Earnings call transcript: MedinCell H2 2026 results show royalty growth

MedinCell said fiscal 2026 marked a transition year as royalty income from UZEDY continued to rise, even as the company reported a wider net loss and lower headline income because milestone payments were absent. The company said total income fell to EUR 24.3 million from EUR 27.7 million a year earlier, while UZEDY royalties climbed 42% to EUR 9.3 million. The stock was last up 0.72% at $28.02, compared with a previous close of $27.82, leaving it well above its 52-week low of $15 and below its 52-week high of $39.68.

MedinCell described FY2026 as one of the most important periods in its shift from milestone-dependent revenue toward a more stable royalty model. The company’s underlying business improved, even though headline income declined because it did not repeat milestone payments booked in the prior year.

Excluding milestones, revenue increased 6% to EUR 24.3 million. Over two years, revenue excluding milestones has tripled, according to management. That trend matters because it suggests the company is building a more durable base of recurring income.

The strongest proof point remains UZEDY, a long-acting injectable for schizophrenia and bipolar I disorder sold by Teva. MedinCell said Teva’s net sales of UZEDY reached $215 million in FY2026, up from $141 million a year earlier. The company also said the product’s first quarter of FY2026 was its strongest yet, with sales of $63 million.

• Current ratio: 2.88, indicating liquid assets exceed short-term obligations.

According to InvestingPro Tips, the company maintains a strong liquidity position with liquid assets exceeding short-term obligations, providing financial flexibility during this transition phase.

The forecast data pointed to a loss of $0.15 per share and revenue of $6.4 million for the reported period, but the company did not provide directly comparable actual EPS and revenue figures in the same format. As a result, a precise beat-or-miss calculation is not available from the disclosed figures.

Even so, the broader earnings picture was clear: MedinCell’s results were mixed. Headline income declined because milestone revenue was absent, but the core business improved, helped by UZEDY royalties and partner-funded research revenue. That makes the year look better on a recurring-revenue basis than on a headline accounting basis.

The most important trend is not a one-quarter surprise, but the steady increase in royalty income. Management said royalty revenue rose to 38% of total revenue from 22% a year earlier, showing that the company is becoming less dependent on one-time payments.

MedinCell shares were last at $28.02, up 0.72% on the day from $27.82. The move was modest, suggesting investors viewed the update as constructive but not dramatic. The stock has delivered a remarkable 79.6% return over the past year, according to InvestingPro data, though the current price suggests the shares may be overvalued relative to the platform’s Fair Value analysis. With a market capitalization of $1.16 billion, the company trades on elevated valuation metrics despite ongoing losses.

The stock’s position within its 52-week range also points to a measured reaction. At $28.02, the shares are trading closer to the top half of the range than the bottom, but still below the $39.68 high. That indicates the market has already priced in some optimism around UZEDY and the pipeline, while still leaving room for execution risk.

No unusual trading volume was provided, so there is no evidence here of a major post-earnings rush or selloff.

Management’s near-term outlook centers on three growth engines: UZEDY, olanzapine LAI and the broader pipeline.

For UZEDY, Teva’s 2026 sales guidance is $250 million to $280 million. MedinCell said that guidance has historically been conservative and that actual sales have often exceeded initial targets.

For olanzapine LAI, the company said the U.S. NDA was accepted by the FDA in February 2026 and that launch is expected in Q4 2026, subject to approval. Management said Teva plans to launch immediately after approval. MedinCell expects meaningful revenue from the product starting in the second half of 2027. Analysts maintain a Strong Buy consensus on the stock with price targets ranging from $34.83 to $49.92, though InvestingPro Tips note that analysts do not anticipate profitability this year. Investors can access 7 additional ProTips for deeper analysis of MedinCell’s investment potential.

The company also said:

MedinCell also highlighted work to expand its technology platform into larger hydrophilic molecules, including GLP-1-type compounds, and higher-dose formulations.

Christophe Douat, chief executive, said the company is in the middle of a major transition. “One year ago, when I introduced our Shift to Growth strategy, I said that the coming two years would be the most transformative in MedinCell’s history. One year later, I can confirm that we are exactly in the middle of that transformation,” he said.

Douat said UZEDY is validating the company’s model. “UZEDY is gaining traction, and that traction is translating into growing revenues for MedinCell,” he said. “Beyond the pure numbers, UZEDY provides an important proof point for our business model.”

He also pointed to the company’s next major product opportunity. On olanzapine LAI, Douat said: “This is where differentiation becomes critical. Existing olanzapine LAIs are constrained by PDSS-related monitoring requirements. With MedinCell’s subcu formulation, more than 4,000 injections have been performed across clinical studies with no PDSS observed.”

Chief financial officer Stéphane Postic said the company is becoming less dependent on milestone income. “We are clearly switching into a more royalty-driven revenue model,” he said. “Royalty income continues to increase as a share of the total revenue, reaching 38% this year versus 22% last year.”

Analysts focused on Teva’s guidance, the launch timeline for olanzapine LAI, business development spending and the company’s technology roadmap.

One question centered on Teva’s history of conservative guidance. Douat said the pattern has been consistent and is likely to continue. He noted that Teva’s initial UZEDY guidance in earlier years was later exceeded.

Another area of interest was the launch speed for olanzapine LAI. Douat said Teva would launch immediately after approval, underscoring the company’s expectation of a fast rollout.

Analysts also asked about business development costs and foreign exchange exposure. CFO Stéphane Postic said business development spending mainly reflects personnel costs for global expansion and market insight work. On currency risk, he said the company is most exposed to the U.S. dollar because royalties are denominated in dollars, and that the best hedge is to match some expenses and supplier contracts in dollars.

Questions about the AbbVie collaboration focused on timing and disclosure. Douat confirmed that the first AbbVie candidate is expected to enter Phase I in 2027 and that the name would be disclosed at that time.

Analysts also pressed management on the company’s technology platform. Douat said the main challenge is expanding beyond the company’s current sweet spot in small hydrophilic molecules toward larger hydrophilic compounds and higher doses, including GLP-1-type molecules. He said the lab work underway is generating the most excitement he has seen at MedinCell in 15 years.

David, Moderator/IR, MedinCell: Hello, everyone. Thank you for joining MedinCell’s annual results call for the fiscal year ended March 31st 2026. Our press release and presentation are available on our website. Before we start, I invite you to refer to slide two for important information regarding forward-looking statements. Joining me today are Christophe Douat, our CEO. Hi, Christophe.

Christophe Douat, CEO, MedinCell: Hi, David. Hello, everyone.

David, Moderator/IR, MedinCell: Stéphane Postic, our CFO. Hi, Stéphane.

Stéphane Postic, CFO, MedinCell: Hello, David. Hello, everyone.

David, Moderator/IR, MedinCell: I can now leave the floor to you, Christophe, to start the presentation. Christophe?

Christophe Douat, CEO, MedinCell: Thank you, David. Let me start with MedinCell’s trajectory. Our Shift to Growth strategy is built around three engines of growth, all powered by MedinCell’s innovation. The first is risperidone LAI with UZEDY, successfully marketed in the U.S. since 2023 by our partner, Teva. The second is olanzapine LAI, and the third is AB number one, together with our broader pipeline and innovation platform. What is important here is that these are not isolated assets. They are three complementary engines supporting both near-term execution and long-term value creation. As you may recall, one year ago, when I introduced our Shift to Growth strategy, I said that the coming two years would be the most transformative in MedinCell’s history. One year later, I can confirm that we are exactly in the middle of that transformation. In fiscal year 2025/2026, we delivered strong execution across all our growth engines.

We saw continued ramp-up of UZEDY, which is driving royalty growth. olanzapine LAI progressed toward its expected U.S. launch in the fourth quarter of 2026. On the third engine, we advanced our first AB program toward the clinic while continuing to expand our pipeline and further strengthen our innovation platform. This was a year of broad execution, not just progress on one product, but progress across the company. Starting with UZEDY, momentum continued to build during the year. Net sales by Teva reached $215 million, compared with $141 million in the prior fiscal year, while royalties increased to $10.9 million from $7.1 million. At the same time, prescriptions in the U.S. continued to trend upward, and the product benefited from an FDA label expansion into bipolar I disorder for the one-month formulation in October 2025.

The key message is simple: UZEDY is gaining tractio