Fennec Pharmaceuticals Inc. (NASDAQ:FENC; TSX: FRX), a specialty
pharmaceutical company focused on the development of
PEDMARKTM (a unique formulation of sodium thiosulfate (STS))
for the prevention of platinum-induced ototoxicity in pediatric
patients, today reported its financial results for the fiscal
quarter ended June 30, 2022 and provided a business update.
“We have made significant progress toward the
potential launch of PEDMARKTM in the U.S. for cisplatin induced
ototoxicity for pediatric patients. We are focused on ensuring
readiness for our PDUFA target action date of September 23, 2022,
and have built out our commercial organization with key hires,
including sales, market access and field-based medical teams,” said
Rosty Raykov, chief executive officer of Fennec Pharmaceuticals.
“Cisplatin-induced ototoxicity is an area of significant unmet
medical need, and our market and anecdotal research indicates that
patients and physicians are waiting for treatment options.”
As previously disclosed on August 1, 2022,
Fennec announced up to a $45 million investment from Petrichor
Healthcare Capital Management (“Petrichor”). Additional details
surrounding this investment can be found within the investor
section of Fennec’s website at www.fennecpharma.com.
Financial Results for the Second Quarter
2022
- Cash Position
– Cash and cash equivalents were $14.9 million as of
June 30, 2022. The decrease in cash and cash equivalents between
June 30, 2022 and December 31, 2021 is the result of expenses
related to pre-commercialization activities for the NDA
resubmission of PEDMARKTM and general and administrative
expenses.
- Research and Development
(R&D) Expenses – R&D expenses increased
by $0.4 million for the three months ended June 30, 2022, compared
to the same period in 2021. The Company’s research and development
activities during these three months increased as the Company’s
efforts on a year-over-year basis were focused on ongoing
development and regulatory activities related to the NDA
resubmission of PEDMARKTM.
- General and Administrative
(G&A) Expenses – General and administrative
expenses increased by $0.7 million over same period in 2021. The
increase in general and administrative expenses over the same
period in 2021 reflects increased legal expenses and
pre-commercialization activities over the same period in the prior
year.
- Net Loss
– Net loss for the three months ended June 30, 2022
was $5.1 million ($0.19 per share), compared to $4.0 million ($0.15
per share) for the same period in 2021.
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 June 30,
2022 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 ConsolidatedStatements of
Operations:(U.S. Dollars in thousands except per share amounts)
|
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Three Months Ended |
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June 30, |
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June 30, |
|
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2022 |
|
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2021 |
|
|
|
|
|
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Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
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Operating expenses: |
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|
|
|
|
|
Research and development |
|
|
1,131 |
|
|
|
800 |
|
General and administrative |
|
|
3,878 |
|
|
|
3,120 |
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(5,009 |
) |
|
|
(3,920 |
) |
|
|
|
|
|
|
|
Other (expense)/income |
|
|
|
|
|
|
Unrealized loss on securities |
|
|
(8 |
) |
|
|
(84 |
) |
Amortization expense |
|
|
(8 |
) |
|
|
— |
|
Other (loss)/gain |
|
|
(56 |
) |
|
|
(9 |
) |
Net interest income |
|
|
9 |
|
|
|
12 |
|
Total other income, net |
|
|
(63 |
) |
|
|
(81 |
) |
|
|
|
|
|
|
|
Net (loss) |
|
$ |
(5,072 |
) |
|
$ |
(4,001 |
) |
|
|
|
|
|
|
|
Basic net (loss) per common share |
|
$ |
(0.19 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
Diluted net (loss) per common share |
|
$ |
(0.19 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
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Fennec Pharmaceuticals Inc.Balance Sheets(U.S.
Dollars in thousands)
|
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June 30, 2022 |
|
December 31, |
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(Unaudited) |
|
2021 |
|
|
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Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
14,915 |
|
|
$ |
21,100 |
|
|
Prepaid expenses |
|
490 |
|
|
|
1,034 |
|
|
Other current assets |
|
149 |
|
|
|
253 |
|
|
Total current
assets |
|
15,554 |
|
|
|
22,387 |
|
|
Non-Current
assets |
|
|
|
|
|
|
Deferred issuance cost |
|
507 |
|
|
|
507 |
|
|
Deferred issuance cost (amortization) |
|
(493 |
) |
|
|
(480 |
) |
|
Total non-current
assets |
|
14 |
|
|
|
27 |
|
|
Total
assets |
$ |
15,568 |
|
|
$ |
22,414 |
|
|
|
|
|
|
|
|
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Liabilities and
Shareholders’ Equity |
|
|
|
|
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Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
1,743 |
|
|
$ |
777 |
|
|
Accrued liabilities |
|
294 |
|
|
|
877 |
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Current portion of long-term debt |
|
1,000 |
|
|
|
— |
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|
Total current
liabilities |
|
3,037 |
|
|
|
1,654 |
|
|
Long term
liabilities |
|
|
|
|
|
|
Term loan |
|
4,000 |
|
|
|
5,000 |
|
|
Debt discount |
|
(10 |
) |
|
|
(12 |
) |
|
Total long term
liabilities |
|
3,990 |
|
|
|
4,988 |
|
|
Total
liabilities |
|
7,027 |
|
|
|
6,642 |
|
|
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
|
Common stock, no par value; unlimited shares authorized; 26,067
shares issued and outstanding (2021 -26,014) |
|
149,922 |
|
|
|
140,801 |
|
|
Additional paid-in capital |
|
54,630 |
|
|
|
53,214 |
|
|
Accumulated deficit |
|
(188,254 |
) |
|
|
(179,486 |
) |
|
Accumulated other comprehensive income |
|
1,243 |
|
|
|
1,243 |
|
|
Total shareholders’
equity |
|
8,541 |
|
|
|
15,772 |
|
|
Total liabilities and
shareholders’ equity |
$ |
15,568 |
|
|
$ |
22,414 |
|
|
Working Capital
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
Selected Asset and Liability Data: |
|
June 30,2022 |
|
December 31,2021 |
|
(U.S. Dollars in thousands) |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
14,915 |
|
|
$ |
21,100 |
|
|
Other current assets |
|
|
639 |
|
|
|
1,287 |
|
|
Current liabilities |
|
|
(3,037 |
) |
|
|
(1,654 |
) |
|
Working capital |
|
$ |
12,517 |
|
|
$ |
20,733 |
|
|
|
|
|
|
|
|
|
|
Selected Equity: |
|
|
|
|
|
|
|
Common stock & APIC |
|
$ |
195,552 |
|
|
$ |
194,015 |
|
|
Accumulated deficit |
|
|
(188,254 |
) |
|
|
(179,486 |
) |
|
Stockholders’ equity |
|
|
8,541 |
|
|
|
15,772 |
|
|
About PEDMARK™Cisplatin and
other platinum compounds are essential chemotherapeutic agents for
many pediatric malignancies. Unfortunately, platinum-based
therapies cause ototoxicity, or hearing loss, which is permanent,
irreversible and particularly harmful to the survivors of pediatric
cancer.
In the U.S. and Europe, it is estimated that, annually, over
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 cooperative groups in two Phase 3
clinical studies of survival and reduction of ototoxicity, The
Clinical Oncology Group Protocol 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, and medulloblastoma. SIOPEL 6 enrolled only
hepatoblastoma patients with localized tumors.
The U.S. Food and Drug Administration (FDA) has accepted for
filing the Company’s resubmitted New Drug Application (NDA) for
PEDMARKTM (a unique formulation of sodium thiosulfate (STS)) for
the prevention of platinum-induced ototoxicity in pediatric
patients with localized, non-metastatic, solid tumors. The PDUFA
target action date for the NDA is September 23, 2022. The Marketing
Authorization Application (MAA) for sodium thiosulfate (tradename
PEDMARQSI) is currently under evaluation by the European Medicines
Agency (EMA). PEDMARK has received Breakthrough Therapy and Fast
Track Designation by the FDA in March 2018.
About Fennec
Pharmaceuticals
Fennec Pharmaceuticals Inc. is a specialty
pharmaceutical company focused on the development of PEDMARK™ for
the prevention of platinum-induced ototoxicity in pediatric
patients. Further, PEDMARK has received Orphan Drug Designation in
the U.S. for this potential use. Fennec has a license agreement
with Oregon Health and Science University (OHSU) for exclusive
worldwide license rights to intellectual property directed to
sodium thiosulfate and its use for chemoprotection, including the
prevention of ototoxicity induced by platinum chemotherapy, in
humans. 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 the Company’s
expectations regarding its interactions and communications with the
FDA, including the Company’s expectations and goals respecting the
NDA resubmission for PEDMARK™ and the closing of any tranche of the
financing with Petrichor after the date of this press release.
Obtaining Fast Track Designation and Breakthrough Therapy
Designation by the FDA is no guarantee that the FDA will approve
the NDA resubmission of PEDMARK. If the FDA does not approve the
NDA resubmission of PEDMARK, we will not have access to the
Petrichor financing. 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 risk that
unforeseen factors may result in delays in or failure to obtain FDA
approval of PEDMARK, the risks and uncertainties relating to the
Company’s reliance on third party manufacturing, the risks that the
Company’s NDA resubmission does not adequately address the concerns
identified in the CRL previously provided by the FDA, the risk that
the NDA resubmission to the FDA will not be satisfactory, 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, 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, 2021. 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.
For further information, please contact:
Investors:Robert AndradeChief Financial
OfficerFennec Pharmaceuticals Inc.(919) 246-5299
Media:Elixir Health Public RelationsLindsay
Rocco(862) 596-1304lrocco@elixirhealthpr.com
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