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On Tuesday, 20 May 2025, Fennec Pharmaceuticals (NASDAQ:FENC) presented at the H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025. The company highlighted its strategic focus on the commercialization of Pedmark, a unique FDA-approved treatment, while addressing financial challenges and growth opportunities. Despite facing competition from compounded alternatives, Fennec is committed to expanding its market presence and achieving financial stability.
Key Takeaways
- Pedmark is the first FDA-approved product for reducing ototoxicity risk in pediatric cancer patients.
- Fennec aims to achieve quarterly revenue of $8.5 to $9 million to reach cash flow breakeven.
- A strategic partnership with Norgene is set to expand Pedmark’s reach in Europe, Australia, and New Zealand.
- The company is exploring options to manage its $19.5 million convertible debt with Petrocor.
- Future growth includes potential product acquisitions and expansion into Japan.
Financial Results
- Revenue:
- Q4 net product revenue was $8 million, rising to $8.8 million in the most recent quarter.
- The company targets $8.5 to $9 million quarterly revenue for cash flow breakeven.
- Annual cash operating expenses are approximately $33 to $35 million.
- Profitability:
- Fennec experienced a Q4 cash burn of about $0.5 million.
- Profitability is anticipated with consistent quarterly revenue of $8.5 to $9 million.
- Debt Management:
- The outstanding convertible note with Petrocor stands at $19.5 million with a low-teens interest rate.
- A previous portion of the Petrocor debt, amounting to $13 million, has been retired.
Operational Updates
- Commercial Team:
- A 20-member customer-facing team targets high prescribers, supported by Medical Science Liaisons and Key Account Managers.
- Market Segmentation:
- Focus on the Adolescent and Young Adult (AYA) population and the top 75 cisplatin prescribers in each territory.
- Distribution:
- Utilization of specialty distribution and a home health program.
- Geographical Expansion:
- Norgene has launched PEDMARCY in the UK and Germany, with plans for further expansion in the EU5 countries.
Future Outlook
- Revenue Growth:
- The company aims to maintain $8.5 to $9 million quarterly revenue.
- Pipeline Expansion:
- Potential acquisitions of complementary products are under consideration.
- Japan Opportunity:
- Clinical trial results expected in late summer could pave the way for market entry.
- Debt Management:
- Fennec is exploring strategies to retire or optimize its capital structure.
Q&A Highlights
- Commercialization Strategy:
- Emphasis on refined market segmentation and a focus on the AYA demographic.
- Compounding Issue:
- Continued efforts to promote Pedmark’s FDA approval and clinical data to combat compounding.
- Norgene Partnership:
- The partnership includes a $43 million upfront fee, royalties, and potential milestone payments exceeding $200 million.
- Capital Structure:
- The company is focused on achieving profitability and managing its convertible debt to enhance capital efficiency.
- Future Growth:
- Plans to acquire complementary products and expand operations into Japan.
Readers are invited to refer to the full transcript for more detailed insights.
Full transcript - H.C. Wainwright 3rd Annual BioConnect Investor Conference 2025:
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: Hello, and welcome to the latest in our series of fireside chats here at H. C. Wainwright’s Bioconnet Conference at NASDAQ. My name is Ram Selvaraju and I’m a Senior Healthcare Equity Research Analyst and Managing Director within Wainwright’s Equity Research Department. I’m joined here today by members of the senior executive leadership team at FENEC Pharmaceuticals.
FENEC is traded on the NASDAQ under the ticker symbol FENEC. We here at Wainwright cover FENEC with a buy rating and twelve month price target of $13 per share. Joining me here today are Jeff Hackman, Chief Executive Officer and Robert Andrade, Chief Financial Officer. Gentlemen, it’s a pleasure to have you with us.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Thanks for inviting us. Thank you, Ramo. Always a pleasure. It’s been a number of years, so thank you.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: So maybe, Jeff, we could start with having you provide us with an overview of Phenex marketed product, Pedmark, sodium thiosulfate, and its unique positioning within the domain of oncology supportive care.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Yeah, thanks. I mean, we’re excited. It’s always you’re always excited when you have a product that’s approved, right, by the FDA and EMEA. So we’re both we’re licensed with Pedmark in both The US and Europe. Pedmark’s the first and only FDA approved product that’s indicated for the risk of ototoxicity due to cisplatin use in cancer.
And it’s indicated for pediatric patients age is one month of age and older. We recently also received last year an NCCN guidelines update, which approved through the NCCN guidelines approved this product, Pedmark, for 15 30 nine years of age as well. So while that’s not a, that’s a recommendation, but in in our space, that gives us a little bit broader, opportunity that’s called a two way endorsement from the NCCN. So we’re very excited about that. This product continues to have a significant impact on patients.
And that’s what’s really critical here is is that you know especially when you’re dealing with patients that have been treated you know with cisplatin and in lot many cases have been their their cancer has been cured. But they in some cases can walk away with ototoxicity or loss of hearing. So for a product like ours to be able to for Petmark to protect that in many cases. We it’s a great exciting opportunity for us to be in.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And for those in the audience who don’t know, cisplatin is one of the most widely used chemotherapeutic drugs. It’s a member of a class of drugs called platinum containing chemotherapy. And the approval for Pedmark is not dependent on a specific type of cancer for which cisplatin is used to treat it. So effectively, if you’re a patient who could conceivably be at risk of undergoing ototoxicity because you’re being treated with cisplatin, Pedmark could conceivably be for you. Is that correct?
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Correct.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Yeah. I would just add the only alternative after hearing loss going sense get a
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: of how we’re respect to commercialization of drugs in this context, whether within oncology or within oncology supportive care and how your prior experiences have kind of prepared you for your current role. But I think it would be very helpful for the audience to get an overview of how PetMarket is marketed, particularly in the context of the size of your field sales force and the types of marketing activities that you have deployed as well as the distribution channel that is used to get PetMark into the hands so to speak of the prescribers who need it most.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Yes. Let me talk a little bit about me first and then I’ll go into the details here and why I came here and then and how we’re marketing the product currently today. You know, I’ve been in this business for thirty years from big pharma to small biotech. And over the last fifteen years, I’ve really focused on oncology. Some of the areas that I have been able to really focus my efforts on is in the AYA space, pediatric and AYA space in the past.
So as I was approached by FEDEC to come here back in August, after discussions with some of the board members, it was really to come here to to to continue to add on what, Robert and and the previous CEO had started and really kinda build on the commercial execution. What’s critical about sometimes you’ll find is a small biotechs will will spend years, fifteen years, to to move to license a product. But and and and it takes a lot of effort to get there, to get through the FDA. But then the the the work changes. But it but it’s it’s it’s not any less, and in a lot of can be even more, and and especially when it comes to commercialization of the product.
And so that’s what my, my background has has given me over the years. I’ve been able to do something like, very, very similar to what it is we’re trying to do here. So, we market the product through specialty distribution. We don’t market it through that. We market ourselves, but we sell the product through specialty distribution.
Just the typical, you know, the big three that’s out there. They, but we and we also distribute it through our or or home health program as well. And we really have focused ourselves on really getting good at execution. So that’s really, I think, the most critical thing for us from a commercial standpoint is is who where are where is cisplatin being used? What is the the message that needs to be given to these prescribers?
Do they understand? Are they aware that PEDMARK PEDMARK exists? And then the third in the execution kind of wheel here is are we able to do that? Do we have a a team that’s well trained enough and has the ability to be able to achieve that? So I came in and made some made some additions to the team, brought some folks in that I knew how to do this with us together in the past.
And and now it’s now we’re executing over the last couple of quarters. You’ve seen two quarters of growth for the organization, and we’re excited about where we’re headed in the future, no doubt, with this product. So I hope that I think that answered those. Was there a
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: I just wanted to clarify. How many field reps do you have now?
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: We call them, customer facing representatives. So we have we have 20 customer facing people in the organization right now. It’s a very small group. It’s a small organization, And it doesn’t you know, it’s interesting. It doesn’t have to be that large to be able to to get to the cisplatin users in the country.
There there are 20,000 in the AYA space, there are 20,000 cisplatin, I guess we call them prescriptions in the AYA space. As you or patients in the AYA space. I’m sorry, not prescriptions, but pays. In the pediatric side of the business where this product is also indicated for is that there are just about 3,000 patients that gets Cisplatin. So you can see the size of this marketplace.
The recent recommendations to AYA obviously give us a much larger opportunity there. But the product is really representative by about 20 people out in the field.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Yeah. If if I can just segment it a little bit more for you, what the new commercial team has done is they’ve really taken a a focus in terms of what are our real needs, what are our customers, who are the high prescribers, and how do we facilitate a white glove experience from beginning to end. And so what we’ve done is we’ve also had an alignment such that we have a focus on medical because of the NCCN recommendation. So we’ve increased our MSLs, our medical science liaisons that can speak to anything, including the science of Petmark and also the mechanism of action. And then we’ve also brought in some key account managers that then can really because there’s some large accounts here that need the handholding from beginning to end.
And I think that with Jeff and the remainder of of the leadership team have have done a great job of being able to streamline and focus and pivot to a certain extent so that we can service those customers fully.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And I think the key takeaway for the audience here is that now we are in a situation where all of the market segmentation, all of the market research, all of the refinement and optimization on the sales and marketing front that lot of the And growth the seeing in the shift in marketing and sales strategy and moving into the AYA population, adolescent and young adult, has really helped kind of reinvigorate the momentum behind PetSmart in The United States. And and also maybe give us a sense of, you know, what challenges you see that remain and how Fenek is planning to overcome those?
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Yeah. Robert did a nice job of touching on it. Know, on our side, I I I there was a a need when I walked in to the organization back in August to really increase the focus on the medical side of of of, Petmark and and making sure that that medical, group had the competency to be able to to have these conversations with really top KOLs in the country. And so we have we brought in a chief medical officer, someone who is bringing in his own team right now. And that has been incredibly critical for this organization.
It steps up our credibility, but it also steps up the ability for us to be able to talk about, the product in in all of the areas where it can benefit patients. This is, this was the the first part. The second, I what I wanted to do was, we this could potentially be overwhelming in some cases to say, where where do I need to to put, my sales resources? Where where do they need to go? What are those, and how many territories really should be out there?
And what does this look like? Like? And so having done some of this in the past in the AYA space, I had a good feel for that. I understood how big the sales team really needed to be to to cover 80% of, you know, of the physicians, that we were gonna target out there. And then also then the next thing was is to to give, you know, our commercial organization the right targets to be able to go out and and and target and call on.
Get them focused on, for example, the top 75 physicians in their territory who were really the top 75 physicians who were writing cisplatin in their territory. So by targeting better, by focusing our efforts on medical and then really understanding who we’re talking to and the benefit that we have to be able to offer with Petmark. Those are some of the key things that we’ve been able to do right over the last six months.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: So one thing I did also want to touch upon was kind of the nature of the value proposition in the AYA segment versus the pediatric segment. And I think this is partly important because a lot of times we hear about how hearing loss is particularly critical in the young kids because it affects their ability to learn and how maybe it’s not as significant of a problem in the population. Maybe that’s a misconception. Maybe there are different challenges in the AYA population. Care to elaborate?
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Yeah. I mean, Robert, you can talk a little bit about that from what you’ve learned. I know, you know, from your side over the years, and then I’ll touch on it too.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Yeah. Sure. I mean, if you speak to oncologists to start, they they say any per person should not be at risk if there isn’t a safe product to lose their hearing. Doesn’t matter the age. We recently had a a patient that’s a teenager that went through cisplatinum, survived, took PEDmark, and is so grateful that she has everything in front of her from being able to talk to her friends, go to concerts, have social interactions.
I’ll give you one more example. A pilot, you know, any impact to their hearing, that’s the the loss of their profession. So there’s countless examples, and I think it goes back to a doctor Pepe Brock who who I who I was quoting earlier, who said everyone should have the opportunity to take Petmark to preserve their hearing. It shouldn’t be discriminated by age. So I think that’s where we stand.
Obviously, we’re grateful to all ages, and in particular, the pediatric community. But that’s been our experience.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Yeah. I mean, that’s where some of the studies were done, obviously, in the pediatric community. But this we know that ototoxicity can impact multiple ages. And so when you think about AYA is it less important for a 15 year old you know versus a three year old you know we believe that that you know it’s a incredible responsibility on our side to make sure that we give those patients a chance. And and again, physicians realize that that that they’re treating an incredible disease, you know, whether it’s it’s testicular cancer or or germ cell tumors or so so they know what their, you you know, their their goals are and what they’re trying to accomplish.
I think the biggest thing is is we can give them something else, know, that they can utilize and these physicians have the ability to be able to utilize a product like this when they think it’s appropriate. So, you know, we’ve got some really incredible partnerships going on right now with different institutions. And, these institutions are, have become just incredible partners of ours.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: excited next And furthermore, by moving into the AYA population, you’re just expanding the market substantially versus where things started off immediately after Pedmark was originally approved. Now I was hoping that maybe, Jeff, you could touch upon two other aspects here. One is what sales and marketing strategies you have not yet deployed that you plan to deploy that you anticipate might have the most significant impact in terms of accelerating top line growth for the company? And also maybe talk a little bit about the status of compounding of sodium thiosulfate and the recent FDA recommendations in this regard to ensure that Pedmark is the product being used and why that’s important?
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: I’ll take those in reverse, but we’ll go. Sodium thiosulfate, the compounding we know still continues. There was an FDA letter that was sent out last year asking physicians and institutions not to compound. But we know that that continues. We have seen a steady and use of this product being compounded instead of Petmark in some institutions.
But one of the things that we’ve been able to do most recently is is we’re starting to see some growth in the pediatric places where we hadn’t seen it before. Is that because now we have AYA patients in those institutions that are utilizing Pedmark? In some cases, yes. And we see that. But that continues to be utilized in The US in some pediatric institutions.
And we’re going to continue to utilize our commercial organization and our medical organization to make sure they understand the differences. We’re the only FDA approved product. We’re the only product here that’s been studied for years and got an approval. And so we make sure that we get across those, you know, those those points. What haven’t we done on the commercial side?
You know, it it’s interesting. We were talking earlier today to one of our investors, and we had said that, you know, we’re far away from from getting to many of of the cisplatin users in this country. The awareness of Petmark is really critical for for people to understand that the product exists and there’s something they can utilize. And so from a from a sales and marketing standpoint from our side is is we have to get better at execution. So execution is critical.
And what I mean by that is is targeting the right folks where cisplatin is being used and targeting those high prescribers and and being able to be very focused that. The second thing is is is for our commercial organization is I want them to be some of the best trained salespeople and medical science liaisons in the industry. We spent a lot of time training. We spent a lot of time making sure that they have the right messages and can deliver those messages correctly. So if I if I look at execution, those two critical things are so important for us in the future.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: But no Super Bowl ads.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Right? No Super Bowl ads.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: Actually, so Robert, I think this question is perhaps most appropriate for you. Reported, I think, $8,800,000 in top line revenue for the most recently reported quarter. I think during the quarterly conference call, you actually provided some color around what the quarterly revenue run rate might need to be in order for the company to be cash flow breakeven and potentially achieve sustainable profitability? Maybe just recapitulate that for our audience.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Sure. Thank you. So we’ve had two quarters of growth. And if you look at q four, we did 8,000,000 in net product revenue. In that quarter, we burned approximately half a million dollars.
In q one, we did 8,800,000.0. That quarter, we had a larger burn as our seasonal spending is largely tilted towards q one. But on a normalized quarter, if we hit that $8,500,000 to $9,000,000 a quarter, that’s when the cash flow starts to become breakeven to positive. Just summing the whole thing up on a yearly basis, our cash operating expenses are roughly 33 to $35,000,000. So in line with that $8.5 to $9,000,000 to get to breakeven.
So that’s what we’re working towards here, as we grow from q four to q one and now into q two.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And just for context so that our audience is up to speed, here at Wainwright, we are expecting top line net revenue of $46,000,000 for the full year 2025. Maybe it would be helpful also, Robert, if you could just describe Fenics partnership with Norgene, which, tackles some of the ex US territories for Petmark, most notably Europe, and the economics of this arrangement.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Sure. We were very pleased in February to announce the partnership with Norgene, that Norgene effectively licensed out Europe, Australia, and New Zealand. There was an upfront fee of 43 approximately $43,000,000. In addition to that, we have royalties starting in the mid teens for every dollar earned. We get mid teens growing to the mid twenties, and we have the ability to earn over 200,000,000 US dollars in milestones.
So an incredibly attractive deal for us. And if I could add just a a second to that, Norgeen launched here in the recent months in both The UK and in Germany. Two of the milestones related to that $200,000,000 we believe will be in a position to achieve towards the latter part of this year. One will be the pricing in Germany, and the other one will be a a sales milestone. So we’re looking forward to that.
We’re very enthused about them as a partner, and we’re very pleased with the that we did the deal last year. So in addition
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: to The UK and Germany, maybe just, a, recapitulate what other countries PETMARC C, which is the European trade name for PETMARC, has been approved in? And in what other territories you anticipate Norgene might be in a position to launch before the end of twenty twenty five?
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: They’re work excuse me. They’re working on the EU five, so you’re gonna see towards the end of this year the additional countries within the EU five. They have a very focused strategy, obviously, could potentially include include France, Italy, Spain, Switzerland. So you’re gonna have more to hear from that as we go into the latter part of ’25 and into ’26.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: And I just received, an approval in Scotland. Again, small, but but another approval. And so to get reimbursement and to have clear the pathway for PEDMARCY to be used in Scotland.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And then maybe Robert you could also talk a little bit about the current cap structure of the company as well as your plans regarding either retirement or conversion of the convertible debt that still remains with Petrocor. And I mentioned this mainly because you chose to retire a portion of that debt late last year.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Correct. Thank you. Currently, have, as of March 31, approximately $23,000,000 in U. S. Cash.
As you mentioned, we have a convertible note with Petrocor. They’ve been very supportive investors, strategic health care investors, that helped us at launch. That note was we retired $13,000,000 of it, so it currently stands at $19,500,000 in the aggregate. As we build profitability, as we, look to achieve some of these milestones related to Norgeen getting the royalties, we will look at additional ways to, potentially retire it or find a more efficient capital structure. The note, the convertible note is convertible at $7.89.
So as it stands today, they are also in the money. So lots of tools for us to address it, and we look forward to doing that in the coming months to year. It has a due date of August 2027.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And what’s the coupon on that?
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: It’s low teens is the cost of capital. So for our business and for our growth trajectory, we’d be looking to improve upon that cost of capital.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: And then just very briefly, Jeff, maybe you could recapitulate two things. You had mentioned on multiple previous conference calls that one aspect might be as FENIC gets into the realm of cash flow breakeven and sustainable profitability, the possibility of bringing in a couple of additional products, particularly if those are directly complementary to Petmark within oncology supportive care, maybe give us a sense of how you’re thinking about that at this juncture? And then also what maybe might be some of the other noteworthy value inflection points that we haven’t yet mentioned?
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Thank you.
Jeff Hackman, Chief Executive Officer, FENEC Pharmaceuticals: Sure. Sure. Yeah. There’s multiple ways a company with one product can go. There’s a it can be acquired or we can build
And, you know, my my plan and and discussion with the board when I came here was is to, you know, get FENIC profitable, get this and build this organization to a place where, know, they see profitability for the future. And I and and that’s one of my first goals. The the second and and more importantly is is once we achieve potentially, like Robert said, maybe later on this year, is we’ll have an organization that has a specific competency. And we’ve been approached by others in the past to to potentially, is there a way that we can partner, help bring another product in, grow this business from one product to to multiple products? And and that I’ve been able to do that before in my past.
And and this is this gives us that opportunity as well as we start to move there. The the last the second part of that question is is where where else is on the horizon here that are potentially big inflections? And it could be and it’s Japan. You know, we we did a trial in Japan. We did it in out of the University of Hiroshima Hospital in Japan.
We had 10 sites that utilized Petmark in Japan, and we had they just completed the trial. The trial is now under review, and they’re looking, and, at the getting the data, to us probably later in late summer, you know, August, September time frame. So you see what we did with Ped Marci in Europe. We have the same opportunity to be able to do that in Japan as well. And we’ve been approached by a few folks potentially could be marketing partners for that part of the world.
So that is another significant inflection point for the organization as well.
Ram Selvaraju, Senior Healthcare Equity Research Analyst and Managing Director, H. C. Wainwright: Fantastic. I think we’re out of time. So really appreciate both of you gentlemen walking us through the Fenics story. I think our audience will agree Fenics is really on the cusp of bigger and better things and certainly potentially attainment of sustainable profitability. So now is a very exciting time, particularly in the context of all this market volatility.
I hope our audience will see what a compelling investment opportunity FENIC represents. Thank you so much, gentlemen, for your participation.
Robert Andrade, Chief Financial Officer, FENEC Pharmaceuticals: Thank you, Thank you, HTHW.
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