Fennec Pharmaceuticals Reports Full Year and Fourth Quarter 2022 Financial Results
~ U.S. Commercial Team in Place with PEDMARK® Launch Off to Solid Start Following FDA Approval of PEDMARK® in September 2022 ~
~ Company Has Approximately $23.8 Million in Cash ~
RESEARCH TRIANGLE PARK, N.C., March 30, 2023 (GLOBE NEWSWIRE) -- Fennec Pharmaceuticals Inc. (NASDAQ:FENC; TSX: FRX), a specialty pharmaceutical company, today reported its financial results for the fiscal year ended December 31, 2022 and provided a business update.
“It was an outstanding year for Fennec as we achieved FDA approval of PEDMARK® in the fourth quarter and evolved into a commercial-stage pharmaceutical company. For 2023, we are focused on building upon our early commercial launch momentum by continuing to execute on our strategic plans, expand our prescriber base, and increase the utilization of PEDMARK®,” said Rosty Raykov, chief executive officer of Fennec Pharmaceuticals. “We are very proud of Fennec’s patient-centric approach and the performance across the entire organization, and we continue to be motivated by the positive responses that we are receiving from the pediatric cancer patient community, healthcare providers and payors. Fennec remains dedicated to growing its revenues both in the U.S. and worldwide as we seek to expand PEDMARK’s presence and availability to patients globally.”
Recent Developments and Highlights:
- Received U.S. Food and Drug Administration (FDA) approval of the PEDMARK® New Drug Application (NDA) on September 20, 2022. PEDMARK® is the first and only FDA-approved therapy indicated to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.
- Initiated U.S. commercial launch of PEDMARK® on October 17, 2022. The Fennec HEARS™ program offers comprehensive patient services, including access to care coordinators, financial and prescription drug support.
- The National Comprehensive Cancer Network® (NCCN) updated its clinical practice guidelines for Adolescent and Young Adult (AYA) Oncology to include PEDMARK® (sodium thiosulfate injection) in January 2023.
- The FDA granted Orphan Drug Exclusivity to PEDMARK® (sodium thiosulfate injection) in January 2023. The FDA’s Orphan Drug Designation program is designed to advance the development of drugs that treat a condition affecting 200,000 or fewer U.S. patients annually. The seven-year market exclusivity for PEDMARK® began on September 20, 2022, the date of its FDA approval, and continues until September 20, 2029. Additionally, in the approved prescribing label, the FDA has explicitly directed that PEDMARK® is not substitutable with other sodium thiosulfate products.
Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2022
- Cash Position – There was a $2.7 million increase in cash and cash equivalents between December 31, 2022 and December 31, 2021. The net increase was the result of cash operating expenses, offset by the net $20.0 million received from the Petrichor note and $0.9 million received from the exercise of 273,000 options. During the period ended December 31, 2022, cash for operations was used mainly on the pre-commercialization activities of PEDMARK® prior to FDA approval and then commercialization activities post NDA approval.
- Commercial launch of PEDMARK® commenced in October 2022. The company recorded net product sales of $1.54 million in fiscal 2022. The Company recorded discounts and allowances against sales in the amount of $0.2 million and cost of products sold of $0.1 million. The Company had gross profit of $1.4 million for fiscal year ended 2022. In fiscal 2021, the Company had no revenues.
- Research and Development (R&D) Expenses – R&D expense decreased by $1.5 million in fiscal 2022 as compared to fiscal 2021. The Company reduced research and development costs when it received FDA approval of PEDMARK®. The majority of traditional research and development expenses associated with PEDMARK® are now recorded as general and administrative expenses or capitalized into inventory and eventually recorded to costs of product sales.
- Selling and Marketing (S&M) Expenses – The Company began recording selling and marketing expenses when it expanded its payroll to include an internal salesforce. Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages commissions and out-of-pocket expenses. The Company recorded $2.8 million in selling and marketing expenses in fiscal 2022.
- General and Administrative (G&A) Expenses – There was a $5.5 million increase of general and administrative expenses in fiscal 2022 compared to fiscal 2021. Payroll and benefits related expenses rose by $4.0 million in fiscal 2022 compared to fiscal 2021 as our headcount increased from 10 to 36 over the course of fiscal 2022. There was an increase in legal costs of $1.4 million in fiscal 2022 over fiscal 2021. This net increase is comprised of an increase in $0.2 million in class action suit defense, a decrease in general legal expense of $0.2 million and an increase of $1.4 million in intellectual property litigation. Pre-commercialization activities rose by $0.2 million in fiscal 2022 over fiscal 2021. Non-cash expenses associated with equity remuneration increased by $0.2 million.
- Net Loss – Net losses for the fourth quarter and year ended December 31, 2022 of $6.9 million ($0.26 per share) and $23.7 million ($0.90 per share), respectively, compared to $4.4 million ($0.18 per share) and $17.3 million ($0.67 per share), respectively, for the same periods in 2021.
- Financial Guidance – The Company believes its cash and cash equivalents on hand as of December 31, 2022 will be sufficient to fund the Company's planned commercial activities for 2023.
Financial Update
The selected financial data presented below is derived from our audited, condensed consolidated financial statements, which were prepared in accordance with U.S. generally accepted accounting principles. The complete audited, condensed consolidated financial statements for the period ended December 31, 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.
| Audited Condensed Consolidated | |||||||||||||||
| Statement of Operations: | |||||||||||||||
| (U.S. Dollars in thousands except per share amounts) | |||||||||||||||
| Three Months Ended | Twelve months Ended | ||||||||||||||
| December 31, | December 31, | December 31, | December 31, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenue | |||||||||||||||
| PEDMARK product sales, net | $ | 1,535 | $ | — | $ | 1,535 | $ | — | |||||||
| Cost of products sold | (86 | ) | — | (86 | ) | — | |||||||||
| Gross profit | 1,449 | — | 1,449 | — | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 117 | 523 | 3,531 | 4,981 | |||||||||||
| Selling and marketing | 2,785 | — | 2,785 | — | |||||||||||
| General and administrative | 4,682 | 3,703 | 17,722 | 12,242 | |||||||||||
| Total operating expenses | 7,584 | 4,226 | 24,038 | 17,223 | |||||||||||
| Loss from operations | (6,135 | ) | (4,226 | ) | (22,589 | ) | (17,223 | ) | |||||||
| Other (expense)/income | |||||||||||||||
| Unrealized foreign exchange loss | (58 | ) | (162 | ) | (9 | ) | (10 | ) | |||||||
| Amortization expense | (70 | ) | (8 | ) | (149 | ) | (16 | ) | |||||||
| Unrealized (loss)/gain on securities | (3 | ) | (1 | ) | (184 | ) | (25 | ) | |||||||
| Interest income | 153 | 13 | 195 | 54 | |||||||||||
| Interest expense | (744 | ) | (62 | ) | (978 | ) | (126 | ) | |||||||
| Total other (expense)/income | (722 | ) | (220 | ) | (1,125 | ) | (123 | ) | |||||||
| Net loss | $ | (6,857 | ) | $ | (4,446 | ) | $ | (23,714 | ) | $ | (17,346 | ) | |||
| Basic net loss per common share | $ | (0.26 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.67 | ) | |||
| Diluted net loss per common share | $ | (0.26 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.67 | ) | |||
| Weighted-average number of common shares outstanding basic | 26,275 | 26,006 | 26,275 | 26,006 | |||||||||||
| Weighted-average number of common shares outstanding diluted | 26,275 | 26,006 | 26,275 | 26,006 | |||||||||||
| Audited Condensed Consolidated Balance Sheets | ||||||||
| (U.S. Dollars in thousands) | ||||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 23,774 | $ | 21,100 | ||||
| Accounts receivable, net | 1,545 | — | ||||||
| Prepaid expenses | 770 | 1,034 | ||||||
| Inventory | 576 | — | ||||||
| Other current assets | 63 | 253 | ||||||
| Total current assets | 26,728 | 22,387 | ||||||
| Non-current assets | ||||||||
| Deferred issuance cost, net amortization | 211 | 27 | ||||||
| Total non-current assets | 211 | 27 | ||||||
| Total assets | $ | 26,939 | $ | 22,414 | ||||
| Liabilities and shareholders’ deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,390 | $ | 777 | ||||
| Accrued liabilities | 2,219 |
By: GlobeNewswire
- 30 Mar 2023
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