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FENNEC PHARMACEUTICALS INC.

FENC
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Business Summary

Fennec Pharmaceuticals Inc. is a commercial stage specialty pharmaceutical company dedicated to preventing cisplatin-induced ototoxicity (CIO), a serious and often irreversible side effect of cancer treatment. The company operates within the biotechnology and pharmaceutical industry, specifically focused on rare, oncology-related and orphan diseases. The company's sole approved product, PEDMARK, targets a small patient population: approximately 11,400 pediatric patients with localized, non-metastatic solid tumors each year in the U.S. and Europe, of which include approximately 2,157 cisplatin-treated pediatric patients in the U.S. and 1,250 in Europe who fall within the current PEDMARK market. Additionally, the company estimates approximately 51,282 new AYA solid tumor cases annually in the U.S., of which approximately 25,536 involve cisplatin-treated patients with localized, non-metastatic solid tumors. The company faces a highly competitive landscape with competitors including major and mid-sized pharmaceutical and biotechnology companies, many with significantly greater financial, technical, and other resources.

Fennec's primary competitive advantage is that PEDMARK is currently the 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. The company is not aware of any commercially available agents that reduce the incidence of hearing loss associated with the use of platinum-based anti-cancer agents, which is the purpose of PEDMARK. However, potential competitive agents in preclinical or limited clinical settings include D-methionine, SPI-3005, N-acetylcysteine, amifostine, Vitamin E, salicylate, tiopronin, and DB-020. The company also faces competition from compounding pharmacies that provide sodium thiosulfate, which is likely to be substantially less expensive than PEDMARK. The company's ability to compete depends on factors including maintaining regulatory approvals, obtaining new approvals, product efficacy and safety, timing of approvals, product acceptance, payer reimbursement, protection of proprietary rights, and the level of generic competition.

Fennec generates revenue primarily through product sales of PEDMARK in the United States and through licensing agreements for commercialization in other territories. The company's revenue model is a mix of transactional product sales and potential recurring income from royalties. In the U.S., the company sells its product through an experienced field force including Regional Pediatric Oncology Specialists and utilizes medical science liaisons. The company has established Fennec HEARS, a comprehensive single source program designed to connect PEDMARK patients to both patient financial and product access support. Internationally, the company relies on third-party partners, such as Norgine in Europe, Australia, and New Zealand, and Inpharmus in Turkey and the GCC countries, for commercialization. Under the Norgine licensing agreement, Fennec received approximately $43 million in upfront consideration and may receive up to approximately $230 million in additional commercial and regulatory milestone payments and double-digit tiered royalties (up to the mid-twenties) on net sales of PEDMARQSI in the licensed territories.

Fennec's sole product is PEDMARK (sodium thiosulfate injection), approved in the U.S. as PEDMARK and in Europe, the U.K., Australia, and New Zealand as PEDMARQSI. PEDMARK is 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. In clinical studies, treatment with PEDMARK resulted in an approximate 50% relative reduction in the incidence of cisplatin-induced hearing loss compared to cisplatin alone. The company also has a distribution agreement with Inpharmus for the commercialization of PEDMARK in Turkey and the GCC countries. In Japan, an investigator-initiated clinical trial, STS-J01, demonstrated positive topline results in December 2025, showing use of PEDMARK was associated with a significant reduction in the incidence of hearing loss and an approximate 95% clinical response rate . The company is pursuing a regulatory registration strategy for PEDMARK in Japan. Additionally, the company supports investigator-initiated studies, including a trial by City of Hope evaluating PEDMARK in adult men with stage II–III metastatic testicular germ cell tumors.

The company's intellectual property portfolio includes six patents listed for PEDMARK in the FDA Orange Book, which will expire in 2039. Fennec was granted Orphan Drug Exclusivity (ODE) in January 2023, providing seven years of market exclusivity from its FDA approval on September 20, 2022, until September 20, 2029. In Europe, the company was granted PUMA, which provides for 10 years of exclusivity (8 years of data exclusivity + 2 years of market exclusivity) effective until May 26, 2033. On March 16, 2026, Fennec announced it had entered into an agreement with Cipla Limited and Cipla USA, Inc. to settle the litigation regarding Cipla's ANDA for a generic version of PEDMARK. Under the terms of the agreement, the lawsuit will be dismissed with each party bearing their own costs, and Cipla will not enter the market with its generic sodium thiosulfate product until September 1, 2033 , or earlier under certain circumstances.

In March 2024, Fennec entered into an exclusive licensing agreement with Norgine for the commercialization of PEDMARQSI in Europe, Australia, and New Zealand. During 2025, Norgine made PEDMARQSI commercially available in Germany and the U.K., with additional launches expected in 2026 and beyond. In 2025, the company entered into a distribution agreement with Inpharmus for the commercialization of PEDMARK in Turkey and the GCC countries. On November 17, 2025, the company completed an underwritten public offering of 5,367 of its common shares (including 700 common shares issued upon the underwriters' full exercise of their option to purchase additional shares) at a public offering price of $7.50 per share, for gross proceeds of approximately $40.25 million , before deducting underwriting discounts and offering expenses. Concurrently, the company completed a non-brokered private offering of its common shares in Canada at a price of $7.50 per share, for aggregate gross proceeds of approximately $5.025 million , before offering expenses. The company used a substantial portion of the net proceeds from the offering to redeem its outstanding debt obligations, including the redemption of all remaining outstanding Petrichor Notes for an aggregate redemption price of approximately $21,700 .

For the fiscal year ended December 31, 2025, the company reported total revenue of $44,642 , a decrease from $47,538 in fiscal 2024, primarily due to the absence of $17,958 of licensing revenue recorded in fiscal 2024 related to the Norgine transaction, partially offset by higher net product sales. Net product sales increased to $44,642 in fiscal 2025 from $29,580 in fiscal 2024, reflecting increased market penetration and expanded access for PEDMARK. The company reported a net loss of $9,741 for fiscal 2025, compared to a net loss of $436 in fiscal 2024. Basic and diluted net loss per common share was $0.34 for fiscal 2025, compared to $0.02 in fiscal 2024. As of December 31, 2025, the company had cash and cash equivalents of $36,788 and an accumulated deficit of $229,422 .

Business Outlook

A key growth vector is the international expansion of PEDMARK through partnerships. The Norgine licensing agreement provides a framework for commercialization in Europe, Australia, and New Zealand, with Norgine having made PEDMARQSI commercially available in Germany and the U.K. during 2025 and expecting additional launches to occur in 2026 and beyond. The company may receive up to approximately $230 million in additional commercial and regulatory milestone payments and double-digit tiered royalties (up to the mid-twenties) on net sales of PEDMARQSI in the licensed territories. Another growth vector is the pursuit of a regulatory registration strategy for PEDMARK in Japan following positive topline results from the STS-J01 trial, which demonstrated an approximate 95% clinical response rate . The company is evaluating partnering or licensing opportunities in that market, similar to its model with Norgine in Europe. Additionally, the company is supporting investigator-initiated studies, including a trial evaluating PEDMARK in adult men with stage II–III metastatic testicular germ cell tumors, which could support potential label expansion into AYA and adult populations.

Another growth vector is the expansion of the company's commercial infrastructure and patient support capabilities in the U.S. During 2025, the company significantly expanded its commercial infrastructure and patient support capabilities, including the Fennec HEARS program, which provides a $0 copay savings program for eligible patients with commercial or private insurance and the Fennec Patient Assistance Program for eligible patients without insurance. The company has achieved formulary adoption at certain large oncology networks and academic institutions, with successful activations in both academic centers and community oncology practices occurring throughout 2025. The company's strategy includes expanding adoption beyond pediatric oncologists to include healthcare providers in community settings, with an expanded sales team with a strong track record in both academic and community settings, partnerships with group purchasing organizations, and specialty pharmacy offerings such as home infusions, white bag delivery, and direct billing.The filing does not contain a detailed operational outlook regarding supply chain, manufacturing capacity, technology infrastructure investments, or headcount strategy.A significant headwind is the company's reliance on a single product, PEDMARK, for all of its product revenues. The company is a single product company with only limited commercial experience, which makes it difficult to evaluate its current business, predict its future prospects, and forecast its financial performance and growth. The company faces substantial competition from other pharmaceutical, biopharmaceutical, and biotechnology companies, many of which have significantly greater financial, technical, and human resources. The company also faces competition from compounding pharmacies that provide sodium thiosulfate, which is likely to be substantially less expensive than PEDMARK. The company's success depends on its ability to successfully commercialize PEDMARK, and there are numerous risks associated with product launches, including the extent of market acceptance, payer reimbursement, and the ability to educate physicians and patients.

A key constraint is the small target patient population for PEDMARK. The company estimates approximately 2,157 cisplatin-treated pediatric patients in the U.S. and 1,250 in Europe who fall within the current PEDMARK market. The company must achieve significant market share and obtain relatively high per-patient prices for its product to achieve meaningful gross margins. The company's international commercialization strategy depends on collaborative relationships with third-party development partners, including Norgine in Europe and Inpharmus in Turkey and GCC countries. The company has limited foreign regulatory, clinical, and commercial resources, and future partners are critical to its international success. The company may not be able to enter into collaboration agreements with appropriate partners for important foreign markets on acceptable terms, or at all. Additionally, the company faces risks related to geopolitical instability and armed conflicts in Turkey and the Middle East, which could disrupt product distribution and sales.

Risk Factors

The company has a history of significant losses and has generated limited revenue from the sale of products since its inception, reporting a net loss of approximately $9,741 for the year ended December 31, 2025 and an accumulated deficit of approximately $229,422 at December 31, 2025. As a single product company, Fennec's success depends entirely on the successful commercialization of PEDMARK, and any disruption in manufacturing, supply, reimbursement, or adoption, or any adverse regulatory or competitive development, could materially harm the business. The company faces substantial competition from larger pharmaceutical and biotechnology companies with greater resources, as well as from compounding pharmacies that provide sodium thiosulfate, which is likely to be substantially less expensive than PEDMARK. The company's international commercialization strategy depends on collaborative relationships with third-party partners, including Norgine in Europe and Inpharmus in Turkey and GCC countries, and if these partners fail to execute effectively, the company may not realize anticipated milestone payments, royalties, or meaningful revenue outside of the United States. The company's patent protection for PEDMARK may expire before it can fully realize its commercial value, and the company is currently and may in the future be the target of patent litigation, which could be costly and time-consuming to defend.

Management Priorities

Management's message emphasizes the company's transition to a commercial stage specialty pharmaceutical company following the FDA approval of PEDMARK in September 2022 and the European Commission approval of PEDMARQSI in June 2023. Key themes include the successful execution of the U.S. commercial launch, the expansion of the company's commercial infrastructure, and the strategic partnership with Norgine for international commercialization. Management highlights that during 2025, the company delivered sequential quarterly revenue growth and achieved positive operating cash flow in the third quarter of 2025. The strategic priorities emphasized for the period ahead include continuing to drive adoption of PEDMARK in the U.S., expanding into the AYA population, supporting Norgine's launch of PEDMARQSI in Europe, and pursuing a regulatory registration strategy for PEDMARK in Japan following positive topline results from the STS-J01 trial.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Japan: STS-J01 Investigator-Initiated Trial and Registration Plans
  4. [4] Item 1, Business — CIPLA ANDA Litigation
  5. [5] Item 7, MD&A — Results of Operations
  6. [6] Item 7, MD&A — Results of Operations
  7. [7] Item 7, MD&A — Results of Operations
  8. [8] Item 7, MD&A — Results of Operations
  9. [9] Item 7, MD&A — Results of Operations
  10. [10] Item 7, MD&A — Results of Operations
  11. [11] Note 1, Nature of Business and Liquidity
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Results of Operations
  19. [19] Item 8, Note 3 — Loss per Share
  20. [20] Item 8, Note 3 — Loss per Share
  21. [21] Item 7, MD&A — Selected Asset and Liability Data
  22. [22] Item 7, MD&A — Selected Asset and Liability Data
  23. [23] Item 1, Business — Overview
  24. [24] Item 1, Business — Japan: STS-J01 Investigator-Initiated Trial and Registration Plans
  25. [25] Item 1, Business — PEDMARK Product Overview
  26. [26] Item 1, Business — PEDMARK Product Overview
  27. [27] Item 1A, Risk Factors — Risks Related to Our Business
  28. [28] Item 1A, Risk Factors — Risks Related to Our Business
  29. [29] Item 7, MD&A — Results of Operations
  30. [30] Item 7, MD&A — Results of Operations
  31. [31] Item 7, MD&A — Results of Operations
  32. [32] Item 7, MD&A — Results of Operations
  33. [33] Item 7, MD&A — Results of Operations
  34. [34] Item 7, MD&A — Results of Operations
  35. [35] Item 7, MD&A — Results of Operations
  36. [36] Item 7, MD&A — Results of Operations
  37. [37] Item 8, Note 3 — Loss per Share
  38. [38] Item 8, Note 3 — Loss per Share
  39. [39] Item 7, MD&A — Results of Operations
  40. [40] Item 7, MD&A — Results of Operations
  41. [41] Item 7, MD&A — Results of Operations
  42. [42] Item 7, MD&A — Results of Operations
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  44. [44] Item 7, MD&A — Results of Operations
  45. [45] Item 7, MD&A — Results of Operations
  46. [46] Item 7, MD&A — Results of Operations
  47. [47] Item 7, MD&A — Results of Operations
  48. [48] Item 7, MD&A — Selected Asset and Liability Data
  49. [49] Item 7, MD&A — Selected Asset and Liability Data
  50. [50] Item 7, MD&A — Selected Asset and Liability Data
  51. [51] Item 7, MD&A — Selected Asset and Liability Data
  52. [52] Item 7, MD&A — Selected Cash Flow Data
  53. [53] Item 7, MD&A — Selected Cash Flow Data
  54. [54] Item 7, MD&A — Selected Cash Flow Data
  55. [55] Item 7, MD&A — Selected Cash Flow Data

Analysis on 6/22/2026