Close enough. We'll get started. I'd like to introduce our next presenter of the day, Ken d'Entremont. Did I do it okay? All right. CEO of Medexus Pharmaceuticals. Good morning and welcome.
Thank you so much. Thank you. Thank you. Thanks for the organizers for the opportunity to present Medexus here. Medexus is a orphan drug, rare disease company that is publicly traded on the TSX under the ticker symbol MDP. You can find lots of information on our website at medexus.com, including our forward-looking statement. Let's start with who we are, what we do. Literally, Medexus is a company that is saving patients' lives. We've got products that are working in some very specialized areas that literally extend and save patients' lives. As you look at the base business, we've got last year we reported $108 million of revenue, U.S. dollars. Everything I'll present is in U.S. dollars except for our share price.
$108 million of revenue produced about $20 million of positive EBITDA from a base business that's pretty stable and mature. We've got 14 different products that generate that revenue, and a lot of it's coming out of the U.S. currently. On top of that, we've got a new product, which is called GRAFAPEX, which will provide significant growth into the future. Again, most of that being derived from the U.S. market. The story is becoming very much a U.S. driven story. As you look at our product portfolio, we have been diversified into three specific areas, but that is now consolidating around hematology and more specifically, stem cell transplantation. I'll describe exactly what that drug does in future slides.
Currently, half our revenue is coming from hematology, and again, that's where the growth is going to come from. We've got a stable portfolio of products that generate around $100 million flat, slightly declining, generating good profit. We have a very strong growth asset in GRAFAPEX, which could be bigger than the current portfolio is today at a stronger gross margin. I'm gonna spend a little bit of time on that drug. Our products are very complex, but our business model is dead simple. What we're doing is licensing and acquiring pharmaceutical products for specific therapeutic areas in the U.S. and Canada. We're leveraging the infrastructure that we've built in those two territories to launch more products.
As we build the portfolio, on top of the 14 products that we already have, that becomes extremely accretive, because infrastructure's in place, and as we add products, you know, in the case of GRAFAPEX at an 80% gross margin with infrastructure in place, obviously as revenue ramps, that becomes extremely accretive. The business model is dead simple. We're going out licensing and acquiring products in U.S. and Canada. Business development is really important 'cause that's how we acquire them. We will do a little bit of product development, and that is really about extending the label for existing products. There's no drug development risk here. The risk you would be taking as investors is commercial risk, and obviously that's much less.
The infrastructure that we have built is this. As I mentioned, about 73% of revenue is currently coming out of the U.S., and about 2/3 of our infrastructure is in the U.S. But it is a North American business, meaning, U.S. and Canada, this is the infrastructure on top of which we are adding more products. The exciting product development is really GRAFAPEX. There it is there. GRAFAPEX is interesting in that this is a drug for a rare disease orphan drug indication, meaning AML and MDS, 2 forms of leukemia that have very bad mortality outcomes. You know, with these patients, the goal is to get them into remission and then get them to a transplant.
A transplant for these conditions can be curative, obviously very, very good outcomes for these patients. The drug that we have, treosulfan or brand name GRAFAPEX, is a conditioning agent. What it does is prepare the patient for the transplant. It's an integral part of that transplantation process, when that transplant engrafts, it produces a whole new immune system for that patient, that's a curative modality. You know, very, very good outcomes for these patients. Our drug, GRAFAPEX or treosulfan, is the first drug approved by the FDA for the condition of AML and MDS patients, very, very well positioned. The early commercial response has been excellent.
We have got it already either approved, meaning listed, or under review in 2/3 of the hospitals already within the first year. We've received an NTAP registration by Medicare. An NTAP is very difficult to achieve. It's called a New Technology Add-on Payment, basically where the government is paying for the difference between the old drug and the new drug. The reason they do that is because this new technology is leading to excellent outcomes. Currently, about 30%-40% of patients are Medicare patients, so that NTAP payment is really, really important. Last year, in the entire year, there were only 13 applications for this designation. Only five products received the designation, and treosulfan was one of the five. Basically what that does is provide $21,000 of funding for that Medicare patient.
We are already seeing a large number of hospitals purchasing the product, and we have guided that we do expect GRAFAPEX on its own, last quarter, which was ended in March, to be accretive. We have launched and got the drug to be accretive within the first year of launch. We're really pleased with the early going. We have guided that this drug will be peak sales $100 million-$175 million at an 80% gross margin. Our current blended gross margin is about 60%, GRAFAPEX coming in at an 80% gross margin. With that sort of revenue profile, you would expect to see margin improvement in addition to obviously, strong revenue growth, and EBITDA growth.
This is the reason, or part of the reason, why we're so excited about treosulfan. We launched this drug ourselves in Canada, three or four years ago, and have had tremendous uptake of the drug. The $100 million-$175 million peak sales basically reflects a 29%-42% market share of allogeneic transplants. That is being achieved in Canada, and is being achieved in every country where the drug has been launched in Western Europe. A very, very realistic expectation for the U.S. marketplace. The other reason that we're so bullish on the drug is that the clinical outcomes are excellent. This is a retrospective study that we conducted at Princess Margaret in Toronto.
Princess Margaret is one of the largest transplant centers in North America, the largest transplant center in Canada. They did a retrospective study in MDS, one of the indications, and demonstrated basically a 30% improvement in overall survival relative to the old drug. This is a massive increase in overall survival. That's the reason that Medicare has funded it. That's the reason that the hospitals are putting it on the formulary, because they want to have access to this drug for U.S. patients, because the outcomes are far, far better. The drug is more expensive than the product we're replacing, survival is far, far better, and the cost to the hospital is less because there are fewer complications associated with our drug. Really, really strong outcomes for our drug.
Our confidence that this is going to be $100 million-$170 million at peak sales. We're really pleased with the early going of this drug, we do have a broad portfolio of products. When we describe the $108 million of revenue last year, about 30% of it is associated with this drug here, IXINITY, which is another hemophilia product, another rare disease orphan drug indication. This drug is for hemophilia B, of which there's only 4,000-5,000 patients in the entire U.S. that have hemophilia B. Our drug basically replaces what's missing from their own drug. This has performed very, very well. It's been very, very steady over many years, we would expect that to continue.
This is a biologic drug, so we don't expect any pure generic competition even after the IP runs out. It's just simply too expensive to produce a biologic drug. You wouldn't expect to see that here. The second-largest drug in current portfolio is Rasuvo or called Metoject in Canada. You can see again, you know, we've had really strong market share. That's about an 80% market share that we were able to generate from this drug. Recently, our competitor dropped out of the marketplace, and we basically captured what they had. We'd expect this drug also to go along rather smoothly until it runs out of exclusivity, which we would expect in 2028 or 2029.
It is a drug device, you wouldn't expect a generic competition to capture all of this. It's rather a more slow erosion. When you go back to our business model, you know, as I mentioned, we're very much about licensing and M&A. I think these are two examples, where we have executed M&A, and been very judicious with our cash, where we purchase products at less than one-time revenue. Obviously, in order to do that, we had to convince the partner, that they would benefit from the growth of the drug, which we were able to deliver. Their economics are tied to our revenue success, and that's how we have often structured these deals.
In the case of GRAFAPEX, we acquired a drug that can do $100 million-$175 million for basically $30 million up front and some sales milestones in the future. Again, really, really well structured. If you now turn to our balance sheet, I would say it's quite clean. We have had very steady revenue growth since inception in 2018. Had a bit of a plateau in net revenue for a few years while we were getting GRAFAPEX approved by the FDA. That is now done, and we're expecting to see growth as we go forward. We have been EBITDA positive, I think, for the past three or four years every quarter, even through the period where we were launching GRAFAPEX, which was obviously on the slides, you can see.
You know, we're really, really, really proud with the situation we're in. Low debt, strong cash generation, and a multiple which is, I think, probably below our peers, even in spite of the profile that the company has. Capital structure, as I mentioned, you know, enterprise value is relatively low given the profile of the company. We've got good analyst coverage in Canada, one in the U.S. We've got a very, very strong capital partner, debt provider in National Bank, where we've got debt that's being provided at basically SOFR plus 2.5, really, really low cost of capital.
That gives us some dry powder, which will allow us to go out and do licensing or acquisitions in the space that we're interested in, which is clearly HSCT or transplant and transplant-related modalities. We have the wherewithal to be able to go out and do that. Our growth driver is very much GRAFAPEX. If it is going to do $100 million-$175 million in revenue, obviously that's going to more than double our revenue over the next few years. Growth driver is already in hand, and we are looking for additional products for future revenue growth, specifically in rare disease and orphan drug, which is a very attractive area. You know, we do believe that we've created a company that has a profile that is quite attractive.
If you think of investment highlights, you know, I think it's really a summary of everything I've just said. You know, we've got this really strong base of business that's very, very stable, produces a positive EBITDA and cash flow. We have this growth driver in GRAFAPEX, which can more than double revenue at a better gross margin. That is really the story. I think good time for investors to be looking at our business. Happy to take any questions from the audience.
After your success with GRAFAPEX, you're kind of becoming more of in the orphan drug area and where you're specific on the transplants and everything else. You're kind of becoming a holding company because of the success that you have here. You're gonna go out and acquire. Are you gonna acquire their management, or are you gonna run the platform for them because you were successful doing that?
Yeah
you look at something, how you bring it into the company, and how do you see that going?
Great question. I think it's complex in that we certainly see that we've built the platform.
Yeah.
You know, we have got the platform that's attractive to certain parties. As we're looking for new assets, new drug products, we may move a little bit earlier in their development process. I mean, we've been acquiring products that are either registered or pre-registration. We can certainly now look at earlier products. We're never gonna become a drug development company. That's not the plan. Bigger opportunities will be available from products that are coming through phase III development, you know. That is where we can look for future assets. We're in no rush to do it because we have the growth asset today. We're looking for additional growth assets that will be bigger than GRAFAPEX.
We're looking for much bigger bite sizes in the future to add on to a portfolio, a platform that's already been built. You know, I think that becomes, you know, quite interesting for strategics. You know, clearly orphan drug, rare disease is a good space to be in because you get good pricing. The outcomes are excellent. If you're curing cancer, you're gonna get your pricing, you know, and you're gonna be attractive.
Like, the hockey puck comes right now as you get to the next one that's coming in and the potential there, where people will say, "Okay, now they have this too," plus what you're doing already more of a slow 'Cause you've been slow growth. I've been following the company for years, and it seems like you're-.
Yeah, I think it was rapid growth at the beginning. When we first formed the company, we were about $30 million in revenue. We drove it to $108. Been a little bit flat as we're waiting for GRAFAPEX to get approved, now we're kind of that inflection for the next stage of growth. You know, we very much see ourselves as a growth company. You know, clearly that's what we've done in the past, that's what the future holds for us. As we do that and execute on GRAFAPEX, adding the next growth asset will be really important.
The other company, just one last thing. What are the other, who can we compare this to? Some other symbols or something that we can look at and say, "Their competitors are trading at this. Why are they trading here?" Is it just an industry thing that you believe 'cause there's nobody like you? You know what I'm saying?
Yeah.
You're not getting the valuation you deserve right now. That's what I believe.
If you look at spec pharma companies, which we are no longer, we're more of an orphan drug, rare disease company, but spec pharma companies, you're seeing transactions done most recently at 2.2x revenue. We're not even trading at 1x revenue, our base business, and we have this growth asset. Yeah, I think we've been kinda overlooked a fair bit. That ought to bode well for investors who get in at this point. Thank you very much.