2023. Medexus has also continued to invest moderately in its IXINITY manufacturing process improvement initiative, which has had a positive impact on manufacturing costs, expected to be offset by increases in direct costs of Medexus's third party contract manufacturing arrangements.
• Rasuvo (U.S.): Medexus maintained its market-leading position during the 12-month period ended March 31, 2023, with an estimated greater than 80-per-cent unit share, as unit demand for Rasuvo remained strong in the moderately growing and competitive U.S. branded methotrexate market with a highly efficient allocation of sales force resources (source: Symphony Sub National March 31, 2023, Data & Chargebacks, PAP). Medexus implemented effective unit-level price reductions to defend and grow its strong market position.
• Rupall (Canada): Unit demand in Canada remained strong during the 12-month period ended March 31, 2023, which was reflected in the unit demand growth of 25 per cent over that period (source: IQVIA CDH units -- drugstores and hospitals purchases, MAT March, 2023). This strong performance reflects successful execution of the company's sales and marketing initiatives to sustain the product's strong performance over the six years since launch.
• Gleolan (U.S.): Unit demand in the United States continues to be in line with expectations, with the fourth financial quarter 2023 having included the best month of U.S. unit sales of financial year 2023 (source: customer-reported dispensing data). This strong performance reflects successful execution of the company's posttransition commercial plan including new sales and marketing initiatives. The company began shipping Medexus-labelled product to customers across the United States in August, 2022, meaning that September, 2022, was the first full month, and the three-month period ended Dec. 31, 2022, was the first full fiscal quarter, in which Medexus recognized 100 per cent of Gleolan net sales in the company's total revenue.
• Metoject (Canada): Unit demand increased by 10 per cent in the trailing-12-month period ended March 31, 2023, in spite of direct generic competition (source: IQVIA -- TSA database). Medexus implemented effective unit-level price reductions to defend and grow its strong market position. The trial in Medexus's defense of the Canadian patent for Metoject in Canada's Federal Court concluded in January, 2023. Medexus anticipates that the court will issue its decision later in calendar year 2023.

Product pipeline highlights

• Treosulfan (United States): medac, licensor of Medexus's commercialization rights to treosulfan and the party responsible for regulatory matters, continues to work toward resubmission of the new drug application (NDA) for treosulfan. Based on Medexus's assessment of the FDA's feedback and discussions with medac, Medexus expects that it will take medac up to a year to collect and submit the information requested by the FDA. In light of the continuing delay in medac's response to the FDA's requests in respect of the treosulfan NDA, the FDA's review of the treosulfan NDA has now continued beyond the agreed outside date for FDA approval set out in the treosulfan licence agreement, which provides that milestone payment amounts are subject to renegotiation and adjustment during an agreed negotiation period.
• Topical terbinafine (Canada): In March, 2023, Medexus secured exclusive Canadian rights to commercialize terbinafine hydrochloride nail lacquer supplied by Polichem, an Almirall group company focused on medical dermatological treatments for skin health. The product, which Medexus will submit for Health Canada approval later in calendar year 2023, has been widely used in other markets to treat fungal nail infections. Medexus estimates the total value of the Canadian fungicides market to be $88-million (Canadian) annually. Management views this product as a strategic fit with Rupall and expects that it will both contribute to the company's Canadian revenues and engage the commercial infrastructure previously put in place to support Rupall, one of Medexus's current leading products.

Additional information

Medexus's financial statements and management's discussion and analysis for the fiscal year ended March 31, 2023, are available on Medexus's corporate website and in the company's corporate filings on SEDAR.

Conference call details

Medexus will host a conference call at 8 a.m. Eastern Time on Thursday, June 22, 2023, to discuss the company's operating and financial results and corporate updates for fiscal Q4 2023 and fiscal year 2023.

To participate in the call, please dial the following numbers:

• 888-506-0062 (toll-free) for Canadian and United States callers;
• 1-973-528-0011 for international callers;
• Access code: 199383.

A live webcast of the call will be available on the investors section of Medexus's corporate website.

A replay of the call will be available approximately one hour following the end of the call through Thursday, June 29, 2023. To access the replay, please dial the following numbers:

• 877-481-4010 for Canadian and U.S. callers;
• 1-919-882-2331 for international callers;
• Conference ID: 48579.

A replay of the webcast will be available on the investors section of Medexus's corporate website until Saturday, June 22, 2024.

About Medexus Pharmaceuticals Inc.

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 oncology, hematology, rheumatology, auto-immune diseases, allergy and dermatology.

We seek Safe Harbor.