Medexus Pharma Shares Higher on FDA Approval for Grafapex

Medexus Pharmaceuticals (TSX: MDP) (OTCQX: MEDXF) shares rose on Tuesday, January 22, 2025, following the company's announcement that the US Food and Drug Administration (FDA) has approved GRAFAPEX™ (treosulfan) for injection. The drug, in combination with fludarabine, is now approved as a preparative regimen for allogeneic hematopoietic stem cell transplantation (alloHSCT) in adult and pediatric patients one year of age and older with acute myeloid leukemia (AML) or myelodysplastic syndrome (MDS).

The FDA approval of GRAFAPEX™ is a significant milestone for Medexus, as it solidifies the company's leadership position in the alloHSCT therapeutic field and provides a new, potentially more effective and safer option for patients. The product's Orphan Drug Designation under the Orphan Drug Act grants it up to seven-and-a-half years of regulatory exclusivity in the FDA-approved indication, further strengthening Medexus's market position.

Medexus anticipates that GRAFAPEX™ will have a meaningful impact on the company's total revenue and believes that annual product-level revenue in the United States has the potential to exceed US$100 million within five years after commercial launch. The company is targeting a commercial launch in the first half of calendar year 2025 and is optimistic about Grafapex's potential in the US market, given its recent experience in Canada.

The FDA approval of GRAFAPEX™ also has implications for the competitive landscape in the US market for alloHSCT. The new product provides a useful option for adult and pediatric patients, with the potential to enhance overall survival while minimizing side effects. This can lead to improved patient outcomes and increased demand for the product, potentially challenging established competitors in the market.

Medexus will need to successfully navigate the commercial launch of GRAFAPEX™ in the US market, which may present challenges related to market access, pricing, and reimbursement. The company must also manage the regulatory milestone amount payable to medac under the license agreement, which totals $15 million and will be paid in installments over the next two years.

In conclusion, the FDA approval of GRAFAPEX™ is a positive development for Medexus Pharmaceuticals, with potential long-term implications for the company's growth and profitability. The approval strengthens Medexus's market position, opens up new revenue streams, and provides regulatory exclusivity, enabling the company to expand its presence in the US market and potentially enhance patient outcomes. However, Medexus must also successfully navigate the commercial launch and manage potential challenges related to market access, pricing, and reimbursement.