This article first appeared on GuruFocus .
Release Date: August 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Medexus Pharmaceuticals Inc ( MEDXF ) reported a strong first quarter with total net revenue increasing to $28.6 million from $24.6 million in the prior year, and adjusted EBITDA rising to $4.7 million from $3.4 million.
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Graphopex delivered its strongest quarter to date, generating $4.9 million in product-level net revenue, with underlying patient demand growing 20% sequentially and 118% year-over-year.
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Commercial adoption of Graphopex is progressing well, with 75 healthcare institutions having ordered the product and 54 placing repeat orders, indicating strong market acceptance.
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The company maintains its long-term guidance for Graphopex to achieve annual product-level net revenue of $100 to $175 million within five years, supported by strong pricing and broad adoption.
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Medexus Pharmaceuticals Inc ( MEDXF ) signed agreements for exclusive Canadian rights to commercialize 171 cell therapy, a strategic fit with its existing trio sulfan product, expanding its presence in the HSCT space.
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The company's net debt to adjusted EBITDA ratio improved to a healthy 1.18 times, providing financial flexibility for future business development opportunities.
Negative Points
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Cash used by operating activities was $0.7 million in Q1 2027, a decrease of $4.6 million compared to cash provided by operating activities in the prior year, primarily due to the settlement of year-end payables and working capital timing.
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Gross margin decreased to 55.6% from 56.0% year-over-year, and adjusted gross margin fell to 63.8% from 65.5%, partly due to a one-time positive impact of royalty revenue in the prior year quarter.
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The company faces potential tariff impacts, with a 15% EU-US tariff applying to Rasuvo and potentially to Graphopex, which could affect future margins, though currently deemed not material.
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Rasuvo sales have been negatively impacted by genericization, losing about two-thirds of its unit volume, and while the rate of decline has slowed, market share continues to slowly erode.
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The company's growth trajectory for Graphopex faces seasonality risks, with the summer months historically being challenging, though July 2026 was reported as the second-best month ever.
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The regulatory path for 171 cell therapy in Canada is uncertain, with no guarantee of an expedited review, and the company is still awaiting a meeting with Health Canada.
Q & A Highlights
Q: Can you provide more detail on the trajectory of Graphopex sales to reach the full-year guidance of $30-32 million, given Q1 was $4.9 million? A: Ken Don Tremont, CEO, explained that the confidence in the $30-32 million guidance is based on leading indicators such as formulary listings, commercial payer support, and first use from hospitals. He noted that while the summer quarter is typically the most challenging, July was the second-best month ever for Graphopex, and with August and September historically being strong months, they expect continued acceleration in revenue growth.
Q: What percentage of Graphopex revenue is now coming from repeat orders versus first-time orders, and how has that mix changed over the last two quarters? A: Ken Don Tremont, CEO, stated that most of the revenue is now coming from repeat orders from hospitals that are adopting the product more broadly. He emphasized that the first order is a leading indicator, but repeat usage is the primary driver behind the revenue growth.
Q: What has changed most positively since you initially established the peak Graphopex sales estimate of $100-175 million? A: Ken Don Tremont, CEO, highlighted that pricing has been excellent with universal acceptance and no discounting. He noted that the best indicator of future revenue is the degree to which hospitals are adopting Graphopex as standard of care, with many hospitals already achieving the 29-42% market share that the guidance implies.
Q: Can you describe the penetration into the adult population for Graphopex and what you're seeing among doctors for that population? A: Ken Don Tremont, CEO, explained that growth is largely coming from the adult population, which represents 85% of the market. While there was strong initial uptake in pediatrics, the current growth is driven by adult institutions and patients, which is critical for the product's long-term success.
Q: What are the current inventory levels among wholesalers for Graphopex, and how does that relate to the alignment between underlying demand and product-level revenue? A: Brendan Bushman, CFO, stated that inventory levels at the end of June were about one month's worth, down from the initial launch period when wholesalers held over two months. This consistency between demand and ex-factory sales is expected to continue, though the company has no control over wholesale ordering patterns.
Q: What is the status of Rasuvo sales post-genericization, and how is Xfinity trending? A: Brendan Bushman, CFO, noted that Rasuvo lost about 60-66% of its unit volume after genericization, but the rate of decline has slowed meaningfully and stabilized. For Xfinity, the company saw a strong quarter with a 12% increase in demand, though some of that may be timing-related as patients filled prescriptions before vacations.
Q: Are you seeing any off-label use of Graphopex for other indications such as Castleman disease? A: Ken Don Tremont, CEO, acknowledged that there is a high degree of off-label use in the pediatric area, but the adult population, which drives most of the volume now, is largely using the product on-label for AML and MDS at the 10g label dose. As doctors gain comfort, they may move off-label, but most use so far has been on-label.
Q: Can you quantify the expected impact of tariffs on your margins, and will any costs be passed down? A: Brendan Bushman, CFO, reiterated that the 15% EU-US negotiated tariff applies to Rasuvo, which is brought in from Germany. For Graphopex, there is a potential orphan drug carve-out, but the worst-case scenario is the same 15% tariff. The impact on overall margins is not material, and no tariff-specific price changes are anticipated.
Q: Is the 30-month stay in effect for Rasuvo, and does the litigation change how you think about the durability of demand? A: Brendan Bushman, CFO, confirmed that a 30-month stay is expected to apply and has been filed. The drug should continue to perform along the established demand trend, with the one-time bump from the competitor's exit being stable since then.
Q: Are you having any discussions with Medicare ahead of the first year of the NAP program, and can we assume it will continue? A: Ken Don Tremont, CEO, confirmed that the NAP (New Technology Add-on Payment) is for another year, with the second term for Graphopex expected to be initiated in October.
Q: Do you have a target leverage ratio before diverting more capital towards debt paydown versus other capital deployment? A: Brendan Bushman, CFO, stated that while the company is constantly balancing leverage against BD opportunities, given the durability of the established portfolio and conviction on Graphopex, they would be comfortable getting back to the historical 3 times leverage range.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
