Earnings call transcript: Medexus Pharmaceuticals reports Q1 2026 results

Medexus Pharmaceuticals Inc. (MDXS) reported its Q1 FY2026 earnings, highlighting a revenue decline to $24.6 million from $27.3 million in the previous year. The company noted a positive operating cash flow of $3.9 million, despite a decrease in net income to $500,000 from $2 million. The stock price responded with a 4.17% increase, closing at $2.86. According to InvestingPro data, the company’s strong free cash flow yield and overall "GREAT" financial health score suggest resilience despite recent challenges. The stock currently appears undervalued based on InvestingPro’s Fair Value analysis.

Key Takeaways

• Revenue for Q1 FY2026 decreased by 9.9% compared to the previous year.
• Grafapix, a new product, generated $3 million in revenue in its first full quarter.
• The company reduced its net debt to $12.6 million, with quarterly principal payments down to $1.1 million.
• Medexus secured Medicare NTAP for Grafapix, enhancing its market position.

Company Performance

Medexus Pharmaceuticals faced a challenging Q1 FY2026, with revenue and net income both declining year-over-year. However, the company achieved a higher gross margin of 56%, up from 54.4%. The launch of Grafapix has shown promise, contributing positively to revenue and expected to impact cash flow in future quarters. Medexus has also made strides in reducing its net debt and stabilizing SG&A expenses.

Financial Highlights

• Revenue: $24.6 million, down from $27.3 million YoY.
• Adjusted EBITDA: $3.4 million, down from $6.1 million.
• Net Income: $500,000, down from $2 million.
• Gross Margin: 56%, up from 54.4%.
• Cash on Hand: $9.3 million, down from $24 million.

Outlook & Guidance

Medexus projects Grafapix revenue of $3-3.5 million for Q2 FY2026 and anticipates continued formulary inclusions. The company is exploring business development opportunities in autoimmune, allergy, and transplant areas. Medexus is preparing for potential impacts from a 15% tariff on EU pharmaceutical imports.

Executive Commentary

"We are extremely pleased with the progress we have achieved, thus far," stated Ken Dontormont, CEO. He also noted, "We anticipate that Grafapix will begin contributing positively to quarterly operating cash flows by fourth quarter twenty twenty-five."

Risks and Challenges

• Potential 15% tariff on EU imports could impact costs.
• Continued pressure on Rupel sales due to generic competition.
• Market penetration challenges in transplant centers beyond current 36 out of 180.

Medexus Pharmaceuticals remains focused on strengthening its market position through strategic product launches and financial discipline, despite facing revenue and income pressures in the current quarter. InvestingPro analysts maintain a strong buy consensus with price targets ranging from $4.03 to $7.27, suggesting significant upside potential. For detailed analysis and comprehensive insights, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.

Full transcript - Medexus Pharmaceuticals Inc (MDP) Q1 2026:

Conference Operator: Good morning, everyone, and welcome to the Medexis Pharmaceuticals First Quarter twenty twenty Please note this conference is being recorded. I will now turn the conference over to your host, Victoria Rutherford, Investor Relations. Victoria, the floor is yours.

Victoria Rutherford, Investor Relations, Medexis Pharmaceuticals: Thank you, and good morning, everyone. Welcome to the Medexis Pharmaceuticals First Fiscal Quarter twenty twenty six Earnings Call. On the call this morning are Ken Dontormont, Chief Executive Officer and Brendan Bushman, 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 Medexis 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, this 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, please refer to the company’s MD and A, which along with the financial statements is available on the company’s website at www.medexas.com and on SEDAR plus at www.cedarplus.ca. As a reminder, Medexas reports on March 31 fiscal year basis, Medexis 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 Dontermant.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Thank you, Victoria. And thank you everyone for joining us on this call today. We are now over five months, into the commercial launch of Grafapix, with fiscal Q1 twenty twenty six being the first full quarter, we are recognizing product level net revenue from GrapepEx in our total net revenues. We are extremely pleased with the progress we have achieved, thus far. As of June 30, nine large commercial payers and 14 individual health care institutions have made positive formulary inclusion determinations and an additional 29 commercial payers have added Grafapix to their prior authorization list.

Wholesaler data as of June 30 shows that 36 of 180 transplant centers representing an estimated twenty four percent of total allo HSCT procedures performed in The United States annually have already ordered Grafapax. Earlier this month, we also secured approval from the Centers for Medicare and Medicaid Services, a new technology add on payment or NTAP. Reimbursement of Grafapix for CMS is fiscal, 2026. Starting 10/01/2025, eligible patients can receive up to $21,411 of additional NTAP reimbursement under Medicare. The initial adoption, by major commercial payers and leading healthcare institutions has been highly encouraging and early indicators of patient level demand continue to validate the value proposition Grafapix delivers.

To that end product level net revenue from Grafapix in fiscal Q1 twenty six totaled $3,000,000 relative to $3,000,000 of GrafapEX personnel and infrastructure investments. We anticipate that GrafapEX will begin contributing positively to quarterly operating cash flows by fourth quarter twenty twenty five, which is our fiscal Q3 ’twenty six reinforcing its potential as a meaningful driver of long term value. We expect that product level net revenue from Graflopex in fiscal Q2 twenty six will be 3,000,000 to $3,500,000 taking into account wholesaler purchasing patterns and expected summer slowdown in procedures. Overall our fiscal Q1 twenty six results remain solid with positive net income, EBITDA and operating cash flows. Our results also reflect changes we are seeing in the product life cycle within our portfolio.

The strong initial performance of Grafapix is particularly important as other products in our portfolio shift into the later stages of their product life cycle. For instance, RuPal’s revenues have experienced expected erosion after the loss of its exclusivity period in January 2025. We designed this portfolio approach to ensure Medexis’ success over the long term. Our fiscal Q1 twenty twenty six revenue was 24,600,000.0 a decrease compared to $27,300,000 for the same period last year. Our fiscal Q1 twenty six adjusted EBITDA was $3,400,000 a decrease of six compared to $6,100,000 for the same period last year.

We continue to produce positive net income with 500,000 for the quarter a decrease compared to $2,000,000 for the same period last year and positive operating income of $900,000 a decrease compared to $4,000,000 for the same period last year. Turning to our other products in Canada unit demand for Trecondo the brand name for Trele Sulfan in Canada grew 38% over the trailing twelve month period ending 06/30/2025. To date, BC, Manitoba, Ontario and Quebec have executed listing agreements to reimburse Trucondo following a positive PCPA decision in November ’24. Xynity unit demand in The United States decreased by 1% over the trailing twelve month period ending 06/30/2025. We continue to expect that unit demand will remain relatively stable with only slight continuing decreases in the near term.

RUPEL has now shifted to a later stage of its product lifestyle, life cycle excuse me with the loss of the regulatory exclusivity period in January 2025. RUPEL now faces generic competition in Canada as a result unit demand over the six month period ending June 30 has decreased 29% when compared to the corresponding prior year. This pattern is typical of products at this stage so we anticipate this ship will have put typical and we have put typical generic defense strategies in place. Rasumo unit demand in The United States and Meadowjack unit demand in Canada both decreased by five percent in fiscal Q1 twenty twenty six. The factors we have discussed in the past continue to affect product level revenue.

In summary, we remain focused on delivering strong overall performance across our portfolio of products in both The United States and Canada, advancing Grafapax in The United States and strategically positioning the company to capitalize on future revenue opportunities. I’ll now turn the call over to Brendan who will discuss our financial results in more detail. Brendan?

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: Thank you, Ken. We are pleased with our results for Q1 twenty twenty six, which reflect the natural transitional changes of an evolving product portfolio. We are very pleased with the early performance of GrafiPEX, which as Ken mentioned, generated $3,000,000 of product level revenue in our fiscal Q1 twenty twenty six and is expected to be contributing positive to operating cash flow by the 2025, which is our fiscal Q3 twenty twenty six. Turning to the full quarterly results, total net revenue for fiscal Q1 twenty twenty six was $24,600,000 This represents a decrease of $2,700,000 compared to $27,300,000 for the same period last year. This $2,700,000 year over year revenue decrease was attributable in part to reduced net sales of RUPEL and GLEOLAND in The United States or RUPEL in Canada, GLEOLAND in The United States, partially offset by product level net revenue from Grafifax.

Gross profit was $13,800,000 for Q1 twenty twenty six compared to $14,800,000 for the same period last year. Gross margin was 56% for fiscal Q1 twenty twenty six, which is an improvement on the 54.4 we achieved in the same period last year. We expect an increasing amount of product level revenue from Grafipex together with the absence of product level net revenue from Glioland after fiscal year twenty twenty five to have a positive effect on company level gross margin. These resulting changes in gross margin are expected to continue to emerge over fiscal year twenty twenty six. Selling, general and administrative expenses were $12,200,000 for Q1 twenty twenty six compared to $10,300,000 for the same period last year.

The $1,900,000 year over year increase in selling, general and administrative expenses was primarily due to the $3,000,000 of Grafipex personnel and infrastructure investments we incurred in fiscal Q1 twenty twenty six. We expect these investments to stabilize at approximately $4,000,000 per quarter, although individual future quarters could exceed this estimate. Adjusted EBITDA was $3,400,000 for fiscal Q1 twenty twenty six, a decrease of $2,700,000 compared to $6,100,000 for the same period last year. The decrease was primarily due to the effects of generic competition on product level revenue from RUPEL. Net income was $500,000 for fiscal Q1 twenty twenty six, a decrease of $1,500,000 compared to net income of $2,000,000 for fiscal Q1 twenty twenty five.

Despite the decrease, this marks our fifth consecutive quarter of positive net income and we look forward to striving for positive net income in the quarters to come. We continue to generate cash from our operating activities with quarterly operating cash flow of $3,900,000 compared to $8,200,000 for fiscal Q1 twenty twenty five. Cash on hand of $9,300,000 at 06/30/2025 compares to $24,000,000 at 03/31/2025. The primary factor in this net decrease in cash was a payment of $15,500,000 under our senior secured credit agreement, substantially reducing our outstanding principal amount and go forward principal payments, which are now $1,100,000 per quarter. As of 06/30/2025, our net debt was $12,600,000 a decrease of $600,000 compared to $13,200,000 as at 03/31/2025.

I will conclude with a brief mention of recent tariff announcements. Based on our preliminary assessment, which remains ongoing pending new information, we anticipate a 15% tariff to be applied on branded pharmaceutical products from The EU into The United States, which will apply to our imports of Grafipex and Risupo. We do not currently expect these tariffs to have a material impact on product level performance. As always, there can be variability in quarter to quarter results and the operating environment also remains variable. 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.

Conference Operator: Thank you very much. At this time, we’ll be conducting our question and answer Thank Our first question is coming from Andre Udin of Research Capital. Andre, your line is live.

Andre Udin, Analyst, Research Capital: Thanks, operator. Hi, Ken and Brendan. It looks like Graphifex is off to a nice launch. Just looking ahead, you must be eyeing some new product opportunities. And just was wondering what’s the current environment for business development?

Like, what does that look like in terms of both prices and opportunities? Thanks.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah. Thanks for the question, Andre. I think the environment’s quite positive for us and that, you know, we’ve established ourselves as a significant player. We’ve got a good track record of successful product launches. So, you know, we’ve become an attractive partner for products that might be available.

As as you well know, the environment to to fund some of these things is really challenging. So a company like ours is an attractive option. So we definitely are expecting to have some opportunities come into our portfolio. You look at the three therapeutic areas where we participate. We have one already in autoimmune disease that is in our pipeline.

We’ve got one that we think will come into the allergy derm portfolio. And clearly, we’re working on follow-up products for Grafifex in the transplant area. So, yeah, we we would expect that we’ll have additional products as we go forward.

Andre Udin, Analyst, Research Capital: And and are there any higher margin drugs out there? I know those are usually harder to find. Are there any out there that you’re seeing?

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah. I mean, there certainly are. I mean, you just look at Graphitex, and it’s much better margin than, you know, the rest of our portfolio. So they are out there. It’s a challenge to find the right fit.

And so clearly, you know, we’re we’re very selective as to what we put into a portfolio. Here’s what we, you know, put our effort behind and spend money on. We wanna make sure that it becomes a

Andre Udin, Analyst, Research Capital: Okay. And just can you also discuss, like, how your debt refinancing plans are progressing? And I know that would also tie into future business development. So maybe you could just elaborate a little bit on how that’s going.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: I’ll turn that over to Brendan.

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: Yes. Yes. No. Thanks, Andre. So our leverage right now is just a little over one times adjusted EBITDA.

I think on a net debt basis, it’s well below one. So very reasonable, very comfortable. We don’t see any refinancing risk. We are just in the discussions right now with our current lender and some additional partners to just try to find the right facility that will sort of allow us to build on the Graphitex growth, but more specifically to your point and what Ken was saying to execute on that BD strategy. So we see those two things as very intertwined.

So we’re making good progress on that.

Andre Udin, Analyst, Research Capital: That’s great. That’s it for me.

Conference Operator: Thank you very much. Our next question is coming from Michael Freeman of Raymond James. Michael, your line is live.

Michael Freeman, Analyst, Raymond James: Hey, good morning, Ken, Brendan, Victoria. Congratulations on a strong quarter. This is a great looking launch. I want to talk about GraphPacts. I wonder you provided some good information on your commercial payer coverage and institutional formulary conclusions.

I wonder if you could provide us an update on how your conversations have been going after the quarter, How we should expect, I guess, like coverage total coverage to trend over the next couple of quarters and formulary inclusion and just give us a sense of overall traction in that arena.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah. Great question, Michael. Thank you. So it’s been very positive, you know, as as you saw, we we put out the number of inclusions that we’ve already gotten, which was a little bit surprising that it happened so fast. And so those ones I think we said 14 at the end of the quarter.

It’s obviously grown since then, and there are many multiples of that that are under formulary review currently. So we would expect that those determinations will end up being positive. We haven’t had a negative one yet for any clinical reasons. And so, you know, as as those things become positive, we certainly clearly see that those hospitals become significant purchasers of Grafapax following a formulary inclusion. Remember, we said before, that the early going was a lot of pediatric one offs because the need in that category is so great.

Now as we’re getting formulary approvals in adult hospitals, the volume grows fairly significantly. We’re fairly bullish as we look forward. We think Grafapix is off to a great launch and is performing at or beyond our expectations.

Michael Freeman, Analyst, Raymond James: Thank you, Ken. And I wonder with the NTAP reimbursement announcement, I wonder if you could provide any feedback so far from institutions. Like should we expect your inclusion in this program and this top up payment to influence uptake by docs and ultimately sales volumes?

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah, it’s a great question. So just remind everyone that an NTAP approval reimbursement is for inpatient. We already have a J code, which is for outpatient. Eighty five percent of these patients are treated inpatient and the NTAP applies to the Medicare folks which is we estimate twenty percent, twenty five percent of total inpatient business. So it is significant.

What it does is it allows the adoption of a new technology over the period of time that the DRG or the case costs will grow. And so it allows hospitals to adopt a new technology much more quickly because they have confidence that they’re going to be reimbursed. So obviously it helps for the CMS patients but also helps for commercial payers because you know they see hey you know this product has received NTAP, it must be you know available you know addition to, treatment, and patterns of care, so it’s a very positive thing. There are only 13 applications for an NTAP, only five were approved. We were one of the five.

So, you know, it’s kind of a rare thing, but a very positive thing because it really validates our value proposition and the clinical benefit of our drug.

Michael Freeman, Analyst, Raymond James: That’s great. And then one last follow-up. Just think I know the answer by the amount of, I guess the amount of the NTAP top up, but how would you describe how your target pricing for Grafifyx is holding in?

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah. Excellent. You know, we we try to pick a price where, you know, we would get universal access, and that seems to be working. We also picked the price, you know, at which we would qualify for NTAP. There is a certain floor, that you have to be above in order to qualify.

Otherwise, you know, why bother? So, you know, I it looks like we’ve picked a really good price. That’s it’s being borne out. And you know, as we’ve said before on these calls, the value that Grafapix brings to the cost of treating these patients is a really positive thing. So having the reimbursement go in place gives the institution even more confidence, you know, as they’re looking at our cost comparisons and the various data that we provide to the P and T committee.

So it’s a very positive outcome for us. And so we would expect that over time, we will get very broad coverage for GraphApex. And obviously, will drive revenue.

Michael Freeman, Analyst, Raymond James: Excellent. Thanks. That’s all for me. I’ll pass along.

Conference Operator: Thank you very much. Our next question is coming from Scott Henry of AGP. Scott, your line is live.

Scott Henry, Analyst, AGP: Thank you. Good morning and congratulations on the Grafapix launch. I know it’s been quite a journey to get to hear. So, it’s good to see it going well for you all. Just to one quick follow-up on the NTAP program.

Is that a twelve month program, or is that something that you can renew after a year? Just trying to get a sense of how that works and, you know, how what the duration of that is.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah. I’ll have to check on that for you, Scott. What I have seen so far, it’s temporary. I’m not sure if we can renew. I think the intent of it is to cover the drug while the DRG catches up, you know, and as you know, you know, that takes twelve, eighteen months, sometimes twenty four.

And so it’s for a specific period of time. I’m I’m not sure if you can renew it, but, I will check on that for you.

Scott Henry, Analyst, AGP: And and what is the specific period of time? Does it does it go for twelve months? Hours,

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Brendan, you chime in if you’ve got a different information, but I I think ours is, a period of twelve months. It’s twelve or eighteen months, something like that.

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: I believe it’s twelve months.

Scott Henry, Analyst, AGP: Okay. Great. Thank you for that clarity. Just taking a step back, in general terms, I want to understand how exactly do you define product level revenue? Meaning, when when is the revenue booked?

Is it when the product is is purchased by the hospital, or is it when it’s used by the patient? You know, when does that, that delivery convert to a sale?

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: Yeah. Our way of recognizing, in this case is when it is sold to the wholesaler. So there will often be, differences between the pace at which the wholesaler purchases it from us versus when the hospitals will purchase it from the wholesaler. And then there can be further gaps between where the hospital purchased it from the wholesaler and when it’s ultimately used in a procedure. But for our purposes, it’s from a revenue recognition standpoint, it’s when the sale is made to the wholesaler.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Okay, Just to add to that, Scott, so when we say demand, what we’re referring to is movement from the wholesaler to the hospital. We obviously don’t book those sales, but that that’s what we’re referring to as demand. That’s our indication of how much is being used in in the territory.

Scott Henry, Analyst, AGP: Okay. In the 3 to 3 and a half million, that’s what you’re going to sell into the wholesaler. Correct?

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: That’s correct.

Scott Henry, Analyst, AGP: Okay. So, you know, my my experience with drug drug launches is, you know, the second quarter of the launch often can be flattish if you’re selling into the wholesaler because you, you sell a bolus right away. And then by the third quarter, you start to see the true demand trend as opposed to just wholesaler trends, which should signal faster or accelerating growth after the next quarter. Is that the right way to look at it?

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Think in our

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: case, yes, ahead.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yes. I’ll just jump in here, Brendan. And if you got more, add. In in our case, we’ve only got one wholesaler with two sites, and so they’re not carrying a lot of inventory. Inventory has been building as demand has been building.

So there’s not a big disjoint between ex factory and patient demand. Obviously, as our volume goes up, the amount of inventory that they’ll hold on to will increase because, say, they hold on to a month of inventory as their revenue is going up, a month becomes a bigger and bigger number. But yes, there’s not a big disjoint between ex factory and patient demand.

Scott Henry, Analyst, AGP: Okay. Thanks for the color on that. As well, one just clarification and it’s my understanding this to be correct, but, just wanted to clarify. When we talk about a 15% tariff on GrafiPEX, we’re talking about a 15% on the cost of goods sold. I mean, I assume that’s or the transfer price, which you delivered in.

So the 15% will be on a much lower number than the end user sales. Is that how we should think about that tariff?

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: Yes. That’s correct. So the 15% that we are anticipating would be applied on the cost of goods as it crosses the border, not on the revenue or anything else.

Scott Henry, Analyst, AGP: Okay. Great. And, final question. Estimate that, it looks like about 24% of procedures have already, utilized Grafapax or or ordered it or, I believe, procedures performed. You know, where do you think that number could get to in, say, twelve months?

Is is that a number where you could get to 80% of the procedures to have access? Or, you know, what what is the target? Could you get to a 100%? Just trying to get an idea of, you know, how to track that number and and, you know, what’s a realistic, target for it. Thank you.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: It’s a great question, and I probably don’t have a great answer. It’s all dependent on the speed at which formulary inclusion happens. Remember, 80% of the procedures are done in 70 hospitals, not the 180. That’s why we’ve got a higher percentage of procedures because we’re selling more to the top 70 than we are to the smaller hospitals. So no, we’re not going get to 100%.

I don’t see that. But I think we’ll get a very significant share. Our $100,000,000 guidance, that’s a 20% or 25% share of procedures. That’s kind of at the low end of the scale internationally when you look at what Drill Sulfan has done in Western Europe. In many countries, it’s significantly higher than that.

It could be as high as 60%. So we do expect significant uptake this year, next year, the following year, and then it will start to plateau. We’ve always said we think peak sales in three to five years, and that certainly seems to be playing

Conference Operator: Our next question is coming from David Martin of Bloom Burton. David, your line is live.

Girish, Analyst, Bloom Burton: Good morning, Ken and Brendan. This is Girish on for David. We had a question just about the Canadian portfolio. Do you feel the full impact of the RuPaul generics have been felt yet? And do you think there’s any chance of a rebound on seasonality or stabilization in the Canadian portfolio?

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Yeah, great question. It’s early going in the Rupel genericization. So, yeah, we would expect to be some further erosion. We don’t think it’s hit the bottom yet. But what we do see is the molecule continues to grow, which obviously is a very positive thing.

We are holding on to a significant share. So again, really positive thing. But yeah, I think over time you’ve got to expect that RUPEL is going to erode as you would expect with a generic. We’re doing everything we can to maintain as much as possible various programs to keep people on Rupel rather than generic and in many cases it’s working. You know, we fully expect and we have forecasted that Rupel will erode.

You know, But Repel is our fourth largest product and, you know, the upside on Grafapix is many multiples of that. So, you know, I think our focus is appropriately, you know, on Grafapix because that’s clearly where our opportunity is and then trying to maintain the best we can the rest of the portfolio.

Girish, Analyst, Bloom Burton: Okay, thanks. And just to follow-up on the 15% tariff question. You mentioned or Brendan mentioned that the 15% will be applied to the COGS. Will any of the additional costs be passed on downstream? Or is this going to directly impact your gross margins on the product?

Brendan Bushman, Chief Financial Officer, Medexis Pharmaceuticals: Yes. The impact on the gross margin, because in both the case of both Graphopex, which we have called out specifically in this last quarter as having 85 gross margin, so 15% cost of goods roughly and there’s some royalties in there as well. So the impact of a 15% tariff is not going to be material. We don’t see or expect to have a tariff specific price increase as a result.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: That’s it

Girish, Analyst, Bloom Burton: from us. Thanks.

Conference Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. I will now hand back over to Ken for any final comments.

Ken Dontormont, Chief Executive Officer, Medexis Pharmaceuticals: Just want to thank everyone for participating in the call today. We’re obviously very pleased with the performance this quarter, which underscores the strategic value of our product portfolio approach. The solid foundation positions Midex as well as we enter the next phase of growth driven by the continued rollout of GrafapEX. We look forward to the opportunities that are ahead of us in fiscal year twenty twenty six and beyond and look forward to keeping you posted in future quarters.

Conference Operator: Thank you very much. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

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