Medexus Pharmaceuticals (TSE:MDP) highlighted continued momentum for its U.S. launch of GRAFAPEX while reporting lower year-over-year revenue and earnings in its fiscal third quarter of 2026, management said on the company’s earnings call. Executives emphasized improving demand trends for GRAFAPEX following a slower holiday period and reiterated expectations that the product will begin contributing positively to operating cash flow in fiscal Q4 2026.
GRAFAPEX launch progress and demand trends
Chief Executive Officer Ken d’Entremont said the company was “extremely pleased” with the commercial launch of GRAFAPEX and cited encouraging interest at the Tandem transplant meetings. While the company saw a quieter period during the December holidays, management said January 2026 rebounded strongly and represented one of the strongest months of patient demand since launch.
In fiscal Q3 2026, GRAFAPEX product-level net revenue totaled $2.0 million, while investments tied to GRAFAPEX personnel and infrastructure were $2.5 million. Management also provided demand and revenue context:
- Underlying patient demand in fiscal Q3 2026 was $2.6 million, compared with reported net revenue of $2.0 million, reflecting wholesaler buying patterns.
- Management expects underlying patient demand in fiscal Q4 2026 of approximately $3 million to $4 million, compared with $2.2 million in fiscal Q1 2026, $2.1 million in fiscal Q2 2026, and $2.6 million in fiscal Q3 2026.
- Considering wholesaler inventory at December 31, 2025, the company expects fiscal Q4 2026 product-level net revenue of $3 million to $4 million.
Management said 32% of the 180 U.S. transplant centers have ordered GRAFAPEX, and 77% of the 57 institutions that ordered have reordered. On the call, d’Entremont also outlined formulary adoption progress, saying transplant centers are “roughly broken down” into thirds: about one-third with GRAFAPEX on formulary, one-third under review, and one-third still being worked on.
Executives also noted that transplant activity is concentrated among a subset of centers: 76 of the 180 centers perform about 80% of transplants, and management said GRAFAPEX penetration is better within that top group than across the full 180 centers.
Reimbursement and adoption dynamics
On reimbursement, d’Entremont said the company has not been seeing broad access issues and characterized reimbursement as “excellent.” He discussed the Medicare New Technology Add-on Payment (NTAP), describing it as a payment that can cover up to the difference between generic busulfan and GRAFAPEX/treosulfan, which he said is $21,000. Medexus estimated Medicare represents about 30% of adult patients, making NTAP meaningful for hospitals treating those patients.
Management also described a trend toward conditioning more patients as outpatients before moving them to inpatient care, which can shift reimbursement dynamics so GRAFAPEX is reimbursed “as a commercial product” and does not impact the inpatient DRG case payment. For patients outside NTAP coverage, d’Entremont said institutions may absorb the higher drug cost but can see offsets through factors such as shorter stays and fewer readmissions, based on the company’s analysis.
Asked about clinical experience, d’Entremont said physicians report tangible improvements in patients, including visible reductions in toxicity during hospitalization and at discharge, with longer-term benefits such as survival playing out over time. He also noted that pediatric adoption is influenced by fertility considerations, in addition to observable organ-toxicity improvements.
Fiscal Q3 2026 financial results
Chief Financial Officer Brendon Buschman said fiscal Q3 2026 results reflected “natural, transitional changes” in an evolving product portfolio. Total net revenue for the quarter was $25.3 million, down from $30.0 million in the same period last year. Buschman attributed the $4.7 million decrease primarily to reduced net sales of Rupall in Canada and the return of Gleolan in the United States to the licensor, partially offset by increases from GRAFAPEX and Rasuvo.
Gross profit was $13.6 million, compared with $15.2 million a year earlier. Gross margin improved to 53.6% from 50.7%. Buschman said the mix shift—growing GRAFAPEX revenue and the absence of Gleolan after fiscal 2025—is expected to have a positive effect on company-level gross margin, with changes continuing to emerge through fiscal 2027.
Selling, general and administrative expenses were $11.2 million, compared with $11.0 million in the prior-year period. Adjusted EBITDA was $4.5 million, down from $5.8 million a year earlier. Management cited several factors, including generic competition affecting Rupall, the termination of Gleolan in the U.S., and a $2.0 million benefit in the prior year from customer buying patterns for IXINITY. Net income was $0.1 million, compared with $0.7 million in fiscal Q3 2025, while operating income was $1.7 million versus $2.1 million a year earlier.
Despite the year-over-year declines, d’Entremont noted it was the company’s third consecutive fiscal quarter of operating income and adjusted EBITDA growth since GRAFAPEX’s approval and launch in fiscal Q4 2025.
Portfolio updates: IXINITY, Rasuvo, Rupall
Management also provided updates across the rest of its portfolio:
- IXINITY: The company continues investing in manufacturing process improvements. d’Entremont said the initiative has reduced product-level cost of goods by 30% comparing fiscal Q3 2026 to fiscal Q1 2021. Medexus committed to an additional approximately $1.2 million investment in fiscal Q3, expected to be paid in fiscal 2026.
- Rasuvo: Management said it learned in fiscal Q2 2026 that another branded methotrexate auto-injector competitor was withdrawn by its distributor. The company attributed a 17% increase in patient unit demand (fiscal Q3 2026 versus fiscal Q3 2025) to this competitive change, while noting the impact is expected to be largely reflected going forward.
- Rupall: Rupall continues to face generic competition in Canada. Management said it expects the adverse impact is now largely reflected in product performance and that future declines should be less severe.
Cash flow, debt, and capital allocation
Buschman said operating cash flow was $7.8 million in fiscal Q3 2026, compared with $6.7 million a year earlier. He also said that in the four quarters since the GRAFAPEX launch, Medexus generated an average of $4.3 million of cash from operating activity per quarter, even while investing in the launch.
Cash on hand was $15.0 million at December 31, 2025, down from $24.0 million at March 31, 2025. Net debt was $10.4 million at December 31, 2025, a decrease from $13.2 million at March 31, 2025.
In November 2025, the company entered into a new senior secured credit agreement with National Bank of Canada. Buschman said the delayed-draw term loan feature provides flexibility to finance future licensing or acquisition transactions on a long-term, non-dilutive basis. He also contrasted repayment terms with the prior facility, saying quarterly principal repayments have decreased to $0.5 million per quarter from $3.3 million per quarter under the previous BMO facility.
Management added that the remaining installment of a regulatory milestone payment owed to medac for GRAFAPEX was fully repaid on January 1, 2026 using cash on hand. Medexus also initiated a normal course issuer bid and said it has repurchased 201,500 shares to date.
About Medexus Pharmaceuticals (TSE:MDP)
Medexus Pharmaceuticals Inc, formerly Pediapharm Inc is a leading specialty pharmaceutical company with a strong North American commercial platform. It is focused on the therapeutic areas of auto-immune disease and pediatrics. The leading products are Rasuvo and Metoject, a unique formulation of methotrexate to treat rheumatoid arthritis and other auto-immune diseases; and Rupall, an innovative allergy medication with a unique mode of action.
