Fennec Pharmaceuticals Reports First Quarter 2024 Financial Results and Provides Business Update
~ Achieved First Quarter 2024 Total Net Revenues of $25.4 Million, Including $18.0 Million in Licensing Revenue from Recently Announced Norgine Transaction ~
~ Executed Exclusive Licensing Agreement with Norgine to Commercialize PEDMARQSI™ in Europe, Australia, and New Zealand ~
~ Amended PEDMARK Permanent J-code 07901 Became Effective April 1, 2024 ~
~ Company Has Approximately $51 Million in Cash, Cash Equivalents, and Investment Securities ~
~ Management to Host Conference Call Today at 8:30 a.m. ET ~
RESEARCH TRIANGLE PARK, N.C., May 14, 2024 (GLOBE NEWSWIRE) -- Fennec Pharmaceuticals Inc. (NASDAQ:FENC, TSX:FRX), a specialty pharmaceutical company, today reported its financial results for the first quarter ended March 31, 2024, and provided a business update.
"We made significant progress with our strategic plans to refocus our organizational efforts in the outpatient oncology community where PEDMARK use has been endorsed by the NCCN in the adolescent and young adult (AYA) population. Effective April 1, CMS has amended our permanent J-code to specify the non-interchangeability of PEDMARK with other formulations of sodium thiosulfate (STS). With the successful execution of the Norgine EU licensing agreement, we are well funded and confident in the significant market opportunity in front of us," said Rosty Raykov, chief executive officer of Fennec Pharmaceuticals.
Recent Developments and Highlights:
- Achieved PEDMARK net product revenue of approximately $7.4 million in the first quarter of 2024 and total net revenues of $25.4 million, which is inclusive of $18.0 million in revenue from the Norgine transaction.
- Amended permanent J-Code, which became effective on April 1, 2024, now clearly specifies PEDMARK® from other formulations of sodium thiosulfate (STS).
- Announced execution of exclusive licensing agreement with Norgine to commercialize PEDMARQSI in Europe, Australia, and New Zealand. Fennec received approximately $43.2 million upfront and has the potential to receive up to approximately $230 million in additional commercial and regulatory milestones, and double-digit tiered royalties.
- Within the first quarter, Fennec participated in eleven regional oncology conferences, as well as seven key scientific meetings, including the American Society of Pediatric Hematology/Oncology, the Community Oncology Alliance, the National Comprehensive Cancer Network, and the American Academy of Audiology annual conferences.
Financial Results for the First Quarter 2024
- Net Sales – The company recorded net product sales of $7.4 million and $18.0 million in licensing revenue for total net sales of $25.4 million for the three-month period ended March 31, 2024, compared to $1.7 million in product sales and no licensing revenue for the same period in 2023. The Company recorded discounts and allowances against sales in the amount of $2.1 million and cost of products sold of $0.6 million for the three-month period ended March 31, 2024. For the same period in 2023, the Company recorded $0.2 million in discounts and allowances and $0.1 million in cost of goods sold.
- Cash Position – Cash and cash equivalents were $51.2 million at March 31, 2024 and $13.3 million at December 31, 2023. The increase in cash and cash equivalents between March 31, 2024, and December 31, 2023, is the result of cash outlays for operating expenses related to the promotion of our product, selling and marketing expenses and general and administrative expenses, which were offset by cash inflows of approximately $43.2 million from the Norgine deal. We anticipate that our cash, cash equivalents and investment securities as of March 31, 2024 will be sufficient to fund our planned operations for at least the next twelve months.
- Selling and Marketing Expenses –The Company recorded $5.2 million in selling and marketing expenses for the period ended March 31, 2024, compared to $2.5 million for the same period in 2023. The increase is largely related to increased headcount and additional marketing expenses in the comparable period.
- General and Administrative (G&A) Expenses – G&A expenses increased by approximately $1.6 million over the same period in 2023 to $5.8 million. There was a significant increase in consulting, and professional costs related to European pre-commercialization related expenses in the 2024 period over the comparable period.
- Net Earnings – Net income for the quarter ended March 31, 2024 was $12.8 million (basic EPS $0.47 per share, diluted EPS $0.41), compared to a net loss of $6.1 million (basic and diluted loss of $0.23 per share) for the same period in 2023.
Q1 2024 Conference Call Information
| Date: | Tuesday, May 14, 2024 |
| Time: | 8:30 a.m. ET |
| Link: | https://register.vevent.com/register/BI137d97d6710341398d6f17d0433dc5b8 |
To access the conference call, please register using https://register.vevent.com/register/BI137d97d6710341398d6f17d0433dc5b8. Upon registration, a dial-in number and unique PIN will be provided to join the call. To access the live webcast link, log onto www.fennecpharma.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company's website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. A webcast replay of the conference call will also be archived on www.fennecpharma.com for thirty days.
Financial Update
The selected financial data presented below is derived from our unaudited condensed consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete unaudited condensed consolidated financial statements for the period ended March 31, 2024 and management's discussion and analysis of financial condition and results of operations will be available via www.sec.gov and www.sedar.com. All values are presented in thousands unless otherwise noted.
| Unaudited Condensed Consolidated Statements of Operations (U.S. Dollars in thousands except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2024 | 2023 | |||||||
| Revenue | ||||||||
| PEDMARK product sales, net | $ | 7,419 | $ | 1,677 | ||||
| Licensing revenue | 17,958 | — | ||||||
| Total revenue | 25,377 | 1,677 | ||||||
| Operating expenses: | ||||||||
| Cost of products sold | 550 | 95 | ||||||
| Research and development | 3 | 4 | ||||||
| Selling and marketing | 5,209 | 2,531 | ||||||
| General and administrative | 5,872 | 4,317 | ||||||
| Total operating expenses | 11,634 | 6,947 | ||||||
| Income/(loss) from operations | 13,743 | (5,270 | ) | |||||
| Other (expense)/income | ||||||||
| Unrealized foreign exchange loss | (38 | ) | 9 | |||||
| Amortization expense | (20 | ) | (72 | ) | ||||
| Unrealized loss on securities | (11 | ) | (30 | ) | ||||
| Interest income | 197 | 109 | ||||||
| Interest expense | (1,034 | ) | (798 | ) | ||||
| Total other expense | (906 | ) | (782 | ) | ||||
| Net income/(loss) | $ | 12,837 | $ | (6,052 | ) | |||
| Basic net income/(loss) per common share | $ | 0.47 | $ | (0.23 | ) | |||
| Diluted net income/(loss) per common share | $ | 0.41 | $ | (0.23 | ) | |||
| Weighted-average number of common shares outstanding basic | 27,090 | 26,559 | ||||||
| Weighted-average number of common shares outstanding diluted | 31,136 | 26,559 | ||||||
| Fennec Pharmaceuticals Inc. Balance Sheets (U.S. Dollars in thousands) | ||||||||
| Unaudited | Audited | |||||||
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 51,184 | $ | 13,269 | ||||
| Accounts receivable, net | 10,274 | 8,814 | ||||||
| Prepaid expenses | 4,488 | 2,575 | ||||||
| Inventory | 2,064 | 2,156 | ||||||
| Other current assets | 161 | 44 | ||||||
| Total current assets | 68,171 | 26,858 | ||||||
| Non-current assets | ||||||||
| Other non-current assets, net amortization | 1,022 | 6 | ||||||
| Total non-current assets | 1,022 | 6 | ||||||
| Total assets | $ | 69,193 | $ | 26,864 | ||||
| Liabilities and stockholders' deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,204 | $ | 3,778 | ||||
| Accrued liabilities | 4,363 | 3,754 | ||||||
| Operating lease liability - current | 17 | 21 | ||||||
| Contract liability - Norgine | 252 | — | ||||||
| Total current liabilities | 9,836 | 7,553 | ||||||
| Long term liabilities | ||||||||
| Term loan | 30,000 | 30,000 | ||||||
| PIK interest | 1,617 | 1,219 | ||||||
| Debt discount | (268 | ) | (288 | ) | ||||
| Contract liability - Norgine | 24,994 | 2 | ||||||
| Total long term liabilities | 56,343 | 30,933 | ||||||
| Total liabilities | 66,179 | 38,486 | ||||||
| Stockholders' deficit: | ||||||||
| Common stock, no par value; unlimited shares authorized; 27,105 shares issued and outstanding (2023 ‑27,027) | 144,934 | 144,307 | ||||||
| Additional paid-in capital | 63,245 | 62,073 | ||||||
| Accumulated deficit | (206,408 | ) | (219,245 | ) | ||||
| Accumulated other comprehensive income | 1,243 | 1,243 | ||||||
| Total stockholders' equity/(deficit) | 3,014 | (11,622 | ) | |||||
| Total liabilities and stockholders' deficit | $ | 69,193 | $ | 26,864 | ||||
| Working Capital | ||||||||
| Working capital | Fiscal Period Ended | |||||||
| Selected Asset and Liability Data: | March 31, 2024 | December 31, 2023 | ||||||
| (U.S. Dollars in thousands) | ||||||||
| Cash and equivalents | $ | 51,184 | $ | 13,269 | ||||
| Other current assets | 16,987 | 13,589 | ||||||
| Current liabilities | 9,836 | 7,553 | ||||||
| Working capital | $ | 58,335 | $ | 19,305 | ||||
| Selected Equity: | ||||||||
| Common stock and additional paid in capital | 208,179 | 206,380 | ||||||
| Accumulated deficit | (206,408 | ) | (219,245 | ) | ||||
| Stockholders' equity / (deficit) | 3,014 | (11,622 | ) | |||||
About Cisplatin-Induced Ototoxicity
Cisplatin and other platinum compounds are essential chemotherapeutic agents for the treatment of many pediatric malignancies. Unfortunately, platinum-based therapies can cause ototoxicity, or hearing loss, which is permanent, irreversible, and particularly harmful to the survivors of pediatric cancer.i
The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids or cochlear implants, which can be helpful for some, but do not reverse the hearing loss and can be costly over time.ii Infants and young children that are affected by ototoxicity at critical stages of development lack speech and language development and literacy, and older children and adolescents often lack social-emotional development and educational achievement.iii
PEDMARK® (sodium thiosulfate injection)
PEDMARK® is the first and only U.S. Food and Drug Administration (FDA) approved therapy indicated to reduce the risk of ototoxicity associated with cisplatin treatment in pediatric patients with localized, non-metastatic, solid tumors. It is a unique formulation of sodium thiosulfate in single-dose, ready-to-use vials for intravenous use in pediatric patients.7 PEDMARK is also the only therapeutic agent with proven efficacy and safety data with an established dosing paradigm, across two open-label, randomized Phase 3 clinical studies, the Clinical Oncology Group (COG) Protocol ACCL0431 and SIOPEL 6.
In the U.S. and Europe, it is estimated that, annually, more than 10,000 children may receive platinum-based chemotherapy. The incidence of ototoxicity depends upon the dose and duration of chemotherapy, and many of these children require lifelong hearing aids. There is currently no established preventive agent for this hearing loss and only expensive, technically difficult, and sub-optimal cochlear (inner ear) implants have been shown to provide some benefit. Infants and young children that suffer ototoxicity at critical stages of development lack speech language development and literacy, and older children and adolescents lack social-emotional development and educational achievement.
PEDMARK has been studied by co-operative groups in two Phase 3 clinical studies of survival and reduction of ototoxicity, COG ACCL0431 and SIOPEL 6. Both studies have been completed. The COG ACCL0431 protocol enrolled childhood cancers typically treated with intensive cisplatin therapy for localized and disseminated disease, including newly diagnosed hepatoblastoma, germ cell tumor, osteosarcoma, neuroblastoma, medulloblastoma, and other solid tumors. SIOPEL 6 enrolled only hepatoblastoma patients with localized tumors.
Indications and Usage
PEDMARK® (sodium thiosulfate injection) is indicated to reduce the risk of ototoxicity associated with cisplatin in pediatric patients 1 month of age and older with localized, non-metastatic solid tumors.
Limitations of Use
The safety and efficacy of PEDMARK have not been established when administered following cisplatin infusions longer than 6 hours. PEDMARK may not reduce the risk of ototoxicity when administered following longer cisplatin infusions, because irreversible ototoxicity may have already occurred.
Important Safety Information
PEDMARK is contraindicated in patients with history of a severe hypersensitivity to sodium thiosulfate or any of its components.
Hypersensitivity reactions occurred in 8% to 13% of patients in clinical trials. Monitor patients for hypersensitivity reactions. Immediately discontinue PEDMARK and institute appropriate care if a hypersensitivity reaction occurs. Administer antihistamines or glucocorticoids (if appropriate) before each subsequent administration of PEDMARK. PEDMARK may contain sodium sulfite; patients with sulfite sensitivity may have hypersensitivity reactions, including anaphylactic symptoms and life-threatening or severe asthma episodes. Sulfite sensitivity is seen more frequently in people with asthma.
PEDMARK is not indicated for use in pediatric patients less than 1 month of age due to the increased risk of hypernatremia or in pediatric patients with metastatic cancers.
Hypernatremia occurred in 12% to 26% of patients in clinical trials, including a single Grade 3 case. Hypokalemia occurred in 15% to 27% of patients in clinical trials, with Grade 3 or 4 occurring in 9% to 27% of patients. Monitor serum sodium and potassium levels at baseline and as clinically indicated. Withhold PEDMARK in patients with baseline serum sodium greater than 145 mmol/L.
Monitor for signs and symptoms of hypernatremia and hypokalemia more closely if the glomerular filtration rate (GFR) falls below 60 mL/min/1.73m2.
Administer antiemetics prior to each PEDMARK administration. Provide additional antiemetics and supportive care as appropriate.
The most common adverse reactions (≥25% with difference between arms of >5% compared to cisplatin alone) in SIOPEL 6 were vomiting, nausea, decreased hemoglobin, and hypernatremia. The most common adverse reaction (≥25% with difference between arms of >5% compared to cisplatin alone) in COG ACCL0431 was hypokalemia.
Please see full Prescribing Information for PEDMARK® at: www.PEDMARK.com.
About Fennec Pharmaceuticals
Fennec Pharmaceuticals Inc. is a specialty pharmaceutical company focused on the development and commercialization of PEDMARK® to reduce the risk of platinum-induced ototoxicity in pediatric patients. Further, PEDMARK received FDA approval in September 2022 and European Commission approval in June 2023 and U.K. approval in October 2023. PEDMARK has received Orphan Drug Exclusivity in the U.S. For more information, please visit www.fennecpharma.com.
Forward Looking Statements
Except for historical information described in this press release, all other statements are forward-looking. Words such as "believe," "anticipate," "plan," "expect," "estimate," "intend," "may," "will," or the negative of those terms, and similar expressions, are intended to identify forward-looking statements. These forward-looking statements include statements about our business strategy, timeline and other goals, plans and prospects, including our commercialization plans respecting PEDMARK®, the market opportunity for and market impact of PEDMARK®, its potential impact on patients and anticipated benefits associated with its use, and potential access to further funding after the date of this release. Forward-looking statements are subject to certain risks and uncertainties inherent in the Company's business that could cause actual results to vary, including the risks and uncertainties that regulatory and guideline developments may change, scientific data and/or manufacturing capabilities may not be sufficient to meet regulatory standards or receipt of required regulatory clearances or approvals, clinical results may not be replicated in actual patient settings, unforeseen global instability, including political instability, or instability from an outbreak of pandemic or contagious disease, such as the novel coronavirus (COVID-19), or surrounding the duration and severity of an outbreak, protection offered by the Company's patents and patent applications may be challenged, invalidated or circumvented by its competitors, the available market for the Company's products will not be as large as expected, the Company's products will not be able to penetrate one or more targeted markets, revenues will not be sufficient to fund further development and clinical studies, our ability to obtain necessary capital when needed on acceptable terms or at all, the Company may not meet its future capital requirements in different countries and municipalities, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2023. Fennec disclaims any obligation to update these forward-looking statements except as required by law.
For a more detailed discussion of related risk factors, please refer to our public filings available at www.sec.gov and www.sedar.com.
PEDMARK® and Fennec® are registered trademarks of Fennec Pharmaceuticals Inc.
©2024 Fennec Pharmaceuticals Inc. All rights reserved. FEN-1604-v1
For further information, please contact:
Investors:
Robert Andrade
Chief Financial Officer
Fennec Pharmaceuticals Inc.
+1 919-246-5299
Corporate and Media:
Lindsay Rocco
Elixir Health Public Relations
+1 862-596-1304
[email protected]
_________________________________
i Rybak L. Mechanisms of Cisplatin Ototoxicity and Progress in Otoprotection. Current Opinion in Otolaryngology & Head and Neck Surgery. 2007, Vol. 15: 364-369.
ii Landier W. Ototoxicity and Cancer Therapy. Cancer. June 2016 Vol. 122, No.11: 1647-1658.
iii Bass JK, Knight KR, Yock TI, et al. Evaluation and Management of Hearing Loss in Survivors of Childhood and Adolescent Cancers: A Report from the Children's Oncology Group. Pediatric Blood & Cancer. 2016 Jul;63(7):1152-1162.
