Medexus Eyes $175M GRAFAPEX Opportunity as Transplant Drug Gains Traction

Key Points

• GRAFAPEX is Medexus’ key near-term growth driver: The transplant drug generated approximately $11.5 million–$11.6 million in its first year, with fiscal-year revenue guidance of $30 million–$32 million and a potential annual opportunity of $100 million–$175 million.
• Adoption is expanding, with about half of relevant U.S. transplant hospitals having ordered and used GRAFAPEX. Broad reimbursement, Medicare’s NTAP program, seven years of orphan-drug exclusivity and an estimated 80% gross margin support the product’s outlook.
• Medexus is concentrating its portfolio on hematology and stem-cell transplantation while using legacy products to fund growth. The company is already EBITDA-positive, has net debt of slightly more than one times EBITDA and approximately $25 million–$30 million in borrowing capacity for acquisitions or licensing.

Medexus Pharmaceuticals TSE: MDP is prioritizing growth in hematology and oncology, with its recently launched GRAFAPEX treatment expected to be the company’s primary near-term revenue catalyst, Chief Executive Officer and Director Ken d’Entremont said during a Planet MicroCap presentation.

The pharmaceutical company markets about 14 products and generates just under $100 million in U.S. revenue, according to d’Entremont. He said the business is already producing positive EBITDA and has built commercial infrastructure across the United States and Canada. About 75% of current revenue comes from the United States, a proportion management expects could rise toward 90% over time.

Medexus has been shifting from a broader specialty-product portfolio toward hematology and oncology, particularly treatments associated with leukemia and hematopoietic stem-cell transplants. About half of the company’s revenue currently comes from areas it views as growth opportunities, while its legacy products provide cash flow to support investment in the hematology-oncology business, d’Entremont said.

GRAFAPEX Launch and Revenue Outlook

GRAFAPEX, Medexus’ brand for treosulfan, was approved in January 2025 for conditioning patients with acute myeloid leukemia and myelodysplastic syndromes ahead of stem-cell transplantation. D’Entremont described it as the first and only product approved for that use.

The company generated approximately $11.5 million to $11.6 million in GRAFAPEX revenue during its first year on the market. Medexus has guided for $30 million to $32 million in net revenue from the product in its current fiscal year.

D’Entremont said that roughly half of U.S. hospitals performing relevant transplants have ordered and used the product in patients. He also cited broad reimbursement and a Medicare new technology add-on payment, or NTAP, as factors supporting adoption. According to the CEO, no prescriptions written by clinicians have been rejected for reimbursement to date.

Medexus estimates GRAFAPEX could generate $100 million to $175 million in annual revenue, based on an expected 29% to 42% share of allogeneic stem-cell transplants. The company said treosulfan carries an approximately 80% gross margin, above its current blended portfolio margin of about 60%.

• Medexus has seven years of orphan-drug exclusivity for GRAFAPEX.
• The company expects clinical and economic real-world data presentations at the American Society of Hematology meeting in December to support further adoption.
• D’Entremont said Canadian experience with the treatment, where reimbursement supported a sharp increase in use, informs management’s U.S. outlook.

Portfolio Strategy Centers on Stem-Cell Transplants

The company is seeking to build a portfolio around the same transplant patients, physicians and treatment centers served by GRAFAPEX. D’Entremont said the relevant market is concentrated among approximately 180 U.S. institutions and 17 Canadian institutions, allowing Medexus to use a relatively focused commercial organization.

Medexus has licensed UM171 in Canada as a potential cell-source product for transplant patients and is also evaluating opportunities involving graft-versus-host disease treatments. The company does not pursue early-stage drug development, d’Entremont said, instead acquiring or licensing commercial-stage products and potentially making label or lifecycle improvements.

Management is deprioritizing mature products outside its core hematology focus, though d’Entremont said Medexus remains willing to sell non-strategic assets if they would be better owned by another company and could help fund growth in hematopoietic stem-cell transplantation.

Existing Products and Capital Position

IXINITY, a factor IX replacement therapy for hemophilia B, remains Medexus’ largest product, according to d’Entremont. The treatment has patent protection through 2028. He said the company does not expect generic competition to be likely because biologic products are expensive to develop.

Rasuvo, marketed as Metoject in Canada, is another major product. D’Entremont said Medexus now is the sole supplier of methotrexate in an auto-injector for rheumatoid arthritis in the United States after a competitor left the market. He expects the product to remain stable until an estimated 2028-to-2030 timeframe, when exclusivity could expire and generics could enter.

Chief Financial Officer Brendon Buschman said Medexus has repurchased more than 1 million shares since beginning buybacks in November, representing roughly 3% to 4% of shares outstanding. He estimated the average repurchase price at about $4.50 per share. The company has approximately 31 million shares outstanding, according to d’Entremont.

Management described net debt as slightly above one times EBITDA and said its credit facility includes approximately $25 million to $30 million of anticipated borrowing capacity for business-development activity. Buschman said the facility was used in connection with the UM171 agreement in Canada.

About Medexus Pharmaceuticals (TSE:MDP)

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 hematology and hematology-oncology and rheumatology and allergy.

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