Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals Fourth Quarter and Fiscal Year 2025 Earnings Call.

On the call this morning are Ken d'Entremont, Chief Executive Officer; and Brendon Buschman, Chief Financial Officer. If you have any questions after the conference call or would like further information about the company, please contact Adelaide Capital at (480) 625-5772.

I would like to remind everyone that this discussion will include forward-looking information as defined in Canadian securities laws that is based on certain assumptions that Medexus believes to be reasonable in the circumstances, but is subject to risks and uncertainties. Actual results may differ materially from historical results or results anticipated by the forward-looking information.

In addition, the discussion will also include non-GAAP measures such as adjusted EBITDA, adjusted EBITDA margin and adjusted gross margin, which do not have any standardized meaning under IFRS, and therefore, may not be comparable to similar measures presented by other companies. For more information about forward-looking information and non-GAAP measures, including reconciliations to net income and loss, please refer to the company's MD&A, which, along with the financial statements, are available on the company's website at www.medexus.com, and on cedar at www.cedarplus.ca.

As a reminder, Medexus reports on March 31 fiscal year basis. Medexus reports financial results in U.S.

dollars and all references are to U.S. dollars, unless otherwise specified.

I would now like to turn the call over to Ken d'Entremont.

Thank you, Victoria, and thank you, everyone, for joining us on the call today. The last few months have been an exciting and dynamic time at Medexus as we have begun the commercialization efforts for GRAFAPEX, the brand name for treosulfan, in the United States.

I'm pleased to report that Medexus achieved $0.6 million of product level revenue for GRAFAPEX in fiscal Q4 '25 after becoming commercially available late in February relative to $2.7 million of GRAFAPEX personnel and infrastructure investments in the quarter, and our preliminary estimates indicate that we have already generated over $2.5 million of product level revenue in fiscal Q1 '26. We continue to expect that GRAFAPEX will be accretive to quarterly operating cash flows by fiscal Q4 '26, that's calendar Q1 '26, although we continue to assess the strong market response and performance of key indicators for any updates to this expectation.

We continue to expect that annual product level adjusted gross margin of GRAFAPEX will ultimately be approximately 80%, although, as a preliminary estimate, product level adjusted gross margin will be slightly higher in the initial months after commercial launch, primarily due to the evolving reimbursement dynamics for the product. Our fiscal Q4 net revenue was $24.8 million, a decrease compared to $26 million for the same period last year.

Our fiscal Q4 '25 adjusted EBITDA was $2.3 million, a decrease compared to $4.4 million for the same period last year. This decrease was primarily due to $2.7 million of GRAFAPEX personnel and infrastructure investments over the quarter to support our commercialization efforts for the product.

Our net income of negative $0.6 million for the quarter is a decrease from the positive $0.8 million for the same period last year. And negative operating income of $1.2 million is a decrease of $2 million compared to positive $0.8 million for the same period last year.

Again, the decreases in these metrics are primarily due to the investment we are making in GRAFAPEX commercialization efforts at this time. We are also proud of the financial results we are reporting for our fiscal year '25.

We achieved record adjusted EBITDA and record net income in fiscal year '25, both primarily due to effects of our ongoing financial discipline efforts and further supporting the stability of our base business base portfolio. Our fiscal year '25 net revenue was $108.3 million, which compares to $113.1 million in fiscal '24.

We reported adjusted EBITDA of $20.2 million for fiscal year '25, which compares to $19.5 million in fiscal year '24. We also produced a net income of $2.2 million compared to negative $0.2 million in the fiscal year '24.

Turning to our specific products. The key business update for this quarter is the commercialization of GRAFAPEX.

We initiated the execution of a commercial launch of GRAFAPEX in the first half of calendar year '25, with product commercially available in United States in February. The launch, which was originally expected to occur in April of '25 followed swiftly on the FDA's approval of the product in January, allowing us to begin generating product level revenue earlier than originally planned.

We have seen a positive market response to GRAFAPEX to date with the progress consistent with our expectations. Four large commercial players together covering an approximate 34 million patient lives and 12 individual health care institutions representing 7% of the 180 transplant centers in the United States have made positive formulary inclusion determinations.

This is a promising indicator of the product's commercial potential and additional 15 payers have added GRAFAPEX on their prior authorization list. Wholesaler data shows that 34 of the 180 transplant centers have already ordered GRAFAPEX for procedures in their institutions.

We are very happy with GRAFAPEX product performance to date, response from the market and the attention of treosulfan from the medical and scientific community has been excellent. In Canada, unit demand for Trecondyv, the brand name for treosulfan in Canada, grew by 70% over the trailing 12-month period ending March 31, 2025.

To date, British Columbia, Ontario and Quebec have executed listing agreements to reimburse Trecondyv in those provinces following a positive PCPA decision in November of '24. IXINITY unit demand in the United States increased by 1% over the trailing 12-month period ending December -- March 31, '25.

We expect that the unit demand will remain relatively stable with only slight continued decreases in the near term. Rupall unit demand in Canada increased by 14% over the trailing 12-month period ending March 31, '25.

Rupall's market exclusivity granted by Health Canada expired in January '25. Rupall has now begun to face generic competition in Canada, and we have initiated a strategy to support the product in this context.

Rasuvo unit demand in the United States and Metoject unit demand in Canada both remained strong during fiscal Q4 '25, although the factors we have discussed in the past continue to affect product level revenue. I will now turn the call over to Brendon, who will discuss our financial results in more detail.

Thank you, Ken. We are thrilled to be posting record adjusted EBITDA and record net income for our fiscal year 2025 as we continue to realize the benefits from our ongoing financial discipline efforts and streamlined capital structure.

Net revenue for fiscal Q4 2025 was $24.8 million, a decrease of $1.2 million compared to $26 million for the same period last year. Net revenue for the full year was $108.3 million, a $4.8 million decrease compared to $113.1 million for fiscal year 2024.

The decrease in fourth quarter revenue is primarily due to the timing of customer buying patterns of IXINITY, which we previously disclosed as having a $2 million beneficial impact in fiscal Q3 2025 and has had a proportionately negative impact in fiscal Q4 2025. This was offset by $0.6 million in revenue from GRAFAPEX realized during fiscal Q4 '25.

Gross profit was $12.4 million and $56.6 million for the 3- and 12-month periods ending March '25 compared to gross profit of $13.3 million and $59.5 million for the same periods in the previous year. Gross margin was 50.2% and 52.2% for the 3- and 12-month periods ending March '25, which are comparable to the 51.2% and 52.6% for the same periods in the previous year.

Selling, general and administrative expenses were $12.2 million and $43.2 million for the 3- and 12-month periods ending March '25 compared to $10.4 million and $44.9 million for the same periods in the previous year. As Ken mentioned, we have begun making more significant investments in personnel and infrastructure for the commercialization of GRAFAPEX, which are reflected in those SG&A expenses.

These investments totaled $2.7 million and $5.2 million for the 3- and 12-month periods ending March '25, and are expected to stabilize at around $3 million to $4 million for fiscal Q1 2026 and then around $4 million per quarter thereafter. Adjusted EBITDA for the 3- and 12-month periods ending March 31, '25, was $2.3 million and $20.2 million compared to $4.4 million and $19.5 million for the 3- and 12-month periods in the prior year.

The $2.1 million decrease in quarterly adjusted EBITDA was primarily due to the $2.7 million of GRAFAPEX personnel and infrastructure investments discussed earlier. Net income for the 3- and 12-month periods ended March 31, '25, was negative $0.6 million and positive $2.2 million compared to net income of positive $0.8 million and negative $0.2 million for the same periods last year.

Cash on hand of $24 million at March 31, 2025, compared to $8.4 million at December 31, 2024, and $5.3 million at March 31, 2024. The primary factor in this net increase in cash was Medexus completion of a public offering of common shares in January 2025.

We continue to generate cash from our operating activities with operating cash flow of $2.3 million and $24 million for the 3- and 12- month periods ending March '25 compared to $1.6 million and $18.7 million for the 3- and 12-month periods in the prior year. As of March 31, 2025, we had a combined $37.6 million outstanding under our 2 BMO credit facilities, which consist of $3.5 million drawn under our revolving credit facility and the remainder outstanding under our term loan facility.

In fiscal Q1 2026, we entered into amendments with BMO, allowing for partial principal repayments and adjustments under our term and revolving credit facilities as well as adjustments to the interest rate and financial covenants. These actions lowered our quarterly principal payments from $3.3 million per quarter to $1.1 million per quarter and meaningfully reduces our interest expense.

Looking forward to fiscal year 2026, we are in a great position to support our growth strategy while funding with cash on hand the $15 million remaining regulatory milestone that is payable under our GRAFAPEX agreement, particularly given the favorable payment terms we negotiated in the fourth amendment we announced in December 2024. As always, there can be variability in quarter-to-quarter results, but we look forward to continuing to build the company and its portfolio in the coming quarters and beyond.

Operator, we will now open the call to analyst questions.

Just looking at the initial launch of GRAFAPEX, it looks decent so far. Can you discuss some of the physician feedback that you've received so far?

And has there been any pushback relative to using busulfan?

Thanks, Andre. Yes.

So the physician level feedback to date has been very positive. The initial uses that we saw in Q1 were primarily pediatric patients, which was expected.

That's where there is the greatest need for GRAFAPEX. And now that formulary inclusions are happening, we're beginning to see the adult patients as well, which is also expected.

I would say that, as expected, treosulfan is a significant advancement in this space where there's been little advancement over decades. And so there's keen interest in the drug, and I think we're experiencing that with the uptake and the revenue that's beginning to be generated.

That's great. And so can you also just -- looking at your business development pipeline in terms of progression, do you have anything that you think could possibly fill in for Gleolan and terbinafine?

Or is the sole focus right now the GRAFAPEX launch?

Yes. By far, GRAFAPEX is the best opportunity we have in front of us.

I mean its potential of over $100 million in revenue and the 2 products that you referenced had no chance of being anywhere close to that and have a margin profile that's not nearly as good as GRAFAPEX. The margin profile on Gleolan, which we gave back last quarter, was 50%, whereas GRAFAPEX is 80%.

And as we mentioned in the comments here today, it's coming in above that. So no, absolutely.

The focus is and ought to be on GRAFAPEX and the rest of our base business, which is obviously performing very well.

Congratulations on the strong early launch. This is really encouraging.

These are encouraging numbers. I wonder if we could talk a little bit more about the launch.

If you could, as much as you can, share the ordering patterns that you're seeing now like perhaps rates of reordering? And another question related to coverage.

You mentioned that there are 15 payers that are now covering the drug under prior authorization. What will it take -- what generally does it take to move payers like that from prior auth to full indirect coverage?

Yes. Thanks, Michael.

Two good questions. So let's start with the ordering patterns.

Ordering patterns are kind of as we expected. I mean, as you know, we launched this drug in Canada some years ago.

And we saw pediatric patients being the first. That's where there is the greatest need for many reasons.

And then adults follow. And so that is what we're seeing.

So the first couple of months -- remember, we're still first quarter really of launching this drug. So first couple of months largely was pediatric patients on prior authorizations because there was great need.

Now we're seeing adult hospitals ordering as they include it on their P&T Committee. And so those are obviously bigger volume patients and bigger volume hospitals typically.

So we're seeing strong sales come out of those hospitals that are adding it to their P&T Committee. And so we would expect that trend to continue more adults as we go forward because now we're seeing P&T decisions being made.

It takes 1 to 6 months to get a decision from a P&T Committee within an institution. So we would expect significant numbers of those happening in the coming weeks and months.

And so we would expect to see revenue continue to accelerate as we go through that. With respect to the prior authorizations, right?

So the 15 have it on their prior authorization list just facilitates and enables these one- offs. And clearly, we are talking to all of them and working at having it listed as a fully paid benefit.

So that just takes time. So I think really, the PA listing is really just a matter of facilitating what can be a cumbersome process.

And then as we go forward, a full listing just makes access that much easier.

And on the ordering patterns, you suggested that -- or I guess you mentioned in the press release that 34 of 180 transplant centers have already ordered GRAFAPEX. Do you have on the number of centers that have reordered the drug?

We do. I don't have them off the top of my head, but it is significant.

So most of the orders have -- each month, the order -- number of orders have accelerated, and therefore, we are seeing more and more reorders also. So it seems to be that a hospital that places a first order tends to accelerate their order pattern as we go forward.

Okay. And then just briefly on IXINITY.

I wonder if you could speak to your view on the durability of IXINITY sales. You guys have done very well on improving the COGS for this drug and this appears to be this is looking more durable than we had originally expected.

I wonder if you could just provide an outlook there.

Yes, I think you're right. We've been cautious with IXINITY because we've seen some ups and downs over the quarters.

And now we're seeing good durable demand, which obviously is the key driver for the drug. And it's plus or minus 1% or 2% quarter-to-quarter.

So it has been quite steady and durable. The pediatric indication, I think, has helped to some degree.

So that's been good news. And I think just going forward, yes, we just see a steady kind of durable product for us.

And the team has done a great job even with fewer resources. They continue to do a really good job.

First question, for the payers that require prior authorization, what are the conditions that must be met for the reimbursement of the drug? And how quickly are the authorizations being turned around?

David, good question. So we're not seeing any limitations.

And so no limitation of dose. Some of the full listings have stuck to the label, which was fully expected.

But the prior authorizations, we're not seeing any real limitations. Price has not been an issue.

So they're happening relatively quickly. I do recall most of these are with pediatric patients where there's a great need.

You mentioned price. Are you getting a full wholesale acquisition cost?

Or are there adjustments to net price?

Yes, it's a great question. So price is coming in above expectations.

So we had expected a certain gross to net, and we're actually doing significantly better than expectation.

Okay. And then lastly, are you tracking performance at the call point level, for instance, how many doctors and treatment centers have been called on and what percent of them are using GRAFAPEX or said they will?

And if they do start using it, say, for pediatric patients initially, is it all pediatric patients or a subset of them? And how do they decide which ones they will treat or won't treat?

Yes, great question. So the reach -- first question, I think, was reach.

It's been excellent. We have -- access to these hospitals has been very good, which was expected.

This is an innovative product, and they do want to know about it and have access to it. So access has been really quite good.

Your second question, just remind me, please?

So how many centers and how many doctors have we called on, and what percent of them are using GRAFAPEX or have said they will?

Yes. So the number of called on, remember, there's 180 transplant centers, 70 of them do 80% of the transplants.

And so we've reached, I think, it's something like 134 of the 180. So obviously, it's a very high percentage of the 70 that do most of these transplants.

So we have access to most of them. There are a large number of hospitals that have got it under P&T review.

So that review has started. And the number that we just released today are the ones that are finished with a positive decision.

I don't believe we've had any that have been negative. So it's being added to formularies as we go forward.

And then will they pick and choose patients who they treat with it? Or will it be all patients?

How do you see that?

Yes, we expect to get a share of patients. And so I think we've said historically that our share in Canada of pediatric patients is currently about 60%, 6-0.

And we would expect that our share of adult patients should end up being 25% to 35%. So that's kind of the number.

And so yes, they will stratify the patients based on their condition and their comorbidity index, primarily. And there are some patients that can tolerate busulfan.

So I wouldn't be surprised to see busulfan continue to be used in certain patients. There are other patients that cannot, and therefore, treosulfan fills a very important void.

And you can determine before you give the patient either of the drugs whether they can tolerate it just based on comorbidities?

Yes, correct. So the pivotal study and other studies that have been done since looked at comorbidity index of these patients.

Remember, these are -- obviously, these are quite ill patients. They have leukemia in most cases.

And they also have other conditions. And so if their comorbidity index is high, that means that their organs may not be able to tolerate a more toxic conditioning agent like busulfan.

Therefore, there's a need for a less toxic, but equally effective drug like treosulfan. And so those patients will -- it's expected that those patients would do better on the reduced toxicity conditioning agent, which is treosulfan.

I guess just for starters, $2.5 million in first quarter '26 is an impressive number. I just want to make sure I'm thinking about this right.

That would seem to imply a $10 million run rate already, and assuming sequential growth quarter-over-quarter, an even better number than that for 2026. Just in general, is that the right way to think about how this launch is progressing?

Yes. Thanks, Scott.

Exactly. I mean that is how we're beginning to think about it that the run rate is faster than we had anticipated.

And so yes, as we go forward, we would expect acceleration of the revenue due to better access by P&T Committee approvals. And so yes, if you just straight line where we are today, yes, we'd do $10 million in this year.

But clearly, we're in the very early stages of a launch and so you would expect that each quarter will be sequentially better. That's why we're -- we've stated at the very beginning that we would think by our fiscal Q4, treosulfan or GRAFAPEX in the U.S.

will be accretive, and we still very strongly believe that. Clearly, you can see the trend is very positive in that regard.

Okay. Great.

Well, congratulations on that. That's an impressive start.

When I look at some of the metrics you gave, 34 of 180 transplant centers, how would you expect that to increase through the year? And at peak, would you expect to be in almost every transplant center?

Just trying to get an idea of is that a metric you'll give us on a regular basis, and how we should expect to see that grow?

Yes. So the metrics we've put out today, we expect to repeat until they're no longer relevant.

So we will continue to update on those metrics. The number of hospitals ordering obviously, is really important, and we've shown total number of total hospitals that do transplants.

The really important ones obviously are the top 70, where we obviously have a better percentage of those hospitals who are already ordering. And so we'll keep putting that data out because I think that really will give an indication of the uptake of the drug and how the future ought to unfold.

And I think, in our view, it's still very early going. So we feel really good about this fiscal year and the uptake of GRAFAPEX versus expectations.

It also gives us a good and high degree of confidence in the peak sales target in that it's launching the way we had expected, if not better, and therefore, we feel confident that eventually, it will become a really important standard of care in the U.S. as it has in every other territory where it has been launched.

Okay. Great.

And just the medac agreement, are those terms final? I know there was some question about a couple of the terms.

Yes, correct. So we've always been guiding that we thought that the label earn them the $15 million milestone payment, and they have now agreed with that.

And so we are in the process of making those payments over the schedule that Brendon described.

Okay. Great.

Final question, just on some of the other base franchises, Rasuvo and IXINITY in the U.S. and then Rupall.

My expectations for 2026 are slight declines in those franchises, maybe 5% to 10%. Is that the right way to think about those kind of base franchises or anything that perhaps I should be factoring in?

Yes. No, I think that's the right way to think about them.

We consider those franchises as mature at this stage. So they're getting some support, but not -- we're not attempting to grow them aggressively.

We're looking to defend them and maintain them. So yes, flat to slightly declining, I think, is the way to think about them.

Obviously, we pointed out the generic competition has arrived for Rupall. So the team is working hard to defend our position, and they're doing a good job of that.

And we are seeing the molecule continue to grow. So the molecule keeps growing, but our share, obviously, we're going to start to split it with the generic.

Yes. Just a quick one.

The $0.6 million in Q4 and the $2.5 million in Q1, does that reflect use of the drug at the patient level? Or is any of that inventory build?

Yes, David, both. So the $0.6 million -- and all those numbers are ex factory.

So those aren't demand numbers that we gave you, they're ex factory numbers. So the $0.6 million, yes, was the pipeline load, but it also -- there were 2 orders in that quarter.

So they pulled through the inventory quite quickly. And then the $2.5 million, again, it's ex factory, but we are seeing that demand and ex factory are tracking very nicely together.

So there's no kind of a load in the channel.

Okay. Great.

And then I do have one other one related to the last question. You had 5% to 10% declines, including for Rupall with generics hitting the market.

Usually wouldn't you expect a much greater decline in that situation? And if not, what are the steps that are being taken to defend it?

Yes. Typically, in this generic situation, we only have private reimbursement.

So that actually benefits us in this situation because there's not as many forced substitution situation. So there is no strong push to substitute brand with generic.

The other factor, I think, here is that the pricing isn't that different between brand and generic. The discount is not great.

So there is not a strong financial drive to do that, and therefore, our commercial effort is to continue to support the product and grow the molecule. And we still get a pretty strong share of the molecule, and thus far, that strategy has worked.

Just want to thank everyone for joining us on the call today. We look forward to building upon and advancing GRAFAPEX over the coming months and quarters and continue to deliver strong performance as we look forward in 2026 and beyond.

Thanks very much for joining us.