Mr. Ken d'Entremont reports

MEDEXUS ANNOUNCES FDA APPROVAL OF GRAFAPEX (TREOSULFAN) FOR INJECTION AND PROVIDES BUSINESS UPDATE

Medexus Pharmaceuticals Inc. has provided a business update regarding the successful completion of the regulatory review process for Grafapex (treosulfan) for injection with the U.S. Food and Drug Administration and, in addition, has released preliminary estimates of the company's operating and financial results for the company's third fiscal quarter ended Dec. 31, 2024 (which remain subject to completion of Medexus's financial closing procedures). All dollar amounts in this news release are in U.S. dollars unless specified otherwise.

FDA approval of Grafapex (treosulfan) for injection

On Jan. 22, 2025, Medexus was informed that the FDA approved Grafapex, an alkylating agent, with fludarabine as a preparative regimen, for allogeneic hematopoietic stem cell transplantation in adult and pediatric patients one year of age and older with acute myeloid leukemia or myelodysplastic syndrome. Grafapex holds orphan drug designation under the Orphan Drug Act, meaning that the product will benefit from up to 7-1/2 years of regulatory exclusivity in the Food and Drug Administration-approved indication. Medexus holds exclusive commercial rights to Grafapex in the United States under a February, 2021, exclusive licence agreement with medac GmbH.

"We are pleased to report this positive development, which marks a strategically important step forward for our business and, importantly, will now benefit eligible patients across the United States," commented Ken d'Entremont, Medexus's chief executive officer. "Not only will Grafapex make a substantial contribution to alloHSCT in the United States, but it also solidifies Medexus's leadership position in this therapeutic field."

"We are targeting a commercial launch in the first half of calendar year 2025, and, given our recent experience in Canada, we are very optimistic about the potential of Grafapex in the U.S. market," added Richard Labelle, Medexus's chief operating officer. "We anticipate that Grafapex will have a meaningful impact on Medexus's total revenue and believe that annual product-level revenue in the United States has the potential to exceed $100-million within five years after commercial launch."

"This FDA approval provides a useful option for adult and pediatric patients, with the potential to enhance overall survival while minimizing side effects," said Dr. Filippo Milano, a stem cell transplant physician-scientist and principal investigator in clinical trials using treosulfan as part of a conditioning regimen.

As previously announced, the regulatory milestone amount payable to medac under the fourth amendment to the February, 2021, exclusive licence agreement between the parties is based on the language of the product label approved by the FDA. Based on the terms of the approval, including the Food and Drug Administration-approved product label, Medexus has determined that medac will earn a $15-million regulatory milestone amount. The final amount is subject to review and confirmation by the parties in light of the terms of the agreement. The regulatory milestone amount will be payable in instalments, subject to Medexus's right to temporarily defer instalment amounts, on terms described in Medexus's Dec. 2, 2024, press release, available in the investors section of Medexus's corporate website. For a $15-million regulatory milestone amount, this installment schedule will result in payments of $2.5-million by June 30, 2025, $5-million by Oct. 1, 2025, and $7.5-million by Jan. 1, 2026 -- subject to Medexus's temporary deferral option in respect of the second and/or third such payments. Also as previously announced, given the FDA approval of Grafapex, Medexus will promptly repay a $2.5-million credit received from medac in September, 2021.

Additional information about the terms of the licence agreement, including copies of the relevant documents, is included in the company's filings on SEDAR+. The summary in this news release is qualified by reference to the terms of each such document as applicable.

Preliminary estimates for fiscal third quarter 2025

Medexus remains focused on delivering strong revenue growth and overall performance across the company's entire portfolio of products in both the United States and Canada. This important new development for Medexus regarding Grafapex arrives on the heels of what is expected to be a solid fiscal Q3 2025, and includes an estimated $1.9-million in fiscal Q3 2025 investments in personnel and infrastructure that were made to prepare for this recent positive FDA decision.

Medexus currently expects key selected highlights for fiscal Q3 2025 to include the following:

• Revenue between $29.5-million and $30.5-million for the three-month period ended Dec. 31, 2024, representing a year-over-year increase of at least 17 per cent over $25.2-million for fiscal Q3 2024, attributable in part to continuing growth in net sales of Rupall, and an approximately $2.0-million beneficial impact of customer buying patterns and related timing of orders of Ixinity relative to patient unit demand in fiscal Q3 2025;
• Adjusted earnings before interest, taxes, depreciation and amortization between $5.5-million and $6.0-million for the three-month period ended Dec. 31, 2024, representing a year-over-year increase of at least 70 per cent over $3.2-million for fiscal Q3 2024, primarily attributable to the effects of the company's continuing financial discipline efforts, together with the effect of customer buying patterns mentioned above, and partially offset by the estimated $1.9-million of Grafapex personnel and infrastructure investments mentioned above;
• Available liquidity of approximately $8.5-million (Dec. 31, 2024), consisting of cash and cash equivalents, compared with $5.3-million (March 31, 2024);
• Operating income between $3.5-million and $4.0-million for the three-month period ended Dec. 31, 2024, representing a year-over-year increase of at least 123 per cent over $1.6-million for fiscal Q3 2024;
• Net income between $500,000 and $2.0-million for the three-month period ended Dec. 31, 2024, compared with $500,000 for fiscal Q3 2024; final reported net income for fiscal Q3 2025 will depend on completion of Medexus's financial closing procedures, including in respect of current and deferred income tax expense amounts.

The expected results discussed in this news release are preliminary estimates only, as Medexus's financial closing procedures remain subject to completion, and have not been reviewed or audited by the company's auditor. All such figures are based on information currently available to Medexus management and are subject to change and adjustment as Medexus's financial results for fiscal Q3 2025 are finalized. Accordingly, final reported results may differ, and may differ materially, from these preliminary estimates, and investors therefore should not place undue reliance on any such preliminary estimates. All such preliminary estimates constitute forward-looking information within the meaning of applicable securities laws, are based on a number of assumptions, and are subject to a number of risks and uncertainties. Medexus currently expects to file its financial statements and management's discussion and analysis for fiscal Q3 2025 after markets close on Feb. 5, 2025.

Medexus expects key operational highlights for fiscal Q3 2025 to include the following:

• Ixinity (United States): continuing slight decline in unit demand, reflecting the continued effect of previously disclosed trends and factors;
• Rupall (Canada): continuing strong unit demand growth, reflecting successful execution of the company's initiatives in advance of the expiration of Rupall's market exclusivity in late January, 2025;
• Rasuvo (U.S.) and Metoject (Canada): continuing strong unit demand in the face of sustained competition and the continued effect of previously disclosed trends and factors;
• Gleolan (U.S.): continuing slightly positive trend in U.S. unit demand growth, reflecting the response to the company's commercialization efforts and successful execution of the company's commercial plan to date; there nevertheless continue to be disagreements with the licensor regarding the terms of the U.S. Gleolan agreement, which Medexus continues to seek to resolve through mutual negotiation and pursuant to the terms of the U.S. Gleolan agreement, including its dispute resolution process; Medexus is confident that it has performed its obligations under the U.S. Gleolan agreement, and, pending resolution of the U.S. Gleolan agreement, whether by mutually acceptable agreement or otherwise, in accordance with its existing terms, currently intends to continue commercializing Gleolan in the United States through to at least March 31, 2025, in accordance with and subject to the terms of the U.S. Gleolan agreement;
• Trecondyv (treosulfan) (Canada): continuing strong unit demand growth, reflecting successful execution of the company's initiatives in support of the product, but which does not yet include the effect of the successful completion of the negotiation process with the pan-Canadian Pharmaceutical Alliance and any subsequent decisions by participating government organizations on public reimbursement of Trecondyv for their regions and jurisdictions.

About Medexus Pharmaceuticals Inc.

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 oncology, hematology, rheumatology, autoimmune diseases, allergy and dermatology.

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