Meredith Corporation
Q4 2021 Earnings Call Transcript

Published: 17 Jun 2021

[Operator:]

Good day, ladies and gentlemen, and welcome to the Medexus Pharmaceuticals, Inc. Fiscal 2021 Year-end Business Update Conference Call.

[[Operator Instructions]:]

[It is now my pleasure to turn the floor over to your host, Tina Byers. Ma'am, the floor is yours.:]

[Tina Byers:]

Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals Fourth Quarter and Fiscal Year-end 2021 Earnings Call. On the call this morning are

[If you have any questions after the conference call or would like further information about the company, please contact Adelaide Capital at [phone].:]

[I would like to remind everyone that this discussion will include forward-looking information that is based on certain assumptions and is subject to risks and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Forward-looking information provided on this call speaks only as of the date of this call and is based on the plans, beliefs, estimates, projections, expectations, opinions and assumptions of management as of today's date.:]

[There can be no assurance that forward-looking information will prove to be accurate and should -- you should not place undue reliance on forward-looking information. Investors disclaims any obligation to update any forward-looking information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law.:]

[In addition, during the course of this call, there may also be references to certain non-IFRS financial measures, including references to adjusted net loss and adjusted EBITDA, which do not have standardized meaning under IFRS and, therefore, may not be comparable to similar measures presented by other companies.:]

[For information about both forward-looking information and non-IFRS financial measures, including reconciliation of each adjusted net loss and adjusted EBITDA to net loss, please refer to the company's management discussion and analysis, which, along with financial statements, are available on the company's website at www.medexus.com, and on the company's corporate filings on SEDAR at www.sedar.com.:]

[I would now like to turn over the call to Ken d'Entremont to discuss the fourth quarter and year-end results for fiscal 2021.:]

[Kenneth d'Entremont:]

Thank you, Tina, and thanks, everyone, for joining us on this call today. Before I discuss the financials, I wanted to note that we have changed our presentation currency to U.S. dollars from Canadian dollars. We feel that this change better reflects our current activities, increases the comparability to peer companies and enhances the relevance of the financial statements to users. Any numbers discussed on the call will be in U.S. dollars unless otherwise specified.

[So we continue to make progress on our growth objectives and are advancing several exciting initiatives that we believe will have a meaningful impact on the business going forward. I'd like to start by pointing out that fiscal 2021 was another record year for Medexus as we achieved $79.7 million in total revenue or 43.5% in year-over-year revenue growth and continue to build out our business in the United States.:]

[In addition, adjusted EBITDA increased to $8.2 million for fiscal 2021 compared to $4.4 million for fiscal 2020. Given our current trajectory, we could not be more excited about the outlook for fiscal 2022.:]

[As I'll discuss in more in a moment, we are especially encouraged by the potential for Treosulfan, which we believe could be a transformative for our business, and has the potential to more than double our current revenue run rate with a very significant margin contribution.:]

[Turning to our results for the quarter. During fiscal 2021, fourth quarter ended March 31, we achieved revenues of $17.6 million compared to $18.8 million for the same period last year, while patient unit demand for IXINITY continued to grow during the fourth quarter. Net sales were lower as pharmacies and wholesalers worked through inventory on hand.:]

[Adjusted EBITDA decreased to negative $1.6 million compared to positive $3.1 million for the same period last year as we invested heavily in our personnel and infrastructure to support our anticipated growth going forward, including preparation for the commercial launch of Treosulfan. We were also impacted by an unexpected manufacturing expense related to the pediatric trial for IXINITY. However, we do not expect this to affect the timing for completing the trial. With our long term -- with the goal of long-term margin improvement, we are working with our manufacturing partners to improve the supply chain and manufacturing process in order to meet unit demand for IXINITY, which grew by more than 15% in the year ending March 31, 2021.:]

[We are pleased to share that cash provided by operating activities improved significantly in the fourth quarter to $4.2 million compared to cash used by operating activities of $1.3 million for the same period last year. One final note on our financial results. The noncash fair value of derivatives associated with the conversion rights of the existing debentures increased due to the significant appreciation in our share price. As a result, the adjusted net loss was $5.2 million compared to $5.1 million for the same period last year.:]

[Overall, we are pleased with our performance despite some challenges in the fourth quarter, but we believe we are very well positioned heading into fiscal 2022.:]

[Turning to our specific product lines. We continue to see strong demand for our core portfolio of products. Our commercial hematology product, IXINITY, is an FDA-approved intravenous recombinant factor IX therapeutic for use in patients 12 years of age or older with hemophilia B, a hereditary bleeding disorder characterized by a deficiency in clotting Factor IX in the blood, which is necessary to control bleeding. The hemophilia B market size in the United States alone is estimated to be in excess of USD 1 billion, and continues to grow. The incorporation of IXINITY into our existing operations is now complete, even with the extreme changes to the selling environment brought about by COVID-19, the newly integrated U.S. team has experienced success with IXINITY in the form of continued patient conversions on top of a stable existing base of patients.:]

[In September of 2020, the U.S. Food and Drug Administration approved our application to supplement the IXINITY Biologics license application to add the indication for routine prophylaxis. This label expansion provides additional flexibility in the prescriber -- in the prescribed dosing regimen for IXINITY and may appeal to health care professionals who prefer this dosing regimen. We believe this label expansion will help us further penetrate the market and enhance our ability to retain our existing base of business.:]

[We also continued to enroll patients in the ongoing Phase IV clinical trial to evaluate the safety and efficacy of IXINITY in previously treated patients under 12 years of age with hemophilia B. Once completed, this study may support a significant expansion of the indicated patient population for IXINITY as approximately 1 in 3 patients treated with -- treated for hemophilia B in the United States are 12 years of age or younger. To date, the study is over 95% enrolled, and we are aggressively pursuing patients to complete the enrollment.:]

[Turning to Rasuvo, a once-weekly subcutaneous single-dose auto-injector befetrexate indicated for the treatment of rheumatoid arthritis, psoriasis and juvenile idiopathic arthritis or JIA. Unit market demand in the United States has remained steady in the year ended March 31, 2021, and continues to reflect strong payer, prescriber and patient acceptance. We believe we will maintain a strong position with -- within the methotrexate auto-injector segment.:]

[Metoject realized a 9% unit demand growth in Canada in the year ending March 31, 2021, due in part to public reimbursement through provincial formularies in all provinces except British Columbia and Manitoba. Metoject is a prefilled syringe of methotrexate, which is indicated for the treatment of rheumatoid arthritis and psoriasis. It is a highly effective and cost-effective treatment for these debilitating diseases. Public reimbursement creates access for a group of patients who previously could not get the product.:]

[In August of 2020, we responded to a competitive threat to Metoject from a generic entry with a commercial response to protect our market share and a legal action to defend the product's IP. With medac GmBH, we have jointly filed a statement of claim against core health care regarding the launch of a generic version of Metoject in the Canadian market.:]

[Rupall is experiencing very strong unit demand growth in its market with an increase of 36% in the year ended March 31, 2021, as physicians are switching patients from either generic prescription antihistamines or over-the-counter products. We expect Rupall to be a leading prescription antihistamine in a total market valued at approximately $140 million, including $61 million from the prescription market, which is growing at an annual rate of over 15%.:]

[During the year ended March 31, Rupall was one of the fastest-growing antihistamines in the Canadian prescription market. On September 9, 2020, we announced that Gliolan was approved by Health Canada.:]

[Gliolan is used for the guiding of maximal surgical resection of high-grade gliomas and malignant brain tumors in adults. International studies have shown that the use of Gliolan during brain tumor surgery has nearly doubled the rate of achieving a complete resection of the tumor, which in turn has resulted in a doubling of the number of patients without progression of their brain cancer 6 months after surgery. We announced a full commercial launch on February 25, 2021.:]

[In Canada, there has been a long-standing drug shortage of triamcinolone hexacetonide, also known as TH. The drug of choice for juvenile idiopathic arthritis or JIA. In October of 2018, we launched our own TH product, branded Trispan, which we had previously made available to children with JIA through the Health Canada Special Access Program. With the commercial launch of Trispan, children with JIA now have a reliable source of a product, which is a key component for the management of their disease. The commercial launch also allows us to promote the product for use in adults with other indications such as osteoarthritis, rheumatoid arthritis and other forms of joint disease.:]

[Trispan is the longest-acting corticosteroid for intra-articular injection, often lasting twice as long as competitive products. We have now achieved public reimbursement for Trispan in all federal, provincial and territorial provincial formularies except British Columbia and we have initiated a full commercial launch of the product.:]

[On December 18, 2020, we entered into an exclusive agreement with Ethypharma for the rights to register commercialize TH injectable suspension in the United States. While we are continuing to pursue FDA approval for a commercial product launch in the near term, we are pleased to make the drug available immediately through the FDA's CDER drug shortage staff in an effort to address the ongoing drug shortage in the United States.:]

[On September 10, 2020, Health Canada granted priority review for Treosulfan. Treosulfan is an innovative orphan-designated agent developed for the use as part of a conditioning treatment for patients undergoing allogeneic hematopoietic stem cell transplantation. It is used as a conditioning treatment to clear the bone marrow and make room for the transplanted marrow cells which can then produce healthy blood cells. We are currently negotiating the license in anticipation of a full commercial launch following Health Canada approval. Until then, we will continue to supply the product to the market through the special access program.:]

[On February 2, 2021, we announced the exclusive license to commercialize Treosulfan in the United States. If approved by the FDA, we expect that Treosulfan-based regimen will be the first in a new conditioning treatment class, reduced toxicity conditioning, resulting in a unique combination of improved survival outcomes compared to reduced intensity in regimens and decreased toxicity compared to standard myeloblative regimens. A Prescription Drug User Fee Act date to review the initial NDA has been scheduled for August 11 of 2021. This transaction is expected to be highly accretive with near-term loss potential and expected 7.5-year exclusivity under the Orphan Drug Act.:]

[This will be our largest product launch to date and as such, it is critical that we invest in the proper team and resources to meet the anticipated demand. To prepare for this launch, new positions have been staffed. The medical affairs team has engaged the hematology thought leader community, and market research is confirming the key launch assumptions around demand, pricing and product positioning. We expect that Treosulfan will become a leading product for use in the conditioning regimens as part of allogeneic hematopoietic stem cell transplantation patient protocols.:]

[In addition to our current product portfolio, we also have a right of first refusal on current product from the previous owner of Medexus U.S., with whom we entered into the Medexus U.S. supply agreement. We believe that several of these products represent a commercial opportunity in North America and are in the process of assessing the licensing of these drugs. We are also in discussions with several partners regarding other licensing agreements and believe that those products have the potential to materially contribute to revenue within the next few years.:]

[A key aspect of our growth strategy will be to continue to leverage and grow our infrastructure through acquisition and partnerships around new products. To that end, in September 2020, we added a new member to our management team in the role of SVP Business Development and Strategy, with a focus on identifying, evaluating, negotiating and acquiring new products to commercialize.:]

[We are exploring a large number of opportunities including a portion of our deal pipeline in the negotiation phase in both the U.S. and Canada. We will continue to look at optimizing our portfolio and leveraging our resources with the goal of executing near-term accretive transactions to achieve our sales growth targets over the coming years.:]

[As part of our growth strategy, we were pleased to announce the uplisting to the TSX earlier this week. We have demonstrated significant growth since our listing on the TSX Venture Exchange, and given the success and size of our company, it is a logical step in our growth path to graduate to the TSX. We feel confident that graduating to a senior exchange will positively impact access to a broader range of institutional shareholders.:]

[The common shares, the convertible debentures and awards are all expected to begin trading on the TSX effective this morning at market open. The listed securities will continue to trade under the ticker symbols MDP, MDP.DB and MDP.WT, respectively. In light of this accelerated listing opportunity, we have decided to delay our previously announced plans to list on the NASDAQ capital market. We continue to believe that a dual listing would be beneficial and reaffirm our intention to obtain a NASDAQ listing in the future. However, at this time, we have demonstrated that a graduation to the TSX will provide an opportunity to increase exposure and liquidity while advancing our other ongoing initiatives to enhance shareholder value as we evaluate the timing of a dual listing on NASDAQ. In summary, we believe we have built a highly scalable business platform which should provide significant incremental earnings potential. We continue to grow revenue, leverage our North American sales force across products, realize synergies of the combined entities and maintain strict financial discipline. We have a solid cash availability from which to execute our business plan, including the launch of several new products.:]

[I will now turn it over to Roland, who will discuss the financial results in more detail.:]

[Roland Boivin:]

Thanks, Ken. As a reminder, all numbers will be denoted in U.S. dollars unless otherwise mentioned. Total revenue reached $17.6 million and $79.7 million for the 3 and 12-month periods ended March 31, 2021, respectively, compared to revenue of $18.8 million and $55.5 million for the same period last year. As Ken mentioned, while patient unit demand for IXINITY continued to grow during the fourth quarter, net sales were lower as pharmacies and wholesalers worked through an inventory on hand. Our revenue for fiscal 2021 was significantly higher than fiscal 2020, due in part to the acquisition of IXINITY as well as unit demand growth of our key product lines -- our key products in the period.

[Selling and administrative expenses as a percentage of revenue decreased to 45.4% in fiscal 2021 from 55.2% for the same period last year as we continue to leverage our platform and significantly increase revenues with only modest increases to operating expenses. Our selling and administrative expenses for the 12-month period ended March 31, 2021, increased 18% versus the comparative period, which is well below our revenue growth of 43.5% over the same period.:]

[Adjusted EBITDA for the 3 and 12-month periods ended March 31, 2021, was negative $1.6 million and positive $8.2 million, respectively, compared to $3.1 million and $4.4 million for the same period last year. A $900,000 expense related to IXINITY product was included in R&D expenses and negatively impacted adjusted EBITDA. This expense was included in our R&D line as it was the result of an unexpected manufacturing expense related to the pediatric trial. This is not expected to have an impact on the timing of the trial.:]

[Adjusted EBITDA was also impacted by investments in the expected launch of Treosulfan later this year, as Ken mentioned.:]

[Cash provided by operating activities for the 3 and 12-month period ended March 31 of this year, were $4.2 million and $5 million, respectively. This compares to cash used by operating activities of $1.3 million and $1.7 million for the same respective periods last year.:]

[Net loss for the 3 and 12-month periods ended March 31, 2021, was $10.5 million and $28.3 million, respectively, compared to a net loss of $1.6 million and $4.7 million for the same period last year. The increase in the reported net losses relate primarily to a noncash unrealized loss on fair value of the embedded derivatives of our outstanding convertible debentures, which are sensitive to, among other things, the fluctuations in our share price. These unrealized losses amounted to $5.3 million in the fourth quarter and $20.6 million in fiscal 2021. We believe that adjusted net income or loss, which excludes the impact of the unrealized gains and losses on the fair value of the derivatives, provides a better representation of performance of our operations because it excludes noncash fair value adjustments on liabilities, which may be settled for shares.:]

[The adjusted net loss for the 3 and 12-month period ended March 31, 2021, was $5.2 million and $7.6 million, respectively compared to $5.1 million and $13.9 million for the 3 and 12-month periods ended March 31, 2020, respectively. We maintained a solid balance sheet with $24.8 million of available liquidity at March 31, 2020, which consisted of $18.7 million in cash and cash equivalents and an undrawn credit of $6.1 million available under our ABL facility.:]

[Subsequent to the quarter, on May 27, 2021, we entered into certain amendments to our existing credit agreements with MidCap Financial. In addition to the existing $10 million of secured term loan, an additional $5 million is now available to be drawn under the term loan facility, contingent upon certain conditions being satisfied including conditions related to the PDUFA date for Treosulfan scheduled for August 11, 2021, and the company's obligation to make the payment related to the Treosulfan license agreement.:]

[Operator, we'll now open the call to questions.:]

[Operator:]

[Operator Instructions]

[And the first question is coming from Andre Uddin from Research Capital.:]

[Andre Uddin:]

Just a quick question. I'm assuming the IXINITY wholesaler inventory reduction, was that a 1 quarter issue? Is that fair?

[Kenneth d'Entremont:]

Yes. Thanks for the question, Andre. I would say it's something that we've been working on over time. I think we've been making good success and movement. COVID certainly slowed down new patient recruitment. So the inventory, we've been -- we're eating away at it more quickly. COVID -- in the last quarter in particular, we kind of shut things down pretty severely. So the patient conversion slowed, and so there's more inventory in the channel than we want. So I think it's something that we've been working on since we acquired the drug, and we're making progress.

[Andre Uddin:]

Okay. And just in terms of the IXINITY pediatric trial, when do you think those results will read out?

[Kenneth d'Entremont:]

Yes. So once we have complete enrollment. So literally, we need 1 more patient. So at 100%, then it runs for 6 months then we get the readout and then make the applications. And we think it's a 4 to 6-month review for a supplemental.

[Andre Uddin:]

Okay. And can you also just provide us an update on your Rasuvo prefilled syringe? And when would you expect that to be launched or filed at the FDA?

[Kenneth d'Entremont:]

Yes. I mean we've kind of reevaluated that with the addition now of Cumberland kind of in the same space. So we're -- we don't think -- I doubt that we're going to launch it at this stage because it's -- we're behind that competitive product. And we think we can defend Rasuvo more aggressively without having that prefilled syringe.

[Andre Uddin:]

Just one last question. Just in terms of Treosulfan, assuming it is FDA approved, how many patients do you think you'll target? And what type of pricing do you think -- like where do you think it would be priced around?

[Kenneth d'Entremont:]

Great question. So in terms of the patient target, there's 9,000 allo transplants roughly done per year in the U.S., about 60% of those are on label for us. And so that will be the label target. In terms of pricing, we're still doing the work on that. But we think the pregeneric busulfan pricing is probably above the range that will come in. We can't show a pretty significant cost savings to the system as a result of fewer side effects, less hospitalization. And then, of course, there's the improvement in overall survival.

[Andre Uddin:]

And where was that -- sorry, where was that pre-generic pricing level around?

[Kenneth d'Entremont:]

Pre-generic, there are about $25,000 per patient.

[Operator:]

And the next question is coming from Justin Keywood from Stifel GMP.

[Justin Keywood:]

Just a follow-up to IXINITY. It's understandable there is some lumpiness there, just given the nature of the drug. But I'm just wondering if we take a step back, if you're able to characterize any market share gains in fiscal 2021 and considering some COVID challenges. And then also, if you have any broad market share gain goals for fiscal 2022.

[Kenneth d'Entremont:]

Yes. Thanks, Justin. So I think the true measure of our performance with IXINITY is patient conversion. So patient conversion or patient uptake more accurately was 15%. So that's actual demand. So it's more like prescriptions being filled. So we're up 15% on the year. So that's still good performance considering that we've had a pretty rough period with COVID, and face-to-face promotion has been extremely limited. So we feel good about 15% patient growth what you're seeing in our ex factory is a result of pipeline.

[Justin Keywood:]

So the 15% patient growth, but I assume there was some inventory dynamics where we haven't necessarily seen that in the financial results. Is that fair to say?

[Kenneth d'Entremont:]

Yes. I mean, since day 1, I think if you remember right back to the day we acquired this, all of the sales for the previous owner was coming in the last month of the quarter. And so there was this dynamic of filling the channel in the last month of the quarter. And we're trying to get away from that and have the ex factory sales more closely match the patient demand. And so we're slowly moving towards that.

[So any of these ups and downs are related mostly to channel fill and pipeline fill, not necessarily patient demand. And we continue to see patient demand increasing. So I think the long-term outlook for the drug is very good. But we've got to get through this period of pipeline adjustment.:]

[Justin Keywood:]

Okay. Understood. And any expected changes as far as reimbursement or pricing for IXINITY?

[Kenneth d'Entremont:]

No. None expected. Rare disease, not tightly managed by the payers. So all the products basically get reimbursed.

[Justin Keywood:]

Okay. And then for Treosulfan, just subsequent to the August 11 PDUFA date. Can you remind us of the expansion plans for the sales force? And I understood that there was also some expenses in the current quarter, if that's related to any personnel or other expenses just coming up to the date ahead?

[Kenneth d'Entremont:]

Yes. Yes, correct. So yes, there were some Treo expenses in current quarter. And we continue to build the team subsequent to the quarter we're just reporting. The medical affairs team is largely built out. That's a few people in management, 6 MSLs, then the commercial team. The head of the commercial team has now been hired, VP of Sales. She is planning the build out of the rest of the team, which we think will be in the 14- to 16-person range in institutions, and it might be a mix of reimbursement specialists and key account managers.

[Justin Keywood:]

And what was the actual dollar expense in the quarter related to Treosulfan?

[Kenneth d'Entremont:]

I'll have to flip that over to Roland.

[Roland Boivin:]

Yes. We're not -- we don't show specifically what was for Treo. But what I can say is that it was definitely significant and it's going to keep increasing in the next couple of quarters as we ramp up and be absolutely ready for that launch post-PDUFA date.

[Justin Keywood:]

Okay. And any indication of that ramp-up in expenses in the next quarter?

[Roland Boivin:]

I think it's related to what Ken was saying before. It's timing of building the team. And without giving any specifics on that, we are going to keep investing and accelerating investment in Treo.

[Operator:]

[Operator Instructions]

[And the next question is coming from [ Oman Ame ] from Bloom Burton.:]

[Unknown Analyst:]

Just a few questions, some sort of building off the IXINITY discussion that's been going on so far. Are you anticipating that there will -- are you anticipating that there's -- that you'll get through the inventory in the channel as opposed to having to take returns on it, and any potential write-downs of that inventory?

[Kenneth d'Entremont:]

Yes. Good question. So no, we don't expect any write-downs of inventory. So we don't expect any returns. They've been extremely minimal to date. So we don't see that. But we do see a balancing of the inventory. So our monthly sort of sales are better balanced and more consistent with consumer uptake -- patient uptake.

[Unknown Analyst:]

Okay. Fantastic. And so I think it was mentioned that there was the $900,000 R&D expense. So that was attributed to the quarter. Is that correct for the pediatric trial?

[Kenneth d'Entremont:]

That's correct. That was in the quarter. That's a onetime hit, won't affect the completion of the trial.

[Unknown Analyst:]

Okay. So following the completion of the trial, do you like have an anticipated level of what your quarterly R&D expenses are going to be going forward?

[Kenneth d'Entremont:]

Yes. Once trial complete, that's the only R&D expense we have. So unless we find another project, they would basically go to 0. We may advance the autoimmune disease product once this trial is complete, but we haven't made that final decision yet.

[Unknown Analyst:]

Okay. Great. All right. And I know you mentioned Gliolan briefly. So does that product -- is it requiring any sort of PMT approval? And if so, kind of where -- whereabouts is that on your listing statuses?

[Kenneth d'Entremont:]

Yes. It does. So it's kind of institution by institution. But there are a small number of institutions that do these procedures, so it's pretty targeted. I think we've been having good success. So it was good uptake. We're getting a lot of positive press because this fundamentally changes how surgeons go about removing these tumors. And so there's very strong support from the clinicians because this allows them just to do a much better job. So there's a lot of interest in it. And so we're just going hospital-by-hospital, institution-by-institution, getting that added to the formulary and then away we go.

[Unknown Analyst:]

Okay. All right. Great. And one last question for me, kind of going back to IXINITY. You'd mentioned that you're looking for trying to -- working with your manufacturing partners and improving the COGS on that product. When do you anticipate those kind of -- those improvements sort of rolling through? And what degree of lift that might give on the margin?

[Kenneth d'Entremont:]

Yes. It's a long-term project, changing the manufacturing of a biologic product. So we would anticipate we start to make small gains this year. I mean it's already started. So there are small improvements that are being made. And then as we move along, the improvements are -- become fairly significant. And ultimately, we want to bring the gross margin of that product in line with the rest of our portfolio, and we certainly think we can do it with this COGS improvement program.

[Operator:]

The next question is coming from [ Alan First ].

[Unknown Analyst:]

So just on the Treosulfan FDA review. I think you mentioned that the inclusion of pediatric patients on the labeling, and it is expected to give you exclusivity. I just wonder if you could talk a bit more about the labeling and why that's -- why the link to the pediatric patients kind of indication with IXINITY?

[Kenneth d'Entremont:]

Yes. So the Orphan Drug Act enables an extra 6 months if pediatric is included in the label. We now believe that pediatrics will be in the FDA label. That's the 7.5 years exclusivity now. And we're getting very close to the PDUFA date. So we're within 2 months of the approval. And so the discussions back and forth with the FDA make us very optimistic that it will get approved, that PDUFA date, and it will have a fairly favorable label.

[Unknown Analyst:]

That's helpful. I guess it's the extra 6 months related to the pediatric indication. And the other question I had is on IXINITY, which I think we have largely covered. I guess just conscious in the kind of comparable quarter from March 2020, I think you only recognized 85% of the quarterly revenue because of the acquisition date. So I guess with that and then the unit growth, I guess you might have expected kind of growth in the 30s. So it seems quite significant decline against that, but that's really just due to all the inventory that was held, there was quite a lot inventory in the channel was it?

[Kenneth d'Entremont:]

Yes. There was a significant amount of inventory in the channel. So again, I think -- let's go back to what really drives ex factory sales, which is patient demand. I mean that's a true measure of what's happening in the market. So we know patient demand. We measure that. It's plus 15% last year, even during COVID, where it was tough to get new starts. And so we feel pretty good about it. It was expected. The inventory lumpiness from the previous owner, we saw it. We knew that we'd have to address it. I think the -- having the entire year that we've owned this product was COVID. Remember, a week after we acquired this, basically we went into a lockdown. And so the type of patient conversion slowed from previous. We had anticipated that through a period of 12 months, we'd be able to normalize the channel. But with COVID, that just wasn't possible.

[Operator:]

And there were no more questions in queue. I will now turn the call back to the management team for any closing remarks.

[Kenneth d'Entremont:]

Great. Thank you so much. We appreciate everyone paying attention, and all the great questions today. We believe Medexus has achieved significant growth over the last few years, and we continue to invest in the team and the resources to accelerate that growth. With the Treosulfan PDUFA date now less than 2 months away, we are clearly doing everything we can to position the company for what will be our most substantial product launch to date.

[We look forward to updating investors and stakeholders on our progress over the coming months. Thanks very much for participating today.:]

[Operator:]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.