Medexus obtains $51-million (U.S.) credit, plans NCIB

Executive Summary

• Medexus Pharmaceuticals Inc. secured a new senior secured credit facility totaling $51.0 million (U.S.) with National Bank of Canada, consisting of a $21.0 million term loan and a $5.0 million revolving loan.
• The company intends to commence a Normal Course Issuer Bid (NCIB) to purchase up to 10% of its public float, subject to Toronto Stock Exchange approval, as part of its capital allocation strategy.
• Proceeds from the new term loan were used to repay existing senior secured credit facilities that were set to mature in March 2026, with the new facilities maturing in November 2029.

Key Details

• Credit Facility Structure:
  • Term Loan: $21.0 million (U.S.).
  • Revolving Loan: $5.0 million (U.S.).
  • Delayed Draw Feature: Additional $10.0 million (U.S.) available for future licensing and acquisition transactions.
  • Accordion Feature: Uncommitted $15.0 million (U.S) feature.
  • Maturity Date: November 17, 2029 (four years from the agreement date).
  • Administrative Agent: National Bank of Canada.
• Use of Proceeds: Net proceeds from the new term loan were used to satisfy obligations under existing senior secured credit facilities that would have otherwise matured in March 2026.
• Interest Rates:
  • Borrowings bear interest at adjusted term SOFR (or other customary base rate) plus a margin determined quarterly based on the consolidated net leverage ratio.
  • Initial weighted average interest rate: 6.74%.
  • Comparison: This is lower than the previously repaid facilities, which had a weighted average interest rate of 6.95% as of the repayment date.
• Normal Course Issuer Bid (NCIB):
  • Intent: To commence an NCIB for common shares, subject to TSX approval.
  • Volume: Up to 10% of the public float (calculated per TSX rules).
  • Duration: 12 months following TSX acceptance.
  • Pricing: At prevailing market prices or as permitted by TSX rules.
  • Purpose: Capital allocation strategy; potential use of available cash flow from operating activities if shares are undervalued; aims to uphold a liquid, stable, and orderly market.
• Company Context:
  • Medexus highlighted an improving financial and operating profile since the launch of Grafapex (treosulfan) for injection in February 2025.
  • The financing is described as "long term, non-dilutive."

Notable Quotes

• "We are pleased to announce this long term, non-dilutive financing, which demonstrates our access to capital on competitive terms... Medexus has demonstrated an improving financial and operating profile since the launch of Grafapex (treosulfan) for injection in February, 2025, and we are pleased that our new partners at National Bank of Canada have recognized the strength and potential of our business, including as we look beyond the Grafapex launch." — Brendon Buschman, Chief Financial Officer
• "An NCIB adds an important lever to our capital allocation strategy... Any such purchases we make will benefit the company and its investors by seeking to uphold a liquid, stable and orderly market for our common shares." — Brendon Buschman, Chief Financial Officer